EXHIBIT 99.1
Execution Copy
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ASPECT COMMUNICATIONS CORPORATION
AMENDED AND RESTATED CREDIT AGREEMENT
DATED AS OF FEBRUARY 13, 2004
COMERICA BANK
AS CO-ARRANGER AND ADMINISTRATIVE AGENT
THE CIT GROUP/BUSINESS CREDIT, INC.
AS CO-ARRANGER, CO-DOCUMENTATION AGENT AND COLLATERAL AGENT
FLEET NATIONAL BANK
AS CO-DOCUMENTATION AGENT
GENERAL ELECTRIC CAPITAL CORPORATION
KEYBANK NATIONAL ASSOCIATION
AS CO-SYNDICATION AGENTS
U.S. BANK NATIONAL ASSOCIATION
AS SENIOR MANAGING AGENT
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TABLE OF CONTENTS
PAGE
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1. DEFINITIONS........................................................................................... 1
1.1 Certain Defined Terms....................................................................... 1
2. REVOLVING CREDIT...................................................................................... 24
2.1 Commitment.................................................................................. 24
2.2 Accrual of Interest and Maturity; Evidence of Indebtedness.................................. 24
2.3 Requests for and Refundings and Conversions of Advances..................................... 25
2.4 Disbursement of Advances.................................................................... 27
2.5 Swing Line Advances......................................................................... 29
2.6 Prime-based Interest Payments............................................................... 35
2.7 Eurocurrency-based Interest Payments and Quoted Rate Interest Payments...................... 35
2.8 Interest Payments on Conversions............................................................ 35
2.9 Interest on Default......................................................................... 36
2.10 Optional Prepayments........................................................................ 36
2.11 Prime-based Advance in Absence of Election or Upon Default.................................. 37
2.12 Revolving Credit Facility Fee............................................................... 37
2.13 Mandatory Repayment of Revolving Credit Advances............................................ 37
2.14 Optional Reduction or Termination of Revolving Credit Aggregate Commitment.................. 39
2.15 Use of Proceeds of Advances................................................................. 40
2.16 Extensions of Revolving Credit Maturity Date................................................ 40
3. LETTERS OF CREDIT..................................................................................... 41
3.1 Letters of Credit........................................................................... 41
3.2 Conditions to Issuance...................................................................... 42
3.3 Notice...................................................................................... 43
3.4 Letter of Credit Fee........................................................................ 44
3.5 Other Fees.................................................................................. 45
3.6 Drawings and Demands for Payment Under Letters of Credit.................................... 45
3.7 Obligations Irrevocable..................................................................... 47
3.8 Risk Under Letters of Credit................................................................ 48
3.9 Indemnification............................................................................. 49
3.10 Right of Reimbursement...................................................................... 50
4. Intentionally omitted................................................................................. 50
5. CONDITIONS............................................................................................ 50
5.1 Effective Date Conditions................................................................... 51
5.2 Continuing Conditions....................................................................... 55
6. REPRESENTATIONS AND WARRANTIES........................................................................ 55
6.1 Corporate Authority......................................................................... 55
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6.2 Due Authorization - Company................................................................. 55
6.3 Due Authorization - Other Loan Parties...................................................... 56
6.4 Good Title, No Liens........................................................................ 56
6.5 Taxes....................................................................................... 56
6.6 No Defaults................................................................................. 56
6.7 Enforceability of Agreement and Loan Documents -- Company................................... 56
6.8 Enforceability of Loan Documents -- Other Loan Parties...................................... 57
6.9 Compliance with Laws........................................................................ 57
6.10 Non-contravention -- Company................................................................ 57
6.11 Non-contravention -- Other Loan Parties..................................................... 57
6.12 No Litigation............................................................................... 57
6.13 Consents, Approvals and Filings, Etc........................................................ 58
6.14 Agreements Affecting Financial Condition.................................................... 58
6.15 No Investment Company or Margin Stock....................................................... 58
6.16 ERISA....................................................................................... 59
6.17 Conditions Affecting Business or Properties................................................. 59
6.18 Environmental and Safety Matters............................................................ 59
6.19 Subsidiaries................................................................................ 60
6.20 Accuracy of Information..................................................................... 60
6.21 Labor Relations............................................................................. 60
6.22 Existing Debt............................................................................... 61
6.23 Solvency.................................................................................... 61
6.24 Capitalization.............................................................................. 61
6.25 Accounts.................................................................................... 61
7. AFFIRMATIVE COVENANTS................................................................................. 62
7.1 Financial Statements........................................................................ 62
7.2 Certificates; Other Information............................................................. 63
7.3 Payment of Obligations...................................................................... 64
7.4 Conduct of Business and Maintenance of Existence; Compliance with Laws...................... 64
7.5 Maintenance of Property; Insurance.......................................................... 65
7.6 Inspection of Property; Books and Records, Discussions...................................... 65
7.7 Notices..................................................................................... 66
7.8 Hazardous Material Laws..................................................................... 67
7.9 Maintain Liquidity Ratio.................................................................... 67
7.9A Maintain Consolidated Fixed Charge Coverage Ratio........................................... 68
7.9B Maintain Maximum Total Debt to EBITDA Ratio................................................. 68
7.10 Maintain Consolidated Tangible Effective Net Worth.......................................... 68
7.11 Maintain Consolidated EBITDA................................................................ 68
7.12 Governmental and Other Approvals............................................................ 68
7.13 Compliance with ERISA....................................................................... 68
7.14 ERISA Notices............................................................................... 68
7.15 Security; Defense of Collateral............................................................. 69
7.16 Intellectual Property....................................................................... 69
7.17 Use of Proceeds............................................................................. 69
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7.18 Future Subsidiaries; Additional Collateral.................................................. 70
7.19 Further Assurances.......................................................................... 71
7.20 Additional Collateral Actions............................................................... 71
7.21 Investment Property and Cash................................................................ 71
8. NEGATIVE COVENANTS.................................................................................... 71
8.1 Limitation on Debt.......................................................................... 72
8.2 Limitation on Liens......................................................................... 73
8.3 Limitation on Guarantee Obligations......................................................... 73
8.4 Acquisitions................................................................................ 73
8.5 Limitation on Mergers, other Fundamental Changes or Sale of Assets.......................... 73
8.6 Restricted Payments......................................................................... 74
8.7 [Intentionally Left Blank].................................................................. 75
8.8 Limitation on Investments, Loans and Advances............................................... 75
8.9 Transactions with Affiliates................................................................ 77
8.10 Sale and Leaseback.......................................................................... 77
8.11 Limitation on Negative Pledge Clauses....................................................... 77
8.12 Prepayment of Debts......................................................................... 77
8.13 Amendment of Subordinated Debt Documents.................................................... 78
8.14 Modification of Certain Agreements.......................................................... 78
8.15 Fiscal Year................................................................................. 78
8.16 Asset Allocation............................................................................ 78
8.17 Anti-Terrorism Laws......................................................................... 79
9. DEFAULTS.............................................................................................. 79
9.1 Events of Default........................................................................... 79
9.2 Exercise of Remedies........................................................................ 81
9.3 Rights Cumulative........................................................................... 82
9.4 Waiver by Company of Certain Laws........................................................... 82
9.5 Waiver of Defaults.......................................................................... 82
9.6 Set Off..................................................................................... 83
10. PAYMENTS, RECOVERIES AND COLLECTIONS; MARGIN ADJUSTMENTS.............................................. 83
10.1 Payment Procedure........................................................................... 83
10.2 Application of Proceeds of Collateral....................................................... 85
10.3 Pro-rata Recovery........................................................................... 85
10.4 Margin Adjustments.......................................................................... 86
11. CHANGES IN LAW OR CIRCUMSTANCES; INCREASED COSTS...................................................... 86
11.1 Reimbursement of Prepayment Costs........................................................... 86
11.2 Eurocurrency Lending Office................................................................. 87
11.3 Circumstances Affecting Eurocurrency-based Rate Availability................................ 87
11.4 Laws Affecting Eurocurrency-based Advance Availability...................................... 88
11.5 Increased Cost of Eurocurrency-based Advances............................................... 88
11.6 Capital Adequacy and Other Increased Costs.................................................. 89
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11.7 Substitution of Banks....................................................................... 90
11.8 Right of Banks to Fund through Branches and Affiliates...................................... 91
11.9 Obligation to Mitigate...................................................................... 91
12. AGENTS................................................................................................ 91
12.1 Appointment of Agents....................................................................... 91
12.2 Deposit Account with Administrative Agent................................................... 92
12.3 Scope of Agents' Duties..................................................................... 92
12.4 Successor Agents............................................................................ 93
12.5 Credit Decisions............................................................................ 93
12.6 Authority of Administrative Agent to Enforce This Agreement................................. 93
12.7 Indemnification of Agents................................................................... 94
12.8 Knowledge of Default........................................................................ 94
12.9 Agents' Authorization; Action by Banks...................................................... 95
12.10 Enforcement Actions by the Agents........................................................... 95
12.11 Collateral Matters.......................................................................... 95
12.12 Agents in their Individual Capacities....................................................... 96
12.13 Agents' Fees................................................................................ 96
12.14 Documentation and Syndication Agents........................................................ 96
13. MISCELLANEOUS......................................................................................... 97
13.1 Accounting Principles....................................................................... 97
13.2 Consent to Jurisdiction..................................................................... 97
13.3 Law of California........................................................................... 97
13.4 Interest.................................................................................... 98
13.5 Closing Costs and Other Costs; Indemnification.............................................. 98
13.6 Notices..................................................................................... 99
13.7 Further Action.............................................................................. 100
13.8 Successors and Assigns; Participations; Assignments......................................... 100
13.9 Counterparts................................................................................ 103
13.10 Amendment and Waiver........................................................................ 103
13.11 Confidentiality............................................................................. 104
13.12 Withholding Taxes........................................................................... 105
13.13 Taxes and Fees.............................................................................. 106
13.14 WAIVER OF JURY TRIAL........................................................................ 106
13.15 Complete Agreement; Conflicts............................................................... 106
13.16 Severability................................................................................ 106
13.17 Table of Contents and Headings.............................................................. 107
13.18 Construction of Certain Provisions.......................................................... 107
13.19 Independence of Covenants................................................................... 107
13.20 Reliance on and Survival of Various Provisions.............................................. 107
13.21 USA Patriot Act............................................................................. 107
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TABLE OF CONTENTS
(CONTINUED)
SCHEDULES
Schedule 1.1 Pricing Matrix
Schedule 1.2 Percentages and Allocations
Schedule 1.3 Significant Foreign Subsidiaries
Schedule 1.4 Investment Policy
Schedule 1.5 Proprietary Rights
Schedule 1.6 Significant Guarantors
Schedule 5.1(b) List of Jurisdictions in which Company and/or
Subsidiaries do material business
Schedule 5.1(c)(i) Description of Owned Real Property
Schedule 5.1(c)(ii) Description of Leased Real Property
Schedule 5.1(c)(iv) List of Jurisdictions in which to file financing
statements
Schedule 6.1 Exceptions to Foreign Corporation Qualifications
Schedule 6.9 Compliance with Laws
Schedule 6.12 Litigation
Schedule 6.16 Employee Pension Benefit Plans
Schedule 6.18 Environmental Matters
Schedule 6.19 Subsidiaries
Schedule 6.20 Contingent Obligations
Schedule 6.24 Capitalization
Schedule 8.1(b) Existing Funded Debt
Schedule 8.2 Permitted Liens
Schedule 8.3 Existing Guaranties
Schedule 8.8 Existing Investments
Schedule 8.9 Transactions with Affiliates
Schedule 8.11 Negative Pledges
Schedule 13.6 Notices
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TABLE OF CONTENTS
(CONTINUED)
EXHIBITS
A FORM OF REQUEST FOR REVOLVING CREDIT ADVANCE
B FORM OF REVOLVING CREDIT NOTE
C FORM OF SWING LINE NOTE
D FORM OF REQUEST FOR SWING LINE ADVANCE
E FORM OF SWING LINE BANK PARTICIPATION CERTIFICATE
F FORM OF NOTICE OF LETTERS OF CREDIT
G INTENTIONALLY OMITTED
H FORM OF COMPANY PLEDGE AGREEMENT
I FORM OF ASSIGNMENT AGREEMENT
J FORM OF GUARANTY
K FORM OF SECURITY AGREEMENT
L FORM OF INTERCOMPANY NOTE
M FORM OF COVENANT COMPLIANCE REPORT
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AMENDED AND RESTATED CREDIT AGREEMENT
This Amended and Restated Credit Agreement ("Agreement") is made as of
February 13, 2004, by and among the financial institutions from time to time
signatory hereto (individually a "Bank," and any and all such financial
institutions collectively the "Banks"), Comerica Bank, as Co-Arranger and as
Administrative Agent for the Banks (in such capacity, "Administrative Agent"),
The CIT Group/Business Credit, Inc., a New York corporation, as Co-Arranger,
Co-Documentation Agent and as Collateral Agent for the Banks (in such capacity
"Collateral Agent" and together with the Administrative Agent, the "Agents"),
Fleet National Bank as Co-Documentation Agent, General Electric Capital
Corporation as Co-Syndication Agent, KeyBank National Association as
Co-Syndication Agent, U.S. Bank National Association as Senior Managing Agent
and Aspect Communications Corporation, a California corporation (the "Company").
RECITALS:
A. The Company has requested that the Banks amend and restate that
certain Credit Agreement dated as of August 9, 2002 (the "Original Credit
Agreement"), to amend certain of the terms and conditions whereby the Banks have
extended credit and letters of credit to the Company as set forth herein.
B. The Banks are prepared to amend and restate the Original Credit
Agreement and to increase the amount of credit made available to the Company,
but only on the terms and conditions set forth in this Agreement.
NOW THEREFORE, in consideration of the covenants contained herein, the
Company, the Banks, and the Agents agree as follows:
1. DEFINITIONS
1.1 Certain Defined Terms. For the purposes of this Agreement the
following terms will have the following meanings:
"Account(s)" shall mean any account or account receivable as defined
under the UCC, including without limitation, with respect to any Person, any
right of such Person to payment for goods sold or leased or for services
rendered.
"Account Debtor" shall mean the party who is obligated on or under any
Account.
"Account Party(ies)" shall mean, with respect to any Letter of Credit,
the account party or parties (which shall be the Company or a Guarantor) as
named in an application to the Issuing Bank for the issuance of such Letter of
Credit.
"Administrative Agent" shall mean Comerica Bank, in its capacity as
administrative agent for the Banks, or any successor agent appointed in
accordance with Section 12.4.
"Administrative Agent's Correspondent" shall mean for Advances in
eurodollars, Administrative Agent's Grand Cayman Branch (or for the account of
said branch office, at Administrative Agent's main office in Detroit, Michigan,
United States).
"Advance(s)" shall mean, as the context may indicate, a borrowing
requested by the Company, and made by the Revolving Credit Banks under Section
2.1 hereof, or the Swing Line Bank under Section 2.5 hereof, including without
limitation any readvance, refunding or conversion of such borrowing pursuant to
Section 2.3 or 2.5 hereof, and any advance deemed to have been made in respect
of a Letter of Credit under Section 3.6(a) hereof, and shall include, as
applicable, a Eurocurrency-based Advance, a Prime-based Advance and a Quoted
Rate Advance.
"Affiliate" shall mean, with respect to any Person, any other Person or
group acting in concert in respect of the first Person that, directly or
indirectly, through one or more intermediaries, controls, or is controlled by,
or is under common control with such first Person. For purposes of this
definition, "control" (including, with correlative meanings, the terms
"controlled by" and "under common control with"), as used with respect to any
Person or group of Persons, shall mean the possession, directly or indirectly,
of the power to direct or cause the direction of management and policies of such
Person, whether through the ownership of voting securities or by contract or
otherwise. Unless otherwise specified to the contrary herein, or the context
requires otherwise, Affiliate shall refer to Affiliates of the Company.
Officers, directors and employees of the Company are not affiliates of the
Company by virtue of their office or employment alone.
"Agents" shall mean the Administrative Agent and the Collateral Agent.
"Alternate Base Rate" shall mean, for any day, an interest rate per
annum equal to the Federal Funds Effective Rate in effect on such day, plus one
percent (1%).
"Applicable Fee Percentage" shall mean, as of any date of determination
thereof, the applicable percentage used to calculate certain of the fees due and
payable hereunder, determined by reference to the appropriate columns in the
Pricing Matrix attached to this Agreement as Schedule 1.1.
"Applicable Interest Rate" shall mean (i) in respect of Revolving
Credit Advances, the Eurocurrency-based Rate and the Prime-based Rate and (ii)
in respect of Swing Line Advances, the Prime-based Rate and the Quoted Rate; in
each case, as selected by Company from time to time subject to the terms and
conditions of this Agreement.
"Applicable Margin" shall mean, as of any date of determination
thereof, the applicable interest rate margin, determined by reference to the
appropriate columns in the Pricing Matrix attached to this Agreement as Schedule
1.1.
"Asset Sale" shall mean the sale, transfer or other disposition by the
Company or any Loan Party of any tangible or intangible asset (other than stock
or other ownership interests of any Subsidiary or the Company) to any Person
(other than to the Company or any Subsidiary), other than (i) sales, transfers
or other dispositions of Inventory in the ordinary course of
2
business, (ii) sales of assets or other dispositions of assets that have been
damaged, become obsolete, worn out or are no longer useable or useful in the
conduct of Company's or such Loan Party's business, (iii) dispositions of Cash
Equivalents in the ordinary course of business, (iv) sale and leaseback
transactions permitted under Section 8.10 with respect to assets owned by
Company or a Loan Party for less than ninety (90) days prior to the completion
of the sale leaseback transaction, (v) dispositions of Cash Equivalents and
Short Term Investments which are moved to other Cash Equivalents or Short Term
Investments and (vi) sales and licenses of Proprietary Rights in the ordinary
course of business. The creation of a Permitted Lien, in and of itself, is not
an Asset Sale.
"Assignment Agreement" shall mean an Assignment Agreement substantially
in the form of Exhibit I hereto.
"Bank Hedging Agreement" shall mean any Hedging Transaction entered
into between the Company and any Bank or an Affiliate of a Bank.
"Bankruptcy Code" shall mean Title 11 of the United States Code and the
rules promulgated thereunder.
"Banks" shall mean Comerica Bank and such other financial institutions
from time to time parties hereto as lenders and shall include the Revolving
Credit Banks and the Swing Line Bank and any assignee which becomes a Bank
pursuant to Section 13.8 hereof.
"Base Consolidated Tangible Effective Net Worth" shall initially mean
$80,000,000. Base Consolidated Tangible Effective Net Worth shall increase (but
not decrease) as of the last day of each fiscal quarter of Company (commencing
March 31, 2004) by an amount equal to (i) fifty percent (50%) of Consolidated
Net Income (if a positive number) for the preceding fiscal quarter, plus (ii)
one hundred percent (100%) of any Subordinated Debt issued by Company for the
applicable fiscal quarter, plus (iii) one hundred percent (100%) of the cash
proceeds of the issuance of any Equity Interests by Company or any of its
Subsidiaries during the preceding fiscal quarter (net of reasonable and
customary costs and expenses of issuance); provided, that any Equity Interests
issued after the Effective Date, the proceeds of which are used to repurchase or
redeem any existing Equity Interests (including any common or preferred stock)
shall be excluded.
"Borrower" shall mean the Company.
"Business Day" shall mean any day on which commercial banks are open
for domestic and international business in Detroit, Michigan, Los Angeles,
California and if related to a determination of the Eurocurrency-based Rate or
to a Eurocurrency-based Advance, a day on which commercial banks are open in the
relevant interbank market for eurodollar transactions.
"Capital Expenditures" shall mean, for any period, with respect to any
Person, the aggregate of all expenditures incurred by such Person and its
Subsidiaries during such period for the acquisition or leasing (pursuant to a
Capital Lease) of fixed or capital assets or additions to equipment, plant and
property that should be capitalized under GAAP on a consolidated balance sheet
of such Person and its Subsidiaries. The foregoing notwithstanding, "Capital
3
Expenditures" shall not include capital expenditures constituting (i) the
reinvestment of Net Cash Proceeds or insurance proceeds used to acquire assets
to replace assets sold, damaged, destroyed or lost or (ii) Permitted
Acquisitions.
"Capital Lease" shall mean, as applied to any Person, any lease of any
property (whether real, personal or mixed) with respect to which the discounted
present value of the rental obligations of such Person as lessee thereunder, in
conformity with GAAP, is required to be capitalized on the balance sheet of that
Person.
"Cash Equivalents" and "Short Term Investments" shall be as set forth
in Company's Investment Policy, a current version of which is attached as
Schedule 1.4 and as it may be amended by Company from time to time upon approval
of the Administrative Agent, which approval may be withheld in the sole
discretion of the Administrative Agent.
"Change of Control" shall mean (a) the acquisition, after the date of
this Agreement, of ownership, directly or indirectly, beneficially or of record,
by any Person or group (within the meaning of the Securities Exchange Act of
1934 and the rules of the Securities and Exchange Commission thereunder as in
effect on the date hereof) of shares representing more than thirty five percent
(35%) of the aggregate ordinary voting power represented by the issued and
outstanding capital stock of the Company; (b) the occupation after the date of
this Agreement of a majority of the seats (other than vacant seats) on the board
of directors of the Company by Persons who were neither (i) nominated by the
board of directors of the Company nor (ii) appointed by directors so nominated;
or (c) the acquisition of direct or indirect Control of the Company by any
Person or group.
"Collateral" shall mean all property or rights in which a security
interest, mortgage, lien or other encumbrance for the benefit of the Banks is or
has been granted or arises or has arisen, under or in connection with this
Agreement, the Collateral Documents, the other Loan Documents, or otherwise to
secure the Indebtedness.
"Collateral Access Agreement" shall mean an agreement in form and
substance reasonably satisfactory to the Collateral Agent pursuant to which a
mortgagee or lessor of real property on which Collateral is stored or otherwise
located, or a warehouseman, processor or other bailee of Inventory or other
property owned by a Domestic Subsidiary, that acknowledges the Liens under the
Collateral Documents and subordinates or waives any Liens held by such Person on
such property and, in the case of any such agreement with a mortgagee or lessor,
permits the Collateral Agent reasonable access to and the use of such real
property during the continuance of an Event of Default to assemble, complete and
sell any Collateral stored or otherwise located thereon.
"Collateral Agent" shall mean The CIT Group/Business Credit, Inc. in
its capacity as collateral agent for the Banks, or any successor collateral
agent appointed in accordance with Section 12.4.
"Collateral Documents" shall mean the Security Agreement, the Company
Pledge Agreement, the Foreign Pledge Agreement(s), the Mortgages, and all of the
other acknowledgments, certificates, stock powers, financing statements,
instruments and other
4
security documents executed by Company or any Subsidiary in favor of the
Collateral Agent or the Administrative Agent for the benefit of the Banks and
delivered to the Agents, as security for the Indebtedness, in each case as of
the Effective Date or, from time to time, subsequent thereto, in connection with
such collateral documents, in each case, as such collateral documents may be
amended or otherwise modified from time to time.
"Comerica Bank" shall mean Comerica Bank, a Michigan banking
corporation, its successors or assigns.
"Commitment" shall mean the Revolving Credit Aggregate Commitment.
"Company" is defined in the preamble.
"Company Pledge Agreement" shall mean the Company Pledge Agreement,
substantially in the form of Exhibit H hereto, executed and delivered by the
Company and covering all shares or other membership interests issued or to be
issued by any Domestic Subsidiary of the Company which is required to become a
Guarantor hereunder, as amended or otherwise modified from time to time.
"Consolidated" (or "consolidated") or "Consolidating" (or
"consolidating") shall mean, when used with reference to any financial term in
this Agreement, the aggregate for two or more Persons of the amounts signified
by such term for all such Persons determined on a consolidated basis in
accordance with GAAP. Unless otherwise specified herein, "Consolidated" and
"Consolidating" shall refer to Company and its Subsidiaries, determined on a
Consolidated or Consolidating basis, as the case may be.
"Consolidated EBITDA" shall mean for any period, Consolidated Net
Income for such period plus, without duplication and only to the extent
reflected as a charge or reduction in the statement of such Consolidated Net
Income for such period, the sum of (a) restructuring charges, (b) income tax
expense, (c) Consolidated Interest Expense, (d) accrued debenture interest plus
all fees and expenses incurred in connection with the debentures, (e)
depreciation and amortization expense, (f) any extraordinary non-cash expenses
or losses including non-cash losses on sales of assets outside of the ordinary
course of business and unusual or one-time non-cash charges, (g) non-cash stock
based compensation and other non-cash equity charges, and (h) charges resulting
from change in accounting principles and less one time extraordinary gains,
provided however that notwithstanding the foregoing, "Consolidated EBITDA" of
the Company and its Subsidiaries shall be determined on a pro forma basis for
each period during which a Permitted Acquisition shall have occurred, giving
effect to such Permitted Acquisition as if it had occurred on the first day of
the relevant period.
"Consolidated Fixed Charge Coverage Ratio" shall mean as of any date of
determination, a ratio determined by dividing Consolidated EBITDA for the four
preceding fiscal quarters by the sum of (a) Consolidated Interest Expense during
such period, (b) the amount of principal repaid or scheduled to be repaid on any
indebtedness for borrowed money or Capital Lease obligations during such period,
(c) Capital Expenditures actually incurred during such period, (d) to the extent
a positive number, all federal, state and local income tax
5
expenses due and payable during such period, (e) all cash payments related to
past and future restructuring charges during such period, and (f) cash dividends
distributed to shareholders.
"Consolidated Interest Expense" shall mean for any period total cash
interest expense (including that attributable to Capital Leases) of the Company
and its Consolidated Subsidiaries plus, without duplication, capitalized
interest expense, plus all fees and expenses incurred in connection with the
Indebtedness to the extent such costs are allocable to such period in accordance
with GAAP, including the amortization of loan fees, less cash interest income
during such period.
"Consolidated Net Income" shall mean for any period, the consolidated
net income (or loss) of the Company and its Subsidiaries, determined on a
consolidated basis in accordance with GAAP; provided that there shall be
excluded (a) the income (or deficit) of any Person accrued prior to the date it
becomes a Subsidiary or is merged into or consolidated with the Company or any
of its Subsidiaries, (b) the income (or deficit) of any Person (other than a
Subsidiary of the Company) in which the Company or any of Subsidiaries has an
ownership interest, except to the extent that any such income is actually
received by the Company or its Subsidiary in the form of dividends or similar
distributions and (c) the undistributed earnings of any Subsidiary of the
Company to the extent that the declaration or payment of dividends or similar
distributions by such Subsidiary is not at the time permitted by the terms of
any Contractual Obligation (other than under any Loan Document) or Requirement
of Law applicable to such Subsidiary.
"Consolidated Tangible Effective Net Worth" shall mean as of any date
of determination, Consolidated Tangible Net Worth as of such date plus the
outstanding principal amount of the Subordinated Debt as of such date, if any.
"Consolidated Tangible Net Worth" shall mean as of any date of
determination, the shareholders' equity of Company and its consolidated
Subsidiaries, which shall include, without limitation, all of Company's or any
of Company's consolidated Subsidiaries' preferred stock which is issued and
outstanding, as of such date determined in accordance with GAAP, less the
Intangible Assets of the Company and its consolidated Subsidiaries and less
deferred tax assets for stock disqualifying dispositions, all determined as of
such date. For purposes of this Agreement, "Intangible Assets" means the amount
(to the extent reflected in determining such Net Worth) of (i) all write-ups in
the book value of any asset owned by Company and its consolidated Subsidiaries,
(ii) loans or advances to Affiliates, (iii) all investments in unconsolidated
Subsidiaries of the Company and all equity investments in Persons which are not
Subsidiaries of Company that are not tradable in a public securities market,
(iv) all unamortized debt discount and expense, unamortized deferred charges,
goodwill, patents, trademarks, service marks, trade names, copyrights,
organization or developmental expenses and other intangible assets and (v) any
other items that are classified as intangible assets in accordance with GAAP.
"Consolidated Total Debt" shall mean, without duplication, (a) all
Funded Debt of a Person, (b) all obligations of such Person under conditional
sale or other title retention agreements relating to property or assets
purchased by such Person, and (c) (i) any repurchase obligation or liability of
such Person with respect to accounts or notes receivables sold by such
6
Person, (ii) any liability under any sale and leaseback transaction which is not
a Capital Lease, (iii) any liability under any so-called "synthetic lease"
transaction entered into by such Person, or (iv) any obligation arising with
respect to any other transaction which is the functional equivalent of or takes
place of borrowing but which does not constitute a liability on the balance
sheets of such Person, but excluding from this clause Operating Leases.
"Consolidated Total Debt to EBITDA Ratio" means, as of the last day of
each fiscal quarter, the ratio of (a) Consolidated Total Debt as of such day to
(b) Consolidated EBITDA for the four preceding fiscal quarters ending on such
day.
"Contractual Obligation" shall mean, as to any Person, any provision of
any security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.
"Control" means the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of a Person, whether
through the ability to exercise voting power, by contract or otherwise, but not
solely by being an office or director of that Person. "Controlling" and
Controlled" have meanings correlative thereto.
"Covenant Compliance Report" shall mean the report to be furnished by
the Company to the Administrative Agent pursuant to Section 7.2(a) hereof, in
the form attached hereto Exhibit M and certified by a Responsible Officer, which
report shall include, among other things, detailed calculations and the
resultant ratios or financial tests with respect to the financial covenants
contained in Sections 7.9 through 7.11 of this Agreement, accompanied by such
other supplemental or supporting information as may be reasonably requested by
the Administrative Agent or Majority Banks.
"De Minimis Matters" shall mean any suits, actions, proceedings,
investigations, or other matters, the existence of which and any liability which
may result therefrom, would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
"Debt" shall mean as to any Person, without duplication (a) all Funded
Debt of a Person, (b) all Guarantee Obligations of such Person, (c) all
obligations of such Person under conditional sale or other title retention
agreements relating to property or assets purchased by such Person, (d) all
indebtedness of such Person arising in connection with any interest rate swap
transaction, basis swap transaction, forward rate transaction, commodity swap
transaction, equity transaction, equity index transaction, foreign exchange
transaction, cap transaction, floor transaction (including any option with
respect to any of these transactions and any combination of any of the
foregoing) entered into by such Person, (e) any obligations in respect of
phantom stock or comparable employee incentive plans which would be classified
as liabilities on the balance sheet of a Person and (f) (i) any repurchase
obligation or liability of such Person with respect to accounts or notes
receivables sold by such Person, (ii) any liability under any sale and leaseback
transaction which is not a Capital Lease, (iii) any liability under any
so-called "synthetic lease" transaction entered into by such Person, or (iv) any
obligation arising with respect to any other transaction which is the functional
equivalent of or takes place of borrowing but which does not constitute a
liability on the balance sheets of such Person, but excluding from this clause
Operating Leases.
7
"Default" shall mean any event which with the giving of notice or the
passage of time, or both, would constitute an Event of Default under this
Agreement.
"Defaulting Bank" is defined in Section 2.4(c).
"Distribution" is defined in Section 8.6 hereof.
"Dollars" and the sign "$" shall mean lawful money of the United States
of America.
"Domestic Advance" shall mean any Advance other than a
Eurocurrency-based Advance.
"Domestic Subsidiary(ies)" shall mean any direct or indirect Subsidiary
of the Company which is incorporated under the laws of the United States of
America, or any state, territory or other political subdivision thereof.
"Effective Date" shall mean the date on which all the conditions
precedent set forth in Section 5.1 have been satisfied.
"Equity Interests" means, with respect to any Person, any and all
shares, share capital, interests, participations, warrants, options or other
equivalents (however designated) of capital stock of a corporation and any and
all equivalent ownership interests in a Person (other than a corporation),
including preferred stock.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended, or any successor act or code and the regulations in effect from time
to time thereunder.
"Eurocurrency-based Advance" shall mean any Advance that bears interest
at the Eurocurrency-based Rate.
"Eurocurrency-based Rate" shall mean a per annum interest rate which is
equal to the sum of (a) the Applicable Margin, plus (b) the quotient of:
the per annum interest rate at which deposits in the relevant
eurocurrency are offered to Administrative Agent's Eurocurrency Lending Office
by other prime banks in the eurocurrency market in an amount comparable to the
relevant Eurocurrency-based Advance and for a period equal to the relevant
Eurocurrency-Interest Period at approximately 8:00 A.M. Detroit time two (2)
Business Days prior to the first day of such Eurocurrency-Interest Period,
divided by
a percentage equal to 100% minus the maximum rate on such date at which
Administrative Agent is required to maintain reserves on `Eurocurrency
Liabilities' as defined in and pursuant to Regulation D of the Board of
Governors of the Federal Reserve System or, if such regulation or definition is
modified, and as long as Administrative Agent is required to maintain reserves
against a category of liabilities which includes eurocurrency deposits or
includes a category of assets which includes eurocurrency loans, the rate at
which such reserves are required to be maintained on such category,
8
such sum to be rounded upward, if necessary, to the nearest whole multiple of
1/100th of 1%.
"Eurocurrency-Interest Period" shall mean, for any Eurocurrency-based
Advance, an interest period of one, two, three or six months (or any lesser or
greater number of days agreed to in advance by the Company, Administrative Agent
and the Banks) as selected by the Company, for such Eurocurrency-based Advance
pursuant to Section 2.3 or 2.5 hereof, as the case may be.
"Eurocurrency Lending Office" shall mean, (a) with respect to the
Administrative Agent, Administrative Agent's office located at its Grand Caymans
Branch or such other branch of Administrative Agent, domestic or foreign, as it
may hereafter designate as its Eurocurrency Lending Office by written notice to
Company and the Banks and (b) as to each of the Banks, its office, branch or
affiliate located at its address set forth on the signature pages hereof (or
identified thereon as its Eurocurrency Lending Office), or at such other office,
branch or affiliate of such Bank as it may hereafter designate as its
Eurocurrency Lending Office by written notice to Company and Administrative
Agent.
"Event of Default" shall mean each of the Events of Default specified
in Section 9.1 hereof.
"Federal Funds Effective Rate" shall mean, 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 which is a
Business Day, the average of the quotations for such day on such transactions
received by Administrative Agent from three Federal funds brokers of recognized
standing selected by it, all as conclusively determined by the Administrative
Agent, such sum to be rounded upward, if necessary, to the nearest whole
multiple of 1/100th of 1%.
"Fee Letter" shall mean each fee letter in effect from time to time
between Company and the Agents or any Bank hereunder, as amended from time to
time.
"Fees" shall mean the Revolving Credit Facility Fee, the Letter of
Credit Fees and the other fees and charges payable by the Company to the Banks
or Agents hereunder.
"Foreign Pledge Agreement" shall mean the Foreign Pledge Agreement(s),
in form satisfactory to the Collateral Agent (and containing customary local law
provisions, for comparable transactions), executed and delivered (or to be
executed and delivered) by each applicable Loan Party and covering no more than
sixty-five percent (65%) (or in the case of entities which are disregarded
entities for United States income tax purposes, one hundred percent (100%)) of
all of the shares of each of the Significant Foreign Subsidiaries, as amended or
otherwise modified from time to time.
"Foreign Subsidiary(ies)" shall mean each Subsidiary of the Company
which is not a Domestic Subsidiary.
9
"Fremont Loan" shall mean the loan from Fremont Investment & Loan to
Aspect Communications Real Estate Holdings LLC under the Loan and Security
Agreement dated September 28, 2001.
"Funded Debt" of any Person shall mean (a) all indebtedness of such
Person for borrowed money or for the deferred purchase price of property or
services as of such date (other than Operating Leases and trade liabilities
incurred in the ordinary course of business and payable in accordance with
customary practices) or which is evidenced by a note, bond, debenture or similar
instrument, (b) the principal component of all obligations of such Person under
Capital Leases, (c) all reimbursement obligations (actual, contingent or
otherwise) of such Person in respect of letters of credit, acceptances or
similar obligations issued or created for the account of such Person, (d) all
liabilities secured by any liens on any property owned by such Person as of such
date even though such Person has not assumed or otherwise become liable for the
payment thereof, in each case determined in accordance with GAAP; provided
however that so long as such Person is not personally liable for such
liabilities, the amount of such liability shall be deemed to be the lesser of
the fair market value at such date of the property subject to the lien securing
such liability and the amount of the liability secured, and (e) all Guarantee
Obligations in respect of any liability which constitutes Funded Debt; provided,
however that Funded Debt shall not include any interest rate swap transaction,
basis swap transaction, forward rate transaction, commodity swap transaction,
equity transaction, equity index transaction, foreign exchange transaction, cap
transaction, floor transaction (including any option with respect to any of
these transactions and any combination of any of the foregoing) entered into by
such Person prior to the occurrence of a termination event with respect thereto.
"GAAP" shall mean generally accepted accounting principles in the
United States of America, consistently applied; provided however that in the
case of determination of compliance with the financial covenants set forth in
Sections 7.9 through 7.11, GAAP shall mean such accounting principles as in
effect on the Effective Date.
"Governmental Obligations" means noncallable direct general obligations
of the United States of America or obligations the payment of principal of and
interest on which is unconditionally guaranteed by the United States of America.
"Guarantee Obligation" shall mean as to any Person (the "guaranteeing
person") any obligation of the guaranteeing person in respect of any obligation
of another Person (including, without limitation, any bank under any letter of
credit), the creation of which was induced by a reimbursement agreement,
guaranty agreement, keepwell agreement, purchase agreement, counterindemnity or
similar obligation issued by the guaranteeing person, in either case
guaranteeing or in effect guaranteeing any Debt, leases, dividends or other
obligations (the "primary obligations") of any other third Person (the "primary
obligor") in any manner, whether directly or indirectly, including, without
limitation, any obligation of the guaranteeing person, whether or not
contingent, (i) to purchase any such primary obligation or any property
constituting direct or indirect security therefor, (ii) to advance or supply
funds (1) for the purchase or payment of any such primary obligation or (2) to
maintain working capital or equity capital of the primary obligor or otherwise
to maintain the net worth or solvency of the primary obligor, (iii) to purchase
property, securities or services primarily for the purpose of
10
assuring the owner of any such primary obligation of the ability of the primary
obligor to make payment of such primary obligation or (iv) otherwise to assure
or hold harmless the owner of any such primary obligation against loss in
respect thereof; provided, however, that the term Guarantee Obligation shall not
include endorsements of instruments for deposit or collection in the ordinary
course of business. The amount of any Guarantee Obligation of any guaranteeing
person shall be deemed to be the lower of (a) an amount equal to the stated or
determinable amount of the primary obligation in respect of which such Guarantee
Obligation is made and (b) the maximum amount for which such guaranteeing person
may be liable pursuant to the terms of the instrument embodying such Guarantee
Obligation, unless such primary obligation and the maximum amount for which such
guaranteeing person may be liable are not stated or determinable, in which case
the amount of such Guarantee Obligation shall be such guaranteeing person's
maximum reasonably anticipated liability in respect thereof as determined by
Company in good faith.
"Guarantor(s)" shall mean each Subsidiary which is required by the
Banks to guarantee the obligations of the Company hereunder and under the other
Loan Documents.
"Guaranty" shall mean that certain guaranty of all outstanding
Indebtedness of the Company, executed and delivered (or to be executed and
delivered) by the Guarantors (whether by execution thereof, or by execution of
the Joinder Agreement attached as "Exhibit A" to the form of such Guaranty), to
the Administrative Agent, on behalf of the Banks, in the form annexed hereto as
Exhibit J, as amended from time to time.
"Hazardous Material" shall mean any hazardous or toxic waste, substance
or material defined or regulated as such in or for purposes of the Hazardous
Material Laws.
"Hazardous Material Law(s)" shall mean all laws, codes, ordinances,
rules, regulations, orders, decrees and final, written directives issued by any
federal, state, local or other governmental or quasi-governmental authority or
body (or any agency, instrumentality or political subdivision thereof)
pertaining to any substance or material which is regulated for reasons of
health, safety or the environment and which is present or alleged to be present
on or about or used in any facilities owned, leased or operated by the Company
or any of its Subsidiaries, or any portion thereof including, without
limitation, those relating to soil, surface, subsurface ground water conditions
and the condition of the indoor and outdoor ambient air; any so-called
"superfund" or "superlien" law; and any other federal, state or local statute,
law, ordinance, code, rule, regulation, order or decree regulating, relating to,
or imposing liability or standards of conduct concerning, any Hazardous
Material, as now or at any time during the term of this Agreement.
"Hedging Transaction" means each interest rate swap transaction, basis
swap transaction, forward rate transaction, forward market transaction,
commodity swap transaction, equity transaction, equity index transaction,
foreign exchange transaction, cap transaction, floor transaction (including any
option with respect to any of these transactions and any combination of any of
the foregoing) entered into by the Company or other Loan Party from time to
time; provided that such transaction is entered into for risk management
purposes and not for speculative purposes.
11
"Hereof", "hereto", "hereunder" and similar terms shall refer to this
Agreement and not to any particular paragraph or provision of this Agreement.
"Income Taxes" shall mean for any period the aggregate amount of taxes
based on income or profits for such period of the operations of Company and its
Subsidiaries determined in accordance with GAAP on a Consolidated basis (to the
extent such income and profits were included in computing Consolidated Net
Income).
"Indebtedness" shall mean all indebtedness and liabilities including
interest, fees and other charges (including interest accruing at the then
applicable rate provided in this Agreement or any other applicable Loan Document
after the Revolving Credit Maturity Date and interest accruing at the then
applicable rate provided in this Agreement or any other applicable Loan Document
after the filing of any petition in bankruptcy, or the commencement of any
insolvency, reorganization or like proceeding, relating to the Company or any
Guarantor, whether or not a claim for post-filing or post-petition interest is
allowed in such proceeding), arising under this Agreement or any of the other
Loan Documents, whether direct or indirect, absolute or contingent, of Company
or any Subsidiary to any of the Banks or Affiliates thereof or to the Agents, in
any manner and at any time, whether arising under this Agreement, or under the
Guaranty or any of the other Loan Documents, due or hereafter to become due, now
owing or that may hereafter be incurred by the Company or any Subsidiary to, any
of the Banks or Affiliates thereof or to the Agents (and which shall be deemed
to include any liabilities of the Company or any Subsidiary to any Bank arising
in connection with account overdrafts), and any judgments that may hereafter be
rendered on such indebtedness or any part thereof, with interest according to
the rates and terms specified, or as provided by law, any payment obligations,
if any, under Hedging Transactions evidenced by Bank Hedging Agreements, and any
and all consolidations, amendments, renewals, replacements, substitutions or
extensions of any of the foregoing; provided, however that for purposes of
calculating the Indebtedness outstanding under this Agreement or any of the
other Loan Documents, the direct and indirect and absolute and contingent
obligations of the Company and the Subsidiaries (whether direct or contingent)
shall be determined without duplication.
"Intercompany Loan" shall mean any loan (or advance in the nature of a
loan) by the Company to any Subsidiary, or by any Subsidiary to the Company or
to any other Subsidiary, provided that each such loan or advance is subordinated
in right of payment and priority to the Indebtedness on the terms and conditions
set forth in the form of Intercompany Note attached as Exhibit L or on other
terms and conditions satisfactory to Agents and the Majority Banks.
"Intercompany Loans, Advances or Investments" shall mean any
Intercompany Loan, and any advance or investment by the Company or any
Subsidiary (including without limitation any guaranty of obligations or
indebtedness to third parties) to or in another Subsidiary (or by any Subsidiary
to the Company).
"Intercompany Note" shall mean any promissory note issued or to be
issued by the Company or any Subsidiary to evidence an Intercompany Loan
substantially in the form of Exhibit L.
12
"Interest Period" shall mean (a) with respect to a Eurocurrency-based
Advance, a Eurocurrency-Interest Period, commencing on the day a
Eurocurrency-based Advance is made, or on the effective date of an election of
the Eurocurrency-based Rate made under Section 2.3 hereof, and (b) with respect
to a Swing Line Advance carried at the Quoted Rate, an interest period of 7 days
(or any lesser number of days agreed to in advance by the Company,
Administrative Agent and the Swing Line Bank or required under clause (iii) of
the proviso to this definition); provided, however that (i) any Interest Period
which would otherwise end on a day which is not a Business Day shall end on the
next succeeding Business Day, except that as to an Interest Period in respect of
a Eurocurrency-based Advance, if the next succeeding Business Day falls in
another calendar month, such Interest Period shall end on the next preceding
Business Day, (ii) when an Interest Period in respect of a Eurocurrency-based
Advance begins on a day which has no numerically corresponding day in the
calendar month during which such Interest Period is to end, it shall end on the
last Business Day of such calendar month, (iii) with respect to any Quoted Rate
Advance, the last day of the applicable Interest Period shall be on or before
the last Business Day of the week in which such Advance is made, and (iv) no
Interest Period in respect of any Advance shall extend beyond the Revolving
Credit Maturity Date.
"Internal Revenue Code" shall mean the Internal Revenue Code of 1986,
as amended from time to time, and the regulations promulgated thereunder.
"Inventory" shall have the meaning giving to such term in the UCC.
"Investment" shall mean, when used with respect to any Person, (a) any
loan, investment or advance made by such Person to any other Person (including,
without limitation, any contingent obligation) in respect of any capital stock,
Debt, obligation or liability of such other Person and (b) any other investment
made by such Person (however acquired) in stock or other ownership interests in
any other Person, including, without limitation, any investment made in exchange
for the issuance of shares of stock of such Person.
"Issuing Bank" shall mean Comerica Bank in its capacity as issuer of
one or more Letters of Credit hereunder, or its successor or substitute
designated by the Company and the Administrative Agent.
"Issuing Office" shall mean such office as Issuing Bank shall designate
as its Issuing Office.
"Letter of Credit Agreement" shall mean, in respect of each Letter of
Credit, the application and related documentation satisfactory to the Issuing
Bank of an Account Party or Account Parties requesting Issuing Bank to issue
such Letter of Credit, as amended from time to time.
"Letter of Credit Documents" is defined in Section 3.7.
"Letter of Credit Fees" shall mean the fees payable to the
Administrative Agent for the accounts of the Revolving Credit Banks in
connection with Letters of Credit pursuant to Section 3.4(a) and (b) hereof.
13
"Letter of Credit Maximum Amount" shall mean Ten Million Dollars
($10,000,000).
"Letter of Credit Obligations" shall mean at any date of determination,
the sum, without duplication, of (a) the aggregate undrawn amount of all Letters
of Credit then outstanding, (b) the aggregate face amount of all Letters of
Credit requested but not yet issued as of such date and (c) the aggregate amount
of Reimbursement Obligations which have not been reimbursed by the Company as of
such date.
"Letter of Credit Payment" shall mean any amount paid or required to
be paid by the Issuing Bank in its capacity hereunder as issuer of a Letter of
Credit as a result of a draft or other demand for payment under any Letter of
Credit.
"Letter(s) of Credit" shall mean any standby letters of credit issued
by Issuing Bank at the request of or for the account of an Account Party or
Account Parties pursuant to Article 3 hereof.
"Lien" shall mean any pledge, assignment, hypothecation, mortgage,
security interest, deposit arrangement, option, trust receipt, conditional sale
or title retaining contract, sale and leaseback transaction, Capital Lease, or
any other similar type of lien, charge, encumbrance, preferential or priority
arrangement, whether based on common law or statute.
"Liquidity Ratio" shall mean as of any date of determination, a ratio
the numerator of which is Cash Equivalents as of such date which are not subject
to any lien or security interest in favor of any person other than Comerica Bank
or the Collateral Agent (for the benefit of the Banks), plus Accounts of Company
and its Subsidiaries as of such date (net of an allowance for doubtful Accounts)
and the denominator of which is current liabilities of Company and its
Subsidiaries as of such date, less deferred revenue as of such date as
determined in accordance with GAAP.
"Loan Documents" shall mean, collectively, this Agreement, the Notes
(if issued), the Letter of Credit Agreements, the Letters of Credit, the
Guaranty, the Subordination Agreements, the Collateral Documents, any Bank
Hedging Agreement and any other documents, certificates, instruments or
agreements executed or delivered pursuant to or in connection with any such
document or this Agreement, as such documents may be amended or otherwise
modified from time to time.
"Loan Parties" shall mean the Company and any of its Subsidiaries which
are party to any of the Loan Documents and "Loan Party" shall mean any one of
them, as the context indicates or otherwise requires.
"Majority Banks" shall mean (a) so long as the Revolving Credit
Aggregate Commitment is outstanding hereunder, at any time Revolving Credit
Banks holding not less than fifty-one percent (51%) of the aggregate principal
amount of the Revolving Credit Aggregate Commitment and (b) if the Revolving
Credit Aggregate Commitment has been terminated, at any time Revolving Credit
Banks holding not less than fifty-one percent (51%) of the aggregate principal
amount of the Indebtedness then outstanding under the Revolving Credit (provided
that, for purposes of determining Majority Banks hereunder, Indebtedness
14
outstanding under the Swing Line or under any Letter of Credit shall be
allocated among the Revolving Credit Banks based on their respective
Percentages; provided however that so long as there are fewer than three
Revolving Credit Banks, "Majority Banks" shall mean all Revolving Credit Banks).
"Material Adverse Change" shall mean a material adverse change in (a)
the long-term prospects of Company or any Significant Guarantor paying the
Indebtedness as it becomes due and payable or (b) the value or the priority of
the Lien against the Collateral securing the Indebtedness, such that the
Majority Banks reasonably determine that the value of the Lien is materially
less than the Indebtedness outstanding.
"Material Adverse Effect" shall mean a material adverse effect on (a)
the business or financial condition of the Company and is Subsidiaries taken as
a whole, (b) the ability of the Company and the Loan Parties to perform their
respective obligations under this Agreement, the Notes (if issued) or any other
Loan Document to which they are parties, or (c) the validity or enforceability
of this Agreement, any of the Notes (if issued) or any of the other Loan
Documents or the rights or remedies of the Agents or the Banks hereunder or
thereunder.
"Mortgage(s)" shall mean any mortgage(s) and deeds of trust of real
property owned or leased by the Company or any Domestic Subsidiary executed and
delivered as of the date hereof, or executed and delivered after the Effective
Date by the Company or any Domestic Subsidiary pursuant to Section 7.18(c)
hereof, in each case in form and substance satisfactory to the Agents, as such
mortgages may be amended or otherwise modified from time to time and "Mortgage"
shall mean any of them.
"Multiemployer Plan" shall mean a Pension Plan which is a multiemployer
plan as defined in Section 4001(a)(3) of ERISA.
"Net Cash Proceeds" shall mean, with respect to any Asset Sale, the
aggregate cash payments received by the Company and/or any Loan Party, as the
case may be, from such Asset Sale, net of (i) the reasonable direct expenses of
sale such as commissions, (ii) pro rated property taxes, (iii) any taxes
actually payable by the Company or such Loan Party in respect of such sales,
taking into account the Company's or such Loan Party's losses, if any, which are
available under applicable law to reduce such gains, (iv) the amount of such
cash payments applied to payment of Debt secured by the assets that are the
subject of the Asset Sale and (v) the amount of such cash payments applied
within one hundred eighty (180) days of such Asset Sale to acquire assets to
replace the assets that are the subject of the Asset Sale, provided that Company
shall provide Agents with notice of any proceeds pursuant to this subsection (v)
and shall promptly deposit such proceeds in a cash collateral account for the
benefit, and at the direction of the Collateral Agent.
"Non-Defaulting Bank" is defined in Section 2.4(c).
"Notes" shall mean the Revolving Credit Notes and the Swing Line Notes.
15
"Operating Lease" shall mean any lease (or other arrangement conveying
the right to use) real or personal property, or any combination thereof, which
lease is not required to be classified as a Capital Lease in accordance with
GAAP.
"Original Credit Agreement" shall have the meaning given thereto in
Recital A hereof.
"Pension Plan" shall mean any plan established and maintained by the
Company or any Subsidiary which is qualified under Section 401(a) of the
Internal Revenue Code and subject to the minimum funding standards of Section
412 of the Internal Revenue Code.
"Percentage" shall mean, with respect to each Revolving Credit Bank,
its percentage share, as set forth on Schedule 1.2 under column 1, of the
Revolving Credit and its risk participation in Letters of Credit and in any
outstanding Swing Line Advances, as such Schedule may be revised from time to
time by Administrative Agent in accordance with Section 13.8.
"Permitted Acquisition" shall mean any acquisition by the Company or
any of its Subsidiaries of assets, businesses or business interests or shares of
stock or other ownership interests of or in any Person ("target") which operates
in substantially the same or a similar line of business as Company or any of its
Subsidiaries and which is conducted in accordance with the following
requirements:
(a) not more than five (5) days after the signing of any
letter of intent for such proposed acquisition which contains
definitive deal terms and conditions or not later than thirty (30) days
before the consummation of the acquisition, whichever first occurs, the
Company shall have provided a copy of the applicable letter of intent
to the Administrative Agent and promptly upon signing the definitive
acquisition documents, Company shall have provided copies thereof to
the Administrative Agent;
(b) on the date of any such acquisition, all necessary or
appropriate governmental, quasi-governmental, agency, regulatory or
similar approvals of applicable jurisdictions (or the respective
agencies, instrumentalities or political subdivisions, as applicable,
of such jurisdictions) and all necessary or appropriate
non-governmental and other third-party approvals which, in each case,
are material to such acquisition have been obtained and are in effect,
and the Company and its Subsidiaries are in compliance in all material
respects therewith, and all necessary or appropriate declarations,
registrations or other filings with any court, governmental or
regulatory authority, securities exchange or any other person have been
made;
(c) the total consideration (excluding for this purpose,
Equity Interests of Company) of all such acquisitions conducted on or
after the Effective Date which is not paid for with stock of Company,
computed on the basis of total acquisition consideration paid or
incurred, or to be paid or incurred, by the Company or its Subsidiaries
with respect thereto, including all Funded Debt which is assumed or to
which such assets, businesses or business or ownership interests or
shares, or any Person so acquired, is subject, shall not exceed Fifty
Million Dollars ($50,000,000) and shall not exceed Thirty Million
Dollars ($30,000,000) during any single fiscal year of
16
the Company until the Company makes an offering of its Equity
Interests, in which case the total consideration (as described above)
of all such acquisitions conducted on or after the Effective Date as
permitted herein shall, on both an aggregate and an annual basis as
described above, be increased by the aggregate cash proceeds of any and
all issuances of Equity Interests made after the Effective Date (net,
in each case, of any costs, expenses, fees or payments to redeem or
repurchase any existing Equity Interests);
(d) within thirty (30) days after any such acquisition has
been completed Company shall deliver to the Administrative Agent
executed copies of all material documents pertaining to such
acquisition, and Company, its Subsidiaries and any of the corporate
entities involved in such acquisition shall execute or cause to be
executed, and provide or cause to be provided to the Administrative
Agent, such documents and instruments (including without limitation,
the security agreements as required by Section 7.18 hereof and opinions
of counsel, amendments, acknowledgments, consents and evidence of
approvals or filings) as reasonably requested by the Administrative
Agent, if any;
(e) within thirty (30) days prior to the effective date of the
acquisition, Company shall deliver to the Administrative Agent, (i) a
pro forma financial statement for the target, as of the effective date
of the acquisition and (ii) Pro Forma Projected Financial Information
with respect to the acquisition; and
(f) both immediately before and after such acquisition, no
Default or Event of Default (whether or not related to such
acquisition), has occurred and is continuing and on the date of
consummation of such acquisition, Company shall have provided to the
Administrative Agent a certificate of the chief financial officer of
Company stating that no Default or Event of Default has occurred as a
result of such acquisition or otherwise.
"Permitted Liens" shall mean with respect to any Person:
(a) Liens for taxes not yet delinquent or which are being
contested in good faith by appropriate proceedings, provided that
adequate reserves with respect thereto are maintained on the books of
such Person in conformity with GAAP;
(b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's, landlord's liens or other like Liens arising in the
ordinary course of business which are not overdue for a period of more
than 60 days or which are being contested in good faith by appropriate
proceedings; provided however that a reserve or other appropriate
provisions shall have been made therefor in accordance with GAAP;
(c) pledges or deposits made in the ordinary course of
business in connection with workers' compensation, unemployment
insurance and other social security legislation and deposits securing
liability to insurance carriers under insurance or self-insurance
arrangements;
17
(d) deposits to secure (i) the performance of tenders or bids,
trade contracts (other than for borrowed money), statutory obligations,
surety, customs, stay and appeal bonds, performance and return of money
bonds, government contracts and other obligations of a like nature or
(ii) the performance of leases permitted hereunder, in each case given
or incurred on terms, in amounts and otherwise in the ordinary course
of business;
(e) easements, rights-of-way, restrictions, minor defects or
irregularities in title, minor survey exceptions, reservations,
utilities, and other similar encumbrances or Liens incurred in the
ordinary course of business which, in the aggregate, are not
substantial in amount and which do not in any case materially detract
from the value of the property subject thereto or materially interfere
with the ordinary conduct of the business of such Person; and
(f) any attachment or judgment Lien not constituting an Event
of Default under subsection 9.1(h);
(g) Liens on assets acquired in any Permitted Acquisition to
the extent such liens were in existence at the time of the acquisition,
such Liens cover only the assets acquired in the acquisition and were
not created or incurred in anticipation of the acquisition;
(h) leases or subleases of real property interests granted to
third parties in the ordinary course of business and not interfering in
any material respect with the ordinary conduct of business by Company
or any of its Subsidiaries;
(i) any (i) interest or title of a lessor or sublessor under
any lease permitted hereunder, (ii) restriction or encumbrance that the
interest or title of such lessor or sublessor may be subject to, or
(iii) subordination of the interest of the lessee or sublessee under
such lease to any restriction or encumbrance referred to in the
preceding clause (ii), so long as the holder of such restriction of
encumbrance agrees to recognize the rights of such lessee or sublessee
under such lease;
(j) Liens in favor of customs and revenue authorities arising
as a matter of law to secure payment of customs duties in connection
with the importation of goods in the ordinary course of business;
(k) any zoning or similar law or right reserved to or vested
in any governmental office or agency to control or regulate the use of
any real property;
(l) licenses of Proprietary Rights granted by Company or any
of its Subsidiaries in the ordinary course of business and not
interfering in any material respect with the ordinary conduct of
business by Company or any of its Subsidiaries;
(m) Liens securing Debt permitted by Section 8.1(c), provided
that (i) such Liens shall be created within ninety (90) days of the
acquisition of such fixed or capital asset, (ii) such Liens do not at
any time encumber any property other than the property,
18
equipment or improvements financed by such Debt, and (iii) the
principal amount of Debt secured by any such Lien shall at no time
exceed 100% of the original purchase price of such property, equipment
or improvements (purchase price to include for this purpose delivery,
installation and tax expense);
(n) Liens in favor of the Collateral Agent, as security for
the Indebtedness (including Indebtedness under any Bank Hedging
Agreements);
(o) attachments, judgments and other similar Liens (other than
any judgment that is described in clause (h) of Section 9.1 and
constitutes an Event of Default thereunder), arising in connection with
court proceedings, provided that the execution or other enforcement of
such Liens is effectively stayed within 30 days and claims secured
thereby are being actively contested in good faith by appropriate
proceedings;
(p) other Liens, existing on the Effective Date, set forth on
Schedule 8.2 attached hereto and any renewals or refinancing of the
Debt secured thereby in amounts not exceeding the scheduled amounts
(less any required amortization according to the terms thereof), on
terms no less favorable to such Person as in effect on the Effective
Date provided that the average life to maturity of such renewal or
refinancing Debt is greater than or equal to that of the Debt renewed
or refinanced and such renewal Debt or refinancing Debt is otherwise in
compliance with this Agreement;
(q) Liens on the assets of Foreign Subsidiaries granted to
secure the Debt permitted under Section 8.1(n) and Liens on cash
deposits of a Foreign Subsidiary given to secure obligations in respect
of letters of credit issued for the account of such Foreign Subsidiary;
(r) Liens granted to banks or other financial institutions in
the ordinary course of business in connection with deposit,
disbursement or concentration accounts (other than in connection with
borrowed money) maintained with such banks or financial institutions on
funds and other items in such accounts;
(s) Liens on cash representing proceeds from the issuance of
Debt for the purpose of securing interest payments in connection with
such Debt; and
(t) other Liens securing obligations in an aggregate amount
not exceeding $1,000,000 at any one time outstanding.
"Person" shall mean a natural person, corporation, limited liability
company, partnership, limited liability partnership, trust, incorporated or
unincorporated organization, joint venture, joint stock company, or a government
or any agency or political subdivision thereof or other entity of any kind.
"Pledge Agreements" shall mean the Company Pledge Agreement and the
Foreign Pledge Agreements.
"Potential Financial Institution" is defined in Section 2.4(c).
19
"Prime-based Advance" shall mean an Advance which bears interest at the
Prime-based Rate.
"Prime-based Rate" shall mean, for any day, that rate of interest which
is equal to the sum of the Applicable Margin plus the greater of (i) the Prime
Rate, and (ii) the Alternate Base Rate.
"Prime Rate" shall mean the per annum rate of interest announced by the
Administrative Agent, at its main office from time to time as its "prime rate"
(it being acknowledged that such announced rate may not necessarily be the
lowest rate charged by the Administrative Agent to any of its customers), which
Prime Rate shall change simultaneously with any change in such announced rate.
"Pro Forma Projected Financial Information" shall mean, as to any
proposed acquisition, a statement executed by a Responsible Officer (supported
by reasonable detail) setting forth the total consideration to be paid or
incurred in connection with the proposed acquisition, and pro forma combined
projected financial information for the Company and the Consolidated
Subsidiaries and the acquisition target (if applicable), consisting of projected
balance sheets as of the proposed effective date of the acquisition or the
closing date thereof and as of the end of at least the next succeeding three (3)
fiscal years of the Company following the acquisition and projected statements
of income and cash flows for each of those years, including sufficient detail to
permit calculation of the amounts and the ratios described in Sections 7.9
through 7.11 hereof, as projected as of the effective date of the acquisition
and for those fiscal years and accompanied by (i) a statement setting forth a
calculation of the ratios and amounts so described, (ii) a statement in
reasonable detail specifying all material assumptions underlying the projections
and (iii) such other information as the Administrative Agent or Majority Banks
shall reasonably request.
"Purchasing Bank" shall have the meaning set forth in Section 11.7.
"Proprietary Rights" shall mean, as to Company and the Subsidiaries all
of their now owned and hereafter arising or acquired: licenses, franchises,
permits, patents, patent rights, copyrights, works which are the subject matter
of copyrights, trademarks, service marks, trade names, trade styles, patent
trademark and service mark applications, mask works, and all licenses and rights
related to any of the foregoing, including those patents, trademarks, service
marks, trade names, mask works and copyrights set forth on Schedule 1.5 hereto,
and all other rights under any of the foregoing, all extensions, renewals,
reissues, divisions, continuations, and continuations-in-part of any of the
foregoing, and all rights to sue for past, present and future infringement of
any of the foregoing.
"Quoted Rate" shall mean the rate of interest per annum offered by the
Swing Line Bank in its sole discretion with respect to a Swing Line Advance.
"Quoted Rate Advance" means any Swing Line Advance which bears interest
at the Quoted Rate.
20
"Rating Agency" shall mean Moody's Investor Services, Inc., Standard
and Poor's Ratings Services, their respective successors or any other nationally
recognized statistical rating organization which is acceptable to the
Administrative Agent.
"Register" is defined in Section 13.8(f) hereof.
"Reimbursement Obligation(s)" shall mean the aggregate amount of all
unreimbursed drawings under all Letter of Credit Agreements (excluding for the
avoidance of doubt, amounts deemed to have been advanced under Section 3.6(a))
together with all other sums, fees, charges and amounts which may be owing to
the Issuing Bank under such Letter of Credit Agreement or this Agreement
relating to Letters of Credit.
"Request for Advance" shall mean a Request for Revolving Credit Advance
or a Request for Swing Line Advance, as the context may indicate, or otherwise
require.
"Request for Revolving Credit Advance" shall mean a request for a
Revolving Credit Advance issued by the Company under Section 2.3 of this
Agreement in the form annexed hereto as Exhibit A, as amended or otherwise
modified in accordance with the terms hereof.
"Request for Swing Line Advance" shall mean a request for a Swing Line
Advance issued by the Company under Section 2.5(c) of this Agreement in the form
attached hereto as Exhibit D, as amended or otherwise modified in accordance
with the terms of this Agreement.
"Requirement of Law" shall mean as to any Person, the certificate of
incorporation and bylaws, the partnership agreement or other organizational or
governing documents of such Person and any law, treaty, rule or regulation or
determination of an arbitration or a court or other Governmental Authority, in
each case applicable to or binding upon such Person or any of its property or to
which such Person or any of its property is subject.
"Responsible Officer" shall mean the Chief Executive Officer, Chief
Financial Officer, Treasurer, Corporate Controller or the President of the
Company.
"Revolving Credit" shall mean the Revolving Credit Advances to be
advanced to the Company by the applicable Revolving Credit Banks pursuant to
Article 2 hereof, in an aggregate amount (subject to the terms hereof), not to
exceed, at any one time outstanding, the Revolving Credit Aggregate Commitment.
"Revolving Credit Advance" shall mean a borrowing requested by the
Company and made by the Revolving Credit Banks under Section 2.1 of this
Agreement, including without limitation any readvance, refunding or conversion
of such borrowing pursuant to Section 2.3 hereof and any advance in respect of a
Letter of Credit under Section 3.6(a) hereof, and shall include, as applicable,
a Eurocurrency-based Advance and/or a Prime-based Advance.
"Revolving Credit Aggregate Commitment" shall mean One Hundred Million
Dollars ($100,000,000), subject to reduction or termination under Section 2.13,
2.14 or 9.2 hereof.
"Revolving Credit Banks" shall mean the financial institutions from
time to time parties hereto as lenders of the Revolving Credit.
21
"Revolving Credit Facility Fee" shall mean the fees payable to
Administrative Agent for distribution to the Revolving Credit Banks pursuant to
Section 2.12 hereof.
"Revolving Credit Maturity Date" shall mean the earlier to occur of (i)
February 13, 2007, as such date may be extended pursuant to Section 2.16 hereof,
and (ii) the date on which the Revolving Credit Aggregate Commitment shall
terminate in accordance with the provisions of this Agreement.
"Revolving Credit Notes" shall mean the revolving credit notes
described in Section 2.2 hereof, made by the Company to each of the Revolving
Credit Banks in the form annexed to this agreement as Exhibit B, as such notes
may be amended or supplemented from time to time, and any other notes issued in
substitution, replacement or renewal thereof from time to time.
"Security Agreement" shall mean the Security Agreement substantially in
the form of the Security Agreement annexed hereto as Exhibit K executed and
delivered by the Company and the Guarantors in favor of the Collateral Agent, as
amended or otherwise modified from time to time.
"Significant Foreign Subsidiary" shall mean any Foreign Subsidiary
identified on Schedule 1.3 hereto, together with any other Foreign Subsidiary,
whether existing as of the Effective Date or created or acquired (directly or
indirectly) by the Company thereafter, which has total assets, on an individual
basis, on any date of determination, of $10,000,000 (or more) or which has, on
an individual basis, as of the most recent trailing twelve month period, then
ending, total revenues (determined in conformity with GAAP) of $20,000,000 or
more.
"Significant Guarantor" shall mean any Guarantor identified on Schedule
1.6 hereto, together with any other Guarantor that would be a "significant
subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated
pursuant to the Securities Act of 1933, as amended, as such Regulation is in
effect on the Effective Date.
"Stock Option Plan" shall mean the employee stock option plans of
Company in effect on the Effective Date, as amended from time to time by
Company's Board of Directors and any other employee stock option plan that
Company adopts from time to time during the term hereof.
"Subordination Agreement" shall mean any subordination agreement
entered into from time to time between the Administrative Agent, for and on
behalf of the Banks, and any holder of Subordinated Debt, to evidence the
subordination of such Debt to the Indebtedness hereunder, as each such
subordination agreement may be amended from time to time.
"Subordinated Debt" shall mean any Funded Debt of the Company which has
been subordinated in right of payment and priority to the Indebtedness, all on
terms and conditions satisfactory to the Administrative Agent and the Majority
Banks.
"Subordinated Debt Documents" shall mean and include any Subordination
Agreement, Subordinated Note, and any other documents evidencing any other
Subordinated Debt, in each
22
case, as the same may be amended, modified or supplemented from time to time in
compliance with the terms of this Agreement.
"Subordinated Notes" shall mean the any notes or instruments evidencing
Subordinated Debt as the same may be amended, modified or supplemented from time
to time in compliance with the terms of this Agreement and the related
Subordination Agreement.
"Subsidiary(ies)" shall mean any other corporation, association, joint
stock company, business trust, limited liability company or any other business
entity of which more than fifty percent (50%) of the outstanding voting stock,
share capital, membership or other interests, as the case may be, is owned
either directly or indirectly by any Person or one or more of its Subsidiaries,
or the management of which is otherwise controlled, directly, or indirectly
through one or more intermediaries, or both, by any Person and/or its
Subsidiaries. Unless otherwise specified to the contrary herein or the context
otherwise requires, Subsidiary(ies) shall refer to each Person which is a
Subsidiary of the Company.
"Swing Line" shall mean the Revolving Credit loans to be advanced to
the Company by the Swing Line Bank pursuant to Section 2.5 hereof, in an
aggregate amount (subject to the terms hereof), not to exceed, at any one time
outstanding, the Swing Line Maximum Amount.
"Swing Line Advance" shall mean a borrowing requested by Company and
made by Swing Line Bank to the Company pursuant to Section 2.5 hereof.
"Swing Line Bank" shall mean Comerica Bank as successor by merger to
Comerica Bank - California in its capacity as lender under Section 2.5 of this
Agreement or its successor as lender of the Swing Line.
"Swing Line Maximum Amount" shall mean Five Million Dollars
($5,000,000).
"Swing Line Notes" shall mean the swing line notes which may be issued
by the Company at the request of Swing Line Bank pursuant to Section 2.5(a)
hereof in the form annexed hereto as Exhibit C as such Notes may be amended or
supplemented from time to time, and any notes issued in substitution,
replacement or renewal thereof from time to time.
"Uniform Commercial Code" or "UCC" shall mean the Uniform Commercial
Code of any applicable state, and, unless specified otherwise the Uniform
Commercial Code as in effect in the State of California.
"Unrestricted Cash" shall mean as of any date of determination,
aggregate cash and Cash Equivalents which is not subject to any Lien in favor of
any Person other than the Banks, less the aggregate amount of outstanding checks
and other items issued by Company or its Subsidiaries, as applicable, as of such
date.
2. REVOLVING CREDIT
2.1 Commitment. Subject to the terms and conditions of this Agreement
(including without limitation Section 2.3 hereof), each Revolving Credit Bank
severally and for itself alone agrees to make Advances of the Revolving Credit
in Dollars to the Company from time to
23
time on any Business Day during the period from the Effective Date hereof until
(but excluding) the Revolving Credit Maturity Date in an aggregate amount, not
to exceed at any one time outstanding such Bank's Percentage of the Revolving
Credit Aggregate Commitment. Subject to the terms and conditions set forth
herein, advances, repayments and readvances may be made under the Revolving
Credit.
2.2 Accrual of Interest and Maturity; Evidence of Indebtedness. (a) The
Company hereby unconditionally promises to pay to the Administrative Agent for
the account of each Revolving Credit Bank the then unpaid principal amount of
each Revolving Credit Advance (plus all accrued and unpaid interest) of such
Revolving Credit Bank to the Company on the Revolving Credit Maturity Date and
on such other dates and in such other amounts as may be required from time to
time pursuant to this Agreement.
(a) Each Revolving Credit Bank shall maintain in accordance
with its usual practice an account or accounts evidencing Indebtedness
of the Company to the appropriate lending office of such Revolving
Credit Bank resulting from each Revolving Credit Advance made by such
lending office of such Revolving Credit Bank from time to time,
including the amounts of principal and interest payable thereon and
paid to such Revolving Credit Bank from time to time under this
Agreement.
(b) The Administrative Agent shall maintain the Register
pursuant to Section 13.8(f), and a subaccount therein for each
Revolving Credit Bank, in which Register and subaccounts (taken
together) shall be recorded (i) the amount of each Revolving Credit
Advance made hereunder, the type thereof and each Interest Period
applicable to any Eurocurrency-based Advance, (ii) the amount of any
principal or interest due and payable or to become due and payable from
the Company to each Revolving Credit Bank hereunder in respect of the
Revolving Credit Advances and (iii) both the amount of any sum received
by the Administrative Agent hereunder from the Company in respect of
the Revolving Credit Advances and each Revolving Credit Bank's share
thereof.
(c) The entries made in the Register and the accounts of each
Revolving Credit Bank maintained pursuant to paragraphs (b) and (c) of
this Section 2.2 shall absent manifest error, to the extent permitted
by applicable law, be conclusive evidence of the existence and amounts
of the obligations of the Company therein recorded, as well as the date
such amounts have been received; provided, however, that the failure of
any Revolving Credit Bank or the Administrative Agent to maintain the
Register or any such account, as applicable, or any error therein,
shall not in any manner affect the obligation of the Company to repay
the Revolving Credit Advances (and all other amounts owing with respect
thereto) made to the Company by the Revolving Credit Banks in
accordance with the terms of this Agreement.
(d) The Company agrees that, upon written request to the
Administrative Agent (with a copy to the Company) by any Revolving
Credit Bank, the Company will execute and deliver, to such Revolving
Credit Bank, at Company's own expense, a Revolving Credit Note
evidencing the outstanding Revolving Credit Advances owing to such
Revolving Credit Bank.
24
2.3 Requests for and Refundings and Conversions of Advances. The
Company may request an Advance of the Revolving Credit, refund any such Advance
in the same type of Advance or convert any such Advance to any other type of
Advance of the Revolving Credit only after delivery to Administrative Agent of a
Request for Revolving Credit Advance executed by a person previously authorized
(in a writing delivered to the Administrative Agent) by the Company to execute
such Request, subject to the following:
(a) each such Request for Revolving Credit Advance shall set
forth the information required on the Request for Revolving Credit
Advance form annexed hereto as Exhibit A, including without limitation:
(i) the proposed date of such Advance, which
must be a Business Day;
(ii) whether such Advance is a refunding or
conversion of an outstanding Advance; and
(iii) whether such Advance is to be a Prime-based
Advance or a Eurocurrency-based Advance,
and, except in the case of a Prime-based
Advance, the first Interest Period
applicable thereto.
(b) each such Request for Revolving Credit Advance shall be
delivered to Administrative Agent by 1:00 p.m. (Detroit time) three (3)
Business Days prior to the proposed date of Advance, except in the case
of a Prime-based Advance, for which the Request for Advance must be
delivered by 1:00 p.m. (Detroit time) one (1) Business Day prior to
such proposed date for Advances;
(c) on the proposed date of such Advance, after giving effect
to all Advances and Letters of Credit requested by the Company on such
date (including, without duplication, the deemed Advances funded by the
Administrative Agent under Section 3.6(a) hereof in respect of the
Company's or an applicable Account Party's reimbursement obligation
hereunder), the sum of (x) the aggregate principal amount of all
Advances of the Revolving Credit and of the Swing Line requested or
outstanding on such date plus (y) the Letter of Credit Obligations as
of such date, shall not exceed the then applicable Revolving Credit
Aggregate Commitment;
provided however, that, in the case of any Advance being applied to
refund or convert an outstanding Advance, the aggregate principal
amount of such Advances to be refunded or converted shall not be
included for purposes of calculating availability under this Section
2.3(c);
(d) in the case of a Prime-based Advance, the principal amount
of the initial funding of such Advance, as opposed to any refunding or
conversion thereof, shall be at least $1,500,000;
(e) in the case of a Eurocurrency-based Advance, the principal
amount of such Advance, plus the amount of any other outstanding
Advance of the Revolving Credit to
25
be then combined therewith having the same Applicable Interest Rate and
Interest Period, if any, shall be at least $2,000,000 (or a larger
integral multiples of $100,000) and at any one time there shall not be
in effect more than 3 Eurocurrency-based Rates and
Eurocurrency-Interest Periods;
(f) a Request for Revolving Credit Advance, once delivered to
Administrative Agent, shall not be revocable by the Company;
(g) each Request for Revolving Credit Advance shall constitute
a certification by the Company, as of the date thereof that:
(i) both before and after such Advance, the
obligations of the Loan Parties set forth in
this Agreement and the other Loan Documents
to which such Persons are parties are valid,
binding and enforceable obligations of such
Loan Parties (subject to the limitations set
forth in Section 6.7 and 6.8 of this
Agreement);
(ii) all conditions to Advances of the Revolving
Credit have been satisfied, and shall remain
satisfied to the date of such Advance (both
before and after giving effect to such
Advance);
(iii) there is no Default or Event of Default in
existence, and none will exist upon the
making of such Advance (both before and
after giving effect to such Advance);
(iv) the representations and warranties of the
Loan Parties contained in this Agreement and
the other Loan Documents are true and
correct in all material respects and shall
be true and correct in all material respects
as of the making of such Advance (both
before and after giving effect to such
Advance), other than any representation or
warranty that expressly speaks only as of a
different date; and
(v) the execution of such Request for Advance
will not violate the material terms and
conditions of any material contract,
agreement or other borrowing of the Company.
Administrative Agent, acting on behalf of the Revolving Credit Banks,
may, at its option, lend under this Section 2.3 upon the telephone
request of a person previously authorized (in a writing delivered to
the Administrative Agent) by the Company to make such requests and, in
the event Administrative Agent, acting on behalf of the Revolving
Credit Banks, makes any such Advance upon a telephone request, the
requesting officer shall fax to Administrative Agent, on the same day
as such telephone request, a Request for Advance. The Company hereby
authorizes Administrative Agent to disburse Advances under this Section
2.3 pursuant to the telephone instructions of any person purporting to
be a person identified by name on a written list of persons authorized
by the Company and delivered to Administrative Agent prior to the date
of
26
such request to make Requests for Advance on behalf of the Company.
Notwithstanding the foregoing, the Company acknowledges that the
Company shall bear all risk of loss resulting from disbursements made
upon any telephone request. Each telephone request for an Advance shall
constitute a certification of the matters set forth in the Request for
Revolving Credit Advance form as of the date of such requested Advance.
2.4 Disbursement of Advances.
(a) Upon receiving any Request for Revolving Credit Advance
from the Company under Section 2.3 hereof, Administrative Agent shall
promptly notify each Revolving Credit Bank by wire, telex or telephone
(confirmed by wire, telecopy or telex) of the amount of such Advance to
be made and the date such Advance is to be made by said Revolving
Credit Bank pursuant to its Percentage of such Advance. Unless such
Revolving Credit Bank's commitment to make Advances of the Revolving
Credit hereunder shall have been suspended or terminated in accordance
with this Agreement, each such Revolving Credit Bank shall make
available the amount of its Percentage of each Advance in immediately
available funds to Administrative Agent, as follows:
(i) for Domestic Advances, at the office of
Administrative Agent located at One Detroit
Center, Detroit, Michigan 48226, not later
than 3:00 p.m. (Detroit time) on the date of
such Advance; and
(ii) for Eurocurrency-based Advances, at the
Administrative Agent's Correspondent for the
account of the Eurocurrency Lending Office
of the Administrative Agent, not later than
12 noon (the time of the Administrative
Agent's Correspondent) on the date of such
Advance.
(b) Subject to submission of an executed Request for Revolving
Credit Advance by the Company without exceptions noted in the
compliance certification therein, Administrative Agent shall make
available to the Company, the aggregate of the amounts so received by
it from the Revolving Credit Banks in like funds and currencies:
(i) for Domestic Advances, not later than 4:00
p.m. (Detroit time) on the date of such
Advance by credit to an account of Company
maintained with Administrative Agent or to
such other account or third party as Company
may reasonably direct; and
(ii) for Eurocurrency-based Advances, not later
than 4:00 p.m. (the time of the
Administrative Agent's Correspondent) on the
date of such Advance, by credit to an
account of the Company maintained with
Administrative Agent's Correspondent or to
such other account or third party as the
Company may reasonably direct.
27
(c) Administrative Agent shall deliver the documents and
papers received by it for the account of each Revolving Credit Bank to
such Revolving Credit Bank or upon its order. Unless Administrative
Agent shall have been notified by any Revolving Credit Bank prior to
the date of any proposed Revolving Credit Advance that such Revolving
Credit Bank does not intend to make available to Administrative Agent
such Revolving Credit Bank's Percentage of such Advance, Administrative
Agent may assume that such Revolving Credit Bank has made such amount
available to Administrative Agent on such date, as aforesaid and may,
in reliance upon such assumption, make available to the Company a
corresponding amount. If such amount is not in fact made available to
Administrative Agent by such Revolving Credit Bank, as aforesaid,
Administrative Agent shall be entitled to recover such amount on demand
from such Revolving Credit Bank. If such Revolving Credit Bank does not
pay such amount within one (1) Business Day of the Administrative
Agent's demand therefor and the Administrative Agent has in fact made a
corresponding amount available to the Company, the Administrative Agent
shall promptly notify the Company and the Company shall pay such amount
to Administrative Agent, if such notice is delivered to the Company
prior to 1:00 p.m. (Detroit time) on a Business Day, on the day such
notice is received, and otherwise on the next Business Day.
Administrative Agent shall also be entitled to recover from such
Revolving Credit Bank or the Company, as the case may be, but without
duplication, interest on such amount in respect of each day from the
date such amount was made available by Administrative Agent to the
Company, to the date such amount is recovered by Administrative Agent,
at a rate per annum equal to:
(i) in the case of such Revolving Credit Bank,
for the first two (2) Business Days such
amount remains unpaid, with respect to
Domestic Advances, the Federal Funds
Effective Rate, and with respect to
Eurocurrency-based Advances, Administrative
Agent's aggregate marginal cost (including
the cost of maintaining any required
reserves or deposit insurance and of any
fees, penalties, overdraft charges or other
costs or expenses incurred by Administrative
Agent as a result of such failure to deliver
funds hereunder) of carrying such amount and
thereafter, at the rate of interest then
applicable to such Revolving Credit
Advances; and
(ii) in the case of Company, the rate of interest
then applicable to such Advance of the
Revolving Credit.
The obligation of any Revolving Credit Bank to make any Advance of the
Revolving Credit hereunder shall not be affected by the failure of any
other Revolving Credit Bank to make any Advance hereunder, and no
Revolving Credit Bank shall have any liability to the Company or any of
its Subsidiaries, the Agents, any other Revolving Credit Bank, or any
other party for another Revolving Credit Bank's failure to make any
loan or Advance hereunder. In the event any Revolving Credit Bank shall
fail to advance any amounts required to be advanced in accordance with
the terms of this Article 2 (a "Defaulting Bank"), the Administrative
Agent shall promptly provide written notice thereof to the Company and
to each other Revolving Credit Bank (each such other
28
Revolving Credit Bank being referred to in this Section as a
"Non-Defaulting Bank"). Each Non-Defaulting Bank shall have ten (10)
Business Days from receipt of said notice to exercise its option to
agree to enter into an agreement pursuant to which the Non-Defaulting
Bank shall assume the Defaulting Bank's rights and obligations under
this Agreement, its Notes and the other Loan Documents. The
Non-Defaulting Bank shall exercise such option by providing written
notice of same to the Defaulting Bank (and if there is more than one
Non-Defaulting Bank, the assignment agreement shall be entered into
with the Non-Defaulting Bank who first notifies the Defaulting Bank of
its decision to exercise said option) and to the Company. If no
Non-Defaulting Bank shall exercise the above-described option within
the said ten (10) Business Day period and if the Company shall, subject
to Section 13.8(c) hereof, within sixty (60) days of delivering the
notice described above, advise such Defaulting Bank of another bank or
financial institution to which assignments are permitted pursuant to
Section 13.8(c) hereof and which is willing to assume such Defaulting
Bank's rights and obligations under this Agreement, its Notes and the
other Loan Documents (each such bank or financial institution being
hereinafter referred to as a "Potential Financial Institution"), such
Defaulting Bank shall, subject to Section 13.8(c), assign its said
rights and obligations to the Potential Financial Institution; provided
however that any such assignment shall not alter the Company's remedies
vis a vis the Defaulting Bank. During the period that a Bank is a
Defaulting Bank (i) it shall not be deemed to be a "Bank" for purposes
of voting on any matters with respect to any of the Loan Documents, and
(ii) if the Defaulting Bank has failed to make any required advance
within three (3) Business Days of notice from the Administrative Agent
that it is a Defaulting Bank, to the extent permitted by applicable
law, any scheduled payment of and any voluntary or mandatory prepayment
of the Indebtedness shall be applied to the Indebtedness of the other
Banks as though the Defaulting Bank held no Indebtedness.
2.5 Swing Line Advances. (a) The Swing Line Bank shall, on the terms
and subject to the conditions hereinafter set forth (including without
limitation Section 2.5(c) hereof), make one or more advances (each such advance
being a "Swing Line Advance") to the Company, from time to time on any Business
Day during the period from the date hereof to (but excluding) the Revolving
Credit Maturity Date in an amount not to exceed in the aggregate at any time
outstanding the Swing Line Maximum Amount. Swing Line Bank shall maintain in
accordance with its usual practice an account or accounts evidencing
indebtedness of the Company to Swing Line Bank resulting from each Swing Line
Advance of such Bank from time to time, including the amounts of principal and
interest payable thereon and paid to such Bank from time to time. The entries
made in such account or accounts of Swing Line Bank shall, to the extent
permitted by applicable law, be conclusive evidence, absent manifest error, of
the existence and amounts of the obligations of the Company therein recorded;
provided, however, that the failure of Swing Line Bank to maintain such account,
as applicable, or any error therein, shall not in any manner affect the
obligation of the Company to repay the Swing Line Advances (and all other
amounts owing with respect thereto) made to Company by Swing Line Bank in
accordance with the terms of this Agreement. Advances, repayments and readvances
under the Swing Line may be made, subject to the terms and conditions of this
Agreement. Each Swing Line Advance shall mature and the principal amount thereof
shall be due and payable by the Company in the case of any Quoted Rate Advance,
on the last day of
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the Interest Period applicable thereto (if any) and, in the case of any
Prime-based Advance, on the Revolving Credit Maturity Date.
The Company agrees that, upon the written request of Swing Line Bank,
the Company will execute and deliver to Swing Line Bank a Swing Line Note;
provided, that the delivery of such Swing Line Note shall not be a condition
precedent to the Effective Date.
(b) Accrual of Interest. Each Swing Line Advance shall, from
time to time after the date of such Advance, bear interest at its
Applicable Interest Rate. The amount and date of each Swing Line
Advance, its Applicable Interest Rate, its Interest Period, if any, and
the amount and date of any repayment shall be noted on Swing Line
Bank's account maintained pursuant to Section 2.5(a), which records
will be conclusive evidence thereof, absent manifest error; provided,
however, that any failure by the Swing Line Bank to record any such
information shall not relieve the Company of its obligation to repay
the outstanding principal amount of such Advance, all interest accrued
thereon and any amount payable with respect thereto in accordance with
the terms of this Agreement and the other Loan Documents.
(c) Requests for Swing Line Advances. The Company may request
a Swing Line Advance only after the delivery to Swing Line Bank of a
Request for Swing Line Advance executed by a person authorized (in a
writing a copy of which has been previously delivered to the
Administrative Agent) by the Company to make such requests, subject to
the following:
(i) each such Request for Swing Line Advance
shall set forth the information required on
the Request for Advance form annexed hereto
as Exhibit D, including without limitation:
(A) the proposed date of such Swing Line
Advance, which must be a Business Day;
(B) whether such Swing Line Advance is to be
a Prime-based Advance or a Quoted Rate Advance; and
(C) in the case of a Quoted Rate Advance,
the duration of the Interest Period applicable
thereto.
(ii) on the proposed date of such Swing Line
Advance, after giving effect to all Swing
Line Advances requested by the Company on
such date of determination, the aggregate
principal amount of all Swing Line Advances
outstanding on such date shall not exceed
the Swing Line Maximum Amount.
(iii) on the proposed date of such Swing Line
Advance, after giving effect to all Advances
and Letters of Credit requested by the
Company on such date (including, without
duplication, deemed Advances made under
Section 3.6(a) hereof in respect of the
30
Company's or an applicable Account Party's
reimbursement obligation hereunder) of
determination, the sum of (x) the aggregate
principal amount of all Advances of the
Revolving Credit and of the Swing Line
requested or outstanding on such date plus
(y) the Letter of Credit Obligations on such
date shall not exceed the then applicable
Revolving Credit Aggregate Commitment;
(iv) in the case of a Swing Line Advance that is
a Prime-based Advance, the principal amount
of the initial funding of such Advance, as
opposed to any refunding or conversion
thereof, shall be at least Two Hundred Fifty
Thousand Dollars ($250,000) or such lesser
amount as agreed to by the Administrative
Agent from time to time.
(v) in the case of a Swing Line Advance that is
a Quoted Rate Advance, the principal amount
of such Advance plus any other outstanding
Advances of the Swing Line to be then
combined therewith having the same
Applicable Interest Rate and Interest
Period, if any, shall be at least Two
Hundred Fifty Thousand Dollars ($250,000)
(or a larger integral multiple of Ten
Thousand Dollars ($10,000)), or such lesser
amount as agreed to by the Administrative
Agent from time to time, and at any one time
there shall not be in effect more than two
(2) Applicable Interest Rates and Interest
Periods;
(vi) each such Request for Swing Line Advance
shall be delivered to the Swing Line Bank by
2:00 p.m. (Detroit time) on the proposed
date of the Advance;
(vii) each Request for Swing Line Advance, once
delivered to Swing Line Bank, shall be
irrevocable by the Company, and shall
constitute and include a certification by
the Company as of the date thereof that:
(A) both before and after making such Swing
Line Advance, the obligations of the Loan Parties set
forth in this Agreement and the other Loan Documents,
are valid, binding and enforceable obligations of
such Loan Parties (subject to the limitations set
forth in Section 6.7 of this Agreement);
(B) all conditions to the making of Swing
Line Advances have been satisfied (both before and
after giving effect to such Advance);
(C) both before and after giving effect to
such Swing Line Advance, there is no Default or Event
of Default in existence; and
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(D) both before and after giving effect to
such Swing Line Advance, the representations and
warranties of the Loan Parties contained in this
Agreement and the other Loan Documents are true and
correct in all material respects, other than any
representation or warranty that expressly speaks only
as of a different date.
Swing Line Bank, may, at its option, lend under this Section 2.5(c)
upon the telephone request of an authorized officer of Company and, in the event
Swing Line Bank makes any such Advance upon a telephone request, the requesting
officer shall, if so requested by Swing Line Bank, fax to Swing Line Bank, on
the same day as such telephone request, a Request for Swing Line Advance.
Company hereby authorizes Swing Line Bank to disburse Advances under this
Section 2.5(c) pursuant to the telephone instructions of any person purporting
to be a person identified by name on a written list of persons authorized by the
Company to make Requests for Advance on behalf of the Company. Notwithstanding
the foregoing, the Company acknowledges that Company shall bear all risk of loss
resulting from disbursements made upon any telephone request. Each telephone
request for an Advance shall constitute a certification of the matters set forth
in the Request for Swing Line Advance form as of the date of such requested
Advance. Swing Line Bank shall promptly deliver to Administrative Agent by
telecopy a copy of any Request for Advance received hereunder.
(d) Disbursement of Swing Line Advances. Subject to submission
of an executed Request for Swing Line Advance by the Company without
exceptions noted in the compliance certification therein, Swing Line
Bank shall make available to the Company the amount so requested, in
like funds and currencies, not later than 4:00 p.m. (Detroit time) on
the date of such Advance by credit to an account of the Company
maintained with Administrative Agent or to such other account or third
party as the Company may reasonably direct in writing.
Swing Line Bank shall promptly notify Administrative Agent of any Swing Line
Advance by telephone, telex or telecopier.
(e) Refunding of or Participation Interest in Swing Line
Advances.
(i) The Administrative Agent, at any time in its
sole and absolute discretion, may, and on
the last Business Day of each week shall, in
each case on behalf of the Company (which
hereby irrevocably directs the
Administrative Agent to act on its behalf)
request each of the Revolving Credit Banks
(including the Swing Line Bank in its
capacity as a Revolving Credit Bank) to make
an Advance of the Revolving Credit to the
Company, in an amount equal to such
Revolving Credit Bank's Percentage of the
principal amount of the aggregate Swing Line
Advances outstanding on the date such notice
is given (the "Refunded Swing Line
Advances"); provided however that Swing Line
Advances which are carried at the Quoted
Rate which are converted to Revolving Credit
Advances at the request of the
Administrative Agent at a time when no
Default or Event of Default has occurred and
is continuing, shall
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not be subject to Section 11.1 and no
losses, costs or expenses may be assessed by
the Swing Line Bank against the Company or
the Revolving Credit Banks as a consequence
of such conversion. In the case of each
Refunded Swing Line Advance the applicable
Advance of the Revolving Credit used to
refund such Swing Line Advance shall be a
Prime-based Advance. In connection with the
making of any such Refunded Swing Line
Advances or the purchase of a participation
interest in Swing Line Advances under
Section 2.5(e)(ii) hereof, the Swing Line
Bank shall retain its claim against the
Company for any unpaid interest or fees in
respect thereof accrued to the date of such
refunding. Unless any of the events
described in Section 9.1(j) hereof shall
have occurred (in which event the procedures
of subparagraph (ii) of this Section 2.5(e)
shall apply) and regardless of whether the
conditions precedent set forth in this
Agreement to the making of an Advance of the
Revolving Credit are then satisfied but
subject to Section 2.5(e)(iii), each
Revolving Credit Bank shall make the
proceeds of its Advance of the Revolving
Credit available to the Administrative Agent
for the benefit of the Swing Line Bank at
the office of the Administrative Agent
specified in Section 2.4(a) hereof prior to
11:00 a.m. Detroit time on the Business Day
next succeeding the date such notice is
given, in immediately available funds. The
proceeds of such Advances of the Revolving
Credit shall be immediately applied to repay
the Refunded Swing Line Advances in
accordance with the provisions of Section
10.1 hereof.
(ii) If, prior to the making of an Advance of the
Revolving Credit pursuant to subparagraph
(i) of this Section 2.5(e), one of the
events described in Section 9.1(j) hereof
shall have occurred, each Revolving Credit
Bank will, on the date such Advance of the
Revolving Credit was to have been made,
purchase from the Swing Line Bank an
undivided participating interest in each
Swing Line Advance that was to have been
refunded in an amount equal to its
Percentage of such Swing Line Advance. Each
Revolving Credit Bank within the time
periods specified in Section 2.5(e)(i)
hereof, as applicable, shall immediately
transfer to the Administrative Agent, in
immediately available funds, the amount of
its participation and upon receipt thereof
the Administrative Agent will deliver to
such Revolving Credit Bank a Swing Line
Participation Certificate in the form of
Exhibit E evidencing such participation.
(iii) Each Revolving Credit Bank's obligation to
make Advances of the Revolving Credit and to
purchase participation interests in
accordance with clauses (i) and (ii) of this
Section 2.5(e) shall be
33
absolute and unconditional and shall not be
affected by any circumstance, including,
without limitation, (i) any set-off,
counterclaim, recoupment, defense or other
right which such Revolving Credit Bank may
have against Swing Line Bank, the Company or
any other Person for any reason whatsoever;
(ii) the occurrence or continuance of any
Default or Event of Default; (iii) any
adverse change in the condition (financial
or otherwise) of the Company or any other
Person; (iv) any breach of this Agreement by
the Company or any other Person; (v) any
inability of the Company to satisfy the
conditions precedent to borrowing set forth
in this Agreement on the date upon which
such Advance is to be made or such
participating interest is to be purchased;
(vi) the termination of the Revolving Credit
Aggregate Commitment hereunder; or (vii) any
other circumstance, happening or event
whatsoever, whether or not similar to any of
the foregoing. If any Revolving Credit Bank
does not make available to the
Administrative Agent the amount required
pursuant to clause (i) or (ii) above, as the
case may be, the Administrative Agent shall
be entitled to recover such amount on demand
from such Revolving Credit Bank, together
with interest thereon for each day from the
date of non-payment until such amount is
paid in full (x) for the first two (2)
Business Days such amount remains unpaid, at
the Federal Funds Effective Rate and (y)
thereafter, at the rate of interest then
applicable to such Swing Line Advances. The
obligation of any Revolving Credit Bank to
make available its pro rata portion of the
amounts required pursuant to clause (i) or
(ii) above shall not be affected by the
failure of any other Revolving Credit Bank
to make such amounts available, and no
Revolving Credit Bank shall have any
liability to the Company and its
Subsidiaries, the Agents, the Swing Line
Bank, or any other Revolving Credit Bank or
any other party for another Revolving Credit
Bank's failure to make the amounts required
under clause (i) or (ii) available.
(iv) Notwithstanding the foregoing, however,
no Revolving Credit Bank shall be required
to purchase participation interests in a
particular Swing Line Advance as provided in
this Section, if prior to the making of such
Swing Line Advance, the Administrative Agent
or the Swing Line Bank had obtained actual
knowledge (as specified in Section 12.8
hereof) that an Event of Default had
occurred and was continuing; provided,
however that the Revolving Credit Banks
shall be required to purchase participation
interests upon the date such Event of
Default has been waived by the requisite
Revolving Credit Banks, as applicable.
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2.6 Prime-based Interest Payments. Interest on the unpaid balance of
all Prime-based Advances of the Revolving Credit and all Swing Line Advances
carried at the Prime-based Rate from time to time outstanding shall accrue from
the date of such Advance to the date repaid, at a per annum interest rate equal
to the Prime-based Rate, and shall be payable in immediately available funds
commencing on the first day of the calendar quarter next succeeding the calendar
quarter during which the initial Advance of the Revolving Credit or Swing Line
Advance, as the case may be, is made and on the first day of each calendar
quarter thereafter. Interest accruing at the Prime-based Rate shall be computed
on the basis of a 360 day year and assessed for the actual number of days
elapsed, and in such computation effect shall be given to any change in the
interest rate resulting from a change in the Prime-based Rate on the date of
such change in the Prime-based Rate.
2.7 Eurocurrency-based Interest Payments and Quoted Rate Interest
Payments.
(a) Interest on each Eurocurrency-based Advance of the
Revolving Credit shall accrue at its Eurocurrency-based Rate and shall
be payable in immediately available funds on the last day of the
Interest Period applicable thereto (and, if any Interest Period shall
exceed three months, then on the last Business Day of the third month
of such Interest Period, and at three month intervals thereafter).
Interest accruing at the Eurocurrency-based Rate shall be computed on
the basis of a 360 day year and assessed for the actual number of days
elapsed from the first day of the Interest Period applicable thereto to
but not including the last day thereof.
(b) Interest on each Quoted Rate Advance of the Swing Line
shall accrue at its Quoted Rate and shall be payable in immediately
available funds on the last day of the Interest Period applicable
thereto. Interest accruing at the Quoted Rate shall be computed on the
basis of a 360 day year and assessed for the actual number of days
elapsed from the first day of the Interest Period applicable thereto
to, but not including the last day thereof.
2.8 Interest Payments on Conversions. Notwithstanding anything to the
contrary in the preceding sections, all accrued and unpaid interest on any
Advance refunded or converted pursuant to Section 2.3 or 2.5(e) hereof (except
for refundings or conversions of Prime-based Advances) shall be due and payable
in full on the date such Advance is refunded or converted.
2.9 Interest on Default. In the event and so long as any Event of
Default shall exist, in the case of any Event of Default under Sections 9.1(a)
or 9.1(j), immediately upon the occurrence thereof, and in the case of all other
Events of Default, upon notice from the Majority Banks, interest shall be
payable on demand on all Eurocurrency-based Advances of the Revolving Credit and
Quoted Rate Advances from time to time outstanding (and, to the extent
delinquent, on all other monetary obligations of Company hereunder and under the
other Loan Documents) at a per annum rate equal to the Applicable Interest Rate
in respect of each such Advance plus, in the case of Eurocurrency-based
Advances, three percent (3%) for the remainder of the then existing Interest
Period, if any, and at all other such times and for all Prime-based Advances
from time to time outstanding, at a per annum rate equal to the Prime-based Rate
plus three percent (3%).
35
2.10 Optional Prepayments. (a) Except as provided in Section 2.10(b)
hereof, the Company may prepay all or part of the outstanding principal of any
Prime-based Advance(s) of the Revolving Credit (subject to not less than one (1)
Business Day's notice to Administrative Agent), provided that the amount of any
partial prepayment shall be at least One Hundred Thousand Dollars ($100,000)
and, after giving effect to any such partial prepayment, the aggregate balance
of Prime-based Advance(s) of the Revolving Credit remaining outstanding, if any,
shall be at least Five Hundred Thousand Dollars ($500,000). Subject to Section
11.1 hereof and to the other terms and conditions of this Agreement, the Company
may prepay all or part of any Eurocurrency-based Advance of the Revolving Credit
(subject to not less than one (1) Business Day's notice to Administrative Agent)
provided that the amount of any such partial prepayment shall be at least Two
Hundred Fifty Thousand Dollars ($250,000), and after giving effect to any such
partial prepayment, the unpaid portion of such Advance which is refunded or
converted under Section 2.3 hereof shall be at least One Million Dollars
($1,000,000).
(b) The Company may prepay all or part of the outstanding
principal of any Swing Line Advance carried at the Prime-based Rate at
any time.
(c) The Company may, subject to clause (d) below, prepay at
any time all or part of the outstanding principal of any Swing Line
Advance carried at the Quoted Rate (subject to not less than one (1)
day's notice to the Swing Line Bank) provided that the amount of such
prepayment shall be at least Ten Thousand Dollars ($10,000) and, after
giving effect to any such partial prepayment, the aggregate unpaid
portion of such Swing Line Advance shall be at least Fifty Thousand
Dollars ($50,000).
(d) Any prepayment of a Prime-based Advance made in accordance
with this Section shall be without premium or penalty and any
prepayment of any other type of Advance shall be subject to the
provisions of Section 11.1, but otherwise without premium or penalty.
2.11 Prime-based Advance in Absence of Election or Upon Default. If,
(a) as to any outstanding Eurocurrency-based Advance of the Revolving Credit,
the Administrative Agent has not received payment of all outstanding principal
and accrued interest on the last day of the Interest Period applicable thereto,
or does not receive a timely Request for Advance meeting the requirements of
Section 2.3 or 2.5(c) hereof with respect to the refunding or conversion of such
Advance, or (b) subject to Section 2.9 hereof, if on the last day of the
applicable Interest Period a Default or an Event of Default shall have occurred
and be continuing, then, on the last day of the applicable Interest Period the
principal amount of any Eurocurrency-based Advance which has not been prepaid
shall, absent a contrary election of the Majority Banks, be converted
automatically to a Prime-based Advance and the Administrative Agent shall
thereafter promptly notify the Company of said action.
2.12 Revolving Credit Facility Fee. From the Effective Date to the
Revolving Credit Maturity Date, the Company shall pay to the Administrative
Agent for distribution to the Revolving Credit Banks pro-rata in accordance with
their respective Percentages, a Revolving Credit Facility Fee quarterly in
arrears commencing April 1, 2004 (in respect of the prior fiscal quarter or
portion thereof), and on the first day of each fiscal quarter thereafter. The
Revolving
36
Credit Facility Fee payable to each Revolving Credit Bank shall be determined by
multiplying the Applicable Fee Percentage times the Revolving Credit Aggregate
Commitment then in effect (whether used or unused). The Revolving Credit
Facility Fee shall be computed on the basis of a year of three hundred sixty
(360) days and assessed for the actual number of days elapsed. Whenever any
payment of the Revolving Credit Facility Fee shall be due on a day which is not
a Business Day, the date for payment thereof shall be extended to the next
Business Day. Upon receipt of such payment, Administrative Agent shall make
prompt payment to each Revolving Credit Bank of its share of the Revolving
Credit Facility Fee based upon its respective Percentage. It is expressly
understood that the Revolving Credit Facility Fees described in this Section are
not refundable under any circumstances.
2.13 Mandatory Repayment of Revolving Credit Advances.
(a) If at any time and for any reason the aggregate
outstanding principal amount of Revolving Credit Advances plus Swing
Line Advances hereunder to the Company, plus the outstanding Letter of
Credit Obligations, shall exceed the then applicable Revolving Credit
Aggregate Commitment, the Company shall immediately reduce any pending
request for a Revolving Credit Advance on such day by the amount of
such excess and, to the extent any excess remains thereafter,
immediately repay an amount of the Indebtedness equal to such excess
and, to the extent such Indebtedness consists of Letter of Credit
Obligations, provide cash collateral on the basis set forth in Section
9.2 hereof. For purposes of determining whether cash collateral must be
provided in accordance with this sentence the Letter of Credit
Obligations shall be deemed the last Indebtedness outstanding prepaid.
The Company acknowledges that, in connection with any repayment
required hereunder, it shall also be responsible for the reimbursement
of any prepayment or other costs required under Section 11.1 hereof;
provided, however, that the Company shall, in order to reduce any such
prepayment costs and expenses, first prepay such portion of the
Indebtedness then carried as a Prime-based Advance, if any; and then
prepay Indebtedness then carried as Eurocurrency-based Advances, in the
order of maturity of such Advances;
(b) Subject to clause (e) hereof, immediately upon receipt by
the Company or any Subsidiary of the cash proceeds of any Subordinated
Debt issued after the Effective Date by such Person, the Company shall
be obligated to permanently reduce the amount of the Revolving Credit
Aggregate Commitment by an amount equal to one hundred percent (100%)
of any such issuance of Subordinated Debt (net, in any case, of
reasonable and customary costs and expenses of issuance);
(c) Subject to clause (e) hereof, immediately upon receipt by
Company or any of its Subsidiaries of Net Cash Proceeds in excess of
One Million Dollars ($1,000,000) during any fiscal year, Company shall
be obligated to permanently reduce the amount of the Revolving Credit
Aggregate Commitment by an amount equal to one hundred percent (100%)
of such Net Cash Proceeds;
(d) The reductions of the Revolving Credit Aggregate
Commitment pursuant to clause (b) and (c) above shall be accompanied in
each case by prepayments of principal sufficient to reduce the
outstanding principal balance under the Revolving Credit (taking
37
into account outstanding Letters of Credit and Swing Line Advances) to
an amount not greater than the Commitment, as so reduced and no
prepayment premium, based on the Applicable Fee Percentage, shall be
due in connection with such prepayment; and
(e) To the extent that, on the date any mandatory repayment of
the Revolving Credit Advances under this Section 2.13 or payment
pursuant to the terms of any of the Collateral Documents is due, the
Indebtedness under the Revolving Credit or any other Indebtedness to be
prepaid is being carried, in whole or in part, at the
Eurocurrency-based Rate and no Default or Event of Default has occurred
and is continuing, the Company may deposit the amount of such mandatory
prepayment in a cash collateral account to be held by the
Administrative Agent, for and on behalf of the Revolving Credit Banks
(which shall be an interest-bearing account), on such terms and
conditions as are reasonably acceptable to Administrative Agent and
upon such deposit the obligation of the Company to make such mandatory
prepayment shall be deemed satisfied. Subject to the terms and
conditions of said cash collateral account, sums on deposit in said
cash collateral account shall be applied (until exhausted) to reduce
the principal balance of the Revolving Credit on the last day of each
Interest Period attributable to the Eurocurrency-based Advances of such
Revolving Advance, thereby avoiding breakage costs under Section 11.1
hereof; and
(f) During the thirty (30) period commencing on the date that
Company gives Administrative Agent written notice of a Change of
Control, the Majority Banks, by notice to Company and the Agents (a
"Change of Control Prepayment Notice"), may elect to terminate the
Revolving Credit Aggregate Commitment and Company, upon receipt of such
notice, shall prepay, together with any prepayment premium payable
under the terms of this Agreement, all of the Indebtedness outstanding
within thirty (30) days of receipt of such notice. If any Letters of
Credit are outstanding on the prepayment date, they shall remain
outstanding, provided that Company pledges to Issuing Bank, as security
for its reimbursement obligations with respect to such Letters of
Credit, cash equal to one hundred five percent (105%) of the aggregate
undrawn face amount of such Letters of Credit. The Banks shall not be
obligated to make any Advances or issue any Letters of Credit following
the giving of the Change of Control Prepayment Notice.
2.14 Optional Reduction or Termination of Revolving Credit Aggregate
Commitment. The Company may upon at least five Business Days' prior written
notice to the Administrative Agent, permanently reduce the Revolving Credit
Aggregate Commitment in whole at any time, or in part from time to time, without
premium or penalty, except as otherwise provided herein, provided that: (i) each
partial reduction of the Revolving Credit Aggregate Commitment shall be in an
aggregate amount equal to Two Million Five Hundred Thousand Dollars ($2,500,000)
or a larger integral multiple of Five Hundred Thousand Dollars ($500,000); (ii)
each reduction shall be accompanied by the payment of the Revolving Credit
Facility Fee accrued to the date of such reduction; (iii) the Company shall
prepay in accordance with the terms hereof the amount, if any, by which the
aggregate unpaid principal amount of Advances (including, without duplication,
any deemed Advances made under Section 3.6 hereof) outstanding hereunder, plus
the aggregate undrawn amount of outstanding Letter of
38
Credit Obligations, exceeds the amount of the then applicable Revolving Credit
Aggregate Commitment as so reduced, together with interest thereon to the date
of prepayment; (iv) no reduction shall reduce the Revolving Credit Aggregate
Commitment to an amount which is less than the aggregate undrawn amount of any
Letters of Credit outstanding at such time; and (v) no such reduction shall
reduce the Swing Line Commitment unless the Company so elects; provided, however
that if the termination or reduction of the Revolving Credit Aggregate
Commitment requires the prepayment of a Eurocurrency-based Advance or a Quoted
Rate Advance and such termination or reduction is made on a day other than the
last Business Day of the then current Interest Period applicable to such
Eurocurrency-based Advance or such Quoted Rate Advance, then, pursuant to
Section 11.1, the Company shall compensate the Revolving Credit Banks for any
losses or, the Company may deposit the amount of such prepayment in a cash
collateral account. Reductions of the Revolving Credit Aggregate Commitment and
any accompanying prepayments of Advances of the Revolving Credit shall be
distributed by Administrative Agent to each Revolving Credit Bank in accordance
with such Revolving Credit Bank's Percentage thereof, and will not be available
for reinstatement by or readvance to the Company, and any accompanying
prepayments of Advances of the Swing Line shall be distributed by Administrative
Agent to the Swing Line Bank and will not be available for reinstatement by or
readvance to the Company. Any reductions of the Revolving Credit Aggregate
Commitment hereunder shall reduce each Revolving Credit Bank's portion thereof
proportionately (based on the applicable Percentages), and shall be permanent
and irrevocable. Any payments made pursuant to this Section shall be applied
first to outstanding Prime-based Advances under the Revolving Credit, next to
Swing Line Advances carried at the Prime-based Rate, next to Eurocurrency-based
Advances of the Revolving Credit and then to Swing Line Advances carried at the
Quoted Rate.
2.15 Use of Proceeds of Advances. Advances of the Revolving Credit
(including Swing Line Advances) shall be available for general corporate
purposes of Company and its Subsidiaries including the financing of capital
expenditures, and for working capital needs.
2.16 Extensions of Revolving Credit Maturity Date. (a) Provided that no
Default or Event of Default has occurred and is continuing, Company may, by
written notice to the Administrative Agent and each Bank (which notice shall be
irrevocable and which shall not be deemed effective unless actually received by
the Administrative Agent and each Bank) prior to April 30, but not before April
1, of each year beginning in 2005, request that the Banks extend the then
applicable Revolving Credit Maturity Date to a date that is one year later than
the Revolving Credit Maturity Date then in effect (each such request, a
"Request").
(b) Each Bank shall, within 30 days of receipt of any such
request, notify the Administrative Agent in writing whether such Bank
consents to the extension of the Revolving Credit Maturity Date, such
consent to be in the sole discretion of such Bank. If any Bank does not
so notify the Administrative Agent of its decision within such 30 day
period, such Bank shall be deemed to have not consented to such request
of the Company.
(c) The Administrative Agent shall promptly notify the Company
whether the Banks have consented to such request. If the Administrative
Agent does not so notify the Company within 30 days of the
Administrative Agent's receipt such Request, the
39
Administrative Agent shall be deemed to have notified the Company that
the Banks have not consented to the Company's request.
(d) Each Bank which elects not to extend the Revolving Credit
Maturity Date or fails to so notify the Administrative Agent of such
consent (a "Non-Consenting Bank") hereby agrees that if any other Bank
or financial institution acceptable to the Company and the
Administrative Agent offers to purchase such Non-Consenting Bank's
Percentage of the Revolving Credit Aggregate Commitment within 180 days
after receipt of the related Request for a purchase price equal to the
sum of all amounts then owing with respect to the outstanding Advances
(and participations in any Swing Line Advances or any Letters of
Credit) and all other amounts accrued for the account of such
Non-Consenting Bank, such Non-Consenting Bank will promptly assign,
sell and transfer all of its right, title, interest and obligations
with respect to the foregoing to such other Bank or financial
institution pursuant to and on the terms specified in the form of
Assignment Agreement attached hereto as Exhibit I. Before assigning to
a financial institution other than a Bank pursuant to this clause (d),
each Bank that has elected to extend the Revolving Credit Maturity Date
(a "Consenting Bank") shall have the right, but not any obligation, pro
rata with all other Consenting Banks which elect to purchase a pro rata
share of such non-consenting Bank's Percentage of the Revolving Credit
Aggregate Commitment (and participations in Swing Line Advances and
Letters of Credit) to purchase each such Non-Consenting Bank's
Percentage thereof pursuant to this clause (d). The Consenting Banks
which elect to exercise their purchase options hereunder shall by
mutual agreement determine the amount of each Non-Consenting Bank's
Percentage of the Revolving Credit Aggregate Commitment being purchased
by each Consenting Bank, provided that if there is any dispute among
the Consenting Banks such purchase shall be based upon a pro rata
sharing of each Non-Consenting Bank's Percentage thereof. Only if the
Consenting Banks have determined not to purchase all of the
Non-Consenting Bank's Revolving Credit Aggregate Commitment may
financial institutions other than a Consenting Bank then purchase such
Non-Consenting Bank's Revolving Credit Aggregate Commitment.
(e) Except as set forth in subparagraph (f) hereof,
notwithstanding anything herein to the contrary, the Revolving Credit
Maturity Date will not be extended unless all Banks have consented to
the extension or if another Bank or financial institution has purchased
each such Non-Consenting Bank's Revolving Credit Aggregate Commitment
pursuant to the terms of clause (d) above.
(f) In the event, after giving effect to any assignments to
Consenting Banks under Section 2.16(d) hereof or otherwise, Banks
holding eighty percent (80%) or more of the Percentages (the "Approving
Percentages") have consented to an extension of the Revolving Credit
Maturity Date hereunder, such extension shall become effective,
notwithstanding that all of the Banks have failed to approve such
extension in accordance with this Section 2.16, so long as Company,
within forty five (45) days, reduces the Revolving Credit Aggregate
Commitment to an amount not greater than the product of the Approving
Percentages times the Revolving Credit Aggregate Commitment then in
effect and repays the Indebtedness then outstanding hereunder
40
(and, if necessary causes any outstanding Letters of Credit to be
terminated or discharged) to the extent such Indebtedness exceeds the
Revolving Credit Aggregate Commitment as so reduced, such that the
entire Indebtedness outstanding to the Non-Consenting Banks shall have
been paid and discharged in full. Reductions of the Revolving Credit
Aggregate Commitment made under this Section 2.16 (f) may be made
without regard to the notice provisions set forth in Section 2.14
hereof, but shall otherwise comply with said Section 2.14, except that
any amounts repaid by the Company against the Indebtedness pursuant to
this subparagraph (f) shall be first applied to the Indebtedness
outstanding to the Non-Consenting Banks still holding Indebtedness
hereunder at such time, with any remaining amounts applied in
accordance with Section 2.14 hereof and the Percentages held by such
Non-Consenting Banks shall be reallocated to the Consenting Banks
(giving effect to any assignments, as aforesaid), pro rata, based on
the Percentages then in effect and Administrative Agent shall
distribute to the remaining Banks a revised Schedule 1.1 reflecting
such reallocated Percentages.
3. LETTERS OF CREDIT
3.1 Letters of Credit. Subject to the terms and conditions of this
Agreement, Issuing Bank shall through the Issuing Office, at any time and from
time to time from and after the date hereof until thirty (30) days prior to the
Revolving Credit Maturity Date, upon the written request of an Account
Party(ies) accompanied by a duly executed Letter of Credit Agreement and such
other documentation related to the requested Letter of Credit as the Issuing
Bank may require, issue Letters of Credit in Dollars for the account of such
Account Party(ies), in an aggregate amount for all Letters of Credit issued
hereunder at any one time outstanding not to exceed the Letter of Credit Maximum
Amount. Each Letter of Credit shall be in a minimum face amount of One Hundred
Thousand Dollars ($100,000) (or such lesser amount as may be agreed to by
Issuing Bank) and each Letter of Credit (including any renewal thereof) shall
expire not later than the first to occur of: (i) eighteen (18) months after the
date of issuance thereof and (ii) ten (10) Business Days prior to the Revolving
Credit Maturity Date in effect on the date of issuance thereof. The submission
of all applications in respect of and the issuance of each Letter of Credit
hereunder shall be subject in all respects to the International Standby
Practices 98, and any successor documentation thereto and to the extent not
inconsistent therewith, the laws of the State of Michigan. In the event of any
conflict between this Agreement and any Letter of Credit Document other than any
Letter of Credit, this Agreement shall control.
3.2 Conditions to Issuance. No Letter of Credit shall be issued at the
request and for the account of any Account Party(ies) unless, as of the date of
issuance of such Letter of Credit:
(a) in the case of any Account Party:
(i) after giving effect to the Letter of Credit
requested, the outstanding Letter of Credit
Obligations do not exceed the Letter of
Credit Maximum Amount; and
41
(ii) after giving effect to the Letter of Credit
requested, the outstanding Letter of Credit
Obligations on such date plus the aggregate
amount of all Revolving Credit Advances and
Swing Line Advances (including, without
duplication, deemed Advances funded by the
Administrative Agent under Section 3.6(a)
hereof in respect of the Company's or an
applicable Account Party's reimbursement
obligation hereunder) requested or
outstanding on such date do not exceed the
then applicable Revolving Credit Aggregate
Commitment;
(b) the obligations of the Loan Parties set forth in this
Agreement and the other Loan Documents are valid, binding and
enforceable obligations of such Loan Parties and the valid, binding and
enforceable nature of this Agreement and the other Loan Documents has
not been disputed by the Company;
(c) the representations and warranties of the Loan Parties
contained in this Agreement and the other Loan Documents are true in
all material respects as if made on such date (other than any
representation or warranty that expressly speaks only as of a different
date), and both immediately before and immediately after issuance of
the Letter of Credit requested, no Default or Event of Default exists;
(d) the execution of the Letter of Credit Agreement with
respect to the Letter of Credit requested will not violate the terms
and conditions of any contract, agreement or other borrowing of the
relevant Account Party;
(e) the Account Party requesting the Letter of Credit shall
have delivered to Issuing Bank at its Issuing Office, not less than
three (3) Business Days prior to the requested date for issuance (or
such shorter time as the Issuing Bank, in its sole discretion, may
permit), the Letter of Credit Agreement related thereto, together with
such other documents and materials as may be required pursuant to the
terms thereof, and the terms of the proposed Letter of Credit shall be
reasonably satisfactory to Issuing Bank;
(f) no order, judgment or decree of any court, arbitrator or
governmental authority shall purport by its terms to enjoin or restrain
Issuing Bank from issuing the Letter of Credit requested, or any
Revolving Credit Bank from taking an assignment of its Percentage
thereof pursuant to Section 3.6 hereof, and no law, rule, regulation,
request or directive (whether or not having the force of law) shall
prohibit or request that Issuing Bank refrain from issuing, or any
Revolving Credit Bank refrain from taking an assignment of its
Percentage of, the Letter of Credit requested or letters of credit
generally;
(g) there shall have been no introduction of or change in the
interpretation of any law or regulation that would make it unlawful or
unduly burdensome for the Issuing Bank to issue or any Revolving Credit
Bank to take an assignment of its Percentage of the requested Letter of
Credit, no declaration of a general banking moratorium by banking
authorities in the United States, Michigan or the respective
jurisdictions in
42
which the Revolving Credit Banks, the applicable Account Party and the
beneficiary of the requested Letter of Credit are located, and no
establishment of any new restrictions by any central bank or other
governmental agency or authority on transactions involving letters of
credit or on banks materially adversely affecting the extension of
credit by banks; and
(h) Issuing Bank shall have received the issuance fees
required in connection with the issuance of such Letter of Credit
pursuant to Section 3.4 hereof.
Each Letter of Credit Agreement submitted to Issuing Bank pursuant hereto shall
constitute the certification by the Company and the Account Party of the matters
set forth in Section 3.2 (a) through (d) hereof. The Administrative Agent shall
be entitled to rely on such certification without any duty of inquiry.
3.3 Notice. The Issuing Bank will deliver to the Administrative Agent,
concurrently with or promptly following its delivery of any Letter of Credit, a
true and complete copy of each Letter of Credit. Promptly upon its receipt
thereof, Administrative Agent shall give notice, substantially in the form
attached as Exhibit F, to each Revolving Credit Bank of the issuance of each
Letter of Credit, specifying the amount thereof and the amount of such Revolving
Credit Bank's Percentage thereof.
3.4 Letter of Credit Fee. The Company shall pay to the Administrative
Agent for distribution to the Revolving Credit Banks in accordance with their
Percentages, letter of credit fees as follows:
(a) A per annum letter of credit fee with respect to the
undrawn amount of each Letter of Credit issued pursuant hereto (based
on the amount of each Letter of Credit) in the amount of the Applicable
Fee Percentage (determined with reference to Schedule 1.1 to this
Agreement).
(b) A letter of credit facing fee in the amount equal to the
greater of (i) $250 or (ii) one quarter of one percent (0.25%) on the
face amount of each Letter of Credit to be retained by Issuing Bank for
its own account.
(c) If any change in any law or regulation or in the
interpretation thereof by any court or administrative or governmental
authority charged with the administration thereof, adopted after the
date hereof, shall either (i) impose, modify or cause to be deemed
applicable any reserve, special deposit, limitation or similar
requirement against letters of credit issued or participated in by, or
assets held by, or deposits in or for the account of, Issuing Bank or
any Revolving Credit Bank or (ii) impose on Issuing Bank or any
Revolving Credit Bank any other condition regarding this Agreement, the
Letters of Credit or any participations in such Letters of Credit, and
the result of any event referred to in clause (i) or (ii) above shall
be to increase the cost or expense to Issuing Bank or such Revolving
Credit Bank of issuing or maintaining or participating in any of the
Letters of Credit (which increase in cost or expense shall be
determined by the Issuing Bank's or such Revolving Credit Bank's
reasonable allocation of the aggregate of such cost increases and
expenses resulting from such events), then, upon demand by
43
the Issuing Bank or such Revolving Credit Bank, as the case may be, the
applicable Account Party shall, within thirty (30) days following
demand for payment, pay to Issuing Bank or such Revolving Credit Bank,
as the case may be, from time to time as specified by the Issuing Bank
or such Revolving Credit Bank, additional amounts which shall be
sufficient to compensate the Issuing Bank or such Revolving Credit Bank
for such increased cost and expense, together with interest on each
such amount from ten days after the date such payment is due until
payment in full thereof at the Prime-based Rate. Each demand for
payment under this Section 3.4(c), shall be accompanied by a
certificate of Issuing Bank or the applicable Revolving Credit Bank (as
applicable) setting forth the amount of such increased cost or expense
incurred by the Issuing Bank or such Revolving Credit Bank, as the case
may be, as a result of any event mentioned in clause (i) or (ii) above,
and in reasonable detail, the methodology for calculating and the
calculation of such amount, which certificate shall be prepared in good
faith and shall be conclusive evidence, absent manifest error, as to
the amount thereof.
(d) All payments by the Company to the Administrative Agent
for distribution to the Issuing Bank or the Revolving Credit Banks
under this Section 3.4 shall be made in Dollars in immediately
available funds at the Issuing Office or such other office of the
Administrative Agent as may be designated from time to time by written
notice to the Company by the Administrative Agent. The fees described
in clauses (a) and (b) above shall be nonrefundable under all
circumstances and shall be payable upon the issuance of such Letter of
Credit and thereafter semi-annually in advance on January 1 and July 1
of each year. The fees due under clause (a) above shall be determined
by multiplying the Applicable Fee Percentage times the undrawn amount
of the face amount of each such Letter of Credit on the date of
determination, and shall be calculated on the basis of a 360 day year
and assessed for the actual number of days from the date of the
issuance thereof to the stated expiration thereof. The parties hereto
acknowledge that any amendment or extension to a Letter of Credit
issued hereunder shall be treated as a new Letter of Credit for the
purposes of the letter of credit facing fee.
3.5 Other Fees. In connection with the Letters of Credit, and in
addition to the Letter of Credit Fees, the Company and the applicable Account
Party(ies) shall pay, for the sole account of the Issuing Bank, standard
documentation, administration, payment and cancellation charges assessed by
Issuing Bank or the Issuing Office, at the times, in the amounts and on the
terms set forth or to be set forth from time to time in the standard fee
schedule of the Issuing Office in effect from time to time and delivered to the
relevant Account Party(ies).
3.6 Drawings and Demands for Payment Under Letters of Credit.
(a) If the Issuing Bank shall honor a draft or other demand
for payment presented or made under any Letter of Credit, the Company
and each applicable Account Party agree to pay to the Issuing Bank an
amount equal to the amount paid by the Issuing Bank in respect of such
draft or other demand under such Letter of Credit and all expenses paid
or incurred by the Administrative Agent relative thereto not later than
1:00 p.m. (Detroit time), on (i) the Business Day that the Company
receives notice of such presentment and honor, if such notice is
received prior to 11:00 a.m. (Detroit
44
time) or (ii) the Business Day immediately following the day that
Company receives such notice, if such notice is not received prior to
such time. Unless the Company or the applicable Account Party shall
have made such payment to the Administrative Agent for the account of
the Issuing Bank on such day, upon each such payment by the Issuing
Bank, the Administrative Agent shall be deemed to have disbursed to the
Company, and the Company shall be deemed to have elected to substitute
for the reimbursement obligation, with respect to the applicable
Letters of Credit denominated in Dollars, a Prime-based Advance of the
Revolving Credit for the account of the Revolving Credit Banks in an
amount equal to the amount so paid by the Issuing Bank in respect of
such draft or other demand under such Letter of Credit. Such
Prime-based Advance shall be deemed disbursed notwithstanding any
failure to satisfy any conditions for disbursement of any Advance set
forth in Section 2 hereof and, to the extent of the Advances so
disbursed, the reimbursement obligation of the Company or the
applicable Account Party under this Section 3.6 shall be deemed
satisfied.
(b) If the Issuing Bank shall honor a draft or other demand
for payment presented or made under any Letter of Credit, the Issuing
Bank shall provide notice thereof to the Company and the applicable
Account Party on the date such draft or demand is honored, and to each
Revolving Credit Bank on such date unless the Company or applicable
Account Party shall have satisfied its reimbursement obligation under
Section 3.6(a) hereof by payment to the Administrative Agent on such
date. The Issuing Bank shall further use reasonable efforts to provide
notice to the Company or applicable Account Party prior to honoring any
such draft or other demand for payment, but such notice, or the failure
to provide such notice, shall not, subject to Section 3.6(a), affect
the rights or obligations of the Issuing Bank with respect to any
Letter of Credit or the rights and obligations of the parties hereto,
including without limitation the obligations of the Company or
applicable Account Party under Section 3.6(a) hereof.
(c) Upon issuance by the Issuing Bank of each Letter of Credit
hereunder, each Revolving Credit Bank shall automatically acquire a pro
rata participation interest in such Letter of Credit and each related
Letter of Credit Payment based on its respective Percentage. Each
Revolving Credit Bank, on the date a draft or demand under any Letter
of Credit is honored (or the next succeeding Business Day if the notice
required to be given by Agent to the Revolving Credit Banks under
Section 3.6(b) hereof is not given to the Revolving Credit Banks prior
to 2:00 p.m. (Detroit time) on such date of draft or demand), shall
make available its Percentage of the amount paid by the Issuing Bank,
and not reimbursed by the Company or applicable Account Party on such
day, in immediately available funds at the principal office of the
Administrative Agent for the account of Issuing Bank. If and to the
extent such Revolving Credit Bank shall not have made such pro rata
portion available to the Administrative Agent, such Revolving Credit
Bank, the Company and the applicable Account Party severally agree to
pay to the Issuing Bank forthwith on demand such amount together with
interest thereon, for each day from the date such amount was paid by
the Issuing Bank until such amount is so made available to the
Administrative Agent at a per annum rate equal to the interest rate
applicable during such period to the related Advance deemed to have
been disbursed under Section 3.6(a) in respect of the reimbursement
obligation of the
45
Company and the applicable Account Party, as set forth in Section
2.4(c)(i) or 2.4(c)(ii) hereof, as the case may be. If such Revolving
Credit Bank shall pay such amount to the Administrative Agent for the
account of Issuing Bank together with such interest, if any, such
amount so paid shall be deemed to constitute an Advance by such
Revolving Credit Bank disbursed in respect of the reimbursement
obligation of the Company or applicable Account Party under Section
3.6(a) hereof for purposes of this Agreement, effective as of the dates
applicable under said Section 3.6(a). The failure of any Revolving
Credit Bank to make its pro rata portion of any such amount paid by the
Issuing Bank available to the Administrative Agent for the account of
Issuing Bank shall not relieve any other Revolving Credit Bank of its
obligation to make available its pro rata portion of such amount, but
no Revolving Credit Bank shall be responsible for failure of any other
Revolving Credit Bank to make such pro rata portion available to the
Administrative Agent for the account of Issuing Bank.
Notwithstanding the foregoing however no Revolving Credit Bank shall be
deemed to have acquired a participation in a Letter of Credit if, prior to the
issuing of the Letter of Credit by the Issuing Bank, the Administrative Agent or
the Issuing Bank had obtained actual knowledge (as specified in Section 12.8
hereof) that an Event of Default had occurred and was continuing; provided,
however that the Revolving Credit Banks shall be deemed to have acquired such a
participation upon the date of which such Event of Default has been waived by
the requisite Revolving Credit Banks, as applicable.
(d) Nothing in this Agreement shall be construed to require or
authorize any Revolving Credit Bank to issue any Letter of Credit, it
being recognized that the Issuing Bank shall be the sole issuer of
Letters of Credit under this Agreement.
3.7 Obligations Irrevocable. The obligations of the Company and any
Account Party to make payments to Administrative Agent for the account of
Issuing Bank or the Revolving Credit Banks with respect to Letter of Credit
Obligations under Section 3.6 hereof, shall be unconditional and irrevocable and
not subject to any qualification or exception whatsoever, including, without
limitation:
(a) Any lack of validity or enforceability of any Letter of
Credit or any documentation relating to any Letter of Credit or to any
transaction related in any way to any Letter of Credit (the "Letter of
Credit Documents");
(b) Any amendment, modification, waiver, consent, or any
substitution, exchange or release of or failure to perfect any interest
in collateral or security, with
(c) The existence of any claim, setoff, defense or other right
which the Company or any Account Party may have at any time against any
beneficiary or any transferee of any Letter of Credit (or any Persons
for whom any such beneficiary or any such transferee may be acting),
the Administrative Agent, the Issuing Bank or any Revolving Credit Bank
or any other Person, whether in connection with any of the Letter of
Credit Documents, the transactions contemplated herein or therein or
any unrelated transactions;
46
(d) Any draft or other statement or document presented under
any 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) Payment by the Issuing Bank to the beneficiary under any
Letter of Credit against presentation of documents which do not comply
with the terms of such Letter of Credit, including failure of any
documents to bear any reference or adequate reference to such Letter of
Credit;
(f) Any failure, omission, delay or lack on the part of the
Administrative Agent, Issuing Bank or any Revolving Credit Bank or any
party to any of the Letter of Credit Documents to enforce, assert or
exercise any right, power or remedy conferred upon the Administrative
Agent, Issuing Bank, any Revolving Credit Bank or any such party under
this Agreement, any of the other Loan Documents or any of the Letter of
Credit Documents, or any other acts or omissions on the part of the
Administrative Agent, Issuing Bank, any Revolving Credit Bank or any
such party; or
(g) Any other event or circumstance that would, in the absence
of this Section 3.7, result in the release or discharge by operation of
law or otherwise of the Company or any Account Party from the
performance or observance of any obligation, covenant or agreement
contained in Section 3.6 hereof.
No setoff, counterclaim, reduction or diminution of any obligation or
any defense of any kind or nature which the Company or any Account
Party has or may have against the beneficiary of any Letter of Credit
shall be available hereunder to the Company or any Account Party
against the Administrative Agent, Issuing Bank or any Revolving Credit
Bank. Nothing contained in this Section 3.7 shall be deemed to prevent
the Company or the Account Parties, after satisfaction in full of the
absolute and unconditional obligations of the Company and the Account
Parties hereunder, from asserting in a separate action any claim,
defense, set off or other right which they (or any of them) may have
against Administrative Agent, Issuing Bank or any Revolving Credit
Bank.
3.8 Risk Under Letters of Credit. (a) In the administration and
handling of Letters of Credit and any security therefor, or any documents or
instruments given in connection therewith, Issuing Bank shall have the sole
right to take or refrain from taking any and all actions under or upon the
Letters of Credit.
(b) Subject to other terms and conditions of this Agreement,
Issuing Bank shall issue the Letters of Credit and shall hold the
documents related thereto in its own name and shall make all
collections thereunder and otherwise administer the Letters of Credit
in accordance with Issuing Bank's regularly established practices and
procedures and will have no further obligation with respect thereto. In
the administration of Letters of Credit, Issuing Bank shall not be
liable for any action taken or omitted on the advice of counsel,
accountants, appraisers or other experts selected by Issuing Bank with
due care and Issuing Bank may rely upon any notice, communication,
certificate or other statement from the Company, any Account Party,
beneficiaries of Letters of Credit, or any other Person which Issuing
Bank believes to be authentic. Issuing Bank will, upon
47
request, furnish the Revolving Credit Banks with copies of Letter of
Credit Documents related thereto.
(c) In connection with the issuance and administration of
Letters of Credit and the assignments hereunder, Issuing Bank makes no
representation and shall have no responsibility with respect to (i) the
obligations of the Company or any Account Party or the validity,
sufficiency or enforceability of any document or instrument given in
connection therewith, or the taking of any action with respect to same,
(ii) the financial condition of, any representations made by, or any
act or omission of, the Company, the applicable Account Party or any
other Person, or (iii) any failure or delay in exercising any rights or
powers possessed by Issuing Bank in its capacity as issuer of Letters
of Credit in the absence of its gross negligence or willful misconduct.
Each of the Revolving Credit Banks expressly acknowledges that it has
made and will continue to make its own evaluations of the Company's and
the Account Parties' creditworthiness without reliance on any
representation of Issuing Bank or Issuing Bank's officers, agents and
employees.
(d) If at any time Issuing Bank shall recover any part of any
unreimbursed amount for any draw or other demand for payment under a
Letter of Credit, or any interest thereon, the Administrative Agent or
Issuing Bank, as the case may be, shall receive same for the pro rata
benefit of the Revolving Credit Banks in accordance with their
respective Percentages and shall promptly deliver to each Revolving
Credit Bank its share thereof, less such Revolving Credit Bank's pro
rata share of the costs of such recovery, including court costs and
attorney's fees. If at any time any Revolving Credit Bank shall receive
from any source whatsoever any payment on any such unreimbursed amount
or interest thereon in excess of such Revolving Credit Bank's
Percentage of such payment, such Revolving Credit Bank will promptly
pay over such excess to the Administrative Agent, for redistribution in
accordance with this Agreement.
3.9 Indemnification. The Company and each Account Party hereby
indemnifies and agrees to hold harmless the Revolving Credit Banks, the Issuing
Bank and the Agents, and their respective officers, directors, employees and
agents (each an "L/C Indemnified Person"), from and against any and all claims,
damages, losses, liabilities, costs or expenses of any kind or nature whatsoever
which the Revolving Credit Banks, the Issuing Bank or the Agents or any such
Person may incur or which may be claimed against any of them by reason of or in
connection with any Letter of Credit (collectively, the "L/C Indemnified
Amounts"), and none of the Issuing Bank, any Revolving Credit Bank or the Agents
or any of their respective officers, directors, employees or agents shall be
liable or responsible for:
(a) the use which may be made of any Letter of Credit or for
any acts or omissions of any beneficiary in connection therewith;
(b) the validity, sufficiency or genuineness of documents or
of any endorsement thereon, even if such documents should in fact prove
to be in any or all respects invalid, insufficient, fraudulent or
forged;
48
(c) payment by the Issuing Bank to the beneficiary under any
Letter of Credit against presentation of documents which do not
strictly comply with the terms of any Letter of Credit (unless such
payment resulted from the gross negligence or willful misconduct of the
Issuing Bank), including failure of any documents to bear any reference
or adequate reference to such Letter of Credit;
(d) any error, omission, interruption or delay in
transmission, dispatch or delivery of any message or advice, however
transmitted, in connection with any Letter of Credit; or
(e) any other event or circumstance whatsoever arising in
connection with any Letter of Credit;
provided, however, that with respect to subparagraphs (a) through (e) hereof,
(i) neither the Company nor any of the Account Parties shall be required to
indemnify any L/C Indemnified Person for any L/C Indemnified Amounts to the
extent such amounts result from such L/C Indemnified Person's gross negligence
or willful misconduct and (ii) the Administrative Agent and the Issuing Bank
shall be liable to the Company and the Account Parties to the extent, but only
to the extent, of any direct, as opposed to consequential or incidental, damages
suffered by the Company and the Account Parties which were caused by the Issuing
Bank's gross negligence, or willful misconduct or by the Issuing Bank's wrongful
dishonor of any Letter of Credit after the presentation to it by the beneficiary
thereunder of a draft or other demand for payment and other documentation
strictly complying with the terms and conditions of such Letter of Credit.
(f) It is understood that in making any payment under a Letter
of Credit the Issuing Bank will rely on documents presented to it under
such Letter of Credit as to any and all matters set forth therein
without further investigation and regardless of any notice or
information to the contrary.
3.10 Right of Reimbursement. Each Revolving Credit Bank agrees to
reimburse the Issuing Bank on demand, pro rata in accordance with its respective
Percentage, for (i) the reasonable out-of-pocket costs and expenses of the
Issuing Bank to be reimbursed by the Company or any Account Party pursuant to
any Letter of Credit Agreement or any Letter of Credit, to the extent not
reimbursed by the Company or any Account Party and (ii) any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs, fees,
reasonable out-of-pocket expenses or disbursements of any kind and nature
whatsoever which may be imposed on, incurred by or asserted against Issuing Bank
in any way relating to or arising out of this Agreement (including Section
3.6(c) hereof), any Letter of Credit, any documentation or any transaction
relating thereto, or any Letter of Credit Agreement, to the extent not
reimbursed by the Company or any Account Party, except to the extent that such
liabilities, losses, costs or expenses were incurred by Issuing Bank as a result
of Issuing Bank's gross negligence or willful misconduct or by the Issuing
Bank's wrongful dishonor of any Letter of Credit after the presentation to it by
the beneficiary thereunder of a draft or other demand for payment and other
documentation strictly complying with the terms and conditions of such Letter of
Credit.
49
4. INTENTIONALLY OMITTED.
5. CONDITIONS
5.1 Effective Date Conditions. Company will furnish the following prior
to the initial borrowing (or at such later date as may be specified herein):
(a) Execution of Notes and this Agreement. Each of the Loan
Parties shall have executed and delivered to the Administrative Agent
for the account of each Bank requesting Notes, the Revolving Credit
Notes and the Swing Line Note, as applicable, and this Agreement and
the other Loan Documents to which that Loan Party is a party (including
all schedules, exhibits, certificates, opinions, financial statements
and other documents to be delivered pursuant hereto), and such Notes,
and this Agreement and the other Loan Documents shall be in full force
and effect.
(b) Corporate Authority. Agents shall have received, with a
counterpart thereof for each Bank:
(i) For each Loan Party, a certificate of its
Secretary or Assistant Secretary as to:
(A) resolutions of the board of directors of
such Loan Party evidencing approval of the
transactions contemplated by this Agreement, approval
of this Agreement and the other Loan Documents to
which such Loan Party is party and authorizing the
execution and delivery thereof and in the case of the
Company, the borrowing of Advances and the requesting
of Letters of Credit hereunder,
(B) the incumbency and signature of the
officers of such Loan Party executing any Loan
Document,
(C) a certificate of good standing or
continued existence (or the equivalent thereof) from
the state of its incorporation, and from every state
or other jurisdiction listed on Schedule 5.1(b)
hereof if issued by such jurisdiction, subject to the
limitations (as to qualification and authorization to
do business) contained in Section 6.1, and
(D) copies of such Loan Party's articles of
incorporation and bylaws or other constitutional
documents, as in effect on the Effective Date;
(c) Collateral Documents, Guaranties and other Loan Documents.
As security for all Indebtedness, the Agents shall have received the
following documents:
(i) The following Loan Documents:
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(A) First Amendment to Company Pledge
Agreement executed and delivered by the Company
pledging the equity interests of Aspect
Communications Real Estate Holdings LLC;
(B) within 180 days of the Effective Date,
to the extent necessary under local law to perfect
the Bank's lien on the equity interests of the
Significant Foreign Subsidiaries, First Amendments to
Foreign Pledge Agreements, executed and delivered by
the Company or a Subsidiary, as applicable;
(C) Joinder to Security Agreement, executed
and delivered by Aspect Communications Real Estate
Holdings LLC;
(D) Guaranty, executed and delivered by
Aspect Communications Real Estate Holdings LLC; and
(E) A Mortgage for each property listed on
Schedule 5.1(c)(i), together, in each case, with the
following:
(a) ALTA mortgage title insurance
policy from a title insurance company
reasonably satisfactory to the Agents,
without standard exceptions, in an amount
satisfactory to the Agents and the Banks,
insuring the Collateral Agent's mortgage, to
be a first lien on the Company's or
Subsidiary's interest in the subject
property, subject only to Permitted Liens
and those exceptions, provided the same are
available, acceptable to the Agents and the
Banks. The title policy shall contain,
provided the same are available, zoning
compliance, usury, comprehensive, and any
other endorsements required by the Agents
and the Banks;
(b) Within 45 days of the Effective
Date, survey reasonably satisfactory to and
certified to the Collateral Agent and the
title company, by a surveyor approved by the
Agents and the Banks, such approval not to
be unreasonably withheld or delayed showing
no encroachments or adverse rights, other
than those reasonably acceptable to the
Agents and the Banks and showing ingress and
egress, all recorded easements affecting the
subject property, whether or not the subject
is in a flood plain area, and such other
information as the Agents, any Bank or the
title company reasonably requests, all in
compliance with the Agents' survey
requirements, such survey to be in a form
sufficient to remove any survey exceptions
on the title insurance required under
subsection (b) and to otherwise be in form
and substance satisfactory to the Collateral
Agent;
(c) Evidence of flood insurance, if
required by applicable law; and
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(d) Written environmental audit or
risk assessment acceptable to the Agents and
the Banks prepared at the Company's expense
by a company or engineer experienced in such
matters and acceptable to the Agents and the
Banks with respect to the subject real
estate.
(ii) If requested by the Collateral Agent, in the
case of each leased property listed on
Schedule 5.1(c)(ii) hereto, Collateral
Access Agreements in form and substance
reasonably acceptable to the Agents and the
Banks.
(iii) Certified copies of uniform commercial
code requests for information, or a similar
search report certified by a party
acceptable to the Administrative Agent,
dated a date reasonably near to the
Effective Date, listing all effective
financing statements which name, the Company
or any Subsidiary (under their present names
or under any previous names used within five
(5) years prior to the date hereof) as
debtors and which are filed in the
jurisdictions in which filings are to be
made pursuant to the Collateral Documents,
together with (i) copies of such financing
statements, and (ii) executed Uniform
Commercial Code (Form UCC-3) Termination
Statements, if any, necessary to release all
Liens and other rights of any Person in any
Collateral described in the Collateral
Documents previously granted by any Person
(other than Permitted Liens).
(iv) Any documents (including, without
limitation, financing statements, amendments
to financing statements and assignments of
financing statements, stock powers executed
in blank and any endorsements) reasonably
required to be provided in connection with
the Collateral Documents to create, in favor
of the Collateral Agent (for and on behalf
of the Banks), a perfected security interest
in the Collateral thereunder shall have been
delivered to the Collateral Agent in a
proper form for filing in each office in
each jurisdiction listed in Schedule
5.1(c)(iv), or other office, as the case may
be and shall have been filed in each such
office.
(d) Existing Credit Facilities. All Debt issued under or
pursuant to the Fremont Loan and under that certain term loan in the
original principal amount of $25,000,000 issued under and pursuant to
the Original Credit Agreement, together with all interest, all
prepayment premiums and other amounts due and payable with respect
thereto shall be paid in full immediately after the funding of the
initial Advance under this Agreement and all Liens securing payment of
the Debt under the Fremont Loan shall have been released concurrently
with the funding of the initial Advance and the Collateral Agent shall
have received all Uniform Commercial Code Form UCC-3 termination
statements or other instruments as may be suitable or appropriate in
connection therewith, or undertakings from the applicable secured
parties as to the
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termination and discharge thereof satisfactory in form and substance to
the Collateral Agent.
(e) Insurance. The Agents shall have received evidence
satisfactory to it that the Loan Parties have obtained the insurance
policies required by Section 7.5 hereof and that such insurance
policies are in full force and effect.
(f) Compliance with Certain Documents and Agreements. The Loan
Parties shall have each performed and complied in all material respects
with all agreements and conditions contained in this Agreement and the
other Loan Documents and required to be performed or complied with by
each of them (as of the applicable date) and none of such parties shall
be in material default in the performance or compliance with any of the
terms or provisions hereof or thereof.
(g) Opinions of Counsel. (i) The Loan Parties shall furnish
Agents prior to the initial Advance under this Agreement, with signed
copies for each Bank, opinions of counsel to the Loan Parties, dated
the Effective Date and covering such matters as reasonably required by
and otherwise reasonably satisfactory in form and substance to the
Agents and each of the Banks and (ii) the Agents shall have received an
opinion of local counsel to Agents and the Banks, dated the Effective
Date, covering such matters in relation to the Mortgages as reasonably
required by and otherwise reasonably satisfactory in form and substance
to the Agents and each of the Banks.
(h) Company's Certificate. The Agents shall have received,
with a signed counterpart for each Bank, a certificate of a Responsible
Officer of the Company dated the date of the initial Advance hereunder,
stating that to the best of his or her knowledge after due inquiry, (a)
except to the extent set forth in any post closing letter between the
Company and the Agents, the conditions set forth in this Section 5 have
been satisfied; (b) the representations and warranties made by the Loan
Parties in this Agreement or any of the other Loan Documents, are true
and correct in all material respects; (c) no Default or Event of
Default shall have occurred and be continuing; (d) since September 30,
2003, nothing shall have occurred which has had, or could reasonably be
expected to have, a Material Adverse Effect; and (e) there shall have
been no material changes to the pro-forma opening balance sheet of the
Company most recently delivered to the Agents.
(i) Payment of Fees. Concurrently with the initial Advance
hereunder, Company shall have paid to the Agents, in their respective
individual capacity and as Agents (for their sole respective accounts),
any commitment fee and agency fee due under the terms of the applicable
Fee Letter, and any fees due and payable to the Banks and the Agents'
counsel.
(j) Financial Statements. The Company shall have delivered to
the Agents and each Bank a pro-forma opening balance sheet as of the
Effective Date and financial projections in form and substance
reasonably satisfactory to the Agents and the Banks.
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(k) Unrestricted Cash. The Agents shall have received evidence
satisfactory to them that as of the Effective Date, the Unrestricted
Cash shall be equal to or greater than $100,000,000 and that all
payments with respect to Debt and trade payables are current.
(l) Additional Conditions. The Agents shall have received from
the Company and the Loan Parties all Loan Documents deemed necessary or
advisable by the Agents to consummate the lending arrangement
contemplated between Company, the Agents and the Banks.
5.2 Continuing Conditions. The obligations of the Banks to make
Advances (including the initial Advance) under this Agreement and the obligation
of the Issuing Bank to issue any Letters of Credit shall be subject to the
continuing conditions that:
(a) No Default or Event of Default shall exist as of the date
of the Advance or the request for the Letter of Credit; and
(b) Each of the representations and warranties contained in
this Agreement and in each of the other Loan Documents shall be true
and correct in all material respects as of the date of the Advance or
Letter of Credit as if made on and as of such date (other than any
representation or warranty that expressly speaks only as of a different
date).
6. REPRESENTATIONS AND WARRANTIES
The Company represents and warrants and such representations and
warranties shall survive until the Revolving Credit Maturity Date and thereafter
until the expiration of all Letters of Credit and the final payment in full of
the Indebtedness and the performance by the Company of all other obligations
under this Agreement:
6.1 Corporate Authority. Each Loan Party is a corporation (or other
business entity) duly organized and existing in good standing under the laws of
the state or jurisdiction of its incorporation, each other Subsidiary is a
corporation or other business entity duly organized and existing in good
standing under the laws of the jurisdiction of its incorporation, and, other
than as set forth on Schedule 6.1 hereto, each Loan Party and each Subsidiary is
duly qualified and authorized to do business as a foreign corporation in each
jurisdiction where the character of its assets or the nature of its activities
makes such qualification and authorization necessary, except to the extent that
failure to so qualify and be authorized to do business will not have a Material
Adverse Effect.
6.2 Due Authorization - Company. Execution, delivery and performance of
this Agreement, the other Loan Documents to which the Company is a party and the
issuance of the Notes by the Company (if requested) are within the Company's
corporate powers, have been duly authorized, are not in contravention of any law
applicable to the Company or the terms of the Company's organizational documents
and, except as have been previously obtained or as referred to in Section 6.13,
below, do not require the consent or approval, material to the transactions
contemplated by this Agreement and the other Loan Documents, of any governmental
body, agency or authority.
54
6.3 Due Authorization - Other Loan Parties. Execution, delivery and
performance of the Guaranty, and the other Loan Documents to which each Loan
Party (excluding the Company) is a party, are within the corporate powers of
each such Loan Party, have been duly authorized, are not in contravention of any
law applicable to such Loan Party or the terms of such Loan Party's
organizational documents, and, except as have been previously obtained (or as
referred to in Section 6.13 below), do not require the consent or approval,
material to the transactions contemplated by this Agreement and the other Loan
Documents, of any governmental body, agency or authority not previously
obtained.
6.4 Good Title, No Liens. The property described in Schedules 5.1(c)(i)
and 5.1(c)(ii) hereof constitutes all of the real property owned or leased by
the Company and its Subsidiaries on the Effective Date. The Company and its
Subsidiaries have good title to or a valid leasehold interest in (or, in the
case of any fee interest in real property, good and marketable title to) all of
their respective material assets, subject to the exceptions stated in the next
sentence. There are no Liens on and no financing statements on file with respect
to any of the assets owned by Company or its Subsidiaries, except for (i) any
defects in title to real property that, individually or in the aggregate could
not reasonably be expected to have a Material Adverse Effect and (ii) other
Permitted Liens.
6.5 Taxes. Each of the Loan Parties, and each of their respective
Subsidiaries has filed on or before their respective due dates or within the
applicable grace periods, all federal, state and foreign tax returns which are
required to be filed or has obtained extensions for filing such tax returns and
is not delinquent in filing such returns in accordance with such extensions and
has paid all material taxes which have become due pursuant to those returns or
pursuant to any assessments received by any such party, as the case may be, to
the extent such taxes have become due, except to the extent such tax payments
are being actively contested in good faith by appropriate proceedings and with
respect to which adequate provision has been made on the books of such Loan
Party or such other Subsidiary as may be required by GAAP.
6.6 No Defaults. As of the Effective Date, there exists no material
default under the provisions of any instrument evidencing any outstanding
indebtedness for borrowed money in excess of $50,000 of any Loan Party or any of
their respective Subsidiaries or of any agreement relating thereto.
6.7 Enforceability of Agreement and Loan Documents -- Company. This
Agreement and each of the other Loan Documents to which the Company is a party,
have each been duly executed and delivered by its duly authorized officers and
constitute the valid and binding obligations of the Company, enforceable in
accordance with their respective terms, except as enforcement thereof may be
limited by applicable bankruptcy, reorganization, insolvency, fraudulent
conveyance, moratorium or similar laws affecting the enforcement of creditor's
rights, generally and by general principles of equity (regardless of whether
enforcement is considered in a proceeding in law or equity).
6.8 Enforceability of Loan Documents -- Other Loan Parties. The Loan
Documents to which each of the Loan Parties (other than the Company) is a party,
have each been duly executed and delivered by the duly authorized officers or
members or managers, as the case may be, of each such Loan Party and constitute
the valid and binding obligations of each such
55
Loan Party, enforceable in accordance with their respective terms, except as
enforcement thereof may be limited by applicable bankruptcy, reorganization,
insolvency, fraudulent conveyance, moratorium or similar laws affecting the
enforcement of creditor's rights, generally and by general principles of equity
(regardless of whether enforcement is considered in a proceeding in law or
equity).
6.9 Compliance with Laws. Except as disclosed on Schedule 6.9, each of
the Loan Parties, and each of their respective Subsidiaries has complied with
all applicable federal, state and local laws, ordinances, codes, rules,
regulations and guidelines (including consent decrees and administrative orders)
including but not limited to Hazardous Material Laws, except to the extent that
failure to comply therewith would not have a Material Adverse Effect.
6.10 Non-contravention -- Company. The execution, delivery and
performance of this Agreement and the other Loan Documents to which it is a
party by the Company are not in contravention of the terms of any indenture,
contract, agreement or undertaking to which the Company or any of its
Subsidiaries is a party or by which its or their properties are bound or
affected where such violation would reasonably be expected to have a Material
Adverse Effect.
6.11 Non-contravention -- Other Loan Parties. The execution, delivery
and performance of those Loan Documents signed by each of the Loan Parties
(other than the Company) are not in contravention of the terms of any indenture,
contract, agreement or undertaking to which any such Loan Party is a party or by
which it or its properties are bound or affected where such violation would
reasonably be expected to have a Material Adverse Effect.
6.12 No Litigation. Except for De Minimis Matters or as set forth on
Schedule 6.12 hereof, there is no suit, action, proceeding, including, without
limitation, any bankruptcy proceeding, or governmental investigation pending
against or to the knowledge of the Company, threatened against any Loan Party or
any of their respective Subsidiaries (other than any suit, action or proceeding
in which such Loan Party or such Subsidiary is the plaintiff and in which no
counterclaim or cross-claim against such Loan Party or such Subsidiary has been
filed). Except for De Minimis Matters or as set forth on Schedule 6.12, there is
not outstanding against any Loan Party or any Subsidiary any judgment, decree,
injunction, rule, or order of any court, government, department, commission,
agency, instrumentality or arbitrator nor is any Loan Party or any other
Subsidiary in violation of any applicable law, regulation, ordinance, order,
injunction, decree or requirement of any governmental body or court where such
matters would reasonably be expected to have a Material Adverse Effect.
6.13 Consents, Approvals and Filings, Etc. Except as have been
previously obtained or for De Minimis Matters and except for the consents of
landlords with respect to properties leased by Company and their respective
Subsidiaries, no authorization, consent, approval, license, qualification or
formal exemption from, nor any filing, declaration or registration with, any
court, governmental agency or regulatory authority or any securities exchange or
any other person or party (whether or not governmental) is required in
connection with the execution, delivery and performance: (i) by any of the Loan
Parties of this Agreement, any of the other Loan Documents to which they are a
party, or any other documents or instruments to be executed and or delivered by
any such Loan Parties in connection therewith or herewith; or (ii)
56
by Loan Party, of the liens, pledges, mortgages, security interests or other
encumbrances granted, conveyed or otherwise established (or to be granted,
conveyed or otherwise established) by or under this Agreement or the other Loan
Documents, except for such filings to be made concurrently herewith as are
required by the Collateral Documents to perfect liens in favor of the Collateral
Agent and except for such consents, approvals or filings the failure of which to
obtain would not have a Material Adverse Effect. All such material
authorizations, consents, approvals, licenses, qualifications, exemptions,
filings, declarations and registrations which have previously been obtained or
made, as the case may be, are in full force and effect and are not the subject
of any attack, or to the knowledge of the Company threatened attack (in any
material respect) by appeal or direct proceeding or otherwise.
6.14 Agreements Affecting Financial Condition. As of the Effective
Date, none of the Loan Parties nor any of their respective Subsidiaries is party
to any agreement or instrument or subject to any charter or other corporate
restriction which has a Material Adverse Effect.
6.15 No Investment Company or Margin Stock. None of the Loan Parties
nor any of their respective Subsidiaries is an "investment company" within the
meaning of the Investment Company Act of 1940, as amended. None of the Loan
Parties nor any of their respective Subsidiaries is engaged principally, or as
one of its important activities, directly or indirectly, in the business of
extending credit for the purpose of purchasing or carrying margin stock. None of
the proceeds of any of the Advances will be used by any Loan Party nor any of
their respective Subsidiaries to purchase or carry margin stock or will be made
available by any Loan Party or any of their respective Subsidiaries in any
manner to any other Person to enable or assist such Person in purchasing or
carrying margin stock. Terms for which meanings are provided in Regulation U of
the Board of Governors of the Federal Reserve System or any regulations
substituted therefor, as from time to time in effect, are used in this Section
6.15 with such meanings.
6.16 ERISA. None of the Loan Parties nor any of their respective
Subsidiaries maintains or contributes to any Pension Plan subject to Title IV of
ERISA, except as set forth on Schedule 6.16 hereto, as amended by the Company
from time to time during the term hereof; and there is no accumulated funding
deficiency within the meaning of ERISA, or any outstanding liability with
respect to any of the Pension Plans owed to the PBGC or any successor thereto
other than future premiums due and owing pursuant to Section 4006 of ERISA, and
no "reportable event" as defined in ERISA has occurred with respect to any
Pension Plan other than an event for which the notice requirement has been
waived by the PBGC. Neither the Loan Parties nor any of their respective
Subsidiaries have engaged in a transaction with respect to any Pension Plan,
other than a transaction for which an exemption is available and has been
obtained, which could subject the Company or the Subsidiaries to a tax or
penalty imposed by Section 4975 of the Code or Section 502(i) of ERISA in an
amount that would be material. All Pension Plans are in material compliance with
the requirements of the Internal Revenue Code and ERISA.
6.17 Conditions Affecting Business or Properties. As of the Effective
Date, neither the respective businesses nor the properties of any Loan Party nor
any of their respective Subsidiaries is affected by any fire, explosion,
accident, strike, lockout or other dispute, drought, storm, hail, earthquake,
embargo, Act of God, or other casualty (not covered by
57
insurance) which is reasonably likely to have a Material Adverse Effect, or if
such event or condition were to continue for more than thirty (30) additional
days would reasonably be expected to have a Material Adverse Effect.
6.18 Environmental and Safety Matters. Except as set forth in Schedules
6.18 and 6.12 and except for such matters as are not reasonably likely to have a
Material Adverse Effect:
(a) all facilities and property owned or leased by the Loan
Parties or any of their respective Subsidiaries, are in material
compliance with all Hazardous Material Laws;
(b) to the knowledge of the Company, there have been no
unresolved and outstanding past, and there are no pending or threatened
(i) written claims, complaints, notices or
requests for information received by any
Loan Party or any of their respective
Subsidiaries with respect to any alleged
violation of any Hazardous Material Law, or
(ii) written complaints, notices or
inquiries to any Loan Party or any of their
respective Subsidiaries regarding potential
liability of the Loan Parties or any of
their respective subsidiaries under any
Hazardous Material Law; and
(c) to the knowledge of the Company, no conditions exist at,
on or under any property now or previously owned or leased by the Loan
Parties or any of their respective Subsidiaries which, with the passage
of time, or the giving of notice or both, are reasonably likely to give
rise to liability under any Hazardous Material Law or create a
significant adverse effect on the value of the property.
6.19 Subsidiaries. Except as disclosed on Schedule 6.19 hereto as of
the Effective Date, and thereafter, except as disclosed to the Agents in writing
from time to time, Company has no Subsidiaries.
6.20 Accuracy of Information. (a) Each of the Company's financial
statements furnished to Agents and the Banks fairly presents in all material
respects (subject to year-end adjustments and the omission of notes thereto in
the case of interim statements) the financial condition of the Company and its
Subsidiaries and the results of their operations for the periods covered
thereby, and has been prepared in accordance with GAAP. The projections and pro
forma financial information furnished to Agents and the Banks are based upon
good faith estimates and assumptions believed by management of the Company to be
reasonable at the time made, it being recognized by the Banks that such
financial information as it relates to future events is not to be viewed as fact
and that actual results during the period or periods covered by such financial
information may differ from the projected results set forth therein.
(b) Since September 30, 2003, there has been no material
adverse change in the financial condition of Company and its
Subsidiaries taken as a whole, to the knowledge of the Company, as of
the Effective Date, neither Company nor any of its
58
Subsidiaries has any material contingent obligations (including any
liability for taxes) not disclosed by or reserved against in the pro
forma opening balance sheet to be delivered hereunder, except as set
forth on Schedule 6.20 hereof, as of the Effective Date there are no
unrealized or anticipated losses from any present commitment of Company
or any of its Subsidiaries which contingent obligations and losses in
the aggregate would reasonably be expected to have a Material Adverse
Effect.
6.21 Labor Relations. None of the Loan Parties nor any of their
respective Subsidiaries is engaged in any unfair labor practice that could
reasonably be expected to have a Material Adverse Effect. There is (i) no unfair
labor practice complaint pending against the Loan Parties nor any of their
respective Subsidiaries or to the knowledge of Company, threatened against any
of them, before the National Labor Relations Board, and no grievance or
arbitration proceeding arising out of or under any collective bargaining
agreement is so pending against any of them or, to the knowledge of Company,
threatened against any of them, (ii) no strike, labor dispute, slowdown or
stoppage pending against the Company or any Subsidiary or to the knowledge of
Company, threatened against any of them and (iii) no union representation
question existing with respect to the employees of the Loan Parties or any of
their respective Subsidiaries, in each case or in the aggregate which could
reasonably be expected to have a Material Adverse Effect.
6.22 Existing Debt. As of the Effective Date, Schedule 8.1(b) hereto
sets forth a true and complete list of all Debt for borrowed money (other than
Indebtedness) of the Company and the Subsidiaries as of the Effective Date that
is in excess of $50,000 for any one issue and is to remain outstanding after
giving effect to the initial Advance on the Effective Date, in each case showing
the aggregate principal amount thereof and the name of the company (or issuer)
and any other Person which directly or indirectly guaranteed such Debt.
6.23 Solvency. As of the Effective Date, after giving effect to the
consummation of the transactions contemplated by this Agreement, the Company and
the Loan Parties will each be solvent, able to pay its indebtedness as it
matures and will have capital sufficient to carry on its business and all
business in which it is about to engage. This Agreement is being executed and
delivered by the Company to Agents and the Banks in good faith and in exchange
for fair, equivalent consideration. As of the Effective Date, neither the
Company nor any other Loan Party intends to nor does management of the Company
or any other Loan Party believe it will incur debts beyond its ability to pay as
they mature. Neither the Company nor any other Loan Party contemplates filing a
petition in bankruptcy or for an arrangement or reorganization under the
Bankruptcy Code or any similar law of any jurisdiction now or hereafter in
effect relating to the Company or any other Loan Party, nor does the Company or
any other Loan Party have any knowledge of any threatened bankruptcy or
insolvency proceedings against the Company or any Subsidiary of the Company.
6.24 Capitalization. On the Effective Date, all issued and outstanding
shares of capital stock of Company and its Subsidiaries are duly authorized and
validly issued, fully paid, nonassessable, free and clear of all Liens other
than Permitted Liens and such shares were issued in compliance with all
applicable state and federal laws concerning the issuance of securities. On the
Effective Date, the capital stock of each Subsidiary is owned by the
stockholders and in the amounts set forth on Schedule 6.24. On the Effective
Date, no shares
59
of the capital stock of any Subsidiary, other than those described above, are
issued and outstanding. On the Effective Date, except as disclosed on Schedule
6.24, there are no preemptive or other outstanding rights, options, warrants,
conversion rights or similar agreements or understandings for the purchase or
acquisition from the Company or any Subsidiary, of any shares of capital stock
or other securities of any Subsidiary.
6.25 Accounts. Each Account is based on an actual and bona fide sale
and delivery of Inventory or rendition of services to its customers, made by the
Company or one of its Subsidiaries in the ordinary course of its business; the
Inventory being sold, and the Accounts created, are the exclusive property of
the Company or the applicable Subsidiary and are not and shall not be subject to
any Lien, consignment arrangement, or financing statement whatsoever, other than
the Permitted Liens; the invoices evidencing such Accounts are in the name of
the Company or the applicable Subsidiary; and the customers of the Company or
the applicable Subsidiary have accepted the Inventory or services, owe and are
obligated to pay the full amounts stated in the invoices according to their
terms, without dispute, offset, defense, counterclaim or contra, except for
disputes and other matters arising in the ordinary course of business, if
Company has complied with the notification requirements of Section 7.2(g) to the
extent required thereby. Company confirms to the Agents that any and all taxes
or fees relating to its business, its sales, the Accounts or Inventory relating
thereto, are its sole responsibility and that same will be paid by the Company
or the applicable Subsidiary when due and that none of said taxes or fees
represent a lien on or claim against the Accounts. Company hereby further
represents and warrants that neither it nor any of the other Subsidiaries shall
acquire any Inventory on a consignment basis, nor co-mingle its Inventory with
any of its customers or any other Person, including pursuant to any bill and
hold sale or otherwise, and that its Inventory is marketable to its customers in
the ordinary course of business of the Company or the applicable Subsidiary,
except as it may otherwise report in writing to the Agents pursuant to Section
7.2(g) hereof from time to time. Company also warrants and represents that it
and each of its Subsidiaries is a duly and validly existing corporation or other
corporate entity and it and its Subsidiaries are qualified in all states where
the failure to so qualify would have a Material Adverse Effect on its ability or
the ability of such Subsidiaries to enforce collection of Accounts due from
customers residing in that state.
7. AFFIRMATIVE COVENANTS
The Company covenants and agrees that it will, and, as applicable, it
will cause each of its Subsidiaries, until the Revolving Credit Maturity Date
and thereafter until expiration of all Letters of Credit and final payment in
full of the Indebtedness and the performance by the Company and its
Subsidiaries, as applicable, of all other obligations under this Agreement and
the other Loan Documents, to:
7.1 Financial Statements. Furnish to the Agents with sufficient copies
for each Bank:
(a) as soon as available, but in any event within ninety one
(91) days after the end of each fiscal year of the Company a copy of
the audited Consolidated and unaudited Consolidating financial
statements of the Company and the Subsidiaries as of the end of such
year and the related audited statements of income, stockholders equity,
and cash flows for such year and underlying assumptions, setting forth
in each case in
60
comparative form the figures for the previous year, certified as being
fairly stated in all material respects by an independent certified
public accounting firm reasonably satisfactory to the Agents and the
Majority Banks; and
(b) as soon as available, but in any event not later than
forty five (45) days after the end of each fiscal quarter, Company
prepared unaudited Consolidated and Consolidating balance sheets of the
Company and the Subsidiaries as of the end of such fiscal quarter and
the related unaudited statements of income, stockholders equity and
cash flows for the portion of the fiscal year through the end of such
fiscal quarter, setting forth in each case in comparative form the
figures for the corresponding periods in the previous year, and
certified by a Responsible Officer as being fairly stated in all
material respects; and
(c) as soon as available, but in any event not later than
forty five (45) days after the end of each month, Company prepared
unaudited Consolidated and Consolidating balance sheets of the Company
and the Subsidiaries as of the end of such month and the related
unaudited statements of income, stockholders equity and cash flows for
the portion of the fiscal year through the end of such fiscal month,
setting forth in each case in comparative form the figures for the
corresponding periods in the previous year, and certified by a
Responsible Officer as being fairly stated in all material respects
all such financial statements to be complete and correct in all material
respects and to be prepared in reasonable detail and in accordance with GAAP
throughout the periods reflected therein and with prior periods (except as
approved by such officer and disclosed therein), provided however that the
financial statements delivered pursuant to clauses (b) and (c) hereof will not
be required to include footnotes and will be subject to year-end adjustments.
7.2 Certificates; Other Information. Furnish to the Agents with
sufficient copies for each Bank:
(a) Within forty five (45) days after and as the end of each
fiscal quarter, a Covenant Compliance Report;
(b) No earlier than sixty (60) days prior nor later than the
end of each fiscal year beginning with the current fiscal year, the
Company shall prepare and deliver to the Agents and the Banks
projections of the Company and the Subsidiaries for the next succeeding
fiscal year, on a month to month basis and for the following three (3)
fiscal years on an annual basis, including a balance sheet as of the
end of each relevant period and income statements and statements of
cash flows for each relevant period and for the period commencing at
the beginning of the fiscal year and ending on the last day of such
relevant period;
(c) Promptly upon receipt thereof, the Company shall deliver
copies of all significant reports submitted by the Company's firm of
certified public accountants in connection with each annual, interim or
special audit or review of any type of the financial statements or
related internal control systems of the Company and the
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Subsidiaries made by such accountants, including any comment letter
submitted by such accountants to managements in connection with their
services;
(d) Promptly upon becoming available to Company, regular and
periodic reports, including Forms 10-K, 10-Q and 8-K, filed by Company
with the Securities and Exchange Commission;
(e) Other than as set forth in clause (d) above, any reports,
notices, registrations statements, prospectuses, or proxy statements
generally distributed by Company to its stockholders on a date no later
than the date supplied to such stockholders;
(f) Not later than one (1) Business Day prior to the
occurrence thereof, written notification of any Change in Control;
(g) Written notification of any matters affecting the value,
enforceability or collectibility of any Account and of all customer
disputes, offsets, defenses, counterclaims, returns, rejections and all
reclaimed or repossessed merchandise or goods, and of any adverse
effect in the value of its Inventory which in either case shall have a
Material Adverse Effect, in such detail and format as the Collateral
Agent may reasonably require from time to time and prompt written
notification of any such matters which are material, as a whole, to the
Accounts and/or the Inventory.
(h) Contemporaneously with the delivery of each Covenant
Compliance Report submitted by Company to Bank for the fiscal quarter
ending December 31 of each year, information regarding any new
intellectual property acquired by the Company or any Domestic
Subsidiary during the prior fiscal year for which the Company has filed
an application with the United States Patent and Trademark Office or
the United States Copyright Office, including, to the extent available,
the patent number, date of grant and patent application number of all
new patents, the trademark name, registration number, registration
date, application number and filing date of all new trademarks and the
name, registration date, registration number, application number and
filing date of all new copyrights of the Company or any Domestic
Subsidiary, and the application number and filing date of any
applications made to the United States Patent and Trademark Office or
the United States Copyright Office during the prior fiscal year.
(i) Promptly and in form to be reasonably satisfactory to the
requesting Bank, such additional financial and/or other information, or
other reports as any Bank may from time to time reasonably request.
7.3 Payment of Obligations. Pay, discharge or otherwise satisfy at or
before maturity or before they become delinquent, as the case may be, all taxes
and all of its material obligations of whatever nature, except where the amount
or validity thereof is currently being contested in good faith by appropriate
proceedings and reserves in conformity with GAAP with respect thereto have been
provided on the books of the Company.
7.4 Conduct of Business and Maintenance of Existence; Compliance with
Laws.
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(a) (i) Continue to engage solely in the business now
conducted by the Company or its Subsidiaries and businesses related
thereto and (ii) take all action it deems necessary in its reasonable
business judgment to keep in full force and effect its existence,
except as otherwise permitted pursuant to Sections 8.4 and 8.5;
(b) Take all reasonable action it deems necessary in its
reasonable business judgment to maintain all rights, privileges and
franchises necessary in the normal conduct of its business except as
otherwise permitted pursuant to Section 8.5 or where the failure to so
maintain would not reasonably be expected to have a Material Adverse
Effect; and
(c) Comply with all Contractual Obligations and Requirements
of Law, except to the extent that failure to comply therewith could
not, in the aggregate, reasonably be expected to have a Material
Adverse Effect.
7.5 Maintenance of Property; Insurance. (a) Keep all material property
it deems, in its reasonable business judgment, useful and necessary in its
business in working order (ordinary wear and excepted), except where the failure
to maintain such property would not reasonably be expected to have a Material
Adverse Effect; and (b) maintain insurance coverage on its physical assets and
against other business risks in such amounts and of such types as are
customarily carried by companies similar in size and nature (including without
limitation casualty and public liability and property damage insurance), and in
the event of acquisition of additional property, real or personal, or of
incurrence of additional risks of any nature, increase such insurance coverage
in such manner and to such extent as prudent business judgment and present
practice or any applicable Requirements of Law would dictate, and in the case of
all general liability policies name the Agents as additional insureds and in the
case of all policies covering any Collateral, all such insurance policies shall
provide that the loss payable thereunder shall be payable to Company or such
Subsidiary, and to the Collateral Agent for the benefit of the Banks (Collateral
Agent as lender loss payee) as their respective interests may appear, and
certificates evidencing such policies, including all endorsements thereto, to be
deposited with the Collateral Agent upon its request.
7.6 Inspection of Property; Books and Records, Discussions. Permit
Agents and each Bank, through their authorized attorneys, accountants and
representatives (a) at all reasonable times during normal business hours, upon
the request of either Agent or such Bank, to examine Company's and each
Subsidiary's books, accounts, records, ledgers and assets and properties of
every kind and description wherever located; (b) at any time and from time to
time, upon the request of the Collateral Agent or the Majority Banks, to conduct
full or partial collateral audits of Company and the Subsidiaries to be
completed by an appraiser as may be selected by the Collateral Agent and the
Majority Banks and consented to by Company (such consent not to be unreasonably
withheld), with all reasonable costs and expenses of such audits to be
reimbursed by Company, provided however that prior to the occurrence and
continuance of any Default or Event of Default, the Company shall be required to
reimburse the Collateral Agent for the reasonable costs and expenses of no more
than one (1) such audit conducted by Collateral Agent in any year and provided
further however that Company shall be required to reimburse the Collateral Agent
for all reasonable costs and expenses of all audits conducted after the
occurrence and during the continuance of a Default or Event of Default; and (c)
permit Agents
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and each Bank or their authorized representatives, at reasonable times and
intervals, to visit all of their respective offices, discuss their respective
financial matters with their respective officers and independent certified or
chartered public accountants, as applicable, and, by this provision, Company
authorizes such accountants to discuss the finances and affairs of Company and
the Subsidiaries (provided that Company is given an opportunity to participate
in such discussions) and examine any of its or their books and other corporate
records. Notwithstanding the foregoing, all information furnished to the Agents
or the Banks hereunder shall be subject to the undertaking of the Banks set
forth in Section 13.11 hereof.
7.7 Notices. Promptly give notice to the Agents of:
(a) the occurrence of any Default or Event of Default of which
the Company or any Subsidiary has knowledge;
(b) any (i) default or event of default under any Contractual
Obligation of Company or any Subsidiary of which the Company or such
Subsidiary had knowledge or (ii) litigation, investigation or
proceeding which may exist at any time between the Company or any
Subsidiary and any Governmental Authority or other third party, which
in either case, if not cured or if it is reasonably likely to be
adversely determined, as the case may be, would have a Material Adverse
Effect or (iii) any change in the financial condition of the Company or
any of the Subsidiaries since the date of the last audited financial
statements delivered pursuant to Section 7.1(a) hereof which could
reasonably be expected to have a Material Adverse Effect;
(c) any event which the Company reasonably believes is
reasonably likely to have a Material Adverse Effect;
(d) promptly after becoming aware of the taking by the
Internal Revenue Service or any foreign taxing jurisdiction of a
written tax position (or any such tax position taken by the Company or
any Subsidiary) which could reasonably be expected to have a Material
Adverse Effect upon the Company or any Subsidiary setting forth the
details of such position and the financial impact thereof;
(e) not less than 10 days prior to the proposed effective date
thereof, copies of any proposed material amendments, restatements or
other modification to the Subordinated Debt Documents;
(f) (i) all jurisdictions in which the Company or any of the
Subsidiaries becomes qualified after the Effective Date to transact
business, and (ii) any material change after the Effective Date in the
authorized and issued capital stock or other equity interests of
Company or any of the Subsidiaries or any other material amendment to
their charter, by-laws or other organizational documents if such
changes could have a Material Adverse Effect, such notice, in each
case, to identify the applicable jurisdictions, capital structures or
amendments as applicable; and
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(g) concurrently with the delivery thereof, any notices to any
holder of Subordinated Debt pursuant to the Subordinated Debt Documents
other than notices required hereunder.
Each notice pursuant to this Section shall be accompanied by a statement of a
Responsible Officer setting forth details of the occurrence referred to therein
and stating what action the Company has taken or proposes to take with respect
thereto.
7.8 Hazardous Material Laws.
(a) Use and operate all of its facilities and properties in
material compliance with all applicable Hazardous Material Laws, keep
all required material permits, approvals, certificates, licenses and
other authorizations required under such Hazardous Material Laws in
effect and remain in material compliance therewith, and handle all
Hazardous Materials in material compliance with all applicable
Hazardous Material Laws, in each case, except where the failure to do
so would not reasonably be expected to have a Material Adverse Effect;
(b) Promptly notify the Administrative Agent and provide
copies upon receipt of all written claims, complaints, notices or
inquiries received by the Company or any of the Subsidiaries of a
material nature relating to its facilities and properties or compliance
with Hazardous Material Laws;
(c) To the extent necessary to materially comply with
Hazardous Material Laws, remediate or monitor contamination arising
from a release or disposal of Hazardous Material;
(d) Provide such information and certifications which any Bank
may reasonably request from time to time to evidence compliance with
this Section 7.8.
7.9 Maintain Liquidity Ratio. Maintain at all times during each fiscal
quarter of Company ending during the periods specified below, a Liquidity Ratio
of not less than the following amounts:
FISCAL QUARTER ENDING RATIO
--------------------- -----
December 31, 2003 through September 29, 2004 1.50 to 1.0
September 30, 2004 through March 30, 2005 1.75 to 1.00
March 31, 2005 and thereafter 2.00 to 1.00
7.9A Maintain Consolidated Fixed Charge Coverage Ratio.
Maintain a Consolidated Fixed Charge Coverage Ratio of not less than 1.50 to
1.00 as of the last day of each fiscal quarter commencing with the fiscal
quarter ending December 31, 2003.
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7.9B Maintain Consolidated Total Debt to EBITDA Ratio. Maintain a
Consolidated Total Debt to EBITDA Ratio of not more than 1.25 to 1.00 as of the
last day of each fiscal quarter ending December 31, 2003 and each fiscal quarter
thereafter.
7.10 Maintain Consolidated Tangible Effective Net Worth. Maintain at
all times a Consolidated Tangible Effective Net Worth of not less than Base
Consolidated Tangible Effective Net Worth.
7.11 Maintain Consolidated EBITDA. Maintain Consolidated EBITDA as of
the last day of the fiscal quarter ending December 31, 2003 and of each fiscal
quarter thereafter of not less than Ten Million Dollars ($10,000,000).
7.12 Governmental and Other Approvals. Apply for, obtain and/or
maintain in effect, as applicable, all authorizations, consents, approvals,
licenses, qualifications, exemptions, filings, declarations and registrations
(whether with any court, governmental agency, regulatory authority, securities
exchange or otherwise) which are necessary in connection with the execution,
delivery and performance by such Loan Parties, of this Agreement, the other Loan
Documents, or any other documents or instruments to be executed and/or delivered
by such Loan Parties in connection therewith or herewith, except where the
failure to so apply for, obtain or maintain would not reasonably be expected to
have a Material Adverse Effect.
7.13 Compliance with ERISA. Comply in all material respects with all
applicable requirements imposed by ERISA as presently in effect or hereafter
promulgated or the Internal Revenue Code, including, but not limited to, the
minimum funding requirements of any Pension Plan, except where the failure to
comply is not likely to have a Material Adverse Effect.
7.14 ERISA Notices. Promptly notify Administrative Agent upon the
occurrence of any of the following events if such event is likely to have a
Material Adverse Effect:
(a) the termination, other than a standard termination, as
defined in ERISA, of any Pension Plan subject to Subtitle C of Title IV
of ERISA;
(b) the Company's or any Subsidiary's receipt of notice of the
appointment of a trustee by a United States District Court to
administer any Pension Plan subject to Title IV of ERISA;
(c) the Company's or any Subsidiary's receipt of notice of the
commencement by the Pension Benefit Guaranty Corporation, or any
successor thereto, of any proceeding to terminate any Pension Plan
subject to Title IV of ERISA;
(d) the failure of the Company or any Subsidiary to make any
payment in respect of any Pension Plan required under Section 412 of
the Internal Revenue Code;
(e) the withdrawal of the Company or any Subsidiary from any
Multiemployer Plan if the Company reasonably believes that such
withdrawal would give rise to the imposition of withdrawal liability
with respect thereto; or
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(f) the occurrence of a "reportable event" which is required
to be reported by the Company under Section 4043 of ERISA as defined in
ERISA other than any event for which the reporting requirement has been
waived by the PBGC or a "prohibited transaction" as defined in Section
406 of ERISA or Section 4975 of the Internal Revenue Code other than a
transaction for which a statutory exemption is available or an
administrative exemption has been obtained which in either case is
likely to have a Material Adverse Effect.
7.15 Security; Defense of Collateral. Take such actions as the
Collateral Agent or the Majority Banks may from time to time reasonably request
to establish and maintain first perfected security interests in and Liens on all
of its Collateral, subject only to Permitted Liens; and defend the Collateral
from any Liens other than Permitted Liens.
7.16 Intellectual Property. Maintain in force and effect all
Proprietary Rights and other authorizations necessary in Company's reasonable
judgment for the ownership and operation of its and its Subsidiaries' properties
and business, except where the failure to so maintain is not likely to have a
Material Adverse Effect.
7.17 Use of Proceeds. Use all Advances of the Revolving Credit as set
forth in Section 2.15 hereof and not use any portion of the proceeds of any such
advances for the purpose of purchasing or carrying any "margin stock" (as
defined in Regulation U of the Board of Governors of the Federal Reserve System)
in any manner which violates the provisions of Regulation T, U or X of said
Board of Governors or for any other purpose in violation of any applicable
statute or regulation.
7.18 Future Subsidiaries; Additional Collateral.
(a) With respect to each Foreign Subsidiary which is a
Significant Foreign Subsidiary on the Effective Date, within ninety
(90) days of the Effective Date, the Company shall promptly execute, or
cause to be executed by its Domestic Subsidiaries (to the extent
applicable), and delivered to the Collateral Agent a local law Foreign
Pledge Agreement encumbering the capital stock or other ownership
interests of such Foreign Subsidiary to secure the Indebtedness of the
Company;
(b) With respect to each Person which becomes a Domestic
Subsidiary of Company (directly or indirectly) subsequent to the
Effective Date, within thirty (30) days of the date such Person is
created, acquired or otherwise becomes a Subsidiary (whichever first
occurs), cause such new Subsidiary to execute and deliver to the Agents
(x) a Joinder Agreement (attached to the Guaranty as Exhibit A) whereby
such Subsidiary becomes obligated as a Guarantor under the Guaranty and
(y) a joinder agreement to the Security Agreement;
(c) With respect to real property located in the United States
owned, leased or otherwise acquired by Company or any Domestic
Subsidiary after the Effective Date, not later than forty five (45)
days after such property is acquired, the applicable party shall (a) in
the case of owned real property, execute or cause to be executed
(unless waived by the Banks) a Mortgage covering such owned real
property, together with
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such real estate documentation as would have been required for such
property under Section 5.1(c)(i)(E) hereof had it been owned as of the
Effective Date, such as title insurance, surveys, environmental audits,
and opinions of counsel each in form and substance acceptable to Agents
and the Majority Banks, and (b) in the case of leased real property, at
Collateral Agent's option, shall use its best efforts to obtain a
leasehold mortgage and/or a lessor's acknowledgment and consent and
Collateral Access Agreement in form and substance reasonably acceptable
to the Agents;
(d) With respect to the share capital (or other ownership
interests) of each Person which becomes a Subsidiary subsequent to the
Effective Date,
(i) in the case of any Domestic Subsidiary,
within thirty (30) days of the date such
Person is created, acquired or otherwise
becomes a Domestic Subsidiary, the Company
shall execute, or cause to be executed, and
deliver to the Collateral Agent a Pledge
Agreement or a Security Agreement, as
applicable, encumbering all of the share
capital or other ownership interests of such
Subsidiary to secure the Indebtedness of the
Company; and
(ii) in the case of any Significant Foreign
Subsidiary whose share capital is owned in
whole or in part by the Company or any
Domestic Subsidiary, at the request of the
Collateral Agent and the Majority Banks and
to the extent permitted under applicable
local law, the Company or the applicable
Domestic Subsidiary shall promptly execute,
or cause to be executed, and deliver to the
Collateral Agent a local law pledge
agreement encumbering 65% (or such greater
percentage as may then be permitted under
applicable United States tax law) of the
total share capital or other ownership
interests of such Subsidiary to secure the
Indebtedness of the Company; or, if such
Significant Foreign Subsidiary is treated as
a disregarded entity under the Internal
Revenue Code, a local law pledge agreement
encumbering 100% of the total share capital
or other ownership interests of such
Subsidiary;
in each case in form reasonably satisfactory to the Agents and the
Majority Banks, in their reasonable discretion, together with such
supporting documentation, including without limitation corporate
authority items, certificates and opinions of counsel, as reasonably
required by the Agents and the Majority Banks and the Company shall
take, or cause to be taken, such steps as are necessary or advisable
under applicable law to perfect the liens granted under this Section
7.18.
7.19 Further Assurances. Execute and deliver or cause to be executed
and delivered to Agents within a reasonable time following any Agent's
reasonable request, and at the Company's expense, such other documents or
instruments as any Agent may reasonably require to perfect its security interest
in the Collateral or otherwise to effectuate more fully the purposes of this
Agreement or the other Loan Documents.
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7.20 Additional Collateral Actions. Execute and deliver or cause to be
executed and delivered to Collateral Agent such security agreements, account
control agreements and other documents reasonably required by Collateral Agent
in order for Collateral Agent to obtain a first priority perfected security
interest in all of Company's deposit accounts, securities accounts and all
investment property therein, including all Cash Equivalents and Short Term
Investments.
7.21 Investment Property and Cash. Maintain at all times all of its
cash, Cash Equivalents, Short Term Investments and investment property in
deposit accounts and securities accounts which are subject to a first priority
security interest in favor of the Collateral Agent (for the benefit of the
Banks), and maintain a lockbox with the Administrative Agent to hold all
payments made to Company or its Domestic Subsidiaries on Accounts.
8. NEGATIVE COVENANTS.
Company covenants and agrees that, until the Revolving Credit Maturity
Date and thereafter until expiration of all Letters of Credit and final payment
in full of the Indebtedness and the performance by Company and its Subsidiaries
of all other obligations under this Agreement and the other Loan Documents, it
will not, and will not permit any of the Subsidiaries, to:
8.1 Limitation on Debt. Create, incur, assume or suffer to exist any
Debt, except:
(a) Indebtedness under this Agreement and the other Loan
Documents;
(b) any Debt existing on the Effective Date and set forth in
Schedule 8.1(b) attached hereto and any renewals or refinancing of such
Debt in amounts not exceeding the scheduled amounts (less any required
amortization according to the terms thereof), on terms no less
favorable to Company or the applicable Subsidiary as in effect on the
Effective Date provided that the average life to maturity of such
renewal or refinancing Debt is greater than or equal to that of the
Debt renewed or refinanced and such renewal or refinancing Debt is
otherwise in compliance with this Agreement;
(c) Debt of the Company or a Subsidiary, excluding Debt
otherwise permitted under this Section 8.1, incurred to finance the
acquisition of fixed or capital assets (whether pursuant to a loan or a
Capital Lease), provided that the aggregate amount of all such Debt
shall not exceed Ten Million Dollars ($10,000,000) at any one time
outstanding;
(d) Subordinated Debt;
(e) Debt under any Hedging Transactions;
(f) unsecured Debt incurred in the ordinary course of business
in respect of netting services, overdraft protections and otherwise in
connection with deposit accounts;
69
(g) Guarantee Obligations permitted under Section 8.3 or any
other Loan Document;
(h) current unsecured trade, utility or nonextraordinary
accounts payable (including without limitation, Operating Leases and
short term Debt owed to vendors) arising in the ordinary course of
Company's or such Subsidiary's businesses;
(i) Debt in respect of taxes, assessments or governmental
charges to the extent that payment thereof shall not at the time be
required to be made in accordance with Section 7.3;
(j) Guarantee Obligations permitted under Section 8.3;
(k) Debt arising from judgments or decrees in circumstances
not constituting an Event of Default under Section 9.1;
(l) Intercompany Loans, but only to the extent permitted under
Section 8.8 hereof;
(m) Debt secured by Permitted Liens;
(n) Debt of Foreign Subsidiaries in an aggregate amount
outstanding not to exceed $5,000,000 and not to exceed $2,000,000 for
any single Foreign Subsidiary; and
(o) additional unsecured Debt not exceeding $5,000,000 in
aggregate principal amount at any one time outstanding.
8.2 Limitation on Liens. Create, incur, assume or suffer to exist any
Lien upon any of its property, assets or revenues, whether now owned or
hereafter acquired, except for Permitted Liens.
8.3 Limitation on Guarantee Obligations. Create, incur, assume or
suffer to exist any Guarantee Obligation except (a) the Guaranty, (b) Guarantee
Obligations by Company or any Guarantor in respect of Debt incurred by Company
or any other Guarantor or any Foreign Subsidiary subject to Section 8.8(e) of
this Agreement, as the case may be, in compliance with this Agreement, (c)
Guarantee Obligations of the Guarantors in respect of the Subordinated Debt, (d)
Guarantee Obligations not otherwise permitted under this Section 8.3 in respect
of Debt incurred by any Person, provided that the aggregate principal amount of
such Debt at any time outstanding does not exceed $1,000,000, (e) Guarantee
Obligations existing on the Effective Date and set forth on Schedule 8.3 hereof,
(f) Guarantee Obligations arising with respect to customary indemnification and
purchase price adjustment obligations incurred in connection with any sale or
disposition of assets, (g) Guarantee Obligations incurred in the ordinary course
of business with respect to surety and appeal bonds, performance and
return-of-money bonds and similar obligations not exceeding at any time
outstanding $1,000,000 in aggregate liability, (h) unsecured guaranties incurred
in the ordinary course of business of the obligation of suppliers, customers and
licensees of Company and its Subsidiaries not exceeding at any time outstanding
$2,000,000 and (i) unsecured Guarantee Obligations of Company or
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any Subsidiary with respect to Debt of any Foreign Subsidiary not exceeding at
any time outstanding $2,000,000.
8.4 Acquisitions. Except for Permitted Acquisitions, purchase or
otherwise acquire or become obligated for the purchase of all or substantially
all or any material portion of the assets or business interests of any Person,
firm or corporation, or any shares of stock (or other ownership interests) of
any corporation, trusteeship or association, or any business or going concern,
or in any other manner effectuate an expansion of present business in any
material respect by acquisition.
8.5 Limitation on Mergers, other Fundamental Changes or Sale of Assets.
Enter into any merger or consolidation or convey, sell, lease, assign, transfer
or otherwise dispose of any of its property, business or assets (including,
without limitation, receivables and leasehold interests), whether now owned or
hereafter acquired or, if reasonably likely to materially adversely affect the
rights or remedies of the Agents or the Banks under this Agreement or the other
Loan Documents, make any material change in its capital structure, except:
(a) Inventory leased or sold in the ordinary course of
business;
(b) obsolete or worn out property or equipment, or property or
equipment no longer useful in the conduct of Company's or any
Subsidiary's business;
(c) (i) mergers or consolidations of any Subsidiary with or
into Company (so long as Company shall be the continuing or surviving
entity); (ii) mergers or consolidations of any Foreign Subsidiary with
or into any other Foreign Subsidiary; and (iii) mergers or
consolidations of any Subsidiary with or into any Guarantor, so long as
such Guarantor shall be the continuing or surviving entity; provided,
however, that at the time of each such merger or consolidation under
sub-clauses (i) through (iii) of this clause (c), both before and after
giving effect thereto, no Default or Event of Default shall have
occurred and be continuing;
(d) any Subsidiary may liquidate or dissolve into the Company
or any Guarantor if the Company determines in good faith that such
liquidation or dissolution is in the best interests of the Company;
(e) sales or transfers, including upon voluntary liquidation
(i) between Company and any Guarantor; or (ii) from any Subsidiary of
the Company to the Company or any Guarantor; or (iii) between any
Foreign Subsidiaries;
(f) subject to Section 2.13(b) hereof, provided that no
Default or Event of Default has occurred and is continuing at the time
of each such sale (both before and after giving effect to such Asset
Sale), (i) Asset Sales in which the sales price is at least the fair
market value of the assets sold, as determined in good faith by the
Company's Board of Directors, and the aggregate amount of such Asset
Sales is less than Five Million Dollars ($5,000,000) in any fiscal year
and the consideration received is cash or Cash Equivalents or property
that is converted into cash or Cash Equivalents within
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ninety (90) days of the closing of such Asset Sales and (ii) other
Asset Sales approved by the Majority Banks;
(g) the sale, disposition and purchase of Cash Equivalents and
Short Term Investments in the ordinary course of business;
(h) the sale and leaseback of assets authorized under Section
8.10;
(i) licenses of Proprietary Rights in the ordinary course of
business; and
(j) the termination of Contractual Obligations in the ordinary
course of business.
8.6 Restricted Payments. Declare or make, or permit any Subsidiary to,
declare or make any distributions, dividend, payment or other distribution of
assets, properties, cash, rights, obligations or securities (collectively,
"Distributions") on account of any membership interests or any shares of any
class of its capital stock, as applicable, except as may be disclosed on
Schedule 8.9 hereto or purchase, redeem or otherwise acquire for value any
membership interests or any shares of its capital stock, as applicable, or any
warrants, rights or options to acquire such shares or membership interests, now
or hereafter outstanding, except that:
(a) a Subsidiary may make Distributions to the Company or any
Guarantor (which is the parent of such Subsidiary);
(b) the Company may make Distributions in accordance with
Company's Shareholder Rights Plan as in effect on the Effective Date
provided that, both before and after giving effect thereto, no Default
or Event of Default has occurred and is continuing;
(c) the Company or any of the Subsidiaries may declare and
make dividends to its shareholders payable solely in equity securities
of Company;
(d) the Company may grant or re-price options to purchase the
Company's Common Stock or shares of restricted shares in the ordinary
course of business and consistent with past practice; and
(e) the Company or any of the Subsidiaries may repurchase the
Equity Interests of departed directors, employees and consultants,
provided that (i) the aggregated cash repurchase payments made shall
not exceed Two Million Dollars ($2,000,000) in the aggregate until the
Revolving Credit Maturity Date and (ii) no Default or Event of Default
exists before or after the making of such authorized cash repurchase
payments.
8.7 [Intentionally Left Blank]
8.8 Limitation on Investments, Loans and Advances. Make or allow to
remain outstanding any Investment (whether such investment shall be of the
character of investment in shares of stock, evidences of indebtedness or other
securities or otherwise) in, or any loans or advances to, any Person, firm,
corporation or other entity or association, other than:
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(a) Investments existing on the Effective Date and listed on
Schedule 8.8 hereof;
(b) extensions of trade credit in the ordinary course of
business;
(c) Intercompany Loans, Advances or Investments made on or
after the Effective Date by the Company to any Guarantor or by any
Guarantor to the Company (provided that any Intercompany Loan hereunder
shall be evidenced by and funded under an Intercompany Note encumbered
pursuant to the appropriate Collateral Document), provided that at the
time any such loan, advance or investment is made (before and after
giving effect thereto) no Default or Event of Default has occurred and
is continuing;
(d) Intercompany Loans, Advances or Investments made on or
after the Effective Date by the Company or any Guarantor to a Foreign
Subsidiary in an aggregate amount not to exceed $5,000,000 at any time
outstanding, provided that any Intercompany Loan hereunder shall be
evidenced by and funded under an Intercompany Note encumbered pursuant
to the appropriate Collateral Document), and provided further that at
the time any such loan, advance or investment is made (before and after
giving effect thereto) no Default or Event of Default has occurred and
is continuing;
(e) Investments in respect of Hedging Transactions;
(f) Investments received in connection with the bankruptcy or
reorganization of, or settlement of delinquent accounts and disputes
with, customers and suppliers, in each case in the ordinary course of
business;
(g) loans and advances to employees, officers and directors of
the Company or any of the Subsidiaries in an aggregate amount
outstanding not to exceed $2,000,000;
(h) Permitted Acquisitions permitted pursuant to Section 8.4;
(i) Investments constituting deposits made in connection with
the purchase of goods or services in the ordinary course of business in
an aggregate amount for such deposits not to exceed $2,000,000 at any
one time;
(j) deposits required to be made in connection with the
Stockley Park guarantee;
(k) Investments consisting of notes receivable of, or prepaid
royalties and other credit extensions to, customers and suppliers who
are not Affiliates, in the ordinary course of business;
(l) Investments (a) in Accounts arising and trade credit
granted in the ordinary course of business and in any Equity Interests
received in satisfaction or partial satisfaction thereof from
financially troubled Account Debtors, and (b) in the form of deposits,
prepayments and other credits to suppliers made in the ordinary course
of business;
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(m) travel advances, employee relocation loans and other
employee loans and advances in the ordinary course of business not
exceeding at any time outstanding $1,000,000;
(n) Cash Equivalents and Short Term Investments;
(o) other Investments not described above in an amount not to
exceed $5,000,000 over the term of this Agreement outstanding at any
time.
In valuing any Investments for the purpose of applying the limitations set forth
in this Section 8.8 (except as otherwise expressly provided herein), such
Investment shall be taken at the original cost thereof, without allowance for
any subsequent write-offs or appreciation or depreciation, but less any amount
repaid or recovered on account of capital or principal.
8.9 Transactions with Affiliates. Except as set forth in Schedule 8.9
(which transactions described on Schedule 8.9 are on terms that are fair and
reasonable to the Company and its Subsidiaries), enter into any transaction,
including, without limitation, any purchase, sale, lease or exchange of property
or the rendering of any service, or providing for the payment of any management
or other fee, with any Affiliate of a Company or any Subsidiary except (a)
transactions otherwise permitted under this Agreement; (b) transactions in the
ordinary course of Company's or such Subsidiary's business and upon fair and
reasonable terms no less favorable to the Company or such Subsidiary than it
would obtain in a comparable arms length transaction from unrelated third
parties; and (c) transactions between or among Company and the Guarantors not
involving any other Affiliates that are otherwise expressly permitted by the
terms of this Agreement.
8.10 Sale and Leaseback. Except for transactions related to Debt
permitted to be incurred under the provisions of Section 8.1(c), enter into any
arrangement with any Person providing for the leasing by the Company or any
Subsidiary of real or personal property which has been or is to be sold or
transferred by the Company or such Subsidiary to such Person or to any other
Person to whom funds have been or are to be advanced by such Person on the
security of such property or rental obligations of the Company or such
Subsidiary, as the case may be.
8.11 Limitation on Negative Pledge Clauses. After the Effective Date,
except for (i) such agreements, documents or instruments which are in effect on
the Effective Date and which are set forth on Schedule 8.11 hereto, or (ii)
restrictions by reason of customary provisions restricting assignments or
subletting or other transfers contained in leases, licenses and similar
agreements entered into in the ordinary course of business (provided that such
restrictions are limited to the property subject to such leases, licenses or
similar agreements, as applicable), enter into any agreement, document or
instrument which would restrict or prevent the Company and its Domestic
Subsidiaries from granting Collateral Agent on behalf of Banks liens upon,
security interests in and pledges of their respective assets which are senior in
priority to all other Liens, except for Permitted Liens and any other
agreements, documents or instruments pursuant to which Liens not prohibited by
the terms of this Agreement are created, entered into, or allowed to exist.
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8.12 Prepayment of Debts. Make any payment with respect to Subordinated
Debt which is not permitted under the terms of the applicable Subordination
Agreement or other Subordinated Debt Documents, prepay, purchase, redeem nor
defease any Debt for money borrowed (including without limitation any
Subordinated Debt) or any Capital Leases, excluding (i) refinancings or renewals
of such Debt in the same or lesser amounts (and giving effect to any required
amortization) terms no less favorable to Company as in effect on the Effective
Date and provided that the average life to maturity of such renewal or
refinancing Debt is greater than or equal to that of the Debt renewed or
refinanced and otherwise in compliance with this Agreement, (ii) prepayment of
Debt to the extent that the prepayment is required as a result of the
disposition, damage or loss of property that secures such Debt and such
prepayment is made solely with the proceeds of such disposition or from the
insurance paid or condemnation award received in connection with such damage or
loss, (iii) purchase or other acquisition of debt when the consideration paid
consists solely of (A) Equity Interests of Company or a Subsidiary (other than
the payment of reasonable fees and expenses to professionals for services
rendered in connection with such purchase or acquisition), and/or (B) cash
proceeds from a substantially concurrent issuance of Equity interests, provided
that the mandatory prepayment of the Indebtedness with such cash proceeds has
been made in accordance with Section 2.13(b).
8.13 Amendment of Subordinated Debt Documents. Amend, modify or
otherwise alter (or suffer to be amended, modified or altered) any of the terms
and conditions of those documents or instruments evidencing or otherwise related
to any Debt set forth on Schedule 8.1, any Subordinated Debt, any provision
thereof which in any case could reasonably be expected to be adverse to the
Banks, in any case without the prior written approval of the Administrative
Agent and the Majority Banks; for purposes of those documents or instruments
evidencing or otherwise related to such Debt, any shortening of the put exercise
date or increase in the amount of or change in the formula for determining the
put price under any rights agreement, any increase in the original interest rate
or principal amount, any shortening of the original amortization, any change in
financial covenants which make such covenants more restrictive or adds new
covenants, any change in any default, remedial or other repayment term making
such term more onerous or restrictive, shall, without reducing the scope of this
Section 8.13, be deemed to be adverse to the Banks.
8.14 Modification of Certain Agreements. Make, permit or consent to any
amendment or other modification to the constitutional documents of any of the
Loan Parties (including the Company's certificate of incorporation), or any
documents delivered in connection with any Permitted Acquisition, except to the
extent that any such amendment (i) does not violate the terms and conditions of
this Agreement or any of the other Loan Documents, (ii) does not materially
adversely affect the interest of the Banks as creditor under this Agreement, the
other Loan Documents or any other document or instrument in any respect, or
(iii) could not reasonably be expected to have a Material Adverse Effect.
8.15 Fiscal Year. Permit the fiscal year of the Company to end on a
day other than December 31.
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8.16 Asset Allocation. Permit the ratio of total assets of Company and
the Domestic Subsidiaries located in the United States to total assets of
Company and its Subsidiaries to be less than .50 to 1.0.
8.17 Anti-Terrorism Laws. Take any action (including the extension of
credit made under this Agreement) which will violate the Trading with the Enemy
Act, as amended, or any of the foreign assets control regulations of the United
States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) or any
enabling legislation or executive order relating thereto, or The United and
Strengthening America by Providing Appropriate Tools Required to Intercept and
Obstruct Terrorism (USA Patriot Act) Act of 2001, Public Law 107-56, October 26,
2001 (the "USA Patriot Act") or Executive Order 13224 of September 23, 2001
issued by the President of the United States (66 Fed. Reg. 49049 (2001)).
9. DEFAULTS
9.1 Events of Default. The occurrence of any of the following events
shall constitute an Event of Default hereunder:
(a) non-payment when due of (i) the principal or interest on
the Indebtedness under the Revolving Credit (including the Swing Line),
(ii) any Reimbursement Obligation, or (iii) any Fees, and in the case
of interest and Fees, continuance thereof for five (5) days;
(b) non-payment of any money by the Company under this
Agreement or by Company or any Subsidiary under any of the other Loan
Documents to which it is a party, other than as set forth in subsection
(a) above, within five (5) Business Days after notice from the
Administrative Agent that the same is due and payable;
(c) (i) default in the observance or performance of any of the
conditions, covenants or agreements of Company set forth in Sections
7.4(a)(ii), 7.5, 7.6, 7.7(a), 7.7(b), 7.9 through 7.11, 7.17, 7.18 or
Section 8 or (ii) default in the observance or performance of any of
the conditions, covenants or agreements of Company set forth in
Sections 7.1, 7.2(a), 7.3, 7.4(a)(i), 7.20 or 7.21 and continuance
thereof for ten (10) days (provided that Company shall not be entitled
to the benefit of the grace period more than twice during any single
fiscal year);
(d) default in the observance or performance of any of the
other conditions, covenants or agreements set forth in this Agreement
by Company and continuance thereof for a period of thirty (30)
consecutive days after written notice from the Administrative Agent
specifying the default;
(e) any representation or warranty made by Company or any
Subsidiary herein or in any instrument submitted pursuant hereto proves
untrue or misleading in any material adverse respect when made;
(f) default in the observance or performance of or failure to
comply with any of the conditions, covenants or agreements of Company
or any Subsidiary set forth in any
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of the other Loan Documents, and the continuance thereof beyond any
period of grace or cure specified in any such document or, in the case
of the Collateral Documents, continuance thereof for a period of
fifteen (15) days after written notice from the Administrative Agent;
(g) (i) default in the payment of any indebtedness for
borrowed money (other than Indebtedness hereunder, but including
without limitation any Subordinated Debt) of the Company or any
Subsidiary in excess of Five Hundred Thousand Dollars ($500,000) (or
the equivalent thereof in any currency other than Dollars) individually
or in the aggregate when due (whether by acceleration or otherwise) and
continuance thereof beyond any applicable period of cure or (ii)
failure to comply with the terms of any other obligation of the Company
or any Subsidiary with respect to any indebtedness for borrowed money
(other than Indebtedness hereunder) in excess of Five Hundred Thousand
Dollars ($500,000) (or the equivalent thereof in any currency other
than Dollars) individually or in the aggregate, which continues beyond
any applicable period of cure and which would permit the holder or
holders thereto to accelerate such other indebtedness for borrowed
money or (iii) as a consequence of the occurrence or continuation of
any event or condition (other than the passage of time on the right of
the holder of Debt to convert such indebtedness for borrowed money into
Equity Interests), (x) the Company or any Subsidiary has become
obligated to purchase or repay such Debt for borrowed money before its
regular maturity or before its regularly scheduled dates of payment in
an aggregate outstanding principal amount of at least Five Hundred
Thousand Dollars ($500,000) or (y) one or more Persons have the right
to require the Company or any Subsidiary so to purchase or repay such
Debt for borrowed money;
(h) the rendering of any judgment(s) for the payment of money
in excess of the sum of Five Hundred Thousand Dollars ($500,000) (or
the equivalent thereof in any currency other than Dollars) individually
or in the aggregate against the Company or any Subsidiary, and such
judgments shall remain unpaid, unvacated, unbonded or unstayed by
appeal or otherwise for a period of thirty (30) consecutive days,
except as covered by adequate insurance with a reputable carrier as to
which the relevant insurance company has acknowledged coverage;
(i) the occurrence of (i) a "reportable event", as defined in
ERISA, which is determined to constitute grounds for a distress
termination by the PBGC of any Pension Plan subject to Title IV of
ERISA maintained or contributed to by or on behalf of the Company or
any of the Subsidiaries for the benefit of any of its employees or for
the appointment by the appropriate United States District Court of a
trustee to administer such Pension Plan and such reportable event is
not corrected and such determination is not revoked within sixty (60)
days after notice thereof has been given to the plan administrator of
such Pension Plan (without limiting any of either Agent's or any Bank's
other rights or remedies hereunder), or (ii) the institution of
proceedings by the Pension Benefit Guaranty Corporation to terminate
any such Pension Plan or (iii) the appointment of a trustee by the
appropriate United States District Court to administer any such Pension
Plan, which in either case of (i), (ii) or (iii) could reasonably be
expected to have a Material Adverse Effect;
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(j) the Company or any Significant Guarantor shall be
dissolved or liquidated (or any judgment, order or decree therefor
shall be entered) or; if a creditors' committee shall have been
appointed for the business of the Company or any Significant Guarantor;
or if the Company or any Significant Guarantor shall have made a
general assignment for the benefit of creditors or shall have been
adjudicated bankrupt and if not an adjudication based on a filing by
Company it shall not have been dismissed within sixty (60) days, or
shall have filed a voluntary petition in bankruptcy or for
reorganization or to effect a plan or arrangement with creditors or
shall fail to pay its debts generally as such debts become due in the
ordinary course of business (except as contested in good faith and for
which adequate reserves are made in such party's financial statements);
or shall file an answer to a creditor's petition or other petition
filed against it, admitting the material allegations thereof for an
adjudication in bankruptcy or for reorganization; or shall have applied
for or permitted the appointment of a receiver or trustee or custodian
for any of its property or assets; or such receiver, trustee or
custodian shall have been appointed for any of its property or assets
(otherwise than upon application or consent of Company or any
Significant Guarantor) and shall not have been removed within sixty
(60) days; or if an order shall be entered approving any petition for
reorganization of Company or any Significant Guarantor and shall not
have been reversed or dismissed within sixty (60) days; or Company or
any Significant Guarantor shall take any action (corporate or other)
authorizing or in furtherance any of the actions described above in
this subsection;
(k) any material provision of any Collateral Document or the
Guaranty shall at any time for any reason cease to be valid, binding
and enforceable against the Company or any Subsidiary (other than in
accordance with the terms thereof), as applicable, or the validity,
binding effect or enforceability thereof shall be contested by Holding,
the Company or any Subsidiary, or the Company or any Subsidiary shall
deny that it has any or further liability or obligation under any
Collateral Document or the Guaranty, or any such Loan Document shall be
terminated (other than in accordance with the terms thereof),
invalidated, revoked or set aside or in any way cease to give or
provide to the Banks and the Agents the benefits purported to be
created thereby;
(l) if there shall occur any change in the management of the
Company which, in the judgment of the Majority Banks, could reasonably
be expected to have a Material Adverse Effect, and such change in
management has not been corrected to the satisfaction of the Majority
Banks within thirty (30) days following written notice from the
Administrative Agent;
(m) if there shall occur any event or circumstance which is
reasonably likely to have a Material Adverse Effect.
9.2 Exercise of Remedies. If an Event of Default has occurred and is
continuing hereunder: (a) the Administrative Agent may, and shall, upon being
directed to do so by the Majority Banks, declare the Commitments terminated; (b)
the Administrative Agent may, and shall, upon being directed to do so by the
Majority Banks, declare the entire unpaid principal Indebtedness, including the
Notes, immediately due and payable, without presentment, notice or demand, all
of which are hereby expressly waived by Company; (c) upon the occurrence of
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any Event of Default specified in Section 9.1(j) and notwithstanding the lack of
any declaration by Administrative Agent under preceding clauses (a) or (b), the
entire unpaid principal Indebtedness shall become automatically and immediately
due and payable, and the Commitments shall be automatically and immediately
terminated; (d) the Administrative Agent shall, upon being directed to do so by
the Majority Banks, demand immediate delivery of cash collateral, and Company
and each Account Party agrees to deliver such cash collateral upon demand, in an
amount equal to the maximum amount that may be available to be drawn at any time
prior to the stated expiry of all outstanding Letters of Credit; and (e) the
Agents may, and shall, if directed to do so by the Majority Banks or the Banks,
as applicable (subject to the terms hereof), exercise any remedy permitted by
this Agreement, the other Loan Documents or law.
9.3 Rights Cumulative. No delay or failure of any Agent and/or any Bank
in exercising any right, power or privilege hereunder shall affect such right,
power or privilege, nor shall any single or partial exercise thereof preclude
any further exercise thereof, or the exercise of any other power, right or
privilege. The rights of Agents and Banks under this Agreement are cumulative
and not exclusive of any right or remedies which Banks would otherwise have.
9.4 Waiver by Company of Certain Laws. To the extent permitted by
applicable law, the Company hereby agrees to waive, and does hereby absolutely
and irrevocably waive and relinquish the benefit and advantage of any valuation,
stay, appraisement, extension or redemption laws now existing or which may
hereafter exist, which, but for this provision, might be applicable to any sale
made under the judgment, order or decree of any court, on any claim for interest
on the Notes, or any security interest or mortgage contemplated by or granted
under or in connection with this Agreement. These waivers have been voluntarily
given, with full knowledge of the consequences thereof.
9.5 Waiver of Defaults. No Event of Default shall be waived by the
Banks except in a writing signed by an officer of the Administrative Agent in
accordance with Section 13.10 hereof. No single or partial exercise of any
right, power or privilege hereunder, nor any delay in the exercise thereof,
shall preclude other or further exercise of their rights by Agents or the Banks.
No waiver of any Event of Default shall extend to any other or further Event of
Default. No forbearance on the part of the Agents or the Banks in enforcing any
of their rights shall constitute a waiver of any of their rights. Company
expressly agrees that this Section may be waived or modified only in accordance
with Section 13.10 and may not be waived or modified by the Banks or Agents by
course of performance, estoppel or otherwise.
9.6 Set Off. Upon the occurrence and during the continuance of any
Event of Default and with the Administrative Agent's consent, each Bank may at
any time and from time to time, without notice to the Company but subject to the
provisions of Section 10.3 hereof (any requirement for such notice being
expressly waived by the Company), setoff and apply against any and all of the
obligations of the Company now or hereafter existing under this Agreement,
whether owing to such Bank, any Affiliate of such Bank or any other Bank or any
Agent, any and all deposits (general or special, time or demand, provisional or
final, but excluding trust) instruments, money, investment property or other
property at any time held and other indebtedness at any time owing by such Bank
or any Affiliate of such Bank to or for the credit or the account of Company and
any property of Company from time to time in possession of
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such Bank or any Affiliate of such Bank, irrespective of whether or not such
deposits held, indebtedness owing or property held by such Bank (or such
Affiliate) may be contingent and unmatured and regardless of whether any
Collateral then held by Agents or any Bank is adequate to cover the
Indebtedness. Promptly following any such setoff, such Bank shall give written
notice to the Administrative Agent and to Company of the occurrence thereof. The
Company hereby grants to the Banks (and their Affiliates) and the Agents a lien
on and security interest in all such deposits, indebtedness and property as
collateral security for the payment and performance of all of the obligations of
the Company under this Agreement. The rights of each Bank (and their Affiliates)
under this Section 9.6 are in addition to the other rights and remedies
(including, without limitation, other rights of setoff) which such Bank may
have. Notwithstanding anything herein to the contrary herein or in the other
Loan Documents, the Administrative Agent will not place a "hold" on any account
and nor will not deliver to any Person any notice of exclusive control, any
entitlement order, or other directions or instructions pursuant to any account
control agreement or similar agreement providing for control of Collateral,
including with respect to any deposit, investment or other accounts of Borrower,
except in connection with the exercise of remedies hereunder during the
continuance of a Default or an Event of Default.
10. PAYMENTS, RECOVERIES AND COLLECTIONS; MARGIN ADJUSTMENTS
10.1 Payment Procedure.
(a) Except as otherwise provided herein, all payments by the
Company in respect of principal of, or interest on, any Advance in
Dollars under the Revolving Credit or in respect of any Letter of
Credit Obligations under the Revolving Credit or Fees hereunder which
are payable in Dollars shall be made without setoff or counterclaim on
the date specified for payment under this Agreement not later than 1:00
p.m. (Detroit time) in Dollars in immediately available funds to the
Administrative Agent, for the ratable account of the Revolving Credit
Banks in the case of payments in respect of the Revolving Credit, at
Administrative Agent's office located at One Detroit Center, Detroit,
Michigan 48226-3289. Upon receipt of each such payment, the
Administrative Agent shall make prompt payment to each applicable Bank,
or, in respect of Eurocurrency-based Advances, such Bank's Eurocurrency
Lending Office, in like funds and currencies, of all amounts received
by it for the account of such Bank.
(b) Unless the Administrative Agent shall have been notified
by Company prior to the date on which any payment to be made by Company
is due that Company does not intend to remit such payment, the
Administrative Agent may, in its sole discretion and without obligation
to do so, assume that the Company has remitted such payment when so due
and the Administrative Agent may, in reliance upon such assumption,
make available to each Revolving Credit Bank on such payment date an
amount equal to such Bank's share of such assumed payment. If Company
has not in fact remitted such payment to the Administrative Agent each
Revolving Credit Bank shall forthwith on demand repay to the
Administrative Agent the amount of such assumed payment made available
or transferred to such Bank, together with the interest thereon, in
respect of each day from and including the date such amount was made
available by the Administrative Agent to such Bank to the date such
amount is repaid to the
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Administrative Agent at a rate per annum equal to (i) for Prime-based
Advances, the Federal Funds Effective Rate (daily average), as the same
may vary from time to time, and (ii) with respect to Eurocurrency-based
Advances or Quoted Rate Advances, Administrative Agent's aggregate
marginal cost (including the cost of maintaining any required reserves
or deposit insurance and of any fees, penalties, overdraft charges or
other costs or expenses incurred by Administrative Agent) of carrying
such amount.
(c) Subject to the definition of Interest Period, whenever any
payment to be made hereunder shall otherwise be due on a day which is
not a Business Day, such payment shall be made on the next succeeding
Business Day and such extension of time shall be included in computing
interest, if any, in connection with such payment.
(d) All payments to be made by Company under this Agreement or
any of the Notes (including without limitation payments under the Swing
Line) shall be made without setoff or counterclaim, as aforesaid, and,
subject to full compliance by each Bank (and each assignee and
participant pursuant to Section 13.8) with Section 13.12, without
deduction for or on account of any present or future withholding or
other taxes of any nature imposed by any governmental authority or of
any political subdivision thereof or any federation or organization of
which such governmental authority may at the time of payment be a
member (other than any net income, net profits or franchise taxes
imposed on the Administrative Agent or any Bank as a result of a
present or former connection between the Administrative Agent or such
Bank and the governmental authority, political subdivision, federation
or organization imposing such taxes), unless Company is compelled by
law to make payment subject to such tax. In such event, Company shall:
(i) pay to the Administrative Agent for
Administrative Agent's own account and/or,
as the case may be, for the account of the
Banks (and, in the case of Advances of the
Swing Line, pay to the Swing Line Bank which
funded such Advances) such additional
amounts as may be necessary to ensure that
the Administrative Agent and/or such Bank or
Banks receive a net amount equal to the full
amount which would have been receivable had
payment not been made subject to such tax;
and
(ii) remit such tax to the relevant taxing
authorities according to applicable law, and
send to the Administrative Agent or the
applicable Bank (including the Swing Line
Bank) or Banks, as the case may be, such
certificates or certified copy receipts as
the Administrative Agent or such Bank or
Banks shall reasonably require as proof of
the payment by the Company, of any such
taxes payable by the Company.
As used herein, the terms "tax", "taxes" and "taxation" include all taxes (other
than taxes on or measured by the overall income of a Person), levies, imposts,
duties, charges, fees, deductions and withholdings and any restrictions or
conditions resulting in a charge together with interest (and any taxes payable
upon the amounts paid or payable pursuant to this Section 10.1) thereon,
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or the payment or delivery of funds into or out of any jurisdiction other than
the United States (whether assessed against any of the Company, Agents or any of
the Banks). Company shall be reimbursed by the applicable Bank for any payment
made by Company under this Section 10.1 if the applicable Bank is not in
compliance with its obligations under Section 13.12.
10.2 Application of Proceeds of Collateral. Notwithstanding anything to
the contrary in this Agreement, after an Event of Default and the exercise of
remedies pursuant to Article 9 of this Agreement or the other Loan Documents,
the proceeds of any Collateral, together with any offsets, voluntary payments by
Company or any Subsidiary of the Company or others and any other sums received
or collected in respect of the Indebtedness, shall be applied, first, to the
Indebtedness under the Revolving Credit (including the Swing Line), any
Reimbursement Obligations and any Indebtedness consisting solely of dishonored
items associated with any collections previously applied to the Revolving Credit
(including the Swing Loan) or the Reimbursement Obligations under this Agreement
on a pro rata basis (or in such order and manner as determined by the Banks;
subject, however, to the applicable Percentages of the loans held by each of the
Banks), next, to any other Indebtedness on a pro rata basis, and then, if there
is any excess, to Company and the Subsidiaries, as the case may be. Subject to
the terms of this Section 10.2, the application of such proceeds and other sums
to the Advances of the Revolving Credit, the Reimbursement Obligations and under
any Bank Hedging Agreements shall be based on each Bank's Percentage of the
aggregate of the loans.
10.3 Pro-rata Recovery. If any Bank shall obtain any payment or other
recovery (whether voluntary, involuntary, by application of setoff or otherwise)
on account of principal of, or interest on, any of the Indebtedness in excess of
its pro rata share of payments then or thereafter obtained by all Banks upon
principal of and interest on all Indebtedness, such Bank shall purchase from the
other Banks such participations in the Revolving Credit and/or Reimbursement
Obligation held by them as shall be necessary to cause such purchasing Bank to
share the excess payment or other recovery ratably with the Percentage with each
of them in accordance with the applicable Percentages of the Banks; provided,
however, that if all or any portion of the excess payment or other recovery is
thereafter recovered from such purchasing holder, the purchase shall be
rescinded and the purchase price restored to the extent of such recovery, but
without interest. In the event of any inconsistency between the provisions of
this Section 10.3 and the provisions of Section 10.2 regarding application of
proceeds of Collateral, offsets and other items, the provisions of Section 10.2
shall in all cases control.
10.4 Margin Adjustments. Adjustments to the Applicable Margins and the
Applicable Fee Percentages, based on Schedule 1.1, shall be implemented on a
quarterly basis as follows:
(a) Such adjustments shall be given prospective effect only,
effective as to all Advances outstanding hereunder and the Applicable
Fee Percentage, upon the date of delivery of the financial statements
under Sections 7.1(a) and 7.1(b) hereunder and the Covenant Compliance
Report under Section 7.2(a) hereof, in each case establishing
applicability of the appropriate adjustment, in each case with no
retroactivity or claw-back. In the event the Company fails timely to
deliver such financial statements or the Covenant Compliance Report and
such failure continues for three (3) days, then (but without affecting
the Event of Default resulting therefrom) from the date delivery of
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such financial statements and report was required until such financial
statements and report are delivered, the margins and fee percentages
shall be at the highest level on the Pricing Matrix attached to this
Agreement as Schedule 1.1.
(b) FROM THE EFFECTIVE DATE UNTIL THE REQUIRED DATE OF
DELIVERY (OR, IF EARLIER, DELIVERY) UNDER SECTION 7.1(B) OF THE
COMPANY'S FINANCIAL STATEMENTS FOR THE FISCAL QUARTER ENDING DECEMBER
31, 2003 MARGINS AND FEE PERCENTAGES SHALL BE THOSE SET FORTH UNDER THE
LEVEL II COLUMN OF THE PRICING MATRIX ATTACHED TO THIS AGREEMENT AS
SCHEDULE 1.1. THEREAFTER, ALL MARGINS AND FEE PERCENTAGES SHALL BE
BASED UPON THE COMPANY'S QUARTERLY FINANCIAL STATEMENTS AND COVENANT
COMPLIANCE REPORTS, SUBJECT TO RECALCULATION AS PROVIDED IN SUBSECTION
10.4(A) ABOVE.
11. CHANGES IN LAW OR CIRCUMSTANCES; INCREASED COSTS
11.1 Reimbursement of Prepayment Costs. If the Company makes any
payment of principal with respect to any Eurocurrency-based Advance or Quoted
Rate Advance on any day other than the last day of the Interest Period
applicable thereto (whether voluntarily, by acceleration, or otherwise), or if
the Company converts or refunds (or attempts to convert or refund) any such
Advance on any day other than the last day of the Interest Period applicable
thereto; or if the Company fails to borrow, refund or convert into any
Eurocurrency-based Advance or Quoted Rate Advance after notice has been given by
the Company to Administrative Agent in accordance with the terms hereof
requesting such Advance, or if the Company fails to make any payment of
principal or interest in respect of a Eurocurrency-based Advance or Quoted Rate
Advance when due, the Company shall reimburse Administrative Agent for itself
and/or on behalf of any Bank, as the case may be, within ten (10) Business Days
of written demand therefor for any resulting loss, cost or expense incurred
(excluding the loss of any Applicable Margin) by Administrative Agent and Banks,
as the case may be as a result thereof, including, without limitation, any such
loss, cost or expense incurred in obtaining, liquidating, employing or
redeploying deposits from third parties, whether or not Administrative Agent and
Banks, as the case may be, shall have funded or committed to fund such Advance.
Such amount payable by the Company to Administrative Agent for itself and/or on
behalf of any Bank, as the case may be, shall be deemed to equal an amount equal
to the excess, if any, of (a) the amount of interest which would have accrued on
the amount so prepaid, or not so borrowed, refunded or converted, for the period
from the date of such prepayment or of such failure to borrow, refund or
convert, through the last day of the relevant Interest Period, at the applicable
rate of interest for said Advance(s) provided under this Agreement, over (b) the
amount of interest (as reasonably determined by Administrative Agent and Banks,
as the case may be) which would have accrued to Administrative Agent and Banks,
as the case may be, on such amount by placing such amount on deposit for a
comparable period with leading banks in the interbank eurocurrency market.
Calculation of any amounts payable to any Bank under this paragraph shall be
made as though such Bank shall have actually funded or committed to fund the
relevant Advance through the purchase of an underlying deposit in an amount
equal to the amount of such Advance and having a maturity comparable to the
relevant
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Interest Period; provided, however, that any Bank may fund any
Eurocurrency-based Advance or Quoted Rate Advance, as the case may be, in any
manner it deems fit and the foregoing assumptions shall be utilized only for the
purpose of the calculation of amounts payable under this paragraph. Upon the
written request of Company, Administrative Agent and Banks shall deliver to
Company a certificate setting forth the basis for determining such losses, costs
and expenses, which certificate shall be conclusively presumed correct, absent
manifest error.
11.2 Eurocurrency Lending Office. For any Advance to which the
Eurocurrency-based Rate is applicable, if Administrative Agent or a Bank, as
applicable, shall designate a Eurocurrency Lending Office which maintains books
separate from those of the rest of Administrative Agent or such Bank,
Administrative Agent or such Bank, as the case may be, shall have the option of
maintaining and carrying the relevant Advance on the books of such Eurocurrency
Lending Office.
11.3 Circumstances Affecting Eurocurrency-based Rate Availability. If
with respect to any Interest Period, Administrative Agent or the Majority Banks
(after consultation with Administrative Agent) shall determine in good faith
that, by reason of circumstances affecting the foreign exchange and interbank
markets generally, deposits in eurodollars, in the applicable amounts are not
being offered to the Administrative Agent or such Banks for such Interest
Period, then Administrative Agent shall forthwith give notice thereof to the
Company. Thereafter, until Administrative Agent notifies the Company that such
circumstances no longer exist, (i) the obligation of Banks to make
Eurocurrency-based Advances, and the right of the Company to convert an Advance
to or refund an Advance as a Eurocurrency-based Advance, as the case may be,
shall be suspended, and (ii) effective upon the last day of each Interest Period
related to any existing Eurocurrency-based Advance, such Eurocurrency-based
Advance shall automatically be converted into a Prime-based Advance (without
regard to satisfaction of any conditions to conversion contained elsewhere
herein).
11.4 Laws Affecting Eurocurrency-based Advance Availability. If, after
the date of this Agreement, the introduction of, or any change in, any
applicable law, rule or regulation or in the interpretation or administration
thereof by any governmental authority charged with the interpretation or
administration thereof, or compliance by any of the Banks (or any of their
respective Eurocurrency Lending Offices) with any request or directive (whether
or not having the force of law) of any such authority, shall make it unlawful or
impossible for any of the Banks (or any of their respective Eurocurrency Lending
Offices) to honor its obligations hereunder to make or maintain any Advance with
interest at the Eurocurrency-based Rate, such Bank shall forthwith give notice
thereof to the Company and to Administrative Agent. Thereafter, (a) the
obligations of the applicable Banks to make Eurocurrency-based Advances and the
right of the Company to convert an Advance into or refund an Advance as a
Eurocurrency-based Advance shall be suspended and thereafter the Company may
select as Applicable Interest Rates only those which remain available and which
are permitted to be selected hereunder, and (b) if any of the Banks may not
lawfully continue to maintain an Advance to the end of the then current Interest
Period applicable thereto as a Eurocurrency-based Advance, the applicable
Advance shall immediately be converted to a Prime-based Advance and the
Prime-based Rate shall be applicable thereto for the remainder of such Interest
Period. For purposes of this Section, a change in law, rule, regulation,
interpretation or
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administration shall include, without limitation, any change made or which
becomes effective on the basis of a law, rule, regulation, interpretation or
administration presently in force, the effective date of which change is delayed
by the terms of such law, rule, regulation, interpretation or administration.
11.5 Increased Cost of Eurocurrency-based Advances. If the adoption
after the date of this Agreement of, or any change after the date of this
Agreement in, any applicable law, rule or regulation of or in the interpretation
or administration thereof by any governmental authority, central bank or
comparable agency charged with the interpretation or administration thereof, or
compliance by Administrative Agent or any of the Banks (or any of their
respective Eurocurrency Lending Offices) with any request or directive (whether
or not having the force of law) made by any such authority, central bank or
comparable agency after the date hereof:
(a) shall subject any of the Banks (or any of their respective
Eurocurrency Lending Offices) to any tax, duty or other charge with
respect to any Advance or shall change the basis of taxation of
payments to any of the Banks (or any of their respective Eurocurrency
Lending Offices) of the principal of or interest on any Advance or any
other amounts due under this Agreement in respect thereof (except for
changes in the rate of tax on the overall net income of any of the
Banks or any of their respective Eurocurrency Lending Offices); or
(b) shall impose, modify or deem applicable any reserve
(including, without limitation, any imposed by the Board of Governors
of the Federal Reserve System), special deposit or similar requirement
against assets of, deposits with or for the account of, or credit
extended by, any of the Banks (or any of their respective Eurocurrency
Lending Offices) or shall impose on any of the Banks (or any of their
respective Eurocurrency Lending Offices) or the foreign exchange and
interbank markets any other condition affecting any Advance;
and the result of any of the foregoing is to increase the costs to any of the
Banks of maintaining any part of the Indebtedness hereunder as a
Eurocurrency-based Advance or to reduce the amount of any sum received or
receivable by any of the Banks under this Agreement in respect of a
Eurocurrency-based Advance, with respect to Advances to the Company, then such
Bank shall promptly notify Administrative Agent, and Administrative Agent (or
such Bank, as aforesaid) shall promptly notify the Company of such fact and
demand compensation therefor in writing and, within fifteen (15) days after such
notice, the Company agrees to pay to such Bank such additional amount or amounts
as will compensate such Revolving Credit Bank or Banks for such increased cost
or reduction. Administrative Agent will promptly notify the Company of any event
of which it has knowledge which will entitle Revolving Credit Banks to
compensation pursuant to this Section, or which will cause the Company to incur
additional liability under Article 11 hereof, provided that Administrative Agent
shall incur no liability whatsoever to the Banks or the Company in the event it
fails to do so. A certificate of Administrative Agent (or such Bank, if
applicable) setting forth in reasonable detail the basis for determining such
additional amount or amounts necessary to compensate such Bank or Banks shall
accompany such written demand and shall be prepared in good faith and
conclusively presumed to be correct save for manifest error.
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11.6 Capital Adequacy and Other Increased Costs. In the event that
after the Effective Date the adoption of or any change in any applicable law,
treaty, rule or regulation (whether domestic or foreign) now or hereafter in
effect and whether or not presently applicable to any Bank or Administrative
Agent, or any interpretation or administration thereof by any governmental
authority charged with the interpretation or administration thereof, or
compliance by any Bank or Administrative Agent with any guideline, request or
directive of any such authority (whether or not having the force of law),
including any risk based capital guidelines, affects or would affect the amount
of capital required to be maintained by such Bank or Administrative Agent (or
any corporation controlling such Bank or Administrative Agent) and such Bank or
Administrative Agent, as the case may be, determines that the amount of such
capital is increased by or based upon the existence of such Bank's or
Administrative Agent's obligations or Advances hereunder and such increase has
the effect of reducing the rate of return on such Bank's or Administrative
Agent's (or such controlling corporation's) capital as a consequence of such
obligations or Advances hereunder to a level below that which such Bank or
Administrative Agent (or such controlling corporation) could have achieved but
for such circumstances (taking into consideration its policies with respect to
capital adequacy) by an amount deemed by such Bank or Administrative Agent to be
material (collectively, "Increased Costs"), then Administrative Agent or such
Bank shall notify the Company in writing, and thereafter the Company shall pay
to such Bank or Administrative Agent, as the case may be, within fifteen (15)
days of written demand therefor from such Bank or Administrative Agent,
additional amounts sufficient to compensate such Bank or Administrative Agent
(or such controlling corporation) for any increase in the amount of capital and
reduced rate of return which such Bank or Agent reasonably determines to be
allocable to the existence of such Bank's or Administrative Agent's obligations
or Advances hereunder; notwithstanding the forgoing, however, the Company shall
not be required to pay any increased costs under this Section 11.6 or under
Sections 11.3, 11.5 or 3.4(c) for any period ending prior to the date that is
180 days prior to the making of a Bank's initial request for such additional
amounts unless the applicable change in law or other event resulting in such
increased costs is effective retroactively to a date more than 180 days prior to
the date of such request, in which case a Bank's request for such additional
amounts relating to the period more than 180 days prior to the making of the
request must be given not more than 180 days after such Bank becomes aware of
the applicable change in law or other event resulting in such increased costs. A
statement setting forth the amount of such compensation, the methodology for the
calculation and the calculation thereof which shall also be prepared in good
faith and in reasonable detail by such Bank or Administrative Agent, as the case
may be, shall be submitted by such Bank or by Administrative Agent to the
Company, reasonably promptly after becoming aware of any event described in this
Section 11.6 and shall be conclusive, absent manifest error in computation.
11.7 Substitution of Banks. If (a) the obligation of any Bank to make
Eurocurrency-based Advances has been suspended pursuant to Section 11.3 or 11.4
or (b) any Bank has demanded compensation under Section 3.4(c), 11.1, 11.5 or
11.6, (in each case, an "Affected Bank"), then the Company shall have the right
(subject to Section 13.8 hereof), with the assistance of the Administrative
Agent, to seek a substitute Bank or Banks (which may be one or more of the Banks
(the "Purchasing Bank" or "Purchasing Banks") to purchase the Advances of the
Revolving Credit and/or Swing Line and assume the commitments (including without
86
limitation its participations in Swing Line Advances and Letters of Credit)
under this Agreement of such Affected Bank. The Affected Bank shall be obligated
to sell its Advances of the Revolving Credit and/or Swing Line and assign its
commitments to such Purchasing Bank or Purchasing Banks within fifteen days
after receiving notice from Company requiring it to do so, at an aggregate price
equal to the outstanding principal amount thereof, plus unpaid interest accrued
thereon up to but excluding the date of the sale. In connection with any such
sale, and as a condition thereof, Company shall pay to the Affected Bank all
fees accrued for its account hereunder to but excluding the date of such sale,
plus, if demanded by the Affected Bank within ten Business Days after such sale,
(i) the amount of any compensation which would be due to the Affected Bank under
Section 11.1 if the Company had prepaid the outstanding Eurocurrency-based
Advances of the Affected Bank on the date of such sale and (ii) any additional
compensation accrued for its account under Sections 3.4(c) and 11.5 to but
excluding said date. Upon such sale, the Purchasing Bank or Purchasing Banks
shall assume the Affected Bank's commitment, and the Affected Bank shall be
released from its obligations hereunder to a corresponding extent. If any
Purchasing Bank is not already one of the Banks, the Affected Bank, as assignor,
such Purchasing Bank, as assignee, Company and the Administrative Agent, shall
enter into an Assignment Agreement pursuant to Section 13.8 hereof, whereupon
such Purchasing Bank shall be a Bank party to this Agreement, shall be deemed to
be an assignee hereunder and shall have all the rights and obligations of a Bank
with a Percentage equal to its ratable share of the then applicable Revolving
Credit Aggregate Commitment. In connection with any assignment pursuant to this
Section 11.7, the Company or the Purchasing Bank shall pay to the Administrative
Agent the administrative fee for processing such assignment referred to in
Section 13.8.
11.8 Right of Banks to Fund through Branches and Affiliates. Each Bank
(including without limitation the Swing Line Bank) may, if it so elects, fulfill
its commitment as to any Advance hereunder by designating a branch or Affiliate
of such Bank to make such Advance; provided that (a) such Bank shall remain
solely responsible for the performances of its obligations hereunder and (b) no
such designation shall result in any material increased costs to the Company.
11.9 Obligation to Mitigate. Each Bank agrees that, as promptly as
practicable after the officer of such Bank responsible for administering its
Advances becomes aware of the occurrence of an event or the existence of a
condition that would cause such Bank to become an Affected Bank, to the extent
not inconsistent with the internal policies of such Bank and any applicable
legal or regulatory restrictions (as determined in the sole discretion of such
Bank), (i) use reasonable efforts to make, issue, fund or maintain its Advances
through another office of such Bank, or (ii) take such other measures as such
Bank may deem reasonable, if as a result thereof the circumstances which would
cause such Bank to be an Affected Bank would cease to exist or the additional
amounts which would otherwise be required to be paid to such Bank as an Affected
Bank would be materially reduced and if, as determined by such Bank in its sole
discretion, the making, issuing, funding or maintaining of such Advances through
such other office or in accordance with such other measures, as the case may be,
would not otherwise adversely affect such Advances or the interests of such
Bank. Failure of any Bank to comply with the provisions of this Agreement shall
not give rise to any defense on the part of Company to payment of the
Indebtedness or the performance of any of its obligations under this
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Agreement or any of the Loan Documents and Company's damages, if any, as a
result of any non-compliance by any Bank with the provisions of this Section
11.9 shall be limited to the amount of any applicable additional amounts
required to be paid by Company to such Bank under the provisions of Sections
3.4(c), 11.5 or 11.6.
12. AGENTS
12.1 Appointment of Agents. Each Bank and the holder of each Note (if
issued) irrevocably appoints and authorizes the Agents to act on behalf of such
Bank or holder under this Agreement and the other Loan Documents and to exercise
such powers hereunder and thereunder as are specifically delegated to Agents by
the terms hereof and thereof, together with such powers as may be reasonably
incidental thereto, including without limitation the power to execute or
authorize the execution of financing or similar statements or notices, and other
documents. In performing its functions and duties under this Agreement, the
Agents shall act solely as Agents of the Banks and do not assume and shall not
be deemed to have assumed any obligation towards or relationship of agency or
trust with or for Company. Each Bank agrees (which agreement shall survive any
termination of this Agreement) to reimburse each Agent for all reasonable
out-of-pocket expenses (including house and outside attorneys' fees and
disbursements) incurred by such Agent hereunder or in connection herewith or
with an Event of Default or in enforcing the obligations of Company under this
Agreement or the other Loan Documents or any other instrument executed pursuant
hereto, and for which such Agent is not reimbursed by Company, pro rata
according to such Bank's Percentage, but excluding any such expense resulting
from such Agent's gross negligence or wilful misconduct. Any such amounts so
paid by the Banks shall constitute additional Indebtedness hereunder. Neither
Agent shall be required to take any action under the Loan Documents, or to
prosecute or defend any suit in respect of the Loan Documents, unless
indemnified to its satisfaction by the Banks against loss, costs, liability and
expense (excluding liability resulting from its gross negligence or wilful
misconduct). If any indemnity furnished to an Agent shall become impaired, it
may call for additional indemnity and cease to do the acts indemnified against
until such additional indemnity is given.
12.2 Deposit Account with Administrative Agent. Company hereby
authorizes Administrative Agent, in Administrative Agent's sole discretion, upon
notice to Company to charge its general deposit account(s), if any, maintained
with Administrative Agent for the amount of any principal, interest, or other
amounts or costs due under this Agreement when the same become due and payable
under the terms of this Agreement or the Notes.
12.3 Scope of Agents' Duties. The Agents shall have no duties or
responsibilities except those expressly set forth herein, and shall not, by
reason of this Agreement or otherwise, have a fiduciary relationship with any
Bank (and no implied covenants or other obligations shall be read into this
Agreement against the Agents). None of Agents, their respective Affiliates nor
any of their respective directors, officers, employees or agents shall be liable
to any Bank for any action taken or omitted to be taken by it or them under this
Agreement or any document executed pursuant hereto, or in connection herewith or
therewith with the consent or at the request of the Majority Banks (or all of
the Banks for those acts requiring consent of all of the Banks) (except for its
or their own wilful misconduct or gross negligence), nor be responsible for or
have any duties to ascertain, inquire into or verify (a) any recitals or
88
warranties made by the Company, or any Subsidiary or Affiliate of the Company,
or any officer thereof contained herein or therein, (b) the effectiveness,
enforceability, validity or due execution of this Agreement or any document
executed pursuant hereto or any security thereunder, (c) the performance by
Company or any other Loan Party of their respective obligations hereunder or
thereunder, or (d) the satisfaction of any condition hereunder or thereunder,
including without limitation the making of any Advance or the issuance of any
Letter of Credit. Each Agent and its Affiliates shall be entitled to rely upon
any certificate, notice, document or other communication (including any cable,
telegraph, telex, facsimile transmission or oral communication) believed by it
to be genuine and correct and to have been sent or given by or on behalf of a
proper person. Agents may treat the payee of any Note as the holder thereof.
Agents may employ Agents and may consult with legal counsel (who may be counsel
for the Company), independent public accountants and other experts selected by
them and shall not be liable to the Banks (except as to money or property
received by them or their authorized Agents), for the negligence or misconduct
of any such agent selected by them with reasonable care or for any action taken
or omitted to be taken by them in good faith in accordance with the advice of
such counsel, accountants or experts.
12.4 Successor Agents. Either Agent may resign as such at any time upon
at least 30 days prior notice to Company and all Banks. If an Agent at any time
shall resign or if the office of Administrative Agent or Collateral Agent shall
become vacant for any other reason, Majority Banks shall, by written instrument,
appoint successor agent(s) satisfactory to such Majority Banks, and, so long as
no Default or Event of Default has occurred and is continuing, to Company. Such
successor Agent shall thereupon become the Collateral Agent or Administrative
Agent, as applicable, hereunder, and shall be entitled to receive from the prior
Agent such documents of transfer and assignment as such successor Agent may
reasonably request. Any such successor Agent shall be a commercial bank or
commercial finance company organized under the laws of the United States or any
state thereof and shall have a combined capital and surplus of at least
$500,000,000. If a successor is not so appointed or does not accept such
appointment before the resigning Agent's resignation becomes effective, the
resigning Agent may appoint a temporary successor to act until such appointment
by the Majority Banks and, if applicable, the Company is made and accepted or if
no such temporary successor is appointed as provided above by the resigning
Agent, the Majority Banks shall thereafter perform all of the duties of the
resigning Agent hereunder until such appointment by the Majority Banks and, if
applicable, the Company is made and accepted. Such successor Agent shall succeed
to all of the rights and obligations of the resigning Agent as if originally
named. The resigning Agent shall duly assign, transfer and deliver to such
successor Agent all moneys at the time held by the resigning Agent hereunder
after deducting therefrom its expenses for which it is entitled to be
reimbursed. Upon such succession of any such successor Agent, the resigning
Agent shall be discharged from its duties and obligations, in its capacity as
Agent, hereunder, except for its gross negligence or wilful misconduct arising
prior to its resignation hereunder, and the provisions of this Article 12 shall
continue in effect for the benefit of the resigning Agent in respect of any
actions taken or omitted to be taken by it while it was acting as Agent.
12.5 Credit Decisions. Each Bank acknowledges that it has,
independently of Agents and each other Bank and based on the financial
statements of Company and such other
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documents, information and investigations as it has deemed appropriate, made its
own credit decision to extend credit hereunder from time to time. Each Bank also
acknowledges that it will, independently of Agents and each other Bank and based
on such other documents, information and investigations as it shall deem
appropriate at any time, continue to make its own credit decisions as to
exercising or not exercising from time to time any rights and privileges
available to it under this Agreement or any document executed pursuant hereto.
12.6 Authority of Administrative Agent to Enforce This Agreement. Each
Bank, subject to the terms and conditions of this Agreement, authorizes the
Administrative Agent with full power and authority as attorney-in-fact to
institute and maintain actions, suits or proceedings for the collection and
enforcement of any Indebtedness outstanding under this Agreement or any other
Loan Document and to file such proofs of debt or other documents as may be
necessary to have the claims of the Banks allowed in any proceeding relative to
Company, or any of its Subsidiaries, or their respective creditors or affecting
their respective properties, and to take such other actions which Administrative
Agent considers to be necessary or desirable for the protection, collection and
enforcement of the Notes, this Agreement or the other Loan Documents.
12.7 Indemnification of Agents. The Banks agree to indemnify each Agent
and its Affiliates (to the extent not reimbursed by Company, but without
limiting any obligation of Company to make such reimbursement), ratably
according to their respective Percentages, from and against any and all claims,
damages, losses, liabilities, costs or expenses of any kind or nature whatsoever
(including, without limitation, reasonable fees and disbursements of counsel)
which may be imposed on, incurred by, or asserted against such Agent and its
Affiliates in any way relating to or arising out of this Agreement, any of the
other Loan Documents or the transactions contemplated hereby or any action taken
or omitted by such Agent and its Affiliates under this Agreement or any of the
Loan Documents; provided, however, that no Bank shall be liable for any portion
of such claims, damages, losses, liabilities, costs or expenses resulting from
an Agent's or its Affiliate's gross negligence or willful misconduct. Without
limitation of the foregoing, each Bank agrees to reimburse each Agent and its
Affiliates promptly upon demand for its ratable share of any reasonable
out-of-pocket expenses (including, without limitation, reasonable fees and
expenses of counsel) incurred by such Agent and its Affiliates in connection
with the preparation, execution, delivery, administration, modification,
amendment or enforcement (whether through negotiations, legal proceedings or
otherwise) of, or legal advice in respect of rights or responsibilities under,
this Agreement or any of the other Loan Documents, to the extent that such Agent
and its Affiliates is not reimbursed for such expenses by Company, but without
limiting the obligation of Company to make such reimbursement. Each Bank agrees
to reimburse each Agent and its Affiliates promptly upon demand for its ratable
share of any amounts owing to such Agent and its Affiliates by the Banks
pursuant to this Section, provided that, if such Agent or its Affiliates is
subsequently reimbursed by the Company for such amounts, it shall refund to the
Banks on a pro rata basis the amount of any excess reimbursement. If the
indemnity furnished to an Agent and its Affiliates under this Section shall, in
the judgment of such Agent, be insufficient or become impaired, such Agent may
call for additional indemnity from the Banks and cease, or not commence, to take
any action until such additional indemnity is furnished. Any amounts
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paid by the Banks hereunder to an Agent or its Affiliates shall be deemed to
constitute part of the Indebtedness hereunder.
12.8 Knowledge of Default. It is expressly understood and agreed that
the Agents shall be entitled to assume that no Event of Default has occurred and
is continuing, unless the officers of the applicable Agent immediately
responsible for matters concerning this Agreement shall have been notified in a
writing specifying such Event of Default and stating that such notice is a
"notice of default" by a Bank or by Company. Upon receiving such a notice, the
Administrative Agent shall promptly notify each Bank of such Event of Default
and provide each Bank with a copy of such notice and, shall endeavor to provide
such notice to the Banks within three (3) Business Days (but without any
liability whatsoever in the event of its failure to do so). Administrative Agent
shall also furnish the Banks, promptly upon receipt, with copies of all other
notices or other information required to be provided by Company hereunder.
12.9 Agents' Authorization; Action by Banks. Except as otherwise
expressly provided herein, whenever an Agent is authorized and empowered
hereunder on behalf of the Banks to give any approval or consent, or to make any
request, or to take any other action on behalf of the Banks (including without
limitation the exercise of any right or remedy hereunder or under the other Loan
Documents), such Agent shall be required to give such approval or consent, or to
make such request or to take such other action only when so requested in writing
by the Majority Banks or the Banks, as applicable hereunder. Action that may be
taken by Majority Banks or all of the Banks, as the case may be (as provided for
hereunder) may be taken (i) pursuant to a vote at a meeting (which may be held
by telephone conference call) as to which all of the Banks have been given
reasonable advance notice, or (ii) pursuant to the written consent of the
requisite percentages of the Banks as required hereunder, provided that all of
the Banks are given reasonable advance notice of the requests for such consent.
12.10 Enforcement Actions by the Agents. Except as otherwise expressly
provided under this Agreement or in any of the other Loan Documents and subject
to the terms hereof, Agents will take such action, assert such rights and pursue
such remedies under this Agreement and the other Loan Documents as the Majority
Banks or all of the Banks, as the case may be (as provided for hereunder), shall
direct; provided, however, that the Agents shall not be required to act or omit
to act if, in the judgment of the Agents, such action or omission may expose the
Agents to personal liability or is contrary to this Agreement, any of the Loan
Documents or applicable law. Except as expressly provided above or elsewhere in
this Agreement or the other Loan Documents, no Bank (other than an Agent, acting
in its capacity as agent) shall be entitled to take any enforcement action of
any kind under any of the Loan Documents.
12.11 Collateral Matters.
(a) The Collateral Agent is authorized on behalf of all the
Banks, without the necessity of any notice to or further consent from
the Banks, from time to time to take any action with respect to any
Collateral or the Collateral Documents which may be necessary to
perfect and maintain a perfected security interest in and Liens upon
the Collateral granted pursuant to the Loan Documents, such as but not
limited to execution of the Collateral Documents on behalf of the
Banks. This authorization shall include
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the right to grant powers of attorney to the Collateral Agent's
representatives and advisors.
(b) The Banks irrevocably authorize the Collateral Agent, at
its option and in its discretion, to release any Lien granted to or
held by the Collateral Agent upon any Collateral (i) upon termination
of the Revolving Credit Aggregate Commitment and payment in full of all
Indebtedness payable under this Agreement and under any other Loan
Document; (ii) constituting property sold or to be sold or disposed of
as part of or in connection with any disposition expressly permitted
hereunder; (iii) constituting property in which a Loan Party owned no
interest at the time the Lien was granted or at any time thereafter;
(iv) constituting property that has been damaged, become obsolete, worn
out or is no longer useful or useable in the conduct of Company's or a
Subsidiary's business or that has become subject to an eminent domain
action; or (v) if approved, authorized or ratified in writing by the
Majority Banks, or all the Banks, as the case may be, as provided in
Section 13.10. Upon request by the Collateral Agent at any time, the
Banks will confirm in writing the Collateral Agent's authority to
release particular types or items of Collateral pursuant to this
Section 12.11(b).
(c) The Banks hereby consent and agree that Collateral Agent
shall not file any security agreements relating to any intellectual
property owned by the Company or any of its Subsidiaries with the
United States Patent and Trademark Office or the United States
Copyright Office unless a Default or Event of Default has occurred and
is continuing. Following the occurrence and during the continuance of
such a Default or Event of Default, Collateral Agent may, at its option
or upon the direction of the Administrative Agent or the Majority
Banks, make such filings as shall be deemed reasonably necessary or
advisable to perfect its Lien on the intellectual property of the
Company and of the Subsidiaries which are party to the Security
Agreement.
12.12 Agents in their Individual Capacities. Each Agent and its
Affiliates and its successors and assigns, shall have the same rights and powers
hereunder as any other Bank and may exercise or refrain from exercising the same
as though such Bank were not an Agent. Each Agent and its Affiliates and their
respective successors and assigns may (without having to account therefor to any
Bank) accept deposits from, lend money to, and generally engage in any kind of
banking, trust, financial advisory or other business with Company (or its
Subsidiaries) as if such Bank were not acting as Agent hereunder, and may accept
fees and other consideration therefor without having to account for the same to
the Banks.
12.13 Agents' Fees. Until the Indebtedness has been repaid and
discharged in full and no commitment to fund any loan hereunder is outstanding,
the Company shall pay to the Agents, as applicable, agency fee(s) set forth (or
to be set forth from time to time) in the applicable Fee Letter on the terms set
forth therein. The Agents' Fees described in this Section 12.13 shall not be
refundable under any circumstances.
12.14 Co-Arrangers, Co-Documentation Agents, Co-Syndication Agents and
Senior Managing Agents. As of the Effective Date, Comerica Bank shall be deemed
appointed to the position of Co-Arranger, The CIT Group/Business Credit, Inc.
shall be deemed appointed to the position of Co-Arranger and Co-Documentation
Agent, Fleet National Bank shall be deemed
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appointed to the position of Co-Documentation Agent, General Electric Capital
Corporation shall be deemed appointed to the position of Co-Syndication Agent,
KeyBank National Association shall be deemed appointed to the position of
Co-Syndication Agent and U.S. Bank National Association shall be deemed
appointed to the position of Senior Managing Agent. As a result of their
appointment as Co-Arranger, Co-Documentation Agent, Co-Syndication Agent or
Senior Managing Agent, such Banks shall not have any right, power, obligation,
liability, responsibility or duty under this Agreement other than those
applicable to all Banks as such. Without limiting the foregoing, the Banks
appointed as Co-Arranger, Co-Syndication Agent, Co-Documentation Agent or Senior
Managing Agent (or having any similar title) shall not have or be deemed to have
any fiduciary relationship with any Bank as a result of such appointment. Each
Bank acknowledges that it has not relied, and will not rely, on the Banks so
identified in deciding to enter into this Agreement or in taking or not taking
action hereunder in their position as a Co-Arranger, Co-Documentation Agent,
Co-Syndication Agent or Senior Managing Agent.
13. MISCELLANEOUS
13.1 Accounting Principles. Where the character or amount of any asset
or liability or item of income or expense is required to be determined or any
consolidation or other accounting computation is required to be made for the
purposes of this Agreement, it shall be done, unless otherwise specified herein,
in accordance with GAAP. Furthermore, all financial statements required to be
delivered hereunder, subject to year-end audit adjustments thereto and the
omission of footnote disclosure in the case of unaudited statements, shall be
prepared in accordance with GAAP.
13.2 Consent to Jurisdiction. Company, Agents and Banks hereby
irrevocably submit to the non-exclusive jurisdiction of any United States
Federal Court or California state court sitting in San Jose, California in any
action or proceeding arising out of or relating to this Agreement or any of the
Loan Documents and Company, Agents and Banks hereby irrevocably agree that all
claims in respect of such action or proceeding may be heard and determined in
any such United States Federal Court or California state court. Company
irrevocably consents to the service of any and all process in any such action or
proceeding brought in any court in or of the State of California by the delivery
of copies of such process to Company at its address specified on the signature
page hereto or by certified mail directed to such address or such other address
as may be designated by Company in a notice to the other parties that complies
as to delivery with the terms of Section 13.6. Nothing in this Section shall
affect the right of the Banks and the Agents to serve process in any other
manner permitted by law or limit the right of the Banks or the Agents (or any of
them) to bring any such action or proceeding against Company or any Subsidiary
or any of its or their property in the courts with subject matter jurisdiction
of any other jurisdiction. Company hereby irrevocably waives any objection to
the laying of venue of any such suit or proceeding in the above described
courts.
13.3 Law of California. This Agreement and the Notes shall be governed
by and construed and enforced in accordance with the laws of the State of
California (without regard to its conflict of laws provisions). Whenever
possible each provision of this Agreement shall be interpreted in such manner as
to be effective and valid under applicable law, but if any provision of this
Agreement shall be prohibited by or invalid under applicable law, such
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provision shall be ineffective to the extent of such prohibition or invalidity,
without invalidating the remainder of such provision or the remaining provisions
of this Agreement.
13.4 Interest. In the event the obligation of Company to pay interest
on the principal balance of the Notes is or becomes in excess of the maximum
interest rate which Company is permitted by law to contract or agree to pay,
giving due consideration to the execution date of this Agreement, then, in that
event, the rate of interest applicable with respect to each Bank's applicable
Percentages shall be deemed to be immediately reduced to such maximum rate and
all previous payments in excess of the maximum rate shall be deemed to have been
payments in reduction of principal and not of interest.
13.5 Closing Costs and Other Costs; Indemnification. (a) Company agrees
to pay, or reimburse the Agents for payment of, within five Business Days of
demand therefor (except for closing costs which shall be payable on the
Effective Date) (i) all reasonable closing costs and expenses, including, by way
of description and not limitation, in-house and outside attorney fees (without
duplication of fees and expenses for the same services) and advances, appraisal
and accounting fees, and lien search fees incurred by Agents in connection with
the commitment, consummation and closing of the loans contemplated hereby or in
connection with the administration of this Agreement or any consent, waiver,
amendment, refinancing or restructuring of the credit arrangements provided
under this Agreement, (ii) all stamp and other taxes (excluding income,
franchise and other similar taxes) and fees payable or determined to be payable
in connection with the execution, delivery, filing, recording or amendment of
this Agreement and the Loan Documents and the consummation of the transactions
contemplated hereby, and any and all liabilities with respect to or resulting
from any delay in paying or omitting to pay such taxes or fees, and (iii) all
reasonable costs and expenses of the Agents or any of the Banks (including
reasonable fees and expenses of outside counsel (but without duplication of fees
and expenses for the same services)) in connection with any action or proceeding
relating to a court order, injunction or other process or decree restraining or
seeking to restrain the Agents or any of the Banks from paying any amount under,
or otherwise relating in any way to, any Letter of Credit and any and all
reasonable costs and expenses which any of them may incur relative to any
payment under any Letter of Credit. At Administrative Agent's option, all of
said amounts required to be paid by Company, if not paid when due, may be
charged by Administrative Agent as a Prime-based Advance against the
Indebtedness.
(b) Company agrees to indemnify and hold Agents and each of
the Banks harmless from all loss, cost, damage, liability or expenses,
including reasonable house and outside attorneys' fees and
disbursements (but without duplication of fees and expenses for the
same services), incurred by Agents and the Banks by reason of an Event
of Default, or enforcing the obligations of Company or any Subsidiary
under this Agreement or any of the other Loan Documents or in the
prosecution or defense of any action or proceeding concerning any
matter growing out of or connected with this Agreement or any of the
Loan Documents, excluding, however, any loss, cost, damage, liability
or expenses to the extent arising as a result of the gross negligence
or willful misconduct of the party seeking to be indemnified under this
Section 13.5(b).
(c) Company agrees to defend, indemnify and hold harmless
Agents and each of the Banks, and their respective employees, agents,
officers and directors from and
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against any and all claims, demands, penalties, fines, liabilities,
settlements, damages, costs or expenses of whatever kind or nature
(including without limitation, reasonable attorneys and consultants
fees, investigation and laboratory fees, environmental studies required
by Agents or any Bank in connection with the violation of Hazardous
Material Laws, court costs and litigation expenses, excluding however,
those arising solely as a result of the gross negligence or willful
misconduct of the Agents or of the Person seeking indemnification, as
the case may be) arising out of or related to (i) the presence, use,
disposal, release or threatened release of any Hazardous Materials on,
from or affecting any premises owned or occupied by Company or any of
their respective Subsidiaries in violation of or non-compliance with
applicable Hazardous Material Laws, (ii) any personal injury (including
wrongful death) or property damage (real or personal) arising out of or
related to such Hazardous Materials, (iii) any lawsuit or other
proceeding brought or threatened, settlement reached or governmental
order or decree relating to such Hazardous Materials, (iv) if any Event
of Default exists and remains uncured, the cost of remediation or
monitoring of all Hazardous Materials in violation of or non-compliance
with applicable Hazardous Material Laws from all or any portion of any
premises owned by Company or its Subsidiaries, (v) if any Event of
Default exists and remains uncured, complying or coming into compliance
with all Hazardous Material Laws and/or (vi) if any Event of Default
exists and remains uncured, any violation of Hazardous Material Laws.
The obligations of Company under this Section 13.5(c) shall be in
addition to any and all other obligations and liabilities the Company
may have to Agents or any of the Banks at common law or pursuant to any
other agreement.
13.6 Notices. Except as expressly provided otherwise in this Agreement,
all notices and other communications provided to any party hereto under this
Agreement or any other Loan Document shall be in writing and shall be given by
personal delivery, by mail, by reputable overnight courier, by telex or by
facsimile and addressed or delivered to it at its address set forth on Schedule
13.6 or at such other address as may be designated by such party in a notice to
the other parties that complies as to delivery with the terms of this Section
13.6. Any notice, if personally delivered or if mailed and properly addressed
with postage prepaid and sent by registered or certified mail, shall be deemed
given when received or when delivery is refused; any notice, if given to a
reputable overnight courier and properly addressed, shall be deemed given two
(2) Business Days after the date on which it was sent, unless it is actually
received sooner by the named addressee; and any notice, if transmitted by telex
or facsimile, shall be deemed given when received (answer back confirmed in the
case of telexes and receipt confirmed in the case of telecopies). An Agent may,
but, except as specifically provided herein, shall not be required to, take any
action on the basis of any notice given to it by telephone, but the giver of any
such notice shall promptly confirm such notice in writing or by telex or
facsimile, and such notice will not be deemed to have been received until such
confirmation is deemed received in accordance with the provisions of this
Section set forth above. If such telephonic notice conflicts with any such
confirmation, the terms of such telephonic notice shall control.
13.7 Further Action. Company, from time to time, upon written request
of either Agent will make, execute, acknowledge and deliver or cause to be made,
executed,
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acknowledged and delivered, all such further and additional instruments, and
take all such further action as may reasonably be required to carry out the
intent and purpose of this Agreement or the other Loan Documents, and to provide
for Advances under and payment of the Notes, according to the intent and purpose
herein and therein expressed.
13.8 Successors and Assigns; Participations; Assignments.
(a) This Agreement shall be binding upon and shall inure to
the benefit of Company and the Banks and their respective successors
and assigns.
(b) The foregoing shall not authorize any assignment by
Company of its rights or duties hereunder, and, except as otherwise
provided herein, no such assignment shall be made (or effective)
without the prior written approval of the Banks.
(c) The Company and Administrative Agent acknowledge that each
of the Banks may at any time and from time to time, subject to the
terms and conditions hereof, assign or grant participations in such
Bank's rights and obligations hereunder (on a pro rata basis only) and
under the other Loan Documents to any commercial bank, savings and loan
association, insurance company, pension fund, mutual fund, commercial
finance company or other similar institution, the identity of which
institution is approved by Company and Administrative Agent, such
approval not to be unreasonably withheld or delayed; provided, however,
that (i) the approval of Company shall not be required upon the
occurrence and during the continuance of an Event of Default or in
connection with the sale of a participation, (ii) the approval of
Company and Administrative Agent shall not be required for any such
sale, transfer, assignment or participation to the Affiliate of an
assigning Bank, any other Bank or any Federal Reserve Bank and (iii) no
assignment shall be made to an entity which is a competitor of Company
and their Subsidiaries without the consent of the Company, which
consent may be withheld in the sole discretion of Company. The Company
authorizes each Bank to disclose to any prospective assignee or
participant, once approved by Company and Administrative Agent, as
applicable, any and all financial information in such Bank's possession
concerning the Company which has been delivered to such Bank pursuant
to this Agreement; provided that each such prospective participant
shall execute a confidentiality agreement consistent with the terms of
Section 13.11 hereof.
(d) Each assignment by a Bank of all or any portion of its
rights and obligations hereunder and under the other Loan Documents,
which assignments shall be on a pro rata basis, shall be made pursuant
to an Assignment Agreement substantially (as determined by
Administrative Agent) in the form attached hereto as Exhibit I (with
appropriate insertions acceptable to Administrative Agent) (provided
however that such Bank need not deliver an Assignment Agreement in
connection with assignments to such Bank's Affiliates or to a Federal
Reserve Bank) and shall be subject to the terms and conditions hereof,
and to the following restrictions:
(i) each assignment shall be in a minimum amount
of the lesser of (x) Five Million Dollars
($5,000,000) or such lesser amount as the
Administrative Agent shall agree and (y) the
entire remaining
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amount of assigning Bank's aggregate
interest in the Revolving Credit (and
participations in any outstanding Letters of
Credit); provided however that, after giving
effect to such assignment, in no event shall
the entire remaining amount (if any) of
assigning Bank's aggregate interest in the
Revolving Credit (and participations in any
outstanding Letters of Credit) be less than
$5,000,000; and
(ii) no assignment shall be effective unless
Administrative Agent has received from the
assignee (or from the assigning Bank) an
assignment fee of $3,500 for each such
assignment and such assignment is
accompanied by the relevant tax forms
required under Section 13.12 hereof.
In connection with any assignment, Company and Administrative Agent shall be
entitled to continue to deal solely and directly with the assigning Bank in
connection with the interest so assigned until (x) the Administrative Agent
shall have received a notice of assignment duly executed by the assigning Bank
and an Assignment Agreement (with respect thereto) duly executed by the
assigning Bank and each assignee; and (y) the assigning Bank shall have
delivered to the Administrative Agent the original of each Note held by the
assigning Bank under this Agreement. From and after the date on which the
Administrative Agent shall notify Company and the assigning Bank that the
foregoing conditions shall have been satisfied and all consents (if any)
required shall have been given, the assignee thereunder shall be deemed to be a
party to this Agreement. To the extent that rights and obligations hereunder
shall have been assigned to such assignee as provided in such notice of
assignment (and Assignment Agreement), such assignee shall have the rights and
obligations of a Bank under this Agreement and the other Loan Documents
(including without limitation the right to receive fees payable hereunder in
respect of the period following such assignment). In addition, the assigning
Bank, to the extent that rights and obligations hereunder shall have been
assigned by it as provided in such notice of assignment (and Assignment
Agreement), but not otherwise, shall relinquish its rights and be released from
its obligations under this Agreement and the other Loan Documents.
Within five (5) Business Days following Company's receipt of notice from the
Administrative Agent that Administrative Agent has accepted and executed a
notice of assignment and the duly executed Assignment Agreement and assuming the
Company has consented to such assignment (if their consent is required), Company
shall, to the extent applicable, and if requested by the assignee Bank, execute
and deliver to the Administrative Agent in exchange for any surrendered Note,
new Note(s) payable to the order of the assignee in an amount equal to the
amount assigned to it pursuant to such notice of assignment (and Assignment
Agreement), and with respect to the portion of the Indebtedness retained by the
assigning Bank, to the extent applicable, new Note(s) payable to the order of
the assigning Bank in an amount equal to the amount retained by such Bank
hereunder. Administrative Agent, the Banks and the Company acknowledge and agree
that any such new Note(s) shall be given in renewal and replacement of the
surrendered Notes and shall not effect or constitute a novation or discharge of
the Indebtedness evidenced by any surrendered Note, and each such new Note may
contain a
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provision confirming such agreement. In addition, promptly following receipt of
such Notes, Administrative Agent shall prepare and distribute to Company and the
assigning Bank and the assignee Bank a revised Schedule 1.2 to this Agreement
setting forth the applicable new Percentages of the Banks (including the
assignee Bank), taking into account such assignment.
(e) Each Bank agrees that any participation agreement
permitted hereunder shall comply with all applicable laws and shall be
subject to the following restrictions (which shall be set forth in the
applicable Participation Agreement):
(i) such Bank shall remain the holder of its
Notes hereunder (if such Notes are issued),
notwithstanding any such participation;
(ii) a participant shall not reassign or
transfer, or grant any sub-participations in
its participation interest hereunder or any
part thereof; and
(iii) such Bank shall retain the sole right and
responsibility to enforce the obligations of
the Company relating to the Notes and the
other Loan Documents, including, without
limitation, the right to proceed against any
Guarantors, or cause Administrative Agent to
do so (subject to the terms and conditions
hereof), and the right to approve any
amendment, modification or waiver of any
provision of this Agreement without the
consent of the participant (other than a
participant which is an Affiliate of such
Bank), except for those matters covered by
Section 13.10(a) through (e) and (h) hereof
(provided that a participant may exercise
approval rights over such matters only on an
indirect basis, acting through such Bank,
and Company, Agents and the other Banks may
continue to deal directly with such Bank in
connection with such Bank's rights and
duties hereunder). Notwithstanding the
foregoing, however, in the case of any
participation granted by any Bank hereunder,
the participant shall not have any rights
under this Agreement or any of the other
Loan Documents (the participant's rights
against such Bank in respect of such
participation to be those set forth in the
agreement executed by such Bank in favor of
the participant relating thereto) and all
amounts payable by the Company hereunder
shall be determined as if such Bank had not
sold such participation, provided, however,
that such participant shall be entitled to
the benefits of this Section 13.8(e) (if
any), the benefit of Section 9.6 with
respect to rights of setoff to the extent
provided therein and the benefits of Section
11 hereof, and provided further, however,
that no participant shall be entitled to
receive any greater amount pursuant to such
Sections than the Issuing Bank would have
been entitled to receive in respect of the
amount of the participation transferred by
such issuing Bank to such participant had no
such transfer occurred.
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(f) The Administrative Agent shall maintain at its principal
office a copy of each Assignment Agreement delivered to it and a
register (the "Register") for the recordation of the names and
addresses of the Banks, the Percentages of such Banks and the principal
amount of each type of Advance owing to each such Bank from time to
time. The entries in the Register shall be conclusive evidence, absent
manifest error, and the Company, the Administrative Agent, and the
Banks may treat each Person whose name is recorded in the Register as
the owner of the Advances recorded therein for all purposes of this
Agreement. The Register shall be available for inspection by the
Company or any Bank upon reasonable notice to the Administrative Agent
and a copy of such information shall be provided to any such party on
their prior written request. The Administrative Agent shall give prompt
written notice to the Company of the making of any entry in the
Register or any change in such entry.
(g) Nothing in this Agreement, the Notes or the other Loan
Documents, expressed or implied, is intended to or shall confer on any
Person other than the respective parties hereto and thereto and their
successors and assignees and participants permitted hereunder and
thereunder any benefit or any legal or equitable right, remedy or other
claim under this Agreement, the Notes or the other Loan Documents.
13.9 Counterparts. This Agreement may be executed in several
counterparts, and each executed copy shall constitute an original instrument,
but such counterparts shall together constitute but one and the same instrument.
13.10 Amendment and Waiver. No amendment or waiver of any provision of
this Agreement or any other Loan Document, nor consent to any departure by
Company or any Loan Party therefrom, shall in any event be effective unless the
same shall be in writing and signed by the Majority Banks (or by the
Administrative Agent at the written request of the Majority Banks) or, if this
Agreement expressly so requires with respect to the subject matter thereof, by
all Banks (and, with respect to any amendments to this Agreement or the other
Loan Documents, by Company or the Loan Parties which are signatories thereto),
and then such waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given; provided, however, (X) that no
amendment, waiver or consent shall increase the Percentage or the stated
commitment amounts applicable to any Bank unless approved, in writing, by the
affected Bank and (Y) that no amendment, waiver or consent shall, unless in
writing and signed by all the Banks, do any of the following: (a) reduce the
principal of, or interest on, any outstanding Indebtedness or any Fees or other
amounts payable hereunder, (b) postpone any date fixed for any payment of
principal of, or interest on, any outstanding Indebtedness or any Fees or other
amounts payable hereunder, (c) waive any Event of Default specified in Section
9.1(a) hereof (d) except as expressly permitted hereunder or under the
Collateral Documents, release or defer the granting or perfecting of a lien or
security interest in all or substantially all or any material part of the
Collateral or release any guaranty or similar undertaking provided by any
Person, provided however that Agents shall be entitled to release any Collateral
or guaranty in connection with (A) any sale or other transfer by Company or any
Subsidiary which is permitted under the terms of this Agreement or the other
Loan Documents without notice to or any further action or consent of the Banks
or (B) any transaction involving Collateral described in Section 12.11(b), (e)
terminate or modify any indemnity provided to the
99
Banks hereunder or under the other Loan Documents, except as shall be otherwise
expressly provided in this Agreement or any other Loan Document, (f) take any
action which requires the approval or consent of all Banks pursuant to the terms
of this Agreement or any other Loan Document, (g) amend any provisions which by
their terms require the consent of a percentage of the Banks, in a manner that
would reduce the percentage of Banks which are required to give their consent,
or (h) change the definitions of "Percentage", "Majority Banks", or this Section
13.10. Notwithstanding the foregoing, (A) the Revolving Credit Maturity Date may
be extended (subject to the terms and conditions of Section 2.16 hereof) only
with the consent of Revolving Credit Banks holding aggregate percentages of
eighty percent (80%) or more of the Revolving Credit Maximum Amount; (B) no
amendment, waiver or consent shall, unless in writing signed by the Swing Line
Bank, do any of the following: (x) reduce the principal of, or interest on, the
Swing Line Note or (y) postpone any date fixed for any payment of principal of,
or interest on, the Swing Line Note; (C) no amendment, waiver, or consent shall,
unless in writing and signed by the Issuing Bank, affect the rights or duties of
the Issuing Bank under Article 3 hereof and (D) no amendment, waiver, or consent
shall, unless in writing and signed by the applicable Agent in addition to all
the Banks, affect the rights or duties of the applicable Agent under this
Agreement or any other Loan Document. All references in this Agreement to
"Banks" or "the Banks" shall refer to all Banks, unless expressly stated to
refer to Majority Banks (or the like).
13.11 Confidentiality. Each Bank and each Agent agrees that it will not
disclose without the prior consent of Company (other than to its employees, its
Subsidiaries, another Bank, an Affiliate of a Bank or to its auditors or
counsel) any information with respect to Company or any Subsidiary or other
non-public information, which is furnished pursuant to this Agreement or any of
the other Loan Documents; provided that any Bank or Agent may disclose any such
information (a) as has become generally available to the public or has been
lawfully obtained by such Bank or Agent from any third party under no duty of
confidentiality to Company, (b) as may be required or appropriate in any report,
statement or testimony submitted to, or in respect to any inquiry, by, any
municipal, state or federal regulatory body having or claiming to have
jurisdiction over such Bank, including the Board of Governors of the Federal
Reserve System of the United States, the Office of the Comptroller of the
Currency or the Federal Deposit Insurance Corporation or similar organizations
(whether in the United States or elsewhere) or their successors, (c) as may be
required or appropriate in respect to any summons or subpoena or in connection
with any litigation provided that such Bank or Agent uses good faith efforts to
give Company advance notice of such request for disclosure unless prohibited
from doing so by applicable law, (d) in order to comply with any law, order,
regulation or ruling applicable to such Bank or Agent, and (e) to any permitted
transferee or assignee or to any approved participant of, or with respect to,
the Notes, as aforesaid; provided that each such Person executed a
confidentiality agreement consistent with the terms of this Section 13.11.
13.12 Withholding Taxes. If any Bank is not a United States person
within the meaning of Section 7701(a)(30) of the Internal Revenue Code such Bank
shall promptly (but in any event prior to the initial payment of interest
hereunder) deliver to the Administrative Agent, for transmission to the Company,
two executed copies of (i) Internal Revenue Service Form W-8BEN or any successor
form specifying the applicable tax treaty between the United States and the
jurisdiction of such Bank's domicile which provides for the exemption from
withholding on
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interest payments to such Bank, (ii) Internal Revenue Service Form W-8ECI or any
successor form evidencing that the income to be received by such Bank hereunder
is effectively connected with the conduct of a trade or business in the United
States or (iii) other evidence satisfactory to the Administrative Agent that
such Bank is exempt from United States income tax withholding with respect to
such income; provided, however, that such Bank shall not be required to deliver
to Administrative Agent the aforesaid forms or other evidence with respect to
Advances to the Company, if such Bank has assigned its entire interest in the
Revolving Credit (including any outstanding Advances thereunder and
participations in Letters of Credit issued hereunder), and the Swing Line and
any Notes issued to it by the Company, to an Affiliate which is incorporated
under the laws of the United States or a state thereof, and so notifies the
Administrative Agent. Such Bank shall amend or supplement any such form or
evidence as required to insure that it is accurate, complete and non-misleading
at all times. Promptly upon notice from the Administrative Agent of any
determination by the Internal Revenue Service that any payments previously made
to such Bank hereunder were subject to United States income tax withholding when
made, such Bank shall pay to the Administrative Agent the excess of the
aggregate amount required to be withheld from such payments over the aggregate
amount actually withheld by the Administrative Agent. In addition, from time to
time upon the reasonable request and at the sole expense of the Company, each
Bank and the Administrative Agent shall (to the extent it is able to do so based
upon applicable facts and circumstances), complete and provide the Company with
such forms, certificates or other documents as may be reasonably necessary to
allow the Company, as applicable, to make any payment under this Agreement or
the other Loan Documents without any withholding for or on the account of any
tax under Section 10.1(d) hereof (or with such withholding at a reduced rate),
provided that the execution and delivery of such forms, certificates or other
documents does not adversely affect or otherwise restrict the right and benefits
(including without limitation economic benefits) available to such of the Bank
or the Administrative Agent, as the case may be, under this Agreement or any of
the other Loan Documents, or under or in connection with any transactions not
related to the transactions contemplated hereby.
13.13 Taxes and Fees. Should any tax (other than as a result of a
Bank's failure to comply with Section 13.12 or a tax based upon the net income
or capitalization of any Bank or the Administrative Agent by any jurisdiction
where a Bank or Administrative Agent is or has been located), recording or
filing fee become payable in respect of this Agreement or any of the other Loan
Documents or any amendment, modification or supplement hereof or thereof, the
Company agrees to pay the same, together with any interest or penalties thereon
arising from the Company's act or omission, and agrees to hold the
Administrative Agent and the Banks harmless with respect thereto.
Notwithstanding the foregoing, nothing contained in this Section 13.13 shall
affect or reduce the rights of any Bank or the Administrative Agent under
Section 11.5 hereof.
13.14 WAIVER OF JURY TRIAL. THE BANKS, THE AGENTS AND THE COMPANY
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT ANY OF THEM MAY HAVE TO
A TRIAL BY JURY IN ANY LITIGATION BASED UPON OR ARISING OUT OF THIS AGREEMENT OR
ANY RELATED INSTRUMENT OR AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED BY
THIS AGREEMENT OR ANY COURSE OF CONDUCT, DEALING, STATEMENTS
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(WHETHER ORAL OR WRITTEN) OR ACTION OF ANY OF THEM. NEITHER THE BANKS, THE
AGENT, NOR COMPANY SHALL SEEK TO CONSOLIDATE, BY COUNTERCLAIM OR OTHERWISE, ANY
SUCH ACTION IN WHICH A JURY TRIAL HAS BEEN WAIVED WITH ANY OTHER ACTION IN WHICH
A JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED. THESE PROVISIONS SHALL NOT BE
DEEMED TO HAVE BEEN MODIFIED IN ANY RESPECT OR RELINQUISHED BY THE BANKS AND THE
AGENT OR COMPANY EXCEPT BY A WRITTEN INSTRUMENT EXECUTED BY ALL OF THEM.
13.15 Complete Agreement; Conflicts. This Agreement, the Notes (if
issued), any Requests for Revolving Credit Advance, and Requests for Swing Line
Advance hereunder, and the other Loan Documents contain the entire agreement of
the parties hereto, superseding all prior agreements, discussions and
understandings relating to the subject matter hereof, and none of the parties
shall be bound by anything not expressed in writing. In the event of any
conflict between the terms of this Agreement and the other Loan Documents, this
Agreement shall govern.
13.16 Severability. In case any one or more of the obligations of
Company under this Agreement, the Notes or any of the other Loan Documents shall
be invalid, illegal or unenforceable in any jurisdiction, the validity, legality
and enforceability of the remaining obligations of Company shall not in any way
be affected or impaired thereby, and such invalidity, illegality or
unenforceability in one jurisdiction shall not affect the validity, legality or
enforceability of the obligations of Company under this Agreement, the Notes or
any of the other Loan Documents in any other jurisdiction.
13.17 Table of Contents and Headings. The table of contents and the
headings of the various subdivisions hereof are for convenience of reference
only and shall in no way modify or affect any of the terms or provisions hereof.
13.18 Construction of Certain Provisions. If any provision of this
Agreement or any of the Loan Documents refers to any action to be taken by any
Person, or which such Person is prohibited from taking, such provision shall be
applicable whether such action is taken directly or indirectly by such Person,
whether or not expressly specified in such provision.
13.19 Independence of Covenants. Each covenant hereunder shall be given
independent effect (subject to any exceptions stated in such covenant) so that
if a particular action or condition is not permitted by any such covenant
(taking into account any such stated exception), the fact that it would be
permitted by an exception to, or would be otherwise within the limitations of,
another covenant shall not avoid the occurrence of a Default or an Event of
Default.
13.20 Reliance on and Survival of Various Provisions. All terms,
covenants, agreements, representations and warranties of Company or any party to
any of the other Loan Documents made herein or in any of the Loan Documents or
in any certificate, report, financial statement or other document furnished by
or on behalf of Company or any Subsidiary in connection with this Agreement or
any of the Loan Documents shall be deemed to have been relied upon by the Banks,
notwithstanding any investigation heretofore or hereafter made by
102
any Bank or on such Bank's behalf, and those covenants and agreements of Company
set forth in Section 13.5 hereof (together with any other indemnities of Company
or any Subsidiary contained elsewhere in this Agreement or in any of the other
Loan Documents) and of Banks set forth in Section 12.7 hereof shall survive the
repayment in full of the Indebtedness and the termination of this Agreement.
13.21 Amendment and Restatement; Waiver of Claims
This Agreement amends, extends and restates in its entirety the
Original Credit Agreement. The execution of this Agreement and the other Loan
Documents executed in connection herewith does not extinguish the Indebtedness
outstanding in connection therewith nor does it constitute a novation with
respect to the Indebtedness outstanding in connection with the Original Credit
Agreement. The Company hereby represents and warrants that as of the date of
this Agreement there are no claims or offsets against or defenses or
counterclaims to the Company's obligations under the Original Credit Agreement
or any other Loan Document. The Loan Parties waive any and all such claims,
offsets, defenses or counterclaims, whether known or unknown, arising prior to
the date of this Agreement.
13.22 USA Patriot Act. Pursuant to Section 326 of the USA Patriot Act,
Agents and the Banks hereby notify the Company that if it or any of its
Subsidiaries open an account, including any loan, deposit account, treasury
management account, or other extension of credit, the applicable Bank or Agents
will request the applicable Person's name, tax identification number, business
address and other information necessary to identify such Person (and may request
such Person's organizational documents or other identifying documents) to the
extent necessary for the applicable Bank or Agents to comply with the USA
Patriot Act.
* * *
[SIGNATURES FOLLOW ON SUCCEEDING PAGE]
103
WITNESS the due execution hereof as of the day and year first above
written.
ASPECT COMMUNICATIONS CORPORATION
By: /s/ ASPECT COMMUNICATIONS CORPORATIONS
----------------------------------------------------
Its:
----------------------------------------------------
SWING LINE BANK: COMERICA BANK (AS SUCCESSOR BY MERGER
TO COMERICA BANK - CALIFORNIA)
By: /s/ COMERICA BANK
----------------------------------------------------
Its:
----------------------------------------------------
ISSUING BANK: COMERICA BANK (AS SUCCESSOR BY MERGER
TO COMERICA BANK - CALIFORNIA)
By:
----------------------------------------------------
Its:
----------------------------------------------------
BANKS: COMERICA BANK
(AS SUCCESSOR BY MERGER TO
COMERICA BANK - CALIFORNIA), as Administrative
Agent and Co-Arranger and as a Bank
By:
----------------------------------------------------
Its:
----------------------------------------------------
104
THE CIT GROUP/BUSINESS CREDIT, INC.,
as Co-Arranger, Co-Documentation Agent and
Collateral Agent, and as a Bank
By:_____________________________________________________
Its:____________________________________________________
FLEET NATIONAL BANK, as Co-Documentation
Agent and as a Bank
By:_____________________________________________________
Its:____________________________________________________
GENERAL ELECTRIC CAPITAL CORPORATION, as Co-Syndication
Agent and as a Bank
By:_____________________________________________________
Its:____________________________________________________
105
KEYBANK NATIONAL ASSOCIATION, as Co-Syndication
Agent and as a Bank
By:_____________________________________________________
Its:____________________________________________________
U.S. BANK NATIONAL ASSOCIATION,
as Senior Managing Agent and as a Bank
By:_____________________________________________________
Its:____________________________________________________
106
Schedule 1.1
APPLICABLE MARGIN GRID
ASPECT COMMUNICATIONS CORPORATION
CREDIT AGREEMENT
(BASIS POINTS PER ANNUM)
LEVEL II
BASIS FOR PRICING LEVEL I ** Level III
----------------- ------- -------- ---------
Liquidity Ratio* >2.50:1.00 >2.00:1.00 < or = 2.00:1.00
but < or = 2.50:1.00
Revolving Credit Eurodollar Margin 175 200 250
Revolving Credit Facility Fee 50 50 50
Revolving Credit Base Rate Margin 25 50 100
Letter of Credit Fees (exclusive of facing fees) 175 200 250
* As defined in Credit Agreement.
** Level II pricing shall be in effect until the delivery of the financial
statements for the quarter ending December 31, 2003, after which time the
pricing grid shall govern.
Schedule 1.2
(PERCENTAGES AND ALLOCATIONS)
BANK PERCENTAGES TOTAL
---- ----------- ------
Comerica Bank (as successor by merger to Comerica Bank -
California) 18.75% $18,750,000
The CIT Group/Business Credit 16.25% $16,250,000
Fleet National Bank 16.25% $16,250,000
General Electric Capital Corporation 16.25% $16,250,000
KeyBank National Association 16.25% $16,250,000
U.S. Bank National Association 16.25% $16,250,000
TOTAL 100% $100,000,000
EXHIBIT A
REQUEST FOR REVOLVING CREDIT ADVANCE
No. _____________ Dated:___________
TO: Comerica Bank ("Administrative Agent")
RE: Aspect Communications Corporation Amended and Restated Credit Agreement
dated as of February 13, 2004 by and among Aspect Communications
Corporation ("Company"), the Banks signatories thereto, Comerica Bank,
as Co-Arranger and Administrative Agent The CIT Group/Business Credit,
Inc., as Co-Arranger, Co-Documentation Agent and as Collateral Agent
for the Banks, Fleet National Bank as Co-Documentation Agent, General
Electric Capital Corporation as Co-Syndication Agent, KeyBank National
Association as Co-Syndication Agent and U.S. Bank National Association
as Senior Managing Agent (as amended or otherwise modified from time to
time, the "Credit Agreement")
Company, pursuant to the Credit Agreement, requests an Advance of the
Revolving Credit from the Banks, as follows:
A. Date of Advance: ________________
B. [ ] (check if applicable)
This Advance is or includes a whole or partial refunding/conversion of:
[Describe Advance to be refunded or converted by reference to principal
amount, current interest rate and current interest period]
Advance No(s). _________________
C. Type of Advance (check only one);
[ ] Prime-based Advance
[ ] Eurocurrency-based Advance
D. Amount of Advance:
_______________________
E. Interest Period (not applicable to Prime-based Advances)
__________ months (insert 1, 2, 3 or 6)
F. Disbursement Instructions
[ ] Comerica Bank Account No. _______________
[ ] Other: ____________________________
___________________________________
Company certifies to the matters specified in Section 2.3(g) of the
Credit Agreement.
Capitalized terms used herein, except as defined to the contrary, have
the meanings given them in the Credit Agreement.
ASPECT COMMUNICATIONS CORPORATION
By:_______________________________________________
Its:______________________________________________
Administrative Agent Approval: __________________
2
EXHIBIT B
REVOLVING CREDIT NOTE
[$____________] _______________, 2004
On or before the Revolving Credit Maturity Date, FOR VALUE RECEIVED,
Aspect Communications Corporation, a California corporation ("Company"),
promises to pay to the order of [insert Bank] ("Bank") at Detroit, Michigan,
care of the Administrative Agent (for the account of Bank's Eurocurrency Lending
Office with respect to any Eurocurrency-based Advances hereunder and for the
account of the Bank with respect to any Prime-based Advances hereunder) in
lawful money of the United States of America so much of the sum of [insert
amount derived from Percentages] Dollars ($ ________), as may from time to time
have been advanced by Bank to the Company and then be outstanding hereunder
pursuant to the Aspect Communications Corporation Amended and Restated Credit
Agreement dated as of February 13, 2004 made by and among the Company and
certain banks signatory thereto, including the Bank, and Comerica Bank as
Administrative Agent for such banks, as the same may be amended or otherwise
modified from time to time ("Credit Agreement"), together with interest thereon
as hereinafter set forth.
Each of the Advances made hereunder shall bear interest at the
Applicable Interest Rate from time to time applicable thereto under the Credit
Agreement or as otherwise determined thereunder, and interest shall be computed,
assessed and payable as set forth in the Credit Agreement.
This Note is a Revolving Credit Note under which Advances of the
Revolving Credit (including refundings and conversions), repayments and
readvances may be made from time to time, by Bank, but only in accordance with
the terms and conditions of the Credit Agreement. This Note evidences borrowings
under, is subject to, is secured in accordance with, and may be accelerated or
prepaid under, the terms of the Credit Agreement to which reference is hereby
made. Capitalized terms used herein, except as defined to the contrary, shall
have the meanings given them in the Credit Agreement.
This Note shall be interpreted and the rights of the parties hereunder
shall be determined under the laws of, and enforceable in, the State of
California, without regard to its conflict of law provisions.
Company hereby waives presentment for payment, demand, protest and
notice of dishonor and nonpayment of this Note and agrees that no obligation
hereunder shall be discharged by reason of any extension, indulgence, release,
or forbearance granted by any holder of this Note to any party now or hereafter
liable hereon or any present or subsequent owner of any property, real or
personal, which is now or hereafter security for this Note.
Nothing herein shall limit any right granted Bank by any other
instrument or by law.
ASPECT COMMUNICATIONS CORPORATION
By:_______________________________________________
Its:______________________________________________
2
EXHIBIT C
SWING LINE NOTE
$5,000,000 _____________, 2004
On the Revolving Credit Maturity Date, FOR VALUE RECEIVED, Aspect
Communications Corporation, a California corporation ("Company"), promises to
pay to the order of Comerica Bank, a Michigan banking corporation (as successor
by merger of Comerica Bank - California) ("Swing Line Bank") at Detroit,
Michigan, in lawful money of the United States of America, so much of the sum of
Five Million Dollars ($5,000,000), as may from time to time have been advanced
by Swing Line Bank to Company and then be outstanding hereunder pursuant to the
Aspects Communications Corporation Amended and Restated Credit Agreement dated
as of February 13, 2004 made by and among Company and certain banks signatory
thereto, including the Swing Line Bank, Comerica Bank, as Co-Arranger and
Administrative Agent and The CIT Group/Business Credit, Inc., as Co-Arranger,
Co-Documentation Agent and Collateral Agent, as the same may be amended or
otherwise modified from time to time (the "Credit Agreement"), together with
interest thereon as hereinafter set forth.
Each of the Advances made hereunder shall bear interest at the
Applicable Interest Rate from time to time applicable thereto under the Credit
Agreement or as otherwise determined thereunder, and interest shall be computed,
assessed and payable as set forth in the Credit Agreement.
This Note is a Swing Line Note under which Advances of the Swing Line
(including refundings and conversions), repayments and readvances may be made
from time to time by Swing Line Bank, but only in accordance with the terms and
conditions of the Credit Agreement. This Note evidences borrowings under, is
subject to, is secured in accordance with, and may be accelerated or prepaid
under, the terms of the Credit Agreement, to which reference is hereby made.
Capitalized terms used herein, except as defined to the contrary, shall have the
meanings given them in the Credit Agreement.
This Note shall be interpreted and the rights of the parties shall be
determined under the laws of, and enforceable in, the State of California,
without regard to its conflict of law provisions.
Company hereby waives presentment for payment, demand, protest and
notice of dishonor and nonpayment of this Note and agrees that no obligation
hereunder shall be discharged by reason of any extension, indulgence, release,
or forbearance granted by any holder of this Note to any party now or hereafter
liable hereon or any present or subsequent owner of any property, real or
personal, which is now or hereafter security for this Note.
Nothing herein shall limit any right granted Swing Line Bank by any
other instrument or by law.
This Note is in increase and renewal of that certain Swing Line Note
dated August 9, 2002 from the Company to Comerica Bank - California.
ASPECT COMMUNICATIONS CORPORATION
By:_______________________________________________
Its:______________________________________________
2
EXHIBIT D
REQUEST FOR SWING LINE ADVANCE
No. _________________ Dated: ___________
TO: Comerica Bank (as successor by merger to Comerica Bank - California)
("Swing Line Bank")
RE: Aspect Communications Corporation Amended and Restated Credit Agreement
dated as of February 13, 2004 by and among Aspect Communications
Corporation ("Company"), the Banks signatories thereto, Comerica Bank,
as Co-Arranger and Administrative Agent, The CIT Group/Business Credit,
Inc., as Co-Arranger, Co-Documentation Agent and as Collateral Agent
for the Banks, Fleet National Bank as Co-Documentation Agent, General
Electric Capital Corporation as Co-Syndication Agent, KeyBank National
Association as Co-Syndication Agent and U.S. Bank National Association
as Senior Managing Agent (as amended or otherwise modified from time to
time, the "Credit Agreement")
Company, pursuant to the Credit Agreement, requests an Advance from the
Swing Line Bank as follows:
A. Date of Advance: ___________________
B. [ ] (check if applicable)
This Advance is or includes a whole or partial refund/conversion of:
Advance No(s). ____________________
[Describe Advance to be refunded or converted by reference to principal
amount, current interest rate and current interest period]
C. Type of Advance (check only one);
[ ] Prime-based Advance
[ ] Quoted Rate Advance
D. Amount of Advance:
_____________________________
E. Interest Period (applicable only to Quoted Rate Advances)
Quoted Rate Advances
[ ] One month
[ ] Other _________________
F. Disbursement Instructions
[ ] Comerica Bank Account No. ____________________________
[ ] Other: ________________
_______________________
Company certifies to the matters specified in Section 2.5(c)(vii) of
the Credit Agreement.
Capitalized terms used herein, except as defined to the contrary, have
the meanings given them in the Credit Agreement.
ASPECT COMMUNICATIONS CORPORATION
By:_______________________________________________
Its:______________________________________________
2
EXHIBIT E
FORM OF SWING LINE BANK PARTICIPATION CERTIFICATE
__________________, ______
[Name of Bank]
_________________________
_________________________
Ladies and Gentlemen:
Pursuant to Section 2.5(e) of the Aspect Communications Corporation
Amended and Restated Credit Agreement dated as of February 13, 2004 (as amended
or otherwise modified from time to time, "Credit Agreement") by and among Aspect
Communications Corporation ("Company"), the Banks signatories thereto, Comerica
Bank, as Co-Arranger and Administrative Agent, The CIT Group/Business Credit,
Inc., as Co-Arranger, Co-Documentation Agent and as Collateral Agent for the
Banks, Fleet National Bank as Co-Documentation Agent, General Electric Capital
Corporation as Co-Syndication Agent, KeyBank National Association as
Co-Syndication Agent and U.S. Bank National Association as Senior Managing Agent
the undersigned hereby acknowledges receipt from you of ___________________ as
payment for a participating interest in the following Swing Line Loan:
Date of Swing Line Loan:________________________________
Principal Amount of Swing Line Loan:_____________________
The participation evidenced by this certificate shall be subject to the
terms and conditions of the Credit Agreement including without limitation
Section 2.5(e) thereof.
Very truly yours,
COMERICA BANK, as Administrative Agent
By:____________________________________
Its:___________________________________
EXHIBIT F
LETTER OF CREDIT NOTICE
TO: Banks
RE: Issuance of Letter of Credit pursuant to Article 3 of the Aspect
Communications Corporation Amended and Restated Credit Agreement dated
as of February 13, 2004 (as amended or otherwise modified from time to
time, the "Credit Agreement") by and among Aspect Communications
Corporation ("Company"), the Banks signatories thereto, Comerica Bank,
as Co-Arranger and Administrative Agent, The CIT Group/Business Credit,
Inc., as Co-Arranger, Co-Documentation Agent and as Collateral Agent
for the Banks, Fleet National Bank as Co-Documentation Agent, General
Electric Capital Corporation as Co-Syndication Agent, KeyBank National
Association as Co-Syndication Agent and U.S. Bank National Association
as Senior Managing Agent (as amended or otherwise modified from time to
time, the "Credit Agreement")
On ______________________, ________,* Issuing Bank, in accordance with
Article 3 of the Credit Agreement, issued its Letter of Credit number
______________, in favor of ____________________* for the account of
[______________________________________].*The face amount of such Letter of
Credit is $_______________. The amount of each Bank's participation in such
Letter of Credit is as follows:*
This notification is delivered this _________ day of ____________,
________________, pursuant to Section 3.3 of the Credit Agreement. Except as
otherwise defined, capitalized terms used herein have the meanings given them in
the Credit Agreement.
____________________
* Date of Issuance
* Beneficiary
* Account Party
* Amounts based on Percentages
Signed:
COMERICA BANK, as Administrative Agent
By:____________________________________
Its:___________________________________
[This form of Letter of Credit Notice (including footnotes) is subject in all
respects to the terms and conditions of the Credit Agreement which shall govern
in the event of any inconsistencies or omissions.]
EXHIBIT G
Intentionally Omitted.
EXHIBIT H
FORM OF PLEDGE AGREEMENT
2
EXHIBIT I
FORM OF
ASSIGNMENT AGREEMENT
Date: ____________
To: ASPECT COMMUNICATIONS CORPORATION
and
COMERICA BANK ("Administrative Agent")
RE: Aspect Communications Corporation Amended and Restated Credit Agreement
dated as of February 13, 2004 by and among Aspect Communications
Corporation ("Company"), the Banks signatories thereto, Comerica Bank,
as Co-Arranger and Administrative Agent, The CIT Group/Business Credit,
Inc., as Co-Arranger, Co-Documentation Agent and as Collateral Agent
for the Banks, Fleet National Bank as Co-Documentation Agent, General
Electric Capital Corporation as Co-Syndication Agent, KeyBank National
Association as Co-Syndication Agent and U.S. Bank National Association
as Senior Managing Agent (as amended or otherwise modified from time to
time, the "Credit Agreement")
Ladies and Gentlemen:
Reference is made to Sections 13.8(c) and (d) of the Credit Agreement.
Unless otherwise defined herein or the context otherwise requires, all initially
capitalized terms used herein without definition shall have the meanings
specified in the Credit Agreement.
This Assignment Agreement constitutes notice to each of you of the
proposed assignment and delegation by [insert assignor Bank] (the "Assignor") to
[insert proposed assignee] (the "Assignee"), and, subject to the terms and
conditions of the Credit Agreement, the Assignor hereby sells and assigns to the
Assignee, and the Assignee hereby purchases and assumes from the Assignor,
effective on the "Effective Date" (as hereafter defined) that undivided interest
in each of Assignor's rights and obligations under the Credit Agreement and the
other Loan Documents equal to ___% of the Revolving Credit (and participations
in any outstanding Letters of Credit and Swing Line Advances) such that, after
giving effect to the foregoing assignment and assumption, [and the other
assignments by Assignor to ___________ on the date hereof,] the Assignee's
interest and the Assignor's remaining interest in the Revolving Credit (and
participations in any outstanding Letters of Credit and Swing Line Advances)
shall be as set forth on the attached schedule.
The Assignor hereby instructs the Administrative Agent to make all
payments from and including the Effective Date hereof in respect of the interest
assigned hereby, directly to the Assignee. The Assignor and the Assignee agree
that all interest and fees accrued up to, but not including, the Effective Date
of the assignment and delegation being made hereby are the
3
property of the Assignor, and not the Assignee. The Assignee agrees that, upon
receipt of any such interest or fees accrued up to the Effective Date, the
Assignee will promptly remit the same to the Assignor.
The Assignee hereby confirms that it has received a copy of the Credit
Agreement and the exhibits and schedules referred to therein, and all other Loan
Documents which it considers necessary, together with copies of the other
documents which were required to be delivered under the Credit Agreement as a
condition to the making of the loans thereunder. The Assignee acknowledges and
agrees that it: (a) is legally authorized to enter into this Assignment
Agreement; (b) has made and will continue to make such inquiries and has taken
and will take such care on its own behalf as would have been the case had its
Percentages been granted and its loans been made directly by such Assignee to
the Company without the intervention of the Administrative Agent, the Assignor
or any other Bank; and (c) has made and will continue to make, independently and
without reliance upon the Administrative Agent, the Assignor or any other Bank,
and based on such documents and information as it has deemed appropriate, its
own credit analysis and decisions relating to the Credit Agreement. The Assignee
further acknowledges and agrees that neither the Administrative Agent nor the
Assignor has made any representations or warranties about the creditworthiness
of the Company or any other party to the Credit Agreement or any other of the
Loan Documents, or with respect to the legality, validity, sufficiency or
enforceability of the Credit Agreement, or any other of the Loan Documents. This
assignment shall be made without recourse to or warranty by the Assignor, except
as set forth herein.
Assignee represents and warrants that it is a Person to which
assignments are permitted pursuant to Section 13.8(c) of the Credit Agreement.
Assignor represents and warrants, as of the Effective Date, that it is
the legal and beneficial owner of the interest being assigned and delegated by
it hereunder and that such interest is free and clear of any pledge, encumbrance
or other adverse claim or interest created by Assignor.
Except as otherwise provided in the Credit Agreement, effective as of
the Effective Date:
(a) the Assignee: (i) shall be deemed automatically to have
become a party to the Credit Agreement and the other Loan Documents, to
have assumed all of the Assignor's obligations thereunder to the extent
of the Assignee's Percentage referred to in the second paragraph of
this Assignment Agreement, and to have all the rights and obligations
of a "Bank" to the Credit Agreement and the other Loan Documents, as if
it were an original signatory thereto to the extent specified in the
second paragraph hereof; and (ii) agrees to be bound by the terms and
conditions set forth in the Credit Agreement and the other Loan
Documents as if it were an original signatory thereto; and
(b) the Assignor's obligations under the Credit Agreement and
the other Loan Documents shall be reduced by the Percentage assigned to
Assignee referred to in the second paragraph of this Assignment
Agreement.
4
As used herein, the term "Effective Date" means the date on which all
of the following have occurred or have been completed, as reasonably determined
by the Administrative Agent:
(a) the delivery to the Administrative Agent of an original of
this Assignment Agreement executed by the Assignor and the Assignee;
(b) the payment to the Administrative Agent of the $3,500
processing fee referred to in Section 13.8(d) (ii) of the Credit
Agreement; and
(c) all other restrictions and items noted in Sections 13.8(c)
and (d) of the Credit Agreement have been completed or otherwise
complied with.
Following the execution and delivery of this Assignment Agreement by
the Assignor and Assignee to the Administrative Agent, Administrative Agent
shall record the assignment in the Register pursuant to Section 13.8(f) of the
Credit Agreement and the Administrative Agent shall notify the Assignor and the
Assignee, along with the Company of the Effective Date.
On the Effective Date the Assignee shall pay to the Assignor the amount
agreed upon with respect to the outstanding principal amount of the outstanding
Advances owed to Assignor by Company under the Credit Agreement in respect of
the interest being assigned hereby.
The Assignee has delivered to the Administrative Agent (or is
delivering to the Administrative Agent concurrently herewith) the tax forms
referred to in Section 13.12 of the Credit Agreement, and other forms reasonably
requested by the Administrative Agent, if required. The Assignor has delivered
to the Administrative Agent (or is delivering to the Administrative Agent
concurrently herewith), the original of each Note (if any issued) held by the
Assignor under the Credit Agreement.
Please evidence your consent to and acceptance of the proposed
assignment and delegation set forth herein by signing and returning counterparts
hereof to the Assignor and the Assignee.
[ASSIGNOR]
By:____________________________________
Its:___________________________________
5
[ASSIGNEE]
By:____________________________________
Its:___________________________________
ACCEPTED AND CONSENTED TO
this _______ day of __________, ______
COMERICA BANK, Administrative Agent
By:____________________________________
Its:___________________________________
ASPECT COMMUNICATIONS CORPORATION
By:____________________________________
Its:___________________________________
[This form of Assignment Agreement (including footnotes) is subject in all
respects to the terms and conditions of the Credit Agreement which shall govern
in the event of any inconsistencies or omissions.]
6
SCHEDULE TO ASSIGNMENT AGREEMENT
ASSIGNEE'S/ASSIGNOR'S PERCENTAGES AND ALLOCATIONS
Revolving Credit
Assignor [Name]
Assignee [Name]
EXHIBIT J
FORM OF GUARANTY
EXHIBIT K
FORM OF SECURITY AGREEMENT
EXHIBIT L
FORM OF INTERCOMPANY NOTE
COMPANY OR GUARANTOR, AS MAKER
__________, _____
ON DEMAND, FOR VALUE RECEIVED, the undersigned ("Maker") promises to
pay to the order of [the entity or entities appearing on Schedule 1 hereto] from
which it has received advances of credit ("Holder") at such place as shall be
designated from time to time by each such Holder to Maker, in lawful money of
the United States of America or in such other currencies applicable to any
particular advance made hereunder (each an "Advance" and, collectively, the
"Advances") which may, from time to time, be outstanding hereunder, such sum as
may from time to time have been advanced by Holder to Maker and then be
outstanding hereunder, together with interest thereon as hereinafter set forth.
Each Advance may bear interest at Holder's average cost of borrowing as
certified by Holder from time to time and in accordance with the Holder's
customary penalties.
This Note is a note under which advances, repayments and readvances may
be made from time to time.
This Note shall be fully subordinated in all respects to the
Indebtedness (as defined in the Credit Agreement). Upon the occurrence and
during the continuance of an Event of Default (as defined in the Credit
Agreement), no payments may be made of the principal of or interest on this
Note.
As used herein:
"Credit Agreement" means that certain Aspect Communications Corporation
Amended and Restated Credit Agreement dated as of February 13, 2004 by and among
Aspect Communications Corporation, the Banks signatories thereto, Comerica Bank,
as Co-Arranger and Administrative Agent, The CIT Group/Business Credit, Inc., as
Co-Arranger, Co-Documentation Agent and as Collateral Agent for the Banks, Fleet
National Bank as Co-Documentation Agent, General Electric Capital Corporation as
Co-Syndication Agent, KeyBank National Association as Co-Syndication Agent and
U.S. Bank National Association as Senior Managing Agent (as amended or otherwise
modified from time to time, the "Credit Agreement").
During the period when payments of interest hereon are not permitted by
the second preceding paragraph, interest shall accrue and be added to principal
on each interest payment date.
Maker agrees, and Holder by accepting this Note agrees, that: (A) the
obligations evidenced by this Note are subordinated in right of payment, to the
prior payment in full of all of the Indebtedness, the subordination is for the
benefit of the Banks and each Bank (whether now outstanding or hereafter
created, incurred, assumed or guaranteed) shall be deemed to have acquired the
Indebtedness in reliance upon the covenants and provisions contained in this
Note; (B) if Maker is prohibited by the terms of this Note from making any
payment of principal, interest or any other sum under or in respect of this Note
when due, and therefore the Maker shall fail to pay when due any such sum, such
failure shall not constitute a default or event of default under and in respect
of this Note (provided that interest shall continue to accrue as provided herein
and be added to principal as herein set forth); and (C) no revision to any
provision of this Note applicable or relevant to the subordination of this Note
to the Indebtedness shall be made or become effective until approved in writing
by the Collateral Agent.
Upon any distribution (whether cash, securities or other property, by
setoff or otherwise) to creditors of Maker in a liquidation or dissolution of
Maker or in a bankruptcy, reorganization, insolvency, receivership or similar
proceeding relating to Maker or its property: (A) Banks shall be entitled to
payment in full of all obligations with respect to the Indebtedness (including
interest after the commencement of any such proceeding at the rates specified
for the applicable indebtedness) to the date of payment of the applicable
Indebtedness before Holder shall be entitled to receive any payment of any
obligations with respect to this Note; and (B) until all obligations with
respect to the Indebtedness are indefeasibly paid in full, any distribution to
which Holder would be entitled shall be made to the Collateral Agent.
No right of any Bank to enforce the subordination of the indebtedness
evidenced by this Note shall be impaired by any act or failure to act by the
Maker or by its failure to comply with the terms and conditions of this Note.
This Note shall be interpreted and the rights of the parties hereunder
shall be determined under the laws of, and enforceable in, the State of
California, without giving effect to conflict of law principles.
Maker hereby waives presentment for payment, demand, protest and notice
of dishonor and nonpayment of this Note and agrees that no obligation hereunder
shall be discharged by reason of any extension, indulgence, release, or
forbearance granted by any holder of this Note to any party now or hereafter
liable hereon or any present or subsequent owner of any property, real or
personal, which is now or hereafter security for this Note.
Terms not defined herein shall have the meanings set forth in the
Credit Agreement.
Nothing herein shall limit any right granted Holder by any other
instrument or by law.
[________________________________]
By:_____________________________________________________
Its:____________________________________________________
Dated: _________ ____, ____
Pay to the order of The CIT Group/Business Credit
Inc., as Collateral Agent
By:_____________________________________________________
Its:____________________________________________________
EXHIBIT M
COVENANT COMPLIANCE REPORT
To: Comerica Bank, as Administrative Agent
Re: Aspect Communications Corporation Amended and Restated Credit Agreement
dated as of February 13, 2004 by and among Aspect Communications
Corporation ("Company"), the Banks signatories thereto, Comerica Bank,
as Co-Arranger and Administrative Agent, The CIT Group/Business Credit,
Inc., as Co-Arranger, Co-Documentation Agent and as Collateral Agent
for the Banks, Fleet National Bank as Co-Documentation Agent, General
Electric Capital Corporation as Co-Syndication Agent, KeyBank National
Association as Co-Syndication Agent and U.S. Bank National Association
as Senior Managing Agent (as amended or otherwise modified from time to
time, the "Credit Agreement")
This Covenant Compliance Report ("Report") is furnished pursuant to
Section 7.2(a) of the Credit Agreement and sets forth various information as of
__________ ____ (the "Computation Date").
1. Liquidity Ratio. On the Computation Date, the Liquidity Ratio, which
is required to be not less than _____ to 1, was ____ to 1 as computed in the
supporting documents attached hereto as Schedule 1.
2. Consolidated EBITDA. For the period from _______ to ________,
Consolidated EBITDA, which is required to be not less than $10,000,000 was $
_________ as computed in the supporting documents attached hereto as Schedule 2.
3. Consolidated Tangible Effective Net Worth. On the Computation Date,
the Consolidated Tangible Effective Net Worth, which is required to be not less
than $___________________ was $____________ as computed in the supporting
documents attached hereto as Schedule 3.
4. Consolidated Fixed Charge Coverage Ratio. On the Computation Date,
the Consolidated Fixed Charge Coverage Ratio, which was required to be not less
than 1.50 to 1.0 was ____ to 1.0 as computed in the supporting documents
attached hereto as Schedule 4.
5. Consolidated Total Debt to EBITDA Ratio. On the Computation Date,
the Consolidated Total Debt to EBITDA Ratio, which was required to be not more
than ____ to 1.0 was ____ to 1.0 as computed in the supporting documents
attached hereto as Schedule 5.
The undersigned Responsible Officer of Company hereby certifies that to
the best of his/her knowledge, after due inquiry:
A. All of the information set forth in this Report (and in any
Schedules attached hereto) is true and correct in all material respects.
B. As of the Computation Date, each of Company and each Subsidiary has
observed and performed, in all material respects, all of its covenants and other
agreements contained in the Credit Agreement and in the Notes (if issued) and
any other Loan Documents to be observed, performed and satisfied by it.
C. He/she has personally reviewed the Credit Agreement and this Report
is based on an examination sufficient to assure that this Report is accurate in
all material respects.
D. Except as stated in Schedule D hereto (which shall describe any
existing Event of Default or Default and the notice and period of existence
thereof and any action taken with respect thereto or contemplated to be taken by
Company), no Event of Default, or Default, has occurred and is continuing on the
date of this Report.
[E. Schedule E attached hereto sets forth all new intellectual property
acquired by the Company or its Subsidiaries during the prior fiscal year as
required pursuant to Section 7.2(h) of the Credit Agreement.]
Capitalized terms used in this Report and in the schedules hereto,
unless specifically defined to the contrary, have the meanings given to them in
the Credit Agreement.
IN WITNESS WHEREOF, the undersigned has caused this Report to be
executed and delivered by its duly authorized officer this ______ day
of_______________.
ASPECT COMMUNICATIONS CORPORATION
By:_____________________________________________________
Its:____________________________________________________
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