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EXHIBIT 10.35
REVOLVING CREDIT
AGREEMENT
Dated as of April 24, 1996
among
WESTERN DIGITAL CORPORATION,
NATIONSBANK OF TEXAS, N.A.,
THE FIRST NATIONAL BANK OF BOSTON
and the other lending institutions listed on Schedule 1 hereto
and
NATIONSBANK OF TEXAS, N.A.
as Syndication Agent
and
THE FIRST NATIONAL BANK OF BOSTON
as
Administrative Agent
with
NATIONSBANC CAPITAL MARKETS, INC.
and
THE FIRST NATIONAL BANK OF BOSTON
having acted as arrangers for this transaction
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TABLE OF CONTENTS
1. DEFINITIONS AND RULES OF INTERPRETATION....................................1
1.1. Definitions........................................................1
1.2. Rules of Interpretation...........................................13
2. THE REVOLVING CREDIT FACILITY.............................................14
2.1. Commitment to Lend; Extension of Maturity.........................14
2.1.1. Commitment to Lend.....................................14
2.1.2. Extension of Maturity..................................14
2.1.3. Replacement Banks......................................15
2.2. Commitment Fee....................................................16
2.3. Reduction of Total Commitment.....................................16
2.4. The Revolving Credit Notes........................................17
2.5. Interest on Revolving Credit Loans................................17
2.6. Requests for Revolving Credit Loans...............................18
2.7. Conversion Options................................................18
2.7.1. Conversion to Different Type of Revolving Credit Loan..18
2.7.2. Continuation of Type of Revolving Credit Loan..........19
2.7.3. Eurodollar Rate Loans..................................19
2.8. Funds for Revolving Credit Loan...................................19
2.8.1. Funding Procedures.....................................19
2.8.2. Advances by Agent......................................20
3. REPAYMENT OF THE REVOLVING CREDIT LOANS...................................20
3.1. Maturity. .......................................................20
3.2. Mandatory Repayments of Revolving Credit Loans....................20
3.3. Optional Repayments of Revolving Credit Loans.....................21
4. LETTERS OF CREDIT.........................................................21
4.1. Letter of Credit Commitments......................................21
4.1.1. Commitment to Issue Letters of Credit..................21
4.1.2. Letter of Credit Applications..........................22
4.1.3. Terms of Letters of Credit.............................22
4.1.4. Reimbursement Obligations of Banks.....................22
4.1.5. Participations of Banks................................23
4.2. Reimbursement Obligation of the Borrower..........................23
4.3. Letter of Credit Payments.........................................23
4.4. Obligations Absolute..............................................24
4.5. Reliance by Issuer................................................25
4.6. Letter of Credit Fee..............................................25
5. CERTAIN GENERAL PROVISIONS................................................25
5.1. Arrangement Fee...................................................25
5.2. Administration Fee................................................25
5.3. Funds for Payments................................................25
5.3.1. Payments to Agent......................................25
5.3.2. No Offset, etc.........................................26
5.4. Computations......................................................26
5.5. Inability to Determine Eurodollar Rate............................26
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5.6. Illegality.....................................................27
5.7. Additional Costs, etc..........................................27
5.8. Capital Adequacy...............................................28
5.9. Certificate....................................................29
5.10. Indemnity.....................................................29
5.11. Interest After Default........................................29
5.11.1. Overdue Amounts....................................29
5.11.2. Amounts Not Overdue................................30
6. GUARANTIES................................................................30
6.1. Guaranties of Domestic Subsidiaries............................30
6.2. New Domestic Subsidiaries......................................30
7. REPRESENTATIONS AND WARRANTIES............................................30
7.1. Corporate Authority............................................30
7.1.1. Incorporation; Good Standing........................30
7.1.2. Authorization.......................................30
7.1.3. Enforceability......................................31
7.2. Governmental Approvals.........................................31
7.3. Title to Properties; Leases....................................31
7.4. Financial Statements and Projections...........................31
7.4.1. Financial Statements................................31
7.4.2. Projections.........................................32
7.5. No Material Changes, etc.......................................32
7.6. Franchises, Patents, Copyrights, etc...........................32
7.7. Litigation.....................................................32
7.8. No Materially Adverse Contracts, etc...........................33
7.9. Compliance with Other Instruments, Laws, etc...................33
7.10. Tax Status....................................................33
7.11. No Event of Default...........................................33
7.12. Holding Company and Investment Company Acts...................33
7.13. Absence of Financing Statements, etc..........................34
7.14. Certain Transactions..........................................34
7.15. Employee Benefit Plans........................................34
7.15.1. In General.........................................34
7.15.2. Terminability of Welfare Plans.....................34
7.15.3. Guaranteed Pension Plans...........................35
7.15.4. Multiemployer Plans................................35
7.16. Regulations U and X...........................................35
7.17. Environmental Compliance......................................35
7.18. Subsidiaries, etc.............................................37
7.19. Chief Executive Office........................................37
7.20. Fiscal Year...................................................37
7.21. Disclosure....................................................38
7.22. Insurance.....................................................38
8. AFFIRMATIVE COVENANTS OF THE BORROWER.....................................38
8.1. Punctual Payment...............................................38
8.2. Maintenance of Office..........................................38
8.3. Records and Accounts...........................................38
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8.4. Financial Statements, Certificates and Information.............39
8.5. Notices........................................................40
8.5.1. Defaults............................................40
8.5.2. Environmental Events................................40
8.5.3. Notice of Litigation and Judgments..................40
8.6. Corporate Existence; Maintenance of Properties.................41
8.7. Insurance......................................................41
8.8. Taxes..........................................................41
8.9. Inspection of Properties and Books, etc........................42
8.9.1. General.............................................42
8.9.2. Appraisals; Commercial Finance Examinations.........42
8.9.3. Communications with Accountants.....................42
8.10. Compliance with Laws, Contracts, Licenses, and Permits........43
8.11. Employee Benefit Plans........................................43
8.12. Use of Proceeds...............................................43
8.13. Further Assurances............................................43
9. CERTAIN NEGATIVE COVENANTS OF THE BORROWER................................44
9.1. Restrictions on Indebtedness...................................44
9.2. Restrictions on Liens..........................................45
9.3. Restrictions on Investments....................................46
9.4. Distributions. ...............................................47
9.5. Merger, Consolidation and Disposition of Assets................47
9.5.1. Mergers and Acquisitions............................47
9.5.2. Disposition of Assets...............................48
9.6. Sale and Leaseback.............................................48
9.7. Compliance with Environmental Laws.............................48
9.8. Employee Benefit Plans.........................................49
9.9. Changes in Terms of Capital Stock..............................49
9.10. Fiscal Year...................................................49
9.11. Negative Pledges..............................................50
9.12. Transactions with Affiliates..................................50
9.13. Upstream Limitations..........................................50
9.14. Inconsistent Agreements.......................................50
10. FINANCIAL COVENANTS OF THE BORROWER......................................50
10.1. Profitable Operations.........................................50
10.2. Fixed Rate Coverage Ratio.....................................51
10.3. Minimum Liquidity.............................................51
10.4. Consolidated Net Worth........................................51
11. CLOSING CONDITIONS.......................................................51
11.1. Loan Documents................................................51
11.2. Certified Copies of Charter Documents.........................51
11.3. Corporate, Action.............................................51
11.4. Incumbency Certificate........................................52
11.5. Certificates of Insurance.....................................52
11.6. Solvency Certificate..........................................52
11.7. Opinion of Counsel............................................52
11.8. Payment of Fees...............................................52
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11.9. Termination of Receivables Financing............................52
12. CONDITIONS TO ALL BORROWINGS.............................................52
12.1. Representations True; No Event of Default.......................53
12.2. No Legal Impediment.............................................53
12.3. Governmental Regulation.........................................53
12.4. Proceedings and Documents.......................................53
13. EVENTS OF DEFAULT; ACCELERATION; ETC.....................................53
13.1. Events of Default and Acceleration..............................53
13.2. Termination of Commitments......................................57
13.3. Remedies........................................................57
14. SETOFF...................................................................57
15. THE BANK AGENTS..........................................................58
15.1. Authorization...................................................58
15.2. Employees and Agents............................................59
15.3. No Liability....................................................59
15.4. No Representations..............................................59
15.5. Payments........................................................60
15.5.1. Payments to Agent....................................60
15.5.2. Distribution by Agent................................60
15.5.3. Delinquent Banks.....................................60
15.6. Holders of Notes................................................61
15.7. Indemnity.......................................................61
15.8. Bank Agents as Bank.............................................61
15.9. Resignation.....................................................61
15.10. Notification of Defaults and Events of Default.................62
16. EXPENSES.................................................................62
17. INDEMNIFICATION..........................................................63
18. SURVIVAL OF COVENANTS, ETC...............................................63
19. ASSIGNMENT AND PARTICIPATION; ACCESSION..................................64
19.1. Conditions to Assignment and Accession..........................64
19.1.1. Assignment by Banks..................................64
19.1.2. Accession............................................64
19.2. Certain Representations and Warranties; Limitations; Covenants..65
19.3. Register........................................................66
19.4. New Notes.......................................................67
19.5. Participations..................................................67
19.6. Disclosure......................................................68
19.7. Assignee or Participant Affiliated with the Borrower............68
19.8. Miscellaneous Assignment Provisions.............................68
19.9. Assignment by Borrower..........................................69
20. NOTICES, ETC.............................................................69
21. GOVERNING LAW............................................................70
22. HEADINGS.................................................................70
23. COUNTERPARTS.............................................................70
24. ENTIRE AGREEMENT, ETC....................................................70
25. WAIVER OF JURY TRIAL.....................................................70
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26. CONSENTS, AMENDMENTS, WAIVERS, ETC.......................................71
27. SEVERABILITY.............................................................72
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SCHEDULES AND EXHIBITS
EXHIBITS
Exhibit A Form of Revolving Credit Note
Exhibit B Form of Loan Request
Exhibit C Form of Compliance Certificate
Exhibit D Form of Assignment and Acceptance
Exhibit E Form of Instrument of Accession
SCHEDULES
Schedule 1 Commitments
Schedule 7.3 Titles to Properties
Schedule 7.7 Litigation
Schedule 7.14 Transactions with Affiliates
Schedule 7.17 Environmental Matters
Schedule 7.18 Subsidiaries; Joint Ventures
Schedule 7.22 Insurance
Schedule 9.1 Existing Indebtedness
Schedule 9.2 Existing Liens
Schedule 9.3 Existing Investments
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REVOLVING CREDIT
AGREEMENT
This REVOLVING CREDIT AGREEMENT is made as of April 24, 1996, by and
among (a) WESTERN DIGITAL CORPORATION (the "Borrower"), a Delaware corporation
having its principal place of business at 8105 Irvine Center Drive, Irvine,
California 92718, (b) NATIONSBANK OF TEXAS, N.A., THE FIRST NATIONAL BANK OF
BOSTON, and the other lending institutions listed on Schedule 1 hereto, (c)
NATIONSBANK OF TEXAS, N.A., as syndication agent for the Banks (as hereinafter
defined)(the "Syndication Agent") and (d) THE FIRST NATIONAL BANK OF BOSTON as
administrative agent for the Banks (the "Agent" and, collectively with the
Syndication Agent, the "Bank Agents").
1. DEFINITIONS AND RULES OF INTERPRETATION.
1.1. DEFINITIONS. The following terms shall have the meanings set forth
in this Section 1 or elsewhere in the provisions of this Credit Agreement
referred to below:
Acceding Bank. See Section 19.1.2 hereof.
Accounts Receivable. All rights of the Borrower or any of its
Subsidiaries to payment for goods sold, leased or otherwise marketed in the
ordinary course of business and all rights of the Borrower or any of its
Subsidiaries to payment for services rendered in the ordinary course of business
and all sums of money or other proceeds due thereon pursuant to transactions
with account debtors, except for that portion of the sum of money or other
proceeds due thereon that relate to sales, use or property taxes in conjunction
with such transactions, recorded on books of account in accordance with
generally accepted accounting principles.
Adjustment Date. The first day of the month immediately following the
month in which a Compliance Certificate is to be delivered by the Borrower
pursuant to Section 8.4(c).
Affiliate. Any Person that would be considered to be an affiliate of
the Borrower under Rule 144(a) of the Rules and Regulations of the Securities
and Exchange Commission, as in effect on the date hereof, if the Borrower were
issuing securities.
Agent's Head Office. The Agent's head office located at 100 Federal
Street, Boston, Massachusetts 02110, or at such other location as the Agent may
designate from time to time.
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Agent. As defined in the preamble hereto.
Applicable Margin. For each period commencing on an Adjustment Date
through the date immediately preceding the next Adjustment Date (each a "Rate
Adjustment Period"), the Applicable Margin shall be the applicable margin set
forth below with respect to the Borrower's Fixed Charge Coverage Ratio as
determined for the fiscal period of the Borrower ending on the fiscal quarter
ended immediately preceding the applicable Rate Adjustment Period.
------------------------------------------------------------------------------------------------
BASE RATE EURODOLLAR RATE COMMITMENT LETTER OF
FIXED CHARGE COVERAGE RATIO LOANS LOANS FEE RATE CREDIT FEES
(BASIS POINTS) (BASIS POINTS) (BASIS POINTS) (BASIS POINTS)
================================================================================================
Less than 3.00:1.00 0 100 30 100
------------------------------------------------------------------------------------------------
Greater than or equal to
3.00:1.00, but less than 0 75 25 75
4.00:1.00
------------------------------------------------------------------------------------------------
Greater than or equal to 0 50 20 50
4.00:1.00
------------------------------------------------------------------------------------------------
Notwithstanding the foregoing, (a) for Revolving Credit Loans
outstanding and Letter of Credit Fees and the Commitment Fee Rate payable during
the period commencing on the Closing Date through the date immediately preceding
the first Adjustment Date to occur after September 30, 1996, the Applicable
Margin shall be the second to the highest Applicable Margin set forth above, and
(b) if the Borrower fails to deliver any Compliance Certificate when required by
Section 8.4(c) hereof then, for the period commencing on the next Adjustment
Date to occur subsequent to such failure through the date immediately following
the date on which such Compliance Certificate is delivered, the Applicable
Margin shall be the highest Applicable Margin set forth above.
Assignment and Acceptance. See Section 19.1.
Balance Sheet Date. December 30, 1995.
Bank Agents. As defined in the preamble hereto.
Bank Agents' Special Counsel. Bingham, Dana & Gould LLP or such other
counsel as may be approved by the Bank Agents.
Banks. NationsBank, FNBB and the other lending institutions listed on
Schedule 1 hereto and any other Person who becomes an assignee of any rights and
obligations of a Bank pursuant to Section 19 or which becomes an Acceding Bank
pursuant to Section 19 hereof.
Base Rate. The higher of (a) the annual rate of interest announced from
time to time by FNBB at its head office in Boston, Massachusetts, as its "base
rate" and (b) one-half of one percent (1/2%) above the Federal Funds Effective
Rate. For the purposes of this definition, "Federal Funds Effective Rate" shall
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mean for any day, the rate per annum equal to the weighted average of the rates
on overnight federal funds transactions with members of the Federal Reserve
System arranged by federal funds brokers, as published for such day (or, if such
day is not a Business Day, for the next preceding Business Day) by the Federal
Reserve Bank of New York, or, if such rate is not so published for any day that
is a Business Day, the average of the quotations for such day on such
transactions received by the Agent from three funds brokers of recognized
standing selected by the Agent.
Base Rate Loans. Revolving Credit Loans bearing interest calculated by
reference to the Base Rate.
Borrower. As defined in the preamble hereto.
Business Day. Any day on which banking institutions in each of the
cities in which each Bank's Domestic Lending Office is located are open for the
transaction of banking business and, in the case of Eurodollar Rate Loans, also
a day which is a Eurodollar Business Day.
Capital Assets. Fixed assets, both tangible (such as land, buildings,
fixtures, machinery and equipment) and intangible (such as patents, copyrights,
trademarks, franchises and good will); provided that Capital Assets shall not
include any item customarily charged directly to expense or depreciated over a
useful life of twelve (12) months or less in accordance with generally accepted
accounting principles.
Capital Expenditures. Amounts paid or indebtedness incurred by the
Borrower or any of its Subsidiaries in connection with the purchase or lease by
the Borrower or any of its Subsidiaries of Capital Assets that would be required
to be capitalized and shown on the balance sheet of such Person in accordance
with generally accepted accounting principles; provided, however, for purposes
of this Credit Agreement, Capitalized Leases shall not be included as Capital
Expenditures.
Capitalized Leases. Leases under which the Borrower or any of its
Subsidiaries is the lessee or obligor, the discounted future rental payment
obligations under which are required to be capitalized on the balance sheet of
the lessee or obligor in accordance with generally accepted accounting
principles.
CERCLA. See Section 7.17.
Closing Date. The first date on which the conditions set forth in
Section 11 have been satisfied and any Revolving Credit Loans are to be made or
any Letter of Credit is to be issued hereunder.
Code. The Internal Revenue Code of 1986.
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Commitment. With respect to each Bank, the amount set forth on Schedule
1 hereto as the amount of such Bank's commitment to make Revolving Credit Loans
to, and to participate in the issuance, extension and renewal of Letters of
Credit for the account of, the Borrower, as the same may be modified pursuant to
Section 19.1.2 hereof, and as the same may be reduced from time to time; or if
such commitment is terminated pursuant to the provisions hereof, zero.
Commitment Fee. See Section 2.2.
Commitment Fee Rate. As referred to as such in the table contained in
the definition of Applicable Margin.
Commitment Percentage. With respect to each Bank, the percentage set
forth on Schedule 1 hereto as such Bank's percentage of the aggregate
Commitments of all of the Banks.
Compliance Certificate. See Section 8.4(c).
Consolidated or consolidated. With reference to any term defined
herein, shall mean that term as applied to the accounts of the Borrower and its
Subsidiaries, consolidated in accordance with generally accepted accounting
principles.
Consolidated Net Income (or Deficit). The consolidated net income (or
deficit) of the Borrower and its Subsidiaries, after deduction of all expenses,
taxes, and other proper charges, determined in accordance with generally
accepted accounting principles.
Consolidated Net Operating Income (or Deficit). Consolidated Net Income
(or Deficit), after eliminating therefrom all extraordinary nonrecurring items
of income or loss.
Consolidated Net Worth. The excess of Consolidated Total Assets over
Consolidated Total Liabilities, less, to the extent otherwise includable in the
computations of Consolidated Net Worth, any subscriptions receivable.
Consolidated Total Assets. All assets of the Borrower and its
Subsidiaries determined on a consolidated basis in accordance with generally
accepted accounting principles.
Consolidated Total Interest Expense. For any period, the aggregate
amount of interest required to be paid or accrued by the Borrower and its
Subsidiaries during such period on all Indebtedness of the Borrower and its
Subsidiaries outstanding during all or any part of such period, whether such
interest was or is required to be reflected as an item of expense or
capitalized, including payments consisting of interest in respect of Capitalized
Leases and including commitment fees, agency fees, facility fees, balance
deficiency fees and similar fees or expenses in connection with the borrowing of
money.
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Consolidated Total Liabilities. All liabilities of the Borrower and its
Subsidiaries determined on a consolidated basis in accordance with generally
accepted accounting principles and all Indebtedness of the Borrower and its
Subsidiaries, whether or not so classified.
Conversion Request. A notice given by the Borrower to the Agent of the
Borrower's election to convert or continue a Revolving Credit Loan in accordance
with Section 2.7.
Credit Agreement. This Revolving Credit Agreement, including the
Schedules and Exhibits hereto.
Current Accounts Receivable. All Accounts Receivable of the Borrower
and its Subsidiaries on a consolidated basis that, in accordance with generally
accepted accounting principles, are properly classified as current assets,
provided that such Accounts Receivable shall be included only if good and
collectible as determined by the Borrower in accordance with established
practice consistently applied and only if payable and outstanding not more than
ninety (90) days after the date of the shipment of goods or other transaction
out of which any such account receivable arose; and such Accounts Receivable
shall be taken at their face value less reserves determined to be sufficient in
accordance with generally accepted accounting principles.
Declining Bank. See Section 2.1.2.
Default. See Section 13.1.
Distribution. The declaration or payment of any dividend on or in
respect of any shares of any class of capital stock of the Borrower, other than
dividends payable solely in shares of common stock of the Borrower; the
purchase, redemption, or other retirement of any shares of any class of capital
stock of the Borrower, directly or indirectly through a Subsidiary of the
Borrower or otherwise; the return of capital by the Borrower to its shareholders
as such; or any other distribution on or in respect of any shares of any class
of capital stock of the Borrower.
Dollars or $. Dollars in lawful currency of the United States of
America.
Domestic Lending Office. Initially, the office of each Bank designated
as such in Schedule 1 hereto; thereafter, such other office of such Bank, if
any, located within the United States that will be making or maintaining Base
Rate Loans.
Domestic Subsidiary. Any Subsidiary of the Borrower which is not a
Foreign Subsidiary.
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Drawdown Date. The date on which any Revolving Credit Loan is made or
is to be made, and the date on which any Revolving Credit Loan is converted or
continued in accordance with Section 2.7.
EBITDA. With respect to the Borrower and its Subsidiaries for any
fiscal period, an amount equal to Consolidated Net Income for such period, plus,
to the extent deducted in the calculation of Consolidated Net Income and without
duplication, (a) depreciation for such period, (b) other amortization for such
period, (c) income tax expense for such period and (d) Consolidated Total
Interest Expense paid or accrued during such period, all as determined in
accordance with generally accepted accounting principles.
Eligible Assignee. Any of (a) a commercial bank or finance company
organized under the laws of the United States, or any State thereof or the
District of Columbia, and having total assets in excess of $1,000,000,000; (b) a
savings and loan association or savings bank organized under the laws of the
United States, or any State thereof or the District of Columbia, and having a
net worth of at least $100,000,000, calculated in accordance with generally
accepted accounting principles; (c) a commercial bank organized under the laws
of any other country which is a member of the Organization for Economic
Cooperation and Development (the "OECD"), or a political subdivision of any such
country, and having total assets in excess of $1,000,000,000, provided that such
bank is acting through a branch or agency located in the country in which it is
organized or another country which is also a member of the OECD; (d) the central
bank of any country which is a member of the OECD; and (e) if, but only if, any
Event of Default has occurred and is continuing, any other bank, insurance
company, commercial finance company or other financial institution or other
Person approved by the Agent, such approval not to be unreasonably withheld.
Employee Benefit Plan. Any employee benefit plan within the meaning of
Section 3(3) of ERISA maintained of contributed to by the Borrower or any ERISA
Affiliate, other than a Multiemployer Plan.
Environmental Laws. See Section 7.17(a).
ERISA. The Employee Retirement Income Security Act of 1974.
ERISA Affiliate. Any Person which is treated as a single employer with
the Borrower under Section 414 of the Code.
ERISA Reportable Event. A reportable event with respect to a Guaranteed
Pension Plan within the meaning of Section 4043 of ERISA and the regulations
promulgated thereunder as to which the requirement of notice has not been
waived.
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Eurocurrency Reserve Rate. For any day with respect to a Eurodollar
Rate Loan, the maximum rate (expressed as a decimal) at which any lender subject
thereto would be required to maintain reserves under Regulation D of the Board
of Governors of the Federal Reserve System (or any successor or similar
regulations relating to such reserve requirements) against "Eurocurrency
Liabilities" (as that term is used in Regulation D), if such liabilities were
outstanding. The Eurocurrency Reserve Rate shall be adjusted automatically on
and as of the effective date of any change in the Eurocurrency Reserve Rate.
Eurodollar Business Day. Any day on which commercial banks are open for
international business (including dealings in Dollar deposits) in London or such
other eurodollar interbank market as may be selected by the Agent in its sole
discretion acting in good faith.
Eurodollar Lending Office. Initially, the office of each Bank
designated as such in Schedule 1 hereto; thereafter, such other office of such
Bank, if any, that shall be making or maintaining Eurodollar Rate Loans.
Eurodollar Rate. For any Interest Period with respect to a Eurodollar
Rate Loan, the rate of interest equal to (a) the arithmetic average of the rates
per annum for each Reference Bank (rounded upwards to the nearest 1/16 of one
percent) of the rate at which such Reference Bank's Eurodollar Lending Office is
offered Dollar deposits two (2) Eurodollar Business Days prior to the beginning
of such Interest Period in the interbank eurodollar market where the eurodollar
and foreign currency and exchange operations of such Eurodollar Lending Office
are customarily conducted, for delivery on the first day of such Interest Period
for the number of days comprised therein and in an amount comparable to the
amount of the Eurodollar Rate Loan of such Reference Bank to which such Interest
Period applies, divided by (b) a number equal to 1.00 minus the Eurocurrency
Reserve Rate, if applicable.
Eurodollar Rate Loans. Revolving Credit Loans bearing interest
calculated by reference to the Eurodollar Rate.
Event of Default. See Section 13.1.
Extension Date. April 24, 1997 and, thereafter, each April 24 of each
calendar year.
Fee Letter. The Fee Letter dated as of February 26, 1996 by and among
the Borrower and the Bank Agents, as the same may be amended, modified, restated
or supplemented from time to time.
Foreign Subsidiary. Any Subsidiary which conducts substantially all of
its business in countries other than the United States of America and that is
organized under the laws of a jurisdiction other than the United States of
America and the States (or the District of Columbia) thereof.
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FNBB. The First National Bank of Boston, a national banking
association, in its individual capacity.
generally accepted accounting principles. (a) When used in Section 10,
whether directly or indirectly through reference to a capitalized term used
therein, means (i) principles that are consistent with the principles
promulgated or adopted by the Financial Accounting Standards Board and its
predecessors, in effect for the fiscal year ended on the Balance Sheet Date, and
(ii) to the extent consistent with such principles, the accounting practice of
the Borrower reflected in its financial statements for the year ended on the
Balance Sheet Date, and (b) when used in general, other than as provided above,
means principles that are (i) consistent with the principles promulgated or
adopted by the Financial Accounting Standards Board and its predecessors, as in
effect from time to time, and (ii) consistently applied with past financial
statements of the Borrower adopting the same principles, provided that in each
case referred to in this definition of "generally accepted accounting
principles" a certified public accountant would, insofar as the use of such
accounting principles is pertinent, be in a position to deliver an unqualified
opinion (other than a qualification regarding changes in generally accepted
accounting principles) as to financial statements in which such principles have
been properly applied.
Guaranteed Pension Plan. Any employee pension benefit plan within the
meaning of Section 3(2) of ERISA maintained or contributed to by the Borrower or
any ERISA Affiliate the benefits of which are guaranteed on termination in full
or in part by the PBGC pursuant to Title IV of ERISA, other than a Multiemployer
Plan.
Guarantors. All Domestic Subsidiaries.
Guaranty. The Guaranty, dated or to be dated on or prior to the Closing
Date, made by each Domestic Subsidiary of the Borrower in favor of the Banks and
the Bank Agents pursuant to which each Domestic Subsidiary of the Borrower
guaranties to the Banks and the Bank Agents the payment and performance of the
Obligations and in form and substance satisfactory to the Banks and the Agent.
Hazardous Substances. See Section 7.17(b).
Indebtedness. All obligations, contingent and otherwise, that in
accordance with generally accepted accounting principles should be classified
upon the obligor's balance sheet as liabilities, or to which reference should be
made by footnotes thereto, including in any event and whether or not so
classified: (a) all debt and similar monetary obligations, whether direct or
indirect; (b) all liabilities secured by any mortgage, pledge, security
interest, lien, charge or other encumbrance existing on property owned or
acquired subject thereto, whether or not the liability secured thereby shall
have been assumed; and (c) all guarantees, endorsements and other contingent
obligations whether direct or indirect in respect of indebtedness of others,
including any
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obligation to supply funds to or in any manner to invest in, directly or
indirectly, the debtor, to purchase indebtedness, or to assure the owner of
indebtedness against loss, through an agreement to purchase goods, supplies, or
services for the purpose of enabling the debtor to make payment of the
indebtedness held by such owner or otherwise, and the obligations to reimburse
the issuer in respect of any letters of credit.
Instrument of Accession. See Section 19.1.2.
Interest Payment Date. (a) As to any Base Rate Loan, the last day of
the calendar quarter which includes the Drawdown Date thereof; and (b) as to any
Eurodollar Rate Loan in respect of which the Interest Period is (i) 3 months or
less, the last day of such Interest Period, (ii) more than three (3) month but
less than twelve (12) months, the date that is three (3) months from the first
day of such Interest Period and, in addition, the last day of such Interest
Period and (iii) is twelve (12) months, the dates which are (x) three (3) months
from the first day of such Interest Period, (y) six (6) months from the first
day of such Interest Period, (z) nine (9) months from the first day of such
Interest Period and, in addition, the last day of such Interest Period.
Interest Period. With respect to each Revolving Credit Loan, (a)
initially, the period commencing on the Drawdown Date of such Revolving Credit
Loan and ending on the last day of one of the periods set forth below, as
selected by the Borrower in a Loan Request (i) for any Base Rate Loan, the last
day of the calendar quarter; and (ii) for any Eurodollar Rate Loan, 1, 2, 3 or 6
months, and, if available or consented to by the Banks, 12 months; and (b)
thereafter, each period commencing on the last day of the next preceding
Interest Period applicable to such Revolving Credit Loan and ending on the last
day of one of the periods set forth above, as selected by the Borrower in a
Conversion Request; provided that all of the foregoing provisions relating to
Interest Periods are subject to the following:
(a) if any Interest Period with respect to a Eurodollar Rate
Loan would otherwise end on a day that is not a Eurodollar Business
Day, that Interest Period shall be extended to the next succeeding
Eurodollar Business Day unless the result of such extension would be to
carry such Interest Period into another calendar month, in which event
such Interest Period shall end on the immediately preceding Eurodollar
Business Day;
(b) if the Borrower shall fail to give notice as provided in
Section 2.7, the Borrower shall be deemed to have requested a
conversion of the affected Eurodollar Rate Loan to a Base Rate Loan and
the continuance of all Base Rate Loans as Base Rate Loans on the last
day of the then current Interest Period with respect thereto;
(c) any Interest Period relating to any Eurodollar Rate Loan
that begins on the last Eurodollar Business Day of a calendar month (or
on a
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day for which there is no numerically corresponding day in the calendar
month at the end of such Interest Period) shall end on the last
Eurodollar Business Day of a calendar month; and
(d) any Interest Period relating to any Eurodollar Rate Loan
that would otherwise extend beyond the Revolving Credit Loan Maturity
Date shall end on the Revolving Credit Loan Maturity Date.
Investments. All expenditures made and all liabilities incurred
(contingently or otherwise) for the acquisition of stock or Indebtedness of, or
for loans, advances, capital contributions or transfers of property to, or in
respect of any guaranties (or other commitments as described under
Indebtedness), or obligations of, any Person. In determining the aggregate
amount of Investments outstanding at any particular time: (a) the amount of any
Investment represented by a guaranty shall be taken at not less than the
principal amount of the obligations guaranteed and still outstanding; (b) there
shall be included as an Investment all interest accrued with respect to
Indebtedness constituting an Investment unless and until such interest is paid;
(c) there shall be deducted in respect of each such Investment any amount
received as a return of capital (but only by repurchase, redemption, retirement,
repayment, liquidating dividend or liquidating distribution); (d) there shall
not be deducted in respect of any Investment any amounts received as earnings on
such Investment, whether as dividends, interest or otherwise, except that
accrued interest included as provided in the foregoing clause (b) may be
deducted when paid; and (e) there shall not be deducted from the aggregate
amount of Investments any decrease in the value thereof.
Letter of Credit. See Section 4.1.1.
Letter of Credit Application. See Section 4.1.1.
Letter of Credit Participation. See Section 4.1.4.
Loan Documents. This Credit Agreement, the Notes, the Letter of Credit
Applications, the Letters of Credit and the Guaranty.
Loan Request. See Section 2.6.
Majority Banks. As of any date, the Banks holding at least sixty-six
and two thirds percent (66 2/3%) of the outstanding principal amount of the
Revolving Credit Notes on such date; and if no such principal is outstanding,
the Banks whose aggregate Commitments constitutes at least sixty-six and two
thirds percent (66 2/3%) of the Total Commitment.
Maximum Drawing Amount. The maximum aggregate amount that the
beneficiaries may at any time draw under outstanding Letters of Credit, as such
aggregate amount may be reduced from time to time pursuant to the terms of the
Letters of Credit.
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Multiemployer Plan. Any multiemployer plan within the meaning of
Section 3(37) of ERISA maintained or contributed to by the Borrower or any ERISA
Affiliate.
NationsBank. NationsBank of Texas, N.A., a national banking
association, in its individual capacity.
Obligations. All indebtedness, obligations and liabilities of any of
the Borrower and its Subsidiaries to any of the Banks and the Bank Agents,
individually or collectively, existing on the date of this Credit Agreement or
arising thereafter, direct or indirect, joint or several, absolute or
contingent, matured or unmatured, liquidated or unliquidated, secured or
unsecured, arising by contract, operation of law or otherwise, arising or
incurred under this Credit Agreement or any of the other Loan Documents or in
respect of any of the Revolving Credit Loans made or Reimbursement Obligations
incurred or any of the Revolving Credit Notes, Letter of Credit Application,
Letter of Credit or other instruments at any time evidencing any thereof.
outstanding. With respect to the Revolving Credit Loans, the aggregate
unpaid principal thereof as of any date of determination.
PBGC. The Pension Benefit Guaranty Corporation created by Section 4002
of ERISA and any successor entity or entities having similar responsibilities.
Permitted Liens. Liens, security interests and other encumbrances
permitted by Section 9.2.
Person. Any individual, corporation, partnership, trust, unincorporated
association, business, or other legal entity, and any government or any
governmental agency or political subdivision thereof.
Rate Adjustment Period. See the definition of Applicable Margin.
Real Estate. All real property at any time owned or leased (as lessee
or sublessee) by the Borrower or any of its Subsidiaries.
Record. The grid attached to a Revolving Credit Note, or the
continuation of such grid, or any other similar record, including computer
records, maintained by any Bank with respect to any Revolving Credit Loan
referred to in such Revolving Credit Note.
Reference Banks. NationsBank and FNBB.
Reimbursement Obligation. The Borrower's obligation to reimburse the
Agent and the Banks on account of any drawing under any Letter of Credit as
provided in Section 4.2.
Remaining Banks. See Section 2.1.2.
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Rental Obligations. All present or future obligations of the Borrower
or any of its Subsidiaries under any rental agreements or leases of real or
personal property, other than (a) obligations that can be terminated by the
giving of notice without liability to the Borrower or such Subsidiary in excess
of the liability for rent due as of the date on which such notice is given and
under which no penalty or premium is paid as a result of any such termination,
and (b) obligations in respect of Capitalized Leases.
Replacement Bank. See Section 2.1.3.
Replacement Date. See Section 2.1.3.
Revolving Credit Loan Maturity Date. April 24, 1999, unless extended in
accordance with Section 2.1.2, and then such date as set forth in such extension
notice.
Revolving Credit Loans. Revolving credit loans made or to be made by
the Banks to the Borrower pursuant to Section 2.
Revolving Credit Notes. See Section 2.4.
Senior Funded Indebtedness. At any time of determination, the amount of
the Total Commitment.
Strategic Partners. Any corporation or other business entity with which
the Borrower or any of its Subsidiaries has or seeks to have a substantial or
continuing commercial relationship involving the purchase and/or sale of
products or materials or the development, acquisition or use of products,
technology or intellectual property, and which Strategic Partner and any
Investment in such Strategic Partner by the Borrower has been approved by the
Board of Directors of the Borrower prior to making any Investment in such
Strategic Partner.
Subsidiary. Any corporation, association, trust, or other business
entity of which the designated parent shall at any time own directly or
indirectly through a Subsidiary or Subsidiaries at least a majority (by number
of votes) of the outstanding Voting Stock.
Syndication Agent. As defined in the preamble hereto.
Total Commitment. The sum of the Commitments of the Banks, as in effect
from time to time.
Type. As to any Revolving Credit Loan its nature as a Base Rate Loan or
a Eurodollar Rate Loan.
Uniform Customs. With respect to any Letter of Credit, the Uniform
Customs and Practice for Documentary Credits (1993 Revision), International
Chamber of Commerce Publication No. 500 or any successor version thereto
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adopted by the Agent in the ordinary course of its business as a letter of
credit issuer and in effect at the time of issuance of such Letter of Credit.
Unpaid Reimbursement Obligation. Any Reimbursement Obligation for which
the Borrower does not reimburse the Agent and the Banks on the date specified
in, and in accordance with, Section 4.2.
Voting Stock. Stock or similar interests, of any class or classes
(however designated), the holders of which are at the time entitled, as such
holders, to vote for the election of a majority of the directors (or persons
performing similar functions) of the corporation, association, trust or other
business entity involved, whether or not the right so to vote exists by reason
of the happening of a contingency.
1.2. RULES OF INTERPRETATION.
(a) A reference to any document or agreement shall include
such document or agreement as amended, modified or supplemented from
time to time in accordance with its terms and the terms of this Credit
Agreement.
(b) The singular includes the plural and the plural includes
the singular.
(c) A reference to any law includes any amendment or
modification to such law.
(d) A reference to any Person includes its permitted
successors and permitted assigns.
(e) Accounting terms not otherwise defined herein have the
meanings assigned to them by generally accepted accounting principles
applied on a consistent basis by the accounting entity to which they
refer.
(f) The words "include", "includes" and "including" are not
limiting.
(g) All terms not specifically defined herein or by generally
accepted accounting principles, which terms are defined in the Uniform
Commercial Code as in effect in the State of New York, have the
meanings assigned to them therein, with the term "instrument" being
that defined under Article 9 of the Uniform Commercial Code.
(h) Reference to a particular "Section" refers to that
section of this Credit Agreement unless otherwise indicated.
(i) The words "herein", "hereof", "hereunder" and words of
like import shall refer to this Credit Agreement as a whole and not to
any particular section or subdivision of this Credit Agreement.
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2. THE REVOLVING CREDIT FACILITY.
2.1. COMMITMENT TO LEND; EXTENSION OF MATURITY.
2.1.1. COMMITMENT TO LEND. Subject to the terms and conditions
set forth in this Credit Agreement, each of the Banks severally agrees
to lend to the Borrower and the Borrower may borrow, repay, and
reborrow from time to time between the Closing Date and the Revolving
Credit Loan Maturity Date upon notice by the Borrower to the Agent
given in accordance with Section 2.6, such sums as are requested by the
Borrower up to a maximum aggregate amount outstanding (after giving
effect to all amounts requested) at any one time equal to such Bank's
Commitment minus such Bank's Commitment Percentage of the sum of the
Maximum Drawing Amount and all Unpaid Reimbursement Obligations,
provided that the sum of the outstanding amount of the Revolving Credit
Loans (after giving effect to all amounts requested) plus the Maximum
Drawing Amount and all Unpaid Reimbursement Obligations shall not at
any time exceed the Total Commitment. The Revolving Credit Loans shall
be made pro rata in accordance with each Bank's Commitment Percentage.
Each request for a Revolving Credit Loan hereunder shall constitute a
representation and warranty by the Borrower that the conditions set
forth in Section 11 and Section 12, in the case of the initial
Revolving Credit Loans to be made on the Closing Date, and Section 12,
in the case of all other Revolving Credit Loans, have been satisfied on
the date of such request.
2.1.2. EXTENSION OF MATURITY. The Total Commitment shall
terminate and all Revolving Credit Loans shall become finally due and
payable on the Revolving Credit Loan Maturity Date; provided, however,
that such Total Commitment and Revolving Credit Loan Maturity Date may
be extended for successive annual periods, as provided in this Section
2.1.2 and at each Bank's sole discretion, upon the written request of
the Borrower. A written request, if any, for the extension of the Total
Commitment and the then current Revolving Credit Loan Maturity Date
shall be given by the Borrower to the Agent and the Banks not less than
one hundred twenty (120) days prior to the Extension Date. Except as
expressly provided in this Section 2.1.2, no extension of the Total
Commitment and then current Revolving Credit Loan Maturity Date
pursuant to this Section 2.1.2 shall be effective unless all of the
Banks shall have approved such extension by written notice to the
Agent. If on or prior to ninety (90) days prior to the applicable
Extension Date, all of the Banks consent to such extension by written
notice to the Agent, the Total Commitment and the Revolving Credit Loan
Maturity Date automatically shall be extended to that date which is one
year later than the then current Revolving Credit Loan Maturity Date.
If on or prior to ninety (90) days prior to the applicable Extension
Date, any Bank (a "Declining Bank") shall have objected to such
requested extension by written notice to the Agent or shall not have
delivered the written notice to the Agent consenting to
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such requested extension, then the Borrower may on or prior to thirty
(30) days prior to such Extension Date, replace such Bank in accordance
with the provisions of Section 2.1.3 hereof with a Replacement Bank
which consents to the requested extension of the Total Commitment and
the Revolving Credit Loan Maturity Date, in which case the Replacement
Bank shall become a Bank party hereto effective no later than such
Extension Date, the Total Commitment and the Revolving Credit Loan
Maturity Date automatically shall be extended to that date which is one
year later than the then current Revolving Credit Loan Maturity Date.
In the event that the Borrower is unable to obtain such a Replacement
Bank, no later than thirty (30) days prior to the applicable Extension
Date the Borrower may deliver to the Agent a written request that each
Bank other than the Declining Bank (collectively, the "Remaining
Banks") agree to such requested extension, to the reduction of the
Total Commitment to reflect the elimination of the Declining Bank's
Commitment and to the recalculation of the Remaining Bank's Commitment
Percentages to reflect such elimination of the Declining Bank. Upon
receipt of such a request, the Agent shall promptly deliver to the
Remaining Banks a written notice stating the proposed reduced Total
Commitment with each Remaining Bank's proposed recalculated Commitment
Percentage. No later than the applicable Extension Date, each Remaining
Bank shall give written notice to the Borrower and the Agent accepting
or rejecting such proposed reduced Total Commitment and recalculated
Commitment Percentages. In the event that all of the Remaining Banks so
consent, the Total Commitment and the Revolving Credit Loan Maturity
Date automatically shall be extended to that date which is one year
later than the then current Revolving Credit Loan Maturity date, the
Total Commitment shall be reduced by the amount of the Declining Bank's
Commitment, all amounts payable hereunder to the Declining Bank shall
be paid in full, the Commitment of the Declining Bank shall be
eliminated and each Remaining Bank's Commitment Percentage shall be
recalculated as provided in this Section 2.1.2, in each case effective
as of such Extension Date. In the event that the Borrower fails to
obtain a Replacement Bank or any Remaining Bank fails to so consent, no
extension of the Total Commitment and no extension of the then current
Revolving Credit Loan Maturity Date, and no adjustments to the Total
Commitment or Commitment Percentages, shall occur.
2.1.3. REPLACEMENT BANKS.
Notwithstanding any other provision of this Credit Agreement
to the contrary, in the event that any Bank is a Declining Bank
pursuant to Section 2.1.2 and the Borrower so elects in accordance with
Section 2.1.2 hereof, then the Borrower in its discretion may (a) send
written notice to such Declining Bank and the Agent advising such
Declining Bank that, subject to the provisions of this Section 2.1.3,
its Commitment hereunder shall be terminated on a date determined by
the Borrower (the "Replacement Date"), which Replacement Date shall be
no earlier than the date on which such Declining Bank and the Agent
have
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received such notice from the Borrower, and, commencing on the
Replacement Date, the Commitment of such Declining Bank hereunder shall
be terminated and no Commitment Fee shall be payable by the Borrower to
such Declining Bank with respect to such Commitment and (b) replace
such Declining Bank with another Bank or other commercial banking
institution (the "Replacement Bank") which has been selected by the
Borrower and approved by the Majority Banks, which approval shall not
be unreasonably withheld, provided that the Borrower, the Banks and the
Agent agree that (i) on or prior to the Replacement Date, the Borrower
shall have paid all principal, interest and fees owing by the Borrower
hereunder, accruing up to and including the Replacement Date, to the
Declining Bank being replaced on the Replacement Date, (ii) as of the
Replacement Date, the Replacement Bank will take over the entire
Commitment of the Declining Bank being replaced, (iii) on or prior to
the Drawdown Date first following the Replacement Date, the Borrower,
the Agent and the Banks (other than the Declining Bank being replaced)
and the Replacement Bank shall make such arrangements by way of new
Revolving Credit Loans, purchases or refundings of existing Revolving
Credit Loans or otherwise as will result thereafter in the outstanding
and unpaid Revolving Credit Loans of each Bank being equal, as near as
may practically be, to such Bank's Commitment Percentage of all the
outstanding and unpaid Revolving Credit Loans made to the Borrower, and
(iv) the Agent shall be entitled to receive prior to the Replacement
Date from the Borrower and the Replacement Bank such supplemental
agreements, documents, certificates and legal opinions in connection
with the replacement of such Declining Bank as the Agent and the other
Banks may reasonably request to give effect to the foregoing provisions
of this Section 2.1.3.
2.2. COMMITMENT FEE. The Borrower agrees to pay to the Agent for the
accounts of the Banks in accordance with their respective Commitment Percentages
a commitment fee (the "Commitment Fee") calculated at the applicable Commitment
Fee Rate on the average daily amount during each calendar quarter or portion
thereof from the Closing Date to the Revolving Credit Loan Maturity Date by
which the Total Commitment minus the sum of the Maximum Drawing Amount and all
Unpaid Reimbursement Obligations exceeds the outstanding amount of Revolving
Credit Loans during such calendar quarter. The Commitment Fee shall be payable
quarterly in arrears on the first day of each calendar quarter for the
immediately preceding calendar quarter commencing on the first such date
following the date hereof, with a final payment on the Revolving Credit Maturity
Date or any earlier date on which the Commitments shall terminate.
2.3. REDUCTION OF TOTAL COMMITMENT. The Borrower shall have the right
at any time and from time to time upon five (5) Business Days prior written
notice to the Agent to reduce by $10,000,000 or a whole multiple of $500,000 in
excess thereof or terminate entirely the Total Commitment, whereupon the
Commitments of the Banks shall be reduced pro rata in
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accordance with their respective Commitment Percentages of the amount specified
in such notice or, as the case may be, terminated. Promptly after receiving any
notice of the Borrower delivered pursuant to this Section 2.3, the Agent will
notify the Banks of the substance thereof. Upon the effective date of any such
reduction or termination, the Borrower shall pay to the Agent for the respective
accounts of the Banks the full amount of any Commitment Fee then accrued on the
amount of the reduction. No reduction or termination of the Commitments may be
reinstated.
2.4. THE REVOLVING CREDIT NOTES. The Revolving Credit Loans shall be
evidenced by separate promissory notes of the Borrower in substantially the form
of Exhibit A hereto (each a "Revolving Credit Note"), dated as of the Closing
Date and completed with appropriate insertions. One Revolving Credit Note shall
be payable to the order of each Bank in a principal amount equal to such Bank's
Commitment or, if less, the outstanding amount of all Revolving Credit Loans
made by such Bank, plus interest accrued thereon, as set forth below. The
Borrower irrevocably authorizes each Bank to make or cause to be made, at or
about the time of the Drawdown Date of any Revolving Credit Loan or at the time
of receipt of any payment of principal on such Bank's Revolving Credit Note, an
appropriate notation on such Bank's Record reflecting the making of such
Revolving Credit Loan or (as the case may be) the receipt of such payment. The
outstanding amount of the Revolving Credit Loans set forth on such Bank's Record
shall be prima facie evidence of the principal amount thereof owing and unpaid
to such Bank, but the failure to record, or any error in so recording, any such
amount on such Bank's Record shall not limit or otherwise affect the obligations
of the Borrower hereunder or under any Revolving Credit Note to make payments of
principal of or interest on any Revolving Credit Note when due.
2.5. INTEREST ON REVOLVING CREDIT LOANS. Except as otherwise provided
in Section 5.11,
(a) Each Base Rate Loan shall bear interest for the period
commencing with the Drawdown Date thereof and ending on the last day of
the Interest Period with respect thereto at the rate per annum equal to
the Base Rate plus the Applicable Margin.
(b) Each Eurodollar Rate Loan shall bear interest for the
period commencing with the Drawdown Date thereof and ending on the last
day of the Interest Period with respect thereto at the rate per annum
equal to the Eurodollar Rate determined for such Interest Period plus
the Applicable Margin.
(c) The Borrower promises to pay interest on each Revolving
Credit Loan in arrears on each Interest Payment Date with respect
thereto.
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2.6. REQUESTS FOR REVOLVING CREDIT LOANS. The Borrower shall give to
the Agent written notice in the form of Exhibit B hereto (or telephonic notice
confirmed in a writing in the form of Exhibit B hereto) of each Revolving Credit
Loan requested hereunder (a "Loan Request") not later than (a) 11:00 a.m.
(Boston time) on the proposed Drawdown Date of any Base Rate Loan and (ii) 11:00
a.m. (Boston time) two (2) Eurodollar Business Days prior to the proposed
Drawdown Date of any Eurodollar Rate Loan. Each such notice shall specify (i)
the principal amount of the Revolving Credit Loan requested, (ii) the proposed
Drawdown Date of such Revolving Credit Loan, (iii) the Interest Period for such
Revolving Credit Loan and (iv) the Type of such Revolving Credit Loan. Promptly
upon receipt of any such notice, the Agent shall notify each of the Banks
thereof. Each Loan Request shall be irrevocable and binding on the Borrower and
shall obligate the Borrower to accept the Revolving Credit Loan requested from
the Banks on the proposed Drawdown Date. Each Loan Request shall for a Base Rate
Loan shall be in a minimum aggregate amount of $1,000,000 or a larger integral
multiple of $100,000 in excess thereof, and each Loan Request for a Eurodollar
Rate Loan shall be in a minimum aggregate amount of $5,000,000 or a larger
integral multiple of $1,000,000 in excess thereof.
2.7. CONVERSION OPTIONS.
2.7.1. CONVERSION TO DIFFERENT TYPE OF REVOLVING CREDIT LOAN.
The Borrower may elect from time to time to convert any outstanding
Revolving Credit Loan to a Revolving Credit Loan of another Type,
provided that (a) with respect to any such conversion of a Revolving
Credit Loan to a Base Rate Loan, the Borrower shall give the Agent at
least one (1) Business Days prior written notice of such election; (b)
with respect to any such conversion of a Base Rate Loan to a Eurodollar
Rate Loan, the Borrower shall give the Agent at least two (2)
Eurodollar Business Days prior written notice of such election; (c)
with respect to any such conversion of a Eurodollar Rate Loan into a
Revolving Credit Loan of another Type, such conversion shall only be
made on the last day of the Interest Period with respect thereto and
(d) no Revolving Credit Loan may be converted into a Eurodollar Rate
Loan when any Default or Event of Default has occurred and is
continuing. On the date on which such conversion is being made each
Bank shall take such action as is necessary to transfer its Commitment
Percentage of such Revolving Credit Loans to its Domestic Lending
Office or its Eurodollar Lending Office, as the case may be. All or any
part of outstanding Revolving Credit Loans of any Type may be converted
into a Revolving Credit Loan of another Type as provided herein,
provided that any partial conversion into a Base Rate Loan shall be in
an aggregate principal amount of $1,000,000 or a larger integral
multiple of $100,000 in excess thereof, and any partial conversion into
a Eurodollar Rate Loan shall be in an aggregate principal amount of
$5,000,000 or a larger integral multiple of $1,000,000 in excess
thereof. Each Conversion Request relating to the
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conversion of a Revolving Credit Loan to a Eurodollar Rate Loan shall
be irrevocable by the Borrower.
2.7.2. CONTINUATION OF TYPE OF REVOLVING CREDIT LOAN. Any
Revolving Credit Loan of any Type may be continued as a Revolving
Credit Loan of the same Type upon the expiration of an Interest Period
with respect thereto by compliance by the Borrower with the notice
provisions contained in Section 2.7.1; provided that no Eurodollar Rate
Loan may be continued as such when any Default or Event of Default has
occurred and is continuing, but shall be automatically converted to a
Base Rate Loan on the last day of the first Interest Period relating
thereto ending during the continuance of any Default or Event of
Default. In the event that the Borrower fails to provide any such
notice with respect to the continuation of any Eurodollar Rate Loan as
such, then such Eurodollar Rate Loan shall be automatically converted
to a Base Rate Loan on the last day of the first Interest Period
relating thereto. The Agent shall notify the Banks promptly when any
such automatic conversion contemplated by this Section 2.7 is scheduled
to occur.
2.7.3. EURODOLLAR RATE LOANS. Any conversion to or from
Eurodollar Rate Loans shall be in such amounts and be made pursuant to
such elections so that, after giving effect thereto, the aggregate
principal amount of all Eurodollar Rate Loans having the same Interest
Period shall not be less than $5,000,000 or an integral multiple of
$1,000,000 in excess thereof. In addition, there shall not be more than
ten (10) Eurodollar Rate Loans outstanding at any one time.
2.8. FUNDS FOR REVOLVING CREDIT LOAN.
2.8.1. FUNDING PROCEDURES. Not later than 1:00 p.m. (Boston
time) on the proposed Drawdown Date of any Revolving Credit Loans, each
of the Banks will make available to the Agent, at the Agent's Head
Office, in immediately available funds, the amount of such Bank's
Commitment Percentage of the amount of the requested Revolving Credit
Loans. Upon receipt from each Bank of such amount, and upon receipt of
the documents required by Sections 11 and 12 and the satisfaction of
the other conditions set forth therein, to the extent applicable, the
Agent will make available to the Borrower the aggregate amount of such
Revolving Credit Loans made available to the Agent by the Banks. The
failure or refusal of any Bank to make available to the Agent at the
aforesaid time and place on any Drawdown Date the amount of its
Commitment Percentage of the requested Revolving Credit Loans shall not
relieve any other Bank from its several obligation hereunder to make
available to the Agent the amount of such other Bank's Commitment
Percentage of any requested Revolving Credit Loans.
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2.8.2. ADVANCES BY AGENT. The Agent may, unless notified to
the contrary by any Bank prior to a Drawdown Date, assume that such
Bank has made available to the Agent on such Drawdown Date the amount
of such Bank's Commitment Percentage of the Revolving Credit Loans to
be made on such Drawdown Date, and the Agent may (but it shall not be
required to), in reliance upon such assumption, make available to the
Borrower a corresponding amount. If any Bank makes available to the
Agent such amount on a date after such Drawdown Date, such Bank shall
pay to the Agent on demand an amount equal to the product of (a) the
average computed for the period referred to in clause (c) below, of the
weighted average interest rate paid by the Agent for federal funds
acquired by the Agent during each day included in such period, times
(b) the amount of such Bank's Commitment Percentage of such Revolving
Credit Loans, times (c) a fraction, the numerator of which is the
number of days that elapse from and including such Drawdown Date to the
date on which the amount of such Bank's Commitment Percentage of such
Revolving Credit Loans shall become immediately available to the Agent,
and the denominator of which is 360. A statement of the Agent submitted
to such Bank with respect to any amounts owing under this paragraph
shall be prima facie evidence of the amount due and owing to the Agent
by such Bank. If the amount of such Bank's Commitment Percentage of
such Revolving Credit Loans is not made available to the Agent by such
Bank within three (3) Business Days following such Drawdown Date, the
Agent shall be entitled to recover such amount from the Borrower on
demand, with interest thereon at the rate per annum applicable to the
Revolving Credit Loans made on such Drawdown Date.
3. REPAYMENT OF THE REVOLVING CREDIT LOANS.
3.1. MATURITY. The Borrower promises to pay on the Revolving Credit
Loan Maturity Date, and there shall become absolutely due and payable on the
Revolving Credit Loan Maturity Date, all of the Revolving Credit Loans
outstanding on such date, together with any and all accrued and unpaid interest
thereon.
3.2. MANDATORY REPAYMENTS OF REVOLVING CREDIT LOANS. If at any time the
sum of the outstanding amount of the Revolving Credit Loans, the Maximum Drawing
Amount and all Unpaid Reimbursement Obligations exceeds the Total Commitment,
then the Borrower shall immediately pay the amount of such excess to the Agent
for the respective accounts of the Banks for application: first, to any Unpaid
Reimbursement Obligations; second, to the Revolving Credit Loans; and third, to
provide to the Agent cash collateral for Reimbursement Obligations as
contemplated by Section 4.2(b) and (c). Each payment of any Unpaid Reimbursement
Obligations or prepayment of Revolving Credit Loans shall be allocated among the
Banks, in proportion, as nearly as practicable, to each
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Reimbursement Obligation or (as the case may be) the respective unpaid principal
amount of each Bank's Revolving Credit Note, with adjustments to the extent
practicable to equalize any prior payments or repayments not exactly in
proportion.
3.3. OPTIONAL REPAYMENTS OF REVOLVING CREDIT LOANS. The Borrower shall
have the right, at its election, to repay the outstanding amount of the
Revolving Credit Loans, as a whole or in part, at any time without penalty or
premium, provided that any full or partial prepayment of the outstanding amount
of any Eurodollar Rate Loans pursuant to this Section 3.3 may be made only on
the last day of the Interest Period relating thereto. The Borrower shall give
the Agent, no later than 1:00 p.m., Boston time, at least one (1) Business Days
prior written notice of any proposed prepayment pursuant to this Section 3.3 of
Base Rate Loans, and two (2) Eurodollar Business Days notice of any proposed
prepayment pursuant to this Section 3.3 of Eurodollar Rate Loans, in each case
specifying the proposed date of prepayment of Revolving Credit Loans and the
principal amount to be prepaid. Each such partial prepayment of the Revolving
Credit Loans shall be in an integral multiple of $1,000,000, shall be
accompanied by the payment of accrued interest on the principal prepaid to the
date of prepayment and shall be applied, in the absence of instruction by the
Borrower, first to the principal of Base Rate Loans and then to the principal of
Eurodollar Rate Loans. Each partial prepayment shall be allocated among the
Banks, in proportion, as nearly as practicable, to the respective unpaid
principal amount of each Bank's Revolving Credit Note, with adjustments to the
extent practicable to equalize any prior repayments not exactly in proportion.
4. LETTERS OF CREDIT.
4.1. LETTER OF CREDIT COMMITMENTS.
4.1.1. COMMITMENT TO ISSUE LETTERS OF CREDIT. Subject to the
terms and conditions hereof and the execution and delivery by the
Borrower of a letter of credit application on the Agent's customary
form (a "Letter of Credit Application"), the Agent on behalf of the
Banks and in reliance upon the agreement of the Banks set forth in
Section 4.1.4 and upon the representations and warranties of the
Borrower contained herein, agrees, in its individual capacity, to
issue, extend and renew for the account of the Borrower one or more
standby letters of credit (individually, a "Letter of Credit"), in such
form as may be requested from time to time by the Borrower and agreed
to by the Agent; provided, however, that, after giving effect to such
request, (a) the sum of the aggregate Maximum Drawing Amount and all
Unpaid Reimbursement Obligations shall not exceed $15,000,000 at any
one time and (b) the sum of (i) the Maximum Drawing Amount on all
Letters of Credit, (ii) all Unpaid Reimbursement Obligations, and (iii)
the amount of all Revolving Credit Loans outstanding shall not exceed
the Total Commitment. Notwithstanding the foregoing, the Agent shall
have no obligation to issue any Letter of Credit to support or secure
any Indebtedness of the Borrower or any of its
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Subsidiaries to the extent that such Indebtedness was incurred prior to
the proposed issuance date of such Letter of Credit, unless in any such
case the Borrower demonstrates to the satisfaction of the Agent that
(x) such prior incurred Indebtedness were then fully secured by a prior
perfected and unavoidable security interest in collateral provided by
the Borrower or such Subsidiary to the proposed beneficiary of such
Letter of Credit or (y) such prior incurred Indebtedness were then
secured or supported by a letter of credit issued for the account of
the Borrower or such Subsidiary and the reimbursement obligation with
respect to such letter of credit was fully secured by a prior perfected
and unavoidable security interest in collateral provided to the issuer
of such letter of credit by the Borrower or such Subsidiary. Within a
reasonable time after the issuance of any Letter of Credit, the Agent
shall notify the Banks of the issuance of such Letter of Credit.
4.1.2. LETTER OF CREDIT APPLICATIONS. Each Letter of Credit
Application shall be completed to the satisfaction of the Agent. In the
event that any provision of any Letter of Credit Application shall be
inconsistent with any provision of this Credit Agreement, then the
provisions of this Credit Agreement shall, to the extent of any such
inconsistency, govern.
4.1.3. TERMS OF LETTERS OF CREDIT. Each Letter of Credit
issued, extended or renewed hereunder shall, among other things, (a)
provide for the payment of sight drafts for honor thereunder when
presented in accordance with the terms thereof and when accompanied by
the documents described therein, (b) have an expiry date no later than
the date which is fourteen (14) days (or, if the Letter of Credit is
confirmed by a confirmer or otherwise provides for one or more
nominated persons, forty-five (45) days) prior to the Revolving Credit
Loan Maturity Date and (c) have an expiry date no longer than one (1)
year from the date of issuance. Each Letter of Credit so issued,
extended or renewed shall be subject to the Uniform Customs.
4.1.4. REIMBURSEMENT OBLIGATIONS OF BANKS. Each Bank severally
agrees that it shall be absolutely liable, without regard to the
occurrence of any Default or Event of Default or any other condition
precedent whatsoever, to the extent of such Bank's Commitment
Percentage, to reimburse the Agent on demand for the amount of each
draft paid by the Agent under each Letter of Credit to the extent that
such amount is not reimbursed by the Borrower pursuant to Section 4.2
(such agreement for a Bank being called herein the "Letter of Credit
Participation" of such Bank).
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4.1.5. PARTICIPATIONS OF BANKS. Each such payment made by a
Bank shall be treated as the purchase by such Bank of a participating
interest in the Borrower's Reimbursement Obligation under Section 4.2
in an amount equal to such payment. Each Bank shall share in accordance
with its participating interest in any interest which accrues pursuant
to Section 4.2.
4.2. REIMBURSEMENT OBLIGATION OF THE BORROWER. In order to induce the
Agent to issue, extend and renew each Letter of Credit and the Banks to
participate therein, the Borrower hereby agrees to reimburse or pay to the
Agent, for the account of the Agent or (as the case may be) the Banks, with
respect to each Letter of Credit issued, extended or renewed by the Agent
hereunder,
(a) except as otherwise expressly provided in Section 4.2(b)
and (c), on each date that any draft presented under such Letter of
Credit is honored by the Agent, or the Agent otherwise makes a payment
with respect thereto, (i) the amount paid by the Agent under or with
respect to such Letter of Credit, and (ii) the amount of any taxes,
fees, charges or other costs and expenses whatsoever incurred by the
Agent or any Bank in connection with any payment made by the Agent or
any Bank under, or with respect to, such Letter of Credit,
(b) upon the reduction (but not termination) of the Total
Commitment to an amount less than the Maximum Drawing Amount, an amount
equal to such difference, which amount shall be held by the Agent for
the benefit of the Banks and the Agent as cash collateral for all
Reimbursement Obligations, and
(c) upon the termination of the Total Commitment, or the
acceleration of the Reimbursement Obligations with respect to all
Letters of Credit in accordance with Section 13, an amount equal to the
then Maximum Drawing Amount on all Letters of Credit, which amount
shall be held by the Agent for the benefit of the Banks and the Agent
as cash collateral for all Reimbursement Obligations.
Each such payment shall be made to the Agent at the Agent's Head Office in
immediately available funds. Interest on any and all amounts remaining unpaid by
the Borrower under this Section 4.2 at any time from the date such amounts
become due and payable (whether as stated in this Section 4.2, by acceleration
or otherwise) until payment in full (whether before or after judgment) shall be
payable to the Agent on demand at the rate specified in Section 5.11 for overdue
principal on the Revolving Credit Loans.
4.3. LETTER OF CREDIT PAYMENTS. If any draft shall be presented or
other demand for payment shall be made under any Letter of Credit, the Agent
shall notify the Borrower of the date and amount of the draft presented or
demand for payment and of the date and time when it expects to pay such draft
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or honor such demand for payment. If the Borrower fails to reimburse the Agent
as provided in Section 4.2 on or before the date that such draft is paid or
other payment is made by the Agent, the Agent may at any time thereafter notify
the Banks of the amount of any such Unpaid Reimbursement Obligation. No later
than 3:00 p.m. (Boston time) on the Business Day next following the receipt of
such notice, each Bank shall make available to the Agent, at the Agent's Head
Office, in immediately available funds, such Bank's Commitment Percentage of
such Unpaid Reimbursement Obligation, together with an amount equal to the
product of (a) the average, computed for the period referred to in clause (c)
below, of the weighted average interest rate paid by the Agent for federal funds
acquired by the Agent during each day included in such period, times (b) the
amount equal to such Bank's Commitment Percentage of such Unpaid Reimbursement
Obligation, times (c) a fraction, the numerator of which is the number of days
that elapse from and including the date the Agent paid the draft presented for
honor or otherwise made payment to the date on which such Bank's Commitment
Percentage of such Unpaid Reimbursement obligation shall become immediately
available to the Agent, and the denominator of which is 360. The responsibility
of the Agent to the Borrower and the Banks shall be only to determine that the
documents (including each draft) delivered under each Letter of Credit in
connection with such presentment shall be in conformity in all material respects
with such Letter of Credit.
4.4. OBLIGATIONS ABSOLUTE. The Borrower's obligations under this
Section 4 shall be absolute and unconditional under any and all circumstances
and irrespective of the occurrence of any Default or Event of Default or any
condition precedent whatsoever or any setoff, counterclaim or defense to payment
which the Borrower may have or have had against the Agent, any Bank or any
beneficiary of a Letter of Credit. The Borrower further agrees with the Agent
and the Banks that the Agent and the Banks shall not be responsible for, and the
Borrower's Reimbursement Obligations under Section 4.2 shall not be affected by,
among other things, the validity or genuineness of documents or of any
endorsements thereon, even if such documents should in fact prove to be in any
or all respects invalid, fraudulent or forged, or any dispute between or among
the Borrower, the beneficiary of any Letter of Credit or any financing
institution or other party to which any Letter of Credit may be transferred or
any claims or defenses whatsoever of the Borrower against the beneficiary of any
Letter of Credit or any such transferee. The Agent and the Banks shall not be
liable for 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. The Borrower agrees that any action taken or omitted by
the Agent or any Bank under or in connection with each Letter of Credit and the
related drafts and documents, if done in good faith, shall be binding upon the
Borrower and shall not result in any liability on the part of the Agent or any
Bank to the Borrower.
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4.5. RELIANCE BY ISSUER. To the extent not inconsistent with Section
4.4, the Agent shall be entitled to rely, and shall be fully protected in
relying upon, any Letter of Credit, draft, writing, resolution, notice, consent,
certificate, affidavit, letter, cablegram, telegram, telecopy, telex or teletype
message, statement, order or other document believed by it to be genuine and
correct and to have been signed, sent or made by the proper Person or Persons
and upon advice and statements of legal counsel, independent accountants and
other experts selected by the Agent. The Agent shall be fully justified in
failing or refusing to take any action under this Agreement unless it shall
first have received such advice or concurrence of the Majority Banks as it
reasonably deems appropriate or it shall first be indemnified to its reasonable
satisfaction by the Banks against any and all liability and expense which may be
incurred by it by reason of taking or continuing to take any such action. The
Agent shall in all cases be fully protected in acting, or in refraining from
acting, under this Agreement in accordance with a request of the Majority Banks,
and such request and any action taken or failure to act pursuant thereto shall
be binding upon the Banks and all future holders of the Revolving Credit Notes
or of a Letter of Credit Participation.
4.6. LETTER OF CREDIT FEE. The Borrower shall, on the date of issuance
or any extension or renewal of any Letter of Credit and at such other time or
times as such charges are customarily made by the Agent, pay a fee (in each
case, a "Letter of Credit Fee") in respect of each Letter of Credit issued
pursuant to this Credit Agreement, calculated at the rate of the Applicable
Margin per annum on the face amount of each such Letter of Credit plus the
Agent's customary issuance and/or amendment fee, such Letter of Credit Fee (but
not such issuance or amendment fee) to be for the accounts of the Banks in
accordance with their respective Commitment Percentages.
5. CERTAIN GENERAL PROVISIONS.
5.1. ARRANGEMENT FEE. The Borrower agrees to pay to the Bank Agents an
arrangement fee in the amounts and at the times set forth in the Fee Letter.
5.2. ADMINISTRATION FEE. The Borrower shall pay to the Agent an
administrative fee in the amounts and at the times set forth in the Fee Letter.
5.3. FUNDS FOR PAYMENTS.
5.3.1. PAYMENTS TO AGENT. All payments of principal, interest,
Reimbursement Obligations, commitment fees, Letter of Credit Fees and
any other amounts due hereunder or under any of the other Loan
Documents shall be made to the Agent, for the respective accounts of
the Banks and the Bank Agents, at the Agent's Head Office or at such
other location in the Boston, Massachusetts, area that the Agent may
from time to time designate, in each case in immediately available
funds.
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5.3.2. NO OFFSET, ETC. All payments by the Borrower hereunder
and under any of the other Loan Documents shall be made without setoff
or counterclaim and free and clear of and without deduction for any
taxes, levies, imposts, duties, charges, fees, deductions,
withholdings, compulsory loans, restrictions or conditions of any
nature now or hereafter imposed or levied by any jurisdiction or any
political subdivision thereof or taxing or other authority therein
unless the Borrower is compelled by law to make such deduction or
withholding. If any such obligation is imposed upon the Borrower with
respect to any amount payable by it hereunder or under any of the other
Loan Documents, the Borrower will pay to the Agent, for the account of
the Banks or (as the case may be) either of the Bank Agents, on the
date on which such amount is due and payable hereunder or under such
other Loan Document, such additional amount in Dollars as shall be
necessary to enable the Banks or either of the Bank Agents to receive
the same net amount which the Banks or either of the Bank Agents would
have received on such due date had no such obligation been imposed upon
the Borrower. The Borrower will deliver promptly to the Agent
certificates or other valid vouchers for all taxes or other charges
deducted from or paid with respect to payments made by the Borrower
hereunder or under such other Loan Document.
5.4. COMPUTATIONS. All computations of interest on Base Rate Loans
shall be based on a 365-day year and paid for the actual number of days elapsed.
All computations of interest on the Eurodollar Rate Loans and of Commitment
Fees, Letter of Credit Fees or other fees shall be based on a 360-day year and
paid for the actual number of days elapsed. Except as otherwise provided in the
definition of the term "Interest Period" with respect to Eurodollar Rate Loans,
whenever a payment hereunder or under any of the other Loan Documents becomes
due on a day that is not a Business Day, the due date for such payment shall be
extended to the next succeeding Business Day, and interest shall accrue during
such extension. The outstanding amount of the Revolving Credit Loans as
reflected on the Records from time to time shall be considered correct and
binding on the Borrower unless within five (5) Business Days after receipt of
any notice by the Agent or any of the Banks of such outstanding amount, the
Agent or such Bank shall notify the Borrower to the contrary.
5.5. INABILITY TO DETERMINE EURODOLLAR RATE. In the event, prior to the
commencement of any Interest Period relating to any Eurodollar Rate Loan, the
Agent shall determine or be notified by the Majority Banks that adequate and
reasonable methods do not exist for ascertaining the Eurodollar Rate that would
otherwise determine the rate of interest to be applicable to any Eurodollar Rate
Loan during any Interest Period, the Agent shall forthwith give notice of such
determination (which shall be conclusive and binding on the Borrower and the
Banks) to the Borrower and the Banks. In such event (a) any Loan Request or
Conversion Request with respect to Eurodollar Rate Loans shall be automatically
withdrawn and shall be deemed a request for Base Rate Loans, (b) each Eurodollar
Rate Loan will automatically, on the last day of the
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then current Interest Period relating thereto, become a Base Rate Loan, and (c)
the obligations of the Banks to make Eurodollar Rate Loans shall be suspended
until the Agent or the Majority Banks determines that the circumstances giving
rise to such suspension no longer exist, whereupon the Agent or, as the case may
be, the Agent upon the instruction of the Majority Banks, shall so notify the
Borrower and the Banks.
5.6. ILLEGALITY. Notwithstanding any other provisions herein, if any
present or future law, regulation, treaty or directive or in the interpretation
or application thereof shall make it unlawful for any Bank to make or maintain
Eurodollar Rate Loans, such Bank shall forthwith give notice of such
circumstances to the Borrower and the other Banks and thereupon (a) the
commitment of such Bank to make Eurodollar Rate Loans or convert Base Rate Loans
to Eurodollar Rate Loans shall forthwith be suspended and (b) such Bank's
Revolving Credit Loans then outstanding as Eurodollar Rate Loans, if any, shall
be converted automatically to Base Rate Loans on the last day of each Interest
Period applicable to such Eurodollar Rate Loans or within such earlier period as
may be required by law. The Borrower hereby agrees promptly to pay the Agent for
the account of such Bank, upon demand by such Bank, any additional amounts
necessary to compensate such Bank for any costs incurred by such Bank in making
any conversion in accordance with this Section 5.6, including any interest or
fees payable by such Bank to lenders of funds obtained by it in order to make or
maintain its Eurodollar Rate Loans hereunder.
5.7. ADDITIONAL COSTS, ETC. If any present or future applicable law,
which expression, as used herein, includes statutes, rules and regulations
thereunder and interpretations thereof by any competent court or by any
governmental or other regulatory body or official charged with the
administration or the interpretation thereof and requests, directives,
instructions and notices at any time or from time to time hereafter made upon or
otherwise issued to any Bank or the Agent by any central bank or other fiscal,
monetary or other authority (whether or not having the force of law), shall:
(a) subject any Bank or the Agent to any tax, levy, impost,
duty, charge, fee, deduction or withholding of any nature with respect
to this Credit Agreement, the other Loan Documents, any Letters of
Credit, such Bank's Commitment or the Revolving Credit Loans (other
than taxes based upon or measured by the income or profits of such Bank
or the Agent), or
(b) materially change the basis of taxation (except for
changes in taxes on income or profits) of payments to any Bank of the
principal of or the interest on any Revolving Credit Loans or any other
amounts payable to any Bank or the Agent under this Credit Agreement or
any of the other Loan Documents, or
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(c) impose or increase or render applicable (other than to the
extent specifically provided for elsewhere in this Credit Agreement)
any special deposit, reserve, assessment, liquidity, capital adequacy
or other similar requirements (whether or not having the force of law)
against assets held by, or deposits in or for the account of, or loans
by, or letters of credit issued by, or commitments of an office of any
Bank, or
(d) impose on any Bank or the Agent any other conditions or
requirements with respect to this Credit Agreement, the other Loan
Documents, any Letters of Credit, the Revolving Credit Loans, such
Bank's Commitment, or any class of loans, letters of credit or
commitments of which any of the Revolving Credit Loans or such Bank's
Commitment forms a part, and the result of any of the foregoing is
(i) to increase the cost to any Bank of making,
funding, issuing, renewing, extending or maintaining any of
the Revolving Credit Loans or such Bank's Commitment or any
Letter of Credit, or
(ii) to reduce the amount of principal, interest,
Reimbursement Obligation or other amount payable to such Bank
or the Agent hereunder on account of such Bank's Commitment,
any Letter of Credit or any of the Revolving Credit Loans, or
(iii) to require such Bank or the Agent to make any
payment or to forego any interest or Reimbursement Obligation
or other sum payable hereunder, the amount of which payment or
foregone interest or Reimbursement Obligation or other sum is
calculated by reference to the gross amount of any sum
receivable or deemed received by such Bank or the Agent from
the Borrower hereunder,
then, and in each such case, the Borrower will, upon demand made by such Bank or
(as the case may be) the Agent at any time and from time to time and as often as
the occasion therefor may arise, pay to such Bank or the Agent such additional
amounts as will be sufficient to compensate such Bank or the Agent for such
additional cost, reduction, payment or foregone interest or Reimbursement
Obligation or other sum.
5.8. CAPITAL ADEQUACY. If after the date hereof any Bank or the Agent
determines that (a) the adoption of or change in any law, governmental rule,
regulation, policy, guideline or directive (whether or not having the force of
law) regarding capital requirements for banks or bank holding companies or any
change in the interpretation or application thereof by a court or governmental
authority with appropriate jurisdiction, or (b) compliance by such Bank or the
Agent or any corporation controlling such Bank or the Agent with any law,
governmental rule, regulation, policy, guideline or directive (whether or not
having the force of law) of any such entity regarding capital adequacy, has the
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effect of reducing the return on such Bank's or the Agent's commitment with
respect to any Revolving Credit Loans to a level below that which such Bank or
the Agent could have achieved but for such adoption, change or compliance
(taking into consideration such Bank's or the Agent's then existing policies
with respect to capital adequacy and assuming full utilization of such entity's
capital) by any amount deemed by such Bank or (as the case may be) the Agent to
be material, then such Bank or the Agent may notify the Borrower of such fact.
To the extent that the amount of such reduction in the return on capital is not
reflected in the Base Rate, the Borrower and such Bank shall thereafter attempt
to negotiate in good faith, within thirty (30) days of the day on which the
Borrower receives such notice, an adjustment payable hereunder that will
adequately compensate such Bank in light of these circumstances. If the Borrower
and such Bank are unable to agree to such adjustment within thirty (30) days of
the date on which the Borrower receives such notice, then commencing on the date
of such notice (but not earlier than the effective date of any such increased
capital requirement), the fees payable hereunder shall increase by an amount
that will, in such Bank's reasonable determination, provide adequate
compensation. Each Bank shall allocate such cost increases among its customers
in good faith and on an equitable basis.
5.9. CERTIFICATE. A certificate setting forth any additional amounts
payable pursuant to Sections 5.7 or 5.8 and a brief explanation of such amounts
which are due, submitted by any Bank or the Agent to the Borrower, shall be
conclusive, absent manifest error, that such amounts are due and owing.
5.10. INDEMNITY. The Borrower agrees to indemnify each Bank and to hold
each Bank harmless from and against any loss, cost or expense (including loss of
anticipated profits) that such Bank may sustain or incur as a consequence of (a)
default by the Borrower in payment of the principal amount of or any interest on
any Eurodollar Rate Loans as and when due and payable, including any such loss
or expense arising from interest or fees payable by such Bank to lenders of
funds obtained by it in order to maintain its Eurodollar Rate Loans, (b) default
by the Borrower in making a borrowing or conversion after the Borrower has given
(or is deemed to have given) a Loan Request or a Conversion Request relating
thereto in accordance with Section 2.6 or Section 2.7 or (c) the making of any
payment of a Eurodollar Rate Loan or the making of any conversion of any such
Eurodollar Rate Loan to a Base Rate Loan on a day that is not the last day of
the applicable Interest Period with respect thereto, including interest or fees
payable by such Bank to lenders of funds obtained by it in order to maintain any
such Eurodollar Rate Loans.
5.11. INTEREST AFTER DEFAULT.
5.11.1. OVERDUE AMOUNTS. Overdue principal and (to the extent
permitted by applicable law) interest on the Revolving Credit Loans and
all other overdue amounts payable hereunder or under any of the other
Loan Documents shall bear interest compounded monthly and payable on
demand at a rate per annum equal to two percent (2%) above the Base
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Rate until such amount shall be paid in full (after as well as before
judgment).
5.11.2. AMOUNTS NOT OVERDUE. During the continuance of a
Default or an Event of Default the principal of the Revolving Credit
Loans not overdue shall, until such Default or Event of Default has
been cured or remedied or such Default or Event of Default has been
waived by the Majority Banks pursuant to Section 26, bear interest at a
rate per annum equal to the greater of (a) four percent (4%) above the
rate of interest otherwise applicable to such Revolving Credit Loans
pursuant to Section 2.5 and (b) the rate of interest applicable to
overdue principal pursuant to Section 5.11.1.
6. GUARANTIES.
6.1. GUARANTIES OF DOMESTIC SUBSIDIARIES. The Obligations shall be
jointly and severally guaranteed by the Guarantors pursuant to the terms of the
Guaranty.
6.2. NEW DOMESTIC SUBSIDIARIES. In the event any new Domestic
Subsidiary is formed or acquired after the Closing Date, such new Domestic
Subsidiary shall, immediately upon becoming a Subsidiary, become a party to the
Guaranty, pursuant to which such Domestic Subsidiary guarantees all of the
Obligations to the Agent and the Banks.
7. REPRESENTATIONS AND WARRANTIES.
The Borrower represents and warrants to the Banks and the Bank Agents
as follows:
7.1. CORPORATE AUTHORITY.
7.1.1. INCORPORATION; GOOD STANDING. Each of the Borrower and
its Subsidiaries (a) is a corporation duly organized, validly existing
and in good standing under the laws of its state of incorporation, (b)
has all requisite corporate power to own its property and conduct its
business as now conducted and as presently contemplated, and (c) is in
good standing as a foreign corporation and is duly authorized to do
business in each jurisdiction where such qualification is necessary
except where a failure to be so qualified would not have a materially
adverse effect on the business, assets or financial condition of the
Borrower or such Subsidiary.
7.1.2. AUTHORIZATION. The execution, delivery and performance
of this Credit Agreement and the other Loan Documents to which the
Borrower or any of its Domestic Subsidiaries is or is to become a party
and the transactions contemplated hereby and thereby (a) are within the
corporate authority of such Person, (b) have been duly authorized by
all
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necessary corporate proceedings, (c) do not conflict with or result in
any breach or contravention of any provision of law, statute, rule or
regulation to which the Borrower or any of its Domestic Subsidiaries is
subject or any judgment, order, writ, injunction, license or permit
applicable to the Borrower or any of its Domestic Subsidiaries and (d)
do not conflict with any provision of the corporate charter or bylaws
of, or any agreement or other instrument binding upon, the Borrower or
any of its Domestic Subsidiaries.
7.1.3. ENFORCEABILITY. The execution and delivery of this
Credit Agreement and the other Loan Documents to which the Borrower or
any of its Domestic Subsidiaries is or is to become a party will result
in valid and legally binding obligations of such Person enforceable
against it in accordance with the respective terms and provisions
hereof and thereof, except as enforceability is limited by bankruptcy,
insolvency, reorganization, moratorium or other laws relating to or
affecting generally the enforcement of creditors' rights and except to
the extent that availability of the remedy of specific performance or
injunctive relief is subject to the discretion of the court before
which any proceeding therefor may be brought.
7.2. GOVERNMENTAL APPROVALS. The execution, delivery and performance by
the Borrower and any of its Domestic Subsidiaries of this Credit Agreement and
the other Loan Documents to which the Borrower or any of its Domestic
Subsidiaries is or is to become a party and the transactions contemplated hereby
and thereby do not require the approval or consent of, or filing with, any
governmental agency or authority other than those already obtained.
7.3. TITLE TO PROPERTIES; LEASES. Except as indicated on Schedule 7.3
hereto, the Borrower and its Subsidiaries own all of the assets reflected in the
consolidated balance sheet of the Borrower and its Subsidiaries as at the
Balance Sheet Date or acquired since that date (except property and assets sold
or otherwise disposed of in the ordinary course of business since that date),
subject to no rights of others, including any mortgages, leases, conditional
sales agreements, title retention agreements, liens or other encumbrances except
Permitted Liens.
7.4. FINANCIAL STATEMENTS AND PROJECTIONS.
7.4.1. FINANCIAL STATEMENTS. There has been furnished to each
of the Banks a consolidated balance sheet and statement of cash flow of
the Borrower and its Subsidiaries as at the Balance Sheet Date, and a
consolidated statement of income of the Borrower and its Subsidiaries
for the fiscal year then ended, certified by KPMG Peat Marwick. Such
balance sheet and statement of income have been prepared in accordance
with generally accepted accounting principles and fairly present the
financial condition of the Borrower as at the close of business on the
date
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thereof and the results of operations for the fiscal year then ended.
There are no contingent liabilities of the Borrower or any of its
Subsidiaries as of such date involving material amounts, known to the
officers of the Borrower, which were not disclosed in such balance
sheet and the notes related thereto.
7.4.2. PROJECTIONS. The projections of the annual operating
budgets of the Borrower and its Subsidiaries on a consolidated basis,
balance sheets and cash flow statements for the 1996 to 1998 fiscal
years, copies of which have been delivered to each Bank, disclose all
assumptions made with respect to general economic, financial and market
conditions used in formulating such projections. To the knowledge of
the Borrower or any of its Subsidiaries, no facts exist that
(individually or in the aggregate) would result in any material change
in any of such projections or to the cash flow statements delivered to
the Banks. The projections are based upon reasonable estimates and
assumptions, have been prepared on the basis of the assumptions stated
therein and reflect the reasonable estimates of the Borrower and its
Subsidiaries of the results of operations and other information
projected therein.
7.5. NO MATERIAL CHANGES, ETC. Since the Balance Sheet Date there has
occurred no materially adverse change in the financial condition or business of
the Borrower and its Subsidiaries as shown on or reflected in the consolidated
balance sheet of the Borrower and its Subsidiaries as at the Balance Sheet Date,
or the consolidated statement of income for the fiscal year then ended, other
than changes in the ordinary course of business that have not had any materially
adverse effect either individually or in the aggregate on the business or
financial condition of the Borrower or any of its Subsidiaries. Since the
Balance Sheet Date, neither the Borrower nor any of its Subsidiaries has made
any Distributions.
7.6. FRANCHISES, PATENTS, COPYRIGHTS, ETC. Each of the Borrower and its
Subsidiaries possesses all franchises, patents, copyrights, trademarks, trade
names, licenses and permits, and rights in respect of the foregoing, adequate
for the conduct of its business substantially as now conducted without known
conflict with any rights of others where such conflict could reasonably expected
to have a materially adverse effect on the business, assets or financial
condition of the Borrower or any of its Subsidiaries.
7.7. LITIGATION. Except as set forth in Schedule 7.7 hereto, there are
no actions, suits, proceedings or investigations of any kind pending or
threatened against the Borrower or any of its Subsidiaries before any court,
tribunal or administrative agency or board that, if adversely determined, might,
either in any case or in the aggregate, materially adversely affect the
properties, assets, financial condition or business of the Borrower and its
Subsidiaries or materially impair the right of the Borrower and its
Subsidiaries, considered as a whole, to carry on business substantially as now
conducted by them, or result in
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any substantial liability not adequately covered by insurance, or for which
adequate reserves are not maintained on the consolidated balance sheet of the
Borrower and its Subsidiaries, or which question the validity of this Credit
Agreement or any of the other Loan Documents, or any action taken or to be taken
pursuant hereto or thereto.
7.8. NO MATERIALLY ADVERSE CONTRACTS, ETC. Neither the Borrower nor any
of its Subsidiaries is subject to any charter, corporate or other legal
restriction, or any judgment, decree, order, rule or regulation that has or is
expected in the future to have a materially adverse effect on the business,
assets or financial condition of the Borrower or any of its Subsidiaries.
Neither the Borrower nor any of its Subsidiaries is a party to any contract or
agreement that has or is expected, in the judgment of the Borrower's officers,
to have any materially adverse effect on the business of the Borrower or any of
its Subsidiaries.
7.9. COMPLIANCE WITH OTHER INSTRUMENTS, LAWS, ETC. Neither the Borrower
nor any of its Subsidiaries is in violation of any provision of its charter
documents, bylaws, or any agreement or instrument to which it may be subject or
by which it or any of its properties may be bound or any decree, order,
judgment, statute, license, rule or regulation, in any of the foregoing cases in
a manner that could result in the imposition of substantial penalties or
materially and adversely affect the financial condition, properties or business
of the Borrower or any of its Subsidiaries.
7.10. TAX STATUS. The Borrower and its Subsidiaries (a) have made or
filed all federal and state income and all other tax returns, reports and
declarations required by any jurisdiction to which any of them is subject, (b)
have paid all taxes and other governmental assessments and charges shown or
determined to be due on such returns, reports and declarations, except those
being contested in good faith and by appropriate proceedings and (c) have set
aside on their books provisions reasonably adequate for the payment of all taxes
for periods subsequent to the periods to which such returns, reports or
declarations apply. There are no unpaid taxes in any material amount claimed to
be due by the taxing authority of any jurisdiction, and the officers of the
Borrower know of no basis for any such claim.
7.11. NO EVENT OF DEFAULT. No Default or Event of Default has occurred
and is continuing.
7.12. HOLDING COMPANY AND INVESTMENT COMPANY ACTS. Neither the Borrower
nor any of its Subsidiaries is a "holding company", or a "subsidiary company" of
a "holding company", or an affiliate" of a "holding company", as such terms are
defined in the Public Utility Holding Company Act of 1935; nor is it an
"investment company", or an "affiliated company" or a "principal underwriter" of
an "investment company", as such terms are defined in the Investment Company Act
of 1940.
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7.13. ABSENCE OF FINANCING STATEMENTS, ETC. Except with respect to
Permitted Liens, there is no financing statement, security agreement, chattel
mortgage, real estate mortgage or other document filed or recorded with any
filing records, registry or other public office, that purports to cover, affect
or give notice of any present or possible future lien on, or security interest
in, any assets or property of the Borrower or any of its Subsidiaries or any
rights relating thereto.
7.14. CERTAIN TRANSACTIONS. Except as set forth on Schedule 7.14 hereto
and except for arm's length transactions pursuant to which the Borrower or any
of its Subsidiaries makes payments in the ordinary course of business upon terms
no less favorable than the Borrower or such Subsidiary could obtain from third
parties or which could otherwise have a material adverse effect on the business,
assets or financial condition of the Borrower or any of its Subsidiaries, none
of the officers, directors, or employees of the Borrower or any of its
Subsidiaries is presently a party to any transaction with the Borrower or any of
its Subsidiaries (other than for services as employees, officers and directors),
including any contract, agreement or other arrangement providing for the
furnishing of services to or by, providing for rental of real or personal
property to or from, or otherwise requiring payments to or from any officer,
director or such employee or, to the knowledge of the Borrower, any corporation,
partnership, trust or other entity in which any officer, director, or any such
employee has a substantial interest or is an officer, director, trustee or
partner.
7.15. EMPLOYEE BENEFIT PLANS.
7.15.1. IN GENERAL. Each Employee Benefit Plan has been
maintained and operated in compliance in all material respects with the
provisions of ERISA and, to the extent applicable, the Code, including
but not limited to the provisions thereunder respecting prohibited
transactions. The Borrower has heretofore delivered to the Agent the
most recently completed annual report, Form 5500, with all required
attachments, and actuarial statement required to be submitted under
Section 103(d) of ERISA, with respect to each Guaranteed Pension Plan.
7.15.2. TERMINABILITY OF WELFARE PLANS. Under each Employee
Benefit Plan which is an employee welfare benefit plan within the
meaning of Section 3(1) or Section 3(2)(B) of ERISA, no benefits are
due unless the event giving rise to the benefit entitlement occurs
prior to plan termination (except as required by Title I, Part 6 of
ERISA). The Borrower or an ERISA Affiliate, as appropriate, may
terminate each such Plan at any time (or at any time subsequent to the
expiration of any applicable bargaining agreement) in the discretion of
the Borrower or such ERISA Affiliate without liability to any Person.
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7.15.3. GUARANTEED PENSION PLANS. Each contribution required
to be made to a Guaranteed Pension Plan, whether required to be made to
avoid the incurrence of an accumulated funding deficiency, the notice
or lien provisions of Section 302(f) of ERISA, or otherwise, has been
timely made. No waiver of an accumulated funding deficiency or
extension of amortization periods has been received with respect to any
Guaranteed Pension Plan. No liability to the PBGC (other than required
insurance premiums, all of which have been paid) has been incurred by
the Borrower or any ERISA Affiliate with respect to any Guaranteed
Pension Plan and there has not been any ERISA Reportable Event, or any
other event or condition which presents a material risk of termination
of any Guaranteed Pension Plan by the PBGC. Based on the latest
valuation of each Guaranteed Pension Plan (which in each case occurred
within twelve months of the date of this representation), and on the
actuarial methods and assumptions employed for that valuation, the
aggregate benefit liabilities of all such Guaranteed Pension Plans
within the meaning of Section 4001 of ERISA did not exceed the
aggregate value of the assets of all such Guaranteed Pension Plans,
disregarding for this purpose the benefit liabilities and assets of any
Guaranteed Pension Plan with assets in excess of benefit liabilities.
7.15.4. MULTIEMPLOYER PLANS. Neither the Borrower nor any
ERISA Affiliate has incurred any material liability (including
secondary liability) to any Multiemployer Plan as a result of a
complete or partial withdrawal from such Multiemployer Plan under
Section 4201 of ERISA or as a result of a sale of assets described in
Section 4204 of ERISA. Neither the Borrower nor any ERISA Affiliate has
been notified that any Multiemployer Plan is in reorganization or
insolvent under and within the meaning of Section 4241 or Section 4245
of ERISA or that any Multiemployer Plan intends to terminate or has
been terminated under Section 4041A of ERISA.
7.16. REGULATIONS U AND X. The proceeds of the Revolving Credit Loans
shall be used for working capital and general corporate purposes. The Borrower
will obtain Letters of Credit solely for working capital and general corporate
purposes. No portion of any Revolving Credit Loan is to be used, and no portion
of any Letter of Credit is to be obtained, for the purpose of purchasing or
carrying any "margin security" or "margin stock" as such terms are used in
Regulations U and X of the Board of Governors of the Federal Reserve System, 12
C.F.R. Parts 221 and 224.
7.17. ENVIRONMENTAL COMPLIANCE. To the best of the Borrower's
knowledge, based upon a reasonable investigation, the Borrower has determined
that:
(a) none of the Borrower, its Subsidiaries or any operator of
the Real Estate or any operations thereon is in violation, or alleged
violation, of any judgment, decree, order, law, license, rule or
regulation pertaining to environmental matters, including without
limitation, those arising
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under the Resource Conservation and Recovery Act ("RCRA"), the
Comprehensive Environmental Response, Compensation and Liability Act of
1980 as amended ("CERCLA"), the Superfund Amendments and
Reauthorization Act of 1986 ("SARA"), the Federal Clean Water Act, the
Federal Clean Air Act, the Toxic Substances Control Act, or any state
or local statute, regulation, ordinance, order or decree relating to
health, safety or the environment (hereinafter "Environmental Laws"),
which violation would have a material adverse effect on the environment
or the business, assets or financial condition of the Borrower or any
of its Subsidiaries;
(b) neither the Borrower nor any of its Subsidiaries has
received notice from any third party including, without limitation, any
federal, state or local governmental authority, (i) that any one of
them has been identified by the United States Environmental Protection
Agency ("EPA") as a potentially responsible party under CERCLA with
respect to a site listed on the National Priorities List, 40 C.F.R.
Part 300 Appendix B; (ii) that any hazardous waste, as defined by 42
U.S.C. Section 6903(5), any hazardous substances as defined by 42
U.S.C. Section 9601(14), any pollutant or contaminant as defined by 42
U.S.C. Section 9601(33) and any toxic substances, oil or hazardous
materials or other chemicals or substances regulated by any
Environmental Laws ("Hazardous Substances") which any one of them has
generated, transported or disposed of has been found at any site at
which a federal, state or local agency or other third party has
conducted or has ordered that any Borrower or any of its Subsidiaries
conduct a remedial investigation, removal or other response action
pursuant to any Environmental Law; or (iii) except to the extent that
the following would not have a material adverse effect on the business,
assets or financial condition of the Borrower or any of its
Subsidiaries, that it is or shall be a named party to any claim,
action, cause of action, complaint, or legal or administrative
proceeding (in each case, contingent or otherwise) arising out of any
third party's incurrence of costs, expenses, losses or damages of any
kind whatsoever in connection with the release of Hazardous Substances;
(c) except as set forth on Schedule 7.17 attached hereto: (i)
no portion of the Real Estate has been used for the handling,
processing, storage or disposal of Hazardous Substances except in
accordance with applicable Environmental Laws the noncompliance with
which would have a material adverse effect on the business, assets or
financial condition of the Borrower and its Subsidiaries; and no
underground tank or other underground storage receptacle for Hazardous
Substances is located on any portion of the Real Estate in violation of
any Environmental Laws the noncompliance with which would have a
material adverse effect on the business, assets or financial condition
of the Borrower and its Subsidiaries; (ii) in the course of any
activities conducted by the Borrower, its Subsidiaries or operators of
its properties, no Hazardous Substances have been generated or are
being used on the
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Real Estate except in accordance in all material respects with
applicable Environmental Laws; (iii) there have been no releases (i.e.
any past or present releasing, spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, disposing or
dumping) or threatened releases of Hazardous Substances on, upon, into
or from the properties of the Borrower or its Subsidiaries, which
releases would have a material adverse effect on the value of the
business, assets or financial condition of the Borrower or any of its
Subsidiaries; (iv) to the best of the Borrower's knowledge, there have
been no releases on, upon, from or into any real property in the
vicinity of any of the Real Estate which, through soil or groundwater
contamination, may have come to be located on, and which would have a
material adverse effect on the value of, the Real Estate; and (v) in
addition, except to the extent that the following would not have a
materially adverse effect on the business, assets or financial
condition of the Borrower or any of its Subsidiaries, any Hazardous
Substances that have been generated on any of the Real Estate have been
transported offsite only by carriers having an identification number
issued by the EPA, treated or disposed of only by treatment or disposal
facilities maintaining valid permits as required under applicable
Environmental Laws, which transporters and facilities have been and
are, to the best of the Borrower's knowledge, operating in compliance
with such permits and applicable Environmental Laws; and
(d) None of the Borrower and its Subsidiaries or any of the
Real Estate is subject to any applicable environmental law requiring
the performance of Hazardous Substances site assessments, or the
removal or remediation of Hazardous Substances, or the giving of notice
to any governmental agency or the recording or delivery to other
Persons of an environmental disclosure document or statement by virtue
of the transactions set forth herein and contemplated hereby, or as a
condition to the effectiveness of any other transactions contemplated
hereby.
7.18. SUBSIDIARIES, ETC. Schedule 7.18(a) sets forth the only
Subsidiaries of the Borrower. Except as set forth on Schedule 7.18(b) hereto,
neither the Borrower nor any Subsidiary of the Borrower is engaged in any joint
venture or partnership with any other Person.
7.19. CHIEF EXECUTIVE OFFICE. The Borrower's chief executive office is
at 8105 Irvine Center Drive, Irvine, California 92718, at which location its
books and records are kept.
7.20. FISCAL YEAR. The Borrower and each of its Subsidiaries has a
fiscal year which is the twelve (12) months ending on the last Saturday of every
June of each year.
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7.21. DISCLOSURE. No representation or warranty made by the Borrower in
this Credit Agreement or in any agreement, instrument, document, certificate,
statement or letter furnished to either Bank Agent or any Bank by or on behalf
of the Borrower in connection with any of the transactions contemplated by any
of the Loan Documents contains any untrue statement of a material fact or omits
to state a material fact necessary in order to make the statements contained
therein not misleading in light of the circumstances in which they were made.
7.22. INSURANCE. The Borrower and each of its Subsidiaries maintains
with financially sound and reputable insurers insurance with respect to its
properties and businesses against such casualties and contingencies as are in
accordance with sound business practice, with the details of such coverage being
more fully described on Schedule 7.22 hereto.
8. AFFIRMATIVE COVENANTS OF THE BORROWER.
The Borrower covenants and agrees that, so long as any Revolving Credit
Loan, Unpaid Reimbursement Obligation, Letter of Credit or Revolving Credit Note
is outstanding or any Bank has any obligation to make any Revolving Credit Loans
or the Agent has any obligation to issue, extend or renew any Letters of Credit:
8.1. PUNCTUAL PAYMENT. The Borrower will duly and punctually pay or
cause to be paid the principal and interest on the Revolving Credit Loans, all
Reimbursement Obligations, the Letter of Credit Fees, the Commitment Fees, the
administrative fee and all other amounts provided for in this Credit Agreement
and the other Loan Documents to which the Borrower or any of its Subsidiaries is
a party, all in accordance with the terms of this Credit Agreement and such
other Loan Documents.
8.2. MAINTENANCE OF OFFICE. The Borrower will maintain its chief
executive office at 8105 Irvine Center Drive, Irvine, California 92718, or at
such other place in the United States of America as the Borrower shall designate
upon written notice to the Agent, where notices, presentations and demands to or
upon the Borrower in respect of the Loan Documents to which the Borrower is a
party may be given or made.
8.3. RECORDS AND ACCOUNTS. The Borrower will (a) keep, and cause each
of its Subsidiaries to keep, true and accurate records and books of account in
which full, true and correct entries will be made in accordance with generally
accepted accounting principles and (b) maintain adequate accounts and reserves
for all taxes (including income taxes), depreciation, depletion, obsolescence
and amortization of its properties and the properties of its Subsidiaries,
contingencies, and other reserves.
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8.4 FINANCIAL STATEMENTS, CERTIFICATES AND INFORMATION. The Borrower
will deliver to each of the Banks:
(a) as soon as practicable, but in any event not later than
ninety (90) days after the end of each fiscal year of the Borrower,
the consolidated balance sheet of the Borrower and its Subsidiaries
and the consolidating balance sheet of the Borrower and its
Subsidiaries, each as at the end of such year, and the related
consolidated statement of income and consolidated statement of cash
flow and consolidating statement of income and consolidating
statement of cash flow for such year, each setting forth in
comparative form the figures for the previous fiscal year and all
such consolidated and consolidating statements to be in reasonable
detail, prepared in accordance with generally accepted accounting
principles, and certified without qualification by KPMG Peat Marwick
or by other independent certified public accountants satisfactory to
the Agent, together with a written statement from such accountants to
the effect that they have read a copy of this Credit Agreement, and
that, in making the examination necessary to said certification, they
have obtained no knowledge of any Default or Event of Default, or, if
such accountants shall have obtained knowledge of any then existing
Default or Event of Default they shall disclose in such statement any
such Default or Event of Default; provided that such accountants
shall not be liable to the Banks for failure to obtain knowledge of
any Default or Event of Default;
(b) as soon as practicable, but in any event not later than
forty-five (45) days after the end of each of the fiscal quarters of
the Borrower, copies of the unaudited consolidated balance sheet of
the Borrower and its Subsidiaries as at the end of such quarter, and
the related consolidated statement of income and consolidated
statement of cash flow for the portion of the Borrower's fiscal year
then elapsed, all in reasonable detail and prepared in accordance
with generally accepted accounting principles, together with a
certification by the principal financial or accounting officer of the
Borrower that the information contained in such financial statements
fairly presents the financial position of the Borrower and its
Subsidiaries on the date thereof (subject to year-end adjustments);
(c) simultaneously with the delivery of the financial
statements referred to in subsections (a) and (b) above, a statement
certified by the principal financial or accounting officer of the
Borrower in substantially the form of Exhibit C hereto (the
"Compliance Certificate") and setting forth in reasonable detail
computations evidencing compliance with the covenants contained in
Section 10 and (if applicable) reconciliations to reflect changes in
generally accepted accounting principles since the Balance Sheet
Date;
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(d) contemporaneously with the filing or mailing thereof,
copies of all material of a financial nature filed with the
Securities and Exchange Commission or sent to the stockholders of the
Borrower;
(e) as soon as practicable, but in any event not later than
thirty days prior to the end of each fiscal year, the budget of the
Borrower for the next fiscal year, and from time to time upon the
reasonable request of the Bank Agents, projections of the Borrower
and its Subsidiaries updating those projections delivered to the
Banks and referred to in Section 7.4.2 or, if applicable, updating
any later such projections delivered in response to this Section
8.4(e); and
(f) from time to time such other financial data and
information (including accountants and management letters) as either
of the Bank Agents or any Bank may reasonably request.
8.5. NOTICES.
8.5.1. DEFAULTS. The Borrower will promptly notify the
Agent and each of the Banks in writing of the occurrence of any
Default or Event of Default. If any Person shall give any notice or
take any other action in respect of a claimed default (whether or not
constituting an Event of Default) under this Credit Agreement or any
other note, evidence of indebtedness, indenture or other obligation
to which or with respect to which the Borrower or any of its
Subsidiaries is a party or obligor, whether as principal, guarantor,
surety or otherwise, the Borrower shall forthwith give written notice
thereof to the Agent and each of the Banks, describing the notice or
action and the nature of the claimed default.
8.5.2. ENVIRONMENTAL EVENTS. The Borrower will promptly
give notice to the Agent and each of the Banks (a) of any violation
of any Environmental Law that the Borrower or any of its Subsidiaries
reports in writing or is reportable by such Person in writing (or for
which any written report supplemental to any oral report is made) to
any federal, state or local environmental agency and (b) upon
becoming aware thereof, of any inquiry, proceeding, investigation, or
other action, including a notice from any agency of potential
environmental liability, of any federal, state or local environmental
agency or board, that has the potential to materially affect the
assets, liabilities, financial conditions or operations of the
Borrower or any of its Subsidiaries.
8.5.3. NOTICE OF LITIGATION AND JUDGMENTS. The Borrower
will, and will cause each of its Subsidiaries to, give notice to the
Agent and each of the Banks in writing within fifteen (15) days of
becoming aware of any litigation or proceedings threatened in writing
or any pending litigation and proceedings affecting the Borrower or
any of its Subsidiaries or to which the Borrower or any of its
Subsidiaries is or becomes a party involving an uninsured claim
against the Borrower or any of its Subsidiaries that could reasonably
be expected to have a materially adverse effect on the Borrower or
any of its Subsidiaries and stating the nature and status of such
litigation or proceedings. The Borrower will, and will cause each of
its Subsidiaries to, give notice to the Agent and each of the Banks,
in writing, in form and detail satisfactory to the Agent, within ten
(10) days of any judgment not covered by insurance, final or
otherwise, against the Borrower or
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any of its Subsidiaries in an amount in excess of $5,000,000.
8.6. CORPORATE EXISTENCE; MAINTENANCE OF PROPERTIES. The Borrower
will do or cause to be done all things necessary to preserve and keep in full
force and effect its corporate existence, rights and franchises and those of its
Subsidiaries and will not, and will not cause or permit any of its Subsidiaries
to, convert to a limited liability company. It (a) will cause all of its
properties and those of its Subsidiaries used or useful in the conduct of its
business or the business of its Subsidiaries to be maintained and kept in good
condition, repair and working order and supplied with all necessary equipment,
(b) will cause to be made all necessary repairs, renewals, replacements,
betterments and improvements thereof, all as in the judgment of the Borrower may
be necessary so that the business carried on in connection therewith may be
properly and advantageously conducted at all times, and (c) will, and will cause
each of its Subsidiaries to, continue to engage primarily in the businesses now
conducted by them and in related businesses; provided that nothing in this
Section 8.6 shall prevent the Borrower from discontinuing the operation and
maintenance of any of its properties or any of those of its Subsidiaries if such
discontinuance is, in the judgment of the Borrower, desirable in the conduct of
its or their business and that do not in the aggregate materially adversely
affect the business of the Borrower and its Subsidiaries on a consolidated
basis.
8.7. INSURANCE. The Borrower will, and will cause each of its
Subsidiaries to, maintain with financially sound and reputable insurers
insurance with respect to its properties and business against such casualties
and contingencies as shall be in accordance with the general practices of
businesses engaged in similar activities in similar geographic areas and in
amounts, containing such terms, in such forms and for such periods as may be
reasonable and prudent.
8.8. TAXES. The Borrower will, and will cause each of its
Subsidiaries to, duly pay and discharge, or cause to be paid and discharged,
before the same shall become overdue, all taxes, assessments and other
governmental charges imposed upon it and its real properties, sales and
activities, or any part thereof, or upon the income or profits therefrom, as
well as all claims for labor, materials, or supplies that if unpaid might by law
become a lien or charge upon any of its property; provided that any such tax,
assessment, charge, levy or claim need not be paid if the validity or amount
thereof shall currently be
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contested in good faith by appropriate proceedings and if the Borrower or such
Subsidiary shall have set aside on its books adequate reserves with respect
thereto; and provided further that the Borrower and each Subsidiary of the
Borrower will pay all such taxes, assessments, charges, levies or claims
forthwith upon the commencement of proceedings to foreclose any lien that may
have attached as security therefor.
8.9. INSPECTION OF PROPERTIES AND BOOKS, ETC.
8.9.1. GENERAL. The Borrower shall permit the Banks, through the
Agent or any of the Banks' other designated representatives, to visit and
inspect any of the properties of the Borrower or any of its Subsidiaries, to
examine the books of account of the Borrower and its Subsidiaries (and to make
copies thereof and extracts therefrom), and to discuss the affairs, finances and
accounts of the Borrower and its Subsidiaries with, and to be advised as to the
same by, its and their officers, all at such reasonable times and intervals as
the Agent or any Bank may reasonably request.
8.9.2. APPRAISALS; COMMERCIAL FINANCE EXAMINATIONS. No more
frequently than once each calendar year, or more frequently as determined by the
Agent if an Event of Default shall have occurred and be continuing, upon the
request of the Agent, the Borrower will obtain and deliver to the Agent
appraisal reports in form and substance and from appraisers satisfactory to the
Agent, stating (a) the then current fair market, orderly liquidation and forced
liquidation values of all or any portion of the equipment or real estate owned
by the Borrower or any of its Subsidiaries and (b) the then current business
value of each of the Borrower and its Subsidiaries. All such appraisals shall be
conducted and made at the expense of the Borrower. In addition, no more
frequently than once each calendar year, or more frequently as determined by the
Agent if an Event of Default shall have occurred and be continuing, the Agent
shall be entitled to conduct a commercial finance examination of the Borrower at
its Subsidiaries, such commercial finance examinations to be at the Borrower's
expense
8.9.3. COMMUNICATIONS WITH ACCOUNTANTS. The Borrower authorizes the
Agent and, if accompanied by the Agent, the Banks to communicate directly with
the Borrower's independent certified public accountants and authorizes such
accountants to disclose to the Agent and the Banks any and all financial
statements and other supporting financial documents and schedules including
copies of any management letter with respect to the business, financial
condition and other affairs of the Borrower or any of its Subsidiaries. At the
request of the Agent, the Borrower shall deliver a letter addressed to such
accountants instructing them to comply with the provisions of this Section 8.9.3
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8.10. COMPLIANCE WITH LAWS, CONTRACTS, LICENSES, AND PERMITS. The
Borrower will, and will cause each of its Subsidiaries to, comply with (a) the
applicable laws and regulations wherever its business is conducted, including
all Environmental Laws, unless the failure to so comply would not have a
material adverse effect on the business, assets or financial condition of the
Borrower or such Subsidiary, (b) the provisions of its charter documents and
by-laws, (c) all agreements and instruments by which it or any of its properties
may be bound, unless the failure to so comply would not have a material adverse
effect on the business, assets or financial condition of the Borrower or such
Subsidiary and (d) all applicable decrees, orders, and judgments, unless the
failure to so comply would not have a material adverse effect on the business,
assets or financial condition of the Borrower or such Subsidiary. If any
authorization, consent, approval, permit or license from any officer, agency or
instrumentality of any government shall become necessary or required in order
that the Borrower or any of its Subsidiaries may fulfill any of its obligations
hereunder or any of the other Loan Documents to which the Borrower or such
Subsidiary is a party, the Borrower will, or (as the case may be) will cause
such Subsidiary to, immediately take or cause to be taken all reasonable steps
within the power of the Borrower or such Subsidiary to obtain such
authorization, consent, approval, permit or license and furnish the Agent and
the Banks with evidence thereof.
8.11. EMPLOYEE BENEFIT PLANS. The Borrower will (a) promptly upon
filing the same with the Department of Labor or Internal Revenue Service furnish
to the Agent a copy of the most recent actuarial statement required to be
submitted under Section 103(d) of ERISA and Annual Report, Form 5500, with all
required attachments, in respect of each Guaranteed Pension Plan and (b)
promptly upon receipt or dispatch, furnish to the Agent any notice, report or
demand sent or received in respect of a Guaranteed Pension Plan under Section
Section 302, 4041, 4042, 4043, 4063, 4065, 4066 and 4068 of ERISA, or in respect
of a Multiemployer Plan, under Section Section 4041A, 4202, 4219, 4242, or 4245
of ERISA.
8.12. USE OF PROCEEDS. The Borrower will use the proceeds of the
Revolving Credit Loans solely for working capital and general corporate purposes
(including, without limitation, the repurchase by the Borrower of its capital
stock). The Borrower will obtain Letters of Credit solely for working capital
and general corporate purposes.
8.13. FURTHER ASSURANCES. The Borrower will, and will cause each of
its Subsidiaries to, cooperate with the Banks and the Agent and execute such
further instruments and documents as the Banks or the Agent shall reasonably
request to carry out to their satisfaction the transactions contemplated by this
Credit Agreement and the other Loan Documents.
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9. CERTAIN NEGATIVE COVENANTS OF THE BORROWER.
The Borrower covenants and agrees that, so long as any Revolving
Credit Loan, Unpaid Reimbursement Obligation, Letter of Credit or Revolving
Credit Note is outstanding or any Bank has any obligation to make any Revolving
Credit Loans or the Agent has any obligations to issue, extend or renew any
Letters of Credit:
9.1. RESTRICTIONS ON INDEBTEDNESS. The Borrower will not, and will
not permit any of its Subsidiaries to, create, incur, assume, guarantee or be or
remain liable, contingently or otherwise, with respect to any Indebtedness other
than:
(a) Indebtedness to the Banks and the Agent arising under
any of the Loan Documents;
(b) current liabilities of the Borrower or such Subsidiary
incurred in the ordinary course of business not incurred through (i)
the borrowing of money, or (ii) the obtaining of credit except for
credit on an open account basis customarily extended and in fact
extended in connection with normal purchases of goods and services;
(c) Indebtedness in respect of taxes, assessments,
governmental charges or levies and claims for labor, materials and
supplies to the extent that payment therefor shall not at the time be
required to be made in accordance with the provisions of Section 8.8;
(d) Indebtedness in respect of judgments or awards that
have been in force for less than the applicable period for taking an
appeal so long as execution is not levied thereunder or in respect of
which the Borrower or such Subsidiary shall at the time in good faith
be prosecuting an appeal or proceedings for review and in respect of
which a stay of execution shall have been obtained pending such
appeal or review;
(e) endorsements for collection, deposit or negotiation and
warranties of products or services, in each case incurred in the
ordinary course of business;
(f) obligations under Capitalized Leases not exceeding
$50,000,000 in aggregate amount in any fiscal year;
(g) Indebtedness incurred in connection with the
acquisition after the date hereof of any real or personal property by
the Borrower or such Subsidiary, provided that the aggregate
principal amount of such Indebtedness of the Borrower and its
Subsidiaries shall not exceed the aggregate amount of $5,000,000 at
any one time;
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(h) Indebtedness existing on the date hereof and listed and
described on Schedule 9.1 hereto;
(i) Indebtedness of a Domestic Subsidiary of the Borrower
existing on the Closing Date to the Borrower;
(j) Indebtedness of a Foreign Subsidiary of the Borrower
existing on the Closing Date to the Borrower, provided that the
aggregate principal amount of such Indebtedness of all the Foreign
Subsidiaries to the Borrower does not exceed $30,000,000 at any time;
and
(k) Indebtedness of the Borrower or any of its Subsidiaries
(other than Indebtedness of a Foreign Subsidiary to the Borrower or
any Domestic Subsidiary) not otherwise permitted hereunder, provided,
that the aggregate amount of all such Indebtedness does not exceed
$25,000,000 in the aggregate at any time.
9.2. RESTRICTIONS ON LIENS. The Borrower will not, and will not
permit any of its Subsidiaries to, (a) create or incur or suffer to be created
or incurred or to exist any lien, encumbrance, mortgage, pledge, charge,
restriction or other security interest of any kind upon any of its property or
assets of any character whether now owned or hereafter acquired, or upon the
income or profits therefrom; (b) transfer any of such property or assets or the
income or profits therefrom for the purpose of subjecting the same to the
payment of Indebtedness or performance of any other obligation in priority to
payment of its general creditors; (c) acquire, or agree or have an option to
acquire, any property or assets upon conditional sale or other title retention
or purchase money security agreement, device or arrangement; (d) suffer to exist
for a period of more than thirty (30) days after the same shall have been
incurred any Indebtedness or claim or demand against it that if unpaid might by
law or upon bankruptcy or insolvency, or otherwise, be given any priority
whatsoever over its general creditors; or (e) sell, assign, pledge or otherwise
transfer any accounts, contract rights, general intangibles, chattel paper or
instruments, with or without recourse; provided that the Borrower and any
Subsidiary of the Borrower may create or incur or suffer to be created or
incurred or to exist:
(i) liens in favor of the Borrower on all or part of the
assets of Subsidiaries of the Borrower securing Indebtedness owing by
Subsidiaries of the Borrower to the Borrower;
(ii) liens to secure taxes, assessments and other
government charges in respect of obligations not overdue or liens on
properties other than Mortgaged Properties to secure claims for
labor, material or supplies in respect of obligations not overdue;
(iii) deposits or pledges made in connection with, or to
secure payment of, workmen's compensation, unemployment insurance,
old age pensions or other social security obligations;
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(iv) liens on properties in respect of judgments or awards,
the Indebtedness with respect to which is permitted by Section
9.1(d);
(v) liens of carriers, warehousemen, mechanics and
materialmen, and other like liens on properties, in existence less
than 120 days from the date of creation thereof in respect of
obligations not overdue;
(vi) encumbrances on Real Estate consisting of easements,
rights of way, zoning restrictions, restrictions on the use of real
property and defects and irregularities in the title thereto,
landlord's or lessor's liens under leases to which the Borrower or a
Subsidiary of the Borrower is a party, and other minor liens or
encumbrances none of which in the opinion of the Borrower interferes
materially with the use of the property affected in the ordinary
conduct of the business of the Borrower and its Subsidiaries, which
defects do not individually or in the aggregate have a materially
adverse effect on the business of the Borrower individually or of the
Borrower and its Subsidiaries on a consolidated basis;
(vii) liens existing on the date hereof and listed on
Schedule 9.2 hereto;
(viii) purchase money security interests in or purchase
money mortgages on real or personal property acquired after the date
hereof to secure purchase money Indebtedness of the type and amount
permitted by Section 9.1(g), incurred in connection with the
acquisition of such property, which security interests or mortgages
cover only the real or personal property so acquired;
(ix) liens in favor of any lender of Indebtedness permitted
pursuant to Section 9.1 hereof, provided that the aggregate principal
amount of all Indebtedness permitted to be secured pursuant to this
Section 9.2(x) shall not exceed $10,000,000 in the aggregate
outstanding at any one time.
9.3. RESTRICTIONS ON INVESTMENTS. The Borrower will not, and will not
permit any of its Subsidiaries to, make or permit to exist or to remain
outstanding any Investment except Investments in:
(a) marketable direct or guaranteed obligations of the
United States of America that mature within one (1) year from the
date of purchase by the Borrower;
(b) demand deposits, certificates of deposit, bankers
acceptances and time deposits of United States banks having total
assets in excess of $1,000,000,000;
(c) securities commonly known as "commercial paper" issued
by a corporation organized and existing under the laws of the United
States of America or any state thereof that at the time of purchase
have been rated
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and the ratings for which are not less than "P 1" if rated by Moody's
Investors Services, Inc., and not less than "A 1" if rated by
Standard and Poor's;
(d) Investments existing on the date hereof and listed on
Schedule 9.3 hereto (including those Investments in the Strategic
Partners set forth on Schedule 9.3);
(e) Investments with respect to Indebtedness permitted by
Section 9.1(i) and (j) so long as such entities remain Subsidiaries
of the Borrower;
(f) Investments consisting of the Guaranty or Investments
by the Borrower in Subsidiaries of the Borrower existing on the
Closing Date;
(g) Investments of the Borrower made after the Closing Date
in Strategic Partners, provided that the aggregate amount of all such
Investments made after the Closing Date shall not exceed $25,000,000
at any time; and
(h) Investments made in the ordinary course of business
consistent with past practices consisting (and not for speculative
purposes) of contracts entered into for foreign exchange hedging
purposes.
9.4. DISTRIBUTIONS. The Borrower will not make any Distributions.
9.5. MERGER, CONSOLIDATION AND DISPOSITION OF ASSETS.
9.5.1. MERGERS AND ACQUISITIONS. The Borrower will not, and
will not permit any of its Subsidiaries to, become a party to any
merger or consolidation, or agree to or effect any asset acquisition
or stock acquisition (other than the acquisition of assets in the
ordinary course of business consistent with past practices) except,
so long as no Default or Event of Default has occurred and is
continuing, or would exist after giving effect thereto, (a) the
merger or consolidation of one or more of the Subsidiaries of the
Borrower with and into the Borrower so long as the Borrower is the
survivor; (b) the merger or consolidation of two or more Subsidiaries
of the Borrower; and (c) other asset or stock acquisitions of Persons
in the same or a similar line of business as the Borrower (the
"Permitted Acquisitions") where (i) the Borrower has provided the
Agent with thirty (30) days prior written notice of such Permitted
Acquisition, which notice shall include a reasonably detailed
description of such Permitted Acquisition; (ii) the business to be
acquired would not subject the Bank Agents or the Banks to regulatory
or third party approvals in connection with the exercise of its
rights and remedies under this Credit Agreement or the other Loan
Documents; (iii) the business and assets so acquired in such
Permitted Acquisition shall be acquired by the Borrower free and
clear of all liens (other than liens permitted by Section 9.2) and
all
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Indebtedness (other than Indebtedness permitted by Section 9.1); (iv)
no contingent obligations or liabilities will be incurred or assumed
in connection with such Permitted Acquisition which could be expected
to have a material adverse effect on the business, assets or
financial condition of the Borrower and its Subsidiaries; (v) the
Borrower has demonstrated to the satisfaction of the Agent, based on
a pro forma Compliance Certificate, compliance with Section 10 on a
pro forma basis immediately prior to and after giving effect to such
Permitted Acquisition; (vi) the aggregate purchase price for any one
Permitted Acquisition or a series of related Permitted Acquisitions
does not exceed $50,000,000 and the aggregate purchase price for all
Permitted Acquisitions does not exceed $200,000,000 during the term
of this Credit Agreement; and (vii) the required majority of the
Board of Directors of the target Person incumbent at the time such
Permitted Acquisition is proposed has acquiesced, or the transaction
is otherwise deemed in the reasonable judgment of the Banks to be a
"friendly" acquisition.
9.5.2. DISPOSITION OF ASSETS. The Borrower will not, and
will not permit any of its Subsidiaries to, become a party to or
agree to or effect any disposition of assets, other than the
disposition of assets in the ordinary course of business, consistent
with past practices.
9.6. SALE AND LEASEBACK. The Borrower will not, and will not permit
any of its Subsidiaries to, enter into any arrangement, directly or indirectly,
whereby the Borrower or any Subsidiary of the Borrower shall sell or transfer
any property owned by it in order then or thereafter to lease such property or
lease other property that the Borrower or any Subsidiary of the Borrower intends
to use for substantially the same purpose as the property being sold or
transferred, other than the sale or transfer and subsequent lease by the
Borrower or any Subsidiary of new equipment purchased by the Borrower or such
Subsidiary within ninety (90) days of such sale or transfer.
9.7. COMPLIANCE WITH ENVIRONMENTAL LAWS. The Borrower will not, and
will not permit any of its Subsidiaries to, (a) use any of the Real Estate or
any portion thereof for the handling, processing, storage or disposal of
Hazardous Substances in violation of any Environmental Law the noncompliance
with which would have a material adverse effect on the business, assets or
financial condition of the Borrower or such Subsidiary, (b) cause or permit to
be located on any of the Real Estate any underground tank or other underground
storage receptacle for Hazardous Substances in violation of any Environmental
Law the noncompliance with which would have a material adverse effect on the
business, assets or financial condition of the Borrower or such Subsidiary, (c)
generate any Hazardous Substances on any of the Real Estate in violation of any
Environmental Law the noncompliance with which would have a material adverse
effect on the business, assets or financial condition of the Borrower or such
Subsidiary, (d) conduct any activity at any Real Estate or use any Real Estate
in any manner so as to cause a release (i.e.
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releasing, spilling, leaking, pumping, pouring, emitting, emptying, discharging,
injecting, escaping, leaching, disposing or dumping) or threatened release of
Hazardous Substances on, upon or into the Real Estate or (e) otherwise conduct
any activity at any Real Estate or use any Real Estate in any manner that would
violate any Environmental Law or bring such Real Estate in violation of any
Environmental Law in each case if such violation would have a materially adverse
effect on the business, assets or financial condition of the Borrower or such
Subsidiary.
9.8. EMPLOYEE BENEFIT PLANS. Neither the Borrower nor any ERISA
Affiliate will
(a) engage in any "prohibited transaction" within the
meaning of Section 406 of ERISA or Section 4975 of the Code which
could result in a material liability for the Borrower or any of its
Subsidiaries; or
(b) permit any Guaranteed Pension Plan to incur an
"accumulated funding deficiency", as such term is defined in Section
302 of ERISA, whether or not such deficiency is or may be waived; or
(c) fail to contribute to any Guaranteed Pension Plan to an
extent which, or terminate any Guaranteed Pension Plan in a manner
which, could result in the imposition of a lien or encumbrance on the
assets of the Borrower or any of its Subsidiaries pursuant to Section
302(f) or Section 4068 of ERISA; or
(d) permit or take any action which would result in the
aggregate benefit liabilities (with the meaning of Section 4001 of
ERISA) of all Guaranteed Pension Plans exceeding the value of the
aggregate assets of such Plans, disregarding for this purpose the
benefit liabilities and assets of any such Plan with assets in excess
of benefit liabilities.
9.9. CHANGES IN TERMS OF CAPITAL STOCK. The Borrower will not, nor
will it permit any of its Subsidiaries to, effect or permit any change in or
amendment to any document or instrument pertaining to the terms of such Person's
capital stock unless such a change or amendment is of an immaterial or
ministerial nature that would not have any adverse effect on any of the Bank
Agents' or the Banks' rights or interests under the Loan Documents or the
Borrower's or any of its Subsidiaries' obligations under the Loan Documents to
which such Person is a party.
9.10. FISCAL YEAR. The Borrower will not change the date of the end
of its fiscal year from that set forth in Section 7.20 hereof.
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9.11. NEGATIVE PLEDGES. The Borrower will not, nor will it permit any
Subsidiary to, enter into any agreement (excluding this Credit Agreement)
prohibiting the creation or assumption of any lien upon its properties, revenues
or assets or those of any of its Subsidiaries, whether now owned or hereafter
acquired, other than those agreements with Persons prohibiting any such lien on
assets in which such Person has a prior security interest which is permitted by
Section 9.2.
9.12. TRANSACTIONS WITH AFFILIATES. The Borrower will not, nor will
it permit any Subsidiary to, enter into or cause, suffer or permit to exist (a)
any arrangement or contract with any of its other Affiliates of a nature
customarily entered into by Persons which are Affiliates of each other
(including management or similar contracts or arrangements relating to the
allocation of revenues, taxes and expenses or otherwise) requiring any payment
to be made by the Borrower or any of its Subsidiaries to any Affiliate unless
such arrangement is fair and equitable to the Borrower or such Subsidiary; or
(b) any other transaction, arrangement, contract with any of its other
Affiliates which would not be entered into by a prudent Person in the position
of the Borrower or such Subsidiary with, or which is on terms which are less
favorable than are obtainable from, any Person which is not one of its
Affiliates.
9.13. UPSTREAM LIMITATIONS. The Borrower will not, nor will it permit
any Subsidiary to, enter into any agreement, contract, or arrangement (other
than the Credit Agreement and the other Loan Documents) restricting the ability
of any Subsidiary to pay or make dividends or distributions in cash or kind, to
make loans, advances or other payments of whatsoever nature or to make transfers
or distributions of all or any part of its assets to the Borrower.
9.14. INCONSISTENT AGREEMENTS. The Borrower will not, nor will it
permit any Subsidiary to, enter into any agreement containing any provision
which would be violated or breached by the performance by the Borrower or such
Subsidiary of its obligations hereunder or under any of the other Loan
Documents.
10. FINANCIAL COVENANTS OF THE BORROWER.
The Borrower covenants and agrees that, so long as any Revolving
Credit Loan, Unpaid Reimbursement Obligation, Letter of Credit or Revolving
Credit Note is outstanding or any Bank has any obligation to make any Revolving
Credit Loans or the Agent has any obligation to issue, extend or renew any
Letters of Credit:
10.1. PROFITABLE OPERATIONS. The Borrower will not permit
Consolidated Net Income or Consolidated Net Operating Income for any two
consecutive fiscal quarters to be less than $1.00.
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10.2. FIXED RATE COVERAGE RATIO. The Borrower will not as at the end
of any fiscal quarter, permit the ratio of (a) the sum of (i) EBITDA for the
period of four (4) consecutive fiscal quarters ending on such date plus (ii)
Rental Obligations for the period of four (4) consecutive fiscal quarters ending
on such date to (b) the sum of (i) Consolidated Total Interest Expense for the
period of four (4) consecutive fiscal quarters ending on such date plus (ii)
Rental Obligations for the period of four (4) consecutive fiscal quarters ending
on such date, to be less than 2.00:1.00.
10.3. MINIMUM LIQUIDITY. The Borrower will not permit the ratio of
(a) the sum of (i) cash of the Borrower plus (ii) Current Accounts Receivable of
the Borrower to (b) the sum of (i) accounts payable of the Borrower plus (ii)
Senior Funded Indebtedness to be less than 1.25 to 1.00 at any time.
10.4. CONSOLIDATED NET WORTH. The Borrower will not permit
Consolidated Net Worth at any time to be less than the greater of (a)
$375,000,000 or (b) the sum of (i) $375,000,000 plus (ii) on a cumulative basis,
75% of positive Consolidated Net Income for each fiscal quarter beginning with
the fiscal quarter ended March 31, 1996, minus (iii) 100% of the purchase price
paid by the Borrower to repurchase the capital stock of the Borrower in such
fiscal quarter.
11. CLOSING CONDITIONS.
The obligations of the Banks to make the initial Revolving Credit
Loans and of the Agent to issue any initial Letters of Credit shall be subject
to the satisfaction of the following conditions precedent.
11.1. LOAN DOCUMENTS. Each of the Loan Documents shall have been duly
executed and delivered by the respective parties thereto, shall be in full force
and effect and shall be in form and substance satisfactory to each of the Banks.
Each Bank shall have received a fully executed copy of each such document.
11.2. CERTIFIED COPIES OF CHARTER DOCUMENTS. Each of the Banks shall
have received from the Borrower and each of its Subsidiaries a copy, certified
by a duly authorized officer of such Person to be true and complete on the
Closing Date, of each of (a) its charter or other incorporation documents as in
effect on such date of certification, and (b) its by-laws as in effect on such
date.
11.3. CORPORATE, ACTION. All corporate action necessary for the valid
execution, delivery and performance by the Borrower and each of its Subsidiaries
of this Credit Agreement and the other Loan Documents to which it is or is to
become a party shall have been duly and effectively taken, and evidence thereof
satisfactory to the Banks shall have been provided to each of the Banks.
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11.4. INCUMBENCY CERTIFICATE. Each of the Banks shall have received
from the Borrower and each of its Subsidiaries an incumbency certificate, dated
as of the Closing Date, signed by a duly authorized officer of the Borrower or
such Subsidiary, and giving the name and bearing a specimen signature of each
individual who shall be authorized: (a) to sign, in the name and on behalf of
each of the Borrower of such Subsidiary, each of the Loan Documents and
Subordination Documents to which the Borrower or such Subsidiary is or is to
become a party; (b) in the case of the Borrower, to make Loan Requests and
Conversion Requests and to apply for Letters of Credit; and (c) to give notices
and to take other action on its behalf under the Loan Documents.
11.5. CERTIFICATES OF INSURANCE. The Agent shall have received (a) a
certificate of insurance from an independent insurance broker dated as of the
Closing Date, identifying insurers, types of insurance, insurance limits, and
policy terms and (b) certified copies of all policies evidencing such insurance
(or certificates therefore signed by the insurer or an agent authorized to bind
the insurer).
11.6. SOLVENCY CERTIFICATE. Each of the Banks shall have received an
officer's certificate of the Borrower dated as of the Closing Date as to the
solvency of the Borrower and its Subsidiaries following the consummation of the
transactions contemplated herein and in form and substance satisfactory to the
Banks.
11.7. OPINION OF COUNSEL. Each of the Banks and the Agent shall have
received a favorable legal opinion addressed to the Banks and the Agent, dated
as of the Closing Date, in form and substance satisfactory to the Banks and the
Agent, from Michael A. Cornelius, Esq., counsel to the Borrower and its Domestic
Subsidiaries.
11.8. PAYMENT OF FEES. The Borrower shall have paid to the Banks or
the Agent, as appropriate, the closing fee and the administrative fee as set
forth in the Fee Letter.
11.9. TERMINATION OF RECEIVABLES FINANCING. The Agent shall have
received evidence satisfactory to the Agent that all Indebtedness of the
Borrower to J.P. Morgan Delaware, as Administrative Agent pursuant to
Receivables Purchase Agreement dated as of December __, 1993 has been repaid and
such agreement, and all the Borrower's obligations thereunder, has been
terminated.
12. CONDITIONS TO ALL BORROWINGS.
The obligations of the Banks to make, convert or continue any
Revolving Credit Loan, including making the initial Revolving Credit Loan, and
of the Agent to issue, extend or renew any Letter of Credit, in each case
whether on or after the Closing Date, shall also be subject to the satisfaction
of the following conditions precedent:
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12.1. REPRESENTATIONS TRUE; NO EVENT OF DEFAULT. Each of the
representations and warranties of any of the Borrower and its Subsidiaries
contained in this Credit Agreement, the other Loan Documents or in any document
or instrument delivered pursuant to or in connection with this Credit Agreement
shall be true as of the date as of which they were made and shall also be true
at and as of the time of the making of such Revolving Credit Loan or the
issuance, extension or renewal of such Letter of Credit, with the same effect as
if made at and as of that time (except to the extent of changes resulting from
transactions contemplated or permitted by this Credit Agreement and the other
Loan Documents and changes occurring in the ordinary course of business that
singly or in the aggregate are not materially adverse, and to the extent that
such representations and warranties relate expressly to an earlier date) and no
Default or Event of Default shall have occurred and be continuing.
12.2. NO LEGAL IMPEDIMENT. No change shall have occurred in any law
or regulations thereunder or interpretations thereof that in the reasonable
opinion of any Bank would make it illegal for such Bank to make such Revolving
Credit Loan or to participate in the issuance, extension or renewal of such
Letter of Credit or in the reasonable opinion of the Agent would make it illegal
for the Agent to issue, extend or renew such Letter of Credit.
12.3. GOVERNMENTAL REGULATION. Each Bank shall have received such
statements in substance and form reasonably satisfactory to such Bank as such
Bank shall require for the purpose of compliance with any applicable regulations
of the Comptroller of the Currency or the Board of Governors of the Federal
Reserve System.
12.4. PROCEEDINGS AND DOCUMENTS. All proceedings in connection with
the transactions contemplated by this Credit Agreement, the other Loan Documents
and all other documents incident thereto shall be satisfactory in substance and
in form to the Banks and to the Agent and the Bank Agent's Special Counsel, and
the Banks, the Agent and such counsel shall have received all information and
such counterpart originals or certified or other copies of such documents as the
Agent may reasonably request.
13. EVENTS OF DEFAULT; ACCELERATION; ETC.
13.1. EVENTS OF DEFAULT AND ACCELERATION. If any of the following
events ("Events of Default" or, if the giving of notice or the lapse of time or
both is required, then, prior to such notice or lapse of time, "Defaults") shall
occur:
(a) the Borrower shall fail to pay any principal of the
Revolving Credit Loans or any Reimbursement Obligation when the same
shall become due and payable, whether at the stated date of maturity
or any accelerated date of maturity or at any other date fixed for
payment;
(b) the Borrower or any of its Domestic Subsidiaries shall
fail to pay any interest on the Revolving Credit Loans, the
Commitment Fee,
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any Letter of Credit Fee, the administrative fee, or other sums due
hereunder or under any of the other Loan Documents, when the same
shall become due and payable, whether at the stated date of maturity
or any accelerated date of maturity or at any other date fixed for
payment;
(c) the Borrower shall fail to comply with any of its
covenants contained in Section 8, 9 or 10;
(d) the Borrower or any of its Subsidiaries shall fail to
perform any term, covenant or agreement contained herein or in any of
the other Loan Documents (other than those specified elsewhere in
this Section 13.1) for fifteen (15) days after written notice of such
failure has been given to the Borrower by the Agent;
(e) any representation or warranty of the Borrower or any
of its Subsidiaries in this Credit Agreement or any of the other Loan
Documents or in any other document or instrument delivered pursuant
to or in connection with this Credit Agreement shall prove to have
been false in any material respect upon the date when made or deemed
to have been made or repeated;
(f) the Borrower or any of its Subsidiaries shall fail to
pay at maturity, or within any applicable period of grace, any
obligation for borrowed money or credit received or in respect of any
Capitalized Leases, or fail to observe or perform any material term,
covenant or agreement contained in any agreement by which it is
bound, evidencing or securing borrowed money or credit received or in
respect of any Capitalized Leases for such period of time as would
permit (assuming the giving of appropriate notice if required) the
holder or holders thereof or of any obligations issued thereunder to
accelerate the maturity thereof;
(g) the Borrower or any of its Subsidiaries shall make an
assignment for the benefit of creditors, or admit in writing its
inability to pay or generally fail to pay its debts as they mature or
become due, or shall petition or apply for the appointment of a
trustee or other custodian, liquidator or receiver of the Borrower or
any of its Subsidiaries or of any substantial part of the assets of
the Borrower or any of its Subsidiaries or shall commence any case or
other proceeding relating to the Borrower or any of its Subsidiaries
under any bankruptcy, reorganization, arrangement, insolvency,
readjustment of debt, dissolution or liquidation or similar law of
any jurisdiction, now or hereafter in effect, or shall take any
action to authorize or in furtherance of any of the foregoing, or if
any such petition or application shall be filed or any such case or
other proceeding shall be commenced against the Borrower or any of
its Subsidiaries and the Borrower or any of its Subsidiaries shall
indicate its approval thereof, consent thereto or acquiescence
therein or such petition or application shall not have been dismissed
within forty-five (45) days following the filing thereof;
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(h) a decree or order is entered appointing any such
trustee, custodian, liquidator or receiver or adjudicating the
Borrower or any of its Subsidiaries bankrupt or insolvent, or
approving a petition in any such case or other proceeding, or a
decree or order for relief is entered in respect of the Borrower or
any Subsidiary of the Borrower in an involuntary case under federal
bankruptcy laws as now or hereafter constituted;
(i) there shall remain in force, undischarged, unsatisfied
and unstayed, for more than thirty days, whether or not consecutive,
any final judgment against the Borrower or any of its Subsidiaries
that, with other outstanding final judgments, undischarged, against
the Borrower or any of its Subsidiaries exceeds in the aggregate
$10,000,000;
(j) if any of the Loan Documents shall be cancelled,
terminated, revoked or rescinded otherwise than in accordance with
the terms thereof or with the express prior written agreement,
consent or approval of the Banks, or any action at law, suit or in
equity or other legal proceeding to cancel, revoke or rescind any of
the Loan Documents shall be commenced by or on behalf of the Borrower
or any of its Subsidiaries party thereto or any of their respective
stockholders, or any court or any other governmental or regulatory
authority or agency of competent jurisdiction shall make a
determination that, or issue a judgment, order, decree or ruling to
the effect that, any one or more of the Loan Documents is illegal,
invalid or unenforceable in accordance with the terms thereof;
(k) with respect to any Guaranteed Pension Plan, an ERISA
Reportable Event shall have occurred and the Majority Banks shall
have determined in their reasonable discretion that such event
reasonably could be expected to result in liability of the Borrower
or any of its Subsidiaries to the PBGC or such Guaranteed Pension
Plan in an aggregate amount exceeding $2,000,000 and such event in
the circumstances occurring reasonably could constitute grounds for
the termination of such Guaranteed Pension Plan by the PBGC or for
the appointment by the appropriate United States District Court of a
trustee to administer such Guaranteed Pension Plan; or a trustee
shall have been appointed by the United States District Court to
administer such Plan; or the PBGC shall have instituted proceedings
to terminate such Guaranteed Pension Plan;
(l) the Borrower or any of its Subsidiaries shall be
enjoined, restrained or in any way prevented by the order of any
court or any administrative or regulatory agency from conducting any
material part of its business and such order shall continue in effect
for more than thirty (30) days;
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(m) there shall occur any material damage to, or loss,
theft or destruction of, any assets of the Borrower or any of its
Subsidiaries, whether or not insured, or any strike, lockout, labor
dispute, embargo, condemnation, act of God or public enemy, or other
casualty, which in any such case causes, for more than fifteen (15)
consecutive days, the cessation or substantial curtailment of revenue
producing activities at any facility of the Borrower or any of its
Subsidiaries if such event or circumstance is not covered by business
interruption insurance and would have a material adverse effect on
the business or financial condition of the Borrower or such
Subsidiary;
(n) there shall occur the loss, suspension or revocation
of, or failure to renew, any license or permit now held or hereafter
acquired by the Borrower or any of its Subsidiaries if such loss,
suspension, revocation or failure to renew would have a material
adverse effect on the business or financial condition of the Borrower
or such Subsidiary;
(o) the Borrower or any of its Subsidiaries shall be
indicted for a state or federal crime, or any civil or criminal
action shall otherwise have been brought or threatened against the
Borrower or any of its Subsidiaries, a punishment for which in any
such case could include the forfeiture of any assets of the Borrower
or such Subsidiary;
(p) the Borrower shall at any time fail legally or
beneficially own less than 100% of the capital stock of any of the
Guarantors; or
(q) any Person shall at any time be the legal or beneficial
owner (within the meaning used in Rule 13d-3 of the Securities and
Exchange Commission promulgated under the Securities Exchange Act of
1934, as amended) of more than fifty percent (50%) of the outstanding
shares of the common stock of the Borrower;
then, and in any such event, so long as the same may be continuing, the Agent
may, and upon the request of the Majority Banks shall, by notice in writing to
the Borrower declare all amounts owing with respect to this Credit Agreement,
the Revolving Credit Notes and the other Loan Documents and all Reimbursement
Obligations to be, and they shall thereupon forthwith become, immediately due
and payable without presentment, demand, protest or other notice of any kind,
all of which are hereby expressly waived by the Borrower; provided that in the
event of any Event of Default specified in Section Section 13.1(g) or 13.1(h),
all such amounts shall become immediately due and payable automatically and
without any requirement of notice from the Agent or any Bank.
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13.2. TERMINATION OF COMMITMENTS. If any one or more of the Events of
Default specified in Section 13.1(g) or Section 13.1(h) shall occur, any unused
portion of the credit hereunder shall forthwith terminate and each of the Banks
shall be relieved of all further obligations to make Revolving Credit Loans to
the Borrower and the Agent shall be relieved of all further obligations to
issue, extend or renew Letters of Credit. If any other Event of Default shall
have occurred and be continuing, or if on any Drawdown Date or other date for
issuing, extending or renewing any Letter of Credit the conditions precedent to
the making of the Revolving Credit Loans to be made on such Drawdown Date or (as
the case may be) to issuing, extending or renewing such Letter of Credit on such
other date are not satisfied, the Agent may and, upon the request of the
Majority Banks, shall, by notice to the Borrower, terminate the unused portion
of the credit hereunder, and upon such notice being given such unused portion of
the credit hereunder shall terminate immediately and each of the Banks shall be
relieved of all further obligations to make Revolving Credit Loans and the Agent
shall be relieved of all further obligations to issue, extend or renew Letters
of Credit. No termination of the credit hereunder shall relieve the Borrower or
any of its Domestic Subsidiaries of any of the Obligations.
13.3. REMEDIES. In case any one or more of the Events of Default
shall have occurred and be continuing, and whether or not the Banks shall have
accelerated the maturity of the Revolving Credit Loans pursuant to Section 13.1,
each Bank, if owed any amount with respect to the Revolving Credit Loans or the
Reimbursement Obligations, may, with the consent of the Majority Banks but not
otherwise, proceed to protect and enforce its rights by suit in equity, action
at law or other appropriate proceeding, whether for the specific performance of
any covenant or agreement contained in this Credit Agreement and the other Loan
Documents or any instrument pursuant to which the Obligations to such Bank are
evidenced, including as permitted by applicable law the obtaining of the ex
parte appointment of a receiver, and, if such amount shall have become due, by
declaration or otherwise, proceed to enforce the payment thereof or any other
legal or equitable right of such Bank. No remedy herein conferred upon any Bank
or the Agent or the holder of any Revolving Credit Note or purchaser of any
Letter of Credit Participation is intended to be exclusive of any other remedy
and each and every remedy shall be cumulative and shall be in addition to every
other remedy given hereunder or now or hereafter existing at law or in equity or
by statute or any other provision of law.
14. SETOFF.
Regardless of the adequacy of any collateral, during the continuance
of any Event of Default, any deposits or other sums credited by or due from any
of the Banks to the Borrower and any securities or other property of the
Borrower in the possession of such Bank may be applied to or set off by such
Bank against the payment of Obligations and any and all other liabilities,
direct, or indirect, absolute or contingent, due or to become due, now existing
or hereafter arising, of the Borrower to such Bank. Each of the Banks agrees
with each other Bank that (a) if an amount to be set off is to be applied to
Indebtedness of the
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Borrower to such Bank, other than Indebtedness evidenced by the Revolving Credit
Notes held by such Bank or constituting Reimbursement Obligations owed to such
Bank, such amount shall be applied ratably to such other Indebtedness and to the
Indebtedness evidenced by all such Revolving Credit Notes held by such Bank or
constituting Reimbursement Obligations owed to such Bank, and (b) if such Bank
shall receive from the Borrower, whether by voluntary payment, exercise of the
right of setoff, counterclaim, cross action, enforcement of the claim evidenced
by the Revolving Credit Notes held by, or constituting Reimbursement Obligations
owed to, such Bank by proceedings against the Borrower at law or in equity or by
proof thereof in bankruptcy, reorganization, liquidation, receivership or
similar proceedings, or otherwise, and shall retain and apply to the payment of
the Revolving Credit Note or Revolving Credit Notes held by, or Reimbursement
Obligations owed to, such Bank any amount in excess of its ratable portion of
the payments received by all of the Banks with respect to the Revolving Credit
Notes held by, and Reimbursement Obligations owed to, all of the Banks, such
Bank will make such disposition and arrangements with the other Banks with
respect to such excess, either by way of distribution, pro tanto assignment of
claims, subrogation or otherwise as shall result in each Bank receiving in
respect of the Revolving Credit Notes held by it or Reimbursement obligations
owed it, its proportionate payment as contemplated by this Credit Agreement;
provided that if all or any part of such excess payment is thereafter recovered
from such Bank, such disposition and arrangements shall be rescinded and the
amount restored to the extent of such recovery, but without interest.
15. THE BANK AGENTS.
15.1. AUTHORIZATION.
(a) Each of the Bank Agents is authorized to take such
action on behalf of each of the Banks and to exercise all such powers
as are hereunder and under any of the other Loan Documents and any
related documents delegated to such Bank Agent, together with such
powers as are reasonably incident thereto, provided that no duties or
responsibilities not expressly assumed herein or therein shall be
implied to have been assumed by such Bank Agent.
(b) The relationship between each of the Bank Agents and
each of the Banks is that of an independent contractor. The use of
the terms "Syndication Agent", "Bank Agents" and "Agent" is for
convenience only and is used to describe, as a form of convention,
the independent contractual relationship between each of the Bank
Agents and each of the Banks. Nothing contained in this Credit
Agreement nor the other Loan Documents shall be construed to create
an agency, trust or other fiduciary relationship between any of the
Bank Agents and any of the Banks.
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(c) As an independent contractor empowered by the Banks to
exercise certain rights and perform certain duties and
responsibilities hereunder and under the other Loan Documents, each
of the Bank Agents is nevertheless a "representative" of the Banks,
as that term is defined in Article 1 of the Uniform Commercial Code,
for purposes of actions for the benefit of the Banks and each of the
Bank Agents with respect to all collateral security and guaranties
contemplated by the Loan Documents. Such actions include the
designation of either of the Bank Agents as "secured party",
"mortgagee" or the like on all financing statements and other
documents and instruments, whether recorded or otherwise, relating to
the attachment, perfection, priority or enforcement of any security
interests, mortgages or deeds of trust in collateral security
intended to secure the payment or performance of any of the
Obligations, all for the benefit of the Banks and the Bank Agents.
15.2. EMPLOYEES AND AGENTS. Each of the Bank Agents may exercise its
powers and execute its duties by or through employees or agents and shall be
entitled to take, and to rely on, advice of counsel concerning all matters
pertaining to its rights and duties under this Credit Agreement and the other
Loan Documents. Each of the Bank Agents may utilize the services of such Persons
as such Bank Agent in its sole discretion may reasonably determine, and all
reasonable fees and expenses of any such Persons shall be paid by the Borrower.
15.3. NO LIABILITY. Neither the Syndication Agent, the Agent nor any
of their respective shareholders, directors, officers or employees nor any other
Person assisting them in their duties nor any agent or employee thereof, shall
be liable for any waiver, consent or approval given or any action taken, or
omitted to be taken, in good faith by it or them hereunder or under any of the
other Loan Documents, or in connection herewith or therewith, or be responsible
for the consequences of any oversight or error of judgment whatsoever, except
that such Bank Agent or such other Person, as the case may be, may be liable for
losses due to its willful misconduct or gross negligence.
15.4. NO REPRESENTATIONS. Neither of the Bank Agents shall be
responsible for the execution or validity or enforceability of this Credit
Agreement, the Revolving Credit Notes, the Letters of Credit, any of the other
Loan Documents, or for any recitals or statements, warranties or representations
made herein or in any of the other Loan Documents or in any certificate or
instrument hereafter furnished to it by or on behalf of the Borrower or any of
its Subsidiaries, or be bound to ascertain or inquire as to the performance or
observance of any of the terms, conditions, covenants or agreements herein or to
inspect any of the properties, books or records of the Borrower or any of its
Subsidiaries. Neither of the Bank Agents shall be bound to ascertain whether any
notice, consent, waiver or request delivered to it by the Borrower or any holder
of any of the Revolving Credit Notes shall have been duly authorized or is true,
accurate and complete. Neither of the Bank Agents has made nor does it now make
any representations or warranties, express or
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implied, nor does it assume any liability to the Banks, with respect to the
credit worthiness or financial conditions of the Borrower or any of its
Subsidiaries. Each Bank acknowledges that it has, independently and without
reliance upon either of the Bank Agents or any other Bank, and based upon such
information and documents as it has deemed appropriate, made its own credit
analysis and decision to enter into this Credit Agreement.
15.5. PAYMENTS.
15.5.1. PAYMENTS TO AGENT. A payment by the Borrower to the
Agent hereunder or any of the other Loan Documents for the account of
any Bank shall constitute a payment to such Bank. The Agent agrees
promptly to distribute to each Bank such Bank's pro rata share of
payments received by the Agent for the account of the Banks except as
otherwise expressly provided herein or in any of the other Loan
Documents.
15.5.2. DISTRIBUTION BY AGENT. If in the opinion of the
Agent the distribution of any amount received by it in such capacity
hereunder, under the Revolving Credit Notes or under any of the other
Loan Documents might involve it in liability, it may refrain from
making distribution until its right to make distribution shall have
been adjudicated by a court of competent jurisdiction. If a court of
competent jurisdiction shall adjudge that any amount received and
distributed by the Agent is to be repaid, each Person to whom any
such distribution shall have been made shall either repay to the
Agent its proportionate share of the amount so adjudged to be repaid
or shall pay over the same in such manner and to such Persons as
shall be determined by such court.
15.5.3. DELINQUENT BANKS. Notwithstanding anything to the
contrary contained in this Credit Agreement or any of the other Loan
Documents, any Bank that fails (a) to make available to the Agent its
pro rata share of any Revolving Credit Loan or to purchase any Letter
of Credit Participation or (b) to comply with the provisions of
Section 14 with respect to making dispositions and arrangements with
the other Banks, where such Bank's share of any payment received,
whether by setoff or otherwise, is in excess of its pro rata share of
such payments due and payable to all of the Banks, in each case as,
when and to the full extent required by the provisions of this Credit
Agreement, shall be deemed delinquent (a "Delinquent Bank") and shall
be deemed a Delinquent Bank until such time as such delinquency is
satisfied. A Delinquent Bank shall be deemed to have assigned any and
all payments due to it from the Borrower, whether on account of
outstanding Revolving Credit Loans, Unpaid Reimbursement Obligations,
interest, fees or otherwise, to the remaining nondelinquent Banks for
application to, and reduction of, their respective pro rata shares of
all outstanding Revolving Credit Loans and Unpaid Reimbursement
Obligations. The Delinquent Bank hereby authorizes the Agent to
distribute such payments to the nondelinquent
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Banks in proportion to their respective pro rata shares of all
outstanding Revolving Credit Loans and Unpaid Reimbursement
Obligations. A Delinquent Bank shall be deemed to have satisfied in
full a delinquency when and if, as a result of application of the
assigned payments to all outstanding Revolving Credit Loans and
Unpaid Reimbursement Obligations of the nondelinquent Banks, the
Banks' respective pro rata shares of all outstanding Revolving Credit
Loans and Unpaid Reimbursement Obligations have returned to those in
effect immediately prior to such delinquency and without giving
effect to the nonpayment causing such delinquency.
15.6. HOLDERS OF NOTES. The Agent may deem and treat the payee of any
Revolving Credit Note or the purchaser of any Letter of Credit Participation as
the absolute owner or purchaser thereof for all purposes hereof until it shall
have been furnished in writing with a different name by such payee or by a
subsequent holder, assignee or transferee.
15.7. INDEMNITY. The Banks ratably agree hereby to indemnify and hold
harmless each of the Bank Agents from and against any and all claims, actions
and suits (whether groundless or otherwise), losses, damages, costs, expenses
(including any expenses for either of the Bank Agents has not been reimbursed by
the Borrower as required by Section 16), and liabilities of every nature and
character arising out of or related to this Credit Agreement, the Revolving
Credit Notes, or any of the other Loan Documents or the transactions
contemplated or evidenced hereby or thereby, or either of the Bank Agents'
actions taken hereunder or thereunder, except to the extent that any of the same
shall be directly caused by such Bank Agent's willful misconduct or gross
negligence.
15.8. BANK AGENTS AS BANK. In its individual capacity, NationsBank
and FNBB, as the case may be, shall have the same obligations and the same
rights, powers and privileges in respect to its Commitment and the Revolving
Credit Loans made by it, and as the holder of any of the Revolving Credit Notes
and as the purchaser of any Letter of Credit Participations, as it would have
were it not also a Bank Agent.
15.9. RESIGNATION. Either or both of the Bank Agents may resign at
any time by giving sixty (60) days prior written notice thereof to the Banks,
the Borrower and the other Bank Agent. Upon any such resignation, the Majority
Banks shall have the right to appoint a successor Syndication Agent or Agent, as
the case may be. Unless a Default or Event of Default shall have occurred and be
continuing, such successor Bank Agent shall be reasonably acceptable to the
Borrower. If no successor Bank Agent shall have been so appointed by the
Majority Banks and shall have accepted such appointment within thirty (30) days
after the retiring Bank Agent's giving of notice of resignation, then the
retiring Bank Agent may, on behalf of the Banks, appoint a successor Bank Agent,
which shall be a financial institution having a rating of not less than A or its
equivalent by Standard & Poor's Corporation. Upon the acceptance of any
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appointment as a Bank Agent hereunder by a successor Bank Agent, such successor
Bank Agent shall thereupon succeed to and become vested with all the rights,
powers, privileges and duties of the retiring Bank Agent, and the retiring Bank
Agent shall be discharged from its duties and obligations hereunder. After any
retiring Bank Agent's resignation, the provisions of this Credit Agreement and
the other Loan Documents shall continue in effect for its benefit in respect of
any actions taken or omitted to be taken by it while it was acting as Bank
Agent.
15.10. NOTIFICATION OF DEFAULTS AND EVENTS OF DEFAULT. Each Bank
hereby agrees that, upon learning of the existence of a Default or an Event of
Default, it shall promptly notify the Agent thereof. The Agent hereby agrees
that upon receipt of any notice under this Section 15.10 it shall promptly
notify the other Banks of the existence of such Default or Event of Default.
16. EXPENSES.
The Borrower agrees to pay (a) the reasonable costs of producing and
reproducing this Credit Agreement, the other Loan Documents and the other
agreements and instruments mentioned herein, (b) any taxes (including any
interest and penalties in respect thereto) payable by either of the Bank Agents
or any of the Banks (other than taxes based upon such Bank Agent's or any Bank's
net income) on or with respect to the transactions contemplated by this Credit
Agreement (the Borrower hereby agreeing to indemnify each Bank Agent and each
Bank with respect thereto), (c) the reasonable fees, expenses and disbursements
of the Bank Agents' Special Counsel or any local counsel to the Bank Agents
incurred in connection with the preparation, administration or interpretation of
the Loan Documents and other instruments mentioned herein, each closing
hereunder, and amendments, modifications, approvals, consents or waivers hereto
or hereunder, (d) the fees, expenses and disbursements of the Bank Agents
incurred by the Bank Agents in connection with the preparation, administration
or interpretation of the Loan Documents and other instruments mentioned herein,
and (e) all reasonable out-of-pocket expenses (including without limitation
reasonable attorneys' fees and costs, which attorneys may be employees of any
Bank or either of the Bank Agents, and reasonable consulting, accounting,
appraisal, investment banking and similar professional fees and charges)
incurred by any Bank or either of the Bank Agents in connection with (i) the
enforcement of or preservation of rights under any of the Loan Documents against
the Borrower or any of its Subsidiaries or the administration thereof after the
occurrence of a Default or Event of Default and (ii) any litigation, proceeding
or dispute whether arising hereunder or otherwise, in any way related to any
Bank's or either of the Bank Agents' relationship with the Borrower or any of
its Subsidiaries. The covenants of this Section 16 shall survive payment or
satisfaction of all other Obligations.
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17. INDEMNIFICATION.
The Borrower agrees to indemnify and hold harmless each of the Bank
Agents and the Banks from and against any and all claims, actions and suits
whether groundless or otherwise, and from and against any and all liabilities,
losses, damages and expenses of every nature and character arising out of this
Credit Agreement or any of the other Loan Documents or the transactions
contemplated hereby including, without limitation, (a) any actual or proposed
use by the Borrower or any of its Subsidiaries of the proceeds of any of the
Revolving Credit Loans or Letters of Credit, (b) the Borrower or any of its
Subsidiaries entering into or performing this Credit Agreement or any of the
other Loan Documents or (c) with respect to the Borrower and its Subsidiaries
and their respective properties and assets, the violation of any Environmental
Law, the presence, disposal, escape, seepage, leakage, spillage, discharge,
emission, release or threatened release of any Hazardous Substances or any
action, suit, proceeding or investigation brought or threatened with respect to
any Hazardous Substances (including, but not limited to, claims with respect to
wrongful death, personal injury or damage to property), in each case including,
without limitation, the reasonable fees and disbursements of counsel and
allocated costs of internal counsel incurred in connection with any such
investigation, litigation or other proceeding. In litigation, or the preparation
therefor, the Banks and the Bank Agents shall be entitled to select their own
counsel and, in addition to the foregoing indemnity, the Borrower agrees to pay
promptly the reasonable fees and expenses of such counsel. If, and to the extent
that the obligations of the Borrower under this Section 17 are unenforceable for
any reason, the Borrower hereby agrees to make the maximum contribution to the
payment in satisfaction of such obligations which is permissible under
applicable law. The covenants contained in this Section 17 shall survive payment
or satisfaction in full of all other Obligations.
18. SURVIVAL OF COVENANTS, ETC.
All covenants, agreements, representations and warranties made
herein, in the Revolving Credit Notes, in any of the other Loan Documents or in
any documents or other papers delivered by or on behalf of the Borrower or any
of its Subsidiaries pursuant hereto shall be deemed to have been relied upon by
the Banks and the Bank Agent, notwithstanding any investigation heretofore or
hereafter made by any of them, and shall survive the making by the Banks of any
of the Revolving Credit Loans and the issuance, extension or renewal of any
Letters of Credit, as herein contemplated, and shall continue in full force and
effect so long as any Letter of Credit or any amount due under this Credit
Agreement or the Revolving Credit Notes or any of the other Loan Documents
remains outstanding or any Bank has any obligation to make any Revolving Credit
Loans or the Agent has any obligation to issue, extend or renew any Letter of
Credit, and for such further time as may be otherwise expressly
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specified in this Credit Agreement. All statements contained in any certificate
or other paper delivered to any Bank or the Agent at any time by or on behalf of
the Borrower or any of its Subsidiaries pursuant hereto or in connection with
the transactions contemplated hereby shall constitute representations and
warranties by the Borrower or such Subsidiary hereunder.
19. ASSIGNMENT AND PARTICIPATION; ACCESSION.
19.1. CONDITIONS TO ASSIGNMENT AND ACCESSION.
19.1.1. ASSIGNMENT BY BANKS. Except as provided herein,
each Bank may assign to one or more Eligible Assignees all or a
portion of its interests, rights and obligations under this Credit
Agreement (including all or a portion of its Commitment Percentage
and Commitment and the same portion of the Revolving Credit Loans at
the time owing to it, the Revolving Credit Notes held by it and its
participating interest in the risk relating to any Letters of
Credit); provided that (a) each of the Agent and, unless a Default or
Event of Default shall have occurred and be continuing, the Borrower
shall have given its prior written consent to such assignment, which
consent, in the case of each of the Agent and the Borrower, will not
be unreasonably withheld; provided, however, for an assignment by a
Bank to its affiliate the consent of the Agent and the Borrower shall
not be required; (b) each such assignment shall be of a constant, and
not a varying, percentage of all the assigning Bank's rights and
obligations under this Credit Agreement, and each assignment shall be
in an amount that is a whole multiple of $5,000,000, (d) the parties
to such assignment shall execute and deliver to the Agent, for
recording in the Register (as hereinafter defined), an Assignment and
Acceptance, substantially in the form of Exhibit D hereto (an
"Assignment and Acceptance"), together with any Revolving Credit
Notes subject to such assignment. Upon such execution, delivery,
acceptance and recording, from and after the effective date specified
in each Assignment and Acceptance, which effective date shall be at
least five (5) Business Days after the execution thereof, (i) the
assignee thereunder shall be a party hereto and, to the extent
provided in such Assignment and Acceptance, have the rights and
obligations of a Bank hereunder, and (ii) the assigning Bank shall,
to the extent provided in such assignment and upon payment to the
Agent of the registration fee referred to in Section 19.3, be
released from its obligations under this Credit Agreement.
19.1.2. ACCESSION. Except as otherwise provided herein,
Eligible Assignees (each such Eligible Assignee, an "Acceding Bank")
may, at the request of the Borrower and with the consent of the Bank
Agents, become party to this Credit Agreement by entering into an
Instrument of Accession in substantially the form of Exhibit E hereto
(an "Instrument of Accession") with the Borrower and the Bank Agents
and assuming thereunder a Commitment, in an amount to be agreed upon
by the Borrower, such Acceding Bank and the Bank Agents, to make
Revolving
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Credit Loans and participate in the risk relating to the Letters of
Credit pursuant to the terms hereof, and the Total Commitment shall
thereupon be increased by the amount of such Acceding Bank's
Commitment; provided, however, that (a) each of the Bank Agents shall
have given its prior written consent to such accession, and (b) in no
event shall the Total Commitment be increased under any one or more
of such Instruments of Accession so as to exceed, in the aggregate,
$150,000,000. On the effective date specified in any Instrument of
Accession, Schedule 1 hereto shall be deemed to be amended to reflect
(a) the name, address, Commitment and Commitment Percentage of such
Acceding Bank, (b) the Total Commitment as increased by such Acceding
Bank's Commitment, and (c) the changes to the other Banks' respective
Commitment Percentages and any changes to the other Banks' respective
Commitments (in the event such Bank is also the Acceding Bank)
resulting from such assumption and such increased Total Commitment.
19.2. CERTAIN REPRESENTATIONS AND WARRANTIES; LIMITATIONS; COVENANTS.
By executing and delivering an Assignment and Acceptance or Instrument of
Accession, as the case may be, the parties to the assignment and Instrument of
Accession, as the case may be, thereunder confirm to and agree with each other
and the other parties hereto as follows:
(a) other than the representation and warranty that it is
the legal and beneficial owner of the interest being assigned (in the
case of an Assignment and Acceptance) thereby free and clear of any
adverse claim, the assigning Bank makes no representation or
warranty, express or implied, and assumes no responsibility with
respect to any statements, warranties or representations made in or
in connection with this Credit Agreement or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of this
Credit Agreement, the other Loan Documents or any other instrument or
document furnished pursuant hereto or the attachment, perfection or
priority of any security interest or mortgage,
(b) the assigning Bank makes no representation or warranty
and assumes no responsibility with respect to the financial condition
of the Borrower and its Subsidiaries or any other Person primarily or
secondarily liable in respect of any of the Obligations, or the
performance or observance by the Borrower and its Subsidiaries or any
other Person primarily or secondarily liable in respect of any of the
Obligations of any of their obligations under this Credit Agreement
or any of the other Loan Documents or any other instrument or
document furnished pursuant hereto or thereto;
73
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(c) such assignee or Acceding Bank, as the case may be,
confirms that it has received a copy of this Credit Agreement,
together with copies of the most recent financial statements referred
to in Section 7.4 and Section 8.4 and such other documents and
information as it has deemed appropriate to make its own credit
analysis and decision to enter into such Assignment and Acceptance or
Instrument of Accession, as the case may be;
(d) such assignee or Acceding Bank, as the case may be,
will, independently and without reliance upon the assigning Bank,
either of the Bank Agents or any other Bank and based on such
documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking
action under this Credit Agreement;
(e) such assignee or Acceding Bank, as the case may be,
represents and warrants that it is an Eligible Assignee;
(f) such assignee or Acceding Bank, as the case may be,
appoints and authorizes each of the Bank Agents to take such action
as agent on its behalf and to exercise such powers under this Credit
Agreement and the other Loan Documents as are delegated to such Bank
Agent by the terms hereof or thereof, together with such powers as
are reasonably incidental thereto;
(g) such assignee or Acceding Bank, as the case may be,
agrees that it will perform in accordance with their terms all of the
obligations that by the terms of this Credit Agreement are required
to be performed by it as a Bank;
(h) such assignee or Acceding Bank, as the case may be,
represents and warrants that it is legally authorized to enter into
such Assignment and Acceptance or Instrument of Accession, as the
case may be; and
(i) such assignee acknowledges that it has made
arrangements with the assigning Bank satisfactory to such assignee
with respect to its pro rata share of Letter of Credit Fees in
respect of outstanding Letters of Credit.
19.3. REGISTER. The Agent shall maintain a copy of each Assignment
and Acceptance and Instrument of Accession delivered to it and a register or
similar list (the "Register") for the recordation of the names and addresses of
the Banks and the Commitment Percentage of, and principal amount of the
Revolving Credit Loans owing to and Letter of Credit Participations purchased
by, the Banks from time to time. The entries in the Register shall be
conclusive, in the absence of manifest error, and the Borrower, each of the Bank
Agents and the Banks may treat each Person whose name is recorded in the
Register as a Bank hereunder for all purposes of this Credit Agreement. The
Register shall
74
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be available for inspection by the Borrower and the Banks at any reasonable time
and from time to time upon reasonable prior notice. Upon each such recordation,
the assigning Bank agrees to pay to the Agent a registration fee in the sum of
$3,500.
19.4 NEW NOTES. Upon its receipt of an Assignment and Acceptance or
Instrument of Accession, as the case may be, executed by the parties to such
assignment, together with each Revolving Credit Note subject to such assignment,
the Agent shall (a) record the information contained therein in the Register,
and (b) give prompt notice thereof to the Borrower and the Banks (other than the
assigning Bank). Within five (5) Business Days after receipt of such notice, the
Borrower, at its own expense, shall execute and deliver to the Agent, in
exchange for each surrendered Revolving Credit Note, a new Revolving Credit Note
to the order of such Eligible Assignee or Acceding Bank, as the case may be, in
an amount equal to the amount assumed by such Eligible Assignee or Acceding
Bank, as the case may be, pursuant to such Assignment and Acceptance or
Instrument of Accession and, in the event of an assignment, if the assigning
Bank has retained some portion of its obligations hereunder, a new Revolving
Credit Note to the order of the assigning Bank in an amount equal to the amount
retained by it hereunder. Such new Revolving Credit Notes shall provide that
they are replacements for the surrendered Revolving Credit Notes, shall be in an
aggregate principal amount equal to the aggregate principal amount of the
surrendered Revolving Credit Notes, shall be dated the effective date of such in
Assignment and Acceptance and shall otherwise be substantially the form of the
assigned Revolving Credit Notes. Within five (5) days of issuance of any new
Revolving Credit Notes pursuant to this Section 19.4, the Borrower shall deliver
an opinion of counsel, addressed to the Banks and each of the Bank Agents,
relating to the due authorization, execution and delivery of such new Revolving
Credit Notes and the legality, validity and binding effect thereof, in form and
substance satisfactory to the Banks. The surrendered Revolving Credit Notes
shall be cancelled and returned to the Borrower.
19.5. PARTICIPATIONS. Each Bank may sell participations to one or
more banks or other entities in all or a portion of such Bank's rights and
obligations under this Credit Agreement and the other Loan Documents; provided
that (a) each such participation shall be in an amount of not less than
$2,500,000, (b) any such sale or participation shall not affect the rights and
duties of the selling Bank hereunder to the Borrower and (c) the only rights
granted to the participant pursuant to such participation arrangements with
respect to waivers, amendments or modifications of the Loan Documents shall be
the rights to approve waivers, amendments or modifications that would reduce the
principal of or the interest rate on any Revolving Credit Loans, extend the term
or increase the amount of the Commitment of such Bank as it relates to such
participant, reduce the amount of any Commitment Fees or Letter of Credit Fees
to which such participant is entitled or extend any regularly scheduled payment
date for principal or interest.
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19.6. DISCLOSURE. The Borrower agrees that in addition to disclosures
made in accordance with standard and customary banking practices any Bank may
disclose information obtained by such Bank pursuant to this Credit Agreement to
assignees or participants and potential assignees or participants hereunder;
provided that such assignees or participants or potential assignees or
participants shall agree (a) to treat in confidence such information unless such
information otherwise becomes public knowledge, (b) not to disclose such
information to a third party, except as required by law or legal process and (c)
not to make use of such information for purposes of transactions unrelated to
such contemplated assignment or participation.
19.7. ASSIGNEE OR PARTICIPANT AFFILIATED WITH THE BORROWER. If any
assignee Bank or Acceding Bank is an Affiliate of the Borrower, then any such
assignee Bank or Acceding Bank shall have no right to vote as a Bank hereunder
or under any of the other Loan Documents for purposes of granting consents or
waivers or for purposes of agreeing to amendments or other modifications to any
of the Loan Documents or for purposes of making requests to the Agent pursuant
to Section 13.1 or Section 13.2, and the determination of the Majority Banks
shall for all purposes of this Credit Agreement and the other Loan Documents be
made without regard to such assignee Bank's or Acceding Bank's interest in any
of the Revolving Credit Loans. If any Bank sells a participating interest in any
of the Revolving Credit Loans or Reimbursement Obligations to a participant, and
such participant is the Borrower or an Affiliate of the Borrower, then such
transferor Bank shall promptly notify the Agent of the sale of such
participation. A transferor Bank shall have no right to vote as a Bank hereunder
or under any of the other Loan Documents for purposes of granting consents or
waivers or for purposes of agreeing to amendments or modifications to any of the
Loan Documents or for purposes of making requests to the Agent pursuant to
Section 13.1 or Section 13.2 to the extent that such participation is
beneficially owned by the Borrower or any Affiliate of the Borrower, and the
determination of the Majority Banks shall for all purposes of this Credit
Agreement and the other Loan Documents be made without regard to the interest of
such transferor Bank in the Revolving Credit Loans to the extent of such
participation.
19.8. MISCELLANEOUS ASSIGNMENT PROVISIONS. Any assigning Bank shall
retain its rights to be indemnified pursuant to Section 16 with respect to any
claims or actions arising prior to the date of such assignment. If any assignee
Bank or Acceding Bank is not incorporated under the laws of the United States of
America or any state thereof, it shall, prior to the date on which any interest
or fees are payable hereunder or under any of the other Loan Documents for its
account, deliver to the Borrower and the Agent certification as to its exemption
from deduction or withholding of any United States federal income taxes. If any
Reference Bank transfers all of its interest, rights and obligations under this
Credit Agreement, the Agent shall, in consultation with the Borrower and with
the consent of the Borrower and the Majority Banks, appoint another Bank to
76
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act as a Reference Bank hereunder. Anything contained in this Section 19 to the
contrary notwithstanding, any Bank may at any time pledge all or any portion of
its interest and rights under this Credit Agreement (including all or any
portion of its Revolving Credit Notes) to any of the twelve Federal Reserve
Banks organized under Section 4 of the Federal Reserve Act, 12 U.S.C. Section
341. No such pledge or the enforcement thereof shall release the pledgor Bank
from its obligations hereunder or under any of the other Loan Documents.
19.9. ASSIGNMENT BY BORROWER. The Borrower shall not assign or
transfer any of its rights or obligations under any of the Loan Documents
without the prior written consent of each of the Banks.
20. NOTICES, ETC.
Except as otherwise expressly provided in this Credit Agreement, all
notices and other communications made or required to be given pursuant to this
Credit Agreement or the Revolving Credit Notes or any Letter of Credit
Applications shall be in writing and shall be delivered in hand, mailed by
United States registered or certified first class mail, postage prepaid, sent by
overnight courier, or sent by telegraph, telecopy, facsimile or telex and
confirmed by delivery via courier or postal service, addressed as follows:
(a) if to the Borrower, at 8105 Irvine Center Drive,
Irvine, California 92718, Attention: Mr. Duston Williams, or at such
other address for notice as the Borrower shall last have furnished in
writing to the Person giving the notice;
(b) if to the Agent, at 100 Federal Street, Boston,
Massachusetts 02110, USA, Attention: High Technology Division, with a
copy to 435 Tasso Street, Suite 250, Palo Alto, California 94301,
USA, Attention: Maia D. Heymann, Vice President, or such other
address for notice as the Agent shall last have furnished in writing
to the Person giving the notice;
(c) if to the Syndication Agent, at 901 Main Street, 67th
Floor, Dallas, Texas 75283-1000, USA, Attention: William C. Collins,
Senior Vice President, or such other address for notice as the
Syndication Agent shall last have furnished in writing to the Person
giving the notice; and
(d) if to any Bank, at such Bank's address set forth on
Schedule 1 hereto, or such other address for notice as such Bank
shall have last furnished in writing to the person giving the notice.
Any such notice or demand shall be deemed to have been duly given or
made and to have become effective (i) if delivered by hand, overnight courier or
facsimile to a responsible officer of the party to which it is directed, at the
time of the receipt thereof by such officer or the sending of such facsimile and
(ii) if sent by registered or certified first-class mail, postage prepaid, on
the third Business Day following the mailing thereof.
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21. GOVERNING LAW.
THIS CREDIT AGREEMENT AND, EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED
THEREIN, EACH OF THE OTHER LOAN DOCUMENTS ARE CONTRACTS UNDER THE LAWS OF THE
STATE OF NEW YORK AND SHALL FOR ALL PURPOSES BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE LAWS OF SAID STATE OF NEW YORK (EXCLUDING THE LAWS APPLICABLE TO
CONFLICTS OR CHOICE OF LAW). THE BORROWER AGREES THAT ANY SUIT FOR THE
ENFORCEMENT OF THIS CREDIT AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS MAY BE
BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR ANY FEDERAL COURT SITTING
THEREIN AND CONSENTS TO THE NONEXCLUSIVE JURISDICTION OF SUCH COURT AND SERVICE
OF PROCESS IN ANY SUCH SUIT BEING MADE UPON THE BORROWER BY MAIL AT THE ADDRESS
SPECIFIED IN SECTION20. THE BORROWER HEREBY WAIVES ANY OBJECTION THAT IT MAY NOW
OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH SUIT OR ANY SUCH COURT OR THAT SUCH
SUIT IS BROUGHT IN AN INCONVENIENT COURT.
22. HEADINGS.
The captions in this Credit Agreement are for convenience of
reference only and shall not define or limit the provisions hereof.
23. COUNTERPARTS.
This Credit Agreement and any amendment hereof may be executed in
several counterparts and by each party on a separate counterpart, each of which
when executed and delivered shall be an original, and all of which together
shall constitute one instrument. In proving this Credit Agreement it shall not
be necessary to produce or account for more than one such counterpart signed by
the party against whom enforcement is sought.
24. ENTIRE AGREEMENT, ETC.
The Loan Documents and any other documents executed in connection
herewith or therewith express the entire understanding of the parties with
respect to the transactions contemplated hereby. Neither this Credit Agreement
nor any term hereof may be changed, waived, discharged or terminated, except as
provided in Section 26.
25. WAIVER OF JURY TRIAL.
Each of the Borrower and the Banks hereby waives its right to a jury
trial with respect to any action or claim arising out of any dispute in
connection with this Credit Agreement, the Revolving Credit Notes or any of the
other Loan Documents, any rights or obligations hereunder or thereunder or the
78
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performance of which rights and obligations. Except as prohibited by law, the
Borrower hereby waives any right it may have to claim or recover in any
litigation referred to in the preceding sentence any special, exemplary,
punitive or consequential damages or any damages other than, or in addition to,
actual damages. The Borrower (a) certifies that no representative, agent or
attorney of any Bank or either of the Bank Agents has represented, expressly or
otherwise, that such Bank or such Bank Agent would not, in the event of
litigation, seek to enforce the foregoing waivers and (b) acknowledges that each
of the Bank Agents and the Banks have been induced to enter into this Credit
Agreement, the other Loan Documents to which it is a party by, among other
things, the waivers and certifications contained herein.
26. CONSENTS, AMENDMENTS, WAIVERS, ETC.
Any consent or approval required or permitted by this Credit
Agreement to be given by all of the Banks may be given, and any term of this
Credit Agreement, the other Loan Documents or any other instrument related
hereto or mentioned herein may be amended, and the performance or observance by
the Borrower or any of its Subsidiaries of any terms of this Credit Agreement,
the other Loan Documents or such other instrument or the continuance of any
Default or Event of Default may be waived (either generally or in a particular
instance and either retroactively or prospectively) with, but only with, the
written consent of the Borrower and the written consent of the Majority Banks.
Notwithstanding the foregoing, the rate of interest on the Revolving Credit
Notes (other than interest accruing pursuant to Section 5.11.2 following the
effective date of any waiver by the Majority Banks of the Default or Event of
Default relating thereto), the term of the Revolving Credit Notes, the date
fixed for payment of any amounts owing pursuant to this Credit Agreement or the
other Loan Documents, the release of any of the Guarantors or all or
substantially all of any collateral held by the Agent for the benefit of the
Banks, the amount of the Commitments of the Banks (other than changes which are
contemplated and permitted by Section 19.1.2 hereof), and the amount of
Commitment Fee or Letter of Credit fees hereunder may not be changed without the
written consent of the Borrower and the written consent of each Bank; the
definition of Majority Banks may not be amended without the written consent of
all of the Banks; the amount of the administrative fee or any Letter of Credit
fees payable for the Agent's account may not be amended without the consent of
the Agent and Section 16 may not be amended without the written consent of the
Bank Agents. No waiver shall extend to or affect any obligation not expressly
waived or impair any right consequent thereon. No course of dealing or delay or
omission on the part of either of the Bank Agents or any Bank in exercising any
right shall operate as a waiver thereof or otherwise be prejudicial thereto. No
notice to or demand upon the Borrower shall entitle the Borrower to other or
further notice or demand in similar or other circumstances.
79
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27. SEVERABILITY.
The provisions of this Credit Agreement are severable and if any one
clause or provision hereof shall be held invalid or unenforceable in whole or in
part in any jurisdiction, then such invalidity or unenforceability shall affect
only such clause or provision, or part thereof, in such jurisdiction, and shall
not in any manner affect such clause or provision in any other jurisdiction, or
any other clause or provision of this Credit Agreement in any jurisdiction.
80
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IN WITNESS WHEREOF, the undersigned have duly executed this Credit
Agreement as a sealed instrument as of the date first set forth above.
WESTERN DIGITAL CORPORATION
By: /s/ D. Scott Mercer
-------------------------------
Name: D. Scott Mercer
Title: Chief Financial and
Administrative Officer
NATIONSBANK OF TEXAS, N.A.,
individually and as Syndication
Agent
By: /s/ William C. Collins
-------------------------------
William C. Collins
Senior Vice President
THE FIRST NATIONAL BANK OF BOSTON,
individually and as Agent
By: /s/ Jay L. Massino
-------------------------------
Name: Jay L. Massino
Vice President
UNION BANK OF CALIFORNIA, N.A.
By: /s/ Scott Lance
-------------------------------
Name: Scott Lance
Title: Vice President
BANQUE NATIONALE de PARIS
By: /s/ Clive Bettles
-------------------------------
Name: Clive Bettles
Title: SVP and Manager
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By: /s/ Tjalling Terpstra
-------------------------------
Name: Tjalling Terpstra
Title: Vice President
THE BANK OF NOVA SCOTIA
By: /s/ J.S. York
-------------------------------
Name: J.S. York
Title: Vice President
FLEET NATIONAL BANK
By: /s/ [Signature]
-------------------------------
Name:
Title:
82
Schedule 1
Commitments; Commitment Percentages
COMMITMENT
BANK COMMITMENT PERCENTAGE
NationsBank of Texas, N.A. $ 30,750,000 23.6538%
Domestic Lending Office:
901 Main Street, 67th Floor
Dallas, TX 75283-1000
Attn: Lori Stone, Vice President
Eurodollar Lending Office:
Same as Above
The First National Bank of Boston $ 30,750,000 23.6538%
Domestic Lending Office
100 Federal Street
Boston, MA 02110
Attn: High Technology Division
Eurodollar Lending Office:
Same as Above
Fleet National Bank $ 20,000,000 15.3846%
Domestic Lending Office
One Federal Street
Boston, MA 02211
Attn: Frank Benesh, Managing Director
Eurodollar Lending Office:
Same as Above
Union Bank of California, N.A. $ 18,500,000 14.2308%
Domestic Lending Office:
550 South Hope Street, 5th Floor
Los Angeles, CA 90071
Attn: Scott Lane, Vice President
Eurodollar Lending Office:
Same as Above
Banque Nationale de Paris $ 15,000,000 11.5385%
Domestic Lending Office
725 Figueroa Street
Los Angeles, CA 90017
Attn: Mr. Tjalling Terpstra
Eurodollar Lending Office:
Same as Above
The Bank of Nova Scotia $ 15,000,000 11.5385%
Domestic Lending Office:
580 California Street, Suite 2100
San Francisco, CA 94104
Attn: Werner Tillinger, Relationship
Manager
Eurodollar Lending Office:
Same as Above
83
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Totals $130,000,000 100%
84
SCHEDULE 7.3
TITLES TO PROPERTIES
(None)
[WESTERN DIGITAL LOGO]
85
Schedule 7.7
Litigation
1. Rodime plc
On December 14, 1994, Rodime plc ("Rodime") filed suit against the
Company, asserting that one of its United States patents which relates to
3.5-inch disk drives is infringed by the Company's disk drive products. Rodime
had previously offered to grant the Company a royalty bearing license under
this and other Rodime patents. On April 11, 1994, in another case involving
this patent which was brought by Quantum Corporation, the court granted
Quantum's motion for summary judgment, finding certain key claims of the patent
in question to be invalid. On September 22, 1995, the Quantum decision was
upheld by the Federal Circuit Court of Appeals, and Rodime's petition for
rehearing has been denied. Rodime has filed a petition for writ of certiorari
with the U.S. Supreme Court, which has not yet determined if it will hear the
case. If the Court of Appeals' decision is not reversed by the Supreme Court,
the substantial portion of the claims in the Rodime suit against the Company
will be dismissed.
2. Amstrad plc
The Company was sued by Amstrad plc ("Amstrad") on December 4, 1992, in
Orange County Superior Court. The complaint alleged that disk drives supplied
to Amstrad by the Company in 1988 and 1989 were defective and caused damages to
Amstrad of not less than $186 million. The suit also seeks punitive damages.
The Company has denied the material allegations of the complaint and
has filed cross-claims against Amstrad. Substantial discovery in the case is
currently being conducted. A tentative trial date of February 18, 1997, has
been established by the court.
The Company's E&O insurance carrier has acknowledged its responsibility
to defend the case and to afford coverage. The policy limits, however, are well
below the amount of damages sought by Amstrad.
86
[WESTERN DIGITAL LOGO]
SCHEDULE 7.14
TRANSACTIONS WITH AFFILIATES
Loan to Employee
Roger Johnson (Former Employee) $500,000
Glenn Josephson (Former Employee) $ 75,971
John Porcelli $ 8,300
Ron Sinclair $ 86,774
--------
$671,045
========
[WESTERN DIGITAL LOGO]
87
SCHEDULE 7.17(d)
Environmental Compliance
1. Redhill Facility
In January 1991, Riedel Environmental Services removed a 2,000 gallon
underground storage tank (UST) and four underground concrete clarifiers from
the site. According to Riedel's report, Underground Storage Tank Closure Report
for 3128 Redhill Avenue, Costa Mesa, CA Permit #92-013, dated April 1992, the
work was accomplished in accordance with city, county, state and federal
regulations. Soil samples were collected from approximately 2 feet below the
bottoms of the former locations of the UST, the sump associated with the UST,
and each of the four clarifiers. The report indicates that the soils below the
former locations of the UST and clarifiers were minimally impacted by
chemicals; the report also describes the excavation and disposal of the
impacted soil.
In August 1994, Western Digital retained Harding Lawson Associates to conduct
investigation and closure of a potential groundwater issue at the above site.
On August 25, 1994, HLA submitted a workplan to the REGIONAL WATER QUALITY
CONTROL BOARD (RWQCB), Santa Ana Region, for additional site characterization.
The RWQCB approved HLA's workplan on October 20, 1994. On February 3, 1995, the
Final Report on additional Site Characterization was submitted to RWQCB
requesting formal closure of the above site.
During a November 1995 meeting with RWQCB, a report from a previous
investigation was made available for review. The report, performed for the U.S.
Environmental Protection Agency (EPA) Regional IX by URS Consultants, Inc.
(URS) in April, 1992, titled CERCLA Site Inspection Report, Western Digital
Corporation, 3128 Red Hill Avenue, Costa Mesa, CA, identified two historical
features previously unknown to Western Digital and HLA.
In November, 1995, HLA submitted a workplan to the RWQCB for additional site
investigation. The workplan was approved by the regional board in January, 1996.
All site investigation was completed in March 1996. Western Digital is reviewing
the Draft report at this time. The Final report will be submitted to RWQCB by
May, 1996.
Based on the result from the last round of investigation, Western Digital
Corporation intends to request a formal closure of the above site from the
RWQCB.
88
Schedule 7.18(a)
Subsidiaries
Date of
Jurisdiction of Incorporation or
Name of Subsidiary Incorporation Acquisition
Selanar Corporation (**) California 07/03/87
Selanar GmbH (**, 1) Germany 07/03/87
Western Digital Canada Corporation Ontario, Canada 01/14/87
Western Digital Capital Corporation Delaware 12/30/93
Western Digital CSG Corporation Delaware 03/01/96
Western Digital (Deutschland) GmbH Germany 06/27/83
Western Digital Europe (**) California 04/20/87
Western Digital (France) SARL (2) France 01/28/86
Western Digital Hong Kong Limited (3) Hong Kong 11/20/87
Western Digital Ireland, Ltd. Cayman Islands 04/12/83
Western Digital (I.S.) Limited (6) Ireland 03/24/94
Western Digital Japan Ltd. Japan 07/23/84
Western Digital (Malaysia) SDN BHD Malaysia 11/12/73
Western Digital Netherlands B.V. The Netherlands 11/29/89
Western Digital Pacific Corporation (**) California 12/13/85
Western Digital Rochester, Inc. (**) Delaware 11/28/94
Western Digital (S.E. Asia) Pte Ltd. Singapore 02/12/90
Western Digital (Singapore) Pte Ltd. (4) Singapore 10/16/87
Western Digital Taiwan Co., Ltd. (5) Taiwan, R.O.C. 06/07/88
Western Digital (Taus - Singapore) Pte
Ltd.(7) Singapore 08/21/95
Western Digital (U.K.) Limited England 06/24/84
(**) Inactive
(1) Subsidiary of Selanar Corporation; merged into Western Digital
Deutschland GmbH in process in 10/95; change method to mandatory
cancellation 5/96.
(2) Subsidiary of Western Digital Corporation ("WDC" (999 shares) and
Western Digital (U.K.) Limited ("WDUK")(1 share).
(3) Subsidiary of WDC and WDUK (1 share each) (WDUK holds share in trust
for WDC)
(4) Subsidiary of Western Digital Ireland, Ltd. ("WDIL")
(5) WDC is majority shareholder; one share owned by Western Digital Canada
Corporation, WDUK, Selanar Corporation, Western Digital (Malaysia) SDN
BHD, Western Digital Europe and Western Digital Pacific Corporation
(6) Subsidiary of WDC and Western Digital Ireland, Ltd. (1 share each)
(7) Subsidiary of Western Digital (Singapore) Pte Ltd. (in turn owned by
WDIL)
89
SCHEDULE 7.18(b)
JOINT VENTURES
(None)
[WESTERN DIGITAL LOGO]
90
Schedule 7.22
[ACORD LOGO] CERTIFICATE OF INSURANCE ISSUE DATE (MM/DD/YY)
04/12/96
THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO
RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AMEND, EXTEND OR
PRODUCER ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW.
JOHNSON & HIGGINS OF CA
695 TOWN CENTER DRIVE, SUITE 700 COMPANIES AFFORDING COVERAGE
COSTA MESA, CA 92626
PH. 714/641-8899 COMPANY LETTER A ST. PAUL FIRE & MARINE INS. CO.
FAX 714/979-0797
COMPANY LETTER B
INSURED
WESTERN DIGITAL CORPORATION COMPANY LETTER C
8105 IRVINE CENTER DRIVE
IRVINE, CA 92718-2902 COMPANY LETTER D
ATTN: STEPHEN PAGE COMPANY LETTER E
- ----------------------------------------------------------------------------------------------------------------------------------
COVERAGES
THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD
INDICATED, NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS
CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS,
EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS.
POLICY
EXPIRATION
CO POLICY POLICY EFFECTIVE DATE
LTR TYPE OF INSURANCE NUMBER DATE (MM/DD/YY) (MM/DD/YY) LIMITS
- ----------------------------------------------------------------------------------------------------------------------------------
GENERAL LIABILITY GENERAL AGGREGATE $2,000,000.
A X COMMERCIAL GENERAL LIABILITY PRODUCTS-COMP/OP AGG. $2,000,000.
CLAIMS MADE X OCCUR. TE09401580 07/01/95 07/01/96 PERSONAL & ADV. INJURY $1,000,000.
OWNER'S & CONTRACTOR'S PROT. EACH OCCURRENCE $1,000,000.
FIRE DAMAGE
(Any one fire) $1,000,000.
MED. EXPENSE
(Any one person) $ 5,000.
- ----------------------------------------------------------------------------------------------------------------------------------
AUTOMOBILE LIABILITY COMBINED SINGLE LIMIT $1,000,000.
A X ANY AUTO TE09401580 07/01/95 07/01/96 BODILY INJURY $
(Per Person)
ALL OWNED AUTOS
BODILY INJURY $
SCHEDULED AUTOS (Per Accident)
HIRED AUTOS PROPERTY DAMAGE $
GARAGE LIABILITY
- ----------------------------------------------------------------------------------------------------------------------------------
EXCESS LIABILITY EACH OCCURRENCE $20,000,000.
A X UMBRELLA FORM TE09401580 07/01/95 07/01/96 AGGREGATE $20,000,000.
OTHER THAN UMBRELLA FORM
- ----------------------------------------------------------------------------------------------------------------------------------
STATUTORY LIMITS
A WORKER'S COMPENSATION WVA9400155 07/01/95 07/01/96 EACH ACCIDENT $1,000,000.
AND DISEASE-POLICY LIMIT $1,000,000.
EMPLOYERS' LIABILITY DISEASE-EACH EMPLOYEE $1,000,000.
- ----------------------------------------------------------------------------------------------------------------------------------
OTHER
- ----------------------------------------------------------------------------------------------------------------------------------
DESCRIPTION OF OPERATIONS/LOCATIONS/VEHICLES/SPECIAL ITEMS
- ----------------------------------------------------------------------------------------------------------------------------------
CERTIFICATE HOLDER CANCELLATION
EVIDENCE OF COVERAGE SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE
THE EXPIRATION DATE THEREOF, THE ISSUING COMPANY WILL ENDEAVOR TO
MAIL ____ DAYS WRITTEN NOTICE TO THE CERTIFICATE HOLDER NAMED TO
THE LEFT, BUT FAILURE TO MAIL SUCH NOTICE SHALL IMPOSE NO
OBLIGATION OR LIABILITY OF ANY KIND UPON THE COMPANY, ITS AGENTS
OR REPRESENTATIVES.
-----------------------------------------------------------------
AUTHORIZED REPRESENTATIVE
ACCORD 25-S(7/90) (C) ACORD CORPORATION 1990
- ----------------------------------------------------------------------------------------------------------------------------------
91
Schedule 722
- -------------------------------------------------------------------------------
Date (MM/DD/YY)
[ACORD LOGO] EVIDENCE OF PROPERTY INSURANCE / / 12/15/96
THIS IS EVIDENCE THAT INSURANCE AS IDENTIFIED BELOW HAS BEEN ISSUED, IS IN
FORCE, AND CONVEYS ALL THE RIGHTS AND PRIVILEGES AFFORDED UNDER THE POLICY.
- -------------------------------------------------------------------------------
PRODUCER COMPANY
RHH of Northern California Allianz Insurance Company
One Market 3400 Riverside Drive, #300
Spear Street Tower Ste. 2100 Burbank, CA 91505-4569
San Francisco, CA 94105
415-543-9360
CODE SUB-CODE
- -------------------------------------------------------------------------------
INSURED LOAN NUMBER POLICY NUMBER
Western Digital Corporation CLP1025285
P. O. BOX #19665 -----------------------------------------------
8105 Irvine Center Drive EFFECTIVE DATE EXPIRATION DATE CONT. UNTIL
Irvine, CA 92713-9665 (MM/DD/YY) (MM/DD/YY) TERMINATED--
7/01/95 7/01/96 IF CHECKED//
-----------------------------------------------
THIS REPLACES PRIOR EVIDENCE DATED:
- -------------------------------------------------------------------------------
PROPERTY INFORMATION
LOCATION/DESCRIPTION
as filed with company
- -------------------------------------------------------------------------------
COVERAGE INFORMATION
COVERAGE/PERILS/FORMS AMOUNT OF INSURANCE DEDUCTIBLE
- -------------------------------------------------------------------------------
All Risk incl EQ & Flood
$1,000,000,000 Blanket Limit 100,000
Manuscript Form
Covers Buildings, Personal
Property, Rents, Tenants
Improvements & Betterments
Bailer & Machinery,
Business Income
Replacement Cost
- -------------------------------------------------------------------------------
REMARKS (including Special Conditions)
Earthquake sublimit $10,000,000 with 5% TIV Deductible.
Flood sublimit $50,000,000 with $100,000 Deductible.
Ocean Cargo #MC1287 with Lloyd's Underwriters: $4,000,000 Steamer under Deck,
$500,000 Steamer on Deck, $10 mil any one aircraft, $4 mil any one land
convey.
- -------------------------------------------------------------------------------
CANCELLATION
THE POLICY IS SUBJECT TO THE PREMIUMS, FORMS, AND RULES IN EFFECT FOR EACH
POLICY PERIOD. SHOULD THE POLICY BE TERMINATED, THE COMPANY WILL GIVE THE
ADDITIONAL INTEREST IDENTIFIED BELOW 30 DAYS WRITTEN NOTICE, AND WILL SEND
NOTIFICATION OF ANY CHANGES TO THE POLICY THAT WOULD AFFECT THAT INTEREST, IN
ACCORDANCE WITH THE POLICY PROVISIONS OR AS REQUIRED BY LAW.
- -------------------------------------------------------------------------------
ADDITIONAL INTEREST
NAME AND ADDRESS NATURE OF INTEREST
/ / MORTGAGEE / / ADDITIONAL INSURED
To Whom It May Concern
/ / LOSS PAYEE / / OTHER
-----------------
-----------------------------------------------
SIGNATURE OF AUTHORIZED AGENT OF COMPANY
/s/ [SIGNATURE] 346355
ACORD 27 (2/88) (c) ACORD CORPORATION 1985
- -------------------------------------------------------------------------------
92
[WESTERN DIGITAL LOGO]
SCHEDULE 9.1
EXISTING INDEBTEDNESS
(None)
[WESTERN DIGITAL LOGO]
93
[WESTERN DIGITAL LOGO]
SCHEDULE 9.2
EXISTING LIENS
(None)
[WESTERN DIGITAL LOGO]
94
SCHEDULE 9.3
EXISTING INVESTMENTS
(As of 4-15-96)
INVESTMENTS
Investment in Silmag 3,000,000
Investment in San Disk 2,000,000
Investment in Wang 52,366
Investment in JTS 4,100,000
Investment in Censtor 3,000,000
----------
TOTAL INVESTMENTS 12,152,366
95
EXHIBIT A
REVOLVING CREDIT NOTE
$________________ as of April 24, 1996
FOR VALUE RECEIVED, the undersigned WESTERN DIGITAL CORPORATION, a
Delaware corporation (the "Borrower"), hereby promises to pay to the order of
[INSERT NAME OF BANK] (the "Bank") at the Agent's Head Office (as defined in
the Credit Agreement as hereinafter defined):
(a) prior to or on Revolving Credit Loan Maturity Date the
principal amount of [INSERT COMMITMENT AMOUNT] or, if less, the
aggregate unpaid principal amount of Revolving Credit Loans advanced by
the Bank to the Borrower pursuant to the Revolving Credit Agreement
dated as of April 24, 1996 (as amended and in effect from time to time,
the "Credit Agreement"), among the Borrower, the Bank and other parties
thereto;
(b) the principal outstanding hereunder from time to time at the
times provided in the Credit Agreement; and
(c) interest on the principal balance hereof from time to time
outstanding from the Closing Date under the Credit Agreement through and
including the maturity date hereof at the times and at the rate provided
in the Credit Agreement.
This Note evidences borrowings under and has been issued by the
Borrower in accordance with the terms of the Credit Agreement. The Bank and any
holder hereof is entitled to the benefits of the Credit Agreement and the other
Loan Documents, and may enforce the agreements of the Borrower contained
therein, and any holder hereof may exercise the respective remedies provided
for thereby or otherwise available in respect thereof, all in accordance with
the respective terms thereof. All capitalized terms used in this Note and not
otherwise defined herein shall have the same meanings herein as in the Credit
Agreement.
The Borrower irrevocably authorizes the Bank to make or cause to be
made, at or about the time of the Drawdown Date of any Revolving Credit Loan or
at the time of receipt of any payment of principal of this Note, an appropriate
notation on the grid attached to this Note, or the continuation of such grid,
or any other similar record, including computer records, reflecting the making
of such Revolving Credit Loan or (as the case may be) the receipt of such
payment.
96
-2-
The outstanding amount of the Revolving Credit Loans set forth on the grid
attached to this Note, or the continuation of such grid, or any other similar
record, including computer records, maintained by the Bank with respect to any
Revolving Credit Loans shall be prima facie evidence of the principal amount
thereof owning and unpaid to the Bank, but the failure to record, or any error
in so recording, any such amount on any such grid, continuation or other record
shall not limit or otherwise affect the obligation of the Borrower hereunder or
under the Credit Agreement to make payments of principal of and interest on this
Note when due.
The Borrower has the right in certain circumstances and the obligation
under certain other circumstances to prepay the whole or part of the principal
of this Note on the terms and conditions specified in the Credit Agreement.
If any one or more of the Events of Default shall occur, the entire
unpaid principal amount of this Note and all of the unpaid interest accrued
thereon may become or be declared due and payable in the manner and with the
effect provided in the Credit Agreement.
No delay or omission on the part of the Bank or any holder hereof in
exercising any right hereunder shall operate as a waiver of such right or of
any other rights of the Bank or such holder, nor shall any delay, omission or
waiver on any one occasion be deemed a bar or waiver of the same or any other
right on any further occasion.
The Borrower and every endorser and guarantor of this Note or the
obligation represented hereby waives presentment, demand, notice, protest and
all other demands and notices in connection with the delivery, acceptance,
performance, default or enforcement of this Note, and assents to any extension
or postponement of the time of payment or any other indulgence, to any
substitution, exchange or release of collateral and to the addition or release
of any other party or person primarily or secondarily liable.
THIS NOTE AND THE OBLIGATIONS OF THE BORROWER HEREUNDER SHALL FOR ALL
PURPOSES BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF
NEW YORK (EXCLUDING THE LAWS APPLICABLE TO CONFLICTS OR CHOICE OF LAW). THE
BORROWER AGREES THAT ANY SUIT FOR THE ENFORCEMENT OF THIS NOTE MAY BE BROUGHT IN
THE COURTS OF THE STATE OF NEW YORK OR ANY FEDERAL COURT SITTING THEREIN AND
THE CONSENT TO THE NONEXCLUSIVE JURISDICTION OF SUCH COURT AND THE SERVICE OF
PROCESS IN ANY SUCH SUIT BEING MADE UPON THE BORROWER BY MAIL AT THE ADDRESS
SPECIFIED IN SECTION 20 OF THE CREDIT AGREEMENT. THE BORROWER HEREBY WAIVES ANY
OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH SUIT OR
ANY SUCH COURT OF THAT SUCH SUIT IS BROUGHT IN AN INCONVENIENT COURT.
97
-3-
This Note shall be deemed to take effect as a sealed instrument under
the laws of the State of New York.
98
-4-
IN WITNESS WHEREOF, the undersigned has caused this Revolving Credit
Note to be signed in its corporate name and its corporate seal to be impressed
thereon by its duly authorized officer as of the day and year first above
written.
[Corporate Seal]
WESTERN DIGITAL CORPORATION
By:
----------------------------
Title:
99
Amount of Balance of
Amount Principal Paid Principal Notation
Date of Loan or Prepaid Unpaid Made By:
- --------------------------------------------------------------------------------
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
100
EXHIBIT B
FORM OF LOAN REQUEST
----------------
The First National Bank of Boston, as Agent
100 Federal Street
Boston, Massachusetts 02110
Attention: High Technology Division
Re: Loan Request
Ladies and Gentlemen:
Reference is hereby made to that certain Revolving Credit Agreement,
dated as of April 24, 1996 (as the same may be amended and in effect from time
to time, the "Credit Agreement"), by and among Western Digital Corporation (the
"Borrower"), NationsBank of Texas, N.A. ("Nations"), The First National Bank of
Boston ("FNBB"), the other lending institutions party thereto (collectively
with Nations and FNBB, the "Banks"), and NationsBank of Texas, N.A. as
syndication agent for itself and the other Banks (the "Syndication Agent"), and
The First National Bank of Boston as administrative agent for itself and the
other Banks (the "Agent"). Capitalized terms which are used herein without
definition and which are defined in the Credit Agreement shall have the same
meanings herein as in the Credit Agreement.
Pursuant to Section 2.6 of the Credit Agreement, we hereby request
that a Revolving Credit Loan consisting of [a Base Rate Loan in the principal
amount of $________, or a Eurodollar Rate Loan in the principal amount of
$_______ with an Interest Period of _________] be made on ____________ __,
____. We understand that this request is irrevocable and binding on us and
obligates us to accept the requested Revolving Credit Loan on such date.
We hereby certify (a) that the aggregate outstanding principal amount
of the Revolving Credit Loans on today's date is $__________, (b) that we will
use the proceeds of the requested Revolving Credit Loan in accordance with the
provisions of the Credit Agreement, (c) that each of the representations and
warranties contained in the Credit Agreement or in any document or instrument
delivered pursuant to or in connection with the Credit Agreement was true in
all material respects as of the date as of which it was made and is true at and
as of the date hereof (except to the extent of changes resulting
101
The First National Bank of Boston,
as Agent
Page 2
from transactions contemplated or permitted by the Credit Agreement and changes
occurring in the ordinary course of business that singly or in the aggregate
are not materially adverse, and to the extent that such representations and
warranties related expressly to an earlier date) and (d) that no Default or
Event of Default has occurred and is continuing.
Very truly yours,
WESTERN DIGITAL CORPORATION
By:________________________________
Title:
102
EXHIBIT C
FORM OF COMPLIANCE CERTIFICATE
[date]
The First National Bank of Boston
100 Federal Street
Boston, Massachusetts 02110
Attention: High Technology Division
Ladies and Gentlemen:
Reference is made to the Revolving Credit Loan Agreement, dated as of
April 24, 1996 (as amended and in effect from time to time, the "Credit
Agreement"), by and among Western Digital Corporation (the "Borrower"),
NationsBank of Texas, N.A., The First National Bank of Boston and the other
lending institutions listed on Schedule 1 to the Credit Agreement (collectively,
the "Banks"), NationsBank of Texas, N.A. as syndication agent for the Banks (the
"Syndication Agent") and The First National Bank of Boston as administrative
agent for the Banks (the "Agent", and, collectively with the Syndication Agent,
the "Bank Agents"). Capitalized terms which are used herein without definition
and which are defined in the Credit Agreement shall have the respective meanings
assigned to such terms in the Credit Agreement.
Pursuant to Section 9.4(c) of the Credit Agreement, the principal
financial or accounting officer of the Borrower hereby certifies to you as
follows: (a) the information furnished in the calculations attached hereto was
true and correct as of the last day of the fiscal [year] [quarter] [month]
ended______________; (b) as of the date of this certificate, there exists no
Default or Event of Default or condition which would, with either or both the
giving of notice or the lapse of time, result in a Default or an Event of
Default; and (c) the financial statements delivered herewith were prepared in
accordance with generally accepted accounting principles applied on a basis
consistent with prior periods.
IN WITNESS WHEREOF, the undersigned officer has executed this Compliance
Certificate as of the date first written above.
WESTERN DIGITAL CORPORATION
By:
--------------------------------------
Title:
103
-2-
COMPLIANCE CERTIFICATE
WESTERN DIGITAL CORPORATION
10.1. PROFITABLE OPERATIONS
(a) Consolidated Net Income for quarter ended _______ $___________
(b) Consolidated Net Income for immediately preceding
fiscal quarter $___________
(not to be less than $1.00 for any two consecutive
fiscal quarters)
(c) Consolidated Net Operating Income for quarter ended _____ $___________
(d) Consolidated Net Operating Income for immediately
preceding fiscal quarter $___________
(not to be less than $1.00 for any two consecutive
fiscal quarters)
10.2. FIXED RATE COVERAGE RATIO
(a) EBITDA for such period $___________
(i) Consolidated Net Income for such
period, plus (without duplication) $__________
(ii) depreciation for such period, plus $__________
(iii) amortization for such period, plus $__________
(iv) income tax expense for such period, plus $__________
(v) Consolidated Total Interest Expense
paid or accrued during such period $__________
(b) Rental Obligations for such period $___________
(c) Sum of (a) plus (b) $___________
(d) Consolidated Total Interest Expense for such period $___________
(e) Rental Obligations for such period $___________
(f) Sum of (d) plus (e) $___________
(g) Ratio of (c) to (f) ______:______
(Not to be less than 2.00:1.00 as at the end of any
fiscal quarter)
10.3. MINIMUM LIQUIDITY
(a) Cash of the Borrower for such period $___________
(b) Current Accounts Receivable of the Borrower for such period $___________
(c) Sum of (a) plus (b) $___________
(d) Accounts payable of the Borrower for such period $___________
(e) Senior Funded Indebtedness for such period $___________
(f) Sum of (d) plus (e) $___________
(g) Ratio of (c) to (f) _______:_____
(Not to be less than 1.25:1.00 at any time)
104
-3-
10.4. CONSOLIDATED NET WORTH
(a) Consolidated Net Worth at time of determination $___________
(i) Consolidated Total Assets for such period, $___________
minus
(ii) Consolidated Total Liabilities for such period, $___________
minus
(iii) any subscriptions receivable for such period $___________
(b) seventy five percent (75%) of positive Consolidated Net Income for
such period $___________
(c) one hundred percent (100%) of purchase price paid during
such period to repurchase capital stock $___________
(d) Sum of (a) plus (b), less (c) $___________
(Not to be less at any time than the greater of $375,000,000
or the sum of $375,000,000 plus (d))
105
EXHIBIT D
ASSIGNMENT AND ACCEPTANCE
Dated as of _____, 19__
Reference is made to the Revolving Credit Agreement, dated as of April
24, 1996 (as from time to time amended and in effect, the "Credit Agreement"),
by and among WESTERN DIGITAL CORPORATION, a Delaware corporation (the
"Borrower"), the banking institutions referred to therein as Banks
(collectively, the "Banks"), and THE FIRST NATIONAL BANK OF BOSTON, a national
banking association, as agent (in such capacity, the "Agent") for the Banks.
Capitalized terms used herein and not otherwise defined shall have the meanings
assigned to such terms in the Credit Agreement.
__________________ (the "Assignor") and ________________ (the
"Assignee") hereby agree as follows:
1. ASSIGNMENT. Subject to the terms and conditions of this Assignment
and Acceptance, the Assignor hereby sells and assigns to the Assignee, and the
Assignee hereby purchases and assumes without recourse to the Assignor, a
$__________ interest in and to the rights, benefits, indemnities and
obligations of the Assignor under the Credit Agreement equal to __% in respect
of the Total Commitment immediately prior to the Effective Date (as hereinafter
defined).
2. ASSIGNOR'S REPRESENTATIONS. The Assignor (a) represents and
warrants that (i) it is legally authorized to enter into this Assignment and
Acceptance, (ii) as of the date hereof, its Commitment is $__________, its
Commitment Percentage is __%, the aggregate outstanding principal balance of
its Revolving Credit Loans equals $__________, the aggregate amount of its
Letter of Credit Participations equals $__________ (in each case after giving
effect to the assignment contemplated hereby but without giving effect to any
contemplated assignments which have not yet become effective), and (iii)
immediately after giving effect to all assignments which have not yet become
effective, the Assignor's Commitment Percentage will be sufficient to give
effect to this Assignment and Acceptance, (b) makes no representation or
warranty, express or implied, and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with the
Credit Agreement or any of the other Loan Documents or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Credit
Agreement, the other Loan Documents or any other instrument or document
furnished pursuant thereto or the attachment, perfection or priority of any
106
-2-
security interest or mortgage, other than that it is the legal and beneficial
owner of the interest being assigned by it hereunder free and clear of any
claim or encumbrance; (c) makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Borrower or any
of its Subsidiaries or any other Person primarily or secondarily liable in
respect of any of the Obligations, or the performance or observance by the
Borrower or any of its Subsidiaries or any other Person primarily or
secondarily liable in respect of any of the Obligations of any of its
obligations under the Credit Agreement or any of the other Loan Documents or
any other instrument or document delivered or executed pursuant thereto; and
(d) attaches hereto the Revolving Credit Note delivered to it under the Credit
Agreement.
The Assignor requests that the Borrower exchange the Assignor's
Revolving Credit Note for new Revolving Credit Notes payable to the Assignor
and the Assignee as follows.
Notes Payable to Amount of Revolving
the Order of: Credit Note
- ---------------- -------------------
Assignor $*
Assignee $*
3. ASSIGNEE's REPRESENTATIONS. The Assignee (a) represents and
warrants that (i) it is duly and legally authorized to enter into this
Assignment and Acceptance, (ii) the execution, delivery and performance of this
Assignment and Acceptance do not conflict with any provision of law or of the
charter or by-laws of the Assignee, or of any agreement binding on the
Assignee, (iii) all acts, conditions and things required to be done and
performed and to have occurred prior to the execution, delivery and performance
of this Assignment and Acceptance, and to render the same the legal, valid and
binding obligation of the Assignee, enforceable against it in accordance with
its terms, having been done and performed and have occurred in due and strict
compliance with all applicable laws; (b) confirms that it has received a copy
of the Credit Agreement, together with copies of the most recent financial
statements delivered pursuant to Sections 7.4, 8.4 thereof and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into this Assignment and Acceptance; (c) agrees
that it will, independently and without reliance upon the Assignor, the Agent
or any other Bank and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under the Credit Agreement; (d) represents and warrants that
it is an Eligible Assignee; (e) appoints and authorizes the Agent to take such
action as agent on its behalf and to exercise such powers under the Credit
Agreement and the other Loan Documents as are delegated to the Agent by the
terms thereof, together with such powers as are reasonably incidental thereto;
(f) agrees that it will perform in accordance with their terms all the
obligations which by the terms of the Credit Agreement are required to be
performed by it
107
-3-
as a Bank; and (g) acknowledges that it has made arrangements with the Assignor
satisfactory to the Assignee with respect to its pro rata share of Letter of
Credit Fees in respect of outstanding Letters of Credit.
4. EFFECTIVE DATE. The effective date for this Assignment and
Acceptance shall be __________ (the "Effective Date"). Following the execution
of this Assignment and Acceptance, each party hereto shall deliver its duly
executed counterpart hereof to the Agent for acceptance by the Agent and
recording in the Register by the Agent. Schedule 1 to the Credit Agreement
shall thereupon be replaced as of the Effective Date by the Schedule 1 annexed
hereto.
5. RIGHTS UNDER CREDIT AGREEMENT. Upon such acceptance and recording,
from and after the Effective Date, (a) the Assignee shall be a party to the
Credit Agreement and, to the extent provided in this Assignment and Acceptance,
have the rights and obligations of a Bank thereunder, and (ii) the Assignor
shall, with respect to that portion of its interest under the Credit Agreement
assigned hereunder, relinquish its rights and be released from its obligations
under the Credit Agreement; provided, however, that the Assignor shall retain
its rights to be indemnified pursuant to Section 17 of the Credit Agreement
with respect to any claims or actions arising prior to the Effective Date.
6. PAYMENTS. Upon such acceptance of this Assignment and Acceptance by
the Agent and such recording, from and after the Effective Date, the Agent
shall make all payments in respect of the rights and interests assigned hereby
(including payments of principal, interest, fees and other amounts) to the
Assignee. The Assignor and the Assignee shall make any appropriate adjustments
in payments for periods prior to the Effective Date by the Agent or with
respect to the making of this assignment directly between themselves.
7. GOVERNING LAW. THIS ASSIGNMENT AND ACCEPTANCE IS INTENDED TO TAKE
EFFECT AS A SEALED INSTRUMENT TO BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK (WITHOUT REFERENCE TO CONFLICT OF
LAWS).
8. COUNTERPARTS. This Assignment and Acceptance may be executed in any
number of counterparts which shall together constitute but one and the same
agreement.
108
-4-
IN WITNESS WHEREOF, intending to be legally bound, each of the
undersigned has caused this Assignment and Acceptance to be executed on its
behalf by its officer thereunto duly authorized, as of the date first above
written.
[INSERT NAME OF ASSIGNEE]
By: ________________________________
Title:
[INSERT NAME OF ASSIGNOR]
BY: ________________________________
Title:
CONSENTED TO:
WESTERN DIGITAL
CORPORATION
By: ______________________________
Title:
THE FIRST NATIONAL
BANK OF BOSTON, as
Agent
By: ______________________________
Title:
109
EXHIBIT E
FORM OF INSTRUMENT OF ACCESSION
Dated as of______________
Reference is hereby made to the Revolving Credit Agreement dated as of
April 24, 1996 (as heretofore and from time to time amended and in effect, the
"Credit Agreement"), by and among Western Digital Corporation, a Delaware
corporation (the "Borrower"), NationsBank of Texas, N.A., The First National
Bank of Boston and the other lending institutions set forth on Schedule 1 to
the Credit Agreement (collectively, the "Banks"), NationsBank of Texas, N.A. as
syndication agent for the Banks (the "Syndication Agent") and The First
National Bank of Boston as administrative agent for the Banks (the "Agent",
and, collectively with the Syndication Agent, the "Bank Agents"). Capitalized
terms used herein and not otherwise defined shall have the meanings assigned to
such terms in the Credit Agreement.
Pursuant to the terms of Section 19.1.2 of the Credit Agreement, the
Borrower, the Bank Agents and [INSERT NAME OF ACCEDING BANK] (the "Acceding
Bank") hereby agree as follows:
1. Subject to the terms and conditions of this Accession Agreement,
the Acceding Bank hereby agrees to assume, without recourse to the Banks or the
Bank Agents, on the Effective Date (as defined below), a Commitment of $_______
in accordance with the terms and conditions set forth in the Credit Agreement.
Upon such assumption, the Total Commitment shall be automatically increased by
the amount of such assumption. The Acceding Bank hereby agrees to be bound by,
and hereby requests the agreement of the Borrower and the Bank Agents that the
Acceding Bank shall be entitled to the benefits of, all of the terms,
conditions and provisions of the Credit Agreement as if the Acceding Bank had
been one of the lending institutions originally executing the Credit Agreement
as a "Bank"; provided that nothing herein shall be construed as making the
Acceding Bank liable to the Borrower or the other Banks in respect of any acts
or omissions of any party to the Credit Agreement or in respect of any other
event occurring prior to the Effective Date (as defined below) of this
Accession Agreement.
2. The Acceding Bank (a) represents and warrants that (i) it is duly
and legally authorized to enter into this Accession Agreement, (ii) the
execution, delivery and performance of this Accession Agreement do not conflict
with any provision of law or of the charter or by-laws of the Acceding Bank, or
of any agreement binding on the Acceding Bank, (iii) all acts, conditions and
things required to be done and performed and to have occurred prior to the
execution, deliver and performance of this Accession Agreement, and to render
the same the legal, valid and binding obligation of the Acceding Bank,
enforceable against it in accordance with its terms, have been done and
performed and have occurred in due and strict compliance with all applicable
laws; (b) confirms that it has
110
-2-
received a copy of the Credit Agreement, together with copies of the most recent
financial statements delivered pursuant to sections 7.4 and 8.4 thereof and
such other documents and information as it has deemed appropriate to make its
own credit analysis and decision to enter into this Accession Agreement; (c)
agrees that it will, independently and without reliance upon the Banks or
either of the Bank Agents and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under the Credit Agreement; (d) represents and
warrants that it is an Eligible Assignee; (e) appoints and authorizes the Bank
Agents to take such action as agents on its behalf and to exercise such powers
under the Credit Agreement and the other Loan Documents as are delegated to
each of the Bank Agents by the terms thereof, together with such powers as are
reasonably incidental thereto; (f) agrees that it will perform in accordance
with their terms all of the obligations which by the terms of the Credit
Agreement are required to be performed by it as a Bank; and acknowledges that
it has made arrangements with the Agent satisfactory to the Acceding Bank with
respect to its pro rata share of Letter of Credit Fees in respect of
outstanding Letters of Credit.
3. The Acceding Bank hereby requests that the Borrower issue a new
Revolving Credit Note payable to the order of the Acceding Bank in the
principal amount of $___. In the event the Acceding Bank is also a Bank party
to the Credit Agreement immediately prior to the Effective Date of this
Accession Agreement, that such Acceding Bank agrees to deliver to the Borrower,
as soon as reasonably practicable after the Effective Date (as defined below),
the prior Revolving Credit Note held by it prior to the issuance of the new
Revolving Credit Note, marked "Cancelled".
4. The effective date for this Accession Agreement shall be [Insert
Effective Date] (the "Effective Date"). Following the execution of this
Accession Agreement by the Borrower and the Acceding Bank, it will be
delivered to the Bank Agents for acceptance. Upon acceptance by the Bank
Agents, Schedule 1 to the Credit Agreement shall thereupon be replaced as of
the Effective Date by the Schedule 1 annexed hereto. The Agent shall
thereafter notify the other Banks of the revised Schedule 1.
5. Upon such acceptance, from and after the Effective Date, the
Borrower shall make all payments in respect of the Acceding Bank Commitment
(including payments of principal, interest, fees and other amounts) to the
Agent for the account of the Acceding Bank.
6. THIS ACCESSION AGREEMENT SHALL FOR ALL PURPOSES BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (WITHOUT
REFERENCE TO CONFLICTS OF LAW).
7. This Accession Agreement may be executed in any number of
counterparts which shall together constitute but one and the same agreement.
111
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IN WITNESS WHEREOF, intending to be legally bound, each of the
undersigned has caused this Accession Agreement to be executed on its behalf by
its officer thereunto duly authorized, to take effect as a sealed instrument as
of the date first above written.
WESTERN DIGITAL CORPORATION
By:___________________________
Title:________________________
NATIONSBANK OF TEXAS, N.A., as
Syndication Agent
By:___________________________
Title:________________________
THE FIRST NATIONAL BANK OF BOSTON,
as Agent
By:___________________________
Title:________________________
[NAME OF ACCEDING BANK]
By:___________________________
Title:________________________