EXHIBIT 10.20
CREDIT AGREEMENT
between
PLASMA & MATERIALS TECHNOLOGIES, INC.,
US Borrower,
ELECTROTECH LIMITED and
ELECTROTECH EQUIPMENTS LIMITED,
UK Borrowers,
NATIONSBANK OF TEXAS, N.A.,
Administrative Agent,
LLOYDS BANK PLC
UK-Collateral Agent,
and
CERTAIN LENDERS,
Lenders
$35,000,000
Dollar Equivalent
November 15, 1996
[LOGO OF PLASMA & MATERIALS TECHNOLOGIES, INC.]
PLASMA & MATERIALS TECHNOLOGIES, INC. ("US BORROWER"), HEREBY DESIGNATES THE "US
OBLIGATION" AND THE "UK OBLIGATION" AS GUARANTEED BY US BORROWER UNDER THIS
CREDIT AGREEMENT AS "DESIGNATED SENIOR DEBT," AS THAT TERM IS DEFINED IN THE
INDENTURE (AS RENEWED, EXTENDED, AMENDED, OR SUPPLEMENTED) DATED AS OF OCTOBER
7, 1996, BETWEEN US BORROWER AND U.S. TRUST COMPANY OF CALIFORNIA, N.A.,
PROVIDING FOR THE ISSUANCE OF US BORROWER'S 7-1/8% CONVERTIBLE SUBORDINATED
NOTES DUE 2001.
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PREPARED BY HAYNES AND BOONE, L.L.P.
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TABLE OF CONTENTS
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TABLE OF CONTENTS......................................................... (i)
LIST OF SCHEDULES AND EXHIBITS............................................ (v)
SECTION 1 DEFINITIONS AND TERMS......................................... 1
1.1 Definitions................................................... 1
1.2 Time References.............................................. 19
1.3 Other References............................................. 19
1.4 Accounting Principles........................................ 19
SECTION 2 US FACILITY.................................................. 19
2.1 Commitment................................................... 19
2.2 Borrowing Procedure.......................................... 20
2.3 LC Subfacility............................................... 21
2.4 Requests..................................................... 23
2.5 Termination.................................................. 24
SECTION 3 UK FACILITY.................................................. 24
3.1 Commitment................................................... 24
3.2 Borrowing Procedure.......................................... 24
3.3 Overdraft Subfacility........................................ 26
3.4 BG/LC Subfacility............................................ 27
3.5 Requests..................................................... 29
3.6 Termination.................................................. 30
3.7 Joint and Several............................................ 30
SECTION 4 PAYMENT TERMS................................................ 30
4.1 Notes and Payments........................................... 30
4.2 Interest and Principal Payments.............................. 31
4.3 Interest Options............................................. 32
4.4 Rate Quotations.............................................. 32
4.5 Default Rate................................................. 33
4.6 Interest Recapture........................................... 33
4.7 Interest Calculations........................................ 33
4.8 Maximum Rate................................................. 33
4.9 Interest Periods............................................. 34
4.10 Conversions.................................................. 34
4.11 Order of Application......................................... 34
4.12 Sharing of Payments.......................................... 35
4.13 Offset....................................................... 35
4.14 Booking Borrowings........................................... 36
4.15 Basis Unavailable or Inadequate for Euro Rate................ 36
4.16 Additional Costs............................................. 36
4.17 Change in Laws............................................... 37
4.18 Funding Loss................................................. 37
4.19 Taxes, Grossing Up Provisions, and Value Added Tax........... 38
SECTION 5 FEES......................................................... 41
5.1 Treatment of Fees............................................ 41
5.2 Initial Commitment Fees...................................... 41
5.3 Unused Commitment Fees....................................... 41
Table of Contents
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5.4 BG and LC Fees............................................... 42
5.5 Structure/Syndication and Administrative Fees................ 42
5.6 Collateral Fees.............................................. 42
SECTION 6 SECURITY..................................................... 42
6.1 Guaranties................................................... 42
6.2 US Collateral................................................ 42
6.3 UK Collateral................................................ 43
6.4 Further Assurances........................................... 43
6.5 Release of Collateral........................................ 43
SECTION 7 CONDITIONS PRECEDENT......................................... 44
7.1 Conditions Precedent for US Facility......................... 44
7.2 Conditions Precedent for UK Facility......................... 44
7.3 Other Conditions Precedent................................... 44
7.4 Conditions Material.......................................... 45
SECTION 8 REPRESENTATIONS AND WARRANTIES............................... 45
8.1 Purpose and Regulation U..................................... 45
8.2 Corporate Existence, Good Standing, and Authority............ 45
8.3 Subsidiaries and Names....................................... 45
8.4 Authorization and Contravention.............................. 45
8.5 Binding Effect............................................... 46
8.6 Financials and Existing Debt................................. 46
8.7 Projections.................................................. 46
8.8 Solvency..................................................... 46
8.9 Litigation................................................... 46
8.10 Taxes........................................................ 46
8.11 Environmental Matters........................................ 46
8.12 Employee Plans............................................... 47
8.13 Properties; Liens............................................ 47
8.14 Government Regulations....................................... 47
8.15 Transactions with Affiliates................................. 47
8.16 Debt......................................................... 47
8.17 Leases....................................................... 47
8.18 Insurance.................................................... 48
8.19 Labor Matters................................................ 48
8.20 Intellectual Property........................................ 48
8.21 Full Disclosure.............................................. 48
SECTION 9 AFFIRMATIVE COVENANTS........................................ 48
9.1 Certain Items Furnished...................................... 48
9.2 Use of Credit................................................ 50
9.3 Books and Records............................................ 50
9.4 Inspections.................................................. 50
9.5 Taxes........................................................ 50
9.6 Payment of Obligations....................................... 50
9.7 Expenses..................................................... 50
9.8 Maintenance of Existence, Assets, and Business............... 51
9.9 Insurance.................................................... 51
9.10 Environmental Matters........................................ 51
9.11 Subsidiaries................................................. 51
9.12 Indemnification.............................................. 51
(ii) Table of Contents
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SECTION 10 NEGATIVE COVENANTS FOR COMPANIES............................. 52
10.1 Payroll Taxes................................................ 53
10.2 Debt......................................................... 53
10.3 Prepayments.................................................. 53
10.4 Subordinated Debt............................................ 53
10.5 Capital Expenditures......................................... 54
10.6 Investments.................................................. 54
10.7 Employee Plans............................................... 54
10.8 Transactions with Affiliates................................. 54
10.9 Compliance with Governmental Requirements and Documents...... 54
10.10 Distributions................................................ 54
10.11 Assignment................................................... 54
10.12 Fiscal Year and Accounting Methods........................... 55
10.13 New Businesses............................................... 55
10.14 Government Regulations....................................... 55
10.15 Strict Compliance............................................ 55
SECTION 11 NEGATIVE COVENANTS FOR DOMESTIC COMPANIES.................... 55
11.1 Disposition of Assets........................................ 55
11.2 Liens........................................................ 55
11.3 Mergers, Consolidations, and Dissolutions.................... 55
SECTION 12 NEGATIVE COVENANTS FOR FOREIGN COMPANIES..................... 55
12.1 Disposition of Assets........................................ 56
12.2 Liens........................................................ 56
12.3 Mergers, Consolidations, and Dissolutions.................... 56
SECTION 13 FINANCIAL COVENANTS.......................................... 56
13.1 Tangible-Net Worth........................................... 56
13.2 Current Ratio................................................ 56
13.3 EBITDA....................................................... 57
13.4 Senior Debt/EBITDA........................................... 57
13.5 Interest Coverage............................................ 57
13.6 Projections.................................................. 57
SECTION 14 EVENTS OF DEFAULT............................................ 58
14.1 Payments..................................................... 58
14.2 Covenants.................................................... 58
14.3 Debtor Relief................................................ 58
14.4 Judgments and Attachments.................................... 58
14.5 Government Action............................................ 58
14.6 Misrepresentation............................................ 58
14.7 Change of Control............................................ 59
14.8 Other Funded Debt............................................ 59
14.9 Validity and Enforceability.................................. 59
14.10 BGs or LCs................................................... 59
SECTION 15 RIGHTS AND REMEDIES.......................................... 59
15.1 Remedies..................................................... 59
15.2 Judgment Currency............................................ 60
15.3 Company Waivers.............................................. 60
15.4 Performance by Administrative Agent.......................... 61
15.5 Not in Control............................................... 61
15.6 Course of Dealing............................................ 61
15.7 Cumulative Rights............................................ 61
(iii) Table of Contents
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15.8 Application of Proceeds...................................... 61
15.9 Certain Proceedings.......................................... 61
15.10 Expenditures by Lenders...................................... 62
15.11 Diminution in Value of Collateral............................ 62
15.12 UK Borrowers' Obligations.................................... 62
SECTION 16 AGENTS AND LENDERS........................................... 62
16.1 Agents....................................................... 62
16.2 Expenses..................................................... 64
16.3 Proportionate Absorption of Losses........................... 64
16.4 Delegation of Duties; Reliance............................... 64
16.5 Limitation of Agents' Liability.............................. 65
16.6 Event of Default............................................. 66
16.7 Collateral Matters........................................... 66
16.8 Limitation of Liability...................................... 66
16.9 Relationship of Lenders...................................... 67
16.10 Benefits of Agreement........................................ 67
SECTION 17 MISCELLANEOUS................................................ 67
17.1 Nonbusiness Days............................................. 67
17.2 Communications............................................... 67
17.3 Form and Number of Documents................................. 67
17.4 Exceptions to Covenants...................................... 67
17.5 Survival..................................................... 67
17.6 Governing Law................................................ 67
17.7 Invalid Provisions........................................... 67
17.8 Certain Reinstatement........................................ 68
17.9 Amendments, Waivers, Consents, Supplements, and Conflicts.... 68
17.10 Multiple Counterparts........................................ 69
17.11 Parties...................................................... 69
17.12 Venue, Service of Process, and Jury Trial.................... 70
17.13 Information Regarding Borrowers.............................. 71
17.14 Entirety..................................................... 71
(iv) Table of Contents
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LIST OF SCHEDULES AND EXHIBITS
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Schedule 1 - Lenders and Commitments
Schedule 4.3 - Mandatory-Liquid-Assets-Costs Formula
Schedule 7.1 - Closing Documents for US Facility
Schedule 7.2 - Closing Documents for UK Facility
Schedule 8.3 - Companies
Schedule 8.7 - Projections
Schedule 8.9 - Litigation and Judgments
Schedule 8.11 - Environmental Matters
Schedule 8.12 - Employee-Plan Matters
Schedule 8.13(a) - Real Property
Schedule 8.13(b) - Existing Liens
Schedule 8.13(c) - Sale of Property
Schedule 8.15 - Affiliate Transactions
Schedule 8.16 - Existing Debt
Schedule 8.17 - Existing Leases
Schedule 8.18 - Landlord Insured Properties
Schedule 8.20 - Infringement Claims
Exhibit A-1 - US-Facility Note
Exhibit A-2 - UK-Facility Note
Exhibit B - Guaranty
Exhibit C-1 - Security Agreement
Exhibit C-2 - Collateral Assignment of Intellectual Property
Exhibit C-3 - Financing Statement
Exhibit C-4 - Landlord Estoppel Letter
Exhibit C-5 - Customer Estoppel Letter
Exhibit D-1 - Borrowing Request for US Facility
Exhibit D-2 - Borrowing Request for UK Facility
Exhibit D-3 - Conversion Notice for US Facility
Exhibit D-4 - [Intentionally Blank]
Exhibit D-5 - LC Request
Exhibit D-6 - BG/LC Request
Exhibit D-7 - Borrowing-Base Report for US Facility
Exhibit D-8 - Borrowing-Base Report for UK Facility
Exhibit D-9 - Compliance Certificate
Exhibit E-1 - Opinion of US counsel to Domestic Companies
Exhibit E-2 - Opinion of Intellectual Property Counsel
Exhibit F - Assignment and Assumption Agreement
(v) Table of Contents
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CREDIT AGREEMENT
----------------
THIS AGREEMENT is entered into as of November 15, 1996, between the
following parties:
. PLASMA & MATERIALS TECHNOLOGIES, INC., a California corporation ("US
BORROWER").
. ELECTROTECH LIMITED, a corporation (registered No. 1373344) organized under
the laws of England, and ELECTROTECH EQUIPMENTS LIMITED, a corporation
(registered No. 939289) organized under the laws of England (collectively,
"UK BORROWERS").
. Lenders (defined below).
. NATIONSBANK OF TEXAS, N.A., as Administrative Agent for Lenders.
. LLOYDS BANK PLC, UK-Collateral Agent for Lenders.
SECTION 1.1 contains other definitions used in this agreement.
US Borrower has requested that the Lenders under the US Facility extend
credit to US Borrower not to exceed a total outstanding principal amount equal
to the total US-Facility Commitments, to be used by US Borrower as provided in
SECTION 8.1 as a revolving-credit facility (the "US FACILITY") and to be funded
by the Lenders under the US Facility from time to time in a combination of
advances and letters of credit denominated in Dollars. The US Facility thus
encompasses the LC Subfacility. The Lenders under the US Facility are willing
to extend the requested credit on the terms and conditions of this agreement.
UK Borrowers have requested that the Lenders under the UK Facility extend
credit to UK Borrowers not to exceed a total outstanding principal amount equal
to the Dollar Equivalent of the total UK-Facility Commitments, to be used by UK
Borrowers as provided in SECTION 8.1 as a revolving-credit facility (the "UK
FACILITY") and to be funded by the Lenders under the UK Facility from time to
time in a combination of advances, letters of credit, bank guarantees, and
overdraft and other financial accommodations variously denominated in Dollars,
Deutsche Marks, Pound Sterling, or other Alternative Currency. The UK Facility
thus encompasses the BG/LC Subfacility and the Overdraft Subfacility. The
Lenders under the UK Facility are willing to extend the requested credit on the
terms and conditions of this agreement.
ACCORDINGLY, for adequate and sufficient consideration, Borrowers, Lenders,
and Agents agree as follows:
SECTION 1 DEFINITIONS AND TERMS.
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1.1 DEFINITIONS. As used in the Loan Documents:
-----------
"ADMINISTRATIVE AGENT" means, at any time, NationsBank of Texas, N.A. (or
its successor appointed under SECTION 16), acting as administrative, US-
collateral, managing, and syndication agent for Lenders under the Loan
Documents.
Credit Agreement
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"AFFILIATE" of a Person means any other individual or entity who directly
or indirectly controls, is controlled by, or is under common control with that
Person. For purposes of this definition (a) "control," "controlled by," and
"under common control with" mean possession, directly or indirectly, of power to
direct or cause the direction of management or policies (whether through
ownership of voting securities or other interests, by contract, or otherwise),
and (b) the Companies are "Affiliates" of each other.
"AGENTS" mean, at any time, Administrative Agent and UK-Collateral Agent.
"ALTERNATIVE CURRENCY" means either Pound Sterling or Deutsche Marks (or
any other freely convertible currency designated as such by the Administrative
Agent).
"APPLICABLE MARGIN" means, for any day, the margin of interest over the
Base Rate or the Euro Rate, as the case may be, that is applicable when the Base
Rate or Euro Rate, as applicable, is determined under this agreement. The
Applicable Margin is subject to adjustment (upwards or downwards, as
appropriate) based on the ratio of the Companies' Funded Debt to EBITDA as
provided in the following table:
=================================================================
Applicable Applicable
Ratio of Funded Debt to Margin for Margin for
EBITDA Base-Rate Euro-Rate
Borrowings Borrowings
=================================================================
4.25 to 1.00 or more 1.00% 3.00%
- -----------------------------------------------------------------
Less than 4.25 to 1.00, but 3.75 to 0.75% 2.75%
1.00 or more
- -----------------------------------------------------------------
Less than 3.75 to 1.00, but 2.75 to 0.50% 2.50%
1.00 or more
- -----------------------------------------------------------------
Less than 2.75 to 1.00, but 2.00 to 0.25% 2.25%
1.00 or more
- -----------------------------------------------------------------
Less than 2.00 to 1.00 0.00% 2.00%
=================================================================
For purposes of the definition of APPLICABLE MARGIN, EBITDA is calculated for
the Companies' most recently-completed-four-fiscal quarters, and Funded Debt is
determined as of the last day of that four-fiscal-quarter period. The
calculation of EBITDA for any period before the date of this agreement shall be
made on the basis of the combined Financials, before the date of this agreement,
of US Borrower and of UK Borrowers and their Subsidiaries to the extent acquired
by US Borrower in the Electrotech Acquisition. From the date of this agreement
through the date that Administrative Agent receives the Current Financials and
Compliance Certificate for the year ending December 31, 1996, the Applicable
Margin is deemed to be 2.50% for Euro-Rate Borrowings and 0.50% for Base-Rate
Borrowings. After Administrative Agent's receipt of the Current Financials and
Compliance Certificate for the year ending December 31, 1996, the Applicable
Margin in effect at any time (whether in the middle of an Interest Period or
otherwise) is based upon the ratio of the Companies' Funded Debt to EBITDA as
determined from the Current Financials and related Compliance Certificate then
most recently received by Administrative Agent, effective as of the date
received by Administrative Agent. If US Borrower fails to timely furnish to
Administrative Agent any Financials and related Compliance Certificate as
required by this agreement, then the maximum Applicable Margin applies from the
date those Financials and related Compliance Certificate are required to be
delivered and remain in effect until US Borrower furnishes them to
Administrative Agent.
Credit Agreement
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2
"ARRANGER" means NationsBanc Capital Markets, Inc.
"ASSIGNEE" is defined in SECTION 17.11(c).
"ASSIGNMENTS" is defined in SECTION 17.11(c).
"BASE RATE" for any day means:
(a) For Borrowings under the US Facility, the greater of either (i)
the annual interest rate most recently established by Administrative Agent
as its general reference rate (which may not necessarily represent the
lowest or best rate actually charged to any customer) in effect at its
principal office in Dallas, Texas, automatically fluctuating upward and
downward without special notice to any Borrower or any other Person, or
(ii) the sum of the Fed-Funds Rate plus 0.5%; or
(b) For the Overdraft Exposure, the base rate of Overdraft Lender from
time to time.
"BASE-RATE BORROWING" means a Borrowing under the US Facility bearing
interest at the sum of the Base Rate plus the Applicable Margin.
"BG" means a bank guarantee issued for the account of either UK Borrower by
the Issuer under the BG/LC Subfacility.
"BG/LC EXPOSURE" means, at any time and without duplication, the sum of the
Dollar Equivalent of (a) the total outstanding amount under every BG issued
under the UK Facility, plus (b) the total face amount of all undrawn and
uncancelled LCs issued under the UK Facility, plus (c) the total unpaid
reimbursement obligations of UK Borrowers for any payments made under any of
those BGs or drawings under any of those LCs.
"BG/LC REQUEST" means a request for a BG or a LC under the BG/LC
Subfacility, substantially in the form of EXHIBIT D-6, and signed by Responsible
Officers of both UK Borrowers.
"BG/LC SUBFACILITY" means a subfacility of the UK Facility for the
issuance of BGs and LCs, as described in Section 3.4, under which the BG/LC
Exposure (a) may never exceed the combined single limitation of $3,000,000 (or
the Dollar Equivalent of that amount denominated in Alternative Currencies) and
(b) together with the Dollar Equivalent of Principal Debt of the UK Facility,
and (without duplication) the Overdraft Exposure, may never exceed the Dollar
Equivalent of the lesser of either (i) the total UK-Facility Commitments or (ii)
the Borrowing Base for the UK Facility.
"BORROWERS" means US Borrower and UK Borrowers.
"BORROWING" means any amount disbursed under the Loan Documents by one or
more Lenders to or on behalf of any Borrower (either as an original disbursement
of funds, a renewal, extension, or continuation of an amount outstanding), a
payment under a LC or BG, or any amounts outstanding or other financial
accommodation to either UK Borrower under the Overdraft Subfacility.
"BORROWING BASE" means -- at any time, for any Borrower, and without
duplication -- the sum of the Dollar Equivalent of (a) 80% of Eligible Accounts
owed to that Borrower by Domestic Persons and certain Foreign Subsidiaries of
Domestic Persons designated by agreement of all Lenders from time to time, plus
(b) 50% of Eligible Accounts owed to that Borrower by Foreign Persons (including
any Foreign Subsidiary of any Domestic Person that has not been designated by
Lenders as being included
Credit Agreement
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3
in clause (a) preceding), plus (c) through the first anniversary date of this
agreement, 50% of Eligible-Dated Accounts owed to that Borrower by any Person,
and after the first anniversary date of the date of this agreement, none of
those Eligible-Dated Accounts, plus (d) 100% of Eligible Accounts, whether owed
by Domestic or Foreign Persons, to the extent not already included under any of
the preceding clause and to the extent supported by one or more letters of
credit that are in form and substance and issued by one or more financial
institutions acceptable to Administrative Agent in its sole discretion, plus (e)
25% of Eligible-Demonstration Systems owned by that Borrower (so long as the
portion of Eligible-Demonstration Systems included in this clause for both
Borrowing Bases under this agreement may never exceed $2,000,000). The
Borrowing Base for the US Facility is the Borrowing Base applicable to US
Borrower, and the Borrowing Base for the UK Facility is the total Borrowing Base
applicable to both UK Borrowers.
"BORROWING-BASE DEFICIENCY" means any amount by which any limitation in
Sections 2.1 or 2.3(a) (in respect of the US Facility) or SECTIONS 3.1, 3.3, or
3.4(a) (in respect of the UK Facility), as the case may be, is exceeded, for any
reason whatsoever.
"BORROWING-BASE REPORT" means either (a) for the US Facility, a report
delivered by US Borrower, substantially in the form of EXHIBIT D-7, and signed
by a Responsible Officer of US Borrower, or (b) for the UK Facility, a report
delivered by UK Borrowers, substantially in the form of EXHIBIT D-8, and signed
by Responsible Officers of both UK Borrowers.
"BORROWING DATE" means the date on which a Borrowing is to be disbursed
under SECTIONS 2.2, 2.3, 3.2, 3.3, or 3.4.
"BORROWING REQUEST" means a written request for a Borrowing that must be
either (a) for a Borrowing under the US Facility, signed by a Responsible
Officer of US Borrower, and substantially in the form of EXHIBIT D-1, or (b) for
Borrowing under the UK Facility (other than under the Overdraft Subfacility),
signed by Responsible Officers of both UK-Borrowers, and substantially in the
form of EXHIBIT D-2.
"BUSINESS DAY" means any day other than Saturday, Sunday, and any other day
that commercial banks are authorized by law to be closed in California, Texas,
or London, which, for purposes of any (a) Euro-Rate Borrowing denominated in
Pound Sterling or fundings in, or conversions to or from, Pound Sterling, must
also be a day when commercial banks are open for international business in
London, and (b) Euro-Rate Borrowing denominated in Deutsche Marks or other
Alternative Currency or fundings in, or conversions to or from, Deutsche Marks
or other Alternative Currency, must also be a day when commercial banks are open
for international business in Germany or, as the case may be, the principal
financial center in the country of that other Alternative Currency.
"CAPITAL LEASE" means any lease or sublease that is required by GAAP to be
capitalized on a balance sheet.
"CERCLA" means the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, 42 U.S.C. (S)(S)9601 et seq.
"CHANGE IN LAW" means, in respect of SECTION 4.19(b)(iv) any
implementation, introduction, enactment, imposition, abolition, withdrawal, or
variation or change of any law, order, regulation, published practice, or
official directive, published ruling, notice, concession, guideline, request, or
requirement or statement of policy or published practice statement by the Bank
of England, the European Union, or any central bank, fiscal, governmental,
local, international, national, or other competent authority or agency (whether
or not having the force of law but in respect of which compliance by banks and
other
Credit Agreement
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4
financial institutions in the relevant jurisdiction is generally customary) or
any change in any interpretation or application, or the introduction or making
of any new or further or difference interpretation or application by any court,
tribunal, central bank, fiscal, governmental, local, international, national, or
other competent authority or agency or compliance with any new or different
request or direction made after the date hereof (whether or not having the force
of law but in respect of which compliance by banks and other financial
institutions in the relevant jurisdiction is generally customary) from any
central bank, fiscal, governmental, local, international, national, or other
competent authority.
"CLOSING DATE" means a Business Day on or before November 30, 1996, which
(although intended to be virtually concurrent) may be different for the US
Facility and the UK Facility and which (a) for the US Facility, is the date
agreed to by US Borrower and Administrative Agent on or after which the initial
Borrowing or other extension of credit under the US Facility may occur and (b)
for the UK Facility, is the date agreed to by UK Borrowers and Administrative
Agent on or after which the initial Borrowing or other extension of credit under
the UK Facility may occur.
"COMMITMENT PERCENTAGE" means, for any Lender, the proportion (stated as a
percentage) that (a) in respect of the US Facility, its US-Facility Commitment
(if any) bears to the total US-Facility Commitments of all Lenders, (b) in
respect of the UK Facility, its UK-Facility Commitment (if any) bears to the
total UK-Facility Commitments of all Lenders, and (c) in respect of both of
those facilities combined, the sum of its US-Facility Commitment (if any) and
its UK-Facility Commitment (if any) bears to the sum of the total US-Facility
Commitments of all Lenders and the total UK-Facility Commitments of all Lenders.
"COMPANIES" means, at any time, US Borrower and each of its Subsidiaries.
"COMPLIANCE CERTIFICATE" means a certificate substantially in the form of
EXHIBIT D-9 and signed by a Responsible Officer of US Borrower.
"CONVERSION NOTICE" means a notice of conversion to a different Type of
Borrowing, new Interest Period(s), or both under the US Facility, which must be
signed by a Responsible Officer of US Borrower and be substantially in the form
of EXHIBIT D-3.
"CURRENT FINANCIALS" means, unless otherwise specified, either:
(a) Except as provided in CLAUSE (B) below, the (i) Companies'
consolidated Financials for the year ended December 31, 1995, (ii)
Companies' consolidated Financials for the six months ended June 30, 1996,
and (iii) consolidated Financials for the consolidated group in which UK
Borrowers were included for the year ended June 30, 1996; or
(b) At any time after annual Financials are first delivered under
SECTION 9.1, the (i) Companies' annual Financials then most recently
delivered to Administrative Agent under SECTION 9.1(A) and (ii) Companies'
quarterly Financials then most recently delivered to Administrative Agent
under SECTION 9.1(B).
"DEBT" means -- for any Person, at any time, and without duplication -- the
sum of (a) all obligations for borrowed money, (b) all obligations evidenced by
bonds, debentures, notes, or similar instruments, (c) all obligations to pay the
deferred purchase price of property or services except trade accounts payable
arising in the ordinary course of business, (d) all obligations arising under
acceptance facilities or facilities for the discount or sale of accounts
receivable, (e) all direct or contingent obligations in respect of letters of
credit, (f) liabilities secured (or for which the holder of the Debt has an
existing
Credit Agreement
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5
Right, contingent or otherwise, to be so secured) by any Lien existing on
property owned or acquired by that Person, (g) Capital Leases, plus (h) all
guaranties, endorsements, and other contingent obligations for Debt of others.
"DEBTOR LAWS" means the Bankruptcy Code of the United States of America and
all other applicable liquidation, conservatorship, bankruptcy, moratorium,
rearrangement, receivership, administration, insolvency, reorganization,
suspension of payments, or similar Governmental Requirements affecting
creditors' Rights in any relevant jurisdiction.
"DEFAULT PERCENTAGE" means -- at any time and for any Lender -- the
proportion (stated as a percentage) that (a) in respect of the US Facility, the
amount (if any) of the US-Facility-Commitment Usage owed to it directly (less
any participations sold to other Lenders under this agreement) or indirectly
(through participations purchased from other Lenders under this agreement) bears
to the total US-Facility-Commitment Usage, (b) in respect of the UK Facility,
the amount (if any) of the UK-Facility-Commitment Usage owed to it directly
(less any participations sold to other Lenders under this agreement) or
indirectly (through participations purchased from other Lenders under this
agreement) bears to the total UK-Facility-Commitment Usage, and (c) in respect
of both of those facilities combined, the amount of the US-Facility-Commitment
Usage and UK-Facility Commitment Usage owed to it directly (less any
participations sold to other Lenders under this agreement) or indirectly
(through participations purchased from other Lenders under this agreement) bears
to the total of the US-Facility-Commitment Usage and the UK-Facility-Commitment
Usage.
"DEFAULT RATE" means, for any day, an annual interest rate equal from day
to day to the lesser of either (a) the Maximum Rate or (b) in respect of:
(i) Borrowings or other amounts owing in respect of the US
Obligation, the sum of the Base Rate for Borrowings under the US Facility
plus 4%;
(ii) the Overdraft Exposure, the sum of the Base Rate for the
Overdraft Exposure plus 4%; and
(iii) Borrowings and other amounts owing in respect of the UK
Obligation (other than the Overdraft Exposure), the sum of one or more Euro
Rates that Administrative Agent determines in its sole reasonable
discretion should be applicable to those Borrowings and other amounts in
order to most fairly reflect the cost to the Lenders under the UK Facility
of maintaining those Borrowings or amounts outstanding, plus 4%, plus any
applicable Mandatory-Liquid-Assets Costs.
"DEUTSCHE MARKS" and the abbreviation "DM" mean the lawful currency of the
Federal Republic of Germany.
"DISTRIBUTION" means, with respect to any shares of any capital stock or
other equity securities issued by a Person (a) the retirement, redemption,
purchase, or other acquisition for value of those securities, (b) the
declaration or payment of any dividend on or with respect to those securities,
(c) any loan or advance by that Person to, or other investment by that Person
in, the holder of any of those securities, and (d) any other payment by that
Person with respect to those securities.
"DOLLAR EQUIVALENT," at any time, means (a) any amount denominated in
Dollars and (b) for any amount denominated in an Alternative Currency, an amount
of Dollars into which Administrative Agent determines that it could convert the
relevant amount of that Alternative Currency by using the applicable-
Credit Agreement
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6
quoted-spot rate reported on Reuters Screen Page 261 at 11:00 (London time)
three Business Days before the day on which the calculation is made.
"DOLLARS" and the symbol "$" mean lawful currency of the United States of
America.
"DOMESTIC" means, in respect of any Person, organized under the laws of,
and domiciled in, the United States of America or one of its states, e.g., a
Domestic Company, a Domestic Subsidiary, or any other Domestic Person.
"DOUBLE TAX TREATY" means any treaty dealing with the taxation of residents
in the jurisdictions to which the treaty relates entered into by the governments
of any jurisdictions in which any party to this agreement is a resident for Tax
purposes.
"EBITDA" means -- for any Person, for any period, and without duplication -
- - the sum of:
(a) the sum of (i) net income from operations, plus (ii) to the extent
included in the calculation of that net income amount, Interest Expense and
income Tax expense; plus
(b) to the extent included in the calculation of the amount in CLAUSE
(A) above, depreciation and amortization expenses from continuing
operations.
"ELECTROTECH ACQUISITION" means the acquisition of the capital stock of UK
Borrowers by US Borrower pursuant to the Electrotech Agreement.
"ELECTROTECH AGREEMENT" means the Share Purchase Agreement dated as of July
17, 1996, between US Borrower, UK Borrowers, Christopher D. Dobson, and the
other shareholders of UK Borrowers.
"ELIGIBLE ACCOUNTS" means the enforceable and outstanding accounts of US
Borrower (in respect of the Borrowing Base for the US Facility) or of UK
Borrowers (in respect of the Borrowing Base for the UK Facility), that are
subject to Lender Liens, except (a) the portion of any account not paid within
120 days after the respective invoice's issue date, (b) the portion of any
account against the payment of which the account debtor is entitled to any
allowable discount, owns a corresponding account payable, or has asserted any
defense, setoff, or counterclaim, (c) any account on which the account debtor
is an Affiliate of any Company, is a Governmental Authority, is not Solvent, or
is the subject of any proceedings under any Debtor Laws, (d) any account which
either Administrative Agent or Required Lenders elect -- in their sole
respective discretion and effective upon ten-days advance notice to either US
Borrower or UK Borrowers, as applicable -- to exclude because of the account
debtor's unsatisfactory financial condition or payment record or unfavorable
risk of priority of collection under laws applicable to it (other than laws of
the United States of America or one of its states in respect of US Borrower or
laws of England in respect of UK Borrowers), (e) any account not arising out of
a sale of inventory in the ordinary course of business, and (f) any account
subject to a Lien that is not a Permitted Lien. Notwithstanding anything herein
to the contrary, solely in respect of the Borrowing Base for the US Facility,
the amount indicated as the amount to be paid to US Borrower in the purchase
order received by US Borrower from Hyundai and dated as of November 11, 1996,
shall be included in this definition of Eligible Accounts for a period of 30
days, commencing with the Closing Date, and after such 30-day period if said
purchase order has not resulted in a finally consummated sale for the account of
Hyundai, any amount with respect to such purchase order previously allowed to be
included in this definition of Eligible Accounts shall not be included in this
definition until such time as such amount otherwise meets the requirements set
forth herein.
Credit Agreement
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7
"ELIGIBLE-DATED ACCOUNTS" means the enforceable and outstanding accounts of
US Borrower (in respect of the Borrowing Base for the US Facility) or of UK
Borrowers (in respect of the Borrowing Base for the UK Facility), that existed
before the date of this agreement and would otherwise constitute Eligible
Accounts except that they may be outstanding more than 120 days after the
respective invoice's issue date.
"ELIGIBLE-DEMONSTRATION SYSTEMS" means finished products owned by a
Borrower and used for purposes of demonstrating performance capabilities to its
customers if (a) properly noted on US Borrower's balance sheet as a line item or
properly included in either UK Borrower's balance sheet as part of its plant and
equipment, as the case may be, and (b) if either (i) located on that Borrower's
premises, (ii) located on the premises of a customer of that Borrower who has
executed and delivered to Administrative Agent an estoppel agreement in
substantially the form of EXHIBIT C-5, or (iii) as of the Closing Date, located
on the premises of Siemens, A.G.
"EMPLOYEE PLAN" means any employee-pension-benefit plan (a) covered by
Title IV of ERISA and established or maintained by any Borrower or any ERISA
Affiliate (other than a Multiemployer Plan) and (b) established or maintained by
any Borrower or any ERISA Affiliate, or to which any Borrower or any ERISA
Affiliate contributes, under the Governmental Requirements of any Foreign
country.
"ENVIRONMENTAL INVESTIGATION" means any environmental site assessment,
investigation, audit, compliance audit, or compliance review conducted at any
time or from time to time -- whether at the request of either Agent or any
Lender, upon the order or request of any Governmental Authority, or at the
voluntary instigation of any Company -- concerning any Real Property or the
business operations or activities of any Company, including, without limitation
(a) air, soil, groundwater, or surface-water sampling and monitoring, and (b)
preparation and implementation of any closure or remedial plans.
"ENVIRONMENTAL LAW" means any applicable Governmental Requirement that
relates to protection of the environment or to the regulation of any Hazardous
Substances, including, without limitation, CERCLA, the Hazardous Materials
Transportation Act (49 U.S.C. (S) 1801 et seq.), the Resource Conservation and
Recovery Act (42 U.S.C. (S) 6901 et seq.), the Clean Water Act (33 U.S.C. (S)
1251 et seq.), the Clean Air Act (42 U.S.C. (S) 7401 et seq.), the Toxic
Substances Control Act (15 U.S.C. (S) 2601 et seq.), the Federal Insecticide,
Fungicide, and Rodenticide Act (7 U.S.C. (S) 136 et seq.), the Emergency
Planning and Community Right-to-Know Act (42 U.S.C. (S) 11001 et seq.), the Safe
Drinking Water Act (42 U.S.C. (S) 201 and (S) 300f et seq.), the Rivers and
Harbors Act (33 U.S.C. (S) 401 et seq.), the Oil Pollution Act (33 U.S.C. (S)
2701 et seq.), analogous state, local, and foreign Governmental Requirements,
and any analogous future enacted or adopted Governmental Requirement.
"ENVIRONMENTAL LIABILITY" means any liability, loss, fine, penalty, charge,
lien, damage, cost, or expense of any kind to the extent that it results (a)
from the violation of any Environmental Law, (b) from the Release or threatened
Release of any Hazardous Substance, or (c) from actual or threatened damages to
natural resources.
"ENVIRONMENTAL PERMIT" means any permit, or license, from any Governmental
Authority that is required under any Environmental Law for the lawful conduct of
any business, process, or other activity.
"ERISA" means the Employee Retirement Income Security Act of 1974.
"ERISA AFFILIATE" means any Person that, for purposes of Title IV of ERISA,
is a member of any Borrower's controlled group or is under common control with
that Borrower within the meaning of Section 414 of the IRC (which provisions are
deemed by this agreement to apply to Foreign Persons).
Credit Agreement
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8
"EURO RATE" means -- for a Euro-Rate Borrowing and for the relevant
Interest Period -- the annual interest rate (rounded upward, if necessary, to
the nearest 0.01%) equal to the London interbank offered rate for deposits in
the currency in which that Borrowing is denominated under this agreement, at
approximately 11:00 a.m. (London time) two Business Days before the first day
(or, solely in the case of Borrowings denominated in Pound Sterling, on the
first day) of the Interest Period for a term comparable to the Interest Period,
that appears on (i) Telerate Page 3750 (or any successor page) or (ii) if no
rate so appears, then on Reuters Screen LIBO Page for a Borrowing denominated in
Dollars, on Reuters Screen Page FWDW for a Borrowing denominated in Pound
Sterling, or on Reuters Screen Page FWDT for a Borrowing denominated in Deutsche
Marks, or on the relevant Reuters Screen-page for any other Alternative
Currency.
"EURO-RATE BORROWING" means a Borrowing bearing interest at the sum of the
Euro Rate plus the Applicable Margin.
"EVENT OF DEFAULT" is defined in SECTION 14.
"FED-FUNDS RATE" means, for any day, the annual rate (rounded upwards, if
necessary, to the nearest 0.01%) determined (which determination is conclusive
and binding, absent manifest error) by Administrative Agent to be equal to (a)
the weighted average of the rates on overnight federal-funds transactions with
member banks of the Federal Reserve System arranged by federal-funds brokers on
that day, as published by the Federal Reserve Bank of New York on the next
Business Day, or (b) if those rates are not published for any day, the average
of the quotations at approximately 10:00 a.m. received by Administrative Agent
from three federal-funds brokers of recognized standing selected by
Administrative Agent in its sole discretion.
"FINANCIALS" of a Person means balance sheets, profit and loss statements,
reconciliations of capital and surplus (for Domestic Companies), and statements
of cash flow prepared (a) according to GAAP (subject to year-end audit
adjustments with respect to interim Financials) and (b) except as stated in
SECTION 1.4, in comparative form to prior year-end figures or corresponding
periods of the preceding fiscal year or other relevant period, as applicable.
"FOREIGN" means, in respect of any Person, organized under the laws of a
jurisdiction other than -- or domiciled outside of -- the United States of
America or one of its states, e.g., a Foreign Company, a Foreign Subsidiary, or
any other Foreign Person.
"FUNDED DEBT" means -- for any Person, at any time, and without
duplication -- the sum of (a) the principal amount of the Subordinated Notes,
(b) the principal amount of all other Debt for borrowed money, (c) the total
amount capitalized on the balance sheet of that Person with respect to Capital
Leases, plus (d) Debt under acceptance facilities or facilities for the discount
or sale of accounts receivable.
"FUNDING LOSS" means any loss, expense, or reduction in yield (but not any
Applicable Margin) that any Lender reasonably incurs because (a) any Borrower
fails or refuses for any reason whatsoever (other than a default by
Administrative Agent or that Lender claiming that loss, expense, or reduction in
yield) to take any Borrowing that it has requested under this agreement, or (b)
any Borrower prepays or pays any Borrowing or converts any Borrowing to another
Type, in each case, other than on the last day of the applicable Interest
Period.
Credit Agreement
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9
"GAAP" means generally accepted accounting principles of the Accounting
Principles Board of the American Institute of Certified Public Accountants and
the Financial Accounting Standards Board that are applicable from time to time.
"GOVERNMENT SECURITIES" means -- to the extent they mature within one year
from the date in question -- readily marketable (a) direct full faith and credit
obligations of the United States of America or obligations guaranteed by the
full faith and credit of the United States of America, and (b) obligations of an
agency or instrumentality of, or corporation owned, controlled or sponsored by,
the United States of America that are generally considered in the securities
industry to be implicit obligations of the United States of America.
"GOVERNMENTAL AUTHORITY" means any (a) local, state, territorial, federal,
or foreign judicial, executive, regulatory, administrative, legislative, or
governmental agency, board, bureau, commission, department, or other
instrumentality, (b) private arbitration board or panel, or (c) central bank.
"GOVERNMENTAL REQUIREMENTS" means all applicable statutes, laws, treaties,
ordinances, rules, regulations, orders, writs, injunctions, decrees, and
judgments and legally binding opinions and interpretations of any Governmental
Authority.
"HAZARDOUS SUBSTANCE" means any substance that is designated, defined,
classified, or regulated as a hazardous waste, hazardous material, pollutant,
contaminant, explosive, corrosive, flammable, infectious, carcinogenic,
mutagenic, radioactive, or toxic or hazardous substance under any Environmental
Law, including, without limitation, any hazardous substance within the meaning
of (S) 101(14) of CERCLA.
"HEDGING AGREEMENT" means, for any Person, any present or future, whether
master or single, agreement, document or instrument providing for or
constituting an agreement to enter into (a) commodity hedges in the normal
course of business in accordance with prior practices of that Person before the
date of this agreement for purposes of hedging material purchases, (b) foreign-
currency purchases and swaps and interest-rate swaps that collectively never
exceed an aggregate notional sum of the Dollar Equivalent of $15,000,000, and
(c) interest-rate-hedging products involving payment premium for which that
Person has no future liability.
"INTEREST EXPENSE" means -- for any Person, for any period, and without
duplication -- all interest on Funded Debt, whether paid in cash or accrued as a
liability and payable in cash during any subsequent period (including, without
limitation, the interest component of Capital Leases), as determined by GAAP,
and premium or penalty for repayment, redemption, or repurchase of Debt.
"INTEREST PERIOD" means, for Euro-Rate Borrowings, any period of one, two,
three, or six months.
"INVESTMENT" means, in respect of any Person, any loan, advance, extension
of credit, or capital contribution to that Person, any investment in that
Person, or any purchase or commitment to purchase any equity securities or Debt
issued by that Person or substantially all of the assets or a division or other
business unit of that Person.
"IRC" means the Internal Revenue Code of 1986.
"ISSUER" means (a) NationsBank of Texas, N.A., with respect to each LC
issued under the LC Subfacility, and (b) Lloyds Bank Plc, with respect to each
BG and LC issued under the BG/LC Subfacility.
Credit Agreement
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10
"LC" means a documentary or standby letter of credit issued for the account
of a Borrower by an Issuer under either the LC Subfacility or the BG/LC
Subfacility.
"LC AGREEMENT" means a letter of credit application and agreement for an LC
(in form and substance satisfactory to Administrative Agent and the applicable
Issuer) executed by the Borrower seeking the LC and submitted to the applicable
Issuer with a copy to Administrative Agent.
"LC EXPOSURE" means, at any time and without duplication, the sum of (a)
the total face amount of all undrawn and uncancelled LCs issued under the LC
Subfacility plus (b) the total unpaid reimbursement obligations of US Borrower
under drawings under any of those LCs.
"LC REQUEST" means a request for a LC under the LC Subfacility
substantially in the form of EXHIBIT D-5, and signed by a Responsible Officer of
US Borrower.
"LC SUBFACILITY" means a subfacility of the US Facility for the issuance of
LCs, as described in SECTION 2.3, under which the LC Exposure may never (a)
collectively exceed $1,000,000 and (b) together with the Principal Debt of the
US Facility may never exceed the lesser of either (i) the total US-Facility
Commitments or (ii) the Borrowing Base for the US Facility.
"LENDER LIEN" means any present or future Lien (subject only to any
applicable Permitted Lien) securing the US Obligation, the UK Obligation, or
both and assigned, conveyed, or granted to or created in favor of either Agent
for the benefit of any Lenders.
"LENDERS" means the financial institutions (including, without limitation,
Issuers and Overdraft Lender) named on SCHEDULE 1 or on the most-recently-
amended SCHEDULE 1, if any, delivered by Administrative Agent under this
agreement, and, subject to this agreement, their respective successors and
permitted assigns (but not any Participant who is not otherwise a party to this
agreement). The Lenders under the US Facility are those with a US-Facility
Commitment beside their respective names on that SCHEDULE 1, and the Lenders
under the UK Facility are those with a UK-Facility Commitment beside their
respective names on that SCHEDULE 1.
"LIEN" means any lien, mortgage, security interest, pledge, assignment,
charge, title retention agreement, or encumbrance of any kind and any other
arrangement for a creditor's claim to be satisfied from assets or proceeds prior
to the claims of other creditors or the owners.
"LITIGATION" means any action by or before any Governmental Authority.
"LOAN DOCUMENTS" means (a) this agreement, certificates and reports
delivered under this agreement, and exhibits and schedules to this agreement,
(b) all guaranties, guarantees, security agreements, debentures, assignments,
charges, and other agreements, documents, and instruments in favor of either
Agent or any Lender (or either Agent on behalf of any Lenders) ever delivered
under this agreement or otherwise delivered in connection with all or any part
of the US Obligation or the UK Obligation, whether to create or perfect Lender
Liens or otherwise, (c) all BGs, LCs, and LC Agreements, (d) the letter
agreement described in SECTION 5.5, and (e) all renewals, extensions, and
restatements of, and amendments and supplements to, any of the foregoing.
"MANDATORY-LIQUID-ASSETS COSTS" means, for any Lender, the additional costs
to that Lender of compliance with the reserve-asset ratio from time to time
required by the Bank of England, calculated in accordance with SCHEDULE 4.3, and
expressed as an annual percentage rate.
Credit Agreement
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11
"MATERIAL-ADVERSE EVENT" means any circumstance or event that, individually
or collectively, is reasonably expected to result in any (a) material impairment
of (i) the ability of any Borrower to perform any of its respective payment or
other material obligations under any Loan Document, or (ii) the ability of
either Agent or any Lender to enforce any of those obligations or any of its
respective Rights under the Loan Documents, (b) material and adverse effect on
the business, assets, operations, financial or other condition, or prospects of
any Borrower (individually) or of the Companies (as a whole) as represented in
each case to Lenders in the Current Financials most recently delivered before
the date of this agreement, in the Projections, in Offering Memorandum, in the
Proxy Statement, or in any other written information delivered to Lenders before
the date of this agreement, or (c) Event of Default or Potential Default.
"MAXIMUM AMOUNT" and "MAXIMUM RATE" respectively mean, for a Lender, the
maximum non-usurious amount and the maximum non-usurious rate of interest that,
under applicable Governmental Requirements, that Lender is permitted to contract
for, charge, take, reserve, or receive on the US Obligation or the UK
Obligation.
"MULTIEMPLOYER PLAN" means a multiemployer plan as defined in Sections
3(37) or 4001(a)(3) of ERISA or Section 414(f) of the IRC (or any similar type
of plan established or regulated under the laws of any foreign country) to which
any Borrower or any ERISA Affiliate is making, or has made, or is accruing, or
has accrued, an obligation to make contributions.
"1933 ACT" means the Securities Act of 1933.
"1934 ACT" means the Securities and Exchange Act of 1934.
"NOTES" means the US-Facility Notes and the UK-Facility Notes.
"OFFERING MEMORANDUM" means the Offering Memorandum dated October 1, 1996,
prepared and circulated by US Borrower, and providing for the issuance and sale
of the Subordinated Notes.
"ORGANIZATIONAL DOCUMENTS" means, for any Person, the documents for its
formation and organization, which, for example, for a (a) corporation are its
corporate charter and bylaws, (b) for a partnership is its partnership
agreement, (c) for a limited-liability company are its certificate of
organization and regulations, and (d) for a trust is the trust agreement or
indenture under which it is created.
"OSHA" means the Occupational Safety and Health Act of 1970, 29 U.S.C. (S)
651 et seq.
"OVERDRAFT BALANCES" means any credit balance on any account of either UK
Borrower (or any of their respective Foreign Subsidiaries) with Overdraft Lender
to the extent that the credit balance is freely available to be set off by
Overdraft Lender against liabilities owed to Overdraft Lender by that UK
Borrower.
"OVERDRAFT DIFFERENTIAL" means the lesser of either (a) the difference of
(i) all amounts outstanding by way of overdraft or other accommodations provided
by Overdraft Lender for the benefit of either UK Borrower under the Overdraft
Subfacility minus (ii) (Pounds)2,500,000, or (b) (Pounds)1,500,000.
"OVERDRAFT EXPOSURE" means, at any time, the sum of (a) all amounts
outstanding by way of overdraft for the benefit of each UK Borrower under the
Overdraft Subfacility at that time net of any credit balance on any account of
that UK Borrower with Overdraft Lender to the extent that the credit balance is
freely available to be set off by Overdraft Lender against liabilities owed to
Overdraft Lender
Credit Agreement
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12
by that UK Borrower, plus (b) the actual and contingent liabilities of each UK
Borrower under SECTION 3.3, plus (c) the other amounts that Overdraft Lender
determines fairly represents the total exposure at that time of Overdraft Lender
in respect of any other facility or financial accommodation provided under the
Overdraft Subfacility.
"OVERDRAFT LENDER" means Lloyds Bank Plc.
"OVERDRAFT SUBFACILITY" means a subfacility of the UK Facility for
overdrafts and other accommodations provided by Overdraft Lender to either UK
Borrower under which (a) the Overdraft Exposure may never exceed
(Pounds)2,500,000 (i.e., "net") and (b) all amounts outstanding by way of
overdraft for the benefit of either UK Borrower under the Overdraft Subfacility
at that time without regard to netting against credit balances as provided in
CLAUSE (A) of the definition of the term Overdraft Exposure may never exceed
(Pounds)4,000,000 (i.e., "gross").
"PARTICIPANT" is defined in SECTION 17.11(B).
"PBGC" means the Pension Benefit Guaranty Corporation.
"PERMITTED DEBT" is defined in SECTION 10.2.
"PERMITTED INVESTMENTS" means the following:
Government Securities.
Readily marketable direct obligations of any state of the United
States of America given on the date of such investment a credit rating of
at least Aa by Moody's Investors Service, Inc., or AA by Standard & Poor's
Corporation, in each case due within one year from the making of the
investment.
Certificates of deposit issued by, bank deposits in, euro rate
deposits through, bankers' acceptances of, and repurchase agreements
covering Government Securities executed by, (i) any Lender or (ii) any bank
incorporated under the laws of the United States of America or any of its
states or any branch or office located in the United States of America of a
bank incorporated under the laws of any jurisdiction outside the United
States of America, in either case having on the date of the investment a
short-term certificate of deposit credit rating of at least P-2 by Moody's
Investors Service, Inc., or A-2 by Standard & Poor's Corporation, in each
case due within one year after the date of the making of the investment.
Repurchase agreements covering Government Securities executed by
a broker or dealer registered under Section 15(b) of the 1934 Act having on
the date of the investment capital of at least $100,000,000, due within 30
days after the date of the making of the investment, so long as the maker
of the investment receives written confirmation of the transfer to it of
record ownership of the Government Securities on the books of a "primary
dealer" in the Government Securities as soon as practicable after the
making of the investment.
Readily marketable commercial paper of corporations doing
business in and incorporated under the laws of the United States of America
or any of its states or of any corporation that is the holding company for
a bank described in CLAUSE (C) above and having on the date of the
investment a credit rating of at least P-1 by Moody's Investors Service,
Inc., or
Credit Agreement
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13
A-1 by Standard & Poor's Corporation, in each case due within 90 days after
the date of the making of the investment.
"Money market preferred stock" issued by a corporation
incorporated under the laws of the United States of America or any of its
states given on the date of the investment a credit rating of at least Aa
by Moody's Investors Services, Inc., and AA by Standard & Poor's
Corporation, in each case having an investment period not exceeding 50
days, so long as (i) the amount of all of those investments issued by the
same issuer does not exceed $5,000,000 and (ii) the total amount of all of
those investments does not exceed $10,000,000.
A readily redeemable "money market mutual fund" sponsored by a
bank described in CLAUSE (C) above, or a registered broker or dealer
described in CLAUSE (D) above, that has and maintains an investment policy
limiting its investments primarily to instruments of the types described in
CLAUSES (A) through (F) above and having on the date of those investment
total assets of at least $1,000,000,000.
The Electrotech Acquisition.
Investments by any Company in respect of any other Company so
long as (A) the Company making the Investment and the Company in respect of
which the Investment is made are both then in compliance with SECTIONS 6
and 9.11, and (B) no Event of Default or Potential Default exists at the
time of the Investment or would otherwise result from it being made.
Loans or advances to directors, officers, and employees of the
Companies that never exceed a total of the Dollar Equivalent of $500,000
outstanding.
Indebtedness of customers created in any Company's ordinary
course of business in a manner consistent with its present practices.
Hedging Agreements.
(k) Acquisitions of new wholly owned Subsidiaries if (i) the sole
consideration for the acquisition is the issuance of capital stock of US
Borrower, (ii) at least 30-days prior written notice of any intended
acquisition is given to Administrative Agent along with pro forma
Financials indicating that the Companies will be in compliance with SECTION
13 after the acquisition is consummated, and (iii) no Potential Default,
Event of Default, or Material-Adverse Event exists or will exist
immediately after the acquisition is consummated.
"PERMITTED LIENS" means, at any time, the following:
(a) The existing Liens that are described on SCHEDULE 8.13(B) (to the
extent that such schedule does not indicate they are to be extinguished as
a condition precedent to extensions of credit under this agreement) and all
renewals, extensions, amendments, and modifications of any of them to the
extent that the total-principal amount each individually secures never
exceeds the total-principal amount secured by it on the date of this
agreement.
(b) Lender Liens.
(c) Any interest or title of a lessor in assets being leased under an
operating lease that does not constitute Debt.
Credit Agreement
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14
(d) Rights of setoff or recoupment and banker's Liens.
(e) Pledges or deposits (that shall not cover any US Collateral or UK
Collateral other than cash) made to secure payment of workers'
compensation, unemployment insurance, or other forms of governmental
insurance or benefits or to participate in any fund in connection with
workers' compensation, unemployment insurance, pensions, or other social
security programs.
(f) Good-faith pledges or deposits (that shall not cover any US
Collateral or UK Collateral other than cash) (i) for 10% or less of the
amounts due under (and made to secure) any Company's performance of bids,
tenders, contracts (except for the repayment of borrowed money), or leases,
or (ii) made to secure statutory obligations, surety or appeal bonds,
indemnity, performance, or other similar bonds, or customs or brokers liens
benefitting any Company in the ordinary course of its business.
(g) Zoning and similar restrictions on the use of (and easements,
restrictions, covenants, title defects, and similar encumbrances on) real
property that do not materially impair the use of the real property and
that are not violated by existing or proposed structures or land use.
(h) If no Lien has been filed in any jurisdiction or agreed to (i)
claims and Liens for Taxes not yet due and payable, (ii) mechanic's Liens
and materialman's Liens for services or materials (real or personal) and
similar Liens incident to construction and maintenance of real property, in
each case for which payments is not yet due and payable, (iii) landlord's
Liens for rental not yet due and payable, and (iv) Liens of warehousemen,
carriers, and vendors and similar Liens securing obligations that are not
yet due and payable.
(i) Any of the following to the extent that the validity or amount is
being properly contested in good faith, reserve or other appropriate
provision (if any) required by GAAP has been made, levy and execution has
not issued or continues to be stayed, they do not individually or
collectively detract materially from the value of the property of the
Person in question or materially impair the use of that property in the
operation of its business, and (other than any such Liens given statutory
priority) they are subordinate to the Lender Liens to the extent that they
cover any US Collateral or UK Collateral: (i) Claims and Liens for Taxes;
(ii) claims and Liens upon, and defects of title to, real or personal
property, including any attachment of personal or real property or other
legal process before adjudication of a dispute on the merits; (iii) claims
and Liens of mechanics, materialmen, warehousemen, carriers, landlords,
vendors, or other like Liens; (iv) Liens incident to construction and
maintenance of real property; and (v) adverse judgments, attachments, or
orders on appeal for the payment of money.
(j) Liens arising under Hedging Agreements that do not cover any US
Collateral or UK Collateral.
(k) Liens that secure any of the Permitted Debt described in SECTION
10.2(E) and any renewal, extension, amendment, or modification of those
Liens so long as they never cover any assets except the assets acquired,
constructed, or improved with that Permitted Debt and the proceeds thereof.
(l) Liens that secure any of the Permitted Debt described in SECTION
10.2(G) and any renewal, extension, amendment, or modification of those
Liens so long as those Liens, renewals, extensions, amendments, and
modifications never cover any US Collateral or UK Collateral.
Credit Agreement
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15
"PERSON" means any individual, entity, or Governmental Authority.
"POTENTIAL DEFAULT" means any event's occurrence or any circumstance's
existence that would (upon any required notice, time lapse, or both) become an
Event of Default.
"POUND STERLING" and the symbol "(Pounds)" means the lawful currency of the
United Kingdom.
"PREDECESSOR" means any Person for whose obligations and liabilities any
Company is reasonably expected to be liable as the result of any merger, de
facto merger, stock purchase, asset purchase or divestiture, combination, joint
venture, investment, reclassification, or other similar business transaction.
"PRINCIPAL DEBT" means, at any time, the unpaid principal balance of
Borrowings.
"PROJECTIONS" means the financial projections for the Companies that are
attached as SCHEDULE 8.7.
"PROXY STATEMENT" means the Proxy Statement dated September 11, 1996, and
supplemented October 1, 1996, and filed by US Borrower with the SEC under
Section 14(a) of the 1934 Act.
"REAL PROPERTY" means any land, buildings, fixtures, and other improvements
to land now or in the future directly or indirectly owned by any Company, leased
to or otherwise operated by any Company, or subleased by any Company to any
other Person.
"RELEASE" means any "release" as defined under any Environmental Law.
"REPRESENTATIVES" means, for any Person, its representatives, officers,
directors, employees, accountants, attorneys, and agents.
"REQUIRED LENDERS" means, at any time, any combination of Lenders holding
(directly or indirectly) at least either (a) before the Termination Date, 66-
2/3% of the sum of the total US-Facility Commitments plus the total UK-Facility
Commitments, or (b) on or after the Termination Date, 66-2/3% of the sum of the
US-Facility-Commitment Usage plus the UK-Facility-Commitment Usage.
"RESPONSIBLE OFFICER" means the chairman, president, chief executive
officer, chief financial officer, or treasurer of US Borrower or a director or
the secretary of the relevant UK Borrower.
"RIGHTS" means rights, remedies, powers, privileges, and benefits.
"SEC" means the Securities and Exchange Commission.
"SENIOR DEBT" means, at any time, the Companies' consolidated Funded Debt
other than the Subordinated Debt.
"SOLVENT" means, as to any Person, that (a) the total fair market value of
its assets exceeds its liabilities, (b) it has sufficient cash flow to enable it
to pay its Debts as they mature, and (c) it does not have unreasonably small
capital to conduct its businesses.
"STATED-TERMINATION DATE" means November 15, 1999.
"SUBORDINATED DEBT," at any time, means (a) the Subordinated Notes and (b)
Debt, whether to repurchase or redeem any Subordinated Notes or otherwise, so
long as that Debt (i) is subject to
Credit Agreement
----------------
16
subordination, payment blockage, and standstill provisions at least as favorable
to Lenders as applicable to the Subordinated Notes, (ii) is subject to
representations, covenants, events of default, and other provision not
significantly more onerous to US Borrower than the Subordinated Notes, (iii)
does not have any scheduled or mandatory principal or sinking fund payment due
before December 31, 1999, and (iv) is upon terms and conditions otherwise
reasonably acceptable to Required Lenders.
"SUBORDINATED-NOTE INDENTURE" means the Indenture dated as of October 7,
1996, between US Borrower and U.S. Trust Company of California, N.A.
"SUBORDINATED-NOTE PROCEEDS" means, at any time, the proceeds of the sale
of the Subordinated Notes pursuant to the Offering Memorandum.
"SUBORDINATED NOTES" means the 7-1/8% Convertible Subordinated Notes Due
2001, issued by US Borrower in accordance with the Offering Memorandum and the
Subordinated-Note Indenture.
"SUBSIDIARY" of any Person means any corporation, partnership, or other
entity of which 50% or more (in number of votes) of the stock (or equivalent
interests) is owned of record or beneficially, directly or indirectly, by that
Person.
"TANGIBLE-NET WORTH" means -- at any time and for any Person -- the sum of
(i) its stockholders' equity, plus (ii) amounts excluded from stockholders'
equity under GAAP relating to the establishment of an employee stock ownership
plan, minus (iii) the total (without duplication of deductions already made in
arriving at stockholders' equity) of the book value of all assets that would be
treated as intangible assets under GAAP, including, without limitation,
goodwill, trademarks, trade names, copyrights, patents, and unamortized debt
discount and expense (other than any such intangibles acquired or realized in
connection with the Electrotech Acquisition, up to but not in excess of
$22,000,000).
"TAXES" means all present and future taxes (including, without limitation,
gross receipts, sales, use, consumption, property, income, franchise, capital,
occupational, value added and excise taxes), withholdings, assessments, levies,
imposts, customs, and other duties, fees or charges, of any nature whatsoever,
together with any penalties, fines or interest thereon or other additions
thereto imposed, withheld, levied or assessed by any taxing authority or
Governmental Authority or by any international authority, and "TAX," "TAXATION,"
and cognate expressions shall be construed accordingly;
"TERMINATION DATE" means the earlier of either (a) the Stated-Termination
Date or (b) the effective date that Lenders' commitments to lend and issue BGs
and LCs under this agreement are fully canceled or terminated.
"TYPE" means any type of Borrowing determined with respect to the
applicable interest option.
"UCC" means the Uniform Commercial Code as enacted in Texas or other
applicable jurisdictions.
"UK BORROWERS" is defined in the preamble to this agreement.
"UK COLLATERAL" is defined in SECTION 6.3.
"UK-COLLATERAL AGENT" means, at any time, Lloyds Bank Plc (or its successor
appointed under SECTION 16), acting as UK-collateral agent for the Lenders under
the UK Facility.
"UK FACILITY" is defined in the recitals to this agreement.
Credit Agreement
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17
"UK-FACILITY COMMITMENT" means, at any time and for any Lender, the amount
(if any) stated beside that Lender's name on the most-recently amended SCHEDULE
1 for the UK Facility (which amount is subject to reduction and cancellation as
provided in this agreement), under which is encompassed the BG/LC Subfacility
and the Overdraft Subfacility.
"UK-FACILITY-COMMITMENT USAGE" means, at any time, the Dollar Equivalent of
the sum of (a) the Principal Debt of Borrowings under SECTION 3.2, plus (b) the
BG/LC Exposure, plus (c) the Overdraft Exposure.
"UK-FACILITY NOTE" means a promissory note substantially in the form of
EXHIBIT A-2.
"UK OBLIGATION" means all present and future (a) Debts, liabilities, and
obligations of any Company to either Agent, any Lender under the UK Facility,
Overdraft Lender, or the Issuer under the BG/LC Subfacility and related to the
UK Facility and any Loan Document, whether principal, interest, fees, costs,
attorneys' fees, or otherwise, (b) Debts, liabilities, or obligations owed by
any Foreign Company to any Lender or its one or more Affiliates under any
agreement, document, or instrument related to any interest swap or foreign-
currency purchase or swap described in the definition of Hedging Agreement, and
(c) renewals, extensions, and modifications of any of the foregoing.
"UK-REVOLVING-COMMITMENT PERCENTAGE" means -- for any Lender under the UK
Facility and at any time -- the proportion (stated as a percentage) that (a) its
UK-Facility Commitment (less, in the case of Overdraft Lender, the Dollar
Equivalent of Overdraft Lender's net commitment under the Overdraft Subfacility)
bears to (b) the total UK-Facility Commitments of all Lender (less the Dollar
Equivalent of Overdraft Lender's net commitment under the Overdraft
Subfacility).
"US COLLATERAL" is defined in SECTION 6.2.
"US BORROWER" is defined in the preamble to this agreement.
"US FACILITY" is defined in the recitals to this agreement.
"US-FACILITY COMMITMENT" means, at any time and for any Lender, the amount
stated beside that Lender's name on the most-recently amended SCHEDULE 1 for the
US Facility (which amount is subject to reduction and cancellation as provided
in this agreement), under which is encompassed the LC Subfacility.
"US-FACILITY-COMMITMENT USAGE" means, at any time, the sum of (a) the
Principal Debt of the US Facility plus (b) the LC Exposure.
"US OBLIGATION" means all present and future (a) Debts, liabilities, and
obligations of any Domestic Company to Administrative Agent, any Lender, the
Issuer under the LC Subfacility, or Arranger and related to the US Facility and
any Loan Document, whether principal, interest, fees, costs, attorneys' fees, or
otherwise, (b) Debts, liabilities, or obligations owed by any Company to any
Lender or its one or more Affiliates under any agreement, document, or
instrument related to any interest swap or foreign-currency purchase or swap
described in the definition of Hedging Agreement, and (c) renewals, extensions,
and modifications of any of the foregoing.
"US-FACILITY NOTE" means a promissory note substantially in the form of
EXHIBIT A-1.
Credit Agreement
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18
"VALUE ADDED TAX" means value added tax as provided for in the Value Added
Tax Act 1994 and legislation (or purported legislation and whether delegated or
otherwise) supplemental thereto or in any primary or secondary legislation
promulgated by the European Union or any official body or agency thereof, and
any tax similar or equivalent to value added tax imposed by any country other
than the United Kingdom and any similar or turnover tax replacing or introduced
in addition to any of the same.
TIME REFERENCES. Unless otherwise specified, in the Loan Documents
---------------
(a) time references (e.g., 10:00 a.m.) are to time in Dallas, Texas, and (b) in
calculating a period from one date to another, the word "from" means "from and
including" and the word "to" or "until" means "to but excluding."
OTHER REFERENCES. Unless otherwise specified, in the Loan Documents
----------------
(a) where appropriate, the singular includes the plural and vice versa, and
words of any gender include each other gender, (b) heading and caption
references may not be construed in interpreting provisions, (c) monetary
references are to currency of the United States of America, (d) section,
paragraph, annex, schedule, exhibit, and similar references are to the
particular Loan Document in which they are used, (e) references to "telecopy,"
"facsimile," "fax," or similar terms are to facsimile or telecopy transmissions,
(f) references to "including" mean including without limiting the generality of
any description preceding that word, (g) the rule of construction that
references to general items that follow references to specific items are limited
to the same type or character of those specific items is not applicable in the
Loan Documents, (h) references to any Person include that Person's heirs,
personal representatives, successors, trustees, receivers, and permitted
assigns, (i) references to any Governmental Requirement include every amendment
or supplement to it, rule and regulation adopted under it, and successor or
replacement for it, and (j) references to any Loan Document or other document
include every renewal and extension of it, amendment and supplement to it, and
replacement or substitution for it.
ACCOUNTING PRINCIPLES. Unless otherwise specified, in the Loan
---------------------
Documents (a) GAAP determines all accounting and financial terms and compliance
with financial covenants, (b) GAAP in effect on the date of this agreement
determines compliance with financial covenants, (c) otherwise, all accounting
principles applied in a current period must be comparable in all material
respects to those applied during the preceding comparable period, (d) all
accounting and financial terms and compliance with reporting covenants must be
on a consolidated basis, as applicable, and (e) compliance with financial
covenants must be on a consolidated basis.
SECTION US FACILITY.
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COMMITMENT. Subject to the provisions in the Loan Documents, each
----------
Lender under the US Facility severally but not jointly agrees to lend to US
Borrower that Lender's Commitment Percentage under the US Facility of requested
or required Borrowings under the US Facility, which US Borrower may borrow,
repay, and reborrow under this agreement subject to the following conditions:
.Each Borrowing under the US Facility may only occur on a Business Day
on or after the Closing Date for the US Facility and before the
Termination Date.
.Each Borrowing under the US Facility may only be (i) $300,000 or a
greater integral multiple of $100,000 if a Base-Rate Borrowing or (ii)
$2,000,000 or a greater integral multiple of $1,000,000 if a Euro-Rate
Borrowing.
.No such Borrowing is permitted that would cause the US-Facility
Commitment Usage to exceed the lesser of either the total US-Facility
Commitments or the Borrowing Base for the US Facility.
Credit Agreement
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19
.No such Borrowing is permitted that would cause the US-Facility-
Commitment Usage (whether direct or participated) owed to any Lender
under the US Facility to exceed that Lender's US-Facility Commitment.
The foregoing limitations are conditions to Borrowings under the US Facility,
the exceeding of which results in mandatory prepayments becoming due under
SECTION 4.2(C). However, any such excess is part of the US Obligation for all
purposes, including, without limitation, US Borrower's obligations to pay same
in accordance with the Loan Documents.
BORROWING PROCEDURE. The following procedures apply to Borrowings
-------------------
under the US Facility:
BORROWING REQUEST. US Borrower may request a Borrowing under the
-----------------
US Facility by making or delivering a Borrowing Request to Administrative
Agent, which is irrevocable and binding on US Borrower, which must state
the Type, amount, and Interest Period for the Borrowing, and which must be
received by Administrative Agent no later than (i) 10:00 a.m. on the third
Business Day before the Borrowing Date for any Euro-Rate Borrowing, or (ii)
11:00 a.m. on the Borrowing Date for any Base-Rate Borrowing.
Administrative Agent shall promptly on the day received notify each Lender
under the US Facility about the contents of the Borrowing Request.
FUNDING. Each Lender under the US Facility shall remit its
-------
Commitment Percentage under the US Facility of each requested Borrowing
under the US Facility to Administrative Agent's principal office in Dallas,
Texas, in funds that are available for immediate use by Administrative
Agent by 2:00 p.m. on the applicable Borrowing Date. Subject to receipt of
those funds, Administrative Agent shall (unless to its actual knowledge any
of the applicable conditions precedent have not been satisfied by US
Borrower or waived by the requisite Lenders) make those funds available to
US Borrower by (at US Borrower's option according to the related Borrowing
Request) (i) wiring the funds to or for the account of US Borrower at the
direction of US Borrower or (ii) depositing the funds in US Borrower's
account with Administrative Agent.
FUNDING ASSUMED. Absent contrary written notice from a Lender
---------------
under the US Facility, Administrative Agent may assume that each such
Lender has made its Commitment Percentage under the US Facility of the
requested Borrowing available to Administrative Agent on the applicable
Borrowing Date, and Administrative Agent may, in reliance upon that
assumption (but shall not be required to), make available to US Borrower a
corresponding amount. If any such Lender fails to make its Commitment
Percentage under the US Facility of any requested Borrowing available to
Administrative Agent on the applicable Borrowing Date, then Administrative
Agent may recover the applicable amount on demand (i) from that Lender
together with interest, commencing on the Borrowing Date and ending on (but
excluding) the date Administrative Agent recovers the amount from that
Lender, at an annual interest rate equal to the Fed-Funds Rate, or (ii) if
that Lender fails to pay its amount upon demand, then from US Borrower
together with interest at the rate applicable to that Borrowing. No Lender
under the US Facility is responsible for the failure of any other Lender
under the US Facility to make its Commitment Percentage of the US Facility
of any Borrowing available as required by SECTION 2.2(B); however, failure
of any Lender under the US Facility to make its Commitment Percentage of
the US Facility of any Borrowing so available does not excuse any other
Lender under the US Facility from making its Commitment Percentage of the
US Facility of any Borrowing so available.
Credit Agreement
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20
LC SUBFACILITY.
--------------
(a) CONDITIONS. Subject to the provisions of the Loan Documents, the
----------
Issuer for the LC Subfacility agrees, if requested by US Borrower, to issue
LCs upon US Borrower's delivering a LC Request and a LC Agreement, both of
which must be received by that Issuer no later than the second Business Day
before the Business Day on which the requested LC is to be issued, subject
to the following conditions:
. LCs may only be issued on or after the Closing Date for the US
Facility and must expire on or before three Business Days before
the Termination Date.
. Each LC must be in the face amount of at least $100,000.
. No such LC may be issued that would cause the LC Exposure to
exceed the amount of the LC Subfacility.
. No such LC may be issued that would cause the US-Facility
Commitment Usage to exceed the lesser of either the total US-
Facility Commitments or the Borrowing Base for the US Facility.
. No such LC may be issued that would cause the US-Facility-
Commitment Usage (whether direct or participated) owed to that
Issuer under the US Facility to exceed that Issuer's US-Facility
Commitment.
The foregoing limitations are conditions to LCs under the LC Subfacility,
the exceeding of which results in mandatory prepayments becoming due under
SECTION 4.2(c). However, any such excess is part of the US Obligation for
all purposes, including, without limitation, US Borrower's obligations to
pay same in accordance with the Loan Documents.
(b) PARTICIPATION. Immediately upon that Issuer's issuance of a LC,
-------------
that Issuer shall be deemed to have sold and transferred to each other
Lender under the US Facility, and each other such Lender shall be deemed
irrevocably and unconditionally to have purchased and received from that
Issuer, without recourse or warranty, an undivided interest and
participation to the extent of such Lender's Commitment Percentage under
the US Facility in the LC and all applicable Rights of that Issuer in the
LC (other than Rights to receive certain fees provided in SECTION 5.4 to be
for that Issuer's sole account). The Issuer shall as soon as practicable
advise Administrative Agent who shall as soon as practicable advise the
Lenders under the US Facility of any such issuance and their relative
participations.
(c) REIMBURSEMENT OBLIGATION. To induce that Issuer to issue and
------------------------
maintain LCs, and to induce the Lenders under the US Facility to
participate in issued LCs, US Borrower agrees to pay or reimburse that
Issuer (i) on the first Business Day after the Issuer notifies
Administrative Agent and US Borrower that it has made payment under a LC,
the amount paid by the Issuer and (ii) within five Business Days after
demand, the amount of any additional costs, expenses, and fees that Issuer
customarily charges for amending LC Agreements, for honoring drafts under
letters of credit, and for taking similar action in connection with letters
of credit. If US Borrower has not reimbursed the Issuer for any drafts
paid by the date on which reimbursement is required under this section,
then Administrative Agent is irrevocably authorized to fund US Borrower's
reimbursement obligations as a Base-Rate Borrowing under the US Facility if
proceeds are available under the US Facility and if the conditions in this
agreement for such a US Borrowing
Credit Agreement
----------------
21
(other than any notice requirements or minimum funding amounts) have, to
Administrative Agent's knowledge, been satisfied. The proceeds of that
Borrowing shall be advanced directly to the Issuer to pay US Borrower's
unpaid reimbursement obligations. If funds cannot be advanced under the US
Facility, then US Borrower's reimbursement obligation shall constitute a
demand obligation. US Borrower's obligations under this section are
absolute and unconditional under any and all circumstances and irrespective
of any setoff, counterclaim, or defense to payment that US Borrower may
have at any time against the Issuer or any other Person. From the date
that the Issuer pays a draft under a LC until US Borrower either reimburses
or is obligated to reimburse the Issuer for that draft under this section,
the amount of that draft bears interest payable to the Issuer at the rate
then applicable to Base-Rate Borrowings. From the due date of the
respective amounts due under this section, to the date paid (including any
payment from proceeds of a Base-Rate Borrowing), unpaid reimbursement
amounts accrue interest that is payable on demand at the Default Rate.
(d) GENERAL. The Issuer under the LC Subfacility shall promptly
-------
notify Administrative Agent and US Borrower of the date and amount of any
draft presented for honor under any LC (but failure to give notice will not
affect US Borrower's obligations under this agreement). The Issuer shall
pay the requested amount upon presentment of a draft unless presentment on
its face does not comply with the terms of the applicable LC. When making
payment, the Issuer may disregard (i) any default or potential default that
exists under any other agreement and (ii) obligations under any other
agreement that have or have not been performed by the beneficiary or any
other Person (and the Issuer is not liable for any of those obligations).
US Borrower's reimbursement obligations to the Issuer, and the Lenders
under the US Facility, and each such Lender's obligations to the Issuer,
under this section are absolute and unconditional irrespective of, and the
Issuer is not responsible for (i) the validity, enforceability,
sufficiency, accuracy, or genuineness of documents or endorsements (even if
they are in any respect invalid, unenforceable, insufficient, inaccurate,
fraudulent, or forged) except as otherwise provided in CLAUSE (f) below,
(ii) any dispute by any Company with or any Company's claims, setoffs,
defenses, counterclaims, or other Rights against the Issuer, any Lender, or
any other Person, or (iii) the occurrence of any Potential Default or Event
of Default. The Issuer shall promptly pay to Administrative Agent
reimbursement payments received from US Borrower for Administrative Agent
to promptly distribute to all Lenders under the US Facility according to
their respective Commitment Percentages under the US Facility.
(e) LENDERS' OBLIGATIONS. If US Borrower fails to reimburse the
--------------------
Issuer as provided in SECTION 2.3(c) by the date on which reimbursement is
due under that section, and funds cannot be advanced under the US Facility
to satisfy the reimbursement obligations, then Administrative Agent shall
promptly notify each Lender under the US Facility of that failure, of the
date and amount paid, and of each such Lender's Commitment Percentage under
the US Facility of the unreimbursed amount. Each such Lender shall
promptly and unconditionally make available to Administrative Agent in
immediately available funds its Commitment Percentage under the US Facility
of the unpaid reimbursement obligation. Funds are due and payable to
Administrative Agent before the close of business on the Business Day when
Administrative Agent gives notice to each such Lender of US Borrower's
reimbursement failure (if notice is given before 1:00 p.m.) or on the next
succeeding Business Day (if notice is given after 1:00 p.m.). All amounts
payable by any such Lender accrue interest after the due date at the Fed-
Funds Rate from the day the applicable draft or draw is paid by
Administrative Agent to (but not including) the date the amount is paid by
that Lender to Administrative Agent. Upon receipt of those funds,
Administrative Agent shall make them available to the Issuer.
Credit Agreement
----------------
22
(f) ISSUER'S DUTIES. The Issuer under the LC Subfacility agrees with
---------------
US Borrower and each Lender under the US Facility that it will exercise and
give the same care and attention to each LC that it issues as it gives to
its other letters of credit. Each such Lender and US Borrower agree that,
in paying any draft under any LC, the Issuer has no responsibility to
obtain any document (other than any documents expressly required by the
respective LC) or to ascertain or inquire as to any document's validity,
enforceability, sufficiency, accuracy, or genuineness or the authority of
any Person delivering it. Neither the Issuer nor its Representatives will
be liable to any such Lender or any Company for any LC's use or for any
beneficiary's acts or omissions. Any action, inaction, error, delay, or
omission taken or suffered by the Issuer or any of its Representatives in
connection with any LC, applicable drafts or documents, or the
transmission, dispatch, or delivery of any related message or advice, if in
good faith and in conformity with applicable Governmental Requirements and
in accordance with the standards of care specified in the Uniform Customs
and Practices for Documentary Credits (1993 Revision), International
Chamber of Commerce Publication No. 500 (as amended or modified), is
binding upon the Companies and Lenders and, except as provided in SECTION
2.3(e), does not place that Issuer or any of its Representatives under any
resulting liability to any Company or any Lender. Administrative Agent is
not liable to any Company or any Lender for any action taken or omitted, in
the absence of gross negligence or willful misconduct, by that Issuer or
its Representative in connection with any LC.
(g) CASH COLLATERAL. On the Termination Date and if requested by the
---------------
Lenders under the US Facility while an Event of Default exists, US Borrower
shall provide Administrative Agent, for the benefit of Lenders under the US
Facility, cash collateral in an amount to equal the then-existing LC
Exposure (with interest on that cash collateral accruing to the benefit of
US Borrower).
(h) INDEMNIFICATION. US BORROWER SHALL PROTECT, INDEMNIFY, PAY, AND
---------------
SAVE ADMINISTRATIVE AGENT, THE ISSUER UNDER THE LC SUBFACILITY, AND EACH
OTHER LENDER UNDER THE US FACILITY, AND THEIR RESPECTIVE REPRESENTATIVES
HARMLESS FROM AND AGAINST ANY AND ALL CLAIMS, DEMANDS, LIABILITIES,
DAMAGES, COSTS, CHARGES, AND EXPENSES (INCLUDING REASONABLE ATTORNEYS'
FEES) WHICH ANY OF THEM MAY INCUR OR BE SUBJECT TO AS A CONSEQUENCE OF THE
ISSUANCE OF ANY LC, ANY DISPUTE ABOUT IT, OR THE FAILURE OF ANY ISSUING
LENDER TO HONOR A DRAW REQUEST UNDER ANY LC AS A RESULT OF ANY ACT OR
OMISSION (WHETHER RIGHT OR WRONG) OF ANY PRESENT OR FUTURE GOVERNMENTAL
AUTHORITY. HOWEVER, NO PERSON IS ENTITLED TO INDEMNITY UNDER THE FOREGOING
FOR ITS OWN GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.
(i) LC AGREEMENTS. Although referenced in any LC, terms of any
-------------
particular agreement or other obligation to the beneficiary are not
incorporated into this agreement in any manner. The fees and other amounts
payable with respect to each LC are as provided in this agreement, drafts
under each LC are part of the US Obligation, only the events specified in
this agreement as an Event of Default shall constitute a default under any
LC Agreement, and the terms of this agreement control any conflict between
the terms of this agreement and any LC Agreement.
2.4 REQUESTS. Each Borrowing Request under the US Facility and LC Request
--------
constitutes a representation and warranty by US Borrower that as of the
Borrowing Date or the date of issuance of the requested LC, as the case may be,
all of the applicable conditions precedent in SECTION 7.1 have been satisfied.
Credit Agreement
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23
2.5 TERMINATION. US Borrower may -- upon giving at least five Business
-----------
Days prior written and irrevocable notice to Administrative Agent -- terminate
all or part of the US Facility. US Borrower may not, however, terminate all of
the US Facility without Administrative Agent's prior written consent unless the
UK Facility is concurrently terminated in accordance with SECTION 3.6. Each
partial termination must be in an amount of not less than $1,000,000 or a
greater integral multiple of $1,000,000 and must be ratable in accordance with
the Commitment Percentage of each Lender under the US Facility. At the time of
any termination, US Borrower shall pay to Administrative Agent, for the account
of each Lender under the US Facility, as applicable, any amounts that may then
be due under SECTION 4.2(c)(i), all accrued and unpaid fees under this
agreement, the interest attributable to the amount of that termination, and any
related Funding Loss. Any part of the US-Facility Commitments that are
terminated may not be reinstated.
SECTION 3 UK FACILITY.
- --------- -----------
3.1 COMMITMENT. Subject to the provisions in the Loan Documents, each
----------
Lender under the UK Facility severally but not jointly agrees to lend to UK
Borrowers that Lender's UK-Revolving-Commitment Percentage of requested or
required Borrowings under the UK Facility (other than under the Overdraft
Subfacility) which UK Borrowers may borrow, repay, and reborrow under this
agreement subject to the following conditions:
. Each Borrowing under the UK Facility may only occur on a Business Day
on or after the Closing Date for the UK Facility and before the
Termination Date.
. Each such Borrowing shall be due and payable on the last day of the
relevant Interest Period.
. Each such Borrowing may be denominated in Dollars or -- subject to
SECTION 3.2(D) -- an Alternative Currency and shall be a minimum
amount of $2,000,000 (or the equivalent in that Alternative Currency
and a round amount in that Alternative Currency as is acceptable to
Administrative Agent) or a greater integral multiple of $1,000,000 (or
the equivalent in that Alternative Currency and a round amount in that
Alternative Currency as is acceptable to Administrative Agent).
. No such Borrowing is permitted that would cause the UK-Facility-
Commitment Usage (calculated at the then-Dollar Equivalent of that
amount) to exceed the lesser of either the total UK-Facility
Commitments or the Borrowing Base for the UK Facility.
. No such Borrowing is permitted that would cause the UK-Facility-
Commitment Usage (calculated at the then-Dollar Equivalent of that
amount) (whether direct or participated) owed to any Lender under the
UK Facility to exceed that Lender's UK-Facility Commitment.
The foregoing limitations are conditions to Borrowings under the UK Facility,
the exceeding of which results in mandatory prepayments becoming due under
SECTION 4.2(c). However, any such excess is part of the UK Obligation for all
purposes, including, without limitation, UK Borrowers' joint and several
obligations to pay same in accordance with the Loan Documents.
3.2 BORROWING PROCEDURE. The following procedures apply to Borrowings
-------------------
under the UK Facility other than Borrowings under the Overdraft Subfacility:
Credit Agreement
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24
(a) BORROWING REQUEST. UK Borrowers may request a Borrowing under
-----------------
the UK Facility by making or delivering a Borrowing Request to
Administrative Agent, which is irrevocable and binding on UK Borrowers,
which must state which UK Borrower is to receive that Borrowing and state
the currency (Dollars, Pound Sterling, Deutsche Marks or other Alternative
Currency), amount, and Interest Period for each Borrowing under the UK
Facility, and which must be received by Administrative Agent no later than
10:00 a.m. on the third Business Day before the Borrowing Date.
Administrative Agent shall promptly on the day received notify each Lender
under the UK Facility about the contents of the Borrowing Request.
(b) FUNDING. Each Lender under the UK Facility shall remit its UK-
-------
Revolving-Commitment Percentage of each requested Borrowing under the UK
Facility to Administrative Agent's principal office in Dallas, Texas (or,
at Administrative Agent's discretion and only in respect of the UK
Facility, to an account of Administrative Agent with a bank in the United
Kingdom that Administrative Agent may from time to time designate by
written notice to UK Borrowers and the Lenders under the UK Facility), in
funds that are available for immediate use by Administrative Agent by 2:00
p.m. (London time) on the applicable Borrowing Date in the currency
requested. Subject to receipt of those funds, Administrative Agent shall
(unless to its actual knowledge any of the applicable conditions precedent
have not been satisfied by UK Borrowers or waived by the requisite Lenders
under the UK Facility) make those funds available to the designated UK
Borrower by wiring the funds to or for the account of the designated UK
Borrower at the direction of the designated UK Borrower.
(c) FUNDING ASSUMED. Absent contrary written notice from a Lender
---------------
under the UK Facility, Administrative Agent may assume that each such
Lender has made its UK-Revolving-Commitment Percentage of the requested
Borrowing available to Administrative Agent on the applicable Borrowing
Date, and Administrative Agent may, in reliance upon that assumption (but
shall not be required to), make available to the designated UK Borrower a
corresponding amount. If any such Lender fails to make its UK-Revolving-
Commitment Percentage of any requested Borrowing available to
Administrative Agent on the applicable Borrowing Date, then Administrative
Agent may recover the applicable amount on demand (i) from that Lender
together with interest, commencing on the Borrowing Date and ending on (but
excluding) the date Administrative Agent recovers the amount from that
Lender, at an annual interest rate equal to the Fed-Funds Rate, or (ii) if
that Lender fails to pay its amount upon demand, then from UK Borrowers (on
a joint and several basis) together with interest at the rate applicable to
that Borrowing. No Lender under the UK Facility is responsible for the
failure of any other Lender under the UK Facility to make its UK-Revolving-
Commitment Percentage of any Borrowing available as required by SECTION
3.2(b); however, failure of any such Lender to make its UK-Revolving-
Commitment Percentage of any Borrowing so available does not excuse any
other Lender under the UK Facility from making its UK-Revolving-Commitment
Percentage of any Borrowing so available.
(d) CONDITIONS FOR ALTERNATIVE CURRENCIES. A Borrowing under the UK
-------------------------------------
Facility (other than under the Overdraft Subfacility) may not be
denominated in an Alternative Currency unless Administrative Agent has
confirmed to UK Borrowers that such Alternative Currency is available for
such Borrowings. If no later than 10:00 a.m. on the second Business Day
before the Borrowing Date for a Borrowing in an Alternative Currency a
Lender under the UK Facility notifies Administrative Agent that:
(i) the Lender cannot fund its share of that Borrowing in the
proposed Alternative Currency; or
Credit Agreement
----------------
25
(ii) an authorization of a Governmental Authority is required
in respect of that Alternative Currency to permit its use by the
Lender to make its share of that Borrowing available; or
(iii) the use of that Alternative Currency is restricted or
prohibited,
then Administrative Agent shall notify UK Borrowers and each Lender under
the UK Facility by 1:00 p.m. on the same day and that Borrowing shall not
be made, and UK Borrowers are jointly and severally liable for any
resulting Funding Loss. If no such notice is so given, then the Borrowing
shall be made as requested subject to the other terms and conditions of the
Loan Documents.
3.3 OVERDRAFT SUBFACILITY. Subject to the terms of this agreement and
---------------------
only if no Event of Default or Potential Default exists, the Overdraft
Subfacility is available for utilization by either UK Borrower until the earlier
of either the Termination Date or any earlier date on which Overdraft Lender
terminates the Overdraft Subfacility by notice to UK Borrowers and
Administrative Agent. The Overdraft Subfacility shall be made available on such
terms as shall be agreed between Overdraft Lender and UK Borrowers from time to
time that are not inconsistent with the other terms of this agreement so long
as:
. Each UK Borrower shall complete such mandate and other like documents
in respect of the Overdraft Subfacility as Overdraft Lender may
reasonably require and that are not inconsistent with the other terms
of this agreement.
. None of the Overdraft Subfacility may be utilized that would cause the
UK-Facility-Commitment Usage (calculated at then-Dollar Equivalent of
that amount) to exceed the lesser of either the total UK-Facility
Commitments or the Borrowing Base for the UK Facility.
. None of the Overdraft Subfacility may be used that would cause the UK-
Facility-Commitment Usage (calculated at then-Dollar Equivalent of
that amount) for Overdraft Lender to exceed its UK-Facility
Commitment.
. None of the Overdraft Subfacility may be utilized that would cause
the limitations in the definition of the Overdraft Subfacility to be
exceeded.
The foregoing limitations are conditions to overdrafts and other accommodations
under the Overdraft Subfacility, the exceeding of which results in mandatory
prepayments becoming due under SECTION 4.2(c). However, any such excess is part
of the UK Obligation for all purposes, including, without limitation, UK
Borrowers' joint and several obligations to pay same in accordance with the Loan
Documents. For the avoidance of doubt, Overdraft Lender may, without liability,
return cheques unpaid if the payment of those cheques would result in a breach
of the foregoing limitations. Subject to the foregoing conditions, Overdraft
Lender agrees to make the Overdraft Subfacility available on a revolving basis
to UK Borrowers to be utilized on any business day in London by way of overdraft
on usual banking terms (including that amounts outstanding by way of overdraft
are repayable on demand and are subject to agreement between Overdraft Lender
and UK Borrowers), whether by way of BACS facilities and such other facilities
or financial accommodation as each case on such terms (not inconsistent with the
other terms of this agreement) as Overdraft Lender and UK Borrowers may from
time to time agree.
Credit Agreement
----------------
26
3.4 BG/LC SUBFACILITY.
-----------------
(a) CONDITIONS. Subject to the provisions of the Loan Documents, the
----------
Issuer for the BG/LC Subfacility agrees, if requested by UK Borrowers, to
issue BGs (if it may lawfully do so) or LCs upon UK Borrowers delivering a
BG/LC Request and, if applicable, a LC Agreement, both of which must be
received by Administrative Agent and that Issuer no later than the second
Business Day before the Business Day on which the requested BG or LC is to
be issued, subject to the following conditions:
. BGs and LCs may only be issued on or after the Closing Date for the
UK Facility and must expire on or before three Business Days before
the Termination Date.
. There may be no more than 20 outstanding BGs and LCs, collectively,
at any time.
. Each LC and BG must state on its face its expiry date and the maximum
amount available and otherwise be in form and substance acceptable to
the Issuer and Administrative Agent.
. No such BG or LC may be issued that would cause the BG/LC Exposure
(calculated at then-Dollar Equivalent of that amount) to exceed the
amount of the BG/LC Subfacility.
. No such BG or LC may be issued that would cause the UK-Facility-
Commitment Usage (calculated at then-Dollar Equivalent of that amount)
to exceed the lesser of either the total UK-Facility Commitments or
the Borrowing Base for the UK Facility.
. No such BG or LC may be issued that would cause the UK-Facility-
Commitment Usage (calculated at then-Dollar Equivalent of that amount)
(whether direct or participated) owed to that Issuer under the UK
Facility to exceed that Issuer's UK-Facility Commitment.
The foregoing limitations are conditions to BGs and LCs under the BG/LC
Subfacility, the exceeding of which results in mandatory prepayments
becoming due under SECTION 4.2(c). However, any such excess is part of the
UK Obligation for all purposes, including, without limitation, UK
Borrowers' joint and several obligations to pay same in accordance with the
Loan Documents. The Issuer shall as soon as practicable advise
Administrative Agent who shall as soon as practicable advise the Lenders
under the UK Facility of any such issuance.
(b) REIMBURSEMENT OBLIGATION. To induce that Issuer to issue and
------------------------
maintain BGs or LCs, UK Borrowers jointly and severally agree to pay or
reimburse the Issuer (i) on the first Business Day after the Issuer
notifies Administrative Agent and UK Borrowers that it has made payment
under a BG or LC, the amount paid by that Issuer and (ii) within five
Business Days after demand, the amount of any additional costs, expenses,
and fees that Issuer customarily charges for amending LC Agreements, for
honoring drafts under bank guarantees or letters of credit, and for taking
similar action in connection with bank guarantees or letters of credit. If
UK Borrowers have not reimbursed the Issuer for any drafts paid by the date
on which reimbursement is required under this section, then Administrative
Agent is irrevocably authorized to fund the UK Borrowers' reimbursement
obligations as a Borrowing under the UK Facility if proceeds are available
under the UK Facility and if the conditions in this agreement for such a
Borrowing under the UK Facility (other than any notice requirements or
minimum funding amounts) have, to Administrative Agent's knowledge, been
satisfied. The proceeds of that Borrowing shall be advanced directly to
the Issuer to pay UK Borrowers' unpaid reimbursement obligations. If funds
cannot be advanced under the UK Facility, then UK Borrowers'
Credit Agreement
----------------
27
reimbursement obligation shall constitute a demand obligation. UK
Borrowers' obligations under this section are absolute and unconditional
under any and all circumstances and irrespective of any setoff,
counterclaim, or defense to payment that either UK Borrower may have at any
time against the Issuer or any other Person. From the date that the Issuer
pays a draft under a BG or LC until the UK Borrowers either reimburse or
are obligated to reimburse the Issuer for that draft under this section,
the amount of that draft bears interest payable to the Issuer at an annual
interest rate equal to the sum of the Issuer's cost of funds, plus the
Applicable Margin for Euro-Rate Borrowings, plus the applicable Mandatory-
Liquid-Assets Costs. From the due date of the respective amounts due under
this section, to the date paid (including any payment from proceeds of a
Borrowing), unpaid reimbursement amounts accrue interest that is payable on
demand at the Default Rate.
(c) GENERAL. The Issuer under the BG/LC Subfacility shall promptly
-------
notify Administrative Agent and UK Borrowers of the date and amount of any
draft presented for honor under any BG or LC (but failure to give notice
will not affect UK Borrowers' obligations under this agreement). The
Issuer shall pay the requested amount upon presentment of a draft unless
presentment on its face does not comply with the terms of the applicable BG
or LC. When making payment, that Issuer may disregard (i) any default or
potential default that exists under any other agreement and (ii)
obligations under any other agreement that have or have not been performed
by the beneficiary or any other Person (and that Issuer is not liable for
any of those obligations). UK Borrowers' reimbursement obligations to the
Issuer and the Lenders under the UK Facility, and each such Lender's
obligations to the Issuer, under this section are absolute and
unconditional irrespective of, and the Issuer is not responsible for (i)
the validity, enforceability, sufficiency, accuracy, or genuineness of
documents or endorsements (even if they are in any respect invalid,
unenforceable, insufficient, inaccurate, fraudulent, or forged) except as
otherwise provided in CLAUSE (e) below, (ii) any dispute by any Company
with or any Company's claims, setoffs, defenses, counterclaims, or other
Rights against the Issuer, any Lender, or any other Person, or (iii) the
occurrence of any Potential Default or Event of Default. The Issuer shall
promptly pay to Administrative Agent reimbursement payments received from
either UK Borrower for Administrative Agent to promptly distribute to all
Lenders under the UK Facility according to their respective UK-Revolving-
Commitment Percentages.
(d) LENDERS' OBLIGATIONS. If UK Borrowers fail to reimburse the
--------------------
Issuer as provided in SECTION 3.4(b) by the date on which reimbursement is
due under that section, and funds cannot be advanced under the UK Facility
to satisfy the reimbursement obligations, then Administrative Agent shall
promptly notify each Lender under the UK Facility of that failure, of the
date and amount paid, and of each such Lender's UK-Revolving-Commitment
Percentage of the unreimbursed amount. Each Lender under the UK Facility
shall promptly and unconditionally make available to Administrative Agent
in immediately available funds its UK-Revolving-Commitment Percentage of
the unpaid reimbursement obligation, whereupon, subject to receipt of those
funds, Administrative Agent shall make them available to the Issuer. Funds
are due and payable to Administrative Agent by the close of business
(Dallas time) three Business Days after notification for amounts payable in
Dollars, Deutsche Marks, or other Alternative Currency (other than Pound
Sterling) and one Business Day after notification for amounts payable in
Pound Sterling. All amounts payable by any Lender under the UK Facility
accrue interest after the due date at the Fed-Funds Rate from the day the
applicable draft or draw is paid by Administrative Agent to (but not
including) the date the amount is paid by that Lender to Administrative
Agent. Upon receipt of those funds, Administrative Agent shall make them
available to the Issuer.
Credit Agreement
----------------
28
(e) ISSUER'S DUTIES. The Issuer under the BG/LC Subfacility agrees
---------------
with each Lender and each UK Borrower under the UK Facility that it will
exercise and give the same care and attention to each BG or LC that it
issues as it gives to its other bank guarantees and letters of credit.
Each such Lender and UK Borrowers agree that, in paying any draft under any
BG or LC, the Issuer has no responsibility to obtain any document (other
than any documents expressly required by the respective BG or LC) or to
ascertain or inquire as to any document's validity, enforceability,
sufficiency, accuracy, or genuineness or the authority of any Person
delivering it. Neither the Issuer nor its Representatives will be liable
to any such Lender or any Company for any BG's or LC's use or for any
beneficiary's acts or omissions. Any action, inaction, error, delay, or
omission taken or suffered by the Issuer or any of its Representatives in
connection with any BG or LC, applicable drafts or documents, or the
transmission, dispatch, or delivery of any related message or advice, if in
good faith and in conformity with applicable Governmental Requirements and
in accordance with the standards of care specified in the Uniform Customs
and Practices for Documentary Credits (1993 Revision), International
Chamber of Commerce Publication No. 500 (as amended or modified), is
binding upon the Companies and Lenders and, except as provided in SECTION
3.4(d), does not place the Issuer or any of its Representatives under any
resulting liability to any Company or any Lender. Administrative Agent is
not liable to any Company or any Lender for any action taken or omitted, in
the absence of gross negligence or willful misconduct, by the Issuer or its
Representative in connection with any BG or LC.
(f) CASH COLLATERAL. On the Termination Date and if requested by the
---------------
Lenders under the UK Facility while an Event of Default exists, UK
Borrowers shall provide Administrative Agent, for the benefit of Lenders
under the UK Facility, cash collateral in an amount to equal the then-
existing BG/LC Exposure (with interest on that cash collateral accruing to
the benefit of UK Borrowers).
(g) INDEMNIFICATION. UK BORROWERS SHALL JOINTLY AND SEVERALLY
---------------
PROTECT, INDEMNIFY, PAY, AND SAVE ADMINISTRATIVE AGENT, THE ISSUER UNDER
THE BG/LC SUBFACILITY, AND EACH OTHER LENDER UNDER THE UK FACILITY, AND
THEIR RESPECTIVE REPRESENTATIVES HARMLESS FROM AND AGAINST ANY AND ALL
CLAIMS, DEMANDS, LIABILITIES, DAMAGES, COSTS, CHARGES, AND EXPENSES
(INCLUDING REASONABLE ATTORNEYS' FEES) WHICH ANY OF THEM MAY INCUR OR BE
SUBJECT TO AS A CONSEQUENCE OF THE ISSUANCE OF ANY BG OR LC, ANY DISPUTE
ABOUT IT, OR THE FAILURE OF THE ISSUER TO HONOR A DRAW REQUEST UNDER ANY BG
OR LC AS A RESULT OF ANY ACT OR OMISSION (WHETHER RIGHT OR WRONG) OF ANY
PRESENT OR FUTURE GOVERNMENTAL AUTHORITY. HOWEVER, NO PERSON IS ENTITLED
TO INDEMNITY UNDER THE FOREGOING FOR ITS OWN GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT.
(h) LC AGREEMENTS. Although referenced in any LC, terms of any
-------------
particular agreement or other obligation to the beneficiary are not
incorporated into this agreement in any manner. The fees and other amounts
payable with respect to each BG and LC are as provided in this agreement,
drafts under each BG and LC are part of the UK Obligation, only the events
specified in this agreement as an Event of Default shall constitute a
default in respect of any BG and LC, and the terms of this agreement
control any conflict between the terms of this agreement and any LC
Agreement.
3.5 REQUESTS. Each Borrowing Request under the UK Facility, borrowing or
--------
other accommodation under the Overdraft Subfacility, and BG/LC Request
constitutes a joint and several representation and warranty by UK Borrowers that
as of the Borrowing Date, the date of issuance of the
Credit Agreement
----------------
29
requested BG or LC, or the date of the borrowing or accommodation, as the case
may be, that all of the applicable conditions precedent in SECTION 7.2 have been
satisfied.
3.6 TERMINATION. UK Borrowers may -- upon giving at least five Business
-----------
Days prior written and irrevocable notice to Administrative Agent -- terminate
all or part of the UK Facility. UK Borrowers may not terminate all of the UK
Facility without Administrative Agent's prior written consent unless the US
Facility is concurrently terminated in accordance with SECTION 2.5. Each
partial termination must (a) be in an amount of not less than the Dollar
Equivalent of $1,000,000 or a greater integral multiple of the Dollar Equivalent
of $1,000,000, (b) be ratable in accordance with each Lender's UK-Revolving-
Commitment Percentages, and (c) be accompanied by a concurrent partial
termination of the Overdraft Subfacility in the same ratio as the partial
termination of the overall UK Facility. At the time of any termination, UK
Borrower shall pay to Administrative Agent, for the account of each Lender under
the UK Facility, as applicable, any amounts that may then be due under SECTION
4.2(c)(ii), all accrued and unpaid fees under this agreement, the interest
attributable to the amount of that termination, and any related Funding Loss.
Any part of the UK-Facility Commitments that are terminated may not be
reinstated.
3.7 JOINT AND SEVERAL. UK Borrowers are jointly and severally liable for
-----------------
the UK Obligation. The failure of either UK Borrower to perform its obligations
under any of the Loan Documents shall not affect the obligations of the other UK
Borrower, and the effectiveness of the Loan Documents shall not be revoked or
impaired as to either UK Borrower by any contingency affecting the other UK
Borrower, by the revocation or release of any obligation thereunder of either UK
Borrower, by any time or any indulgence granted to either UK Borrower, or by any
variation or amendment to the terms of any of the Loan Documents.
SECTION 4 PAYMENT TERMS.
- --------- -------------
4.1 NOTES AND PAYMENTS.
------------------
(a) NOTES. The Principal Debt of the US Facility and interest on it
-----
are evidenced by the US-Facility Notes, one payable to each Lender under
the US Facility. The Principal Debt of the UK Facility (other than under
the Overdraft Subfacility) and interest on it are evidenced by the UK-
Facility Notes, one payable to each Lender under the UK Facility.
(b) PAYMENT. UK Borrowers must make each payment and prepayment
-------
under the Overdraft Subfacility directly to Overdraft Lender in funds
available for immediate use by Overdraft Lender by 1:00 p.m. (London time)
on the day due. Each Borrower must make each payment and prepayment it
owes under the Loan Documents to Administrative Agent's principal office in
Dallas, Texas (or, at Administrative Agent's discretion and only in respect
of the UK Facility, to an account of Administrative Agent with a bank in
the United Kingdom that Administrative Agent may from time to time
designate by written notice to UK Borrowers and the Lenders under the UK
Facility) in funds available for immediate use by Administrative Agent by
1:00 p.m. on the day due. Subject to SECTION 4.8, any funds not received
by the applicable deadline on any day in the preceding two sentences shall
continue to accrue interest as if they were received on the next Business
Day. Administrative Agent shall promptly pay to each Lender the part of
any payment or prepayment to which that Lender is entitled under this
agreement on the same day Administrative Agent receives the funds from any
Borrower.
(c) PAYMENT ASSUMED. Unless Administrative Agent has received notice
---------------
from a Borrower before the date on which any payment or prepayment is due
under this agreement that
Credit Agreement
----------------
30
US Borrower will not make that payment or prepayment in full, then
Administrative Agent may assume that US Borrower to have made the full
payment or prepayment due and may (in reliance upon that assumption and
without any obligation to) cause to be distributed to each relevant Lender
on that date the amount then due to each relevant Lender in respect of that
payment or prepayment. If and to the extent US Borrower does not make the
full payment or prepayment due to Administrative Agent, each relevant
Lender receiving any portion of it shall repay to Administrative Agent on
demand the amount distributed to that Lender by Administrative Agent
together with interest for each day from the date that Lender received
payment from Administrative Agent until the date that Lender repays
Administrative Agent (unless such repayment is made on the same day as such
distribution), at an interest rate equal to the Fed-Funds Rate.
4.2 INTEREST AND PRINCIPAL PAYMENTS.
-------------------------------
(a) INTEREST PAYMENTS. Accrued interest on each Euro-Rate Borrowing
-----------------
is due and payable on the last day of its respective Interest Period. If
any Interest Period for a Euro-Rate Borrowing is greater than three months,
then accrued interest is also due and payable on the date three months
after the commencement of the Interest Period. Accrued interest on each
Base-Rate Borrowing is due and payable on the last day of each March, June,
September, and December -- commencing on the first of those dates that
follows the applicable Closing Date -- and on the Termination Date.
Accrued interest on the Overdraft Subfacility is payable on demand.
(b) PRINCIPAL PAYMENTS. The Principal Debt of Borrowings under the
------------------
Overdraft Subfacility are due and payable as provided in SECTION 3.3. Each
Euro-Rate Borrowing under the UK Facility is due and payable on the earlier
of either the Termination Date or the last day of its applicable Interest
Period. All Principal Debt is due and payable on the Termination Date.
(c) PREPAYMENTS.
-----------
(i) Upon demand, US Borrower shall make a mandatory prepayment
of Principal Debt of the US Facility at least in the amount of any
Borrowing-Base Deficiency that may ever exist under the US Facility
for whatever reason, including, without limitation, because of a
downward fluctuation of the Borrowing Base for the US Facility or any
partial reduction of the US-Facility Commitments.
(ii) Upon demand, UK Borrowers shall jointly and severally make a
mandatory prepayment of any combination of Principal Debt of the UK
Facility or the Overdraft Exposure at least in the amount of any
Borrowing-Base Deficiency that may ever exist under the UK Facility
for whatever reason, including, without limitation, because of a
downward fluctuation of the Borrowing Base for the UK Facility or any
partial reduction of the UK-Facility Commitments.
(iii) If Administrative Agent ever determines that, as a result of
fluctuations in exchange rates, the Dollar Equivalent of the UK-
Facility-Commitment Usage ever exceeds the total UK-Facility
Commitments, then, upon demand, UK Borrowers shall jointly and
severally make a mandatory prepayment of any combination of the
Principal Debt of the UK Facility or the Overdraft Exposure at least
in the amount of that excess. Any Lender under the UK Facility may
request that Administrative Agent determine, in which event
Administrative Agent shall promptly determine, the Dollar Equivalent
of the UK-Facility-Commitment Usage for purposes of this CLAUSE (iii).
Credit Agreement
----------------
31
(iv) Any Borrower may at any time prepay, without penalty and
in whole or in part, any of the Principal Debt for which it is
obligated under the Loan Documents in amounts not less than either (i)
the amount of any Euro-Rate Borrowing or (ii) otherwise the lesser of
either (A) the Dollar Equivalent of $1,000,000 or greater integral
multiples of the Dollar Equivalent of $1,000,000, or (B) the total
unpaid balance of the Principal Debt of the US Facility or the UK
Facility, as the case may be.
(v) Upon demand (A) US Borrower shall pay any Funding Loss
resulting from any prepayment of whatever nature of any of the
Principal Debt of the US Facility, and (B) UK Borrowers shall jointly
and severally pay any Funding Loss resulting from any prepayment of
whatever nature of any of the Principal Debt of the UK Facility.
(vi) Conversions under SECTION 4.10 are not prepayments.
(d) REQUIRED CURRENCY. UK Borrowers shall make all principal,
-----------------
interest, and other payments and prepayments for which they are obligated
in the currency in which that obligation was originally denominated (the
"REQUIRED CURRENCY"). However, the failure by UK Borrowers to make any
payment or prepayment in any Required Currency (other than Dollars) on the
date due solely because the Required Currency has ceased to be freely
transferable and convertible into Dollars in the relevant interbank market
shall not constitute an Event of Default if UK Borrowers pay (i) on that
due date, the Dollar Equivalent (as calculated by Administrative Agent in
good faith) of the amount of the Required Currency due on that date and (b)
within ten days after demand through Administrative Agent by any Lender
under the UK Facility, the amount that will (in the reasonable
determination of that Lender) reimburse that Lender for any loss or expense
caused by the failure of UK Borrowers to make that payment or prepayment in
the Required Currency on the date due. That Lender shall submit a
statement as to any such loss or expense (including calculations in
reasonable detail) to Administrative Agent and UK Borrowers, which shall,
in the absence of manifest error, be conclusive and binding on UK
Borrowers.
4.3 INTEREST OPTIONS. Except that the Euro Rate may not be selected in
----------------
respect of the US Facility when an Event of Default or Potential Default exists
and except as otherwise provided in this agreement, Borrowings bear interest at
an annual rate equal to the lesser of either the Maximum Rate, or in respect of
Borrowings under the:
(a) US Facility, the sum of the Base Rate for the US Facility plus
the Applicable Margin or the sum of the Euro Rate plus the Applicable
Margin (in each case as designated or deemed designated by US Borrower for
a Borrowing under the US Facility);
(b) UK Facility, the sum (i) of the Euro Rate, plus (ii) the
Applicable Margin, plus (iii) in respect of Borrowings in Pound Sterling,
any Mandatory-Liquid-Assets Costs; and
(c) Overdraft Subfacility, the sum of the Base Rate for the Overdraft
Subfacility, plus the Applicable Margin.
Each change in the applicable Base Rates and the Maximum Rate is effective,
without notice to any Borrower or any other Person, upon the effective date of
change.
4.4 RATE QUOTATIONS. Any Borrower may call Administrative Agent before
---------------
delivering a Borrowing Request to receive an indication of the interest rates
then in effect, but the indicated rates do
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32
not bind Administrative Agent or any Lenders or affect the interest rate that is
actually in effect when that Borrower makes a Borrowing Request or on the
Borrowing Date.
4.5 DEFAULT RATE. If permitted by applicable Governmental Requirements,
------------
all past-due Principal Debt, past-due payment and reimbursement obligations in
connection with BGs or LCs, and past-due interest accruing on any of the
foregoing bears interest from the date due (stated or by acceleration) at the
Default Rate until paid, regardless whether payment is made before or after
entry of a judgment.
4.6 INTEREST RECAPTURE. If the designated interest rate applicable to any
------------------
Borrowing exceeds the Maximum Rate, the interest rate on that Borrowing is
limited to the Maximum Rate, but any subsequent reductions in the designated
rate shall not reduce the interest rate thereon below the Maximum Rate until the
total amount of accrued interest equals the amount of interest that would have
accrued if that designated rate had always been in effect. If at maturity
(stated or by acceleration), or at final payment of any Note, the total interest
paid or accrued is less than the interest that would have accrued if the
designated rates had always been in effect, then, at that time and to the extent
permitted by applicable Governmental Requirements, the Borrower or Borrowers
obligated on that Note shall pay an amount equal to the difference between (a)
the lesser of the amount of interest that would have accrued if the designated
rates had always been in effect and the amount of interest that would have
accrued if the Maximum Rate had always been in effect, and (b) the amount of
interest actually paid or accrued on that Note.
4.7 INTEREST CALCULATIONS. Interest on the Overdraft Exposure and on
---------------------
Borrowings denominated in Pound Sterling shall be calculated on the basis of
actual number of days (including the first day but excluding the last day)
elapsed over a 365- or 366-day year (as the case may be). All other interest
shall be calculated on the basis of actual number of days elapsed (including the
first day but excluding the last day) elapsed but computed as if each calendar
year consisted of 360 days (unless the calculation would result in an interest
rate greater than the Maximum Rate, in which event it will be computed on the
basis of a year of 365 or 366 days, as the case may be). All interest rate
determinations and calculations by Overdraft Lender in respect of the Overdraft
Subfacility and otherwise by Administrative Agent are conclusive and binding
absent manifest error.
4.8 MAXIMUM RATE. Regardless of any provision contained in any Loan
------------
Document, no Lender is entitled to contract for, charge, take, reserve, receive,
or apply, as interest on all or any part of the US Obligation or UK Obligation,
any amount in excess of the Maximum Rate, and, if any Lender ever does so, then
any excess shall be treated as a partial prepayment of principal and any
remaining excess shall be refunded to the appropriate Borrower or Borrowers. In
determining if the interest paid or payable exceeds the Maximum Rate, Borrowers,
Administrative Agent, and Lenders shall, to the maximum extent lawful, (a) treat
all Borrowings under the US Facility as but a single extension of credit and all
Borrowings under the UK Facility as but a single extension of credit (and
Lenders, Administrative Agent, and Borrowers agree that is the case and that
provision in this agreement for multiple Borrowings is for convenience only),
(b) characterize any nonprincipal payment as an expense, fee, or premium rather
than as interest, (c) exclude voluntary prepayments and their effects, and (d)
amortize, prorate, allocate, and spread the total amount of interest throughout
the entire contemplated term of this agreement. However, if the applicable
Principal Debt is paid in full before the end of their full contemplated term,
and if the interest received for its actual period of existence exceeds the
Maximum Amount, each applicable Lender shall refund any excess (and may not, to
the extent lawful, be subject to any penalties provided by any applicable laws
for contracting for, charging, taking, reserving, or receiving interest in
excess of the Maximum Amount). If Texas laws are applicable for purposes of
determining the "Maximum Rate" or the "Maximum Amount," then those terms mean
the "indicated rate ceiling" from time to time in effect under Article 5069-
1.04, Title 79, Revised Civil Statutes of Texas. Borrowers agree that Chapter
15,
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33
Subtitle 79, Revised Civil Statutes of Texas, 1925 (which regulates certain
revolving credit loan accounts and revolving triparty accounts), does not apply
to the Loan Documents.
4.9 INTEREST PERIODS. When Borrower requests any Euro-Rate Borrowing, it
----------------
may elect the applicable Interest Period, subject to SECTION 17.1 and the
following conditions: (a) The initial Interest Period for a Euro-Rate Borrowing
commences on the applicable Borrowing Date or conversion date, and each
subsequent Interest Period applicable to any Borrowing commences on the day when
the next preceding applicable Interest Period expires; (b) if any Interest
Period for a Euro-Rate Borrowing begins on a day for which no numerically
corresponding Business Day in the calendar month at the end of the Interest
Period exists, then the Interest Period ends on the last Business Day of that
calendar month; (c) if a Borrower is required to pay any portion of a Euro-Rate
Borrowing before the end of its Interest Period in order to comply with the
payment provisions of the Loan Documents, then it shall also pay any related
Funding Loss; and (d) no more than five Interest Periods may be in effect at one
time for either the US Facility or the UK Facility.
4.10 CONVERSIONS. Subject to the applicable dollar limits of SECTION 2.1
-----------
and provided that US Borrower may not convert to or select a new Interest Period
for a Euro-Rate Borrowing at any time when an Event of Default or Potential
Default exists, US Borrower may (a) convert a Euro-Rate Borrowing on the last
day of the applicable Interest Period to a Base-Rate Borrowing, (b) convert a
Base-Rate Borrowing at any time to a Euro-Rate Borrowing, and (c) elect a new
Interest Period for a Euro-Rate Borrowing. That election may be made by delivery
to Administrative Agent a Conversion Notice by no later than 10:00 a.m. on the
second Business Day before the conversion date or the last day of the Interest
Period, as the case may be (for conversion to a Euro-Rate Borrowing or election
of a new Interest Period), and no later than 11:00 a.m. on the last day of the
Interest Period (for conversion to a Base-Rate Borrowing). Absent timely
delivery of a Conversion Notice or if an Event of Default or Potential Default
exists, then, each Euro-Rate Borrowing under the US Facility shall be deemed
converted to a Base-Rate Borrowing effective when the applicable Interest Period
expires.
4.11 ORDER OF APPLICATION.
--------------------
(a) NO EVENT OF DEFAULT. Except as otherwise provided by any Loan
-------------------
Document, if no Event of Default or Potential Default exists, then any
payment or prepayment by (i) US Borrower shall be applied to the US
Obligation in the order and manner as US Borrower shall direct and (ii)
either UK Borrower shall be applied to the UK Obligation in the order and
manner as that UK Borrower shall direct.
(b) EVENT OF DEFAULT. If an Event of Default or Potential Default
----------------
exists or if the appropriate Borrower fails to give direction, then, except
as provided in the last sentence of this paragraph, any payment (including
proceeds from the exercise of any Rights) in respect of the US Obligation
shall be applied to the US Obligation or in respect of the UK Obligation
shall be applied to the UK Obligation, in each case, in the following
order: (i) To all fees and expenses for which either applicable Agent or
any applicable Lender has not been paid or reimbursed in accordance with
the Loan Documents (and if that payment is less than all applicable unpaid
or unreimbursed fees and expenses, then the payment shall be paid against
applicable unpaid and unreimbursed fees and expenses in the order of
incurrence or due date); (ii) to accrued interest on the applicable
Principal Debt; (iii) to any applicable LC or BG/LC, as the case may be,
reimbursement obligations that are due and payable and that remain unfunded
by a Borrowing; (iv) to the remaining applicable Principal Debt in the
order as Required Lenders may elect (but Required Lenders agree to apply
proceeds in an order that will minimize any Funding Loss); (v) to the
remaining US Obligation or UK Obligation, as the case may be, in the order
and
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34
manner Required Lenders deem appropriate; and (vi) as a deposit with
Administrative Agent, for the benefit of Lenders, as security for and
payment of any subsequent LC or BG/LC, as the case may be, reimbursement
obligations. Notwithstanding the foregoing, upon any Event of Default,
Overdraft Lender is entitled and instructed to first setoff against any of
the Overdraft Balances all amounts outstanding under the Overdraft
Subfacility (including without limitation, the Overdraft Differential)
before the foregoing provisions become applicable; Overdraft Lender is
entitled to retain for its own account the amount of that setoff up to but
not in excess of the Overdraft Differential and shall otherwise share that
setoff with Lenders under SECTION 4.12(b).
(c) SEPARATE OBLIGATIONS. Nothing in CLAUSE (b) above requires or
--------------------
permits any payment or prepayment of the US Obligation to be applied to any
portion of the UK Obligation or any payment or prepayment of the UK
Obligation to be applied to any portion of the US Obligation.
(d) DISTRIBUTION TO LENDERS. Subject to the last sentence of CLAUSE
-----------------------
(b) above, each payment or prepayment made under this SECTION 4 shall be
distributed to each Lender in accordance with (i) before the Termination
Date, its Commitment Percentage under the US Facility or its UK-Revolving-
Commitment Percentage, as applicable, of that payment or prepayment, and
(ii) on and after the Termination Date, its Default Percentage under the US
Facility or the UK Facility, as applicable, of that payment or prepayment.
4.12 SHARING OF PAYMENTS.
-------------------
(a) If any Lender under the US Facility obtains any payment or
prepayment with respect to the US Obligation (whether voluntary,
involuntary, or otherwise, including, without limitation, as a result of
exercising its Rights under SECTION 4.13) that exceeds the part of that
payment or prepayment that it is then entitled to receive under the Loan
Documents, then that Lender shall purchase from the other Lenders under the
US Facility participations that will cause the purchasing Lender to share
the excess payment or prepayment ratably with each such other Lender in
accordance with the Loan Documents.
(b) If any Lender under the UK Facility obtains any payment or
prepayment with respect to the UK Obligation (whether voluntary,
involuntary, or otherwise, including, without limitation, as a result of
exercising its Rights under the last sentence of SECTION 4.11(b) or SECTION
4.13) that exceeds the part of that payment or prepayment that it is then
entitled to receive under the Loan Documents, then that Lender shall
purchase from the other Lenders under the UK Facility participations that
will cause the purchasing Lender to share the excess payment or prepayment
ratably with each such other Lender in accordance with the Loan Documents.
(c) If all or any portion of any excess payment or prepayment is
subsequently recovered from a purchasing Lender under CLAUSE (a) or (b)
above, then the purchase shall be rescinded and the purchase price restored
to the extent of the recovery.
(d) Each Borrower agrees that any Lender purchasing a participation
from another Lender under this section may, to the fullest extent lawful,
exercise all of its Rights of payment (including the Right of offset) with
respect to that participation as fully as if that Lender were the direct
creditor of that Borrower in the amount of that participation.
4.13 OFFSET. If an Event of Default has occurred and is then continuing
------
unwaived, each Lender is entitled to exercise (for the benefit of all Lenders in
accordance with SECTION 4.12) the Rights of offset
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35
and banker's Lien against each and every account and other property, or any
interest therein, that any Company may now or hereafter have with, or which is
now or hereafter in the possession of, that Lender to the extent of the full
amount of the US Obligation or UK Obligation, as the case may be, owed (directly
or participated) to it.
4.14 BOOKING BORROWINGS. To the extent permitted by applicable
------------------
Governmental Requirements, any Lender may make, carry, or transfer its share of
Borrowings at, to, or for the account of any of its branch offices or the office
or branch of any of its Affiliates, so long as no additional costs are incurred
by any Borrower as a result thereof. However, no Affiliate or branch is
entitled to receive any greater payment under SECTION 4.16 than the transferor
Lender would otherwise have been entitled to receive with respect to those
Borrowings, and a transfer may not be made if, as a direct result of it, SECTION
4.15, 4.17, 4.19(a), or 4.19(b) would apply to any of the US Obligations or UK
Obligations, as the case may be. If any of the conditions of SECTIONS 4.16,
4.17, 4.19(a), or 4.19(b) ever apply to a Lender, that Lender shall, to the
extent possible, carry or transfer its UK Borrowings at, to, or for the account
of any of its branch offices or the office or branch of any of its Affiliates so
long as the transfer is consistent with the other provisions of this section,
does not create any burden or adverse circumstance for that Lender that would
not otherwise exist, and eliminates or ameliorates the conditions of SECTIONS
4.16 or 4.17 as applicable.
4.15 BASIS UNAVAILABLE OR INADEQUATE FOR EURO RATE. If, on or before any
---------------------------------------------
date when a Euro Rate is to be determined for a Borrowing, Administrative Agent
reasonably determines that the basis for determining the applicable rate is not
available or any Lender reasonably determines that the resulting rate does not
accurately reflect the cost to that Lender of making or converting Borrowings at
that rate for the applicable Interest Period, then Administrative Agent shall
promptly notify Borrowers and Lenders of that determination (which is conclusive
and binding on Borrowers absent manifest error) and the applicable Borrowing
shall bear interest (a) in respect of the US Facility, at the sum of the Base
Rate for the US Facility plus the Applicable Margin, and (b) in respect of each
Lender under the UK Facility (other than under the Overdraft Subfacility) at the
sum of the cost to that Lender of funding its participation in the UK Facility
plus the Applicable Margin for Euro-Rate Borrowings plus any applicable
Mandatory-Liquid-Assets Cost. Until Administrative Agent notifies US Borrower
that those circumstances no longer exist, the commitments of the Lenders under
the US Facility to make, or to convert to, Euro-Rate Borrowings, as the case may
be, are suspended.
4.16 ADDITIONAL COSTS.
----------------
(a) RESERVES. With respect to any Euro-Rate Borrowing (i) if any
--------
change in any present Governmental Requirement, any change in the
interpretation or application of any present Governmental Requirement, or
any future Governmental Requirement imposes, modifies, or deems applicable
(or if compliance by any Lender with any requirement of any Governmental
Authority results in) any requirement that any reserves (including, without
limitation, any marginal, emergency, supplemental, or special reserves) be
maintained (other than any reserve included in the Reserve Requirement),
and if (ii) those reserves reduce any sums receivable by that Lender under
this agreement or increase the costs incurred by that Lender in advancing
or maintaining any portion of any Euro-Rate Borrowing, then (iii) that
Lender (through Administrative Agent) shall deliver to the applicable
Borrower or Borrowers a certificate setting forth in reasonable detail the
calculation of the amount necessary to compensate it for its reduction or
increase (which certificate is conclusive and binding absent manifest
error), and (iv) that Borrower or those Borrowers shall pay that amount to
that Lender within five days after demand. The provisions of and
undertakings and indemnification in this CLAUSE (a) survive the
satisfaction and payment of the US Obligation and UK Obligation and
termination of this agreement. This CLAUSE (a) is
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36
to be applied to avoid duplication and otherwise without prejudice to any
Mandatory-Liquid-Assets Costs payable by any Borrower under this agreement.
(b) CAPITAL ADEQUACY. With respect to any Borrowing, LC, or BG, if
----------------
any change in any present Governmental Requirement, any change in the
interpretation or application of any present Governmental Requirement, or
any future Governmental Requirement regarding capital adequacy, or if
compliance by any Lender with any request, directive, or requirement
imposed in the future by any Governmental Authority regarding capital
adequacy, or if any change in its written policies or in the risk category
of this transaction, in any of the foregoing events or circumstances,
reduces the rate of return on its capital as a consequence of its
obligations under this agreement to a level below that which it otherwise
could have achieved (taking into consideration its policies with respect to
capital adequacy) by an amount deemed by it to be material (and it may, in
determining the amount, utilize reasonable assumptions and allocations of
costs and expenses and use any reasonable averaging or attribution method),
then (unless the effect is already reflected in the rate of interest then
applicable under this agreement) Administrative Agent or that Lender
(through Administrative Agent) shall deliver to the applicable Borrower or
Borrowers a certificate setting forth in reasonable detail (but the Lender
shall not be obligated to disclose confidential information) the
calculation of the amount necessary to compensate it (which certificate is
conclusive and binding absent manifest error), and that Borrower or those
Borrowers shall pay that amount to Administrative Agent or that Lender
within five days after demand. The provisions of and undertakings and
indemnification in this CLAUSE (b) shall survive the satisfaction and
payment of the Obligation and termination of this agreement.
4.17 CHANGE IN LAWS. If any Governmental Requirement makes it unlawful for
--------------
any Lender to make or maintain any Borrowings, then that Lender shall promptly
notify Borrowers and Administrative Agent, and:
(a) as to undisbursed funds, the requested Borrowing shall be made as
another Type of Borrowing if lawful or otherwise shall not be made;
(b) as to any outstanding Base-Rate Borrowing (i) if not prohibited
by applicable Governmental Requirements, then that Base-Rate Borrowing
shall be converted to a Euro-Rate Borrowing as of three Business Days after
the date of notice, or (ii) if that conversion will not resolve the
unlawfulness, then applicable Borrower or Borrowers shall promptly prepay
that Base-Rate Borrowing without penalty; and
(c) as to any outstanding Euro-Rate Borrowing (i) if maintaining a
Euro-Rate Borrowing until the last day of the applicable Interest Period is
unlawful, then that Borrowing shall be converted to a Base-Rate Borrowing
as of the date of notice, or (ii) if not prohibited by applicable
Governmental Requirements, that Euro-Rate Borrowing, if under the US
Facility, shall be converted to a Base-Rate Borrowing as of the last day of
the applicable Interest Period, or (iii) if any conversion will not resolve
the unlawfulness, or in any case under the UK Facility, then the applicable
Borrower or Borrowers shall promptly prepay that Euro-Rate Borrowing
without penalty but with related Funding Loss.
4.18 FUNDING LOSS. US BORROWER IN RESPECT OF THE US OBLIGATION AND UK
------------
BORROWERS JOINTLY AND SEVERALLY IN RESPECT OF THE UK OBLIGATION SHALL INDEMNIFY
EACH LENDER AGAINST, AND PAY TO IT UPON DEMAND, ANY FUNDING LOSS OF THAT LENDER.
WHEN ANY LENDER DEMANDS THAT A BORROWER PAY ANY FUNDING LOSS, THAT LENDER SHALL
DELIVER TO THAT BORROWER AND ADMINISTRATIVE AGENT A CERTIFICATE SETTING FORTH IN
REASONABLE
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37
DETAIL THE BASIS FOR IMPOSING FUNDING LOSS AND THE CALCULATION OF THE AMOUNT,
WHICH CALCULATION IS CONCLUSIVE AND BINDING ABSENT MANIFEST ERROR. THE
PROVISIONS OF AND UNDERTAKINGS AND INDEMNIFICATION IN THIS SECTION SURVIVE THE
SATISFACTION AND PAYMENT OF THE US OBLIGATION AND UK OBLIGATION AND TERMINATION
OF THIS AGREEMENT.
4.19 TAXES, GROSSING UP PROVISIONS, AND VALUE ADDED TAX.
--------------------------------------------------
(a) US FACILITY.
-----------
(i) If any Taxes shall ever become payable by Administrative
Agent or any Lender or shall be ruled (by a Governmental Authority) payable
by Administrative Agent or any Lender in respect of the US Facility, such
Taxes shall, if lawful, be paid by (or if such Taxes have already been
paid, shall be reimbursed by) US Borrower, together with interest and
penalties, if any, except for Taxes payable on or measured by the overall
net income of any such Lender or Administrative Agent and except for
interest and penalties incurred as a result of the gross negligence or
wilful misconduct of Administrative Agent or any Lender. Administrative
Agent or such Lender (through Administrative Agent) shall notify US
Borrower and deliver to US Borrower a certificate setting forth in
reasonable detail the calculation of the amount of such Taxes, which
certificate shall be conclusive and binding (absent manifest error), and US
Borrower shall promptly pay such amount (including any additional Taxes
applicable to the additional sums paid under this SECTION 4.19(a)(i), such
that Administrative Agent or such Lender receives an amount equal to the
sum it would have received had no such Taxes been payable by Administrative
Agent or any Lender with respect to the US Facility) to Administrative
Agent for its account or the account of such Lender, as the case may be.
However, if Administrative Agent or any Lender, as the case may be,
determines that it has received, realized, utilized, and retained a Tax
benefit by reason of any deduction or withholding in respect of which US
Borrower has made an increased payment or paid a compensating sum under
this SECTION 4.19(a), then Administrative Agent or that Lender shall (if
Administrative Agent or that Lender has received all amounts which are then
due and payable by US Borrower under any of the provisions of this
agreement or any other Loan Document) pay to US Borrower such amount, if
any, as Administrative Agent or that Lender reasonably determines will
leave Administrative Agent or that Lender in no worse position than it
would have been in if the deduction or withholding had not been required.
Nothing herein contained shall interfere with the right of Administrative
Agent or any Lender, as the case may be, to arrange its Tax affairs in
whatever manner it thinks fit.
(ii) To the extent lawful and applicable, each Lender under the
US Facility shall execute and deliver to US Borrower and Administrative
Agent from time to time two duly completed copies of U.S. Internal Revenue
Service Form 4224, Form 1001, Form W-8, or other appropriate Internal
Revenue Service form that entitles it to a complete exemption from U.S.
federal withholding Tax on all interest or fee payments in respect of the
US Facility under the Loan Documents.
(b) UK FACILITY. All sums payable to Administrative Agent and each
-----------
Lender in respect of the UK Facility shall be paid in full without any set-
off or counterclaim whatsoever and free and clear of all deductions or
withholdings for or on account of any Tax whatsoever save only as may be
required by law. If any deduction or withholding for or on account of any
Tax is required by law in respect of any payment due to Administrative
Agent or any Lender, as the case may be, pursuant to or in connection with
the UK Facilities, then UK Borrowers shall jointly and severally:
Credit Agreement
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38
(i) ensure or procure that the deduction or withholding is
made and that it does not exceed the minimal legal requirement therefor;
(ii) pay, or procure the payment of, the full amount deducted or
withheld to the relevant Taxation authority in accordance with the
applicable law;
(iii) increase the payment in respect of which the deduction or
withholding for or on account of Tax is required so that the net amount
received and retained (free from any liability in respect of such deduction
or withholding) by Administrative Agent or any Lender after the deduction
or withholding (and after taking account of any further deduction or
withholding which is required to be made as a consequence of the increase)
shall be equal to the amount which Administrative Agent or that Lender
would have been entitled to receive in the absence of any requirement to
make a deduction or withhold; and
(iv) use reasonable endeavors promptly to deliver or procure the
delivery to Administrative Agent or that Lender appropriate receipts
evidencing the deductions or withholding which has been made in accordance
with this SECTION 4.19(b).
If Administrative Agent is obliged to make any deduction or withholding
from any payment to any Lender (an "AGENCY PAYMENT") which represents an
amount or amounts received by the Administrative Agent from either UK
Borrower pursuant to the UK Facilities, then UK Borrowers shall jointly
and severally pay directly to the relevant Lender such sum (a "COMPENSATING
SUM") as will, after taking into account any deduction or withholding which
UK Borrowers are obliged to make from the compensating sum, enable that
Lender to receive and retain (free from any liability in respect of such
deduction or withholding), on the due date for payment of the agency
payment, an amount equal to the agency payment which that Lender would have
received in the absence of any obligation to make a deduction or
withholding.
However, if Administrative Agent or any Lender, as the case may be,
determines that it has received, realized, utilized, and retained a Tax
benefit by reason of any deduction or withholding in respect of which a UK
Borrower has made an increased payment or paid a compensating sum under
this SECTION 4.19(b), then Administrative Agent or that Lender shall (if
Administrative Agent or that Lender has received all amounts which are then
due and payable by UK Borrowers under any of the provisions of this
agreement or any other Loan Document) pay to UK Borrowers such amount, if
any, as Administrative Agent or that Lender reasonably determines will
leave Administrative Agent or that Lender in no worse position than it
would have been in if the deduction or withholding had not been required.
Nothing herein contained shall interfere with the right of Administrative
Agent or any Lender, as the case may be, to arrange its Tax affairs in
whatever manner it thinks fit.
A Borrower shall only be required to make any payment or increased payment
pursuant to this SECTION 4.19(b) where it relates to a payment of interest
(other than, for the avoidance of doubt, interest at the Default Rate) to
the extent that the obligation to make a deduction or withholding (in
respect of which such a payment or increased payment is made) arises as a
result of:
(A) the Lender not being a Bank as that term is defined in
Section 840A of the Income and Corporation Taxes Act 1988 and at the time
the interest was paid the Person beneficially entitled to the interest was
within the charge to corporation Tax in the United Kingdom as respects the
interest, other than where that Lender has ceased to be a Bank, as so
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39
defined, or has ceased to be within the charge to corporation Tax in the
United Kingdom as a consequence of a Change in Law occurring after the date
of this agreement; or
(B) the Lender not being resident for Tax purposes in any
jurisdiction with which the United Kingdom (or any other jurisdiction where
any of UK Borrowers are resident for Tax purposes) has, on the date of this
agreement, a Double Tax Treaty that allows for payments of interest to be
paid to that jurisdiction from the United Kingdom (or such other
jurisdictions where either UK Borrowers is resident for Tax purposes) free
of any deduction or withholding, other than where such Lender has ceased to
so resident as a consequence of a Change in Law occurring after the date of
this agreement.
Each Lender will (at no additional cost to it) make and file all such Tax
returns and statements as Administrative Agent or UK Borrowers may
reasonably notify and request to be made or filed in connection with or for
the purpose of avoiding any such deduction or withholding under this
SECTION 4.19(b). Nothing herein shall interfere with the right of
Administrative Agent or any Lender to arrange its Tax affairs in whatever
manner it thinks fit.
(c) GROSSING-UP OF INDEMNITY PAYMENTS FOR UK FACILITY. If
-------------------------------------------------
Administrative Agent or any Lender under the UK Facility, as the case may
be, makes a payment or suffers a loss in respect of which it is entitled to
be indemnified, reimbursed, or otherwise kept harmless pursuant to any
provision of this agreement and Administrative Agent or that Lender, as the
case may be, considers that:
(i) the Loss or payment is not or is unlikely to be wholly
deductible in computing the profits of Administrative Agent or that Lender
for the purposes of Tax whilst the payment to be made by way of indemnity
or reimbursement (for the purpose of this SECTION 4.19(c), the "PAYMENT")
will or is likely to give rise to a Tax liability for such Administrative
Agent or Lender; or
(ii) the payment is likely to give rise to a Tax liability for
Administrative Agent or that Lender in any accounting period of
Administrative Agent or that Lender earlier than the accounting period in
which the Loss or payment is or is likely to be deductible;
then, at the time of making the payment UK Borrowers shall jointly and
severally pay such an amount (the "ADDITIONAL PAYMENT") as will, after
taking into account any Tax liability likely to be suffered or incurred by
Administrative Agent or that Lender in respect of the payment or additional
payment, leave Administrative Agent or that Lender in the same after-Tax
position as it would have been in had the payment not given rise to any
such Tax liability and the loss or payment had not been so deductible.
However, if:
(A) at the time of the payment, Administrative Agent or that
Lender considers that no additional payment is necessary but subsequently
considers that an additional payment is necessary so to indemnify
Administrative Agent or that Lender the additional payment shall be paid by
UK Borrowers to Administrative Agent or that Lender following a demand by
Administrative Agent or that Lender; or
(B) if it subsequently proves that any payment by UK Borrowers to
either Administrative Agent or any Lender, as the case may be, under this
SECTION 4.19(c) by way of an additional payment or payment by
Administrative Agent or any Lender, as the case may be, to UK Borrowers was
calculated on an incorrect basis, such adjustment shall be made between
Credit Agreement
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40
Administrative Agent or that Lender and UK Borrowers as Administrative
Agent or that Lender considers necessary to restore the after-Tax position
of Administrative Agent or that Lender to that which it would have been if
no adjustment had been necessary.
(d) VALUE ADDED TAX. All payments made by UK Borrowers under this
---------------
agreement are calculated without regard to Value Added Tax. If any payment
by either UK Borrower constitutes the whole or any part of the
consideration for a taxable or deemed taxable supply (whether that supply
is taxable pursuant to the exercise of an option or otherwise) by any of
the Lenders, the amount of that payment shall be increased by an amount
equal to the amount of Value Added Tax which is chargeable in respect of
the taxable supply in question.
SECTION 5 FEES.
- --------------
5.1 TREATMENT OF FEES. The fees described in this SECTION 5 (a) are not
-----------------
compensation for the use, detention, or forbearance of money, (b) are in
addition to, and not in lieu of, interest and expenses otherwise described in
this agreement, (c) are payable in accordance with SECTION 4.1, (d) are non-
refundable, (e) to the fullest extent permitted by law, bear interest, if not
paid when due, at the Default Rate, and (f) are calculated on the basis of a
year of 360 days.
5.2 INITIAL COMMITMENT FEES.
-----------------------
On the Closing Date for the US Facility, US Borrower shall pay to
Administrative Agent an initial commitment fee of $192,500 for the ratable
account of the Lenders under the US Facility in accordance with their
respective Commitment Percentages of it.
On the Closing Date for the UK Facility, US Borrower shall pay to
Administrative Agent an initial commitment fee of $420,000 for the ratable
account of the Lenders under the UK Facility in accordance with their
respective Commitment Percentages of it.
5.3 UNUSED COMMITMENT FEES. The following unused commitment fees are due
----------------------
and payable as they accrue on the last day of each March, June, September, and
December -- commencing on the first of those dates that follows the date of this
agreement -- and on the Termination Date.
US Borrower shall pay to Administrative Agent unused commitment
fees, for the ratable account of the Lenders under the US Facility in
accordance with their respective Commitment Percentages of it, each
installment of which is calculated for the calendar quarter (or portion of
a calendar quarter commencing on the date of this agreement or ending on
the Termination Date) preceding and including the date it is due, and is
equal to the product of (i) 0.50% of the amount by which the daily average
total US-Facility Commitments exceed the daily average US-Facility-
Commitment Usage times (ii) a fraction with the number of days in the
applicable quarter or portion of it as the numerator and 360 as the
denominator.
UK Borrowers shall jointly and severally pay to Administrative
Agent unused commitment fees, for the ratable account of the Lenders under
the UK Facility in accordance with their respective Commitment Percentages
of it, each installment of which is calculated for the calendar quarter (or
portion of a calendar quarter commencing on the Closing Date for the UK
Facility or ending on the Termination Date) preceding and including the
date it is due, and is equal to the product of (i) 0.50% of the amount by
which the daily average total UK-Facility Commitments exceed the sum of the
daily average UK-Facility-Commitment Usage times (ii) a
Credit Agreement
----------------
41
fraction with the number of days in the applicable quarter or portion of it
as the numerator and 360 as the denominator.
5.4 BG AND LC FEES.
--------------
(a) As an inducement for the issuance and extension of each LC under
the LC Subfacility and payable on the date of issuance or extension, US
Borrower shall pay to the Issuer under the LC Subfacility, (i) a fronting
fee equal to an annual percentage of 0.25% of the face amount of the LC for
its tenor, for the Issuer's sole account, and (ii) an issuance or extension
fee equal to an annual percentage of the face amount of the LC for its
tenor, which percentage is the Applicable Margin in effect for Euro-Rate
Borrowings on the date of issuance or extension, to be shared with the
Lenders under the US Facility ratably in accordance with their respective
Commitment Percentages under the US Facility.
(b) As an inducement for the issuance and extension of each BG and LC
under the BG/LC Subfacility and payable on the date of issuance or
extension, UK Borrowers shall jointly and severally pay to the Issuer under
the BG/LC Subfacility (i) a fronting fee equal to an annual percentage of
0.25% of the face amount of the BG or LC for its tenor, for the Issuer's
sole account, and (ii) an issuance or extension fee equal to an annual
percentage of the face amount of the BG or LC for its tenor, which
percentage is the Applicable Margin in effect for Euro-Rate Borrowings on
the date of issuance or extension, to be shared with the Lenders under the
UK Facility ratably in accordance with the respective UK-Revolving-
Commitment Percentages.
STRUCTURE/SYNDICATION AND ADMINISTRATIVE FEES. US Borrower shall pay
---------------------------------------------
to Administrative Agent the Structure/Syndication Fee and the Administrative
Fees in accordance with the Fees Letter (as it may be amended by the parties to
it) dated as of September 24, 1996, between Administrative Agent, Arranger, and
US Borrower.
COLLATERAL FEES. UK Borrowers shall jointly and severally pay to UK-
---------------
Collateral Agent collateral fees in accordance with the separate letter
agreement to that effect (as it may be amended by the parties to it) dated the
Closing Date for the UK Facility, between UK-Collateral Agent and UK Borrowers.
SECTION 6 SECURITY.
- ------------------
6.1 GUARANTIES. US Borrower shall cause each other present and future
----------
Domestic Company to unconditionally guarantee full payment and performance of
the US Obligation. US Borrower shall, and shall cause each other present and
future Domestic Company to, unconditionally guarantee full payment and
performance of the UK Obligation. UK Borrowers shall cause each other present
and future Foreign Company to unconditionally guarantee full payment and
performance of the UK Obligation.
6.2 US COLLATERAL. US Borrower shall cause full payment and performance of
-------------
the US Obligation and the Domestic Companies' guaranties of the UK Obligation to
be secured by Lender Liens on all of the following items and types of property
(as more particularly described in various other Loan Documents, the "US
COLLATERAL"):
(a) All present and future accounts receivable, contract rights,
general intangibles, chattel paper, documents, instruments, money, deposit
accounts, inventory, equipment, fixtures, real property, patents,
copyrights, service marks, trademarks, tradenames, and license agreements
now or in the future owned by each present and future Domestic Company.
Credit Agreement
----------------
42
(b) 100% of all present and future capital stock now or in the future
issued by each present and future Domestic Company (other than US Borrower)
and 65% of all present and future capital stock now or in the future issued
by each present and future Foreign Company that is a direct Subsidiary of
any Domestic Company.
(c) All collateral ever required under SECTION 2.3(G).
(d) All present and future cash and non-cash proceeds of any of the
other US Collateral.
6.3 UK COLLATERAL. UK Borrowers shall cause full payment and performance
-------------
of the UK Obligation to be secured by Lender Liens on all of the following items
and types of property (as more particularly described in various other Loan
Documents, the "UK COLLATERAL"):
(a) All present and future accounts receivable, contract rights,
general intangibles, chattel paper, documents, instruments, money, deposit
accounts, inventory, equipment, fixtures, real property (whether fee or
leasehold), patents, copyrights, service marks, trademarks, trade names,
and license agreements now or in the future owned by each present and
future Foreign Company.
(b) 100% of all present and future capital stock now or in the future
issued by each present and future Foreign Company that is not a direct
Subsidiary of any Domestic Company.
(c) All collateral ever required under SECTION 3.4(F).
(d) All present and future cash and non-cash proceeds of any of the
other UK Collateral.
6.4 FURTHER ASSURANCES. UK Borrowers shall (only in respect of the UK
------------------
Facility) and Borrower shall (in respect of US Facility and the UK Facility) --
and shall cause each other appropriate Company to -- perform the acts, duly
authorize, execute, acknowledge, deliver, file, and record any additional
writings, and pay all filings fees and costs as either Agent or Required Lenders
may reasonably deem appropriate or necessary to perfect and maintain the Lender
Liens and preserve and protect the Rights of Agents and Lenders under any Loan
Document. Without limiting the generality of the foregoing, Borrowers covenant
and agree with Agents and Lenders that, promptly upon the request of
Administrative Agent or Required Lenders, each Borrower shall (a) cause to be
registered with the appropriate Governmental Authorities all present and future
copyrights now or in the future owned by any Company and designated by
Administrative Agent or Required Lenders, and (b) cause to be modified or
clarified any financing statement, whether described on SCHEDULE 8.13(B) or not,
that Administrative Agent or Required Lenders deem, in their respective sole
discretion, to be overly broad and in conflict with the first priority intended
to be created in the US Collateral. The failure of the documentation related to
any guarantee or Lender Lien required by this SECTION 6 to be listed on either
SCHEDULE 7.1 or 7.2 is not a waiver by Agents or Lenders of the right to require
that documentation to be delivered at any date after the two Closing Dates.
6.5 RELEASE OF COLLATERAL.
---------------------
Upon US Borrower's written request and at US Borrower's cost and
expense, Administrative Agent shall cause the Lender Liens on all US
Collateral to be released if (i) no Lender under the US Facility or the UK
Facility has any commitment to make advances, issue
Credit Agreement
----------------
43
LCs or BGs, or otherwise extend credit under any Loan Document, (ii) the US
Obligation and UK Obligation have been fully paid and performed, (iii) all
uncancelled and undrawn LCs and BGs have been either fully cash secured or
backed by letters of credit acceptable in the sole discretion of the
applicable Issuer, and (iv) Administrative Agent does not in good faith
believe that there are reasonable grounds for any payment or prepayment
under any Loan Document lawfully to be required to be rescinded, restored,
or returned for any reason.
(b Upon UK Borrowers' written request and at UK Borrowers' joint and
several cost and expense, Administrative Agent and UK-Collateral Agent
shall cause the Lender Liens on all UK Collateral to be released if (i) no
Lender under the UK Facility has any commitment to make advances, issue LCs
or BGs, or otherwise extend credit under any Loan Document, (ii) the UK
Obligation has been fully paid and performed, (iii) all uncancelled and
undrawn LCs and BGs have been either fully cash secured or backed by
letters of credit acceptable in the sole discretion of the Issuer under the
BG/LC Subfacility, and (iv) neither Administrative Agent nor UK-Collateral
Agent in good faith believes that there are reasonable grounds for any
payment or prepayment of any of the UK Obligation lawfully to be required
to be rescinded, restored, or returned for any reason.
SECTION 7 CONDITIONS PRECEDENT.
- ------------------------------
7.1 CONDITIONS PRECEDENT FOR US FACILITY. No Lender under the US Facility
------------------------------------
is obligated to fund the initial Borrowing under it or issue any LC unless (a)
Administrative Agent has received all of the items described on SCHEDULE 7.1
(other than each item, if any, specifically noted on that schedule as being
required to be delivered by a date later than the applicable Closing Date) and
(b) the conditions precedent under SECTION 7.2 have been fully satisfied or
waived in writing by Lenders.
7.2 CONDITIONS PRECEDENT FOR UK FACILITY. No Lender under the UK Facility
------------------------------------
is obligated to fund the initial Borrowing under it or issue any LC or BG unless
(a) Administrative Agent or UK-Collateral Agent has received all of the items to
be received by it as described on SCHEDULE 7.2 (other than each item, if any,
specifically noted on that schedule as being required to be delivered by a date
later than the applicable Closing Date), (b) the conditions precedent in SECTION
7.1 have been fully satisfied or waived in writing by Lenders, (c) the
Electrotech Acquisition has been consummated, and (d) Lloyds Bank Plc shall have
agreed to extend the approximate (Pounds)800,000 term loan to UK Borrowers on
terms and intercreditor arrangements reasonably acceptable to Administrative
Agent and secured only by Liens on UK Borrowers' Thornbury Laboratories
facilities and other assets acceptable to Lenders.
7.3 OTHER CONDITIONS PRECEDENT. No Lender is obligated to fund (as
--------------------------
opposed to continue or convert) any Borrowing or issue any LC or BG unless on
the applicable Borrowing Date or issue date (and after giving effect to the
requested Borrowing, LC, or BG), as the case may be (a) Administrative Agent
(and the appropriate Issuer, if applicable) timely receives a Borrowing Request,
a LC Request and related LC Agreement, or a BG/LC Request and related LC
Agreement, as the case may be, (b) the Issuer receives any applicable fees then
due and payable under SECTION 5.4, (c) all of the representations and warranties
of the Companies in the Loan Documents are true and correct in all material
respects (unless they speak to a specific date or are based on facts which have
changed by transactions contemplated or expressly permitted by this agreement),
(d) no Material-Adverse Event, Event of Default, or Potential Default exists,
(e) none of the matters disclosed in any supplements to SCHEDULE 8.9, 8.11, 8.12
or 8.20 have been objected to by Administrative Agent or Lenders, (f) no
Borrowing-Base Deficiency will exist after giving effect to the Borrowing or LC
or BG issuance, and (g) if requested by Administrative Agent or Lenders,
Borrowers have delivered to Administrative Agent evidence substantiating
satisfaction of any other conditions precedent under the Loan Documents to that
Borrowing, LC, or BG, as the case may be.
Credit Agreement
----------------
44
7.4 CONDITIONS MATERIAL. Each condition precedent in this agreement is
-------------------
material to the transactions contemplated by this agreement, and time is of the
essence with respect to each condition precedent.
SECTION 8 REPRESENTATIONS AND WARRANTIES. US Borrower represents and warrants
- ----------------------------------------
the following to Agents and Lenders as to US Borrower and all other Companies,
and UK Borrowers jointly and severally represent and warrant the following to
Agents and Lenders only as to UK Borrowers and all other Foreign Companies:
8.1 PURPOSE AND REGULATION U. Borrowers will use LCs and BGs for general
------------------------
corporate purposes and the proceeds of their respective Borrowings solely for
their respective working capital and general corporate purposes. No Company is
engaged principally, or as one of its important activities, in the business of
extending credit for the purpose of purchasing or carrying any "margin stock"
within the meaning of Regulation U of the Board of Governors of the Federal
Reserve System, as amended. No part of the proceeds of any LC draft or drawing
or Borrowing will be used, directly or indirectly, for a purpose that violates
any Governmental Requirement, including, without limitation, Regulation U.
8.2 CORPORATE EXISTENCE, GOOD STANDING, AND AUTHORITY. Each Company is
-------------------------------------------------
duly organized, validly existing, and in good standing under the laws of its
jurisdiction of incorporation. Except where not a Material-Adverse Event, each
Company is duly qualified to transact business and is in good standing as a
foreign corporation in each jurisdiction where the nature and extent of its
business and properties require due qualification and good standing (each of
which jurisdictions is identified on SCHEDULE 8.3, as supplemented from time to
time, subject to SECTION 7.3(E), by a supplement to that schedule that is
dated, executed, and delivered by US Borrower to Administrative Agent to reflect
changes in that schedule as a result of transactions permitted by the Loan
Documents). Each Company possesses all requisite authority and power to conduct
its business as is now being conducted and as proposed under the Loan Documents
to be conducted and to own and operate its assets as now owned and operated and
as proposed to be owned and operated under the Loan Documents.
8.3 SUBSIDIARIES AND NAMES. The Electrotech Acquisition has been
----------------------
completed in substantial accordance with the Electrotech Agreement without
(unless otherwise agreed to by Administrative Agent with the approval of
Lenders) waiver by any party to that agreement of any material condition
precedent to its performance under that agreement. SCHEDULE 8.3 (as
supplemented from time to time by a supplement to that schedule that is dated,
executed, and delivered by US Borrower to Administrative Agent to reflect
changes in that schedule as a result of transactions permitted by the Loan
Documents), after giving effect to the Electrotech Acquisition, describes (a)
all of the Companies, (b) every name or trade name used by each Company during
the five-year period before the date of this agreement, and (c) every change of
each Company's name during the four-month period before the date of this
agreement. All of the outstanding shares of capital stock (or similar voting
interests) of any Borrower's respective Subsidiaries are duly authorized,
validly issued, fully paid, and nonassessable, owned of record and beneficially
as described in SCHEDULE 8.3, free and clear of any Liens except Permitted
Liens, and not subject to any warrant, option, or other acquisition Right of any
Person or subject to any transfer restriction except restrictions imposed by the
Loan Documents and by securities and general corporate laws.
8.4 AUTHORIZATION AND CONTRAVENTION. The execution and delivery by each
-------------------------------
Company of each Loan Document to which it is a party and the performance by it
of its obligations under those Loan Documents (a) are within its corporate
power, (b) have been duly authorized by all necessary corporate action, (c)
require no action by or filing with any Governmental Authority (except any
action or filing that has been taken or made on or before the applicable Closing
Date), (d) do not violate any provision of its
Credit Agreement
----------------
45
charter or bylaws, and (e) do not violate any provision of law applicable to it
or any material agreement to which it is a party except violations that
individually or collectively are not a Material-Adverse Event.
8.5 BINDING EFFECT. Upon execution and delivery by all parties to it,
--------------
each Loan Document will constitute a legal and binding obligation of each
Company party to it, enforceable against that Company in accordance with that
Loan Document's terms except as that enforceability may be limited by Debtor
Laws and general principles of equity.
8.6 FINANCIALS AND EXISTING DEBT. The Current Financials were prepared in
----------------------------
accordance with GAAP and present fairly, in all material respects, the
Companies' consolidated financial condition, results of operations, and cash
flows as of, and for the portion of the fiscal year ending on their dates
(subject only to normal year-end adjustments for interim statements). Except
for transactions directly related to, specifically contemplated by, or expressly
permitted by the Loan Documents or as disclosed in the reports filed by US
Borrower with the SEC pursuant to the 1934 Act and delivered to Administrative
Agent and Lenders after the date of the Current Financials, no material adverse
changes have occurred in the Companies' consolidated financial condition from
that shown in the Current Financials.
8.7 PROJECTIONS. Although Borrowers cannot assure Agents or Lenders that
-----------
the Projections will be achieved, the Projections were prepared by Borrowers in
good faith based upon the assumptions contained in the Projections, which they
believe were reasonable and consistent with each other and with all material
facts then known to Borrowers.
8.8 SOLVENCY. On each Borrowing Date and the date any LC or BG is issued,
--------
each Company is (and after giving effect to the requested Borrowing, LC, or BG
will be) Solvent.
8.9 LITIGATION. Except as disclosed on SCHEDULES 8.9, 8.13(B), or 8.20 --
----------
as supplemented from time to time, subject to SECTION 7.3(E), by a supplement to
either of those schedules that is dated, executed, and delivered by US Borrower
to Administrative Agent to reflect changes in that schedule -- and matters
covered (subject to reasonable and customary deductible and retention) by
adequate insurance (a) no Company is subject to, or aware of the threat of, any
Litigation that is reasonably likely to be determined adversely to any Company
and, if so adversely determined, would be a Material-Adverse Event, and (b) no
outstanding and unpaid judgments against any Company exist that would be a
Material-Adverse Event.
8.10 TAXES. Except where not a Material-Adverse Event (a) all Tax returns
-----
of each Company required to be filed have been filed (or extensions have been
granted) before delinquency, and (b) all Taxes imposed upon each Company that
are due and payable have been paid before delinquency except as being contested
as permitted by SECTION 9.5.
8.11 ENVIRONMENTAL MATTERS. Except as disclosed on SCHEDULE 8.11 -- as
---------------------
supplemented from time to time, subject to SECTION 7.3(E), by a supplement to
that schedule that is dated, executed, and delivered by US Borrower to
Administrative Agent to reflect changes in that schedule -- (a) no Company has
received notice from any Governmental Authority that it has actual or potential
Environmental Liability and no Company has knowledge that it has any
Environmental Liability, which actual or potential Environmental Liability in
either case constitutes a Material-Adverse Event, and (b) no Company has
received notice from any Governmental Authority that any Real Property is
affected by, and no Company has knowledge that any Real Property is affected by,
any Release of any Hazardous Substance which constitutes a Material-Adverse
Event.
Credit Agreement
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46
8.12 EMPLOYEE PLANS. Except as disclosed on SCHEDULE 8.12 or where not a
--------------
Material-Adverse Event (a) no Employee Plan subject to ERISA has incurred an
"accumulated funding deficiency" (as defined in Section 302 of ERISA or Section
512 of the IRC), (b) neither any Company nor any ERISA Affiliate has incurred
liability -- except for liabilities for premiums that have been paid or that are
not past due -- under ERISA to the PBGC in connection with any Employee Plan,
(c) neither Any Company nor any ERISA Affiliate have withdrawn in whole or in
part from participation in a Multiemployer Plan in a manner that has given rise
to a withdrawal liability under Title IV of ERISA, (d) neither Any Company nor
any ERISA Affiliate have engaged in any "prohibited transaction" (as defined in
Section 406 of ERISA or Section 4975 of the IRC), (e) no "reportable event" (as
defined in Section 4043 of ERISA) has occurred excluding events for which the
notice requirement is waived under applicable PBGC regulations, (f) neither any
Company nor any ERISA Affiliate has any liability, or are subject to any Lien,
under ERISA or the IRC to or on account of any Employee Plan, (g) each Employee
Plan subject to ERISA and the IRC complies in all material respects, both in
form and operation, with ERISA and the IRC, and (h) no Multiemployer Plan
subject to the IRC is in reorganization within the meaning of Section 418 of the
IRC. None of the matters disclosed on SCHEDULE 8.12 give rise to any other
"reportable events," as defined above.
8.13 PROPERTIES; LIENS. Each Company has good and marketable title to all
-----------------
its property reflected on the Current Financials as being owned by it except for
property that is obsolete or that has been disposed of in the ordinary course of
business between the date of the Current Financials and the date of this
agreement or, after the date of this agreement, as permitted by SECTIONS 11.1 or
12.1 and otherwise as disclosed on SCHEDULE 8.13(C). Except as described on
SCHEDULE 8.13(A) no Company owns any Real Property. No Lien exists on any
property of any Company (a) on the date of this agreement except the existing
Liens described on SCHEDULE 8.13(B) and (b) at anytime after the date of this
agreement except Permitted Liens. Except as otherwise disclosed on SCHEDULE
8.13(B), no Company is party or subject to any agreement, instrument, or order
which in any way restricts its ability to allow Liens to exist upon any of its
assets except the Loan Documents.
8.14 GOVERNMENT REGULATIONS. No Company is subject to regulation under the
----------------------
Investment Company Act of 1940 or the Public Utility Holding Company Act of
1935.
8.15 TRANSACTIONS WITH AFFILIATES. Except as otherwise disclosed on
----------------------------
SCHEDULE 8.15 or permitted by SECTION 10.8, no Company is a party to a material
transaction with any of its Affiliates.
8.16 DEBT. No Company has any Debt (a) on the date of this agreement,
----
except the existing Debt described on SCHEDULE 8.16, and (b) at anytime after
the date of this agreement, except Permitted Debt. Unless otherwise provided in
this agreement, UK Borrowers are entitled to cancel all commitments to extend
credit under, and to prepay all indebtedness under, the loan facilities provided
by Lloyds Bank Plc to UK Borrowers as described on SCHEDULE 8.16. The US
Obligation and US Borrower's guarantee of the UK Obligation both constitute
"Designated Senior Debt," as defined in the Subordinated-Note Indenture. The
Subordinated-Note Proceeds as of the date of this agreement total $89,682,032.
8.17 LEASES. Except as otherwise disclosed in SCHEDULE 8.13(B), and except
------
where not a Material-Adverse Event (a) each Company enjoys peaceful and
undisturbed possession under all leases necessary for the operation of its
properties and assets, none of which contains any unusual or burdensome
provisions which might materially affect or impair the operation of those
properties and assets, and (b) all material leases under which any Company is a
lessee are in full force and effect. All leases of Real Property under which
any Company is a lessee and where any of its inventory, equipment, or fixtures
is located are described on Schedule 8.17.
Credit Agreement
----------------
47
8.18 INSURANCE. Except as otherwise disclosed on SCHEDULE 8.18, each
---------
Company maintains with financially sound, responsible, and reputable insurance
companies or associations (or, as to workers' compensation or similar insurance,
with an insurance fund or by self-insurance authorized by the jurisdictions in
which it operates) insurance concerning its properties and businesses against
casualties and contingencies and of types and in amounts (and with co-insurance
and deductibles) as is customary in the case of similar businesses.
8.19 LABOR MATTERS. Except where not a Material-Adverse Event (a) no
-------------
actual or threatened strikes, labor disputes, slow downs, walkouts, work
stoppages, or other concerted interruptions of operations that involve any
employees employed at any time in connection with the business activities or
operations at the Real Property exist, (b) hours worked by and payment made to
the employees of any Company or any Predecessor have not been in violation of
the Fair Labor Standards Act or any other applicable Governmental Requirements
pertaining to labor matters, (c) all payments due from any Company for employee
health and welfare insurance, including, without limitation, workers
compensation insurance, have been paid or accrued as a liability on its books,
(d) the business activities and operations of each Company are in compliance
with OSHA and other applicable health and safety laws.
8.20 INTELLECTUAL PROPERTY. Except as disclosed on SCHEDULE 8.20 (none of
---------------------
which matters constitute a Material-Adverse Event) (a) each Company owns or has
the right to use all material licenses, patents, patent applications,
copyrights, service marks, trademarks, trademark applications and trade names
necessary to continue to conduct its businesses as presently conducted by it and
proposed to be conducted by it immediately after the date of this agreement, (b)
each Company is conducting its business without infringement or claim of
infringement of any license, patent, copyright, service mark, trademark, trade
name, trade secret or other intellectual property right of others, and (c) no
infringement or claim of infringement by others of any material license, patent,
copyright, service mark, trademark, trade name, trade secret or other
intellectual property of any Company exists.
8.21 FULL DISCLOSURE. With respect to information regarding each
---------------
respective Borrower contained in the Proxy Statement, the Offering Memorandum,
and US Borrower's reports filed with the SEC pursuant to the 1934 Act, such
Borrower represents and warrants that such documents do not contain any untrue
statements of material fact and do not omit to state a material fact necessary
in order to make the statements made therein, in light of the circumstances
under which they were made, not misleading. All information previously
furnished in writing to Administrative Agent by or at the direction of the
respective Borrower in connection with the Loan Documents was -- and all
information furnished in writing to Administrative Agent in the future by or at
the direction of that Borrower will be -- true and accurate in all material
respects or (if a projection) based on reasonable estimates on the date the
information is stated or certified.
SECTION 9 AFFIRMATIVE COVENANTS. For so long as any Lender is committed to lend
- -------------------------------
or issue LCs or BGs under this agreement and until the US Obligation and the UK
Obligation have been fully paid and performed, UK Borrowers (jointly and
severally and only in respect of UK Borrowers and all other Foreign Companies)
and US Borrower (in respect of US Borrower and all other Companies) covenant and
agree with Agents and Lenders that, without first obtaining Required Lenders'
consent to the contrary:
9.1 CERTAIN ITEMS FURNISHED. US Borrower shall cause the following to be
-----------------------
furnished to Administrative Agent:
(a) ANNUAL FINANCIALS. Promptly after preparation but no later than
-----------------
90 days after the last day of each fiscal year of the Companies, Financials
showing the Companies' consolidated
Credit Agreement
----------------
48
and consolidating financial condition and results of operations as of, and
for the year ended on, that last day, accompanied by (i) the opinion,
without material qualification of Ernst & Young or other firm of
nationally-recognized independent certified public accountants reasonably
acceptable to Required Lenders, based on an audit using generally accepted
auditing standards, that the consolidated portion of those Financials were
prepared in accordance with GAAP and present fairly, in all material
respects, the Companies' consolidated financial condition and results of
operations, (ii) a Compliance Certificate, (iii) a summary form, reasonably
acceptable to Administrative Agent, of the Companies' accounts-receivable
aging, and (iv) a report of revenues, gross margins, and operating profits
of the Companies for the prior fiscal quarter on a business-segment basis.
(b) QUARTERLY FINANCIALS. Promptly after preparation but no later
--------------------
than 45 days after the last day of each of the first three fiscal quarters
of the Companies each year, Financials showing the Companies' consolidated
and consolidating financial condition and results of operations for that
fiscal quarter and for the period from the beginning of the current fiscal
year to the last day of that fiscal quarter, accompanied by (i) a
Compliance Certificate, (ii) a summary form, reasonably acceptable to
Administrative Agent, of the Companies' accounts-receivable aging, and
(iii) a report of revenues, gross margins, and operating profits of the
Companies for the prior fiscal quarter on a business-segment basis.
(c) BORROWING-BASE REPORTS. Borrowing-Base Reports for the US
----------------------
Facility and for the UK Facility (i) as required on SCHEDULE 7.1 and 7.2
and (ii) otherwise, promptly after preparation but no later than 30 days
after the last day of each calendar month.
(d) FINANCIAL PROJECTIONS. No later than 120 days after the last day
---------------------
of each fiscal year of the Companies, financial projections of the
Companies for the next-succeeding-two-year period following that last day,
in the form reasonably satisfactory to Administrative Agent, setting forth
management's projections for each fiscal quarter of the next-succeeding-
fiscal year and on a yearly basis thereafter.
(e) OTHER REPORTS. Promptly after preparation and distribution,
-------------
accurate and complete copies of all reports and other material
communications about material financial matters or material corporate plans
or projections by or for any Company for distribution to any Governmental
Authority or any creditor including, without limitation, each Form 10-K,
10-Q, and S-8 filed with the SEC.
(f) EMPLOYEE PLANS. As soon as possible and within 30 days after any
--------------
Company knows that any event which would constitute a reportable event
under Section 4043(b) of Title IV of ERISA with respect to any Employee
Plan subject to ERISA has occurred, or that the PBGC has instituted or will
institute proceedings under ERISA to terminate that plan, deliver a
certificate of a Responsible Officer of US Borrower setting forth details
as to that reportable event and the action which that Company or an ERISA
Affiliate, as the case may be, proposes to take with respect to it,
together with a copy of any notice of that reportable event which may be
required to be filed with the PBGC, or any notice delivered by the PBGC
evidencing its intent to institute those proceedings or any notice to the
PBGC that the plan is to be terminated, as the case may be. For all
purposes of this section, each Company is deemed to have all knowledge of
all facts attributable to the plan administrator under ERISA.
(g) OTHER NOTICES. Notice (promptly after any Company knows) of (i)
-------------
the existence and status of any Litigation that is reasonably likely to be
adversely determined and, if determined
Credit Agreement
----------------
49
adversely to any Company, would be a Material-Adverse Event, (ii) any
change in any material fact or circumstance represented or warranted by any
Company in any Loan Document, (iii) an Event of Default or Potential
Default, specifying the nature thereof and what action the Companies have
taken, are taking, or propose to take.
(h) OUTSTANDING CONDITIONS. By the deadline noted for it on SCHEDULE
----------------------
7.1 or SCHEDULE 7.2, as the case may be, each item, if any, beside which is
noted a deadline for delivery to Agents later than the applicable Closing
Date.
(i) OTHER INFORMATION. Promptly upon the reasonable request of
-----------------
either Agent or any Lender, such information (not otherwise required to be
furnished under this agreement) about any Company's business affairs,
assets, and liabilities.
9.2 USE OF CREDIT. Borrowers shall use BGs, LCs, and the proceeds of
-------------
Borrowings only for the purposes represented in this agreement and not for any
other purpose, and, in particular, shall not use (a) any Borrowings under the UK
Facility for any fees, costs, or expenses related to the Electrotech Acquisition
or otherwise in violation of any provision of the United Kingdom Companies Act
of 1985, and (b) any Borrowings for any redemption of any Subordinated Notes or
any "Designated Event Payment" under the Subordinated-Note Indenture.
9.3 BOOKS AND RECORDS. Each Company shall maintain books, records, and
-----------------
accounts necessary to prepare Financials in accordance with GAAP.
9.4 INSPECTIONS. Upon reasonable request, each Company shall allow either
-----------
Agent or any Lender (or their respective Representatives) to inspect any of its
properties, to review reports, files, and other records and to make and take
away copies, to conduct tests or investigations, and to discuss any of its
affairs, conditions, and finances with its other creditors, directors, officers,
employees, or representatives from time to time, during reasonable business
hours.
9.5 TAXES. Each Company shall promptly pay when due any and all Taxes
-----
except Taxes that are being contested in good faith by lawful proceedings
diligently conducted, against which reserve or other provision required by GAAP
has been made, and in respect of which levy and execution of any Lien sufficient
to be enforced has been and continues to be stayed.
9.6 PAYMENT OF OBLIGATIONS. Each Company shall promptly pay (or renew and
----------------------
extend) all of its material obligations as they become due (unless the
obligations are being properly contested in good faith).
9.7 EXPENSES. Within five Business Days after demand accompanied by an
--------
invoice describing the costs, fees, and expenses in reasonable detail, Borrowers
shall, subject to the last sentence in this section, pay (a) all costs, fees,
and expenses paid or incurred by either Agent incident to any Loan Document
(including, without limitation, the reasonable fees and expenses of either
Agent's counsel in connection with the negotiation, preparation, delivery, and
execution of the Loan Documents and any related amendment, waiver, or consent)
and (b) all reasonable costs and expenses incurred by either Agent or any Lender
in connection with the enforcement of the obligations of any Company under the
Loan Documents or the exercise of any Rights under the Loan Documents, all of
which are part of both the US Obligation and the UK Obligation, bearing
interest, (if not paid within five Business Days after demand accompanied by an
invoice describing the costs, fees, and expenses in reasonable detail) at the
Default Rate until paid. UK Borrowers' obligations under this section are joint
and several in respect of each
Credit Agreement
----------------
50
other but do not apply to costs, fees, expenses, and interest described in this
section as they relate to the US Facility, US Obligation, US Collateral, or
direct obligations of any Domestic Company.
9.8 MAINTENANCE OF EXISTENCE, ASSETS, AND BUSINESS. Each Company shall
----------------------------------------------
(a) except in connection with dispositions permitted under SECTIONS 11.1 or 12.1
and mergers, consolidations, and dissolutions permitted under SECTIONS 11.3 or
12.3, maintain its corporate existence and good standing in its jurisdiction of
incorporation, and (b) except where not a Material-Adverse Event (i) maintain
its authority to transact business and good standing in all other states, (ii)
maintain all licenses, permits, and franchises (including, without limitation,
Environmental Permits) necessary for its business, and (iii) keep all of its
material assets that are useful in and necessary to its business in good working
order and condition (ordinary wear and tear excepted) and make all necessary
repairs and replacements.
9.9 INSURANCE. Each Company shall, at its cost and expense, maintain with
---------
financially sound, responsible, and reputable insurance companies or
associations (or, as to workers' compensation or similar insurance, with an
insurance fund or by self-insurance authorized by the jurisdictions in which it
operates) insurance concerning its properties and businesses against casualties
and contingencies and of types and in amounts (and with co-insurance and
deductibles) as is customary in the case of similar businesses.
9.10 ENVIRONMENTAL MATTERS. Each Company shall (a) operate and manage its
---------------------
businesses and otherwise conduct its affairs in compliance with all
Environmental Laws and Environmental Permits except to the extent noncompliance
does not constitute a Material-Adverse Event, (b) promptly deliver to
Administrative Agent a copy of any notice received from any Governmental
Authority alleging that any Company is not in compliance with any Environmental
Law or Environmental Permit if the allegation (if determined adversely) would
constitute a Material-Adverse Event, and (c) promptly deliver to Administrative
Agent a copy of any notice received from any Governmental Authority alleging
that any Company has any potential Environmental Liability if the allegation (if
determined adversely) would constitute a Material-Adverse Event.
9.11 SUBSIDIARIES. Borrowers shall cause each of their respective present
------------
and future Subsidiaries (whether as a result of acquisition, creation, or
otherwise) to promptly and fully comply with the applicable provisions of
SECTION 6 and its capital stock or other equity securities to become subject to
Lender Liens as required by SECTION 6.
9.12 INDEMNIFICATION.
---------------
(a) AS USED IN THIS SECTION: (I) "INDEMNITOR" MEANS (SUBJECT TO
----------
CLAUSE (C) BELOW) BORROWERS; (II) "INDEMNITEE" MEANS EACH AGENT, EACH
---------- ----------
LENDER, EACH PRESENT AND FUTURE AFFILIATE OF EITHER AGENT OR ANY LENDER,
EACH PRESENT AND FUTURE REPRESENTATIVE OF EITHER AGENT, ANY LENDER, OR ANY
OF THOSE AFFILIATES, AND EACH PRESENT AND FUTURE SUCCESSOR AND ASSIGN OF
EITHER AGENT, ANY LENDER, OR ANY OF THOSE AFFILIATES OR REPRESENTATIVES;
AND (III) "INDEMNIFIED LIABILITIES" MEANS ALL PRESENT AND FUTURE, KNOWN AND
-----------------------
UNKNOWN, FIXED AND CONTINGENT, ADMINISTRATIVE, INVESTIGATIVE, JUDICIAL, AND
OTHER CLAIMS, DEMANDS, ACTIONS, CAUSES OF ACTION, INVESTIGATIONS, SUITS,
PROCEEDINGS, AMOUNTS PAID IN SETTLEMENT, DAMAGES, JUDGMENTS, PENALTIES,
COURT COSTS, LIABILITIES, AND OBLIGATIONS -- AND ALL PRESENT AND FUTURE
COSTS, EXPENSES, AND DISBURSEMENTS (INCLUDING, WITHOUT LIMITATION, ALL
REASONABLE ATTORNEYS' FEES AND EXPENSES WHETHER OR NOT SUIT OR OTHER
PROCEEDING EXISTS OR ANY INDEMNITEE IS PARTY TO ANY SUIT OR OTHER
PROCEEDING) IN ANY WAY RELATED TO ANY OF THE FOREGOING -- THAT MAY AT ANY
TIME BE IMPOSED ON, INCURRED BY, OR ASSERTED AGAINST ANY INDEMNITEE AND IN
ANY WAY RELATING TO OR ARISING OUT OF ANY (A) LOAN
Credit Agreement
----------------
51
DOCUMENT, TRANSACTION CONTEMPLATED BY ANY LOAN DOCUMENT, COLLATERAL UNDER
ANY LOAN DOCUMENT, OR REAL PROPERTY, (B) ENVIRONMENTAL LIABILITY IN ANY WAY
RELATED TO ANY COMPANY, PREDECESSOR, COLLATERAL UNDER ANY LOAN DOCUMENT,
REAL PROPERTY, OR ACT, OMISSION, STATUS, OWNERSHIP, OR OTHER RELATIONSHIP,
CONDITION, OR CIRCUMSTANCE CONTEMPLATED BY, CREATED UNDER, OR ARISING
PURSUANT TO OR IN CONNECTION WITH ANY LOAN DOCUMENT, OR (C) INDEMNITEE'S
SOLE OR CONCURRENT ORDINARY NEGLIGENCE.
(b) EACH INDEMNITOR SHALL INDEMNIFY EACH INDEMNITEE FROM AND AGAINST,
PROTECT AND DEFEND EACH INDEMNITEE FROM AND AGAINST, HOLD EACH INDEMNITEE
HARMLESS FROM AND AGAINST, AND ON DEMAND PAY OR REIMBURSE EACH INDEMNITEE
FOR, ALL INDEMNIFIED LIABILITIES.
(c) UK BORROWERS' OBLIGATIONS AS INDEMNITORS UNDER THIS SECTION ARE
JOINT AND SEVERAL IN RESPECT OF EACH OTHER BUT DO NOT APPLY TO ANY
INDEMNIFIED LIABILITIES DESCRIBED IN THIS SECTION AS THEY RELATE TO THE US
FACILITY, US OBLIGATION, US COLLATERAL, OR DIRECT OBLIGATIONS OF ANY
DOMESTIC COMPANY.
(d) THE FOREGOING PROVISIONS (i) ARE NOT LIMITED IN AMOUNT EVEN IF
THAT AMOUNT EXCEEDS THE US OBLIGATION AND THE UK OBLIGATION, (ii) INCLUDE,
WITHOUT LIMITATION, REASONABLE FEES AND EXPENSES OF ATTORNEYS AND OTHER
COSTS AND EXPENSES OF LITIGATION OR PREPARING FOR LITIGATION AND DAMAGES OR
INJURY TO PERSONS, PROPERTY, OR NATURAL RESOURCES ARISING UNDER ANY
STATUTORY OR COMMON LAW, PUNITIVE DAMAGES, FINES, AND OTHER PENALTIES, AND
(iii) ARE NOT AFFECTED BY THE SOURCE OR ORIGIN OF ANY HAZARDOUS SUBSTANCE,
AND (iv) ARE NOT AFFECTED BY ANY INDEMNITEE'S INVESTIGATION, ACTUAL OR
CONSTRUCTIVE KNOWLEDGE, COURSE OF DEALING, OR WAIVER.
(e) HOWEVER, NO INDEMNITEE IS ENTITLED TO BE INDEMNIFIED UNDER THE
LOAN DOCUMENTS FOR ITS OWN FRAUD, GROSS NEGLIGENCE, OR WILFUL MISCONDUCT.
(f) THE PROVISIONS OF AND INDEMNIFICATION AND OTHER UNDERTAKINGS
UNDER THIS SECTION SURVIVE THE FORECLOSURE OF ANY LENDER LIEN OR ANY
TRANSFER IN LIEU OF THAT FORECLOSURE, THE SALE OR OTHER TRANSFER OF ANY
COLLATERAL UNDER ANY LOAN DOCUMENT OR REAL PROPERTY TO ANY PERSON, THE
SATISFACTION OF THE US OBLIGATION AND THE UK OBLIGATION, THE TERMINATION OF
THE LOAN DOCUMENTS, AND THE RELEASE OF ANY OR ALL LENDER LIENS.
SECTION 10 NEGATIVE COVENANTS FOR COMPANIES. For so long as any Lender is
- -------------------------------------------
committed to lend or issue LCs or BGs under this agreement and until the US
Obligation and the UK Obligation have been fully paid and performed, UK
Borrowers (jointly and severally and only in respect of UK Borrowers and all
other Foreign Companies) and US Borrower (in respect of US Borrower and all
other Companies) covenant and agree with Agents and Lenders that, without first
obtaining Required Lenders' consent to the contrary, the Companies designated in
the following sections of this SECTION 10 may not directly or indirectly do any
of the following or commit (other than a commitment that is not binding on it
until any prior written consent of Agents or Lenders required under the Loan
Documents is first obtained) to do any of the following:
Credit Agreement
----------------
52
10.1 PAYROLL TAXES. No Company may use any proceeds of any Borrowing to
-------------
pay the wages of employees unless a timely payment to or deposit with the United
States of America of all amounts of Tax required to be deducted and withheld
with respect to such wages is also made.
10.2 DEBT. No Company may have any Debt except the following ("PERMITTED
----
DEBT"):
(a) The existing Debt that is described on SCHEDULE 8.16 (to the
extent that such schedule does not indicate that it is to be paid as a
condition precedent to extensions of credit under this agreement) and all
renewals, extensions, amendments, modifications, and refinancings of (but
not any principal increases after the date of this agreement to) any of
that Debt.
(b) The US Obligation and the UK Obligation and any guaranties of
them delivered under this agreement.
(c) Subordinated Debt.
(d) Debt of any Company to another Company, the creation of which
constitutes a Permitted Investment.
(e) Debt and Capital Lease obligations incurred by any Company to
acquire, construct, or improve assets that never exceed the Dollar
Equivalent of $3,000,000 total-principal amount outstanding for all of the
Companies (inclusive of and not in addition to the outstanding commitment
by Silicon Valley Bank, if any, described on SCHEDULE 8.16) together with
renewals, extensions, amendments, modifications, and refinancings of that
Debt and those obligations subject to the foregoing limitations of this
CLAUSE (E).
(f) Hedging Agreements; trade payables, accrued taxes, and other
liabilities that do not constitute Funded Debt; and endorsements of
negotiable instruments in the ordinary course of business.
(g) Other Debt that is not Funded Debt and that does not collectively
ever exceed a principal amount equal to the Dollar Equivalent of $1,000,000
for all of the Companies.
10.3 PREPAYMENTS. No Company may prepay or cause to be prepaid any
-----------
principal of, or any interest on, any of its Funded Debt (including, without
limitation, any optional redemption of any Subordinated Note or any "Designated
Event Payment" under the Subordinated-Note Indenture) except (a) the US
Obligation or the UK Obligation, (b) any of its other Senior Debt if no Event of
Default or Potential Default exists, (c) conversions of Subordinated Debt to
equity of US Borrower that is not mandatorily redeemable, (d) exchanges of
Subordinated Debt for Subordinated Debt, and (e) prepayment of Subordinated Debt
with the proceeds of the issuance of additional Subordinated Debt or common
stock issued by US Borrower.
10.4 SUBORDINATED DEBT. No Company may amend or modify the terms of any
-----------------
Subordinated Debt to any extent that (a) any of the applicable subordination,
payment blockage, or standstill provisions are less favorable to Lenders than
exists for the Subordinated Notes on the date of this agreement, (b) the
applicable representations, covenants, events of default, and other provisions
are significantly more onerous to the obligor than exists for the Subordinated
Debt on the date of this agreement, or (c) scheduled or mandatory principal or
sinking fund payment obligations before December 31, 1999, are made applicable
to any Subordinated Debt.
Credit Agreement
----------------
53
10.5 CAPITAL EXPENDITURES. No Company may make expenditures for the
--------------------
acquisition, construction, improvement, or replacement of land, buildings,
equipment, or other fixed or capital assets or leaseholds (excluding
expenditures properly chargeable to repairs or maintenance) except such
expenditures that do not, for all the Companies during any fiscal year of the
Companies, exceed the applicable limitations in the following table, with each
reference to revenue being the revenue of the Companies during the corresponding
fiscal year:
==========================================================
FISCAL YEAR PERMITTED
==========================================================
1996 Lesser of 13.5% of revenue or $17,000,000
- ----------------------------------------------------------
1997 Lesser of 12.0% of revenue or $20,000,000
- ----------------------------------------------------------
1998 Lesser of 10.0% of revenue or $21,000,000
- ----------------------------------------------------------
1999 Lesser of 10.0% of revenue or $22,000,000
==========================================================
For purposes of the foregoing, the calculation of revenue for any period before
the date of this agreement shall be made on the basis of the combined
Financials, before the date of this agreement, of US Borrower and of UK
Borrowers and their Subsidiaries to the extent acquired by US Borrower in the
Electrotech Acquisition.
10.6 INVESTMENTS. No Company may make any Investments except Permitted
-----------
Investments.
10.7 EMPLOYEE PLANS. Except as disclosed on SCHEDULE 7.12 or where not a
--------------
Material-Adverse Event, no Company may permit any of the events or circumstances
described in SECTION 7.12 to exist or occur.
10.8 TRANSACTIONS WITH AFFILIATES. No Company may enter into any material
----------------------------
transaction with any of its Affiliates except (a) those described on SCHEDULE
7.15, and (b) transactions in the ordinary course of business and upon fair and
reasonable terms not materially less favorable than it could obtain or could
become entitled to in an arm's-length transaction with a Person that was not its
Affiliate.
10.9 COMPLIANCE WITH GOVERNMENTAL REQUIREMENTS AND DOCUMENTS. No Company
-------------------------------------------------------
may (a) violate the provisions of any Governmental Requirements (including,
without limitation, OSHA and Environmental Laws) applicable to it or of any
material agreement to which it is a party if that violation alone, or when
aggregated with all other violations, would be a Material-Adverse Event, (b)
violate in any material respect any provision of its Organizational Documents,
or (c) repeal, replace, or amend any provision of its Organizational Documents
if that action would be a Material-Adverse Event.
10.10 DISTRIBUTIONS. No Company may declare, make, or pay any Distribution
-------------
except (i) Distributions paid in the form of additional equity that is not
mandatorily redeemable, (ii) Distributions by any Company to US Borrower, (iii)
Distributions by any Domestic Company (other than US Borrower) to any other
Domestic Company, to the extent that such Domestic Company is in compliance with
SECTIONS 6 and 9.11, (iv) Distributions by any Foreign Company to its parent
company to the extent that such parent company is in compliance with SECTIONS 6
and 9.11, (v) payment of expenses to directors, officers, and employees the
Companies in the ordinary course of business, and (vi) loans and advances to
directors, officers, and employees of the Companies to the extent that they
constitute Permitted Investments.
10.11 ASSIGNMENT. No Company may assign or transfer any of its Rights,
----------
duties, or obligations under any of the Loan Documents.
Credit Agreement
----------------
54
10.12 FISCAL YEAR AND ACCOUNTING METHODS. No Company may change its fiscal
----------------------------------
year for accounting purposes or any material aspect of its method of accounting
except to conform any new Subsidiary's accounting methods to US Borrower's
accounting methods.
10.13 NEW BUSINESSES. No Company may engage in any business except the
--------------
businesses in which it is presently engaged and any other reasonably related
business.
10.14 GOVERNMENT REGULATIONS. No Company may conduct its business in a way
----------------------
that it becomes regulated under the Investment Company Act of 1940 or the
Public Utility Holding Company Act of 1935.
10.15 STRICT COMPLIANCE. No Company may indirectly do anything that it may
-----------------
not directly do under any covenant in any Loan Document.
SECTION 11 NEGATIVE COVENANTS FOR DOMESTIC COMPANIES. For so long as any Lender
- ---------------------------------------------------
is committed to lend or issue LCs or BGs under this agreement and until the US
Obligation and UK Obligation have been fully paid and performed, US Borrower
covenants and agrees with Agents and Lenders that, without first obtaining
Required Lenders' consent to the contrary, the Companies designated in the
following sections of this SECTION 11 may not directly or indirectly do any of
the following or commit (other than a commitment that is not binding on it until
any prior written consent of Agents or Lenders required under the Loan Documents
is first obtained) to do any of the following:
11.1 DISPOSITION OF ASSETS. No Domestic Company may sell, assign, lease,
---------------------
transfer, or otherwise dispose of any of its assets (including, without
limitation, equity interests in any other Company) except (a) sales and
dispositions in the ordinary course of business for a fair and adequate
consideration (and Required Lenders' consent in connection with proposed
licensing arrangements not in the ordinary course of business shall not be
unreasonably withheld or delayed), (b) sales of assets which are obsolete or are
no longer in use and which are not significant to the continuation of its
respective business, (c) dispositions of assets where substantially similar
assets have been or are being acquired, and (d) sales of assets by any Domestic
Company (other than US Borrower) to another Domestic Company to the extent that
the latter Domestic Company is in compliance with SECTIONS 6 and 9.11.
11.2 LIENS. No Domestic Company may (a) create, incur, or suffer or permit
-----
to be created or incurred or to exist any Lien upon any of its assets except
Permitted Liens or (b) enter into or permit to exist any arrangement or
agreement that directly or indirectly prohibits it or any of its Subsidiaries
from creating or incurring any Lien on any of their respective assets except (i)
the Loan Documents, (ii) any lease that places a Lien prohibition on only the
property subject to that lease, and (iii) arrangements and agreements that apply
only to property subject to Permitted Liens.
11.3 MERGERS, CONSOLIDATIONS, AND DISSOLUTIONS. Except as otherwise
-----------------------------------------
provided in the first sentence of SECTION 9.8, no Domestic Company may merge or
consolidate with any other Person or dissolve except, if no Event of Default or
Potential Default exists or will exist as a result of it (a) any merger or
consolidation between Domestic Companies so long as US Borrower is the survivor
if it is involved and (b) dissolution of any Domestic Subsidiary of US Borrower
if substantially all of its assets have been conveyed to any other Domestic
Company to the extent that such Domestic Company is in compliance with SECTIONS
6 and 9.11.
SECTION 12 NEGATIVE COVENANTS FOR FOREIGN COMPANIES. For so long as any Lender
- ---------------------------------------------------
is committed to lend or issue LCs or BGs under the UK Facility and until the UK
Obligation has been fully paid and performed, UK Borrowers jointly and severally
covenant and agree with Agents and
Credit Agreement
----------------
55
Lenders that, without first obtaining Required Lenders' consent to the contrary
the Companies designated in the following sections of this SECTION 12 may not
directly or indirectly do any of the following or commit (other than a
commitment that is not binding on it until any prior written consent of Agents
or Lenders required under the Loan Documents is first obtained) to do any of the
following:
12.1 DISPOSITION OF ASSETS. No Foreign Company may sell, assign, lease,
---------------------
transfer, or otherwise dispose of any of its assets (including, without
limitation, equity interests in any other Company) except (a) sales and
dispositions of inventory in the ordinary course of business for a fair and
adequate consideration (and Required Lenders' consent in connection with
proposed licensing arrangements not in the ordinary course of business shall not
be unreasonably withheld or delayed), (b) sales of assets which are obsolete or
are no longer in use and which are not significant to the continuation of its
respective business, and (c) sales of assets by any Foreign Company (other than
either UK Borrower) to another Foreign Company to the extent that the latter
Foreign Company is in compliance with SECTIONS 6 and 9.11.
12.2 LIENS. No Foreign Company may (a) create, incur, or suffer or permit
-----
to be created or incurred or to exist any Lien upon any of its assets except
Permitted Liens or (b) enter into or permit to exist any arrangement or
agreement that directly or indirectly prohibits it or any of its Subsidiaries
from creating or incurring any Lien on any of their respective assets except (i)
the Loan Documents, (ii) any lease that places a Lien prohibition on only the
property subject to that lease, and (iii) arrangements and agreements that apply
only to property subject to Permitted Liens.
12.3 MERGERS, CONSOLIDATIONS, AND DISSOLUTIONS. Except as otherwise
-----------------------------------------
provided in the first sentence of SECTION 9.8, no Foreign Company may merge or
consolidate with any other Person or dissolve except, if no Event of Default or
Potential Default exists or will exist as a result of it (a) any merger or
consolidation between Foreign Companies so long as a UK Borrower is the survivor
if it is involved or one of them is the survivor if they are both involved, and
(b) dissolution of any Subsidiary of a UK Borrower if substantially all of its
assets have been conveyed to any other Foreign Company to the extent that such
Foreign Company is in compliance with SECTIONS 6 and 9.11.
SECTION 13 FINANCIAL COVENANTS. For so long as any Lender is committed to lend
- ------------------------------
or issue LCs or BGs under this agreement and until the US Obligation and UK
Obligation have been fully paid and performed, Borrowers jointly and severally
covenant and agree with Agents and Lenders that, without first obtaining
Required Lenders' consent to the contrary, they must not directly or indirectly
permit any of the following to occur or exist, as measured on a fiscal-quarterly
basis. Any of the following calculations involving periods before the date of
this agreement shall be made on the basis of the combined Financials, before the
date of this agreement, of US Borrower and of UK Borrowers and their
Subsidiaries to the extent acquired by US Borrower in the Electrotech
Acquisition.
13.1 TANGIBLE-NET WORTH. The Companies' Tangible-Net Worth ever to be less
------------------
than the sum of (a) $7,500,000, plus (b) 75% of the Companies' cumulative net
income (without deduction for losses) after September 30, 1996, plus (c) 75% of
the net (i.e., gross less usual and customary underwriting, placement, and other
related costs and expenses) proceeds of the issuance of any equity securities by
US Borrower after the date of this agreement.
13.2 CURRENT RATIO. The ratio of the Companies' current assets to the sum
-------------
of the Companies' current liabilities plus the US-Facility-Commitment Usage and
the UK-Facility-Commitment Usage ever to be less than 1.65 to 1.00.
Credit Agreement
----------------
56
13.3 EBITDA. The Companies' EBITDA to ever be less than the amount for the
------
corresponding period described in the table below:
==============================================
PERIOD EBITDA
==============================================
Quarter ended 12/31/96 $ 1
- ----------------------------------------------
Quarter ended 3/31/97 $ 1
- ----------------------------------------------
Quarter ended 6/3097 $ 1
- ----------------------------------------------
Quarter ended 9/30/97 $ 1
- ----------------------------------------------
Four quarters ended 12/31/97 $20,000,000
- ----------------------------------------------
Four quarters ended 3/31/98 $22,500,000
- ----------------------------------------------
Four quarters ended 6/30/98 $25,000,000
- ----------------------------------------------
Four quarters ended 9/30/98 $27,500,000
- ----------------------------------------------
Four quarters ended 12/31/98 $30,000,000
- ----------------------------------------------
Four quarters ended 3/31/99 $32,500,000
- ----------------------------------------------
Four quarters ended 6/30/99 $35,000,000
- ----------------------------------------------
Four quarters ended 9/30/99 $37,500,000
=============================================
13.4 SENIOR DEBT/EBITDA. The ratio of the Companies' Senior Debt as of the
------------------
last day of each fiscal quarter (commencing with the quarter ending December 31,
1996) to the Companies' EBITDA for the 12-month period ending on that last day
to exceed 1.0 to 1.0.
13.5 INTEREST COVERAGE. Commencing with the four quarters ended December
-----------------
31, 1996, the ratio of the Companies' EBITDA to the Companies' Interest Expense
ever to be less than:
===================================================
ANY FOUR-QUARTER PERIOD ENDED IN RATIO
===================================================
1996 2.3 to 1.00
--------------------------------------------------
1997 2.3 to 1.00
--------------------------------------------------
1998 3.5 to 1.00
- ---------------------------------------------------
1999 3.5 to 1.00
===================================================
13.6 PROJECTIONS. Borrowers acknowledge and agree that the Projections
-----------
were prepared for the purpose of tailoring the covenants in this SECTION 13 to
the most conservative reasonable estimates of Borrowers' future performance, and
less than substantial deviation from the Projections may cause non-compliance
with any or all of the covenants in this SECTION 13. Notwithstanding anything
in this SECTION 13.6 to the contrary, no deviation from the Projections, in and
of itself, shall be an Event of Default unless (a) that deviation causes actual
non-compliance with any or all of the covenants in this SECTION 13, or (b) that
deviation is due to the representation under SECTION 8.7 having been materially
incorrect when made.
Credit Agreement
----------------
57
SECTION 14 EVENTS OF DEFAULT. The term "EVENT OF DEFAULT" means the occurrence
- ----------------------------
of any one or more of the following:
14.1 PAYMENTS. Any Borrower's failure or refusal to pay (a) on the date
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due, any Principal Debt or reimbursement obligation for which it is obligated
under the Loan Documents or (b) within five days after the date due, any other
portion of the US Obligation or UK Obligation, as the case may be, for which it
is obligated under the Loan Documents.
14.2 COVENANTS. Any Company's failure or refusal to punctually and
---------
properly perform, observe, and comply with any covenant (other than as described
in SECTION 14.1) applicable to it in:
(a) SECTIONS 2.3(G), 3.4(G), 9.2, 9.7, 9.8(A), 10.1, 10.3, 10.4,
10.10 (in respect of Distributions declared, made, or paid by US Borrower),
11.1, 11.3, 12.1, 12.3, 13.1, 13.2, 13.3, or 13.4;
(b) SECTIONS 6.1, 6.2, 6.3, 9.11, 10.2, 10.5, 10.6, 10.8, 10.10
(other than Distributions declared, made, or paid by US Borrower), 11.2, or
12.2, if that failure or refusal was inadvertent, is not a Material-Adverse
Event, is susceptible of cure, and is cured within ten days after the
earlier of either any Company knows of it or any Company is notified of it
by either Agent or any Lender; or
(c) Any other provision of any Loan Document, if that failure or
refusal continues for 30 days after the earlier of either any Company knows
of it or any Company is notified of it by either Agent or any Lender; or
14.3 DEBTOR RELIEF. Any Company (a) is not Solvent, (b) fails to pay its
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Debts generally as they become due, (c) voluntarily seeks, consents to, or
acquiesces in the benefit of any Debtor Law, or (d) becomes a party to or is
made the subject of any proceeding provided for by any Debtor Law (except as a
creditor or claimant) that could suspend or otherwise adversely affect the
Rights of either Agent or any Lender granted in the Loan Documents (unless, if
the proceeding is involuntary, the applicable petition is dismissed within 60
days after its filing).
14.4 JUDGMENTS AND ATTACHMENTS. To the extent that any matter involves an
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amount in controversy or judgment in excess of $100,000 or all such matters
collectively involve amounts in controversy and judgments in excess of $500,000,
any Company fails to pay or have discharged any judgement, order for the payment
of money, or attachment, sequestration, or similar proceedings before (a) any
enforcement proceedings have been commenced against it or any of its assets or
(b) the expiration of 60 consecutive days during which stay of enforcement is
not in effect because of pending appeal or otherwise.
14.5 GOVERNMENT ACTION. A final non-appealable order is issued by any
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Governmental Authority (including, but not limited to, the United States Justice
Department) seeking to cause any Company to divest a significant portion of its
assets under any antitrust, restraint of trade, unfair competition, industry
regulation, or similar Governmental Requirements, or any Governmental Authority
condemns, seizes, or otherwise appropriates, or takes custody or control of all
or any substantial portion of any Company's assets.
14.6 MISREPRESENTATION. Any representation or warranty made by any Company
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in any Loan Document at any time proves to have been materially incorrect when
made.
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14.7 CHANGE OF CONTROL. Either (a) any Person or Persons acting together
-----------------
that would constitute a group under the 1934 Act (other than such group
existing as of the close of business on the date of this agreement or any group
consisting of management of US Borrower existing as of the date of this
agreement) and their respective Affiliates, beneficially own (as defined in Rule
13d-3 of the SEC under the 1934 Act) at least 35% of the aggregate voting power
of all classes of stock of the US Borrower entitled to vote generally in the
election of its directors, or (b) the individuals who, as of the date of this
agreement, constitute the members of US Borrower's board of directors (for
purposes of this section, the "INCUMBENT BOARD") do not constitute or cease for
any reason to constitute at least 51% of: (i) US Borrower's board of directors;
(ii) the surviving corporation's board of directors in the event of any merger
or consolidation (if permitted by SECTION 11.3) involving US Borrower, or (iii)
the controlling entity's board of directors, the comparable body if there is no
board of directors, or voting control if there is no comparable body, in the
event that the surviving corporation under CLAUSE (II) above is directly or
indirectly controlled by that entity. For purposes of this section, any
individual who becomes a member of the board of directors or comparable body or
who obtains a voting interest, as applicable under CLAUSES (I), (II), or (III)
above, after the date of this agreement and whose appointment to the board, or
nomination for election, was approved or ratified by a vote of the individuals
comprising at least 51% of the incumbent board shall be deemed to be a member of
the incumbent board.
14.8 OTHER FUNDED DEBT. In respect of any Funded Debt (other than the US
-----------------
Obligation or the UK Obligation) (a) any Company fails to make any payment when
due, or (b) any default or other event or condition occurs or exists beyond the
applicable grace or cure period, the effect of which is to cause or to permit
any holder of that Funded Debt to cause (whether or not it elects to cause) any
of that Funded Debt to become due before its stated maturity or regularly
scheduled payment dates, or (c) any of that Funded Debt is declared to be due
and payable or required to be prepaid by any Company before its stated maturity.
14.9 VALIDITY AND ENFORCEABILITY. Once executed, any Loan Document ceases
---------------------------
to be in full force and effect in any material respect or is declared to be null
and void or its validity or enforceability is contested in writing by any
Company party to it or any Company party to it denies in writing that it has any
further liability or obligations under it except in accordance with that
document's express provisions or as the appropriate parties under SECTION 17.9
may otherwise agree in writing.
14.10 BGS OR LCS. Either Issuer is served with, or becomes subject to, a
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court order, injunction, or other process or decree restraining or seeking to
restrain it from paying any amount under any BG or LC and either (a) a drawing
has occurred under the BG or LC, and the obligated Borrower has refused to
reimburse the Issuer for payment, or (b) the expiration date of the BG or LC has
occurred, but the Right of the beneficiary to draw under the BG or LC has been
extended past the Stated-Termination Date in connection with the pendency of the
related court action or proceeding, and the obligated Borrower has failed to
deposit cash collateral in an amount equal to the Issuer's maximum exposure
under the BG or LC.
SECTION 15 RIGHTS AND REMEDIES.
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15.1 REMEDIES.
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(a) DEBTOR RELIEF. If an Event of Default exists under SECTION 14.3,
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all commitments to extend credit and issue LCs and BGs under this agreement
automatically terminate and the entire unpaid balance of the US Obligation
and the UK Obligation automatically become due and payable without any
action of any kind whatsoever.
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(b) OTHER EVENTS OF DEFAULT. If any Event of Default exists, subject to
-----------------------
the terms of SECTION 16.5(B), Administrative Agent may (with the consent
of, and must, upon the request of, Required Lenders), do any one or more of
the following: (i) If the maturity of the US Obligation and the UK
Obligation have not already been accelerated under SECTION 15.1(A), declare
the entire unpaid balance of all or any part of the US Obligation and the
UK Obligation immediately due and payable, whereupon it is due and payable;
(ii) terminate the commitments of Lenders to extend credit under this
agreement; (iii) reduce any claim to judgment; (iv) demand payment of an
amount equal to the LC Exposure and the BG/LC Exposure then existing and
retain as collateral for the LC Exposure and the BG/LC Exposure any amounts
received from any Company, from any property of any Company, through
offset, or otherwise; and (v) exercise any and all other legal or equitable
Rights afforded by the Loan Documents, by law, or in equity.
(c) OFFSET. If an Event of Default has occurred and is then continuing
------
unwaived, to the extent lawful, each Lender may exercise the Rights of
offset and banker's lien against each and every account and other property,
or any interest therein, which any Borrower may now or hereafter have with,
or which is now or hereafter in the possession of, that Lender to the
extent of the full amount of the US Obligation and the UK Obligation owed
to that Lender.
15.2 JUDGMENT CURRENCY. If, for the purpose of obtaining judgment in any
-----------------
court, it is necessary to convert an amount due under any Loan Document from a
currency (the "ORIGINAL CURRENCY") into another currency (the "OTHER CURRENCY"),
then the rate of exchange used shall be that at which Administrative Agent (in
accordance with normal banking procedures) could purchase the Original Currency
with the Other Currency at its principal office in Dallas, Texas, two Business
Days before the day on which final judgment is given.
(a) Any Borrower's obligation for any amount due in the Original
Currency from it to either Agent or to any Lender under any Loan Document
shall (notwithstanding any judgment in any Other Currency) be discharged
only if and to the extent that -- on the Business Day following the day on
which that Agent or that Lender receives any amount adjudged to be so due
in the Other Currency -- that Agent or Lender is able (in accordance with
normal banking procedures) to purchase the same amount of the Original
Currency with the Other Currency as the amount that Administrative Agent
could have purchased two Business Days before the day on which the final
judgment referred to above is given.
(b) If the amount of the Original Currency so purchased under CLAUSE
(A) above by that Agent or that Lender is less than the amount of the
Original Currency that Administrative Agent could have so purchased, then
that Borrower shall (as a separate obligation and notwithstanding any such
judgment) remit the deficiency to that Agent or that Lender.
(c) If the amount of the Original Currency so purchased under CLAUSE
(A) above exceeds the amount of the Original Currency that Administrative
Agent could have so purchased, then that Agent or that Lender shall remit
that excess to that Borrower.
15.3 COMPANY WAIVERS. The Companies waive presentment and demand for
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payment, protest, notice of intention to accelerate, notice of acceleration, and
notice of protest and nonpayment, and agree that their respective liability with
respect to all or any part of the US Obligation and the UK Obligation is not
affected by any renewal or extension in the time of payment of all or any part
of the US Obligation and the UK Obligation, by any indulgence, or by any release
or change in any security for the payment of all or any part of the US
Obligation and the UK Obligation.
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15.4 PERFORMANCE BY ADMINISTRATIVE AGENT. If any Company's covenant, duty,
-----------------------------------
or agreement is not performed in accordance with the terms of the Loan
Documents, Administrative Agent may, while an Event of Default exists, at its
option (but subject to the approval of Required Lenders), perform or attempt to
perform that covenant, duty, or agreement on behalf of that Company (and any
amount expended by Administrative Agent in its performance or attempted
performance is payable by the Companies, jointly and severally, to
Administrative Agent on demand, becomes part of the US Obligation and the UK
Obligation, and bears interest at the Default Rate from the date of
Administrative Agent's expenditure until paid). However, Administrative Agent
does not assume and shall never have, except by its express written consent, any
liability or responsibility for the performance of any Company's covenants,
duties, or agreements.
15.5 NOT IN CONTROL. Nothing in any Loan Documents gives or may be deemed
--------------
to give to either Agent or any Lender the Right to exercise control over any
Company's Real Property, other assets, affairs, or management or to preclude or
interfere with any Company's compliance with any Governmental Requirement or
require any act or omission by any Company that may be harmful to Persons or
property. Any "Material-Adverse Event" or other materiality or substantiality
qualifier of any representation, warranty, covenant, agreement, or other
provision of any Loan Document is included for credit documentation purposes
only and does not imply or be deemed to mean that either Agent or any Lender
acquiesces in any non-compliance by any Company with any Governmental
Requirement, document, or otherwise or does not expect the Companies to
promptly, diligently, and continuously carry out all appropriate removal,
remediation, compliance, closure, or other activities required or appropriate in
accordance with all Environmental Laws. Agents' and Lenders' power is limited
to the Rights provided in the Loan Documents. All of those Rights exist solely
(and may be exercised in manner calculated by Agents or Lenders in their
respective good faith business judgment) to preserve and protect the Collateral
and to assure payment and performance of the US Obligation and the UK
Obligation.
15.6 COURSE OF DEALING. The acceptance by Agents or Lenders of any partial
-----------------
payment on the US Obligation or the UK Obligation is not a waiver of any Event
of Default then existing. No waiver by either Agent, Required Lenders, or
Lenders of any Event of Default is a waiver of any other then-existing or
subsequent Event of Default. No delay or omission by either Agent, Required
Lenders, or Lenders in exercising any Right under the Loan Documents impairs
that Right or is a waiver thereof or any acquiescence therein, nor will any
single or partial exercise of any Right preclude other or further exercise
thereof or the exercise of any other Right under the Loan Documents or
otherwise.
15.7 CUMULATIVE RIGHTS. All Rights available to Agents, Required Lenders,
-----------------
and Lenders under the Loan Documents are cumulative of and in addition to all
other Rights granted to Agents, Required Lenders, and Lenders at law or in
equity, whether or not the US Obligation or the UK Obligation are due and
payable and whether or not Agents, Required Lenders, or Lenders have instituted
any suit for collection, foreclosure, or other action in connection with the
Loan Documents.
15.8 APPLICATION OF PROCEEDS. Any and all proceeds ever received by Agents
-----------------------
or Lenders from the exercise of any Rights pertaining to the US Obligation or
the UK Obligation shall be applied to the US Obligation or the UK Obligation
according to SECTION 4.
15.9 CERTAIN PROCEEDINGS. Borrowers shall promptly execute and deliver, or
-------------------
cause the execution and delivery of, all applications, certificates,
instruments, registration statements, and all other documents and papers
Administrative Agent or Required Lenders reasonably request in connection with
the obtaining of any consent, approval, registration (other than securities law
registrations), qualification, permit, license, or authorization of any
Governmental Authority or other Person necessary or appropriate for the
effective exercise of any Rights under the Loan Documents. Because Borrowers
agree that
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Administrative Agent's and Required Lenders' remedies at law for failure of
Borrowers to comply with the provisions of this section would be inadequate and
that failure would not be adequately compensable in damages, Borrowers agree
that the covenants of this section may be specifically enforced.
15.10 EXPENDITURES BY LENDERS. Any sums spent by either Agent or any Lender
-----------------------
in the exercise of any Right under any Loan Document is payable by the Companies
to Administrative Agent within five Business Days after demand, becomes part of
the US Obligation and the UK Obligation, and bears interest at the Default Rate
from the date spent until the date repaid.
15.11 DIMINUTION IN VALUE OF COLLATERAL. Neither Agent nor any Lender has
---------------------------------
any liability or responsibility whatsoever for any diminution in or loss of
value of any collateral now or in the future securing payment or performance of
any of the US Obligation or the UK Obligation (other than diminution in or loss
of value caused by its own gross negligence or willful misconduct).
15.12 UK BORROWERS' OBLIGATIONS. Nothing in this SECTION 15 shall be
-------------------------
construed to make the UK Borrowers obligated in any way with respect to any of
the US Obligation or its enforcement.
SECTION 16 AGENTS AND LENDERS.
- ---------- ------------------
16.1 AGENTS.
------
(a) ADMINISTRATIVE AGENT. Except as provided in CLAUSE (B) below,
--------------------
each Lender appoints Administrative Agent (including, without limitation,
each successor Administrative Agent in accordance with this SECTION 16) as
its nominee and agent to act in its name and on its behalf (and
Administrative Agent and each such successor accepts that appointment):
(i) To act as its nominee and on its behalf in and under all Loan
Documents; (ii) to arrange the means whereby Borrowings are to be made
available to Borrowers (except under the Overdraft Subfacility) under the
Loan Documents; (iii) to take any action that it properly requests under
the Loan Documents (subject to the concurrence of other Lenders as may be
required under the Loan Documents); (iv) to receive all documents and items
to be furnished to it under the Loan Documents; (v) to be the secured
party, mortgagee, beneficiary, recipient, and similar party in respect of
any collateral for the benefit of Lenders except when the UK-Collateral
Agent is serving in that function; (vi) to promptly distribute to it all
material information, requests, documents, and items received from any
Borrower under the Loan Documents; (vii) to promptly distribute to it its
ratable part of each payment or prepayment (whether voluntary, as proceeds
of collateral upon or after foreclosure, as proceeds of insurance thereon,
or otherwise) in accordance with the terms of the Loan Documents; and
(viii) to deliver to the appropriate Persons requests, demands, approvals,
and consents received from it. However, Administrative Agent may not be
required to take any action that exposes it to personal liability or that
is contrary to any Loan Document or applicable Governmental Requirements.
(b) UK-COLLATERAL AGENT. Each Lender under the UK Facility appoints
-------------------
that UK-Collateral Agent (including, without limitation, each successor UK-
Collateral Agent in accordance with this SECTION 16) as its nominee and
agent to act in its name and on its behalf (and that UK-Collateral Agent
and each such successor accepts that appointment): (i) To be the secured
party, mortgagee, beneficiary, recipient, and similar party in respect of
any collateral as may be appropriate in connection with the UK Facility for
the benefit of the Lenders under the UK Facility; (ii) to take any action
that it properly requests under the Loan Documents (subject to the
concurrence of other Lenders under the UK Facility as may be required under
the Loan Documents); (iii) to promptly distribute to it all material
information, requests, documents, and
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items received from any Borrower under the Loan Documents; (iv) to promptly
distribute to it its ratable part of each payment or prepayment (whether
voluntary, as proceeds of collateral upon or after foreclosure, as proceeds
of insurance thereon, or otherwise) in accordance with the terms of the
Loan Documents; and (v) to deliver to the appropriate Persons requests,
demands, approvals, and consents received from it. However, UK-Collateral
Agent may not be required to take any action that exposes it to personal
liability or that is contrary to any Loan Document or applicable
Governmental Requirements.
(c) SUCCESSOR. Either Agent may assign all of its Rights and
---------
obligations as an Agent under the Loan Documents to any of its Affiliates,
which Affiliate shall then be the successor to that Agent under the Loan
Documents. Either Agent may also voluntarily resign and shall resign upon
the request of Required Lenders for cause (i.e., its continuing to fail to
perform its responsibilities as an Agent under the Loan Documents). If any
such successor ever ceases to be a party to this agreement or if the
initial or any such successor ever resigns (whether voluntarily or at the
request of Required Lenders), then Required Lenders shall appoint the
successor from among Lenders (other than the resigning Agent). If Required
Lenders fail to appoint a successor within 30 days after the resigning
Agent has given notice of resignation or Required Lenders have removed the
resigning Agent, then the resigning Agent may, on behalf of Lenders,
appoint a successor, which must be a commercial bank having a combined
capital and surplus of at least the Dollar Equivalent of $1,000,000,000 (as
shown on its most recently published statement of condition). Upon its
acceptance of appointment as successor, the successor succeeds to and
becomes vested with all of the Rights of the former Agent, and the former
Agent is discharged from its duties and obligations as an Agent under the
Loan Documents, and each Lender shall execute the documents that any
Lender, the resigning or removed Agent, or the successor Agent reasonably
request to reflect the change. After any Agent's resignation or removal as
an Agent under the Loan Documents, the provisions of this section inure to
its benefit as to any actions taken or not taken by it while it was an
Agent under the Loan Documents.
(d) RIGHTS AS LENDER. Each Agent, in its capacity as a Lender, has
----------------
the same Rights under the Loan Documents as any other Lender and may
exercise those Rights as if it were not acting as an Agent. The term
"Lender", unless the context otherwise indicates, includes each Agent. An
Agent's resignation or removal does not impair or otherwise affect any
Rights that it has or may have in its capacity as an individual Lender.
Each Lender and each Borrower agree that neither Agent is a fiduciary for
Lenders or Borrowers but is simply acting in the capacity described in this
agreement to alleviate administrative burdens for Borrowers and Lenders,
that neither Agent has any duties or responsibilities to Lenders or
Borrowers except those expressly set forth in the Loan Documents, and that
each Agent in its capacity as a Lender has the same Rights as any other
Lender.
(e) OTHER ACTIVITIES. Subject to SECTIONS 10.2, 11.2, and 12.2, each
----------------
Agent or any Lender may now or in the future be engaged in one or more
loan, letter of credit, leasing, or other financing transactions with any
Borrower, act as trustee or depositary for any Borrower, or otherwise be
engaged in other transactions with any Borrower (collectively, the "OTHER
ACTIVITIES") not the subject of the Loan Documents. Without limiting the
Rights of Lenders specifically set forth in the Loan Documents, neither
Agent nor any Lender is responsible to account to the other Agent or
Lenders for those other activities, and no Lender shall have any interest
in any other Lender's activities, any present or future guaranties by or
for the account of any Borrower that are not contemplated by or included in
the Loan Documents, any present or future offset exercised by either Agent
or any Lender in respect of those other activities, any present or future
property taken as security for any of those other activities, or any
property now or hereafter in either
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Agent's or any Lender's possession or control that may be or become
security for the obligations of any Borrower arising under the Loan
Documents by reason of the general description of indebtedness secured or
of property contained in any other agreements, documents, or instruments
related to any of those other activities (but, if any payments in respect
of those guaranties or that property or the proceeds thereof is applied by
that Agent or Lender to reduce the US Obligation or the UK Obligation, then
each Lender is entitled to share ratably in the application to the extent
so provided in the Loan Documents).
16.2 EXPENSES. Each Lender shall pay, according to its Commitment
--------
Percentage of the US Facility and the UK Facility combined, its part of any
reasonable expenses (including, without limitation, court costs, reasonable
attorneys' fees and other costs of collection) incurred by either Agent or
Issuer (while acting in such capacity) in connection with any of the Loan
Documents if that Agent or Issuer is not reimbursed from other sources within 30
days after incurrence. Each Lender is entitled to receive, according to its
Commitment Percentage of the US Facility and the UK Facility combined, part of
any reimbursement that it makes to either Agent or Issuer if they are
subsequently reimbursed from other sources.
16.3 PROPORTIONATE ABSORPTION OF LOSSES. Except as otherwise provided in
----------------------------------
the Loan Documents nothing in the Loan Documents (a) gives any Lender under the
US Facility any advantage over any other Lender under the US Facility insofar as
the US Obligation is concerned or relieves any such Lender from ratably
absorbing any losses sustained with respect to the US Obligation (except to the
extent unilateral actions or inactions by any Lender result in US Borrower or
any other obligor on the US Obligation having any credit, allowance, set off,
defense, or counterclaim solely with respect to all or any part of that Lender's
part of the US Obligation), determined according to that Lender's Commitment
Percentage of the US Facility, or (b) gives any Lender under the UK Facility any
advantage over any other Lender under the UK Facility insofar as the UK
Obligation is concerned or relieves any such Lender from ratably absorbing any
losses sustained with respect to the UK Obligation (except to the extent
unilateral actions or inactions by any Lender result in UK Borrowers or any
other obligor on the UK Obligation having any credit, allowance, set off,
defense, or counterclaim solely with respect to all or any part of that Lender's
part of the UK Obligation), determined according to that Lender's Commitment
Percentage of the UK Facility.
16.4 DELEGATION OF DUTIES; RELIANCE. Lenders may perform any of their
------------------------------
duties or exercise any of their Rights under the Loan Documents by or through
the appropriate Agent, and Lenders and Agents may perform any of their duties or
exercise any of their Rights under the Loan Documents by or through their
respective Affiliates and Representatives. Each Agent and each Lender (and each
of their respective Representatives) (a) is entitled to rely upon (and shall be
protected in relying upon) any written or oral statement believed by it or them
to be genuine and correct and to have been signed or made by the proper Person
and, with respect to legal matters, upon opinion of counsel it has selected, (b)
is entitled to deem and treat each Lender as the owner and holder of its portion
of the US Obligation or the UK Obligation, as the case may be, for all purposes
until, written notice of the assignment or transfer is given to and received by
it (and any request, authorization, consent, or approval of any Lender is
conclusive and binding on each subsequent holder, assignee, or transferee of or
Participant in that Lender's portion of the US Obligation or the UK Obligation,
as the case may be, until that notice is given and received), (c) is not deemed
to have notice of the occurrence of an Event of Default unless a responsible
officer of that Agent or that Lender, as the case may be, who handles matters
associated with the Loan Documents and transactions thereunder, has actual
knowledge or has been notified by either Agent, a Lender, or a Borrower, and (d)
is entitled to consult with legal counsel (including counsel for any Borrower),
independent accountants, and other experts it has selected and is not liable for
any action taken or not taken in good faith by it in accordance with the advice
of counsel, accountants, or experts.
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16.5 LIMITATION OF AGENTS' LIABILITY.
-------------------------------
(a) EXCULPATION. Neither Agent nor any of its Affiliates or
-----------
Representatives will be liable for any action taken or omitted to be taken
by it or them under the Loan Documents in good faith and believed by it or
them to be within the discretion or power conferred upon it or them by the
Loan Documents or be responsible for the consequences of any error of
judgment (except for fraud, gross negligence, or willful misconduct), and
neither Agent nor any of its Affiliates or Representatives has a fiduciary
relationship with the other Agent or any Lender by virtue of the Loan
Documents (but nothing in this agreement negates the obligation of each
Agent to account for funds received by it for the account of any Lender).
(b) INDEMNITY. Unless indemnified to its satisfaction against loss,
---------
cost, liability, and expense, neither Agent may be compelled to do any act
under the Loan Documents or to take any action toward the execution or
enforcement of the powers thereby created or to prosecute or defend any
suit in respect of the Loan Documents. If an Agent requests instructions
from Lenders, or Required Lenders, as the case may be, with respect to any
act or action in connection with any Loan Document, that Agent is entitled
to refrain (without incurring any liability to any Person by so refraining)
from that act or action unless and until it has received instructions. In
no event, however, may an Agent or any of its Representatives be required
to take any action that it or they determine could incur for it or them
criminal or onerous civil liability. Without limiting the generality of
the foregoing, no Lender has any right of action against either Agent as a
result of an Agent's acting or refraining from acting under this agreement
in accordance with instructions of Required Lenders.
(c) RELIANCE. Neither Agent is responsible to any Lender or any
--------
Participant for, and each Lender represents and warrants that it has not
relied upon either Agent in respect of, (i) the creditworthiness of any
Company and the risks involved to that Lender, (ii) the effectiveness,
enforceability, genuineness, validity, or the due execution of any Loan
Document, (iii) any representation, warranty, document, certificate,
report, or statement made therein or furnished thereunder or in connection
therewith, (iv) the adequacy of any collateral now or hereafter securing
the Obligation or the existence, priority, or perfection of any Lien now or
hereafter granted or purported to be granted on the collateral under any
Loan Document, or (v) observation of or compliance with any of the terms,
covenants, or conditions of any Loan Document on the part of any Company.
EACH LENDER AGREES TO INDEMNIFY EACH AGENT AND ITS REPRESENTATIVES AND HOLD
THEM HARMLESS FROM AND AGAINST (BUT LIMITED TO SUCH LENDER'S COMMITMENT
PERCENTAGE OF THE US FACILITY AND THE UK FACILITY COMBINED) ANY AND ALL
LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS, JUDGMENTS,
SUITS, COSTS, REASONABLE EXPENSES, AND REASONABLE DISBURSEMENTS OF ANY KIND
OR NATURE WHATSOEVER THAT MAY BE IMPOSED ON, ASSERTED AGAINST, OR INCURRED
BY THEM IN ANY WAY RELATING TO OR ARISING OUT OF THE LOAN DOCUMENTS OR ANY
ACTION TAKEN OR OMITTED BY THEM UNDER THE LOAN DOCUMENTS IF AGENT AND ITS
REPRESENTATIVES ARE NOT REIMBURSED FOR SUCH AMOUNTS BY ANY COMPANY.
ALTHOUGH EACH AGENT AND ITS REPRESENTATIVES HAVE THE RIGHT TO BE
INDEMNIFIED UNDER THIS AGREEMENT FOR ITS OR THEIR OWN ORDINARY NEGLIGENCE,
NEITHER AGENT NOR ITS REPRESENTATIVES DO NOT HAVE THE RIGHT TO BE
INDEMNIFIED UNDER THIS AGREEMENT FOR ITS OR THEIR OWN FRAUD, GROSS
NEGLIGENCE, OR WILLFUL MISCONDUCT. Only as between Lenders (and not
Borrowers or any other Persons), their respective US-Facility Commitments
and UK-Facility Commitments are, for purposes of the calculations and
determinations required to be made under his agreement and in particular
for he purposes of the indemnity under this CLAUSE (C), deemed to have
survived any termination or cancellation under Section 15.
Credit Agreement
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65
16.6 EVENT OF DEFAULT. While an Event of Default exists, Lenders agree to
----------------
promptly confer in order that Required Lenders or Lenders, as the case may be,
may agree upon a course of action for the enforcement of the Rights of Lenders.
Each Agent is entitled to act or refrain from taking any action (without
incurring any liability to any Person for so acting or refraining) unless and
until it has received instructions from Required Lenders. In actions with
respect to any Company's property, each Agent is acting for the ratable benefit
of each Lender.
16.7 COLLATERAL MATTERS.
------------------
(a) Each Lender authorizes and directs each Agent to enter into the
Loan Documents for the Lender Liens and agrees that any action taken by an
Agent concerning any collateral (with the consent or at the request of
Required Lenders) in accordance with any Loan Document, that Agent's
exercise (with the consent or at the request of Required Lenders) of powers
concerning the collateral in any Loan Document, and that all other
reasonably incidental powers are authorized and binding upon all Lenders.
(b) Each Agent is authorized on behalf of all Lenders, without the
necessity of any notice to or further consent from any Lender, from time to
time before an Event of Default or Potential Default, to take any action
with respect to any collateral or Loan Documents related to collateral that
may be necessary to perfect and maintain perfected the Lender Liens upon
the collateral.
(c) Except to use the same standard of care that it ordinarily uses
for collateral for its sole benefit, neither Agent has any obligation
whatsoever to any Lender or to any other Person to assure that the
Collateral exists or is owned by any Company or is cared for, protected, or
insured or has been encumbered or that the Lender Liens have been properly
or sufficiently or lawfully created, perfected, protected, or enforced or
are entitled to any particular priority.
(d) Each Agent shall exercise the same care and prudent judgment with
respect to the collateral and the Loan Documents as it normally and
customarily exercises in respect of similar collateral and security
documents.
(e) Lenders irrevocably authorize each Agent, at its option and in
its discretion, to release any Lender Lien upon any collateral (i) in
accordance with SECTION 6.5, (ii) constituting property being disposed of
as permitted under any Loan Document, (iii) constituting property in which
no Company owned any interest at the time the Lender Lien was granted or at
any time after that, (iv) constituting property leased to any Company under
a lease that has expired or been terminated in a transaction permitted
under the Loan Documents or is about to expire and that has not been, and
is not intended by that Company to be, renewed, (v) consisting of an
instrument evidencing Debt pledged to that Agent (for the benefit of
Lenders), if the underlying Debt has been paid in full, or (vi) if
approved, authorized, or ratified in writing by Lenders. Upon request by
either Agent at any time, Lenders shall confirm in writing Administrative
Agent's authority to release particular types or items of collateral under
this CLAUSE (E).
16.8 LIMITATION OF LIABILITY. No Lender or any Participant will incur any
-----------------------
liability to any other Lender or Participant except for acts or omissions in bad
faith, and neither of the Agents nor any Lender or Participant will incur any
liability to any other Person for any act or omission of any other Lender or any
Participant.
Credit Agreement
----------------
66
16.9 RELATIONSHIP OF LENDERS. The Loan Documents do not create a
-----------------------
partnership or joint venture between Agents and Lenders or any of them.
16.10 BENEFITS OF AGREEMENT. None of the provisions of this section inure
---------------------
to the benefit of any Company or any other Person except Agents and Lenders.
Therefore, no Company or any other Person is responsible or liable for, entitled
to rely upon, or entitled to raise as a defense -- in any manner whatsoever --
the failure of Agents or any Lender to comply with these provisions.
SECTION 17 MISCELLANEOUS.
- ------------------------
17.1 NONBUSINESS DAYS. Any payment or action that is due under any Loan
----------------
Document on a non-Business Day may be delayed until the next-succeeding Business
Day (but interest shall continue to accrue on any applicable payment until
payment is in fact made) unless the payment concerns a Euro-Rate Borrowing, in
which case if the next-succeeding Business Day is in the next calendar month,
then such payment shall be made on the next-preceding Business Day.
17.2 COMMUNICATIONS. Unless otherwise specifically provided, whenever any
--------------
Loan Document requires or permits any consent, approval, notice, request, or
demand from one party to another, com munication must be in writing (which may
be by telex or fax) to be effective and shall be deemed to have been given (a)
if by telex, when transmitted to the appropriate telex number and the
appropriate answer back is received, (b) if by fax, when transmitted to the
appropriate fax number (and all communications sent by fax must be confirmed
promptly thereafter by telephone; but any requirement in this parenthetical
shall not affect the date when the fax shall be deemed to have been delivered),
(c) if by mail, on the fifth Business Day after it is enclosed in an envelope
and properly addressed, stamped, sealed, and deposited in the appropriate
official postal service, or (d) if by any other means, when actually delivered.
Until changed by notice pursuant to this agreement, the address (and fax number)
for each Borrower and each Agent is stated beside their respective signatures to
this agreement (or to the amendment to this agreement entered into pursuant to
SECTION 7.2) and for each Lender is stated beside its name on SCHEDULE 1.
17.3 FORM AND NUMBER OF DOCUMENTS. The form, substance, and number of
----------------------------
counterparts of each writing to be furnished under this agreement must be
satisfactory to Agents and their special counsel in the United States of America
and the United Kingdom.
17.4 EXCEPTIONS TO COVENANTS. No Company may take or fail to take any
-----------------------
action that is permitted as an exception to any of the covenants contained in
any Loan Document if that action or omission would result in the breach of any
other covenant contained in any Loan Document.
17.5 SURVIVAL. All covenants, agreements, undertakings, representations,
--------
and warranties made in any of the Loan Documents survive all closings under the
Loan Documents and, except as otherwise indicated, are not affected by any
investigation made by any party.
17.6 GOVERNING LAW. Unless otherwise stated in any Loan Document, the laws
-------------
of the State of Texas and of the United States of America govern the Rights and
duties of the parties to the Loan Documents and the validity, construction,
enforcement, and interpretation of the Loan Documents.
17.7 INVALID PROVISIONS. Any provision in any Loan Document held to be
------------------
illegal, invalid, or unenforceable is fully severable; the appropriate Loan
Document shall be construed and enforced as if that provision had never been
included; and the remaining provisions shall remain in full force and effect and
shall not be affected by the severed provision. Agents, Lenders, and each
Company party to the affected
Credit Agreement
----------------
67
Loan Document agree to negotiate, in good faith, the terms of a replacement
provision as similar to the severed provision as may be possible and be legal,
valid, and enforceable.
17.8 CERTAIN REINSTATEMENT. If any payment or prepayment under any Loan
---------------------
Document is ever rescinded or must be restored or returned for any reason, then
all Rights and obligations under the Loan Documents in respect of that payment
or prepayment are automatically reinstated as though the payment or prepayment
had not been made when due.
17.9 AMENDMENTS, WAIVERS, CONSENTS, SUPPLEMENTS, AND CONFLICTS.
---------------------------------------------------------
(a) REQUIRED LENDERS. Unless otherwise specifically provided (i) the
----------------
provisions of this agreement may be amended and waivers and consents under
it may be given in writing executed by those Borrowers that are then party
to this agreement, Administrative Agent, and Required Lenders and
supplemented only by documents delivered or to be delivered in accordance
with the express terms of this agreement, and (ii) the other Loan Documents
may only be amended or waived and consents under them may be given if in
writing executed by the parties to that Loan Document that is also executed
or approved by Required Lenders.
(b) AGENTS, ISSUERS, AND OVERDRAFT LENDER. Any amendment, waiver, or
-------------------------------------
consent that increases either Agent's, either Issuer's, or Overdraft
Lender's obligations beyond its commitments under any Loan Document or
increases, reduces, or waives the late payment or non-payment of any fees
payable solely to it under SECTION 5.4 or 5.5 must be in writing executed
by it, Administrative Agent, and US Borrower in respect of the US Facility
or UK Borrowers in respect of the UK Facility.
(c) BGS AND LCS. Any LC may be renewed, extended, amended, replaced,
-----------
or canceled consistent with the terms of this agreement by writing executed
by the Issuer and the obligated Borrower if that writing is first approved
in writing by Administrative Agent.
(d) ALL LENDERS. Any amendment to or waiver or consent under this
-----------
agreement or any Loan Document that purports to accomplish any of the
following must be by an instrument in writing executed by those Borrowers
that are then party to it and by Agents and executed (or approved, as the
case may be) by each Lender: (i) Extends the due date, decreases the amount
of, or waives the late or non-payment of any scheduled payment or
amortization of principal or interest of any of the US Obligation or UK
Obligation or any fees payable ratably to Lenders under SECTIONS 5.2, 5.3,
or 5.4; (ii) decreases any rate or amount of interest under this agreement,
fees payable ratably to Lenders under SECTIONS 5.2, 5.3, or 5.4, or --
except as described in CLAUSE (B) above -- other sums payable to Lenders
under this agreement (except such adjustments or reductions as are
contemplated by this agreement); (iii) changes the definition of "UK-
FACILITY COMMITMENT," "US-FACILITY COMMITMENT," "COMMITMENT PERCENTAGE,"
"REQUIRED LENDERS," "UK-REVOLVING-COMMITMENT PERCENTAGE," or the
percentages in the definition of "BORROWING BASE;" (iv) increases any
Lender's UK-Facility Commitment or US-Facility Commitment; (v) waives
compliance with, amends, or fully or partially releases -- except as
expressly provided by SECTION 6.5 or any other Loan Documents or for when a
Company merges into another Person or dissolves when specifically permitted
in the Loan Documents -- any guaranty or collateral; or (vi) changes this
CLAUSE (D) or any other matter specifically requiring the consent of all
Lenders under this agreement.
(e) WAIVERS. No course of dealing or any failure or delay by either
-------
Agent, any Lender, or any of their respective Representatives with respect
to exercising any Right of either
Credit Agreement
----------------
68
Agent or any Lender under any Loan Document operates as a waiver thereof.
A waiver must be in writing and signed by the parties otherwise indicated
in this SECTION 17.9 to be effective and will be effective only in the
specific instance and for the specific purpose for which it is given.
(f) CONFLICTS. Any conflict or ambiguity between the terms and
---------
provisions of this agreement and terms and provisions in any other Loan
Document is controlled by the terms and provisions of this agreement.
17.10 MULTIPLE COUNTERPARTS. Any Loan Document may be executed in a number
---------------------
of identical counterparts (including, at Administrative Agent's discretion,
counterparts or signature pages executed and transmitted by fax) with the same
effect as if all signatories had signed the same document. All counterparts
must be construed together to constitute one and the same instrument.
17.11 PARTIES.
-------
(a) PARTIES BOUND. Each Loan Document binds and inures to the
-------------
parties to it, any intended beneficiary of it, and each of their respective
successors and permitted assigns. No Company may assign or transfer any
Rights or obligations under any Loan Document without first obtaining all
Lenders' consent, and any purported assignment or transfer without Lenders'
consent is void. No Lender may transfer, pledge, assign, sell any
participation in, or otherwise encumber its portion of the US Obligation or
the UK Obligation except as permitted by CLAUSES (b) or (c) below.
(b) PARTICIPATIONS. Any Lender may (subject to the provisions of
--------------
this section, in accordance with applicable Governmental Requirement, in
the ordinary course of its business, and at any time) sell to one or more
Persons (each a "PARTICIPANT") participating interests in its portion of
the US Obligation or the UK Obligation. The selling Lender remains a
"Lender" under the Loan Documents, the Participant does not become a
"Lender" under the Loan Documents, and the selling Lender's obligations
under the Loan Documents remain unchanged. The selling Lender remains
solely responsible for the performance of its obligations and remains the
holder of its share of the Principal Debt for all purposes under the Loan
Documents. Borrowers and Agents shall continue to deal solely and directly
with the selling Lender in connection with that Lender's Rights and
obligations under the Loan Documents, and each Lender must retain the sole
right and responsibility to enforce due obligations of the Companies.
Participants have no Rights under the Loan Documents except as provided
below. Subject to the following, each Lender may obtain (on behalf of its
Participants) the benefits of SECTION 4 with respect to all participations
in its part of the US Obligation or the UK Obligation outstanding from time
to time so long as no Borrower is obligated to pay any amount in excess of
the amount that would be due to that Lender under SECTION 4 calculated as
though no participations have been made. No Lender may sell any
participating interest under which the Participant has any Rights to
approve any amendment, modification, or waiver of any Loan Document except
as to matters in SECTION 17.9(D)(i) and (ii).
(c) ASSIGNMENTS. Each Lender may make assignments to the Federal
-----------
Reserve Bank. Each Lender may also assign to one or more assignees (each
an "ASSIGNEE") all or any part of its Rights and obligations under the Loan
Documents so long as (i) the assignor Lender and Assignee execute and
deliver to Administrative Agent and US Borrower in respect of the US
Obligation or UK Borrowers in respect of the UK Obligation for their
consent and acceptance (that may not be unreasonably withheld in any
instance and is not required if the Assignee is an Affiliate of the
assigning Lender) an assignment and assumption agreement in substantially
the form of EXHIBIT F (an "ASSIGNMENT") and pay to Administrative Agent a
processing fee of $3,500, (ii) the
Credit Agreement
----------------
69
assignment must be for a minimum total amount of the Dollar Equivalent of
$5,000,000 (or less amount if acceptable to Administrative Agent) and, if
the assigning Lender retains any commitment in the facility in which the
Assignment was made, it must be a minimum commitment of the Dollar
Equivalent of $5,000,000 (or less amount if acceptable to Administrative
Agent), and (iii) the conditions for that assignment set forth in the
applicable Assignment are satisfied. The Effective Date in each Assignment
must (unless a shorter period is agreeable to US Borrower in respect of the
US Obligation or UK Borrowers in respect of the UK Obligation and
Administrative Agent) be at least five Business Days after it is executed
and delivered by the assignor Lender and the Assignee to Administrative
Agent and US Borrower in respect of the US Obligation or UK Borrowers in
respect of the UK Obligation for acceptance. Once that Assignment is
accepted by Administrative Agent and US Borrower in respect of the US
Obligation or UK Borrowers in respect of the UK Obligation, and subject to
all of the following occurring, then, on and after the Effective Date
stated in it (i) the Assignee automatically becomes a party to this
agreement and, to the extent provided in that Assignment, has the Rights
and obligations of a Lender under the Loan Documents, (ii) the assignor
Lender, to the extent provided in that Assignment, is released from its
obligations to fund Borrowings under this agreement for the facility the
subject of the assignment and its reimbursement obligations under this
agreement for that facility and, in the case of an Assignment covering all
of the remaining portion of the assignor Lender's Rights and obligations
under the Loan Documents, that Lender ceases to be a party to the Loan
Documents, (iii) the appropriate Borrower shall execute and deliver to the
assignor Lender and the Assignee the appropriate Notes in accordance with
this agreement following the transfer, (iv) upon delivery of the Notes
under CLAUSE (III) preceding, the assignor Lender shall return to the
appropriate Borrower all Notes previously delivered to that Lender under
this agreement for that facility, and (v) SCHEDULE 1 is automatically
deemed to be amended to reflect the name, address, telecopy number, UK-
Facility Commitment, and US-Facility Commitment of the Assignee and the
remaining UK-Facility Commitment and US-Facility Commitment (if any) of the
assignor Lender, and Administrative Agent shall prepare and circulate to
Borrowers and Lenders an amended SCHEDULE 1 reflecting those changes.
Notwithstanding the foregoing, no Assignee may be recognized as a party to
the Loan Documents (and the assigning Lender shall continue to be treated
for all purposes as the party to the Loan Documents) with respect to the
Rights and obligations assigned to that Assignee until the actions
described in CLAUSES (III) and (IV) have occurred. The US Obligation is
registered on the books of US Borrower as to both principal and any stated
interest, and transfers of (as opposed to participations in) principal and
interest of the US Obligation may only be made in accordance with this
SECTION 17.11. The UK Obligation is registered on the books of UK
Borrowers as to both principal and any stated interest, and transfers of
(as opposed to participations in) principal and interest of the UK
Obligation may only be made in accordance with this SECTION 17.11.
17.12 VENUE, SERVICE OF PROCESS, AND JURY TRIAL. BORROWERS, IN EACH CASE
-----------------------------------------
FOR THEMSELVES AND THEIR RESPECTIVE SUCCESSORS AND ASSIGNS, IRREVOCABLY (A)
SUBMIT TO THE NONEXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS IN
TEXAS, (B) WAIVE, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE GOVERNMENTAL
REQUIREMENTS, ANY OBJECTION THAT IT MAY NOW OR IN THE FUTURE HAVE TO THE LAYING
OF VENUE OF ANY LITIGATION ARISING OUT OF OR IN CONNECTION WITH ANY LOAN
DOCUMENT AND THE US OBLIGATION OR THE UK OBLIGATION BROUGHT IN THE DISTRICT
COURTS OF DALLAS COUNTY, TEXAS, OR IN THE UNITED STATES DISTRICT COURT FOR THE
NORTHERN DISTRICT OF TEXAS, DALLAS DIVISION, (C) WAIVE ANY CLAIMS THAT ANY
LITIGATION BROUGHT IN ANY OF THE FOREGOING COURTS HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM, (D) CONSENT TO THE SERVICE OF PROCESS OF ANY OF THOSE COURTS
IN ANY LITIGATION BY THE MAILING OF COPIES OF THAT PROCESS BY CERTIFIED MAIL,
RETURN RECEIPT REQUESTED, POSTAGE PREPAID, BY HAND DELIVERY, OR BY DELIVERY BY A
NATIONALLY-RECOGNIZED COURIER SERVICE, AND
Credit Agreement
----------------
70
SERVICE SHALL BE DEEMED COMPLETE UPON DELIVERY OF THE LEGAL PROCESS AT ITS
ADDRESS FOR PURPOSES OF THIS AGREEMENT, (E) AGREE THAT ANY LEGAL PROCEEDING
AGAINST ANY PARTY TO ANY LOAN DOCUMENT ARISING OUT OF OR IN CONNECTION WITH THE
LOAN DOCUMENTS OR THE US OBLIGATION OR THE UK OBLIGATION MAY BE BROUGHT IN ONE
OF THE FOREGOING COURTS, AND (F) WAIVE TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE GOVERNMENTAL REQUIREMENTS, ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF
ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF ANY LOAN DOCUMENT.
The scope of each of the foregoing waivers is intended to be all encompassing of
any and all disputes that may be filed in any court and that relate to the
subject matter of this transaction, including, without limitation, contract
claims, tort claims, breach of duty claims, and all other common law and
statutory claims. BORROWERS ACKNOWLEDGE THAT THESE WAIVERS ARE A MATERIAL
INDUCEMENT TO ADMINISTRATIVE AGENT'S AND EACH LENDER'S AGREEMENT TO ENTER INTO A
BUSINESS RELATIONSHIP, THAT ADMINISTRATIVE AGENT AND EACH LENDER HAS ALREADY
RELIED ON THESE WAIVERS IN ENTERING INTO THIS AGREEMENT, AND THAT ADMINISTRATIVE
AGENT AND EACH LENDER WILL CONTINUE TO RELY ON EACH OF THESE WAIVERS IN RELATED
FUTURE DEALINGS. BORROWERS FURTHER WARRANT AND REPRESENT THAT THEY HAVE
REVIEWED THESE WAIVERS WITH THEIR LEGAL COUNSEL, AND THAT THEY KNOWINGLY AND
VOLUNTARILY AGREE TO EACH WAIVER FOLLOWING CONSULTATION WITH LEGAL COUNSEL. The
waivers in this section are irrevocable, meaning that they may not be modified
either orally or in writing, and these waivers apply to any future renewals,
extensions, amendments, modifications, or replacements in respect of the
applicable Loan Document. In connection with any Litigation, this agreement may
be filed as a written consent to a trial by the court.
17.13 INFORMATION REGARDING BORROWERS. Borrowers hereby acknowledge and
-------------------------------
agree that Lenders may discuss the financial condition and other information
regarding any Borrowers' business affairs with each other, any Assignee, any
Participant, or any prospective Assignee or Participant.
17.14 ENTIRETY. THE LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN
--------
BORROWERS, LENDERS, AND ADMINISTRATIVE AGENT AND MAY NOT BE CONTRADICTED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE
PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
REMAINDER OF PAGE INTENTIONALLY BLANK.
SIGNATURE PAGES FOLLOW.
Credit Agreement
----------------
71
EXECUTED as of the date first stated above.
Plasma & Materials Technologies, Inc.
9255 Deering Avenue
Chatsworth, CA 91311
Attn: John W. LaValle, Vice President,
Chief Financial Officer, and
Secretary
Tel: 818/886-8000
Fax: 818/886-8756
Electrotech Limited
Thornbury Laboratories
Littleton-Upon-Severn
Thornbury, Bristol BS12-INP
United Kingdom
Attn: Jeremy Linnert,
Treasurer
Tel: 011 44 163 341 4000
Fax: 011 44 163 341 4040
Electrotech Equipments Limited
Thornbury Laboratories
Littleton-Upon-Severn
Thornbury, Bristol BS12-INP
United Kingdom
Attn: Jeremy Linnert,
Treasurer
Tel: 011 44 163 341 4000
Fax: 011 44 163 341 4040
PLASMA & MATERIALS
TECHNOLOGIES, INC., as US Borrower
By /s/ John W. LaValle
----------------------------------
John W. LaValle, Vice President
ELECTROTECH LIMITED, as a
UK Borrower
By /s/
----------------------------------
Name:
---------------------------
Title:
---------------------------
ELECTROTECH EQUIPMENTS
LIMITED, as a UK Borrower
By /s/
----------------------------------
Name:
---------------------------
Title:
---------------------------
Page One of Two Signature Pages to Credit Agreement
NationsBank of Texas, N.A.
67th Floor, NationsBank Plaza
901 Main Street
Dallas, Texas. 75202
Attn: Stan W. Reynolds, Vice
President
Tel: 214/508-3399
Fax: 214/508-9880
LLOYDS BANK PLC, as UK-Collateral
Agent and a Lender
By /s/
----------------------------------
Name:
---------------------------
Title:
---------------------------
NATIONSBANK OF TEXAS, N.A., as
Administrative Agent and a Lender
By /s/ Stan W. Reynolds
----------------------------------
Stan W. Reynolds, Vice President
SILICON VALLEY BANK, as a Lender
By /s/ Doug Rosenthal
-------------------------------------
Doug Rosenthal, Senior Vice President
Page Two of Two Signature Pages to Credit Agreement
SECURITY AGREEMENT
------------------
THIS AGREEMENT is executed as of November 15, 1996, by PLASMA & MATERIALS
TECHNOLOGIES, INC., a California corporation ("DEBTOR"), for the benefit of
NATIONSBANK OF TEXAS, N.A., a national banking association (in its capacity as
Administrative Agent for the Lenders now or in the future party to the Credit
Agreement described below, "SECURED PARTY").
Plasma & Materials Technologies, Inc., Electrotech Limited, Electrotech
Equipments Limited, Lenders, Lloyds Bank Plc, as "UK-Collateral Agent" for the
Lenders, and Secured Party have executed the Credit Agreement (as renewed,
extended, amended, or restated, the "CREDIT AGREEMENT") dated as of November 15,
1996, and certain other Loan Documents. The execution and delivery of this
agreement is a requirement to Secured Party's and Lenders' execution of the
Credit Agreement and other Loan Documents, is integral to the transactions
contemplated by the Loan Documents, and is a condition precedent to Lenders'
obligations to extend credit under the Credit Agreement.
ACCORDINGLY, for adequate and sufficient consideration, Debtor agrees with
Secured Party for the benefit of Lenders as follows:
1. DEFINITIONS. Terms defined in the Credit Agreement or the UCC have
-----------
the same meanings when used -- unless otherwise defined --in this agreement. If
the definition given a term in the Credit Agreement conflicts with the
definition given that term in the UCC, then the Credit Agreement definition
controls to the extent lawful. If the definition given a term in Chapter 9 of
the UCC conflicts with the definition given that term in any other chapter of
the UCC, then the Chapter 9 definition controls. Furthermore, as used in this
agreement:
"ACCOUNTS" means all of Debtor's accounts, instruments, receivables,
accounts receivable, chattel paper, documents, and book debts arising from its
sale or lease of goods or rendition of services, including, without limitation,
all (a) amounts due to it from a factor, (b) returned, reclaimed, refused, or
repossessed goods, and (c) books and records pertaining to, and security and
guaranties for, any of the foregoing.
"CHATTEL PAPER" means any "chattel paper," as that term is defined in
Chapter 9 of the UCC.
"COLLATERAL" is defined in PARAGRAPH 4 below.
"CREDIT AGREEMENT" is defined in the recitals to this agreement.
"DEBTOR" is defined in the preamble to this agreement and includes, without
limitation, Debtor, Debtor as a debtor-in-possession, and any receiver, trustee,
liquidator, conservator, custodian, or similar party appointed for Debtor or for
all or substantially all of Debtor's assets under any Debtor Law.
"DOCUMENT" means any "document," as that term is defined in Chapter 9 of
the UCC, including, without limitation, all documents of title and warehouse
receipts of Debtor.
"EQUIPMENT" means any "equipment," as that term is defined in Chapter 9 of
the UCC, and, in any event, includes, without limitation, all machinery,
equipment, furnishings, and fixtures and any and all additions, substitutions,
and replacements of any of the foregoing, wherever located, together with all
attachments, components, parts, equipment, and accessories installed thereon or
affixed thereto.
"FINANCING STATEMENT" means a financing statement executed by Debtor and
Secured Party for filing in the jurisdictions listed in SCHEDULE 7.1 to the
Credit Agreement, and in substantially the form of EXHIBIT C-3 to the Credit
Agreement.
"GENERAL INTANGIBLES" means any "general intangibles," as that term is
defined in Chapter 9 of the UCC, and, in any event, includes, without
limitation, each of the following: (a) All of Debtor's patents, patent
applications, patent rights, service marks, trademarks, trade names, trade
secrets, intellectual property, registrations, goodwill, copyrights, franchises,
licenses, permits, proprietary information, customer lists, designs, and
inventions; (b) all of Debtor's books, records, data, plans, manuals, computer
software, and computer programs; (c) all of Debtor's contract rights,
partnership interests and joint venture interests (but only to the extent not
otherwise pledged to the Administrative Agent pursuant to a separate pledge or
security agreement), deposit accounts, investment accounts, and certificates of
deposit; (d) all rights of Debtor to payment under letters of credit and similar
agreements; (e) all tax refunds and tax refund claims of Debtor; (f) all choices
in action and causes of action of Debtor (whether arising in contract, tort, or
otherwise and whether or not currently in litigation) and all judgments in favor
of Debtor; (g) all rights and claims of Debtor under warranties and indemnities;
and (h) all rights of Debtor under any insurance, surety, or similar contract or
arrangement.
"INSTRUMENT" means any "instrument," as that term is defined in Chapter 9
of the UCC.
"INVENTORY" means all of Debtor's inventory, including, without limitation,
all present and future (a) materials, goods and work-in-process, finished goods,
and other tangible property held for sale or lease or being processed for sale
or lease in its present or future business, whether to be furnished under
contracts or used or consumed in Debtor's business, (b) documents (including
documents of title) covering any of the foregoing, and (c) such property the
sale or other disposition of which has given rise to accounts and which has not
been returned to or repossessed or stopped in transit by Debtor.
"INVESTMENT PROPERTY" means "investment property," as that term is defined
in Section 9.115(a)(6) of the UCC.
"OBLIGOR" means any Person obligated with respect to any of the Collateral,
whether as a party to a contract, an account debtor, issuer of any securities,
or otherwise.
"PLEDGED SECURITIES" means 100% of all capital stock now or in the future
issued by each present and future Domestic Subsidiary of Debtor and 65% of all
present and future capital stock now or in the future issued by each present and
future Foreign Company that is a direct Subsidiary of any Debtor.
"SECURED OBLIGATION" means the "US Obligation," the "UK Obligation" (as
each is defined in the Credit Agreement), and Debtor's guarantee of the UK
Obligation, including, without limitation, all present and future indebtedness,
liabilities, and obligations of Debtor arising under this agreement, and all
present and future costs, attorneys' fees, and expenses reasonably incurred by
Secured Party or any Lender to enforce Debtor's or any other obligor's payment
of any of the US Obligation or the UK Obligation, including, without limitation
(to the extent lawful), all present and future amounts that would become due but
for the operation of (S)(S) 502 or 506 or any other provision of Title 11 of the
United States Code and all present and future accrued and unpaid interest
(including, without limitation, all post-petition interest if Debtor voluntarily
or involuntarily becomes subject to Debtor Law).
"SECURED PARTY" is defined in the preamble to this agreement and includes
its successor appointed under SECTION 16 of the Credit Agreement and acting as
Administrative Agent for Lenders under the Loan Documents.
2
"SECURITY INTEREST" means the security interests granted and the transfers,
pledges, and assignments made under PARAGRAPH 2 below, which is a "Lender Lien,"
as defined in the Credit Agreement.
"UCC" means the Uniform Commercial Code as adopted in Texas or any other
applicable jurisdiction.
2. SECURITY INTEREST. To secure the prompt, unconditional, and complete
-----------------
payment and performance of the Secured Obligation when due, Debtor grants to
Secured Party a security interest in the Collateral pledges and collaterally
transfers and assigns that Collateral to Secured Party, all upon and subject to
the terms and conditions of this agreement. If the grant, pledge, or collateral
transfer or assignment of any specific item of the Collateral is expressly
prohibited by any contract, then the Security Interest nonetheless remains
effective to the extent allowed by UCC (S) 9.318 or other applicable
Governmental Requirements but is otherwise limited by that prohibition.
3. NO ASSUMPTION OR MODIFICATION. The Security Interest is given as
-----------------------------
security only in order to secure the prompt, unconditional, and complete payment
and performance of the Secured Obligation when due. Neither Secured Party nor
any Lender assumes or may become liable for Debtor's liabilities, duties, or
obligations under or in connection with the Collateral. Neither Secured Party's
acceptance of this agreement nor its taking any action in carrying out this
agreement, constitutes Secured Party's approval of the Collateral or Secured
Party's assumption of any obligation under or in connection with the Collateral.
This agreement does not affect or modify Debtor's obligations with respect to
any Collateral.
4. COLLATERAL. The term "COLLATERAL" means the following items and types of
----------
property --wherever located and now or in the future acquired or existing:
. All of Debtor's Accounts, Chattel Paper, Documents, Equipment, General
Intangibles, Instruments, Investment Property, Inventory, and Pledged
Securities; and
. All cash and noncash proceeds of any other Collateral, including,
without limitation, all cash, accounts, general intangibles, documents,
instruments, chattel paper, goods, and any other property received upon the
sale or disposition of any other Collateral and all insurance proceeds of
any kind paid at any time in connection with any other Collateral.
5. FRAUDULENT CONVEYANCE. Notwithstanding any contrary provision,
---------------------
Debtor agrees that, if -- but for the application of this paragraph -- any of
the Secured Obligation or the Security Interest would constitute a preferential
transfer under 11 U.S.C. (S) 547, a fraudulent conveyance under 11 U.S.C. (S)
548, or a fraudulent conveyance or transfer under any state fraudulent
conveyance, fraudulent transfer, or similar Governmental Requirement in effect
from time to time (each a "FRAUDULENT CONVEYANCE"), then the Secured Obligation
and Security Interest remains enforceable to the maximum extent possible without
causing any of the Secured Obligation or the Security Interest to be a
fraudulent conveyance, and this agreement is automatically amended to carry out
the intent of this paragraph.
6. REPRESENTATIONS AND WARRANTIES. Debtor represents and warrants to
------------------------------
Secured Party on behalf of Lenders that:
(a) Borrowing Base. Any item of Collateral submitted or represented
--------------
to Secured Party as being eligible under the Credit Agreement to be included in
the Borrowing Base fully meets the requirements for eligibility provided in the
Credit Agreement.
3
(b) Binding Obligation. This agreement creates a legal, valid, and
------------------
binding Lender Lien in and to the Collateral (subject to delivery to Secured
Party of the stock certificates for the Pledged Securities) in favor of Secured
Party and enforceable against Debtor. For Collateral in which the Security
Interest may be perfected by the filing of Financing Statements, once those
Financing Statements have been properly filed in the jurisdictions described on
SCHEDULE 7.1 to the Credit Agreement, the Security Interest in that Collateral
will be fully perfected. For the Pledged Securities, the taking by Secured
Party of physical possession in Texas of Documents, Instruments, Chattel Paper,
and the stock certificates representing the Pledged Securities will perfect the
Security Interest in that Collateral. Once perfected, the Security Interest
will constitute a first-priority Lender Lien on the Collateral, subject only to
Permitted Liens. The creation of the Security Interest does not require the
consent of any Person that has not been obtained.
(c) Locations. The attached ANNEX 1 accurately describes (i) the
---------
location of Debtor's principal place of business and chief executive office,
(ii) if different from CLAUSE (I), the one or more locations of its books and
records concerning its Accounts, (iii) the locations where any of its Inventory
and Equipment (except when temporarily in the hands of a third-party contractor
for processing and until sold in the ordinary course of business) is currently
and will -- subject to PARAGRAPH 7(A) below -- in the future be maintained.
Except as stated in CLAUSE (III) above, Debtor's Inventory is currently and will
be in its possession. All Instruments and Chattel Paper have been delivered to
Secured Party.
(d) Accounts. Debtor's Accounts (i) arise from its sales or rendition
--------
of services, (ii) are due to Debtor, and (iii) are not, if represented to be
eligible for inclusion in the Borrowing Base, subject to any material setoff,
counterclaim, defense, allowance, adjustment (other than discounts for prompt
payment shown on the invoice), or material dispute, objection, or complaint by
any Obligor.
(e) Securities. All Pledged Securities are duly authorized, validly
----------
issued, fully paid, and non-assessable, and the transfer of them is not subject
to any restrictions other than restrictions imposed by applicable Governmental
Requirements.
(f) Additional Collateral. The foregoing representations and
---------------------
warranties will be true and correct in all respects with respect to any
additional Collateral or additional specific descriptions of certain Collateral
delivered to Secured Party in the future by Debtor.
The failure of any of these representations or warranties to be accurate and
complete does not impair the Security Interest in any Collateral.
7. COVENANTS. While any Lender is committed to lend or extend credit
---------
under the Credit Agreement and until the Secured Obligation is fully paid and
performed, Debtor covenants and agrees with Secured Party on behalf of Lenders
that, without first obtaining Secured Party's written notice of Required
Lenders' consent to the contrary:
(a) Certain Relocations and Changes. Debtor shall give Secured Party
-------------------------------
30-days-written notice before any proposed (i) relocation of its principal place
of business or chief executive office, (ii) change of its name, (iii) relocation
of the place where its books and records concerning its Accounts are kept, and
(iv) relocation of any Collateral (other than delivery of Inventory in the
ordinary course of business to third-party contractors for processing and sales
of Inventory in the ordinary course of business or as permitted by the Credit
Agreement) to a location not described on the attached ANNEX 1.
4
(b) Estoppel and Other Agreements and Matters. Debtor shall:
-----------------------------------------
(i) With respect to any of its Inventory that is Eligible
Demonstration Systems and is in the possession of any customer of Debtor
solely for demonstration purposes, deliver to Secured Party a bailee and
estoppel agreement in substantially the form of EXHIBIT C-5 to the Credit
Agreement providing that such customer or potential customer holds that
Inventory as Secured Party's bailee, claims no ownership interest in that
Inventory, will release that Inventory only to Debtor or Secured Party, and
acknowledges that such Inventory is not and shall not become fixtures, and
is not and shall not become subject to any Lien imposed by that customer,
which agreement must otherwise be in form and substance reasonably
acceptable to Secured Party and its special counsel; and
(ii) Either (A) cause the landlord or lessor for each location
where any of its Inventory is maintained to execute and deliver to Secured
Party an estoppel and subordination agreement in substantially the form of
EXHIBIT C-4 to the Credit Agreement or such other form as may be reasonably
acceptable to Secured Party and its special counsel, or (B) deliver to
Secured Party a legal opinion or other evidence (in each case that is
reasonably satisfactory to Secured Party and it special counsel) that
neither the applicable lease nor the Governmental Requirements of the
jurisdiction in which that location is situated provide for contractual,
common law, or statutory landlord's Liens that is senior to the Security
Interest.
(c) Other Notices and Actions. Debtor shall promptly notify Secured
-------------------------
Party of (i) any change in any material fact or circumstance represented or
warranted by Debtor with respect to any of the Collateral, and (ii) any claim,
action, or proceeding challenging the Security Interest or affecting title to
all or any material portion of the Collateral or the Security Interest (and, at
Secured Party's request, Debtor shall appear in and defend any such action or
proceeding at Debtor's expense). In case of any default or event of default by
any other party under or in connection with any material portion (individually
or collectively) of the Collateral, Debtor shall immediately use reasonable
efforts to remedy the same or immediately demand that the same be remedied),
(d) Record of Collateral. Debtor shall maintain at its chief executive
--------------------
office a current record of where all of its Collateral is located and permit
Secured Party or its representatives to inspect and make copies from those
records pursuant to the Credit Agreement and furnish to Secured Party upon
request, from time to time, such documents, lists, descriptions, certificates,
and other information necessary or helpful to keep Secured Party informed with
respect to the identity, location, status, condition, terms of, parties to, and
value of the Collateral.
(e) Collateral In Trust. While an Event of Default or Potential
-------------------
Default exists, Debtor shall upon request of Secured Party (unless prevented by
operation of applicable Governmental Requirements from making that request, in
which event Debtor shall) (i) hold in trust (and not commingle with its other
assets) for Secured Party all of its Collateral that is chattel paper,
instruments, or documents of title at any time received by it, (ii) promptly
deliver that Collateral to Secured Party unless Secured Party at its option
gives Debtor written permission to retain any of it, and (iii) cause each
chattel paper, instrument, or document of title so retained to be marked to
state that it is assigned to Secured Party and each instrument to be endorsed to
the order of Secured Party (but failure to be so marked or endorsed may not
impair the Security Interest in any such Collateral).
(f) Perform Obligation. Debtor shall perform all of its material
------------------
obligations under or in connection with all of its Collateral in accordance with
customary business practices.
5
(g) Impairment of Collateral. Debtor shall not do or permit any act
that is reasonably likely to adversely impair the value or usefulness any
material portion of any Collateral.
8. REMEDIES UPON DEFAULT. While an Event of Default exists, Secured
---------------------
Party is, subject to Credit Agreement, entitled to exercise any one or more of
the following Rights.
(a) Rights. Secured Party may exercise any and all Rights available
------
to a secured party under the UCC, in addition to any and all other Rights
afforded by this agreement and the other Loan Documents, at law, in equity, or
otherwise, including, without limitation (i) requiring Debtor to assemble
Collateral and make it available to Secured Party at a place to be designated by
Secured Party which is reasonably convenient to Debtor and Secured Party, (ii)
applying by appropriate judicial proceedings for appointment of a receiver for
Collateral, (iii) applying to the Secured Obligation any cash held by Secured
Party under this agreement, (iv) reducing any claim to judgment, (v) exercising
the Rights of offset or banker's Lien against the interest of Debtor in and to
every account and other property of Debtor in Secured Party's possession to the
extent of the full amount of the Secured Obligation, (vi) foreclosing the
Security Interest and any other Liens Secured Party may have or otherwise
realize upon any and all of the Rights Secured Party may have in and to
Collateral, and (vii) bringing suit or other proceedings before any Governmental
Authority either for specific performance of any covenant or condition contained
in any of the Loan Documents or in aid of the exercise of any Right granted to
Secured Party in any Loan Document.
(b) Notice. If any Collateral threatens to decline speedily in value
------
or is of the type customarily sold on a recognized market, Secured Party may
sell or otherwise dispose of that Collateral without notification,
advertisement, or other notice of any kind. Otherwise, reasonable notice of the
time and place of any public sale of the Collateral -- or reasonable
notification of the time after which any private sale or other intended
disposition of the Collateral is to be made -- shall be sent to Debtor and to
any other Person entitled to notice under the UCC. Notice sent or given not
less than ten calendar days prior to the taking of the action to which the
notice relates is reasonable notice. It is not necessary that the Collateral be
at the location of the sale.
(c) Sales of Securities. In connection with the sale of any
-------------------
Collateral that is securities, Secured Party is authorized, but not obligated,
to limit prospective purchasers to the extent deemed necessary or desirable by
Secured Party to render that sale exempt from the registration and similar
requirements under applicable Governmental Requirements, and no sale so made in
good faith by Secured Party may be deemed not to be "commercially reasonable"
because so made.
(d) Other Sales. Secured Party's sale of less than all Collateral
-----------
does not exhaust Secured Party's Rights under this agreement and Secured Party
is specifically empowered to make successive sales until all Collateral is sold.
If the proceeds of a sale of less than all Collateral is less than the Secured
Obligation, then this agreement and the Security Interest remain in full force
and effect as to the unsold portion of the Collateral just as though no sale had
been made. In the event any sale under this agreement is not completed or is,
in Secured Party's opinion, defective, that sale does not exhaust Secured
Party's Rights under this agreement, and Secured Party is entitled to cause a
subsequent sale or sales to be made. All statements of fact or other recitals
made in any bill of sale or assignment or other instrument evidencing any
foreclosure sale under this agreement -- whether about nonpayment of the Secured
Obligation, the occurrence of any Event of Default, Secured Party's having
declared all of the Secured Obligation to be due and payable, notice of time,
place, and terms of sale and the properties to be sold having been duly given,
or any other act or thing having been duly done by Secured Party -- shall be
taken as prima facie evidence of the truth of the facts so stated and recited.
Secured Party may appoint or delegate any one or more Persons as agent to
perform any act or acts necessary or incident to any sale
6
held by Secured Party, including the sending of notices and the conduct of sale,
but such acts must be done in the name and on behalf of Secured Party.
(e) Obligors. While an Event of Default exists, Secured Party may
--------
notify or require each Obligor to make payment directly to Secured Party, and
Secured Party may take control of the proceeds paid to Secured Party. Until
Secured Party elects to exercise these Rights, Debtor is authorized to collect
and enforce the Collateral and to retain and expend all payments made on
Collateral. While Secured Party is entitled to and elects to exercise these
Rights, Secured Party has the Right in its own name or in the name of Debtor to
(i) compromise or extend time of payment with respect to Collateral for such
amounts and upon such terms as Secured Party may reasonably determine, (ii)
demand, collect, receive, receipt for, sue for, compound, and give acquittance
for any and all amounts due or to become due with respect to Collateral, (iii)
take control of cash and other proceeds of any Collateral, (iv) endorse Debtor's
name on any notes, acceptances, checks, drafts, money orders, or other evidences
of payment on Collateral that may come into Secured Party's possession, (v) sign
Debtor's name on any invoice or bill of lading relating to any Collateral, on
any drafts against Obligors or other Persons making payment with respect to
Collateral, on assignments and verifications of accounts or other Collateral,
and on notices to Obligors making payment with respect to Collateral, (vi) send
requests for verification of obligations to any Obligor, and (vii) do all other
acts and things reasonably necessary to carry out the intent of this agreement.
If any Obligor fails to make payment on any Collateral when due while an Event
of Default exists, Secured Party is authorized, in its sole discretion, either
in its own name or in Debtor's name, to take such action as Secured Party
reasonably shall deem appropriate for the collection of any amounts owed with
respect to Collateral or upon which a delinquency exists. However, Secured
Party is neither (x) liable for its failure to collect, or for its failure to
exercise diligence in the collection of, any amounts owed with respect to
Collateral (except for its own fraud, gross negligence, willful misconduct, or
violation of any applicable Governmental Requirement), nor (y) under any duty
whatever to anyone except Debtor and Lenders to account for funds that it shall
actually receive under this agreement. A receipt given by Secured Party to any
Obligor is a full and complete release, discharge, and acquittance to that
Obligor, to the extent of any amount so paid to Secured Party. While an Event
of Default exists, Secured Party may apply or set off amounts paid and the
deposits against any liability of Debtor to Secured Party. Regarding the
existence of any Event of Default for purposes of this agreement, Debtor agrees
that the Obligors on any Collateral may rely upon written certification from
Secured Party that an Event of Default exists.
(f) Power-of-Attorney. Secured Party is deemed to be irrevocably
-----------------
appointed as Debtor's agent and attorney-in-fact with all Right to enforce all
of Debtor's Rights under or in connection with the Collateral effective and
operable at all times while an Event of Default exists. All reasonable costs,
expenses, and liabilities incurred and all payments made by Secured Party as
Debtor's agent and attorney-in-fact (including, without limitation, reasonable
attorney's fees and expenses) are considered a loan by Secured Party to Debtor
that is repayable on demand, accrues interest at the Default Rate until paid,
and is part of the Secured Obligation.
(g) Application of Proceeds. While an Event of Default exists,
-----------------------
Secured Party shall apply the proceeds of any sale or other disposition of
Collateral in the following order: (i) Payment of all its reasonable expenses
incurred in retaking, holding, and preparing any Collateral for disposition, in
arranging for such disposition, and in actually disposing of the same (all of
which are part of the Secured Obligation); (ii) repayment of amounts reasonably
expended by Secured Party under PARAGRAPH 9 below; (iii) payment of the balance
of the Secured Obligation in the order and manner specified in the Credit
Agreement; and (iv) delivery either (A) to Debtor for its account or (B) as a
court of competent jurisdiction may direct.
7
9. OTHER RIGHTS.
------------
(a) Performance. If Debtor fails to preserve the priority (subject to
-----------
Permitted Liens) of the Security Interest in any Collateral or otherwise fails
to perform any of its obligations under any Loan Document with respect to any
Collateral, then Secured Party may, at its option, but without being required to
do so, after five Business Days or earlier, if Secured Party in its reasonable
judgment deems it necessary, prosecute or defend any suits in relation to the
Collateral or take any other action that Debtor is required -- but has failed --
to take. Any amount that is reasonably expended or paid by Secured Party in
connection with the foregoing (including, without limitation, court costs and
reasonable attorneys' fees and expenses) bears interest at the Default Rate from
the date spent or incurred until repaid and is payable (with that interest) by
Debtor to Secured Party upon demand and is part of the Secured Obligation.
(b) Collateral in Secured Party's Possession. If, while an Event of
----------------------------------------
Default exists, any Collateral comes into Secured Party's possession, Secured
Party may use that Collateral for the purpose of preserving it or its value
pursuant to the order of a court of appropriate jurisdiction or in accordance
with any other Rights held by Secured Party in respect of that Collateral.
Debtor covenants to promptly reimburse and pay to Secured Party, at Secured
Party's request, the amount of all reasonable expenses, costs, Taxes, and other
charges incurred by Secured Party in connection with its custody and
preservation of that Collateral, all of which bear interest at the Default Rate
from the date spent or incurred until repaid and are (with that interest)
payable by Debtor to Secured Party upon demand and are part of the Secured
Obligation. Except for Secured Party's own fraud, gross negligence, or willful
misconduct (i) the risk of accidental loss or damage to, or diminution in value
of, any Collateral is on Debtor, (ii) Secured Party has no liability for
failure to obtain or maintain insurance or to determine whether any insurance in
effect is adequate as to amount or risks insured, (iii) Secured Party has no
duty to fix or preserve Rights against any Obligors in respect of any Collateral
and is never liable for any failure to use diligence to collect any amount
payable in respect of any Collateral (other than to account to Debtor and
Lenders for what Secured Party may actually collect or receive).
(c) Record Ownership of Securities. While an Event of Default exists,
------------------------------
Secured Party may have any Collateral that is securities and that is in the
possession of Secured Party, or its nominee or nominees, registered in its name,
or in the name of its nominee or nominees, as pledgee.
(d) Voting of Securities. As long as no Event of Default exists,
--------------------
Debtor may exercise all voting Rights pertaining to any Collateral that is
securities. While an Event of Default exists, the Right to vote any Collateral
that is securities is vested exclusively in Secured Party. Accordingly, Debtor
irrevocably constitutes and appoints Secured Party as Debtor's proxy and
attorney-in-fact -- effective only after notice to Debtor while an Event of
Default exists but with full power of substitution -- to vote, and to act with
respect to, any Collateral that is securities standing in the name of Debtor or
with respect to which Debtor is entitled to vote and act. That proxy is coupled
with an interest, is irrevocable, and continues until the Secured Obligation is
fully paid and performed.
(e) Certain Proceeds. The provisions of this CLAUSE (E) are applicable
----------------
only while an Event of Default exists. Notwithstanding any contrary provision,
all dividends or distributions of property in respect of, and all proceeds of,
any Collateral that is securities -- whether those dividends, distributions, or
proceeds result from a subdivision, combination, or reclassification of the
outstanding capital stock of any issuer or as a result of any merger,
consolidation, acquisition, or other exchange of assets to which any issuer may
be a party, or otherwise -- are part of the Collateral, shall, if received by
Debtor, be held in trust for Secured Party's benefit, and shall immediately be
delivered to Secured Party (accompanied by proper instruments of assignment or
stock or bond powers executed by Debtor in accordance with Secured Party's
instructions) to be held subject to the terms of this agreement. Any cash
proceeds of any
8
Collateral that come into Secured Party's possession (including, without
limitation, insurance proceeds) may, at Secured Party's option, be applied in
whole or in part to the Secured Obligation (to the extent then due), be fully or
partially released to or under the written instructions of Debtor for any
general or specific purpose, or be fully or partially retained by Secured Party
as additional Collateral. Any cash Collateral in Secured Party's possession may
be invested by Secured Party in certificates of deposit issued by Secured Party,
any Lender, or any other state or national bank having combined capital and
surplus greater than $100,000,000 or in securities issued or guaranteed by the
United States of America or any of its agencies. Secured Party is never
obligated to make any investment and never has any liability to Debtor or any
Lender for any loss that may result from any investment or non-investment. All
interest and other amounts earned from any investment may be dealt with by
Secured Party in the same manner as other cash Collateral.
(f) INDEMNIFICATION. DEBTOR ASSUMES ALL LIABILITY FOR ALL COLLATERAL,
---------------
FOR THE SECURITY INTEREST, AND FOR ANY USE, POSSESSION, MAINTENANCE, AND
MANAGEMENT OF, ALL COLLATERAL (INCLUDING, WITHOUT LIMITATION, ANY TAXES ARISING
AS A RESULT OF, OR IN CONNECTION WITH, THE TRANSACTIONS CONTEMPLATED IN THIS
AGREEMENT) AND AGREES TO ASSUME LIABILITY FOR, AND TO INDEMNIFY AND HOLD SECURED
PARTY, EACH LENDER, AND THEIR RESPECTIVE REPRESENTATIVES (THE "INDEMNIFIED
-----------
PARTIES") HARMLESS FROM AND AGAINST, AND DEFEND EACH INDEMNIFIED PARTY AGAINST,
- -------
ALL CLAIMS, CAUSES OF ACTION, OR LIABILITY, FOR INJURIES TO OR DEATHS OF PERSONS
AND DAMAGE TO PROPERTY HOWSOEVER ARISING FROM OR INCIDENT TO SUCH USE,
POSSESSION, MAINTENANCE, AND MANAGEMENT (WHETHER SUCH PERSONS BE AGENTS OR
EMPLOYEES OF DEBTOR OR OF THIRD PARTIES, OR SUCH DAMAGE BE TO PROPERTY OF DEBTOR
OR OF OTHERS) AND ALL CLAIMS, COSTS, PENALTIES, LIABILITIES, AND EXPENSES,
INCLUDING, WITHOUT LIMITATION, COURT COSTS AND ATTORNEYS' FEES, HOWSOEVER
ARISING OR INCURRED BECAUSE OF, INCIDENT TO, OR WITH RESPECT TO COLLATERAL OR
ANY USE, POSSESSION, MAINTENANCE, OR MANAGEMENT OF IT. (THE "INDEMNIFIED
-----------
LIABILITIES"). HOWEVER, NO INDEMNIFIED PARTY IS ENTITLED TO INDEMNITY UNDER THIS
- -----------
PARAGRAPH FOR ITS OWN GROSS NEGLIGENCE, WILLFUL MISCONDUCT, OR FRAUD OR FOR ANY
INDEMNIFIED LIABILITY ARISING FROM ITS ACTIONS AFTER SECURED PARTY HAS
FORECLOSED THE SECURITY INTEREST OR ACCEPTED CONVEYANCE IN LIEU OF FORECLOSURE
OR (EXCEPT FOR THE PLEDGED SECURITIES) TAKEN POSSESSION OF ANY COLLATERAL. The
------
provisions of this paragraph survive the payment and performance of the Secured
Obligation and the release of the Security Interest. The foregoing indemnity
shall be subject to the provisions of Section 9.12 of the Credit Agreement.
(10) MISCELLANEOUS.
-------------
(a) Term. This agreement terminates when no Lender has any commitment
----
to lend or extend credit under the Credit Agreement and the Secured Obligation
is fully paid and performed. No Obligor on any Collateral is obligated to
inquire about the termination of this agreement and is fully protected in making
payments directly to Secured Party if SECTION 8(E) applies, which payments
Secured Party shall pay to Debtor after termination of this agreement.
(b) No Release. Neither the Security Interest, Debtor's obligations,
----------
nor Secured Party's or any Lenders' Rights under this agreement are released,
diminished, impaired, or adversely affected by the occurrence of any one or more
of the following events: (i) The taking or accepting of any other security or
assurance for any Secured Obligation; (ii) any release, surrender, exchange,
subordination, or loss of any security or assurance at any time existing in
connection with any Secured Obligation; (iii) the modification of, amendment to,
or waiver of compliance with any terms of any other Loan Document without the
consent of Debtor except as required in that Loan Document; (iv) any present or
future insolvency, bankruptcy, or lack of corporate or trust power of any party
at any time liable for the payment
9
of any Secured Obligation; (v) except as specifically required by any other Loan
Document, any renewal, extension, or rearrangement of the payment of any Secured
Obligation (either with or without notice to or consent of Debtor) or any
adjustment, indulgence, forbearance, or compromise that may be granted or given
by Secured Party or any Lender to Debtor; (vi) any neglect, delay, omission,
failure, or refusal of Secured Party or any Lender to take or prosecute any
action in connection with any agreement, document, guaranty, or instrument
evidencing, securing, or assuring the payment of any Secured Obligation; (vii)
any failure of Secured Party or any Lender to notify Debtor of any renewal,
extension, or assignment of any Secured Obligation, or the release of any
security under any other document or instrument, or of any other action taken or
refrained from being taken by Secured Party or any Lender against Debtor, or any
new agreement between Secured Party, any Lender, and Debtor, it being understood
that, except as expressly required by the Credit Agreement, neither Secured
Party nor any Lender is required to give Debtor any notice of any kind under any
circumstances whatsoever with respect to or in connection with the Secured
Obligation, including, without limitation, notice of acceptance of this
agreement or any Collateral ever delivered to or for the account of Secured
Party under this agreement; (viii) the illegality, invalidity, or
unenforceability of any Secured Obligation against any third party obligated
with respect to it by reason of the fact that the Secured Obligation, or the
interest paid or payable with respect to any of it, exceeds the amount permitted
by applicable Governmental Requirements, the act of creating any of it is ultra
vires, or the officers, partners, or trustees creating any of it acted in excess
of their authority, or for any other reason; or (ix) if any payment by any party
obligated with respect to any Secured Obligation is held to constitute a
preference under applicable Laws or for any other reason Secured Party or any
Lender is required to refund any payment on any Secured Obligation or pay the
amount of it to someone else.
(c) Waivers. To the maximum extent lawful, except to the extent
-------
expressly otherwise provided in this agreement or in any other Loan Document,
Debtor waives (i) any Right to require Secured Party or any Lender to proceed
against any other Person, to exhaust Rights in Collateral, or to pursue any
other Right that Secured Party or any Lender may have; (ii) with respect to the
Secured Obligation, presentment and demand for payment, protest, notice of
protest and nonpayment, notice of acceleration, and notice of intent to
accelerate; and (iii) all Rights of marshaling in respect of any Collateral.
(d) Financing Statement. Secured Party may at any time file this
-------------------
agreement (or a carbon, photographic, or other reproduction of this agreement)
as a financing statement, but the failure of Secured Party to do so does not
impair the validity or enforceability of this agreement.
(e) Information. Except as otherwise provided by applicable
-----------
Governmental Requirements, Secured Party's charge for furnishing each statement
of account or each list of Collateral is $10.00.
(f) Loan Document. This agreement is a Loan Document and is subject
-------------
to the applicable provisions of SECTIONS 1 and 17 of the Credit Agreement, all
of which are incorporated in this agreement by reference the same as if set
forth in this agreement verbatim.
(g) Amendments, Etc. No amendment, waiver, or discharge to or under
---------------
this agreement is valid unless it is in writing and is signed by the party
against whom it is sought to be enforced and is otherwise in conformity with the
requirements of SECTION 17.8 of the Credit Agreement.
(h) ENTIRETY. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS TO WHICH
--------
DEBTOR IS PARTY REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS BY THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE
PARTIES.
10
(i) Secured Party and Lenders. Secured Party is the administrative
-------------------------
agent for each Lender under the Credit Agreement. The Security Interest and all
Rights granted to Secured Party under or in connection with this agreement are
for each Lender's ratable benefit. Secured Party may, without the joinder of
any Lender, exercise any Rights in Secured Party's or Lenders' favor under or in
connection with this agreement, including, without limitation, conducting any
foreclosure sales and executing full or partial releases of, amendments or
modifications to, or consents or waivers under this agreement. Secured Party's
and each Lender's Rights and obligations vis-a-vis each other may be subject to
one or more separate agreements between those parties. However, Debtor need not
inquire about any such agreement and is not subject to any terms of it.
Therefore, neither Debtor nor its successors or assigns is entitled to any
benefits or provisions of any such separate agreement or is entitled to rely
upon or raise as a defense any party's failure or refusal to comply with the
provisions of it.
(j) Parties. This agreement benefits Secured Party, Lenders, and
-------
their respective successors and assigns and binds Debtor and its successors and
assigns. Upon appointment of any successor Administrative Agent under the
Credit Agreement, all of the Rights of Secured Party under this agreement
automatically vests in that new Administrative Agent as successor Secured Party
on behalf of Lenders without any further act, deed, conveyance, or other
formality other than that appointment. The Rights of Secured Party and Lenders
under this agreement may be transferred with any assignment of the Secured
Obligation. The Credit Agreement contains provisions governing assignments of
the Secured Obligation and of Rights and obligations under this agreement.
REMAINDER OF PAGE INTENTIONALLY BLANK.
SIGNATURE PAGE FOLLOWS.
11
EXECUTED as of the date first stated above.
PLASMA & MATERIALS TECHNOLOGIES, INC., as Debtor
By /s/ John W. LaValle
---------------------------------------------
John W. LaValle, Vice President
Secured Party executes this agreement in acknowledgment of PARAGRAPH 10(H)
above.
NATIONSBANK OF TEXAS, N.A., as Administrative
Agent for Lenders, as Secured Party
By /s/ Stan W. Reynolds
------------------------------------------------
Stan W. Reynolds, Vice President
12
ANNEX 1
-------
LOCATIONS
---------
DEBTOR PRINCIPAL PLACE OF LOCATION OF BOOKS LOCATION(S) OF OWNER/MANAGER OF
BUSINESS AND AND RECORDS INVENTORY PREMISES
CHIEF EXECUTIVE CONCERNING WHERE INVENTORY
OFFICE ACCOUNTS LOCATED
STATE COUNTY
(NUMBER OF
SITES)
=========================================
Plasma & Materials 9255 Deering Ave. 9255 Deering Ave. CA Los Angeles (3) (Landlord as to
Technologies, Inc. Chatsworth, CA Chatsworth, CA main office and
91311 91311 one other
location with
inventory)
Northpark
Industrial
8929 Wilshire
Blvd.,
Beverly Hills,
California 90210
(Landlords as to
one location with
inventory)
Jack W. Maxwell,
S. Alejandra
Aranovich, Warren
C. Bradley, Clara
Bradley, Terry H.
Hill, and Sharon
D. Hill
1096 Coast
Village Road
Santa Barbara,
California 93108
TX Dallas (1) Koll Management
Services, Inc.
12801 N. Central
Expressway
Dallas, Texas
75243
- ----------------------------------------------------------------------------------------------------------------------------------
GUARANTY
--------
THIS GUARANTY is executed as of the date last stated below by each of the
undersigned as a "Guarantor" (whether one or more, "GUARANTORS"), for the
benefit of NATIONSBANK OF TEXAS, N.A., a national banking association (in its
capacity as Administrative Agent for the Lenders now or in the future party to
the Credit Agreement described below, "ADMINISTRATIVE AGENT").
Plasma & Materials Technologies, Inc. ("US BORROWER"), Electrotech Limited
and Electrotech Equipments Limited (collectively, "UK BORROWERS"),
Administrative Agent, Lloyds Bank Plc, as "UK-Collateral Agent," and certain
Lenders have executed the Credit Agreement (as renewed, extended, amended, or
restated, the "CREDIT AGREEMENT") dated as of November 15, 1996. US Borrower
and UK Borrowers are collectively referred to in this guaranty as "BORROWERS."
This guaranty is integral to the transactions contemplated by the Loan Documents
and is a condition precedent to Lenders' obligations to extend or to continue to
extend credit under the Credit Agreement.
ACCORDINGLY, for adequate and sufficient consideration, each Guarantor
jointly and severally guarantees to Administrative Agent and Lenders the prompt
payment of the Guaranteed Debt (defined below) at -- and at all times after --
its maturity (by acceleration or otherwise) as follows:
1. DEFINITIONS. Terms defined in the Credit Agreement have the same
-----------
meanings when used -- unless otherwise defined -- in this guaranty. As used in
this guaranty:
ADMINISTRATIVE AGENT is defined in the preamble to this guaranty and
includes its successor appointed under SECTION 16 of the Credit Agreement and
acting as administrative agent for Lenders under the Loan Documents.
BORROWER means any of the Borrowers described in the recitals to this
guaranty and includes, without limitation, a Borrower as a debtor-in-possession,
and any receiver, trustee, liquidator, conservator, custodian, or similar party
appointed for a Borrower or for all or substantially all of a Borrower's assets
under any Debtor Law.
CREDIT AGREEMENT is defined in the recitals to this guaranty.
GUARANTEED DEBT means the US Obligation and the UK Obligation, as defined
in the Credit Agreement, and all present and future costs, attorneys' fees, and
expenses reasonably incurred by Administrative Agent or any Lender to enforce
any Borrower's, any Guarantor's, or any other obligor's payment of any of the US
Obligation and the UK Obligation, including, without limitation (to the extent
lawful), all present and future amounts that would become due but for the
operation of (S)(S) 502 or 506 or any other provision of Title 11 of the United
States Code and all present and future accrued and unpaid interest (including,
without limitation, all post-petition interest if any Borrower or any Subsidiary
voluntarily or involuntarily becomes subject to any Debtor Law).
GUARANTORS is defined in the preamble to this guaranty.
SUBORDINATED DEBT means all present and future obligations of any Borrower
to any Guarantor, whether those obligations are (a) direct, indirect, fixed,
contingent, liquidated, unliquidated, joint, several, or joint and several, (b)
due or to become due to any Guarantor, (c) held by or are to be held by any
Guarantor, (d) created directly or acquired by assignment or otherwise, or (e)
evidenced in writing.
2. GUARANTY. This is an absolute, irrevocable, and continuing guaranty,
--------
and the circumstance that at any time or from time to time the Guaranteed Debt
may be paid in full does not affect the obligation of any Guarantor with respect
to the Guaranteed Debt incurred after that. This guaranty remains in effect
until the Guaranteed Debt is fully paid and performed and all commitments to
extend any credit under the Credit Agreement have terminated. No Guarantor may
rescind or revoke its obligations with respect to the Guaranteed Debt.
Notwithstanding any contrary provision in this guaranty, however, each
Guarantor's maximum liability under this guaranty is limited, to the extent, if
any, required so that its liability is not subject to avoidance under any Debtor
Law.
3. CONSIDERATION. Each Guarantor represents and warrants that (a) the
-------------
value of the consideration received and to be received by it is reasonably worth
at least as much as its liability under this guaranty and (b) such liability may
reasonably be expected to directly or indirectly benefit it.
4. CUMULATIVE RIGHTS. If any Guarantor becomes liable for any
-----------------
indebtedness owing by any Borrower to Administrative Agent or any Lender, other
than under this guaranty, that liability may not be in any manner impaired or
affected by this guaranty. The Rights of Administrative Agent or Lenders under
this guaranty are cumulative of any and all other Rights that Administrative
Agent or Lenders may ever have against each Guarantor. The exercise by
Administrative Agent or Lenders of any Right under this guaranty or otherwise
does not preclude the concurrent or subsequent exercise of any other Right.
5. PAYMENT UPON DEMAND. If an Event of Default exists, each Guarantor
-------------------
shall -- on demand and without further notice of dishonor and without any notice
having been given to any Guarantor previous to that demand of either the
acceptance by Administrative Agent or Lenders of this guaranty or the creation
or incurrence of any Guaranteed Debt -- pay the amount of the Guaranteed Debt
then due and payable to Administrative Agent and Lenders. It is not necessary
for Administrative Agent or Lenders, in order to enforce that payment by any
Guarantor, first or contemporaneously to institute suit or exhaust remedies
against any Borrower or others liable on any Guaranteed Debt or to enforce
Rights against any collateral securing any Guaranteed Debt.
6. SUBORDINATION. The Subordinated Debt is expressly subordinated to the
-------------
full and final payment of the Guaranteed Debt. Each Guarantor agrees not to
accept any payment of any Subordinated Debt from any Borrower if an Event of
Default exists. If any Guarantor receives any payment of any Subordinated Debt
in violation of the foregoing, that Guarantor shall hold that payment in trust
for Administrative Agent and Lenders and promptly turn it over to Administrative
Agent, in the form received (with any necessary endorsements), to be applied to
the Guaranteed Debt.
7. SUBROGATION AND CONTRIBUTION. Until no Lender is obligated to lend or
----------------------------
issue BGs or LCs under the Credit Agreement and the Guaranteed Debt has been
fully paid and performed (a) no Guarantor may assert, enforce, or otherwise
exercise any Right of subrogation to any of the Rights or Liens of
Administrative Agent or Lenders or any other beneficiary against Borrower or any
other obligor on the Guaranteed Debt or any collateral or other security or any
Right of recourse, reimbursement, subrogation, contribution, indemnification, or
similar Right against Borrower or any other obligor on any Guaranteed Debt or
any guarantor of it, (b) each Guarantor defers all of the foregoing Rights
(whether they arise in equity, under contract, by statute, under common law, or
otherwise), and (c) each Guarantor defers the benefit of, and any Right to
participate in, any collateral or other security given to Administrative Agent
or Lenders or any other beneficiary to secure payment of any Guaranteed Debt.
8. NO RELEASE. No Guarantor's obligations under this guaranty may be
----------
released, diminished, or affected by the occurrence of any one or more of the
following events: (a) Any taking or accepting of any other security or
assurance for any Guaranteed Debt; (b) any release, surrender, exchange,
2
subordination, impairment, or loss of any collateral securing any Guaranteed
Debt; (c) any full or partial release of the liability of any other obligor on
the US Obligation or the UK Obligation; (d) the modification of, or waiver of
compliance with, any terms of any other Loan Document; (e) the insolvency,
bankruptcy, or lack of corporate or partnership power of any other obligor at
any time liable for any Guaranteed Debt, whether now existing or occurring in
the future; (f) any renewal, extension, or rearrangement of any Guaranteed Debt
or any adjustment, indulgence, forbearance, or compromise that may be granted or
given by Administrative Agent or any Lender to any other obligor on the US
Obligation or the UK Obligation; (g) any neglect, delay, omission, failure, or
refusal of Administrative Agent or any Lender to take or prosecute any action in
connection with the Guaranteed Debt; (h) any failure of Administrative Agent or
any Lender to notify any Guarantor of any renewal, extension, or assignment of
any Guaranteed Debt, or the release of any security or of any other action taken
or refrained from being taken by Administrative Agent or any Lender against any
Borrower or any new agreement between Administrative Agent, any Lender, and any
Borrower, it being understood that neither Administrative Agent nor any Lender
is required to give any Guarantor any notice of any kind under any circumstances
whatsoever with respect to or in connection with any Guaranteed Debt, other than
any notice required to be given to Guarantors by Law or elsewhere in this
guaranty; (i) the unenforceability of any Guaranteed Debt against any other
obligor because it exceeds the amount permitted by Law, the act of creating it
is ultra vires, the officers creating it exceeded their authority or violated
their fiduciary duties in connection with it, or otherwise; or (j) any payment
of the US Obligation or the UK Obligation to Administrative Agent or Lenders is
held to constitute a preference under any Debtor Law or for any other reason
Administrative Agent or any Lender is required to refund that payment or make
payment to someone else (and in each such instance this guaranty will be
reinstated in an amount equal to that payment).
9. WAIVERS. To the maximum extent lawful, each Guarantor waives all
-------
Rights by which it might be entitled to require suit on an accrued right of
action in respect of any Guaranteed Debt or require suit against any Borrower or
others, whether arising under (S) 34.02 of the Texas Business and Commerce Code,
as amended (regarding its Right to require Administrative Agent or Lenders to
sue any Borrower on accrued right of action following its written notice to
Administrative Agent or Lenders), (S) 17.001 of the Texas Civil Practice and
Remedies Code, as amended (allowing suit against it without suit against a
Borrower, but precluding entry of judgment against it before entry of judgment
against that Borrower), Rule 31 of the Texas Rules of Civil Procedure, as
amended (requiring Administrative Agent or Lenders to join a Borrower in any
suit against it unless judgment has been previously entered against that
Borrower), or otherwise.
10. CREDIT AGREEMENT PROVISIONS. Each Guarantor acknowledges that certain
---------------------------
(a) representations and warranties in the Credit Agreement are applicable to it
and confirms that each such representation and warranty is true and correct, and
(b) covenants and other provisions in the Credit Agreement are applicable to it
or are imposed upon it and agrees to promptly and properly comply with or be
bound by each of them.
11. RELIANCE AND DUTY TO REMAIN INFORMED. Each Guarantor confirms that it
------------------------------------
has executed and delivered this guaranty after reviewing the terms and
conditions of the Loan Documents and such other information as it has deemed
appropriate in order to make its own credit analysis and decision to execute
and deliver this guaranty. Each Guarantor confirms that it has made its own
independent investigation with respect to Borrower's creditworthiness and is not
executing and delivering this guaranty in reliance on any representation or
warranty by Administrative Agent or any Lender as to that creditworthiness.
Each Guarantor expressly assumes all responsibilities to remain informed of the
financial condition of Borrowers and any circumstances affecting Borrowers'
ability to perform under the Loan Documents to which it is a party or any
collateral securing any Guaranteed Debt.
3
12. NO REDUCTION. The Guaranteed Debt may not be reduced, discharged, or
------------
released because or by reason of any existing or future offset, claim, or
defense (except for the defense of complete and final payment of the Guaranteed
Debt) of any Borrower or any other obligor against Administrative Agent or
Lenders or against payment of the Guaranteed Debt, whether that offset, claim,
or defense arises in connection with the Guaranteed Debt or otherwise. Those
claims and defenses include, without limitation, failure of consideration,
breach of warranty, fraud, bankruptcy, incapacity/infancy, statute of
limitations, lender liability, accord and satisfaction, usury, forged
signatures, mistake, impossibility, frustration of purpose, and
unconscionability.
13. VENUE AND SERVICE OF PROCESS. EACH GUARANTOR (A) IRREVOCABLY SUBMITS
----------------------------
TO THE NONEXCLUSIVE JURISDICTION OF ANY TEXAS STATE OR FEDERAL COURT, (B)
IRREVOCABLY WAIVES -- TO THE FULLEST EXTENT PERMITTED BY LAW -- ANY OBJECTION
THAT IT MAY NOW OR IN THE FUTURE HAVE TO THE LAYING OF VENUE OF ANY LITIGATION
BROUGHT IN CONNECTION WITH ANY LOAN DOCUMENT OR THE GUARANTEED DEBT BROUGHT IN
DISTRICT COURTS OF DALLAS COUNTY, TEXAS, OR IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF TEXAS, DALLAS DIVISION, (C) IRREVOCABLY WAIVES ANY
CLAIMS THAT ANY LITIGATION BROUGHT IN ANY OF THOSE COURTS HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM, (D) IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF
ANY OF THOSE COURTS IN ANY LITIGATION BY THE MAILING OF COPIES OF THAT LEGAL
PROCESS BY CERTIFIED MAIL, RETURN RECEIPT REQUESTED, POSTAGE PREPAID, BY HAND-
DELIVERY, OR BY DELIVERY BY A NATIONALLY RECOGNIZED COURIER SERVICE, AND SERVICE
IS DEEMED COMPLETE UPON DELIVERY OF THE LEGAL PROCESS AT ITS ADDRESS AS PROVIDED
IN THIS GUARANTY, AND (E) IRREVOCABLY AGREES THAT ANY LEGAL PROCEEDING AGAINST
ANY PARTY TO ANY LOAN DOCUMENT ARISING OUT OF OR IN CONNECTION WITH THE LOAN
DOCUMENTS OR THE GUARANTEED DEBT MAY BE BROUGHT IN ONE OF THOSE COURTS. The
scope of each of these waivers is intended to be all-encompassing of any and all
disputes that may be filed in any court and that relate to the subject matter of
this transaction --including, without limitation, contract claims, tort claims,
breach of duty claims, and all other common law and statutory claims. These
waivers are a material inducement to the agreement by Administrative Agent and
each Lender to enter into the Loan Documents, and they have each relied -- and
may continue to rely -- on these waivers in its dealings with Guarantors. Each
Guarantor represents and warrants that it has reviewed these waivers with its
legal counsel, and that it knowingly and voluntarily agrees to each waiver
following consultation with legal counsel. These waivers are irrevocable, may
not be modified either orally or in writing, and apply to any renewals,
extensions, amendments, and replacements of any Loan Document.
14. LOAN DOCUMENT. This guaranty is a Loan Document and is subject to the
-------------
applicable provisions of SECTIONS 1 and 17 of the Credit Agreement, all of which
are incorporated into this guaranty by reference the same as if set forth in
this guaranty verbatim.
15. COMMUNICATIONS. For purposes of SECTION 17.2 of the Credit Agreement,
--------------
each Guarantor's address and telecopy number are the same as US Borrower's.
16. AMENDMENTS, ETC. No amendment, waiver, or discharge to or under this
---------------
guaranty is valid unless it is in writing and is signed by the party against
whom it is sought to be enforced and is otherwise in conformity with the
requirements of SECTION 17.9 of the Credit Agreement.
17. ENTIRETY. THIS GUARANTY AND THE OTHER LOAN DOCUMENTS TO WHICH ANY
--------
GUARANTOR IS A PARTY REPRESENT THE FINAL AGREEMENT BETWEEN THAT GUARANTOR,
ADMINISTRATIVE AGENT, AND LENDERS WITH RESPECT TO THE SUBJECT MATTER OF THIS
GUARANTY AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR
4
SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN THE PARTIES.
18. ADMINISTRATIVE AGENT AND LENDERS. Administrative Agent is the
--------------------------------
Administrative Agent for each Lender under the Credit Agreement. All Rights
granted to Administrative Agent under or in connection with this guaranty are
for each Lender's ratable benefit. Administrative Agent may, without the
joinder of any Lender, exercise any Rights in Administrative Agent's or Lenders'
favor under or in connection with this guaranty. Administrative Agent's and
each Lender's Rights and obligations vis-a-vis each other may be subject to one
or more separate agreements between those parties. However, no Guarantor is
required to inquire about any such agreement or is subject to any terms of it
unless that Guarantor specifically joins it. Therefore, neither any Guarantor
nor its successors or assigns is entitled to any benefits or provisions of any
such separate agreement or is entitled to rely upon or raise as a defense any
party's failure or refusal to comply with the provisions of it.
19. PARTIES. This guaranty benefits Administrative Agent, Lenders, and
-------
their respective successors and assigns and binds each Guarantor and its
successors and assigns. Upon appointment of any successor Administrative Agent
under the Credit Agreement, all of the Rights of Administrative Agent under this
guaranty automatically vests in that new Administrative Agent as successor
Administrative Agent on behalf of Lenders without any further act, deed,
conveyance, or other formality other than that appointment. The Rights of
Administrative Agent and Lenders under this guaranty may be transferred with any
assignment of the Guaranteed Debt. The Credit Agreement contains provisions
governing assignments of the Guaranteed Debt and of Rights and obligations under
this guaranty.
US BORROWER'S OBLIGATIONS UNDER THIS GUARANTY CONSTITUTE "DESIGNATED SENIOR
DEBT," AS THAT TERM IS DEFINED IN THE INDENTURE (AS RENEWED, EXTENDED, AMENDED,
OR SUPPLEMENTED) DATED AS OF OCTOBER 7, 1996, BETWEEN US BORROWER AND U.S. TRUST
COMPANY OF CALIFORNIA, N.A., PROVIDING FOR THE ISSUANCE OF US BORROWER'S 7-1/8%
CONVERTIBLE SUBORDINATED NOTES DUE 2001.
REMAINDER OF PAGE INTENTIONALLY BLANK.
SIGNATURE PAGE FOLLOWS.
EXECUTED as of _____________________, 199______.
PLASMA & MATERIALS TECHNOLOGIES, INC.,
as Guarantor
By
--------------------------------------
Name:
--------------------------------
Title:
--------------------------------
Administrative Agent executes this guaranty in acknowledgement of PARAGRAPH
17 above.
NATIONSBANK OF TEXAS, N.A.,
as Administrative Agent
By
--------------------------------------
Stan W. Reynolds, Vice President
GUARANTY SIGNATURE PAGE ONE OF ONE
COLLATERAL ASSIGNMENT OF INTELLECTUAL PROPERTY
----------------------------------------------
THIS AGREEMENT is entered into as of November 15, 1996, between PLASMA &
MATERIALS TECHNOLOGIES, INC., a California corporation having a principal place
of business at 9255 Deering Avenue, Chatsworth, California 91311 ("ASSIGNOR"),
and NATIONSBANK OF TEXAS, N.A., a national banking association having a
principal place of business at 901 Main Street, Dallas, Texas 75202 (in its
capacity as Administrative Agent for the Lenders now or in the future party to
the Credit Agreement described below, "ADMINISTRATIVE AGENT").
1. DEFINED TERMS. Unless otherwise defined herein, capitalized terms used in
-------------
this agreement have the meanings assigned in the Credit Agreement (as
hereinafter defined) and the following terms shall have the following
meanings:
"BOOKS AND RECORDS" are defined in SECTION 2(d) hereof.
"BORROWERS" means, collectively, Assignor, Electrotech Limited, a UK
corporation, and Electrotech Equipments Limited, a UK corporation.
"CHATTEL PAPER" shall have the meaning assigned to such term in the Code.
"CODE" shall mean Chapter 9 of the Uniform Commercial Code as in effect
from time to time in the State of Texas as amended (or any successor
statute).
"COLLATERAL" shall have the meaning assigned to such term in SECTION 2
hereof.
"COPYRIGHTS" shall have the meaning assigned to such term in SECTION 2
hereof.
"CREDIT AGREEMENT" shall mean that certain Credit Agreement by and among
Borrowers Administrative Agent, UK-Collateral Agent, and other Lenders
dated as of the date hereof.
"EVENT OF DEFAULT" shall have the meaning assigned to such term in SECTION
6 hereof.
"INSTRUMENTS" shall have the meaning assigned to such term in the Code.
"PATENTS" shall have the meaning assigned to such term in SECTION 2 hereof.
"SECURED OBLIGATION" shall have the meaning assigned to such term in
SECTION 3 hereof.
"TRADEMARKS" shall have the meaning assigned to such term in SECTION 2
hereof.
2. GRANT OF SECURITY INTEREST. For value received and as collateral security
--------------------------
for the Secured Obligation, Assignor hereby grants to Administrative Agent
for the benefit of the Lenders a security interest, lien and mortgage in
and to, and agrees and acknowledges that Administrative Agent has, and
shall continue to have, a security interest, lien and mortgage in and to,
its rights in all those assets and properties of Assignor of the types
described below, wherever located, however arising or created, and whether
now owned or existing or hereafter arising, created or acquired:
(a) All patents, patent applications, and patent rights, together with
(i) all reissues, divisions, substitutions, continuations,
continuations-in-part, renewals and extensions thereof, (ii) all
income, royalties, damages and payments for past or future infringements
thereof, (iii) the right to sue for past, present and future infringements
thereof, and (iv) all rights corresponding thereto throughout the world
(all of the foregoing patents, patent applications and patent rights are
hereinafter referred to as the "PATENTS"), including but not limited to
those listed on EXHIBIT A attached hereto;
(b) All trademarks and service marks, and all trademark registrations,
service mark registrations, trade names, trade name rights, trademark
applications, service mark applications, trade styles, logos, together with
(i) all renewals thereof, (ii) all income, royalties, damages, and payments
now or hereafter due and payable with respect thereto, including, without
limitation, damages and payments for past or future infringements thereof,
(iii) the right to sue for past, present and future infringements thereof,
and (iv) all rights corresponding thereto throughout the world (all of the
foregoing trademarks, service marks, trademark registrations, service mark
registrations, trade names, trade name rights, trademark applications,
service mark applications, trade styles and logos, are hereinafter referred
to as the "TRADEMARKS"), and the goodwill of Assignor's business connected
with and symbolized by the Trademarks, including but not limited to those
listed on EXHIBIT A attached hereto;
(c) All original works of authorship fixed in any tangible medium of
expression, including but not limited to all musical works, lyrics, sound
recordings, literary works (including without limitation, computer
software), dramatic works, pictorial, graphic and sculptural works,
architectural works, and mask works, all whether published or unpublished,
complete or incomplete, joint or sole works, and whether or not subject to
an existing copyright, including the rights to reproduce them, prepare
derivative works, distribute them, publicly perform or display them,
arrange or contract for the exploitation of all or any part of them, and
make any alterations, additions, deletions or other changes to them, and
all copyrights and copyright registrations and recordings thereof in the
United States or in countries foreign thereto, including, without
limitation, applications, registrations and recordings in the United States
Copyright Office or in any similar office or agency of the United States,
any State thereof, or any foreign country, together with (i) all
extensions, reissues or renewals thereof, (ii) all income, royalties,
damages and payments for past, present or future infringements thereof,
(iii) the right to sue for past, present and future infringements thereof,
and (iv) all rights corresponding thereto throughout the world (all of the
foregoing hereinafter referred to as the "COPYRIGHTS"), including but not
limited to those listed on EXHIBIT A attached hereto;
(d) All books, records, files, computer programs, data processing records,
computer software, documents and other information, property, or general
intangibles, at any time evidencing, describing, or pertaining to, and all
containers and packages for, the property described or referred to in
SUBSECTIONS (a) through (c) above (the "BOOKS AND RECORDS"); and
(d) All products and proceeds (as defined in the Code) of any of the
property described above in any form, and all proceeds of such proceeds,
including, without limitation, all cash and credit balances, all payments
under any indemnity, warranty or guaranty with respect to any of such
property, all awards for taking by eminent domain, all proceeds of fire or
other insurance, including any refunds of unearned premiums in connection
with any cancellation, adjustment, or termination of any insurance policy,
all proceeds obtained as a result of any legal action or proceeding with
respect to any of such property, and claims
2
by Assignor against third parties for loss or damage to, or destruction of,
any of such property.
The property described or referred to in SUBSECTIONS (a) through (e) above is
hereinafter collectively called the "COLLATERAL."
3. INDEBTEDNESS SECURED. The security interest contained herein is granted to
--------------------
secure the payment and performance of:
(a) Any and all loans, advances (including, without limitation, future
advances), indebtedness, obligations and liabilities of any of the
Borrowers to any of the Lenders however evidenced, whether as
principal or guarantor or otherwise, whether now existing or hereafter
arising, whether direct or indirect, absolute or contingent, joint or
several, due or not due, primary or secondary, liquidated or
unliquidated, secured or unsecured, original, renewed, or extended
(the "INDEBTEDNESS"), including, without limitation, the US Obligation
and the UK Obligation;
(b) All costs and expenses reasonably incurred by Administrative Agent to
obtain, preserve, perfect and enforce the security interest granted
hereby and all other liens and security interests securing payment of
the Indebtedness, to collect the Indebtedness and, to the extent any
guarantors of the Indebtedness or the Borrowers are obligated to pay
such costs and expenses pursuant to the Credit Agreement or any other
Loan Document, to maintain, preserve and collect the Collateral,
including, but not limited to, taxes, assessments, insurance premiums,
repairs, reasonable attorneys' fees and legal expenses, rent, storage
charges, advertising costs, brokerage fees and expenses of sale; and
(c) All renewals, extensions and modifications of the Indebtedness or any
part thereof.
The Indebtedness and costs mentioned in this SECTION 3 are hereinafter
collectively referred to herein as the "SECURED OBLIGATION."
4. ASSIGNOR'S WARRANTIES AND REPRESENTATIONS. Subject to the disclosures set
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forth in SCHEDULE 8.20 of the Credit Agreement, Assignor represents and
warrants to Administrative Agent that:
(a) Assignor has the authority to execute, deliver and perform this
agreement; and the execution and performance hereof have been
authorized by all necessary action of Assignor;
(b) Except for Permitted Liens, the Collateral is free and clear of all
liens and subject only to such Permitted Liens, Assignor has good and
indefeasible title to the Collateral;
(c) As to after-acquired Collateral which is material to the operation of
Assignor's business, Assignor will have when such Collateral becomes
subject to this agreement, good and indefeasible fee or leasehold
title to, the Collateral, free and clear of all liens except Permitted
Liens;
(d) The place of business (or chief executive office if Assignor maintains
more than one place of business) of Assignor is at 9255 Deering
Avenue, Chatsworth, California 91311;
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(e) Except as disclosed in writing to Administrative Agent, no material
dispute, right of set-off, counterclaim or defenses have been
successfully asserted or are currently being asserted against Assignor
with respect to any part of the Collateral;
(f) The Patents, Trademarks and Copyrights listed on EXHIBIT A constitute
all of the current Patents, registered and material unregistered
Trademarks, and registered and material unregistered Copyrights owned
by Assignor and include all of the current Patents, Trademarks, and
Copyrights material to the operation of Assignor. All of the Patents,
registered Trademarks and registered Copyrights listed on EXHIBIT A
are subsisting and in full force and effect and have not been adjudged
invalid, void or unenforceable in the countries indicated. Further, to
the best of Assignor's knowledge, Assignor may utilize such Patents,
Trademarks, and Copyrights in its business in those countries where
Assignor conducts significant business, where patent, trademark or
copyright applications still are pending (notwithstanding the outcome
of said applications) or where no patents, trademark registrations, or
copyrights registrations exist;
(g) Other than as disclosed in the Credit Agreement, no claim has been
made successfully or is currently being made that the use of any of
the Patents, Trademarks, or Copyrights which are material to the
operation of Assignor's business does or may violate the rights of any
third person (including, without limitation, any demand or request
that Assignor license or acquire any rights from a third party) and
Assignor has no knowledge of any third person infringing on or
misappropriating any of Assignor's rights in the Patents, Trademarks,
and Copyrights which infringement or misappropriation would constitute
a Material-Adverse Event;
(h) All of the representations and warranties made by Assignor in all
instruments and documents evidencing and securing the Secured
Obligation or any part thereof, including, without limitation, this
agreement, were true and correct in all material respects when made;
(i) There have been no claims made successfully and there are no claims
currently being made against Assignor asserting the invalidity, misuse
or unenforceability of any of the Patents, Trademarks, or Copyrights
which are material to the operation of Assignor's business, and to the
best of Assignor's knowledge, there are no valid grounds for same;
(j) To the best of Assignor's knowledge, the conduct of Assignor's
business has not infringed, misappropriated or conflicted with and
does not infringe, misappropriate or conflict with any intellectual
property rights of the type listed in SUBSECTIONS (a) through (c) of
SECTION 2 above of other persons or entities, nor would any future
conduct as presently contemplated infringe, misappropriate or conflict
with any such intellectual property rights of other persons or
entities, subject to any such infringement, misappropriation or
conflict as, in the aggregate, has previously been settled or has not
given rise to and does not give rise to any liability on the part of
Assignor which has caused or may cause a Material-Adverse Event; and
(k) Any errors or inaccuracies contained in applications for registration
or issuance and subsequent prosecution of the Patents, Trademarks, and
Copyrights were inadvertent and made in good faith.
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5. ASSIGNOR'S COVENANTS AND AGREEMENTS. Assignor covenants and agrees with
-----------------------------------
Administrative Agent that:
(a) Assignor shall, at its expense, make, procure, execute and deliver
such financing statement or statements, or amendments thereof or
supplements thereto, or other instruments, certificates, assignments,
passbooks and supplemental writings, and do and deliver all acts,
things, writings and assurances as Administrative Agent may from time
to time reasonably require in order to comply with the Code, or any
other applicable law, and to preserve and protect the security
interest hereby granted. In the event, for any reason, that the laws
of any jurisdiction other than the State of Texas becomes or is
applicable to the creation, perfection or continuation of
Administrative Agent's security interest and lien in the
Administrative Agent, or any part thereof, Assignor agrees to execute
and deliver all such instruments and to do all such other things as
may be necessary or appropriate to preserve, protect and enforce the
security interest or lien of Administrative Agent, under the law of
such other jurisdiction, to at least the same extent as such security
interest would be protected under the Code;
(b) Until the termination of this agreement, Assignor will not execute and
there will not be on file in any public office any financing statement
or statements creating or evidencing a Lien covering any of the
Collateral, except as may have been or may hereafter be granted to
Administrative Agent or that may evidence or perfect other Permitted
Liens and Assignor further agrees that it will keep the Collateral
free from any lien, or any other legal or equitable process, or any
encumbrance of any kind or character, except for Permitted Liens;
(c) Administrative Agent and its agents shall have the right to examine,
audit, inspect and copy, as the case may be, the Collateral during all
normal business hours after reasonable notice to Assignor, the
exercise of such right to be conditioned on the entry by
Administrative Agent and its agents into a reasonable nondisclosure
agreement or the adoption of other means reasonably needed to protect
the confidentiality of material examined, audited, inspected, and
copied pursuant to this paragraph.
(d) Upon the occurrence and during the continuance of an Event of Default,
Assignor shall promptly, at its expense, upon the request of
Administrative Agent:
i. Deliver to Administrative Agent, with appropriate endorsement
or assignment, all Instruments, Chattel Paper, monies, checks,
notes, drafts and other evidence of indebtedness, or other
property in the nature of items of payment representing
proceeds of any of the Collateral, or arising from an account,
which are then in, or may thereafter come into, Assignor's
possession; and
ii. To the extent permitted by law, direct all parties obligated on
any of the Collateral to make all payments due or to become due
thereon directly to Administrative Agent or to such other
person or officer as may be specified by Administrative Agent;
(e) Assignor shall perform, at its sole cost and expense, any and all
reasonable steps, and shall pay the amount of all reasonable expenses
necessary to defend and enforce the security interest in, any of the
Collateral and to defend, enforce and collect the Collateral
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(other than Collateral that Assignor reasonably deems to be no longer
necessary for the conduct of its business);
(f) All risk and liability for safekeeping of the Collateral shall at all
times, either before or after possession thereof by Administrative
Agent, remain that of Assignor;
(g) Assignor shall give Administrative Agent thirty-days' prior written
notice of any change in its chief executive office;
(h) Except for Patents, Trademarks, or Copyrights that Assignor reasonably
deems not to be or no longer necessary for the conduct of its
business, Assignor shall (i) promptly file applications for all future
Patents, Trademarks, or Copyrights in the United States Copyright
Office and the United States Patent and Trademark Office, and where
deemed appropriate corresponding foreign offices in which Assignor has
or expects to have significant business, (ii) diligently prosecute any
patent, trademark, service mark, or copyright application of the
Patents, Trademarks or Copyrights, now or hereafter pending, for so
long as registration is deemed to be reasonably probable and cost
effective, (iii) file, prosecute, and defend all infringements,
opposition and cancellation proceedings that would have a material
adverse impact on any of the Collateral, except those actions which
would have no reasonable likelihood of success or would not be cost
effective, (iv) preserve, maintain and renew all rights and patents
and patent applications, trademark, service mark or copyright
applications, trademark, service mark or copyright registrations of
the Patents, Trademarks, or Copyrights (any expenses incurred in
connection with such application shall be borne by Assignor), for so
long as the success of such efforts is reasonably probable and such
efforts are cost effective, (v) not abandon any pending patent,
trademark, service mark or copyright application, without the consent
of Administrative Agent, which consent shall not be unreasonably
withheld, and (vi) make reasonable, cost effective, efforts to remedy
and correct all errors and inaccuracies that Assignor becomes aware of
in any applications for registration and subsequent prosecution of the
Trademarks and the Copyrights;
(i) Except as specifically allowed in the Credit Agreement, Assignor shall
not sell or assign its interest in, or grant any license under, the
Patents, Trademarks, or Copyrights without the prior consent of
Administrative Agent, except for (i) licenses to affiliates of
Assignor permitted under the Credit Agreement, (ii) licenses to end-
users of the Assignor's products as limited by the end-users' license
agreements, and (iii) licenses implied as a result of product sales
permitted under the Credit Agreement;
(j) Assignor shall maintain the quality of any and all products or
services in connection with the Patents, Trademarks, or Copyrights,
consistent with the quality of such products or services as of the
date hereof;
(k) Except as specifically allowed in the Credit Agreement, Assignor shall
not, without Administrative Agent's prior written consent, enter into
any agreement, including, but not limited to, any licensing agreement,
that is inconsistent with Assignor's obligations under this agreement
or the Credit Agreement, will not take any action, or permit any
action to be taken, that would affect the validity or enforcement of
the rights transferred to Administrative Agent under this agreement or
which may result in a material change to or abandonment, invalidation,
unenforceability, avoidance or diminution in the value of the Patents,
Trademarks, or Copyrights and shall notify Administrative Agent
immediately
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if it knows of any reason or has reason to know that any of the
Patents, Trademarks, or Copyrights may become abandoned, invalidated,
unenforceable, voided or diminuted in value;
(l) If Assignor shall, either itself or through any agent, employee,
licensee or designee, (i) file an application for the registration of
any patents, trademarks, service marks or copyrights with the United
States Patent and Trademark Office or the United States Copyright
Office or any similar office or agency in the United Kingdom or any
other country or any political subdivision thereof or (ii) file any
assignment of any patent, copyright, service mark or trademark, which
Assignor may acquire from a third party, with the United States Patent
and Trademark Office or the United States Copyright Office or any
similar office or agency in the United Kingdom or any other country or
any political subdivision thereof, then Assignor shall, no less often
than the last day of each calendar quarter during the term of this
agreement notify Administrative Agent thereof, and, upon request of
Administrative Agent, execute and deliver any and all assignments,
agreements, instruments, documents and papers as Administrative Agent
may request to evidence the Administrative Agent's interest in such
patent, trademark, service mark or copyright and the goodwill and
general intangibles of Assignor relating thereto or represented
thereby, and Assignor hereby constitutes the Administrative Agent its
attorney-in-fact to execute and file all such writings for the
foregoing purposes; such power being coupled with an interest is
irrevocable until the Secured Obligation is paid in full. If Assignor
shall obtain rights to any new patents, trademarks, service marks, or
copyrights, the provisions of this agreement shall automatically apply
thereto and Assignor shall give to Administrative Agent prompt notice
thereof in writing; Assignor hereby authorizes the Administrative
Agent to modify this agreement by amending EXHIBIT A to include any
future patents, trademarks, service marks, or copyrights, or patent
applications, trademark applications, service mark applications or
copyright applications covered by this agreement; and
(m) Assignor assumes all responsibility and liability arising from the use
of the Trademarks, Patents, and Copyrights, and Assignor hereby
indemnifies and holds Administrative Agent harmless from and against
any claim, suit, loss, damage or expense (including reasonable
attorneys' fees) arising out of any alleged defect in product
manufactured, promoted or sold by Assignor (or any affiliate or
subsidiary thereof) in connection with any Trademark, Patent, or
Copyright or out of the manufacture, promotion, labeling, sale or
advertisement of any such product by Assignor (or any affiliate or
subsidiary thereof). Assignor agrees that Administrative Agent does
not assume, and shall have no responsibility for, the payment of any
sums due or to become due under any agreement or contract included in
the Collateral or the performance or any obligations to be performed
under or with respect to any such agreement or contract by Assignor.
6. EVENTS OF DEFAULT. Assignor shall be in default under this agreement upon
-----------------
the happening of any of the following events or conditions (hereinafter
called an "EVENT OF DEFAULT"):
(a) An Event of Default under the Credit Agreement shall occur and be
continuing;
(b) Except for the transactions allowed by this agreement and the Credit
Agreement, the ownership of the Collateral or any of the Collateral,
or any legal or equitable interest therein, becomes vested in a person
or entity other than Assignor; or
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(c) Administrative Agent's liens in any material part of the Collateral
should become unenforceable, or with the exception of Permitted Liens,
cease to be first priority liens.
7. POWER OF ATTORNEY. Assignor hereby irrevocably constitutes and appoints
-----------------
Administrative Agent, with full power of substitution, as its true and
lawful attorney-in-fact, effective upon the occurrence of and during the
continuance of an Event of Default, with full irrevocable power and
authority in its name or in Administrative Agent's own name, to take after
the occurrence and during the continuance of an Event of Default any and
all action and to execute thereafter any and all documents and instruments
which Administrative Agent deems necessary or desirable to accomplish the
purposes of this agreement and, without limiting the generality of the
foregoing, Assignor hereby gives Administrative Agent the power and right
on its behalf and in its own name to do any of the following, without
notice to or the consent of said Assignor, but only after the occurrence
and during the continuance of an Event of Default:
(a) to demand, sue for, collect, or receive in the name of any Assignor or
in its own name or in the name of Administrative Agent, any money or
property at any time payable or receivable on account of or in
exchange for any of the Collateral, and, in connection therewith,
endorse checks, notes, drafts, acceptances, money orders, documents of
title, or any other instruments for the payment of money under the
Collateral;
(b) to pay or discharge taxes, liens, security interests, or other
encumbrances levied or placed on or threatened against the Collateral;
(c) to send requests for verification to parties obligated in respect of
the Collateral;
(d) to direct any parties liable for any payment under any of the
Collateral to make payment of any and all monies due and to become due
thereunder directly to Administrative Agent or as Administrative Agent
shall direct and to receive payment of and receipt for any and all
monies, claims, and other amounts due and to become due at any time in
respect of or arising out of any Collateral;
(e) to commence and prosecute any suit, action, or proceeding at law or in
equity in any court of competent jurisdiction to collect the
Collateral or any part thereof and to enforce any other right in
respect of any Collateral or to settle, compromise, or adjust any
suit, action, or proceeding described above and, in connection
therewith, to give such discharges or releases as Administrative Agent
may deem appropriate;
(f) to add or release any guarantor, endorser, surety, or other party to
any of the Collateral or the Obligation; and
(g) to sell, transfer, pledge, make any agreement with respect to or
otherwise deal with any of the Collateral as fully and completely as
though Administrative Agent were the absolute owner thereof for all
purposes, and to do, at Assignors' expense, at any time, or from time
to time, all acts and things which the Administrative Agent deem
reasonably necessary to protect, preserve or realize upon the
Collateral and Administrative Agent's security interest therein.
This power of attorney is a power coupled with an interest and shall be
irrevocable. Administrative Agent shall not be under any duty to exercise or
withhold the exercise of any of the rights, powers, privileges, and options
expressly or implicitly granted to Administrative Agent in this agreement,
8
and shall not be liable for any failure to do so or any delay in doing so.
Administrative Agent shall not be liable for any act or omission or for any
error of judgment or any mistake of fact or law in Administrative Agent's
capacity or in Administrative Agent's capacity as attorney-in-fact except acts
or omissions resulting from their own gross negligence or willful misconduct.
This power of attorney is conferred on Administrative Agent solely to protect,
preserve, and realize upon Lenders' security interest in the Collateral.
Administrative Agent shall not be responsible for any decline in the value of
the Collateral and shall not be required to take any steps to preserve rights
against prior parties or to protect, preserve, or maintain any security interest
or lien given to secure the Collateral.
8. ADMINISTRATIVE AGENT'S RIGHTS AND REMEDIES.
------------------------------------------
(a) In the event of the occurrence and during the continuance of any Event
of Default, in addition to the rights and remedies provided in SECTION
7 hereof and in the Code, without demand, presentment, notice of
intention to accelerate, notice of acceleration or any other notice
(which are fully waived):
i. Administrative Agent may, at its option, take possession and
dispose of all or any portion of the Collateral, to the extent
permitted by law, at public or private sale, as a unit or in
parcels, upon any terms and prices and in any order, free from any
claim or right of any kind including any equity of redemption of
Assignor, ANY SUCH DEMAND, RIGHT OR EQUITY BEING EXPRESSLY WAIVED
AND RELEASED. Any disposition of the Collateral may be made by way
of one or more contracts and at any such disposition it shall not
be necessary to exhibit the Collateral;
ii. Administrative Agent may, at its option, to the extent permitted
by the Code or other applicable law, sell and deliver any
Collateral at public or private sale, for cash, upon credit or
otherwise, at such prices and upon such terms as Administrative
Agent deems advisable, in its sole discretion, and may, if
Administrative Agent deems it reasonable, postpone or adjourn any
sale of the Collateral by an announcement at the time and place of
sale or of such postponed or adjourned sale without giving a new
notice of sale;
iii. If any Collateral is sold on terms other than payment in full at
the time of sale, no credit shall be given against the Secured
Obligation until Administrative Agent receives payment, and if the
buyer defaults in payment, then Administrative Agent may resell
the Collateral without further notice to Assignor;
iv. If Administrative Agent seeks to take possession of all or any
portion of the Collateral by judicial process, Assignor
irrevocably waives (A) the posting of any bond, surety or security
with respect thereto that might otherwise be required, (B) any
demand for possession prior to the commencement of any suit or
action to recover the Collateral, and (C) any requirement that
Administrative Agent retain possession and not dispose of any
Collateral until after trial or final judgment;
v. Assignor agrees that Administrative Agent has no obligation to
preserve rights to the Collateral or marshal any Collateral for
the benefit of any person; and
9
vi. Administrative Agent is hereby granted a license or other right
(exercisable only during the continuance of an Event of Default)
to use, without charge, Assignor's labels, Patents, Copyrights,
Trademarks, and advertising matter or any similar property, in
completing production of, advertising or selling any Collateral,
and Assignor's rights under all licenses and all franchise
agreements shall inure to the benefit of Administrative Agent.
(b) In addition:
i. Administrative Agent shall not be liable for any act or omission
on the part of Administrative Agent, its officers, agents, or
employees, except for gross negligence or willful misconduct. All
rights and remedies of Administrative Agent hereunder are
cumulative and may be exercised singly or concurrently. The
exercise of any right or remedy will not be a waiver of any other;
ii. The rights, titles, interests, liens and securities of
Administrative Agent hereunder shall be cumulative of all of the
securities, rights, titles, interests or liens which
Administrative Agent may now or at any time hereafter hold
securing the payment of the Secured Obligation, or any part
thereof;
iii. Administrative Agent is hereby expressly authorized after and
during the continuance of an Event of Default to apply by
appropriate judicial proceedings for appointment of a receiver for
the Collateral, or any part thereof; and
iv. After and during the continuance of an Event of Default,
Administrative Agent shall be entitled to apply the proceeds of
any sale or other disposition of the Collateral, and the payments
received by Administrative Agent with respect to any of the
Collateral, first to the payment of all its reasonable expenses,
including attorneys' fees and legal expenses, incurred in holding
and preparing the Collateral, or any part thereof, for sale or
other disposition, in arranging for such sale or other
disposition, and in actually selling the same, and next toward
payment of the balance of the Secured Obligation in such order and
manner as Administrative Agent, as directed by the Required
Lenders, may deem advisable. Administrative Agent shall account to
the Assignor for any surplus. If the proceeds are not sufficient
to pay the Secured Obligation in full, the Assignor shall remain
liable for any deficiency.
9. MISCELLANEOUS.
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(a) This Agreement and the transactions evidenced hereby shall be governed
by, and interpreted and enforced in accordance with, the laws of the
State of Texas, except that no doctrine of choice of law shall be used
to apply the laws of any other state or jurisdiction.
(b) This Agreement is binding upon and shall inure to the benefit of
Assignor, Lenders, Administrative Agent, their respective
representatives, administrators, successors and assigns; provided,
however, that Assignor may not, without the prior written consent of
Required Lenders, assign any rights, powers, duties or obligations
hereunder and each Lender reserves the right to assign any or all of
its rights hereunder in connection with
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any assignment under SECTION 17.10 of the Credit Agreement and in
accordance with the terms thereof.
(c) Any notice of sale, disposition or other action by Administrative
Agent required by the Code and sent to Assignor at Assignor's address
shown in the Credit Agreement, or at such other address of Assignor as
may from time to time be shown on the records of Administrative Agent,
at least ten (l0) days prior to such action, shall constitute
reasonable notice to Assignor. Notice shall be deemed given or sent
when mailed postage prepaid to Assignor's address.
(d) No failure to exercise, and no delay in exercising, on the part of
Administrative Agent, any right hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise thereof preclude any
other or further exercise thereof or the exercise of any other right.
(e) This Agreement shall not be amended in any way except by a written
agreement signed by Administrative Agent, Required Lenders, and
Assignor.
(f) To the extent any provision of this agreement conflicts with the
express terms of the Credit Agreement, then the terms of the Credit
Agreement shall control.
(g) Administrative Agent shall, upon the reasonable request of Assignor,
and upon satisfactory evidence of compliance with the Credit
Agreement, release any portion of the Collateral which is permitted to
be sold or otherwise transferred under this agreement or the Credit
Agreement.
REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.
SIGNATURE PAGE FOLLOWS.
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IN WITNESS WHEREOF, the undersigned have duly executed this agreement as of
the date first above written.
PLASMA & MATERIALS TECHNOLOGIES, INC.
By /s/ John W. LaValle
----------------------------------
John W. LaValle, Vice President
NATIONSBANK OF TEXAS, N.A.
By /s/ Stan W. Reynolds
---------------------------------
Stan W. Reynolds, Vice President
SIGNATURE PAGE TO COLLATERAL ASSIGNMENT OF INTELLECTUAL PROPERTY