EXHIBIT 10.10
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CREDIT AGREEMENT
among
FSC SEMICONDUCTOR CORPORATION,
FAIRCHILD SEMICONDUCTOR CORPORATION,
VARIOUS BANKS,
BANKERS TRUST COMPANY,
as ADMINISTRATIVE AGENT,
CREDIT SUISSE FIRST BOSTON,
as SYNDICATION AGENT,
and
CANADIAN IMPERIAL BANK OF COMMERCE,
as DOCUMENTATION AGENT
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Dated as of March 11, 1997
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$195,000,000
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TABLE OF CONTENTS
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SECTION 1. Amount and Terms of Credit.................................... 1
1.01 The Commitments............................................... 1
1.02 Minimum Amount of Each Borrowing.............................. 4
1.03 Notice of Borrowing........................................... 4
1.04 Disbursement of Funds......................................... 5
1.05 Notes......................................................... 6
1.06 Conversions................................................... 8
1.07 Pro Rata Borrowings........................................... 8
1.08 Interest...................................................... 9
1.09 Interest Periods.............................................. 10
1.10 Increased Costs, Illegality, etc.............................. 11
1.11 Compensation.................................................. 13
1.12 Change of Lending Office...................................... 14
1.13 Replacement of Banks.......................................... 14
SECTION 2. Letters of Credit............................................. 16
2.01 Letters of Credit............................................. 16
2.02 Letter of Credit Requests..................................... 17
2.03 Letter of Credit Participations............................... 18
2.04 Agreement to Repay Letter of Credit Drawings.................. 20
2.05 Increased Costs............................................... 21
SECTION 3. Commitment Commission; Fees; Reductions of Commitment......... 22
3.01 Fees.......................................................... 22
3.02 Voluntary Termination of Unutilized Commitments............... 23
3.03 Mandatory Reduction of Commitments............................ 24
SECTION 4. Prepayments; Payments; Taxes.................................. 25
4.01 Voluntary Prepayments......................................... 25
4.02 Mandatory Repayments and Commitment Reductions................ 26
4.03 Method and Place of Payment................................... 35
4.04 Net Payments; Taxes........................................... 35
(i)
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SECTION 5. Conditions Precedent to Loans................................. 37
5.01 Execution of Agreement; Notes................................. 37
5.02 Fees, etc..................................................... 38
5.03 Opinions of Counsel........................................... 38
5.04 Corporate Documents; Proceedings; etc......................... 38
5.05 Employee Benefit Plans; Shareholders' Agreements;
Management Agreements; Debt Agreements; Acquisition
Documents; Tax Sharing Agreements........................... 38
5.06 Consummation of Recapitalization Transaction.................. 39
5.07 Senior Subordinated Notes..................................... 41
5.08 Repayment of Purchase Price Note.............................. 41
5.09 Indebtedness.................................................. 41
5.10 Subsidiaries Guaranty......................................... 42
5.11 Pledge Agreement.............................................. 42
5.12 Security Agreement............................................ 42
5.13 Mortgages; Title Insurance; Surveys; etc...................... 43
5.14 Consent Letter................................................ 44
5.15 Adverse Change, etc........................................... 44
5.16 Litigation.................................................... 44
5.17 Solvency Certificate; Environmental Analyses; Insurance....... 45
5.18 Pro Forma Balance Sheet; Financial Statements;
Projections................................................. 45
SECTION 6. Conditions Precedent to All Credit Events..................... 45
6.01 No Default; Representations and Warranties.................... 45
6.02 Notice of Borrowing; Letter of Credit Request................. 46
SECTION 7. Representations, Warranties and Agreements.................... 46
7.01 Corporate Status.............................................. 46
7.02 Corporate Power and Authority................................. 47
7.03 No Violation.................................................. 47
7.04 Governmental Approvals........................................ 47
7.05 Financial Statements; Financial Condition; Undisclosed
Liabilities; Projections; etc............................... 48
7.06 Litigation.................................................... 49
7.07 True and Complete Disclosure.................................. 49
7.08 Use of Proceeds; Margin Regulations........................... 50
7.09 Tax Returns and Payments...................................... 50
7.10 Compliance with ERISA......................................... 50
7.11 The Security Documents........................................ 52
(ii)
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7.12 Representations and Warranties in Documents................... 53
7.13 Properties.................................................... 53
7.14 Capitalization................................................ 54
7.15 Subsidiaries.................................................. 54
7.16 Compliance with Statutes, etc................................. 54
7.17 Investment Company Act........................................ 55
7.18 Public Utility Holding Company Act............................ 55
7.19 Environmental Matters......................................... 55
7.20 Labor Relations............................................... 56
7.21 Patents, Licenses, Franchises and Formulas.................... 56
7.22 Indebtedness.................................................. 56
7.23 Transaction................................................... 56
7.24 Special Purpose Corporations.................................. 57
SECTION 8. Affirmative Covenants......................................... 57
8.01 Information Covenants......................................... 57
8.02 Books, Records and Inspections................................ 61
8.03 Maintenance of Property; Insurance............................ 62
8.04 Corporate Franchises.......................................... 63
8.05 Compliance with Statutes, etc................................. 63
8.06 Compliance with Environmental Laws............................ 63
8.07 ERISA......................................................... 64
8.08 End of Fiscal Years; Fiscal Quarters.......................... 66
8.09 Performance of Obligations.................................... 66
8.10 Payment of Taxes.............................................. 66
8.11 Ownership of Subsidiaries..................................... 66
8.12 Additional Security; Further Assurances; Surveys.............. 66
8.13 Interest Rate Protection...................................... 68
8.14 Foreign Subsidiaries Security................................. 69
SECTION 9. Negative Covenants............................................ 70
9.01 Liens......................................................... 70
9.02 Consolidation, Merger, Purchase or Sale of Assets, etc........ 73
9.03 Dividends..................................................... 74
9.04 Indebtedness.................................................. 75
9.05 Advances, Investments and Loans............................... 77
9.06 Transactions with Affiliates.................................. 79
9.07 Capital Expenditures.......................................... 80
9.08 Consolidated Interest Coverage Ratio.......................... 81
(iii)
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9.09 Consolidated Fixed Charge Coverage Ratio...................... 81
9.10 Maximum Leverage Ratio........................................ 82
9.11 Limitation on Modifications of Indebtedness;
Modifications of Certificate of Incorporation,
By-Laws and Certain Other Agreements; etc................... 82
9.12 Limitation on Certain Restrictions on Subsidiaries............ 83
9.13 Limitation on Issuance of Capital Stock....................... 84
9.14 Limitation on Creation of Subsidiaries........................ 84
9.15 Business...................................................... 84
9.16 Designated Senior Indebtedness................................ 85
SECTION 10. Events of Default............................................ 85
10.01 Payments..................................................... 85
10.02 Representations, etc......................................... 85
10.03 Covenants.................................................... 85
10.04 Default Under Other Agreements............................... 85
10.05 Bankruptcy, etc.............................................. 86
10.06 ERISA........................................................ 86
10.07 Security Documents........................................... 87
10.08 Guaranty..................................................... 88
10.09 Judgments.................................................... 88
10.10 Change of Control............................................ 88
SECTION 11. Definitions and Accounting Terms............................. 89
11.01 Defined Terms................................................ 89
SECTION 12. The Agents...................................................120
12.01 Appointment..................................................120
12.02 Nature of Duties.............................................121
12.03 Lack of Reliance on the Agents...............................121
12.04 Certain Rights of the Agents.................................121
12.05 Reliance.....................................................122
12.06 Indemnification..............................................122
12.07 Each Agent in its Individual Capacity........................122
12.08 Holders......................................................122
12.09 Resignation by the Agents....................................123
SECTION 13. Miscellaneous................................................123
13.01 Payment of Expenses, etc.....................................123
(iv)
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13.02 Right of Setoff..............................................125
13.03 Notices......................................................125
13.04 Benefit of Agreement.........................................125
13.05 No Waiver; Remedies Cumulative...............................127
13.06 Payments Pro Rata............................................128
13.07 Calculations; Computations...................................128
13.08 GOVERNING LAW; SUBMISSION TO JURISDICTION;
VENUE; WAIVER OF JURY TRIAL.................................129
13.09 Counterparts.................................................130
13.10 Effectiveness................................................130
13.11 Headings Descriptive.........................................131
13.12 Amendment or Waiver; etc.....................................131
13.13 Survival.....................................................133
13.14 Domicile of Loans............................................133
13.15 Limitation on Additional Amounts, Etc........................133
13.16 Confidentiality..............................................134
13.17 Register.....................................................134
13.18 Certain Prior Documents......................................135
SECTION 14. Holdings Guaranty............................................135
14.01 The Holdings Guaranty........................................135
14.02 Bankruptcy...................................................136
14.03 Nature of Liability..........................................136
14.04 Independent Obligation.......................................136
14.05 Authorization................................................137
14.06 Reliance.....................................................138
14.07 Subordination................................................138
14.08 Waiver.......................................................138
14.09 Maximum Liability............................................139
(v)
SCHEDULE I Commitments (Sections 3.02, 4.01, 11.01 ["Bank"; "Revolving
Loan Commitment"; "Tranche A Term Loan Commitment";
"Tranche B Term Loan Commitment"], 13.04(b))
SCHEDULE II Bank Addresses (Section 13.03)
SCHEDULE III Real Property (Sections 5.13(a), 7.11(c), 7.13)
SCHEDULE IV Existing Liens (Section 9.01(iii))
SCHEDULE V Existing Indebtedness (Sections 5.09, 7.22,
9.04(iii))
SCHEDULE VI Insurance (Section 8.03(a))
SCHEDULE VII ERISA (Section 7.10)
SCHEDULE VIII Subsidiaries (Sections 7.15, 11.01
["Subsidiary Assignor"; "Subsidiary Guarantor"])
SCHEDULE IX Labor Relations (Section 7.20)
SCHEDULE X Projections (Sections 7.05(d), 7.22)
SCHEDULE XI Securities (Section 7.14)
SCHEDULE XII Organization Chart (Section 7.15)
EXHIBIT A Notice of Borrowing (Section 1.03(a))
EXHIBIT B-1 Tranche A Term Note (Section 1.05(a))
EXHIBIT B-2 Tranche B Term Note (Section 1.05(a))
EXHIBIT B-3 Revolving Note (Section 1.05(a))
EXHIBIT B-4 Swingline Note (Section 1.05(a))
EXHIBIT C Letter of Credit Request (Section 2.02(a))
EXHIBIT D Section 4.04(b)(ii) Certificate (Section 4.04(b)(ii))
EXHIBIT E Opinion of Dechert Price & Rhoads (Section 5.03)
EXHIBIT F Officers' Certificate (Section 5.04(a))
EXHIBIT G Subsidiaries Guaranty (Section 5.10)
EXHIBIT H Pledge Agreement (Section 5.11)
EXHIBIT I Security Agreement (Section 5.12)
EXHIBIT J Consent Letter (Section 5.14)
EXHIBIT K Solvency Certificate (Section 5.17)
EXHIBIT L Assignment and Assumption Agreement (Sections 1.13,
13.04(b), 13.17 ["Assignment and Assumption
Agreement"])
EXHIBIT M Subordination Provisions
(vi)
CREDIT AGREEMENT, dated as of March 11, 1997, among FSC
SEMICONDUCTOR CORPORATION, a Delaware corporation ("Holdings"), FAIRCHILD
SEMICONDUCTOR CORPORATION, a Delaware corporation (the "Borrower"), the Banks
party hereto from time to time, BANKERS TRUST COMPANY, as Administrative Agent
(in such capacity, the "Administrative Agent"), CREDIT SUISSE FIRST BOSTON, as
Syndication Agent (in such capacity, the "Syndication Agent"), and CANADIAN
IMPERIAL BANK OF COMMERCE, as Documentation Agent (in such capacity, the
"Documentation Agent" and, together with the Syndication Agent and the
Administrative Agent, each an "Agent" and collectively the "Agents") (all
capitalized terms used herein and defined in Section 11 are used herein as
therein defined).
W I T N E S S E T H :
WHEREAS, subject to and upon the terms and conditions herein set
forth, the Banks are willing to make available to the Borrower the respective
credit facilities provided for herein;
NOW, THEREFORE, IT IS AGREED:
SECTION 1. Amount and Terms of Credit.
1.01 The Commitments. (a) Subject to and upon the terms and
conditions set forth herein, each Bank with a Tranche A Term Loan Commitment
severally agrees to make, on the Initial Borrowing Date, a term loan (each, a
"Tranche A Term Loan" and, collectively, the "Tranche A Term Loans") to the
Borrower, which Tranche A Term Loans (i) shall be made and initially maintained
as a single Borrowing of Base Rate Loans (subject to the option to convert such
Tranche A Term Loans pursuant to Section 1.06) and (ii) shall be made by each
Bank in that initial aggregate principal amount as is equal to the Tranche A
Term Loan Commitment of such Bank on such date (before giving effect to any
reductions thereto on such date pursuant to Section 3.03(b)(i) but after giving
effect to any reductions thereto on or prior to such date pursuant to Section
3.03(b)(ii)). Once repaid, Tranche A Term Loans incurred hereunder may not be
reborrowed.
(b) Subject to and upon the terms and conditions set forth herein,
each Bank with a Tranche B Term Loan Commitment severally agrees to make, on the
Initial Borrowing Date, a term loan (each, a "Tranche B Term Loan" and,
collectively, the "Tranche B Term Loans") to the Borrower, which Tranche B Term
Loans (i) shall be made and initially maintained as a single Borrowing of Base
Rate Loans (subject to the option to convert such Tranche B Term Loans pursuant
to Section 1.06) and (ii) shall be made by
each Bank in that initial aggregate principal amount as is equal to the Tranche
B Term Loan Commitment of such Bank on such date (before giving effect to any
reductions thereto on such date pursuant to Section 3.03(c)(i) but after giving
effect to any reductions thereto on or prior to such date pursuant to Section
3.03(c)(ii)). Once repaid, Tranche B Term Loans incurred hereunder may not be
reborrowed.
(c) Subject to and upon the terms and conditions set forth herein,
each Bank with a Revolving Loan Commitment severally agrees, at any time and
from time to time after the Initial Borrowing Date and prior to the Revolving
Loan Maturity Date, to make a revolving loan or revolving loans (each, a
"Revolving Loan" and, collectively, the "Revolving Loans") to the Borrower,
which Revolving Loans (i) shall, at the option of the Borrower, be Base Rate
Loans or Eurodollar Loans, provided that (A) except as otherwise specifically
provided in Section 1.10(b), all Revolving Loans comprising the same Borrowing
shall at all times be of the same Type and (B) no Revolving Loans maintained as
Eurodollar Loans may be incurred prior to the earlier of (1) the 14th day after
the Initial Borrowing Date and (2) the Syndication Date, (ii) may be repaid and
reborrowed in accordance with the provisions hereof, (iii) shall not exceed for
any Bank at any time outstanding that aggregate principal amount which, when
added to the product of (x) such Bank's Adjusted Percentage and (y) the sum of
(I) the aggregate amount of all Letter of Credit Outstandings (exclusive of
Unpaid Drawings which are repaid with the proceeds of, and simultaneously with
the incurrence of, the respective incurrence of Revolving Loans) at such time
and (II) the aggregate principal amount of all Swingline Loans (exclusive of
Swingline Loans which are repaid with the proceeds of, and simultaneously with
the incurrence of, the respective incurrence of Revolving Loans) then
outstanding, equals the Revolving Loan Commitment of such Bank at such time and
(iv) shall not exceed for all Banks at any time outstanding that aggregate
principal amount which, when added to (x) the amount of all Letter of Credit
Outstandings (exclusive of Unpaid Drawings which are repaid with the proceeds
of, and simultaneously with the incurrence of, the respective incurrence of
Revolving Loans) at such time and (y) the aggregate principal amount of all
Swingline Loans (exclusive of Swingline Loans which are repaid with the proceeds
of, and simultaneously with the incurrence of, the respective incurrence of
Revolving Loans) then outstanding, equals the Total Revolving Loan Commitment at
such time.
(d) Subject to and upon the terms and conditions herein set forth,
the Swingline Bank in its individual capacity agrees to make at any time and
from time to time on and after the Initial Borrowing Date and prior to the
Swingline Expiry Date, a revolving loan or revolving loans (each, a "Swingline
Loan" and, collectively, the "Swingline Loans") to the Borrower, which Swingline
Loans (i) shall be made and maintained as Base Rate Loans, (ii) may be repaid
and reborrowed in accordance with the provisions hereof, (iii) shall not exceed
in aggregate principal amount at any time outstanding, when combined with the
aggregate principal amount of all Revolving Loans made by Non-Defaulting Banks
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then outstanding and the Letter of Credit Outstandings at such time, an amount
equal to the Adjusted Total Revolving Loan Commitment at such time (after giving
effect to any reductions to the Adjusted Total Revolving Loan Commitment on such
date), (iv) shall not exceed at any time outstanding the Maximum Swingline
Amount and (v) shall not be extended if the Swingline Bank receives a written
notice from any Agent or the Required Banks that has not been rescinded that
there is a Default or an Event of Default in existence hereunder.
(e) On any Business Day, the Swingline Bank may, in its sole
discretion, give notice to the other Banks that its outstanding Swingline Loans
shall be funded with a Borrowing of Revolving Loans (provided that such notice
shall be deemed to have been automatically given upon the occurrence of a
Default or an Event of Default under Section 10.05 or upon the exercise of any
of the remedies provided in the last paragraph of Section 10), in which case a
Borrowing of Revolving Loans constituting Base Rate Loans (each such Borrowing,
a "Mandatory Borrowing") shall be made on the immediately succeeding Business
Day by all Banks with a Revolving Loan Commitment (without giving effect to any
reductions thereto pursuant to the last paragraph of Section 10) pro rata based
on each Bank's Adjusted Percentage (determined before giving effect to any
termination of the Revolving Loan Commitments pursuant to the last paragraph of
Section 10) and the proceeds thereof shall be applied directly to the Swingline
Bank to repay the Swingline Bank for such outstanding Swingline Loans. Each such
Bank hereby irrevocably agrees to make Revolving Loans upon one Business Day's
notice pursuant to each Mandatory Borrowing in the amount and in the manner
specified in the preceding sentence and on the date specified in writing by the
Swingline Bank notwithstanding (i) the amount of the Mandatory Borrowing may not
comply with the minimum amount for Borrowings otherwise required hereunder, (ii)
whether any conditions specified in Section 6 are then satisfied, (iii) whether
a Default or an Event of Default then exists, (iv) the date of such Mandatory
Borrowing and (v) the amount of the Total Revolving Loan Commitment or the
Adjusted Total Revolving Loan Commitment at such time. In the event that any
Mandatory Borrowing cannot for any reason be made on the date otherwise required
above (including, without limitation, as a result of the commencement of a
proceeding under the Bankruptcy Code with respect to the Borrower), then each
such Bank hereby agrees that it shall forthwith purchase (as of the date the
Mandatory Borrowing would otherwise have occurred, but adjusted for any payments
received from the Borrower on or after such date and prior to such purchase)
from the Swingline Bank such participations in the outstanding Swingline Loans
as shall be necessary to cause such Banks to share in such Swingline Loans
ratably based upon their respective Adjusted Percentages (determined before
giving effect to any termination of the Revolving Loan Commitments pursuant to
the last paragraph of Section 10), provided that (x) all interest payable on the
Swingline Loans shall be for the account of the Swingline Bank until the date as
of which the respective participation is required to be purchased and, to the
extent attributable to the purchased participation, shall be payable
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to the participant from and after such date and (y) at the time any purchase of
participations pursuant to this sentence is actually made, the purchasing Bank
shall be required to pay the Swingline Bank interest on the principal amount of
participation purchased for each day from and including the day upon which the
Mandatory Borrowing would otherwise have occurred to but excluding the date of
payment for such participation, at the overnight Federal Funds Rate for the
first three days and at the rate otherwise applicable to Revolving Loans
maintained as Base Rate Loans hereunder for each day thereafter.
1.02 Minimum Amount of Each Borrowing. The aggregate principal
amount of each Borrowing of any Tranche of Term Loans shall not be less than
$5,000,000. The aggregate principal amount of each Borrowing of Revolving Loans
shall be not less than (x) in the case of a Borrowing of Eurodollar Loans,
$5,000,000 and (y) in the case of a Borrowing of Base Rate Loans, $1,000,000,
provided that Mandatory Borrowings shall be made in the amounts required by
Section 1.01(e). The aggregate principal amount of each Borrowing of Swingline
Loans shall not be less than $250,000 and, if greater, shall be in an integral
multiple of $100,000. More than one Borrowing may occur on the same date, but at
no time shall there be outstanding more than twelve Borrowings of Eurodollar
Loans.
1.03 Notice of Borrowing. (a) Whenever the Borrower desires to make
a Borrowing hereunder (excluding Borrowings of Swingline Loans and Mandatory
Borrowings), it shall give the Administrative Agent at its Notice Office at
least one Business Day's prior written notice (or telephonic notice promptly
confirmed in writing) of each Base Rate Loan and at least three Business Days'
prior written notice (or telephonic notice promptly confirmed in writing) of
each Eurodollar Loan to be made hereunder, provided that any such notice shall
be deemed to have been given on a certain day only if given before 11:00 A.M.
(New York time) in the case of a Borrowing of Eurodollar Loans and 12:00 Noon
(New York time) in the case of a Borrowing of Base Rate Loans on such day. Each
such written notice or written confirmation of telephonic notice (each a "Notice
of Borrowing"), except as otherwise expressly provided in Section 1.10, shall be
irrevocable and shall be given by the Borrower in the form of Exhibit A,
appropriately completed to specify the aggregate principal amount of the Loans
to be made pursuant to such Borrowing, the date of such Borrowing (which shall
be a Business Day), whether the Loans being made pursuant to such Borrowing
shall constitute Tranche A Term Loans, Tranche B Term Loans or Revolving Loans
and whether the Loans being made pursuant to such Borrowing are to be initially
maintained as Base Rate Loans or Eurodollar Loans and, if Eurodollar Loans, the
initial Interest Period to be applicable thereto. The Administrative Agent shall
promptly give each Bank which is required to make Loans of the Tranche specified
in the respective Notice of Borrowing, notice of such proposed Borrowing, of
such Bank's proportionate share thereof and of the other matters required by the
immediately preceding sentence to be specified in the Notice of Borrowing.
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(b)(i) Whenever the Borrower desires to make a Borrowing of
Swingline Loans hereunder, it shall give the Swingline Bank not later than 12:00
Noon (New York time) on the date that a Swingline Loan is to be made, written
notice or telephonic notice promptly confirmed in writing of each Swingline Loan
to be made hereunder. Each such notice shall be irrevocable and specify in each
case (A) the date of Borrowing (which shall be a Business Day) and (B) the
aggregate principal amount of the Swingline Loans to be made pursuant to such
Borrowing.
(ii) Mandatory Borrowings shall be made upon the notice specified in
Section 1.01(e), with the Borrower irrevocably agreeing, by its incurrence of
any Swingline Loan, to the making of the Mandatory Borrowings as set forth in
Section 1.01(e).
(c) Without in any way limiting the obligation of the Borrower to
confirm in writing any telephonic notice of any Borrowing of Loans, the
Administrative Agent or the Swingline Bank, as the case may be, may act without
liability upon the basis of telephonic notice of such Borrowing, believed by the
Administrative Agent or the Swingline Bank, as the case may be, in good faith to
be from the Chairman of the Board, the President, the Treasurer, any Assistant
Treasurer or any Controller of the Borrower (or any other officer of the
Borrower designated in writing to the Administrative Agent and the Swingline
Bank by the Chairman of the Board, the President or the Treasurer as being
authorized to give such notices under this Agreement) prior to receipt of
written confirmation. In each such case, the Borrower hereby waives the right to
dispute the Administrative Agent's and the Swingline Bank's record of the terms
of such telephonic notice of such Borrowing of Loans.
1.04 Disbursement of Funds. Except as otherwise specifically
provided in the immediately succeeding sentence, no later than 12:00 Noon (New
York time) on the date specified in each Notice of Borrowing (or (x) in the case
of Swingline Loans, not later than 2:00 P.M. (New York time) on the date
specified pursuant to Section 1.03(b)(i) or (y) in the case of Mandatory
Borrowings, not later than 12:00 Noon (New York time) on the date specified in
Section 1.01(e)), each Bank with a Commitment of the respective Tranche will
make available its pro rata portion of each such Borrowing requested to be made
on such date (or in the case of Swingline Loans, the Swingline Bank shall make
available the full amount thereof). All such amounts shall be made available in
Dollars and in immediately available funds at the Payment Office of the
Administrative Agent, and the Administrative Agent will make available to the
Borrower at the Payment Office the aggregate of the amounts so made available by
the Banks (for Loans other than Swingline Loans, prior to 1:00 P.M. (New York
time) on such day, to the extent of funds actually received by the
Administrative Agent prior to 12:00 Noon (New York time) on such day). Unless
the Administrative Agent shall have been notified by any Bank prior to the date
of Borrowing that such Bank does not intend to make available to the
Administrative Agent
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such Bank's portion of any Borrowing to be made on such date, the Administrative
Agent may assume that such Bank has made such amount available to the
Administrative Agent on such date of Borrowing and the Administrative Agent may,
in reliance upon such assumption, make available to the Borrower a corresponding
amount. If such corresponding amount is not in fact made available to the
Administrative Agent by such Bank, the Administrative Agent shall be entitled to
recover such corresponding amount on demand from such Bank. If such Bank does
not pay such corresponding amount forthwith upon the Administrative Agent's
demand therefor, the Administrative Agent shall promptly notify the Borrower and
the Borrower shall immediately pay such corresponding amount to the
Administrative Agent. The Administrative Agent shall also be entitled to recover
on demand from such Bank or the Borrower, as the case may be, interest on such
corresponding amount in respect of each day from the date such corresponding
amount was made available by the Administrative Agent to the Borrower until the
date such corresponding amount is recovered by the Administrative Agent, at a
rate per annum equal to (i) if recovered from such Bank, at the overnight
Federal Funds Rate and (ii) if recovered from the Borrower, the rate of interest
applicable to the respective Borrowing, as determined pursuant to Section 1.08.
Nothing in this Section 1.04 shall be deemed to relieve any Bank from its
obligation to make Loans hereunder or to prejudice any rights which the Borrower
may have against any Bank as a result of any failure by such Bank to make Loans
hereunder.
1.05 Notes. (a) The Borrower's obligation to pay the principal of,
and interest on, the Loans made by each Bank shall be evidenced (i) if Tranche A
Term Loans, by a promissory note duly executed and delivered by the Borrower
substantially in the form of Exhibit B-1 with blanks appropriately completed in
conformity herewith (each, a "Tranche A Term Note" and, collectively, the
"Tranche A Term Notes"), (ii) if Tranche B Term Loans, by a promissory note duly
executed and delivered by the Borrower substantially in the form of Exhibit B-2
with blanks appropriately completed in conformity herewith (each, a "Tranche B
Term Note" and, collectively, the "Tranche B Term Notes"), (iii) if Revolving
Loans, by a promissory note duly executed and delivered by the Borrower
substantially in the form of Exhibit B-3, with blanks appropriately completed in
conformity herewith (each, a "Revolving Note" and, collectively, the "Revolving
Notes") and (iv) if Swingline Loans, by a promissory note duly executed and
delivered by the Borrower substantially in the form of Exhibit B-4, with blanks
appropriately completed in conformity herewith (the "Swingline Note").
(b) The Tranche A Term Note issued to each Bank shall (i) be
executed by the Borrower, (ii) be payable to the order of such Bank and be dated
the Initial Borrowing Date (or, in the case of Tranche A Term Notes issued after
the Initial Borrowing Date, be dated the date of the issuance thereof), (iii) be
in a stated principal amount equal to the Tranche A Term Loan made by such Bank
on the Initial Borrowing Date (or, in the case of Tranche A Term Notes issued
after the Initial Borrowing Date, be in a stated principal
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amount equal to the outstanding principal amount of the Tranche A Term Loan of
such Bank on the date of the issuance thereof) and be payable in the principal
amount of Tranche A Term Loans evidenced thereby, (iv) mature on the Tranche A
Term Loan Maturity Date, (v) bear interest as provided in the appropriate clause
of Section 1.08 in respect of the Base Rate Loans and Eurodollar Loans, as the
case may be, evidenced thereby, (vi) be subject to voluntary prepayment and
mandatory repayment as provided in Sections 4.01 and 4.02 and (vii) be entitled
to the benefits of this Agreement and the other Credit Documents.
(c) The Tranche B Term Note issued to each Bank shall (i) be
executed by the Borrower, (ii) be payable to the order of such Bank and be dated
the Initial Borrowing Date (or, in the case of Tranche B Term Notes issued after
the Initial Borrowing Date, be dated the date of the issuance thereof), (iii) be
in a stated principal amount equal to the Tranche B Term Loan made by such Bank
on the Initial Borrowing Date (or, in the case of Tranche B Term Notes issued
after the Initial Borrowing Date, be in a stated principal amount equal to the
outstanding principal amount of the Tranche B Term Loan of such Bank on the date
of the issuance thereof) and be payable in the principal amount of Tranche B
Term Loans evidenced thereby, (iv) mature on the Tranche B Term Loan Maturity
Date, (v) bear interest as provided in the appropriate clause of Section 1.08 in
respect of the Base Rate Loans and Eurodollar Loans, as the case may be,
evidenced thereby, (vi) be subject to voluntary prepayment and mandatory
repayment as provided in Sections 4.01 and 4.02 and (vii) be entitled to the
benefits of this Agreement and the other Credit Documents.
(d) The Revolving Note issued to each Bank shall (i) be executed by
the Borrower, (ii) be payable to the order of such Bank and be dated the Initial
Borrowing Date (or, in the case of Revolving Notes issued after the Initial
Borrowing Date, be dated the date of the issuance thereof), (iii) be in a stated
principal amount equal to the Revolving Loan Commitment of such Bank and be
payable in the principal amount of the Revolving Loans evidenced thereby, (iv)
mature on the Revolving Loan Maturity Date, (v) bear interest as provided in the
appropriate clause of Section 1.08 in respect of the Base Rate Loans and
Eurodollar Loans, as the case may be, evidenced thereby, (vi) be subject to
voluntary prepayment and mandatory repayment as provided in Sections 4.01 and
4.02 and (vii) be entitled to the benefits of this Agreement and the other
Credit Documents.
(e) The Swingline Note issued to the Swingline Bank shall (i) be
executed by the Borrower, (ii) be payable to the order of the Swingline Bank and
be dated the Initial Borrowing Date (or, in the case of any Swingline Note
issued after the Initial Borrowing Date, be dated the date of the issuance
thereof), (iii) be in a stated principal amount equal to the Maximum Swingline
Amount and be payable in the principal amount of the outstanding Swingline Loans
evidenced thereby from time to time, (iv) mature on the Swingline Expiry Date,
(v) bear interest as provided in the appropriate clause of Section
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1.08 in respect of the Base Rate Loans evidenced thereby and (vi) be entitled to
the benefits of this Agreement and the other Credit Documents.
(f) Each Bank will note on its internal records the amount of each
Loan made by it and each payment in respect thereof and will prior to any
transfer of any of its Notes endorse on the reverse side thereof the outstanding
principal amount of Loans evidenced thereby. Failure to make any such notation
or any error in any such notation or endorsement shall not affect the Borrower's
obligations in respect of such Loans.
1.06 Conversions. The Borrower shall have the option to convert, on
any Business Day occurring on or after the earlier of (1) the 14th day after the
Initial Borrowing Date and (2) the Syndication Date, all or a portion equal to
at least (x) in the case of a conversion of Term Loans, $5,000,000 and (y) in
the case of a conversion of Revolving Loans, $5,000,000 (or $1,000,000 if in the
case of a conversion into Base Rate Loans), of the outstanding principal amount
of Loans made pursuant to one or more Borrowings (so long as of the same
Tranche) of one or more Types of Loans into a Borrowing (of the same Tranche) of
another Type of Loan, provided that (i) if for any reason whatsoever any
Euro-dollar Loans are converted into Base Rate Loans on a day which is not the
last day of an Interest Period applicable to the Loans being converted, the
Borrower shall pay all amounts owing in connection therewith as required by
Section 1.11, (ii) no partial conversion of Eurodollar Loans shall reduce the
outstanding principal amount of such Eurodollar Loans made pursuant to a single
Borrowing to less than $5,000,000, (iii) unless the Required Banks otherwise
specifically agree in writing, Base Rate Loans may only be converted into
Eurodollar Loans if no Default or Event of Default is in existence on the date
of the conversion, (iv) no conversion pursuant to this Section 1.06 shall result
in a greater number of Eurodollar Borrowings than is permitted under Section
1.02 and (v) Swingline Loans may not be converted pursuant to this Section 1.06.
Each such conversion shall be effected by the Borrower by giving the
Administrative Agent at its Notice Office prior to 12:00 Noon (New York time) at
least (x) in the case of a conversion to Eurodollar Loans, three Business Days'
prior notice and (y) in the case of a conversion to Base Rate Loans, one
Business Day's prior notice (each a "Notice of Conversion") specifying the Loans
to be so converted, the Borrowing(s) pursuant to which such Loans were made and,
if to be converted into Eurodollar Loans, the Interest Period to be initially
applicable thereto. The Administrative Agent shall give each Bank prompt notice
of any such proposed conversion affecting any of its Loans.
1.07 Pro Rata Borrowings. All Borrowings of Tranche A Term Loans,
Tranche B Term Loans and Revolving Loans under this Agreement shall be incurred
from the Banks pro rata on the basis of their Tranche A Term Loan Commitments,
Tranche B Term Loan Commitments or Revolving Loan Commitments, as the case may
be, provided that all Borrowings of Revolving Loans made pursuant to a Mandatory
Borrowing shall be
-8-
incurred from the Banks pro rata on the basis of their Adjusted Percentages. It
is understood that no Bank shall be responsible for any default by any other
Bank of its obligation to make Loans hereunder and that each Bank shall be
obligated to make the Loans provided to be made by it hereunder, regardless of
the failure of any other Bank to make its Loans hereunder.
1.08 Interest. (a) The Borrower agrees to pay interest in respect of
the unpaid principal amount of each Base Rate Loan from the date the proceeds
thereof are made available to the Borrower until the earlier of (i) the maturity
(whether by acceleration or otherwise) of such Base Rate Loan and (ii) the
conversion of such Base Rate Loan to a Eurodollar Loan pursuant to Section 1.06,
at a rate per annum which shall be equal to the sum of the Applicable Margin
plus the Base Rate in effect from time to time.
(b) The Borrower agrees to pay interest in respect of the unpaid
principal amount of each Eurodollar Loan from the date the proceeds thereof are
made available to the Borrower until the earlier of (i) the maturity (whether by
acceleration or otherwise) of such Eurodollar Loan and (ii) the conversion of
such Eurodollar Loan to a Base Rate Loan pursuant to Section 1.06 or 1.09, as
applicable, at a rate per annum which shall, during each Interest Period
applicable thereto, be equal to the sum of the Applicable Margin plus the
Eurodollar Rate for such Interest Period.
(c) Overdue principal and, to the extent permitted by law, overdue
interest in respect of each Loan and any other overdue amount payable hereunder
shall, in each case, bear interest at a rate per annum equal to the greater of
(x) 2% per annum in excess of the rate otherwise applicable to Base Rate Loans
of the respective Tranche of Loans from time to time and (y) the rate which is
2% in excess of the rate then borne by such Loans, in each case with such
interest to be payable on demand.
(d) Accrued (and theretofore unpaid) interest shall be payable (i)
in respect of each Base Rate Loan, quarterly in arrears on each Quarterly
Payment Date, (ii) in respect of each Eurodollar Loan, on the last day of each
Interest Period applicable thereto and, in the case of an Interest Period in
excess of three months, on each date occurring at three month intervals after
the first day of such Interest Period and (iii) in respect of each Loan, on any
repayment or prepayment (on the amount repaid or prepaid), at maturity (whether
by acceleration or otherwise) and, after such maturity, on demand.
(e) Upon each Interest Determination Date, the Administrative Agent
shall determine the Eurodollar Rate for each Interest Period applicable to
Eurodollar Loans and shall promptly notify the Borrower and the Banks thereof.
Each such determination shall, absent manifest error, be final and conclusive
and binding on all parties hereto.
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1.09 Interest Periods. At the time it gives any Notice of Borrowing
or Notice of Conversion in respect of the making of, or conversion into, any
Eurodollar Loan (in the case of the initial Interest Period applicable thereto)
or on the third Business Day prior to the expiration of an Interest Period
applicable to such Eurodollar Loan (in the case of any subsequent Interest
Period), the Borrower shall have the right to elect, by giving the
Administrative Agent notice thereof, the interest period (each an "Interest
Period") applicable to such Eurodollar Loan, which Interest Period shall, at the
option of the Borrower, be a one, two, three or six month period, provided that:
(i) all Eurodollar Loans comprising a Borrowing shall at all times
have the same Interest Period;
(ii) the initial Interest Period for any Eurodollar Loan shall
commence on the date of Borrowing of such Eurodollar Loan (including the
date of any conversion thereto from a Loan of a different Type) and each
Interest Period occurring thereafter in respect of such Eurodollar Loan
shall commence on the day on which the next preceding Interest Period
applicable thereto expires;
(iii) if any Interest Period relating to a Eurodollar Loan begins on
a day for which there is no numerically corresponding day in the calendar
month at the end of such Interest Period, such Interest Period shall end
on the last Business Day of such calendar month;
(iv) if any Interest Period would otherwise expire on a day which is
not a Business Day, such Interest Period shall expire on the next
succeeding Business Day; provided, however, that if any Interest Period
for a Eurodollar Loan would otherwise expire on a day which is not a
Business Day but is a day of the month after which no further Business Day
occurs in such month, such Interest Period shall expire on the next
preceding Business Day;
(v) unless the Required Banks otherwise specifically agree in
writing, no Interest Period may be selected at any time when a Default or
Event of Default is then in existence;
(vi) no Interest Period in respect of any Borrowing of any Tranche
of Loans shall be selected which extends beyond the respective Maturity
Date for such Tranche of Loans; and
(vii) no Interest Period in respect of any Borrowing of Tranche A
Term Loans or Tranche B Term Loans, as the case may be, shall be selected
which extends beyond any date upon which a mandatory repayment of such
Tranche of Term
-10-
Loans will be required to be made under Section 4.02(b) or (c), as the
case may be, if the aggregate principal amount of Tranche A Term Loans or
Tranche B Term Loans, as the case may be, which have Interest Periods
which will expire after such date will be in excess of the aggregate
principal amount of Tranche A Term Loans or Tranche B Term Loans, as the
case may be, then outstanding less the aggregate amount of such required
prepayment.
If upon the expiration of any Interest Period applicable to a
Borrowing of Eurodollar Loans, the Borrower has failed to elect, or is not
permitted to elect, a new Interest Period to be applicable to such Eurodollar
Loans as provided above, the Borrower shall be deemed to have elected to convert
such Eurodollar Loans into Base Rate Loans effective as of the expiration date
of such current Interest Period.
1.10 Increased Costs, Illegality, etc. (a) In the event that any
Bank shall have determined (which determination shall, absent manifest error, be
final and conclusive and binding upon all parties hereto but, with respect to
clause (i) below, may be made only by the Administrative Agent):
(i) on any Interest Determination Date that, by reason of any
changes arising after the date of this Agreement affecting the interbank
Eurodollar market, adequate and fair means do not exist for ascertaining
the applicable interest rate on the basis provided for in the definition
of Eurodollar Rate; or
(ii) at any time, that such Bank shall incur increased costs or
reductions in the amounts received or receivable hereunder with respect to
any Eurodollar Loan because of (x) any change since the date of this
Agreement in any applicable law or governmental rule, regulation, order,
guideline or request (whether or not having the force of law) or in the
interpretation or administration thereof and including the introduction of
any new law or governmental rule, regulation, order, guideline or request,
such as, for example, but not limited to: (A) a change in the basis of
taxation of payment to any Bank of the principal of or interest on such
Eurodollar Loan or any other amounts payable hereunder (except for changes
in the rate of tax on, or determined by reference to, the net income or
profits of such Bank, or any franchise tax based on the net income or
profits of such Bank, in either case pursuant to the laws of the United
States of America, the jurisdiction in which it is organized or in which
its principal office or applicable lending office is located or any
subdivision thereof or therein), but without duplication of any amounts
payable in respect of Taxes pursuant to Section 4.04(a), or (B) a change
in official reserve requirements, but, in all events, excluding reserves
required under Regulation D to the extent included in the computation of
the Eurodollar Rate
-11-
and/or (y) other circumstances since the date of this Agreement affecting
such Bank or the interbank Eurodollar market or the position of such Bank
in such market; or
(iii) at any time, that the making or continuance of any Eurodollar
Loan has been made (x) unlawful by any law or governmental rule,
regulation or order, and/or (y) impossible by compliance by any Bank in
good faith with any governmental request (whether or not having force of
law) or (z) impracticable as a result of a contingency occurring after the
date of this Agreement which materially and adversely affects the
interbank Eurodollar market;
then, and in any such event, such Bank (or the Administrative Agent, in the case
of clause (i) above) shall promptly give notice (by telephone confirmed in
writing) to the Borrower and, except in the case of clause (i) above, to the
Administrative Agent of such determination (which notice the Administrative
Agent shall promptly transmit to each of the other Banks). Thereafter (x) in the
case of clause (i) above, Eurodollar Loans shall no longer be available until
such time as the Administrative Agent notifies the Borrower and the Banks that
the circumstances giving rise to such notice by the Administrative Agent no
longer exist, and any Notice of Borrowing or Notice of Conversion given by the
Borrower with respect to Eurodollar Loans which have not yet been incurred
(including by way of conversion) shall be deemed rescinded by the Borrower, (y)
in the case of clause (ii) above, the Borrower shall, subject to the provisions
of Section 13.15 (to the extent applicable) pay to such Bank, upon written
demand therefor, such additional amounts (in the form of an increased rate of,
or a different method of calculating, interest or otherwise as such Bank in its
reasonable discretion shall determine) as shall be required to compensate such
Bank for such increased costs or reductions in amounts received or receivable
hereunder (a written notice as to the additional amounts owed to such Bank,
showing in reasonable detail the basis for and the calculation thereof,
submitted to the Borrower by such Bank in good faith shall, absent manifest
error, be final and conclusive and binding on all the parties hereto) and (z) in
the case of clause (iii) above, the Borrower shall take one of the actions
specified in Section 1.10(b) as promptly as possible and, in any event, within
the time period required by law. Each of the Administrative Agent and each Bank
agrees that if it gives notice to the Borrower of any of the events described in
clause (i) or (iii) above, it shall promptly notify the Borrower and, in the
case of any such Bank, the Administrative Agent, if such event ceases to exist.
If any such event described in clause (iii) above ceases to exist as to a Bank,
the obligations of such Bank to make Eurodollar Loans and to convert Base Rate
Loans into Eurodollar Loans on the terms and conditions contained herein shall
be reinstated.
(b) At any time that any Eurodollar Loan is affected by the
circumstances described in Section 1.10(a)(ii) or (iii), the Borrower may (and
in the case of a Eurodollar Loan affected by the circumstances described in
Section 1.10(a)(iii) shall) either (x) if the
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affected Eurodollar Loan is then being made initially or pursuant to a
conversion, cancel the respective Borrowing by giving the Administrative Agent
telephonic notice (confirmed in writing) on the same date that the Borrower was
notified by the affected Bank or the Administrative Agent pursuant to Section
1.10(a)(ii) or (iii) or (y) if the affected Eurodollar Loan is then outstanding,
upon at least one Business Day's written notice to the Administrative Agent,
require the affected Bank to convert such Eurodollar Loan into a Base Rate Loan,
provided that, if more than one Bank is affected at any time, then all affected
Banks must be treated the same pursuant to this Section 1.10(b).
(c) If at any time after the date of this Agreement any Bank
determines that the introduction of or any change in any applicable law or
governmental rule, regulation, order, guideline, directive or request (whether
or not having the force of law) concerning capital adequacy, or any change in
interpretation or administration thereof by any governmental authority, central
bank or comparable agency, in each case introduced or changed after the date
hereof, will have the effect of increasing the amount of capital required or
expected to be maintained by such Bank or any corporation controlling such Bank
based on the existence of such Bank's Commitments hereunder or its obligations
hereunder, then the Borrower shall, subject to the provisions of Section 13.15
(to the extent applicable), pay to such Bank, upon its written demand therefor,
such additional amounts as shall be required to compensate such Bank or such
other corporation for the increased cost to such Bank or such other corporation
or the reduction in the rate of return to such Bank or such other corporation as
a result of such increase of capital. In determining such additional amounts,
each Bank will act reasonably and in good faith and will use averaging and
attribution methods which are reasonable, provided that such Bank's
determination of compensation owing under this Section 1.10(c) shall, absent
manifest error, be final and conclusive and binding on all the parties hereto.
Each Bank, upon determining that any additional amounts will be payable pursuant
to this Section 1.10(c), will give prompt written notice thereof to the
Borrower, which notice shall show in reasonable detail the basis for and
calculation of such additional amounts.
1.11 Compensation. The Borrower shall, subject to the provisions of
Section 13.15 (to the extent applicable), compensate each Bank, upon its written
request (which request shall set forth in reasonable detail the basis for
requesting and the calculation of such compensation), for all reasonable losses,
expenses and liabilities (including, without limitation, any loss, expense or
liability incurred by reason of the liquidation or reemployment of deposits or
other funds required by such Bank to fund its Eurodollar Loans but excluding any
loss of anticipated profit) which such Bank may sustain: (i) if for any reason
(other than a default by such Bank or the Administrative Agent) a Borrowing of,
or conversion from or into, Eurodollar Loans does not occur on a date specified
therefor in a Notice of Borrowing or Notice of Conversion (whether or not
withdrawn by the Borrower or deemed withdrawn pursuant to Section 1.10(a)); (ii)
if any repayment
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(including any repayment made pursuant to Section 4.02 or a result of an
acceleration of the Loans pursuant to Section 10) or conversion of any of its
Eurodollar Loans occurs on a date which is not the last day of an Interest
Period with respect thereto; (iii) if any prepayment of any of its Eurodollar
Loans is not made on any date specified in a notice of prepayment given by the
Borrower; or (iv) as a consequence of (x) any other default by the Borrower to
repay its Loans when required by the terms of this Agreement or any Note held by
such Bank or (y) any election made pursuant to Section 1.10(b).
1.12 Change of Lending Office. Each Bank agrees that on the
occurrence of any event giving rise to the operation of Section 1.10(a)(ii) or
(iii), Section 1.10(c), Section 2.05 or Section 4.04 with respect to such Bank,
it will, if requested by the Borrower, use reasonable efforts (subject to
overall policy considerations of such Bank) to designate another lending office
for any Loans or Letters of Credit affected by such event, provided that such
designation is made on such terms that such Bank and its lending office suffer
no economic, legal or regulatory disadvantage, with the object of avoiding the
consequence of the event giving rise to the operation of such Section. Nothing
in this Section 1.12 shall affect or postpone any of the obligations of the
Borrower or the right of any Bank provided in Sections 1.10, 2.05 and 4.04.
1.13 Replacement of Banks. (x) If any Bank becomes a Defaulting Bank
or otherwise defaults in its obligations to make Loans or fund Unpaid Drawings,
(y) upon the occurrence of any event giving rise to the operation of Section
1.10(a)(ii) or (iii), Section 1.10(c), Section 2.05 or Section 4.04 with respect
to any Bank which results in such Bank charging to the Borrower increased costs
in excess of those being generally charged by the other Banks, or (z) as
provided in Section 13.12(b) in the case of certain refusals by a Bank to
consent to certain proposed changes, waivers, discharges or terminations with
respect to this Agreement which have been approved by the Required Banks, the
Borrower shall have the right, if no Default or Event of Default will exist
immediately after giving effect to the respective replacement, to either replace
such Bank (the "Replaced Bank") with one or more other Eligible Transferee or
Transferees, none of whom shall constitute a Defaulting Bank at the time of such
replacement (collectively, the "Replacement Bank") reasonably acceptable to the
Administrative Agent or, at the option of the Borrower, to replace only (a) the
Revolving Loan Commitment (and outstandings pursuant thereto) of the Replaced
Bank with an identical Revolving Loan Commitment provided by the Replacement
Bank or (b) in the case of a replacement as provided in Section 13.12(b) where
the consent of the respective Bank is required with respect to less than all
Tranches of its Loans or Commitments, the Commitments and/or outstanding Term
Loans of such Bank in respect of each Tranche where the consent of such Bank
would otherwise be individually required, with identical Commitments and/or
Loans of the respective Tranche provided by the Replacement Bank, provided that
(i) at the time of any replacement pursuant to this Section 1.13, the
Replacement Bank shall enter into one or
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more Assignment and Assumption Agreements pursuant to Section 13.04(b) (and with
all fees payable pursuant to said Section 13.04(b) to be paid by the Replacement
Bank) pursuant to which the Replacement Bank shall acquire all of the
Commitments and outstanding Loans (or, in the case of the replacement of only
(a) the Revolving Loan Commitment, the Revolving Loan Commitment and outstanding
Revolving Loans or (b) the outstanding Term Loans of one or more Tranches, the
outstanding Term Loans of the respective Tranche or Tranches) of, and in each
case (except for the replacement of only the outstanding Term Loans of one or
more Tranches of the respective Bank) participations in Letters of Credit by,
the Replaced Bank and, in connection therewith, shall pay to (x) the Replaced
Bank in respect thereof an amount equal to the sum (without duplication) of (A)
an amount equal to the principal of, and all accrued interest on, all
outstanding Loans (or, in the case of the replacement of only (I) the Revolving
Loan Commitment, the outstanding Revolving Loans or (II) the Term Loans of one
or more Tranches, the outstanding Term Loans of such Tranche or Tranches) of the
Replaced Bank, (B) except in the case of the replacement of only the outstanding
Term Loans of one or more Tranches of a Replaced Bank, an amount equal to all
Unpaid Drawings that have been funded by (and not reimbursed to) such Replaced
Bank, together with all then unpaid interest with respect thereto at such time
and (C) an amount equal to all accrued, but theretofore unpaid, Fees owing to
the Replaced Bank (but only with respect to the relevant Tranche, in the case of
the replacement of less than all Tranches of Loans then held by the respective
Replaced Bank) pursuant to Section 3.01 and (y) except in the case of the
replacement of only the outstanding Term Loans of one or more Tranches of a
Replaced Bank, the respective Issuing Bank an amount equal to such Replaced
Bank's Adjusted Percentage (for this purpose, determined as if the adjustment
described in clause (y) of the immediately succeeding sentence had been made
with respect to such Replaced Bank) of any Unpaid Drawing (which at such time
remains an Unpaid Drawing) to the extent such amount was not theretofore funded
by such Replaced Bank, and (ii) all obligations of the Borrower owing to the
Replaced Bank (other than those (a) specifically described in clause (i) above
in respect of which the assignment purchase price has been, or is concurrently
being, paid or (b) relating to any Tranche of Loans and/or Commitments of the
respective Replaced Bank which will remain outstanding after giving effect to
the respective replacement) shall be paid in full to such Replaced Bank
concurrently with such replacement. Upon the execution of the respective
Assignment and Assumption Agreements, the payment of amounts referred to in
clauses (i) and (ii) above and, if so requested by the Replacement Bank,
delivery to the Replacement Bank of the appropriate Note or Notes executed by
the Borrower, (x) the Replacement Bank shall become a Bank hereunder and, unless
the respective Replaced Bank continues to have outstanding Term Loans or a
Revolving Loan Commitment hereunder, the Replaced Bank shall cease to constitute
a Bank hereunder, except with respect to indemnification provisions under this
Agreement (including, without limitation, Sections 1.10, 1.11, 2.05, 4.04, 13.01
and 13.06), which shall survive as to such Replaced Bank and (y) in the case of
a replacement of a Defaulting Bank with a Non-Defaulting Bank, the Adjusted
Percentages
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of the Banks shall be automatically adjusted at such time to give effect to such
replacement (and to give effect to the replacement of a Defaulting Bank with one
or more Non-Defaulting Banks).
SECTION 2. Letters of Credit.
2.01 Letters of Credit. (a) Subject to and upon the terms and
conditions herein set forth, the Borrower may request that any Issuing Bank
issue, at any time and from time to time on and after the Initial Borrowing Date
and prior to the Revolving Loan Maturity Date, (x) for the account of the
Borrower and for the benefit of any holder (or any trustee, agent or other
similar representative for any such holders) of L/C Supportable Indebtedness of
the Borrower or any of its Subsidiaries, an irrevocable sight standby letter of
credit, in a form customarily used by such Issuing Bank or in such other form as
has been approved by such Issuing Bank (each such standby letter of credit, a
"Standby Letter of Credit") in support of such L/C Supportable Indebtedness and
(y) for the account of the Borrower and for the benefit of sellers of goods or
materials to the Borrower or any of its Subsidiaries, an irrevocable sight
commercial letter of credit in a form customarily used by such Issuing Bank or
in such other form as has been approved by such Issuing Bank (each such
commercial letter of credit, a "Trade Letter of Credit", and each such Trade
Letter of Credit and each Standby Letter of Credit, a "Letter of Credit") in
support of commercial transactions of the Borrower and its Subsidiaries.
(b) Subject to the terms and conditions contained herein, the
Administrative Agent hereby agrees that it will (and at the Borrower's request
each other Issuing Bank may, at its option, agree that it will), at any time and
from time to time on or after the Initial Borrowing Date and prior to the
Revolving Loan Maturity Date, following its receipt of the respective Letter of
Credit Request, issue for the account of the Borrower one or more Letters of
Credit (x) in the case of Standby Letters of Credit, in support of such L/C
Supportable Indebtedness of the Borrower or any of its Subsidiaries as is
permitted to remain outstanding without giving rise to a Default or Event of
Default hereunder and (y) in the case of Trade Letters of Credit, in support of
sellers of goods or materials as referenced in Section 2.01(a), provided that
the respective Issuing Bank shall be under no obligation to issue any Letter of
Credit of the types described above if at the time of such issuance:
(i) any order, judgment or decree of any governmental authority or
arbitrator shall purport by its terms to enjoin or restrain such Issuing
Bank from issuing such Letter of Credit or any requirement of law
applicable to such Issuing Bank or any request or directive (whether or
not having the force of law) from any governmental authority with
jurisdiction over such Issuing Bank shall prohibit, or request that such
Issuing Bank refrain from, the issuance of letters of credit
-16-
generally or such Letter of Credit in particular or shall impose upon such
Issuing Bank with respect to such Letter of Credit any restriction or
reserve or capital requirement (for which such Issuing Bank is not
otherwise compensated) not in effect on the date hereof, or any
unreimbursed loss, cost or expense which was not applicable, in effect or
known to such Issuing Bank as of the date hereof and which such Issuing
Bank in good faith deems material to it; or
(ii) such Issuing Bank shall have received notice from any Bank prior
to the issuance of such Letter of Credit of the type described in the
second sentence of Section 2.02(b).
(c) Notwithstanding the foregoing, (i) no Letter of Credit shall be
issued the Stated Amount of which, when added to the Letter of Credit
Outstandings (exclusive of Unpaid Drawings which are repaid on the date of, and
prior to the issuance of, the respective Letter of Credit) at such time would
exceed either (x) $25,000,000 or (y) when added to the aggregate principal
amount of all Revolving Loans made by Non-Defaulting Banks and then outstanding
and Swingline Loans then outstanding, an amount equal to the Adjusted Total
Revolving Loan Commitment at such time, (ii) each Letter of Credit shall be
denominated in Dollars, (iii) each Letter of Credit shall by its terms terminate
(x) in the case of Standby Letters of Credit, on or before the earlier of (A)
the date which occurs 12 months after the date of the issuance thereof (although
any such Standby Letter of Credit may be automatically extendable for successive
periods of up to 12 months, but not beyond the tenth Business Day prior to the
Revolving Loan Maturity Date, on terms acceptable to the Issuing Bank thereof)
and (B) the tenth Business Day prior to the Revolving Loan Maturity Date, and
(y) in the case of Trade Letters of Credit, on or before the earlier of (A) the
date which occurs 180 days after the date of issuance thereof and (B) the date
which is 30 days prior to the Revolving Loan Maturity Date and (iv) the Stated
Amount of each Letter of Credit upon issuance shall be not less than $100,000 or
such lesser amount as is acceptable to the respective Issuing Bank.
2.02 Letter of Credit Requests. (a) Whenever the Borrower desires
that a Letter of Credit be issued for its account, the Borrower shall give the
Administrative Agent and the respective Issuing Bank at least five Business
Days' (or such shorter period as is acceptable to the respective Issuing Bank)
written notice thereof. Each notice shall be in the form of Exhibit C (each a
"Letter of Credit Request").
(b) The making of each Letter of Credit Request shall be deemed to
be a representation and warranty by the Borrower that such Letter of Credit may
be issued in accordance with, and will not violate the requirements of, Section
2.01(c). Unless the respective Issuing Bank has received notice from any Bank
before it issues a Letter of Credit that one or more of the conditions specified
in Section 5 or Section 6, as applicable,
-17-
are not then satisfied, or that the issuance of such Letter of Credit would
violate Section 2.01(c), then such Issuing Bank shall issue the requested Letter
of Credit for the account of the Borrower in accordance with such Issuing Bank's
usual and customary practices. Upon the issuance of or amendment to any Standby
Letter of Credit, such Issuing Bank shall promptly notify each Bank of such
issuance or amendment and such notice shall be accompanied by a copy of the
issued Standby Letter of Credit or amendment, as the case may be. For Trade
Letters of Credit on which the Issuing Bank is other than the Administrative
Agent, the Issuing Bank will send to the Administrative Agent by facsimile
transmission, promptly on the first Business Day of each week, the daily
aggregate Stated Amount of Trade Letters of Credit issued by such Issuing Bank
and outstanding during the preceding week. The Administrative Agent shall
deliver to each Bank, after each calendar month end and upon each payment of the
Letter of Credit Fee, a report setting forth for the relevant period the daily
aggregate Stated Amount of all outstanding Trade Letters of Credit during such
period.
2.03 Letter of Credit Participations. (a) Immediately upon the
issuance by any Issuing Bank of any Letter of Credit, such Issuing Bank shall be
deemed to have sold and transferred to each Bank with a Revolving Loan
Commitment, other than such Issuing Bank (each such Bank, in its capacity under
this Section 2.03, a "Participant"), and each such Participant shall be deemed
irrevocably and unconditionally to have purchased and received from such Issuing
Bank, without recourse or warranty, an undivided interest and participation, to
the extent of such Participant's Adjusted Percentage, in such Letter of Credit,
each drawing made thereunder and the obligations of the Borrower under this
Agreement with respect thereto, and any security therefor or guaranty pertaining
thereto. Upon any change in the Revolving Loan Commitments or Adjusted
Percentages of the Banks pursuant to Section 1.13 or 13.04 or as a result of a
Bank Default, it is hereby agreed that, with respect to all outstanding Letters
of Credit and Unpaid Drawings, there shall be an automatic adjustment to the
participations pursuant to this Section 2.03 to reflect the new Adjusted
Percentages of the assignor and assignee Bank or of all Banks with Revolving
Loan Commitments, as the case may be.
(b) In determining whether to pay under any Letter of Credit, such
Issuing Bank shall have no obligation relative to the other Banks other than to
confirm that any documents required to be delivered under such Letter of Credit
appear to have been delivered and that they appear to comply on their face with
the requirements of such Letter of Credit. Any action taken or omitted to be
taken by any Issuing Bank under or in connection with any Letter of Credit if
taken or omitted in the absence of gross negligence or willful misconduct, shall
not create for such Issuing Bank any resulting liability to the Borrower or any
Bank.
-18-
(c) In the event that any Issuing Bank makes any payment under any
Letter of Credit and the Borrower shall not have reimbursed such amount in full
to such Issuing Bank pursuant to Section 2.04(a), such Issuing Bank shall
promptly notify the Administrative Agent, which shall promptly notify each
Participant, of such failure, and each Participant shall promptly and
unconditionally pay to such Issuing Bank the amount of such Participant's
Adjusted Percentage of such unreimbursed payment in Dollars and in same day
funds. If the Administrative Agent so notifies, prior to 11:00 A.M. (New York
time) on any Business Day, any Participant required to fund a payment under a
Letter of Credit, such Participant shall make available to such Issuing Bank in
Dollars such Participant's Adjusted Percentage of the amount of such payment on
such Business Day in same day funds. If and to the extent such Participant shall
not have so made its Adjusted Percentage of the amount of such payment available
to such Issuing Bank, such Participant agrees to pay to such Issuing Bank,
forthwith on demand such amount, together with interest thereon, for each day
from such date until the date such amount is paid to such Issuing Bank at the
overnight Federal Funds Rate. The failure of any Participant to make available
to such Issuing Bank its Adjusted Percentage of any payment under any Letter of
Credit shall not relieve any other Participant of its obligation hereunder to
make available to such Issuing Bank its Adjusted Percentage of any Letter of
Credit on the date required, as specified above, but no Participant shall be
responsible for the failure of any other Participant to make available to such
Issuing Bank such other Participant's Adjusted Percentage of any such payment.
(d) Whenever any Issuing Bank receives a payment of a reimbursement
obligation as to which it has received any payments from the Participants
pursuant to clause (c) above, such Issuing Bank shall forward such payment to
the Administrative Agent, which in turn shall distribute to each Participant
which has paid its Adjusted Percentage thereof, in Dollars and in same day
funds, an amount equal to such Participant's share (based upon the proportionate
aggregate amount originally funded by such Participant to the aggregate amount
funded by all Participants) of the principal amount of such reimbursement
obligation and interest thereon accruing after the purchase of the respective
participations.
(e) Upon the request of any Participant, each Issuing Bank shall
furnish to such Participant copies of any Letter of Credit issued by it and such
other documentation as may reasonably be requested by such Participant.
(f) The obligations of the Participants to make payments to each
Issuing Bank with respect to Letters of Credit issued by it shall be irrevocable
and not subject to any qualification or exception whatsoever and shall be made
in accordance with the terms and conditions of this Agreement under all
circumstances, including, without limitation, any of the following
circumstances:
-19-
(i) any lack of validity or enforceability of this Agreement or any
of the other Credit Documents;
(ii) the existence of any claim, setoff, defense or other right
which the Borrower or any of its Subsidiaries may have at any time against
a beneficiary named in a Letter of Credit, any transferee of any Letter of
Credit (or any Person for whom any such transferee may be acting), the
Administrative Agent, any Issuing Bank, any Participant, or any other
Person, whether in connection with this Agreement, any Letter of Credit,
the transactions contemplated herein or any unrelated transactions
(including any underlying transaction between the Borrower and the
beneficiary named in any such Letter of Credit);
(iii) any draft, certificate or any other document presented under
any Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect;
(iv) the surrender or impairment of any security for the performance
or observance of any of the terms of any of the Credit Documents; or
(v) the occurrence of any Default or Event of Default.
2.04 Agreement to Repay Letter of Credit Drawings. (a) The Borrower
hereby agrees to reimburse the respective Issuing Bank, by making payment to the
Administrative Agent in immediately available funds at the Payment Office, for
any payment or disbursement made by it under any Letter of Credit (each such
amount, so paid until reimbursed, an "Unpaid Drawing"), no later than three
Business Days after the date of such payment or disbursement, with interest on
the amount so paid or disbursed by such Issuing Bank, to the extent not
reimbursed prior to 12:00 Noon (New York time) on the date of such payment or
disbursement, from and including the date paid or disbursed to but excluding the
date such Issuing Bank was reimbursed by the Borrower therefor at a rate per
annum which shall be the Base Rate in effect from time to time plus the
Applicable Margin for Revolving Loans maintained as Base Rate Loans, provided,
however, to the extent such amounts are not reimbursed prior to 12:00 Noon (New
York time) on the fifth Business Day following such payment or disbursement,
interest shall thereafter accrue on the amounts so paid or disbursed by such
Issuing Bank (and until reimbursed by the Borrower) at a rate per annum which
shall be the Base Rate in effect from time to time plus the Applicable Margin
for Revolving Loans maintained as Base Rate Loans plus 2%, in each such case,
with interest to be payable on demand. The respective Issuing Bank shall give
the Borrower prompt notice of each Drawing under any Letter of Credit, provided
that the
-20-
failure to give any such notice shall in no way affect, impair or diminish the
Borrower's obligations hereunder.
(b) The obligations of the Borrower under this Section 2.04 to
reimburse the respective Issuing Bank with respect to drawings on Letters of
Credit (each, a "Drawing") (including, in each case, interest thereon) shall be
absolute and unconditional under any and all circumstances and irrespective of
any setoff, counterclaim or defense to payment which the Borrower may have or
have had against any Bank (including in its capacity as issuer of the Letter of
Credit or as Participant), or any nonapplication or misapplication by the
beneficiary of the proceeds of such Drawing, the respective Issuing Bank's only
obligation to the Borrower being to confirm that any documents required to be
delivered under such Letter of Credit appear to have been delivered and that
they appear to comply on their face with the requirements of such Letter of
Credit. Any action taken or omitted to be taken by any Issuing Bank under or in
connection with any Letter of Credit if taken or omitted in the absence of gross
negligence or willful misconduct, shall not create for such Issuing Bank any
resulting liability to the Borrower.
2.05 Increased Costs. If at any time after the date of this
Agreement, the introduction of or any change in any applicable law, rule,
regulation, order, guideline or request or in the interpretation or
administration thereof by any governmental authority charged with the
interpretation or administration thereof, or compliance by any Issuing Bank or
any Participant with any request or directive by any such authority (whether or
not having the force of law), or any change in generally accepted accounting
principles, shall either (i) impose, modify or make applicable any reserve,
deposit, capital adequacy or similar requirement against letters of credit
issued by any Issuing Bank or participated in by any Participant, or (ii) impose
on any Issuing Bank or any Participant any other conditions relating, directly
or indirectly, to this Agreement or any Letter of Credit; and the result of any
of the foregoing is to increase the cost to any Issuing Bank or any Participant
of issuing, maintaining or participating in any Letter of Credit, or reduce the
amount of any sum received or receivable by any Issuing Bank or any Participant
hereunder or reduce the rate of return on its capital with respect to Letters of
Credit (except for changes in the rate of tax on, or determined by reference to,
the net income or profits of such Issuing Bank or such Participant, or any
franchise tax based on the net income or profits of such Bank or Participant, in
either case pursuant to the laws of the United States of America, the
jurisdiction in which it is organized or in which its principal office or
applicable lending office is located or any subdivision thereof or therein), but
without duplication of any amounts payable in respect of Taxes pursuant to
Section 4.04(a), then, upon demand to the Borrower by such Issuing Bank or any
Participant (a copy of which demand shall be sent by such Issuing Bank or such
Participant to the Administrative Agent) and subject to the provisions of
Section 13.15 (to the extent applicable), the Borrower shall pay to such Issuing
Bank or such Participant such additional amount or amounts as will compensate
-21-
such Bank for such increased cost or reduction in the amount receivable or
reduction on the rate of return on its capital. Any Issuing Bank or any
Participant, upon determining that any additional amounts will be payable
pursuant to this Section 2.05, will give prompt written notice thereof to the
Borrower, which notice shall include a certificate submitted to the Borrower by
such Issuing Bank or such Participant (a copy of which certificate shall be sent
by such Issuing Bank or such Participant to the Administrative Agent), setting
forth in reasonable detail the basis for and the calculation of such additional
amount or amounts necessary to compensate such Issuing Bank or such Participant.
The certificate required to be delivered pursuant to this Section 2.05 shall, if
delivered in good faith and absent manifest error, be final and conclusive and
binding on the Borrower.
SECTION 3. Commitment Commission; Fees; Reductions of Commitment.
3.01 Fees. (a) The Borrower agrees to pay the Administrative Agent
for distribution to each Non-Defaulting Bank with a Revolving Loan Commitment a
commitment commission (the "Commitment Commission") for the period from the
Effective Date to and including the Revolving Loan Maturity Date (or such
earlier date as the Total Revolving Loan Commitment shall have been terminated),
computed at a rate for each day equal to 1/2 of 1% per annum on the daily
average Unutilized Revolving Loan Commitment of such Non-Defaulting Bank.
Accrued Commitment Commission shall be due and payable quarterly in arrears on
each Quarterly Payment Date and on the Revolving Loan Maturity Date or such
earlier date upon which the Total Revolving Loan Commitment is terminated.
(b) The Borrower agrees to pay to the Administrative Agent for
distribution to each Non-Defaulting Bank with a Revolving Loan Commitment (based
on their respective Adjusted Percentages) a fee in respect of each Letter of
Credit issued hereunder (the "Letter of Credit Fee"), for the period from and
including the date of issuance of such Letter of Credit to and including the
termination of such Letter of Credit, computed at a rate per annum equal to the
Applicable Margin then in effect for Revolving Loans maintained as Eurodollar
Loans on the daily average Stated Amount of such Letter of Credit. Accrued
Letter of Credit Fees shall be due and payable quarterly in arrears on each
Quarterly Payment Date and upon the first day on or after the termination of the
Total Revolving Loan Commitment upon which no Letters of Credit remain
outstanding.
(c) The Borrower agrees to pay to the respective Issuing Bank, for
its own account, a facing fee in respect of each Letter of Credit issued for its
account hereunder (the "Facing Fee") for the period from and including the date
of issuance of such Letter of Credit to and including the termination of such
Letter of Credit, computed at a rate equal to 1/4 of 1% per annum of the daily
average Stated Amount of such Letter of Credit; provided that in no event shall
the annual Facing Fee with respect to any Letter of Credit be less than $500, it
being agreed that, on the date of issuance of any Letter of Credit and
-22-
on each anniversary thereof prior to the termination of such Letter of Credit,
$500 will be paid toward the next year's Facing Fees for such Letter of Credit,
which amount shall be credited in direct order to the Facing Fees which would
otherwise be payable with respect to such Letter of Credit in the succeeding
annual period. Accrued Facing Fees shall be due and payable quarterly in arrears
on each Quarterly Payment Date and on the date upon which the Total Revolving
Loan Commitment has been terminated and such Letter of Credit has been
terminated in accordance with its terms.
(d) The Borrower shall pay, upon each drawing under, issuance of, or
amendment to, any Letter of Credit, such amount as shall at the time of such
event be the administrative charge which the respective Issuing Bank is
generally imposing in connection with such occurrence with respect to letters of
credit.
(e) The Borrower shall pay to each of the Agents, for their own
account, such other fees as have been agreed to in writing by the Borrower and
the Agents.
3.02 Voluntary Termination of Unutilized Commitments. (a) Upon at
least one Business Day's prior notice to the Administrative Agent at its Notice
Office (which notice the Administrative Agent shall promptly transmit to each of
the Banks), the Borrower shall have the right, at any time or from time to time,
without premium or penalty, to terminate the Total Unutilized Revolving Loan
Commitment, in whole or in part, in integral multiples of $1,000,000 in the case
of partial reductions to the Total Revolving Loan Commitment, provided that (i)
each such reduction shall apply proportionately to permanently reduce the
Revolving Loan Commitment of each Bank with such a Commitment and (ii) the
reduction to the Total Unutilized Revolving Loan Commitment shall in no case be
in an amount which would cause the Revolving Loan Commitment of any Bank to be
reduced (as required by preceding clause (i)) by an amount which exceeds the
remainder of (x) the Unutilized Revolving Loan Commitment of such Bank as in
effect immediately before giving effect to such reduction minus (y) such Bank's
Adjusted Percentage of the aggregate principal amount of Swingline Loans then
outstanding.
(b) In the event of certain refusals by a Bank as provided in
Section 13.12(b) to consent to certain proposed changes, waivers, discharges or
terminations with respect to this Agreement which have been approved by the
Required Banks, the Borrower may, subject to the requirements of said Section
13.12(b) and upon five Business Days' written notice to the Administrative Agent
at its Notice Office (which notice the Administrative Agent shall promptly
transmit to each of the Banks), terminate all of the Revolving Loan Commitment
of such Bank so long as all Loans, together with accrued and unpaid interest,
fees and all other amounts, owing to such Bank (other than amounts owing in
respect of any Tranche of Term Loans maintained by such Bank, if such Term Loans
are not being repaid pursuant to Section 13.12(b)) are repaid concurrently with
the
-23-
effectiveness of such termination (at which time Schedule I shall be deemed
modified to reflect such changed amounts), and at such time, unless the
respective Bank continues to have outstanding Term Loans hereunder, such Bank
shall no longer constitute a "Bank" for purposes of this Agreement, except with
respect to indemnification provisions under this Agreement (including, without
limitation, Sections 1.10, 1.11, 2.05, 4.04, 13.01 and 13.06), which shall
survive as to such repaid Bank.
3.03 Mandatory Reduction of Commitments. (a) The Total Commitments
(and the Tranche A Term Loan Commitment, the Tranche B Term Loan Commitment and
the Revolving Loan Commitment of each Bank) shall terminate in its entirety on
April 2, 1997 unless the Initial Borrowing Date shall have occurred on or prior
to such date.
(b) In addition to any other mandatory commitment reductions
pursuant to this Section 3.03, the Total Tranche A Term Loan Commitment (and the
Tranche A Term Loan Commitment of each Bank) shall (i) terminate in its entirety
on the Initial Borrowing Date (after giving effect to the making of the Tranche
A Term Loans on such date) and (ii) prior to the termination of the Total
Tranche A Term Loan Commitment as provided in clause (i) above, be reduced from
time to time to the extent required by Section 4.02.
(c) In addition to any other mandatory commitment reductions
pursuant to this Section 3.03, the Total Tranche B Term Loan Commitment (and the
Tranche B Term Loan Commitment of each Bank) shall (i) terminate in its entirety
on the Initial Borrowing Date (after giving effect to the making of the Tranche
B Term Loans on such date) and (ii) prior to the termination of the Total
Tranche B Term Loan Commitment as provided in clause (i) above, be reduced from
time to time to the extent required by Section 4.02.
(d) In addition to any other mandatory commitment reductions
pursuant to this Section 3.03, the Total Revolving Loan Commitment (and the
Revolving Loan Commitment of each Bank) shall terminate in its entirety on the
Revolving Loan Maturity Date.
(e) In addition to any other mandatory commitment reductions
pursuant to this Section 3.03, on each date after the Initial Borrowing Date
upon which a mandatory prepayment of Term Loans pursuant to Section 4.02(d)
through (h), inclusive, is required (and exceeds in amount the aggregate
principal amount of Term Loans then outstanding) or would be required if Term
Loans were then outstanding, the Total Revolving Loan Commitment shall be
permanently reduced by the amount, if any, by which the amount required to be
applied pursuant to said Section (determined as if an unlimited amount of Term
Loans were actually outstanding) exceeds the aggregate principal amount of Term
Loans then outstanding.
-24-
(f) Each reduction to the Total Tranche A Term Loan Commitment, the
Total Tranche B Term Loan Commitment and the Total Revolving Loan Commitment
pursuant to this Section 3.03 (or pursuant to Section 4.02) shall be applied
proportionately to reduce the Tranche A Term Loan Commitment, the Tranche B Term
Loan Commitment or the Revolving Loan Commitment, as the case may be, of each
Bank with such a Commitment.
SECTION 4. Prepayments; Payments; Taxes.
4.01 Voluntary Prepayments. The Borrower shall have the right to
prepay the Loans, without premium or penalty, in whole or in part at any time
and from time to time on the following terms and conditions: (i) the Borrower
shall give the Administrative Agent prior to 1:00 P.M. (New York time) at its
Notice Office (x) at least one Business Day's prior written notice (or
telephonic notice promptly confirmed in writing) of its intent to prepay Base
Rate Loans (or same day notice in the case of Swingline Loans provided such
notice is given prior to 12:00 Noon (New York time)) and (y) at least three
Business Days' prior written notice (or telephonic notice promptly confirmed in
writing) of its intent to prepay Eurodollar Loans, whether Tranche A Term Loans,
Tranche B Term Loans, Revolving Loans or Swingline Loans shall be prepaid, the
amount of such prepayment and the Types of Loans to be prepaid and, in the case
of Eurodollar Loans, the specific Borrowing or Borrowings pursuant to which
made, which notice the Administrative Agent shall promptly transmit to each of
the Banks; (ii) each prepayment shall be in an aggregate principal amount of at
least $1,000,000 (or $250,000 in the case of Swingline Loans) or such lesser
amount of a Borrowing which is outstanding, provided that if any partial
prepayment of Eurodollar Loans made pursuant to any Borrowing shall reduce the
outstanding Eurodollar Loans made pursuant to such Borrowing to an amount less
than $5,000,000, then such Borrowing may not be continued as a Borrowing of
Eurodollar Loans and any election of an Interest Period with respect thereto
given by the Borrower shall have no force or effect; (iii) at the time of any
prepayment of Eurodollar Loans pursuant to this Section 4.01 on any date other
than the last day of the Interest Period applicable thereto, the Borrower shall
pay the amounts required pursuant to Section 1.11; (iv) in the event of certain
refusals by a Bank as provided in Section 13.12(b) to consent to certain
proposed changes, waivers, discharges or terminations with respect to this
Agreement which have been approved by the Required Banks, the Borrower may, upon
5 Business Days' written notice to the Administrative Agent at its Notice Office
(which notice the Administrative Agent shall promptly transmit to each of the
Banks) repay all Loans, together with accrued and unpaid interest, Fees, and
other amounts owing to such Bank (or owing to such Bank with respect to each
Tranche which gave rise to the need to obtain such Bank's individual consent) in
accordance with said Section 13.12(b) so long as (A) in the case of the
repayment of Revolving Loans of any Bank pursuant to this clause (iv) the
Revolving Loan Commitment of such Bank is terminated concurrently with such
repayment (at which time
-25-
Schedule I shall be deemed modified to reflect the changed Revolving Loan
Commitments) and (B) the consents required by Section 13.12(b) in connection
with the repayment pursuant to this clause (iv) have been obtained; (v) each
voluntary prepayment of Term Loans pursuant to this Section 4.01 (except
pursuant to preceding clause (iv)) shall be applied to the Tranche A Term Loans
and the Tranche B Term Loans on a pro rata basis (based upon the then
outstanding principal amount of Tranche A Term Loans and Tranche B Term Loans);
and (vi) except as expressly provided in preceding clause (iv), each prepayment
in respect of any Loans made pursuant to a Borrowing shall be applied pro rata
among the Loans comprising such Borrowing; provided that at the Borrower's
election in connection with any prepayment of Revolving Loans pursuant to this
Section 4.01, such prepayment shall not be applied to any Revolving Loan of a
Defaulting Bank. Each prepayment of principal of any Tranche of Term Loans
pursuant to this Section 4.01 shall be applied to reduce the then remaining
Scheduled Repayments of the respective Tranche of Term Loans pro rata based upon
the then remaining principal amounts of the Scheduled Repayments of the
respective Tranche after giving effect to all prior reductions thereto.
4.02 Mandatory Repayments and Commitment Reductions. (a)(i) On any
day on which the sum of the aggregate outstanding principal amount of the
Revolving Loans made by Non-Defaulting Banks, Swingline Loans and the Letter of
Credit Outstandings exceeds the Adjusted Total Revolving Loan Commitment as then
in effect, the Borrower shall prepay principal of Swingline Loans and, after the
Swingline Loans have been repaid in full, Revolving Loans of Non-Defaulting
Banks in an amount equal to such excess. If, after giving effect to the
prepayment of all outstanding Swingline Loans and Revolving Loans of
Non-Defaulting Banks, the aggregate amount of the Letter of Credit Outstandings
exceeds the Adjusted Total Revolving Loan Commitment as then in effect, the
Borrower shall pay to the Administrative Agent at the Payment Office on such
date an amount of cash or Cash Equivalents equal to the amount of such excess
(up to a maximum amount equal to the Letter of Credit Outstandings at such
time), such cash or Cash Equivalents to be held as security for all obligations
of the Borrower to Non-Defaulting Banks hereunder in a cash collateral account
to be established by the Administrative Agent.
(ii) On any day on which the aggregate outstanding principal amount
of the Revolving Loans made by any Defaulting Bank exceeds the Revolving Loan
Commitment of such Defaulting Bank, the Borrower shall prepay principal of
Revolving Loans of such Defaulting Bank in an amount equal to such excess.
(b) In addition to any other mandatory repayments or commitment
reductions pursuant to this Section 4.02, on each date set forth below, the
Borrower shall be required to repay that principal amount of Tranche A Term
Loans, to the extent then outstanding, as is set forth opposite such date (each
such repayment, as the same may be
-26-
reduced as provided in Sections 4.01 and 4.02(i), a "Tranche A Scheduled
Repayment," and each such date, a "Tranche A Scheduled Repayment Date"):
Tranche A
Scheduled Repayment Date Amount
------------------------ ------
The last Business Day of
May, 1997 $2,500,000
The last Business Day of
August, 1997 $2,500,000
The last Business Day of
November, 1997 $2,500,000
The last Business Day of
February, 1998 $2,500,000
The last Business Day of
May, 1998 $2,500,000
The last Business Day of
August, 1998 $2,500,000
The last Business Day of
November, 1998 $2,500,000
The last Business Day of
February, 1999 $2,500,000
The last Business Day of
May, 1999 $3,250,000
The last Business Day of
August, 1999 $3,250,000
The last Business Day of
November, 1999 $3,250,000
The last Business Day of
February, 2000 $3,250,000
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Tranche A
Scheduled Repayment Date Amount
------------------------ ------
The last Business Day of
May, 2000 $4,000,000
The last Business Day of
August, 2000 $4,000,000
The last Business Day of
November, 2000 $4,000,000
The last Business Day of
February, 2001 $4,000,000
The last Business Day of
May, 2001 $6,500,000
The last Business Day of
August, 2001 $6,500,000
The last Business Day of
November, 2001 $6,500,000
Tranche A Term Loan
Maturity Date $6,500,000
(c) In addition to any other mandatory repayments or commitment
reductions pursuant to this Section 4.02, on each date set forth below, the
Borrower shall be required to repay that principal amount of Tranche B Term
Loans, to the extent then outstanding, as is set forth opposite such date (each
such repayment, as the same may be reduced as provided in Sections 4.01 and
4.02(i), a "Tranche B Scheduled Repayment," and each such date, a "Tranche B
Scheduled Repayment Date"):
Tranche B
Scheduled Repayment Date Amount
------------------------ ------
The last Business Day of
May, 1997 $250,000
The last Business Day of
August, 1997 $250,000
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Tranche B
Scheduled Repayment Date Amount
------------------------ ------
The last Business Day of
November, 1997 $250,000
The last Business Day of
February, 1998 $250,000
The last Business Day of
May, 1998 $250,000
The last Business Day of
August, 1998 $250,000
The last Business Day of
November, 1998 $250,000
The last Business Day of
February, 1999 $250,000
The last Business Day of
May, 1999 $250,000
The last Business Day of
August, 1999 $250,000
The last Business Day of
November, 1999 $250,000
The last Business Day of
February, 2000 $250,000
The last Business Day of
May, 2000 $250,000
The last Business Day of
August, 2000 $250,000
The last Business Day of
November, 2000 $250,000
The last Business Day of
February, 2001 $250,000
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Tranche B
Scheduled Repayment Date Amount
------------------------ ------
The last Business Day of
May, 2001 $250,000
The last Business Day of
August, 2001 $250,000
The last Business Day of
November, 2001 $250,000
The last Business Day of
February, 2002 $250,000
The last Business Day of
May, 2002 $10,000,000
The last Business Day of
August, 2002 $10,000,000
The last Business Day of
November, 2002 $10,000,000
Tranche B Term Loan
Maturity Date $10,000,000
(d) In addition to any other mandatory repayments or commitment
reductions pursuant to this Section 4.02, on each date after the Effective Date
upon which Holdings or any of its Subsidiaries receives any proceeds from any
sale or issuance of its equity (other than (i) proceeds received on or prior to
the Initial Borrowing Date as a result of the Equity Contribution and (ii) cash
proceeds received from sales or issuances of equity to employees, officers or
directors of Holdings or any of its Subsidiaries so long as all such cash
proceeds are, substantially concurrently with the receipt of such cash proceeds,
used to repurchase outstanding shares of common stock (or options to purchase
common stock) of Holdings pursuant to clause (x) of the proviso to Section
9.03(ii) or, to the extent the cash proceeds are not so utilized, so long as the
aggregate amount of cash proceeds excluded pursuant to this clause (ii) does not
exceed $10,000,000) an amount equal to 100% of the cash proceeds of the
respective sale or issuance (net of underwriting discounts and commissions and
other direct costs associated therewith, including, without limitation, legal
fees and expenses) shall be applied as a mandatory repayment of principal of
outstanding Term Loans (or, if the Initial Borrowing Date has not yet occurred,
such amounts shall be applied as a mandatory reduction to the Total Term Loan
Commitment) in accordance with the requirements of Section 4.02(i) and (j),
provided that (i) in the case of an Initial
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Public Offering, only 50% of the net cash proceeds thereof, if any, in excess of
$50,000,000 shall be applied as a mandatory repayment as set forth under this
Section 4.02(d) and (ii) the proceeds of any issuance of options, warrants or
other equity as part of a unit in connection with any issuance of Indebtedness
shall be treated as cash proceeds from the issuance of Indebtedness and applied
as a mandatory repayment as set forth under Section 4.02(e).
(e) In addition to any other mandatory repayments or commitment
reductions pursuant to this Section 4.02, on each date after the Effective Date
upon which Holdings or any of its Subsidiaries receives any proceeds from any
incurrence by Holdings or any of its Subsidiaries of Indebtedness for borrowed
money (other than Indebtedness for borrowed money permitted to be incurred
pursuant to Section 9.04 as such Section is in effect on the Effective Date), an
amount equal to the cash proceeds (net of underwriting discounts and commissions
and other costs associated therewith including, without limitation, legal fees
and expenses) of the respective incurrence of Indebtedness shall be applied as a
mandatory repayment of principal of outstanding Term Loans (or, if the Initial
Borrowing Date has not yet occurred, such amounts shall be applied as a
mandatory reduction to the Total Term Loan Commitment) in accordance with the
requirements of Sections 4.02(i) and (j).
(f) In addition to any other mandatory repayments or commitment
reductions pursuant to this Section 4.02, on each date after the Effective Date
upon which Holdings or any of its Subsidiaries receives proceeds from any sale
of assets (including capital stock and securities held thereby, but excluding
(i) sales or transfers of inventory in the ordinary course of business, (ii)
sales or transfers of assets in accordance with Sections 9.02(v) and (vi) as
originally in effect, (iii) sales of assets between the Borrower and its
Wholly-Owned Subsidiaries and/or sales of assets between Wholly-Owned
Subsidiaries of the Borrower, in each case to the extent permitted by Section
9.02, (iv) the sale or other disposition of equipment in the ordinary course of
business to the extent that the Borrower has delivered a certificate to the
Administrative Agent on or prior to such date stating that it intends to
reinvest such Net Sale Proceeds in replacement equipment within 270 days after
the respective date of sale or disposition and (v) any other sale of assets so
long as, and to the extent that, the aggregate amount of Net Sale Proceeds from
all sales of assets excluded pursuant to this clause (v) during the respective
fiscal year of the Borrower in which the Net Sale Proceeds are received does not
exceed $5,000,000), an amount equal to 100% of the Net Sale Proceeds therefrom
shall be applied as a mandatory repayment of principal of outstanding Term Loans
(or, if the Initial Borrowing Date has not yet occurred, such amounts shall be
applied as a mandatory reduction to the Total Term Loan Commitment) in
accordance with the requirements of Sections 4.02(i) and (j). To the extent any
Net Sale Proceeds are not required to be applied pursuant to this Section
4.02(f) as a result of clause (iv) contained in the parenthetical appearing in
the first sentence of this
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Section 4.02(f), then on the 270th day after the date of the respective sale or
disposition, the Net Sale Proceeds of the respective sale or disposition shall
be applied as otherwise required by this Section 4.02(f) (determined without
regard to clause (iv) contained in the parenthetical appearing in this first
sentence of this Section 4.02(f)) to the extent not actually used as
contemplated by said clause (iv) by said 270th day.
(g) In addition to any other mandatory repayments pursuant to this
Section 4.02, on each Excess Cash Payment Date, an amount equal to 75% of the
Excess Cash Flow for the relevant Excess Cash Payment Period shall be applied as
a mandatory repayment of principal of outstanding Term Loans in accordance with
the requirements of Sections 4.02(i) and (j); provided, however, that after the
time (the "Excess Cash Flow Conversion Time") that the principal of Term Loans
have been repaid, and/or the Total Revolving Loan Commitment has been
permanently reduced, in the aggregate amount of $25,000,000 solely as a result
of this Section 4.02(g) (or pursuant to Section 3.03(e) as a result of this
Section 4.02(g)), an amount equal to 50% (rather than 75%) of such Excess Cash
Flow shall be applied pursuant to this clause (g).
(h) In addition to any other mandatory repayments or commitment
reductions pursuant to this Section 4.02, within 10 days following each date
after the Initial Borrowing Date on which Holdings or any of its Subsidiaries
receives any proceeds from any Recovery Event, an amount equal to 100% of the
proceeds of such Recovery Event (net of reasonable costs including without
limitation legal costs and expenses, and taxes incurred in connection with such
Recovery Event) shall be applied as a mandatory repayment of principal of
outstanding Term Loans (or, if the Initial Borrowing Date has not yet occurred,
such amounts shall be applied as a mandatory reduction to the Total Term Loan
Commitment) in accordance with the requirements of Sections 4.02(i) and (j),
provided that (x) so long as no Default or Event of Default then exists and such
proceeds do not exceed $2,500,000, such proceeds shall not be required to be so
applied on such date to the extent that the Borrower has delivered a certificate
to the Administrative Agent on or prior to such date stating that such proceeds
shall be used or shall be committed to be used to replace or restore any
properties or assets in respect of which such proceeds were paid within one year
following the date of such Recovery Event (which certificate shall set forth the
estimates of the proceeds to be so expended) and (y) so long as no Default or
Event of Default then exists and to the extent that (a) the amount of such
proceeds exceeds $2,500,000, (b) the amount of such proceeds, together with
other cash available to the Borrower and permitted to be spent by it on Capital
Expenditures during the relevant period pursuant to Section 9.07 (without regard
to Section 9.07(c) in the case of such other cash), equals 100% of the cost of
replacement or restoration of the properties or assets in respect of which such
proceeds were paid as determined by the Borrower and as supported by such
estimates or bids from contractors or subcontractors or such other supporting
information as the Administrative Agent may reasonably request and (c) the
Borrower has delivered to
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the Administrative Agent a certificate on or prior to the date the application
would otherwise be required pursuant to this Section 4.02(h) in the form
described in clause (x) above and also certifying (I) its determination as
required by preceding clause (b) and (II) that, for the period from the date of
the respective casualty, condemnation or other event giving rise to the Recovery
Event and continuing through the completion of the replacement or restoration of
respective properties or assets, the Borrower has (and will continue to
maintain) business interruption insurance at levels, and in scope of coverage,
which are at least as great as the amount for such insurance as is set forth in
Schedule VI, then the entire amount of the proceeds of such Recovery Event and
not just the portion in excess of $2,500,000 shall be deposited with the
Administrative Agent pursuant to a cash collateral arrangement reasonably
satisfactory to the Administrative Agent and the Borrower (or, in the case of a
Foreign Subsidiary, with any other lending institution reasonably satisfactory
to the Administrative Agent and the Borrower and located in the jurisdiction of
such Foreign Subsidiary, it being understood and agreed that the Secured
Creditors shall have no security interest in the funds so deposited by a Foreign
Subsidiary) whereby such proceeds shall be disbursed to the Borrower or its
respective Subsidiary from time to time as needed to pay actual costs incurred
by it or required to be advanced by it in connection with the replacement or
restoration of the respective properties or assets (pursuant to such reasonable
certification requirements as may be established by the Administrative Agent),
provided further that (except in the case of funds deposited by a Foreign
Subsidiary as described above) at any time while an Event of Default has
occurred and is continuing, the Required Banks may direct the Administrative
Agent (in which case the Administrative Agent shall, and is hereby authorized by
the Borrower to, follow said directions) to apply any or all proceeds then on
deposit in such collateral account to the repayment of Obligations hereunder in
the same manner as proceeds would be applied pursuant to the Security Agreement,
and provided further, that if all or any portion of such proceeds not required
to be applied to the repayment of Term Loans pursuant to the second preceding
proviso (whether pursuant to clause (x) or (y) thereof) are either (A) not so
used or committed to be so used within one year after the date of the respective
Recovery Event or (B) if committed to be used within one year after the date of
receipt of such proceeds of such Recovery Event and not so used within two years
after the date of the respective Recovery Event then, in either such case, such
remaining portion not used or committed to be used in the case of preceding
clause (A) and not used in the case of preceding clause (B) shall be applied on
the date which is the first anniversary of the date of the respective Recovery
Event in the case of clause (A) above or the date occurring two years after the
date of the respective Recovery Event in the case of clause (B) above as a
mandatory repayment of principal of outstanding Term Loans in accordance with
the requirements of Section 4.02(i) and (j).
(i) Each amount required to be applied to Term Loans (or to the
Total Term Loan Commitment) pursuant to Sections 4.02(d), (e), (f), (g) and (h)
shall be applied pro
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rata to each Tranche of Term Loans based upon the then remaining principal
amounts of the respective Tranches (with each Tranche of Term Loans to be
allocated that percentage of the amount to be applied as is equal to a fraction
(expressed as a percentage) the numerator of which is the then outstanding
principal amount of such Tranche of Term Loans (or, if the Initial Borrowing
Date has not yet occurred, the aggregate Term Loan Commitments of the Banks with
respect to such Tranche) and the denominator of which is equal to the then
outstanding principal amount of all Term Loans (or, if the Initial Borrowing
Date has not yet occurred, the then Total Term Loan Commitment)). Any amount
required to be applied to any Tranche of Term Loans pursuant to Sections
4.02(d), (e), (f), (g) and (h) shall be applied to repay the outstanding
principal amount of Term Loans of the respective Tranche then outstanding (or,
if the Initial Borrowing Date has not yet occurred, to reduce the Total Tranche
A Term Loan Commitment or Total Tranche B Term Loan Commitment, as the case may
be). The amount of each principal repayment of Term Loans (and the amount of
each reduction to the Term Loan Commitments) made as required by Sections
4.02(d), (e), (f), (g) and (h) shall be applied to reduce the then remaining
Scheduled Repayments of the respective Tranche pro rata based upon the then
remaining principal amounts of the Scheduled Repayments of the respective
Tranche after giving effect to all prior reductions thereto.
(j) With respect to each repayment of Loans required by this Section
4.02, the Borrower may designate the Types of Loans of the respective Tranche
which are to be repaid and, in the case of Eurodollar Loans, the specific
Borrowing or Borrowings of the respective Tranche pursuant to which made,
provided that: (i) repayments of Eurodollar Loans pursuant to this Section 4.02
may only be made on the last day of an Interest Period applicable thereto unless
all Eurodollar Loans of the respective Tranche with Interest Periods ending on
such date of required repayment and all Base Rate Loans of the respective
Tranche have been paid in full; (ii) if any repayment of Eurodollar Loans made
pursuant to a single Borrowing shall reduce the outstanding Eurodollar Loans
made pursuant to such Borrowing to an amount less than $5,000,000, such
Borrowing shall be converted at the end of the then current Interest Period into
a Borrowing of Base Rate Loans; and (iii) each repayment of any Loans comprising
a Borrowing shall be applied pro rata among such Loans. In the absence of a
designation by the Borrower as described in the preceding sentence, the
Administrative Agent shall, subject to the above, make such designation in its
sole discretion with a view, but no obligation, to minimize breakage costs owing
under Section 1.11.
(k) Notwithstanding anything to the contrary contained elsewhere in
this Agreement, (i) all then outstanding Swingline Loans shall be repaid in full
on the Swingline Expiry Date and (ii) all other then outstanding Loans shall be
repaid in full on the respective Maturity Date for such Loans.
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4.03 Method and Place of Payment. Except as otherwise specifically
provided herein, all payments under this Agreement or any Note shall be made to
the Administrative Agent for the account of the Bank or Banks entitled thereto
not later than 12:00 Noon (New York time) on the date when due and shall be made
in Dollars in immediately available funds at the Payment Office of the
Administrative Agent. Whenever any payment to be made hereunder or under any
Note shall be stated to be due on a day which is not a Business Day, the due
date thereof shall be extended to the next succeeding Business Day and, with
respect to payments of principal, interest shall be payable at the applicable
rate during such extension.
4.04 Net Payments; Taxes. (a) All payments made by any Credit Party
hereunder or under any Note will be made without setoff, counterclaim or other
defense. Except as provided in Section 4.04(b), all such payments will be made
free and clear of, and without deduction or withholding for, any present or
future taxes, levies, imposts, duties, fees, assessments or other charges of
whatever nature now or hereafter imposed by any jurisdiction or by any political
subdivision or taxing authority thereof or therein with respect to such payments
(but excluding, except as provided in the second succeeding sentence, any tax
imposed on or measured by the net income or net profits of a Bank pursuant to
the laws of the United States of America, the jurisdiction in which it is
organized or the jurisdiction in which the principal office or applicable
lending office of such Bank is located or any subdivision thereof or therein)
and all interest, penalties or similar liabilities with respect to such
non-excluded taxes, levies, imposts, duties, fees, assessments or other charges
(all such non-excluded taxes, levies, imposts, duties, fees, assessments or
other charges being referred to collectively as "Taxes"). If any Taxes are so
levied or imposed, the Borrower agrees to pay the full amount of such Taxes, and
such additional amounts as may be necessary so that every payment of all amounts
due under this Agreement or under any Note, after withholding or deduction for
or on account of any Taxes, will not be less than the amount provided for herein
or in such Note. If any amounts are payable in respect of Taxes pursuant to the
preceding sentence, the Borrower agrees to reimburse each Bank, upon the written
request of such Bank, for taxes imposed on or measured by the net income or net
profits of such Bank pursuant to the laws of the jurisdiction in which such Bank
is organized or in which the principal office or applicable lending office of
such Bank is located or under the laws of any political subdivision or taxing
authority of any such jurisdiction in which such Bank is organized or in which
the principal office or applicable lending office of such Bank is located and
for any withholding of taxes as such Bank shall determine are payable by, or
withheld from, such Bank, in respect of such amounts so paid to or on behalf of
such Bank pursuant to the preceding sentence and in respect of any amounts paid
to or on behalf of such Bank pursuant to this sentence. The Borrower will
furnish to the Administrative Agent within 45 days after the date the payment of
any Taxes is due pursuant to applicable law certified copies of tax receipts
evidencing such payment by the Borrower. The Borrower agrees to indemnify and
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hold harmless each Bank, and reimburse such Bank upon its written request, for
the amount of any Taxes so levied or imposed and paid by such Bank.
(b) Each Bank that is not a United States person (as such term is
defined in Section 7701(a)(30) of the Code) for U.S. Federal income tax purposes
agrees to deliver to the Borrower and the Administrative Agent on or prior to
the Effective Date, or in the case of a Bank that is an assignee or transferee
of an interest under this Agreement pursuant to Section 1.13 or 13.04 (unless
the respective Bank was already a Bank hereunder immediately prior to such
assignment or transfer), on the date of such assignment or transfer to such
Bank, (i) two accurate and complete original signed copies of Internal Revenue
Service Form 4224 or 1001 (or successor forms) certifying to such Bank's
entitlement to a complete exemption from United States withholding tax with
respect to payments to be made under this Agreement and under any Note, or (ii)
if the Bank is not a "bank" within the meaning of Section 881(c)(3)(A) of the
Code and cannot deliver either Internal Revenue Service Form 1001 or 4224
pursuant to clause (i) above, (x) a certificate substantially in the form of
Exhibit D (any such certificate, a "Section 4.04(b)(ii) Certificate") and (y)
two accurate and complete original signed copies of Internal Revenue Service
Form W-8 (or successor form) certifying to such Bank's entitlement to a complete
exemption from United States withholding tax with respect to payments of
interest to be made under this Agreement and under any Note. In addition, each
Bank agrees that from time to time after the Effective Date, when a lapse in
time or change in circumstances renders the previous certification obsolete or
inaccurate in any material respect, it will deliver to the Borrower and the
Administrative Agent two new accurate and complete original signed copies of
Internal Revenue Service Form 4224 or 1001, or Form W-8 and a Section
4.04(b)(ii) Certificate, as the case may be, and such other forms as may be
required in order to confirm or establish the entitlement of such Bank to a
continued exemption from or reduction in United States withholding tax with
respect to payments under this Agreement and any Note, or it shall immediately
notify the Borrower and the Agent of its inability to deliver any such Form or
Certificate, in which case such Bank shall not be required to deliver any such
Form or Certificate pursuant to this Section 4.04(b). Notwithstanding anything
to the contrary contained in Section 4.04(a), but subject to Section 13.04(b)
and the immediately succeeding sentence, (x) the Borrower shall be entitled, to
the extent it is required to do so by law, to deduct or withhold income or
similar taxes imposed by the United States (or any political subdivision or
taxing authority thereof or therein) from interest, Fees or other amounts
payable hereunder for the account of any Bank which is not a United States
person (as such term is defined in Section 7701(a)(30) of the Code) for U.S.
Federal income tax purposes to the extent that such Bank has not provided to the
Borrower U.S. Internal Revenue Service Forms that establish a complete exemption
from such deduction or withholding and (y) the Borrower shall not be obligated
pursuant to Section 4.04(a) hereof to gross-up payments to be made to a Bank in
respect of income or similar taxes imposed by the United States if (I) such Bank
has not provided
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to the Borrower the Internal Revenue Service Forms required to be provided to
the Borrower pursuant to this Section 4.04(b) or (II) in the case of a payment,
other than interest, to a Bank described in clause (ii) above, to the extent
that such Forms do not establish a complete exemption from withholding of such
taxes. Notwithstanding anything to the contrary contained in the preceding
sentence or elsewhere in this Section 4.04 and except as set forth in Section
13.04(b), the Borrower agrees to pay any additional amounts and to indemnify
each Bank in the manner set forth in Section 4.04(a) (without regard to the
identity of the jurisdiction requiring the deduction or withholding) in respect
of any Taxes deducted or withheld by it as described in the immediately
preceding sentence as a result of any changes after the Effective Date in any
applicable law, treaty, governmental rule, regulation, guideline or order, or in
the interpretation thereof, relating to the deducting or withholding of such
Taxes.
(c) If the Borrower pays any additional amount under this Section
4.04 to a Bank and such Bank determines in its sole discretion that it has
actually received or realized in connection therewith any refund or any
reduction of, or credit against, its Tax liabilities in or with respect to the
taxable year in which the additional amount is paid (a "Tax Benefit"), such Bank
shall pay to the Borrower an amount that the Bank shall, in its sole discretion,
determine is equal to the net benefit, after tax, which was obtained by the Bank
in such year as a consequence of such Tax Benefit; provided, however, that (i)
such Bank shall not be required to make any payment under this Section 4.04 (c)
if an Event of Default shall have occurred and be continuing; (ii) any Taxes
that are imposed on a Bank as a result of a disallowance or reduction (including
through the expiration of any tax credit carryover or carryback of such Bank
that otherwise would not have expired) of any Tax Benefit with respect to which
such Bank has made a payment to the Borrower pursuant to this Section 4.04 (c)
shall be treated as a Tax for which the Borrower is obligated to indemnify such
Bank pursuant to this Section 4.04 without any exclusions or defenses; and (iii)
nothing in this Section 4.04 (c) shall require the Bank to disclose any
confidential information to the Borrower (including, without limitation, its tax
returns).
SECTION 5. Conditions Precedent to Loans. The obligation of each Bank
to make Loans, and the obligation of each Issuing Bank to issue Letters of
Credit, on the Initial Borrowing Date, is subject at the time of the making of
such Loans or the issuance of such Letters of Credit to the satisfaction of the
following conditions:
5.01 Execution of Agreement; Notes. On or prior to the Initial
Borrowing Date (i) the Effective Date shall have occurred and (ii) there shall
have been delivered to the Administrative Agent for the account of each of the
Banks the appropriate Tranche A Term Note, Tranche B Term Note and/or Revolving
Note executed by the Borrower, and to the Swingline Bank the Swingline Note
executed by the Borrower, in each case in the amount, maturity and as otherwise
provided herein.
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5.02 Fees, etc. On the Initial Borrowing Date, the Borrower shall
have paid to the Agents and the Banks all costs, fees and expenses (including,
without limitation, legal fees and expenses) payable to the respective Agents
and the Banks to the extent then due.
5.03 Opinions of Counsel. On the Initial Borrowing Date, the
Administrative Agent shall have received (i) from Dechert Price & Rhoads,
special counsel to Holdings and its Subsidiaries, an opinion addressed to each
of the Agents and each of the Banks and dated the Initial Borrowing Date
covering the matters set forth in Exhibit E and (ii) from local counsel
satisfactory to the Agents, opinions each of which (x) shall be addressed to
each of the Agents and each of the Banks and dated the Initial Borrowing Date,
(y) shall be in form and substance satisfactory to the Agents and the Required
Banks and (z) shall cover the perfection of the security interests granted
pursuant to the Security Agreement and the Mortgages and such other matters
incident to the transactions contemplated herein as the Agents may reasonably
request.
5.04 Corporate Documents; Proceedings; etc. (a) On the Initial
Borrowing Date, the Administrative Agent shall have received a certificate,
dated the Initial Borrowing Date, signed by the Chairman of the Board, the
President, any Vice President or the Treasurer of each Credit Party, and
attested to by the Secretary or any Assistant Secretary of such Credit Party, in
the form of Exhibit F with appropriate insertions, together with copies of the
Certificate of Incorporation and By-Laws of such Credit Party and the
resolutions of such Credit Party referred to in such certificate, and the
foregoing shall be reasonably acceptable to the Agents.
(b) All corporate and legal proceedings and all material instruments
and agreements in connection with the transactions contemplated by this
Agreement and the other Documents shall be reasonably satisfactory in form and
substance to the Agents and the Required Banks, and the Administrative Agent
shall have received all information and copies of all documents and papers,
including records of corporate proceedings, governmental approvals, good
standing certificates and bring-down telegrams or facsimiles, if any, which any
Agent reasonably may have requested in connection therewith, such documents and
papers where appropriate to be certified by proper corporate or governmental
authorities.
5.05 Employee Benefit Plans; Shareholders' Agreements; Management
Agreements; Debt Agreements; Acquisition Documents; Tax Sharing Agreements. On
the Initial Borrowing Date, there shall have been made available for review by
the Agents and the Banks true and correct copies of the following documents:
(i) all Plans (and for each Plan that is required to file an annual
report on Internal Revenue Service Form 5500-series, a copy of the most
recent such report
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(including, to the extent required, the related financial and actuarial
statements and opinions and other supporting statements, certifications,
schedules and information), and for each Plan that is a "single-employer
plan," as defined in Section 4001(a)(15) of ERISA, if any, the most
recently prepared actuarial valuation therefor) and any other "employee
benefit plans," as defined in Section 3(3) of ERISA, and any other
material agreements, plans or arrangements, with or for the benefit of
current or former employees of Holdings or any of its Subsidiaries or any
ERISA Affiliate (provided that the foregoing shall apply in the case of
any multiemployer plan, if any, as defined in 4001(a)(3) of ERISA, only to
the extent that any document described therein is in the possession of
Holdings or any Subsidiary of Holdings or any ERISA Affiliate or
reasonably available thereto from the sponsor or trustee of any such plan)
(collectively, the "Employee Benefit Plans");
(ii) all agreements entered into by Holdings or any of its
Subsidiaries governing the terms and relative rights of its capital stock
and any agreements entered into by shareholders relating to any such
entity with respect to its capital stock (collectively, the "Shareholders'
Agreements");
(iii) all agreements with members of, or with respect to, the
management of Holdings or any of its Subsidiaries (collectively, the
"Management Agreements");
(iv) all agreements evidencing or relating to Indebtedness of
Holdings or any of its Subsidiaries which is to remain outstanding after
giving effect to the incurrence of Loans on the Initial Borrowing Date
(collectively, the "Debt Agreements"); and
(v) all tax sharing, tax allocation and other similar agreements
entered into by Holdings, the Borrower or any of their respective
Subsidiaries (collectively, the "Tax Sharing Agreements");
all of which Employee Benefit Plans, Shareholders' Agreements, Management
Agreements, Debt Agreements and Tax Sharing Agreements shall be in form
and substance reasonably satisfactory to the Agents and shall be in full
force and effect on the Initial Borrowing Date.
5.06 Consummation of Recapitalization Transaction. (a) On or prior
to the Initial Borrowing Date, there shall have been delivered to the Agents and
the Banks true and correct copies of the Recapitalization Documents with those
Recapitalization Documents delivered to the Agents on or before January 24, 1997
to be in the form so delivered with such changes thereto or waivers therefrom to
be satisfactory to the Agents and the Required Banks, and with all other
Recapitalization Documents to be in form and substance satisfactory to the
Agents and the Required Banks. All Recapitalization Documents shall
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have been duly executed and delivered by the parties thereto and shall be in
full force and effect. All conditions precedent to the consummation of the
Recapitalization Transaction as set forth in the Recapitalization Documents
shall have been satisfied, and not waived except with the consent (which will
not be unreasonably withheld) of each Agent and the Required Banks, to the
satisfaction of each Agent and the Required Banks. The Recapitalization
Transaction shall have been, or shall substantially contemporaneously (and in
any event on the Initial Borrowing Date) be, consummated in accordance with the
Recapitalization Documents and all applicable law (excluding immaterial
violations of law which could not reasonably be expected to have, in the
aggregate for all such violations, a material adverse effect on the consummation
of the Recapitalization Transaction or on the operations, financial condition or
prospects of the Business, taken as a whole).
(b) On or prior to the Initial Borrowing Date, NSC shall have
transferred the Purchased Assets and the Assumed Liabilities to the Borrower,
and the Borrower shall have accepted the Purchased Assets and assumed the
Assumed Liabilities, pursuant to the Asset Purchase Agreement in exchange for
the Purchase Price Note and 100 shares of Borrower Common Stock (collectively,
the "Asset Transfer").
(c) On or prior to the Initial Borrowing Date, NSC shall have
transferred all of the capital stock of the Borrower and approximately $12.8
million in cash to Holdings, in exchange for 11,667 shares of Holdings Series A
Preferred Stock, 2,340,000 shares of Holdings Common Stock and the Seller Note
in the principal amount of $77 million.
(d) On or prior to the Initial Borrowing Date, Holdings shall have
received (in addition to the equity contributions pursuant to preceding clause
(c)) as equity contributions (x) approximately $58.2 million of cash from
Sterling, in return for which Holdings shall have issued to Sterling 52,889
shares of Holdings Series A Preferred Stock and 10,608,000 shares of Holdings
Common Stock and (y) approximately $6.8 million of cash from the Management
Investors (although the aggregate amount of cash received from the equity
contributions pursuant to this clause (d) shall be required to equal at least
$64.9 million), in return for which Holdings shall have issued to such
Management Investors 5,444 shares of Holdings Series A Preferred Stock and
2,652,000 shares of Holdings Common Stock.
(e) On or prior to the Initial Borrowing Date, Holdings shall have
contributed (the "Holdings Contribution") all cash proceeds received by it
pursuant to the transactions described in clauses (c) and (d) above to the
common equity capital of the Borrower. On or prior to the Initial Borrowing
Date, the Borrower shall have used all such cash proceeds to make payments owing
in connection with the Recapitalization Transaction before utilizing any
proceeds of Loans pursuant to this Agreement for such purpose.
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5.07 Senior Subordinated Notes. (a) On or prior to the Initial
Borrowing Date, the Borrower shall have received aggregate gross cash proceeds
of $300,000,000 from the issuance of Senior Subordinated Notes. All terms and
conditions of the Senior Subordinated Notes and the documentation with respect
thereto (including, without limitation, the maturity thereof, the interest rate
applicable thereto, and the required repayments with respect thereto, the
covenants, events of default and subordination provisions with respect thereto,
and the interest rate payable with respect thereto) shall be consistent with the
term sheet for the Senior Subordinated Notes (the "Senior Subordinated Notes
Term Sheet") which was delivered to the Agents on or before January 24, 1997,
and shall otherwise be in form and substance, and pursuant to documentation in
form and substance, reasonably satisfactory to each Agent and the Required
Banks. To the extent that any of the terms and conditions of the Senior
Subordinated Notes are worse, from the perspective of the Borrower or the Banks,
than those described in the Senior Subordinated Notes Term Sheet, such terms and
conditions shall be required to be satisfactory to each Agent. On or prior to
the Initial Borrowing Date, each Bank shall have received copies of all
agreements entered into, or proposed to be entered into, in respect of all of
the foregoing, certified on behalf of the Borrower as true and complete by an
authorized officer of the Borrower, and each of the foregoing shall be in the
form delivered to the Agents prior to January 24, 1997, with such changes
thereto as are reasonably acceptable to the Agents.
(b) On or prior to the Initial Borrowing Date, the Borrower shall
have used all cash proceeds (net of any underwriting commissions, fees or other
expenses) described in preceding clause (a) to make payments owing in connection
with the Recapitalization Transaction before utilizing any proceeds of Loans
pursuant to this Agreement for such purpose. The cash proceeds received on or
prior to the Initial Borrowing Date from the Senior Subordinated Notes, when
added to the cash proceeds of the Equity Contribution plus the aggregate
principal amount of Tranche A Term Loans, Tranche B Term Loans and Revolving
Loans incurred on the Initial Borrowing Date, shall be sufficient to effect the
Recapitalization Transaction and to pay all fees and expenses in connection
therewith.
5.08 Repayment of Purchase Price Note. (a) On or prior to the
Initial Borrowing Date, the Borrower shall have repaid the Purchase Price Note
in full in cash.
5.09 Indebtedness. Each element of the Transaction shall have been
consummated to the reasonable satisfaction of the Agents. After giving effect to
the consummation of the Transaction, Holdings, the Borrower and their respective
Subsidiaries shall have no outstanding Indebtedness except (i) the Senior
Subordinated Notes, (ii) the Seller Note, (iii) the Loans and (iv) such other
indebtedness, if any, as shall be permitted to remain outstanding by the Agents
and the Required Banks and which is listed on Schedule V hereto.
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5.10 Subsidiaries Guaranty. To the extent any Subsidiary Guarantors
exist on the Initial Borrowing Date, each such Subsidiary Guarantor shall have
duly authorized, executed and delivered a Subsidiaries Guaranty on such date.
5.11 Pledge Agreement. On the Initial Borrowing Date, each Credit
Party shall have duly authorized, executed and delivered a Pledge Agreement in
the form of Exhibit H (as modified, supplemented or amended from time to time,
the "Pledge Agreement") and shall have delivered to the Collateral Agent, as
pledgee, all the Pledged Securities, if any, referred to therein then owned by
such Credit Party, (x) endorsed in blank in the case of promissory notes
constituting Pledged Securities and (y) together with executed and undated stock
powers, in the case of capital stock constituting Pledged Securities.
5.12 Security Agreement. On the Initial Borrowing Date, each Credit
Party shall have duly authorized, executed and delivered a Security Agreement in
the form of Exhibit I (as modified, supplemented or amended from time to time,
the "Security Agreement") covering all of such Credit Party's present and future
Security Agreement Collateral, in each case together with:
(a) proper Financing Statements (Form UCC-1) fully executed for
filing under the UCC or other appropriate filing offices of each
jurisdiction as may be necessary or, in the reasonable opinion of the
Collateral Agent, desirable to perfect the security interests purported to
be created by the Security Agreement;
(b) certified copies of Requests for Information or Copies (Form
UCC-11), or equivalent reports, listing all effective financing statements
that name any Credit Party as debtor and that are filed in the
jurisdictions referred to in clause (a) above, together with copies of
such other financing statements (none of which shall cover the Collateral
except to the extent evidencing Permitted Liens or in respect of which the
Collateral Agent shall have received termination statements (Form UCC-3)
or such other termination statements as shall be required by local law)
fully executed for filing;
(c) evidence of execution for post-closing filing and recordation of
all other recordings and filings of, or with respect to, the Security
Agreement as may be necessary or, in the reasonable opinion of the
Collateral Agent, desirable to perfect the security interests intended to
be created by such Security Agreement; and
(d) evidence that all other actions necessary or, in the reasonable
opinion of the Collateral Agent, desirable to perfect and protect the
security interests purported to be created by the Security Agreement have
been taken.
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5.13 Mortgages; Title Insurance; Surveys; etc. On the Initial
Borrowing Date, the Collateral Agent shall have received:
(a) fully executed counterparts of mortgages or deeds to secure debt
in each case in form and substance reasonably satisfactory to the Agents
(each, a "Mortgage" and, collectively, the "Mortgages"), which Mortgages
shall cover such of the Real Property owned or leased by the Borrower or
any Domestic Subsidiary as shall be designated as such on Schedule III
(each, a "Mortgaged Property" and, collectively, the "Mortgaged
Properties"), together with evidence that counterparts of the Mortgages
have been delivered to the title insurance company insuring the Lien of
the Mortgages for recording in all places to the extent necessary or, in
the reasonable opinion of the Collateral Agent, desirable to effectively
create a valid and enforceable first priority mortgage lien, subject only
to Permitted Encumbrances, on each Mortgaged Property in favor of the
Collateral Agent (or such other trustee as may be required or desired
under local law) for the benefit of the Secured Creditors;
(b) mortgagee title insurance policies on each Mortgaged Property
issued by (x) with respect to the Borrower's Real Property located in West
Jordan, Utah, Lawyers Title Insurance Company and (y) with respect to the
Borrower's Real Property located in South Portland, Maine, First American
Title Insurance Company, or such other title insurers reasonably
satisfactory to the Collateral Agent (the "Mortgage Policies") in amounts
satisfactory to the Agent and the Required Banks assuring the Collateral
Agent that the Mortgages on such Mortgaged Properties are valid and
enforceable first priority mortgage liens on the respective Mortgaged
Properties, free and clear of all defects and encumbrances except
Permitted Encumbrances and such Mortgage Policies shall otherwise be in
form and substance reasonably satisfactory to the Agents and the Required
Banks and shall include, as appropriate, an endorsement for future
advances under this Agreement and the Notes and for any other matter that
the Collateral Agent in its reasonable discretion may reasonably request,
shall not include an exception for mechanics' liens, and shall provide for
affirmative insurance and such reinsurance as the Collateral Agent in its
discretion may reasonably request; and
(c) copies of appraisals prepared for tax allocation purposes for
each Mortgaged Property, which appraisals shall be prepared by Ernst &
Young, shall value the buildings on a depreciated cost basis and on a
continuing use basis and shall otherwise be in form and substance
reasonably satisfactory to each Agent and the Required Banks.
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5.14 Consent Letter. On the Initial Borrowing Date, the
Administrative Agent shall have received a letter from Corporation Service
Company, presently located at 500 Central Avenue, Albany, New York 12206,
substantially in the form of Exhibit J, indicating its consent to its
appointment by each Credit Party as its agent to receive service of process as
specified in Section 13.08.
5.15 Adverse Change, etc. (a) On the Initial Borrowing Date, there
shall not have occurred or been threatened since May 26, 1996 any material
adverse change (or a series of adverse changes) constituting a material adverse
change in the business, property, financial condition or prospects of the
Business taken as a whole.
(b) On or prior to the Initial Borrowing Date, all necessary
material governmental (domestic and foreign) and third party approvals and/or
consents in connection with the Transaction, the transactions contemplated by
the Credit Documents and otherwise referred to herein or therein shall have been
obtained and remain in effect, and all applicable waiting periods shall have
expired without any action being taken by any competent authority which
restrains, prevents or imposes materially adverse conditions upon the
consummation of the Transaction or the transactions contemplated by this
Agreement. Additionally, there shall not exist any judgment, order, injunction
or other restraint prohibiting or imposing materially adverse conditions upon
the Transaction or the transactions contemplated by this Agreement.
(c) There shall not have occurred and be continuing a "market
disruption event" since January 24, 1997. As used in this clause (c), "market
disruption event" shall mean (w) any suspension or limitation of trading in
securities generally on the New York Stock Exchange (not including any
suspension or limitation of trading in any particular security as a result of
computerized trading limits), or any setting of minimum prices for trading on
such exchange, (x) any banking moratorium declared by U.S. Federal or New York
authorities, (y) any outbreak or escalation of major hostilities in which the
United States is involved, any declaration of war by Congress or any other
substantial national or international calamity or emergency or (z) any other
material adverse change in bank or capital market conditions that has had a
material adverse effect on the syndication of bank credit facilities or the
consummation of high yield offerings. The Borrower shall have fully cooperated
in the syndication efforts, including, without limitation, by promptly providing
the Agents with all information deemed necessary by them to successfully
complete the syndication.
5.16 Litigation. On the Initial Borrowing Date, no litigation by any
entity (private or governmental) shall be pending or threatened with respect to
the Transaction or this Agreement or any documentation executed in connection
therewith, or which could reasonably be expected to have a materially adverse
effect on the Transaction or the busi-
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ness, property, assets, condition (financial or otherwise) or prospects of the
Borrower, or the Borrower and its Subsidiaries taken as a whole (after giving
effect to the Transaction).
5.17 Solvency Certificate; Environmental Analyses; Insurance. On or
before the Initial Borrowing Date, the Borrower shall cause to be delivered to
the Administrative Agent (i) a solvency certificate from the chief financial
officer of each of Holdings and the Borrower in the form of Exhibit K hereto,
which shall be addressed to each Agent and each of the Banks and dated the
Initial Borrowing Date, setting forth the conclusion that, after giving effect
to the Transaction and the incurrence of all the financings contemplated herein,
each of Holdings and its Subsidiaries taken as a whole and the Borrower, are not
insolvent and will not be rendered insolvent by the indebtedness incurred in
connection therewith, and will not be left with unreasonably small capital with
which to engage in their businesses and will not have incurred debts beyond
their ability to pay debts as they mature, (ii) environmental and hazardous
substance analyses with respect to the properties of Holdings and its
Subsidiaries, the results of which shall be in scope, and in form and substance
satisfactory to the Agents and the Required Banks (it being acknowledged and
agreed that the environmental and hazardous substance analyses furnished to the
Agents on or prior to January 24, 1997 are in form and substance satisfactory to
the Agents and the Required Banks) and (iii) certificates of insurance complying
with the requirements of Section 8.03 for the business and properties of
Holdings and its Subsidiaries, in scope, form and substance reasonably
satisfactory to the Agents and the Required Banks and naming the Collateral
Agent as an additional insured and/or loss payee, and stating that such
insurance shall not be cancelled or revised without 30 days prior written notice
by the insurer to the Collateral Agent.
5.18 Pro Forma Balance Sheet; Financial Statements; Projections. On
or prior to the Initial Borrowing Date, the Agents shall have received copies of
the financial statements (including the pro forma financial statements) and
Projections referred to in Sections 7.05(a) and (d).
SECTION 6. Conditions Precedent to All Credit Events. The obligation
of each Bank to make Loans (including Loans made on the Initial Borrowing Date
but excluding Mandatory Borrowings made thereafter, which shall be made as
provided in Section 1.01(e)), and the obligation of an Issuing Bank to issue any
Letter of Credit, is subject, at the time of each such Credit Event (except as
hereinafter indicated), to the satisfaction of the following conditions:
6.01 No Default; Representations and Warranties. At the time of each
such Credit Event and also after giving effect thereto (i) there shall exist no
Default or Event of Default and (ii) all representations and warranties
contained herein or in any other Credit Document shall be true and correct in
all material respects with the same effect as though
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such representations and warranties had been made on the date of the making of
such Credit Event (it being understood and agreed that any representation or
warranty which by its terms is made as of a specified date shall be required to
be true and correct in all material respects only as of such specified date).
6.02 Notice of Borrowing; Letter of Credit Request. (a) Prior to the
making of each Loan (excluding Swingline Loans), the Administrative Agent shall
have received the notice required by Section 1.03(a). Prior to the making of any
Swingline Loan, the Swingline Bank shall have received the notice required by
Section 1.03(b)(i).
(b) Prior to the issuance of each Letter of Credit, the
Administrative Agent and the respective Issuing Bank shall have received a
Letter of Credit Request meeting the requirements of Section 2.02.
The acceptance of the proceeds of each Credit Event shall constitute
a representation and warranty by the Borrower to each of the Agents and each of
the Banks that all the conditions specified in Section 5 and in this Section 6
and applicable to such Credit Event exist as of that time. All of the Notes,
certificates, legal opinions and other documents and papers referred to in
Section 5 and in this Section 6, unless otherwise specified, shall be delivered
to the Administrative Agent at the Notice Office for the account of each of the
Banks and, except for the Notes, in sufficient counterparts for each of the
Banks and shall be in form and substance reasonably satisfactory to the Agents.
SECTION 7. Representations, Warranties and Agreements. In order to
induce the Banks to enter into this Agreement and to make the Loans, and issue
(or participate in) the Letters of Credit as provided herein, each of Holdings
and the Borrower makes the following representations, warranties and agreements,
in each case after giving effect to the Transaction as consummated on the
Initial Borrowing Date, all of which shall survive the execution and delivery of
this Agreement and the Notes and the making of the Loans and issuance of the
Letters of Credit, with the occurrence of each Credit Event on or after the
Initial Borrowing Date being deemed to constitute a representation and warranty
that the matters specified in this Section 7 are true and correct in all
material respects on and as of the Initial Borrowing Date and on the date of
each such Credit Event (it being understood and agreed that any representation
or warranty which by its terms is made as of a specified date shall be required
to be true and correct in all material respects only as of such specified date).
7.01 Corporate Status. Holdings, the Borrower and each of their
respective Subsidiaries (i) is a duly organized and validly existing corporation
in good standing under the laws of the jurisdiction of its incorporation, (ii)
has the corporate power and authority to own its property and assets and to
transact the business in which it is engaged and
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presently proposes to engage and (iii) is duly qualified and is authorized to do
business and is in good standing in each jurisdiction where the conduct of its
business requires such qualifications except for failures to be so qualified
which, individually or in the aggregate, could not reasonably be expected to
have a Material Adverse Effect.
7.02 Corporate Power and Authority. Each Credit Party has the
corporate power and authority to execute, deliver and perform the terms and
provisions of each of the Documents to which it is party and has taken all
necessary corporate action to authorize the execution, delivery and performance
by it of each of such Documents. Each Credit Party has duly executed and
delivered each of the Documents to which it is party, and each of such Documents
constitutes the legal, valid and binding obligation of such Credit Party
enforceable in accordance with its terms, except to the extent that the
enforceability thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws generally affecting creditors'
rights and by equitable principles (regardless of whether enforcement is sought
in equity or at law).
7.03 No Violation. Neither the execution, delivery or performance by
any Credit Party of the Documents to which it is a party, nor compliance by it
with the terms and provisions thereof, (i) will contravene any provision of any
applicable law, statute, rule or regulation or any applicable order, writ,
injunction or decree of any court or governmental instrumentality, (ii) will
conflict with or result in any breach of any of the terms, covenants, conditions
or provisions of, or constitute a default under, or result in the creation or
imposition of (or the obligation to create or impose) any Lien (except pursuant
to the Security Documents) upon any of the properties or assets of Holdings, the
Borrower or any of their respective Subsidiaries pursuant to the terms of any
indenture, mortgage, deed of trust, credit agreement or loan agreement, or any
other material agreement, contract or instrument, to which Holdings, the
Borrower or any of their respective Subsidiaries is a party or by which it or
any of its property or assets is bound or to which it may be subject (excluding,
in the case of the Recapitalization Documents, from the foregoing clauses (i)
and (ii) such immaterial violations, which in no event shall violate the
provisions of this Agreement or otherwise be reasonably expected to have (x) a
material adverse effect on (I) the Transaction or (II) the rights or remedies of
the Agents or the Banks, or on the ability of any Credit Party to perform their
respective obligations to the Agents and the Banks or (y) a Material Adverse
Effect) or (iii) will violate any provision of the Certificate of Incorporation
or By-Laws of Holdings, the Borrower or any of their respective Subsidiaries.
7.04 Governmental Approvals. No order, consent, approval, license,
authorization or validation of, or filing, recording or registration with
(except as have been obtained or made or, in the case of any filings or
recordings in respect of the Security Documents executed on the Initial
Borrowing Date, will be made within 10 days thereof),
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or exemption by, any governmental or public body or authority, or any
subdivision thereof, is required to authorize, or is required in connection
with, (i) the execution, delivery and performance of (x) any Recapitalization
Document by any Credit Party or (y) any Credit Document or (ii) the legality,
validity, binding effect or enforceability of (x) any Recapitalization Document
with respect to any Credit Party or (y) any Credit Document.
7.05 Financial Statements; Financial Condition; Undisclosed
Liabilities; Projections; etc. (a) The audited combined balance sheets of the
Business as of May 28, 1995 and May 26, 1996, and the related combined
statements of operations for each of the years in the three year period ended
May 26, 1996 and the unaudited combined balance sheets of the Business as of
November 24, 1996, and the related combined statements of operations for the six
month period ended November 24, 1996, in each case furnished to the Banks prior
to the Effective Date pursuant to Section 5.18, present fairly the combined
assets, liabilities and business equity of the Business at the respective dates
of such balance sheets and its combined revenues less direct expenses before
taxes for each of the years in the three year period ended May 26, 1996 or the
six month period ended November 24, 1996, as the case may be, on the basis
described in Note 1 to the financial statements audited by KPMG Peat Marwick,
LLP, in conformity with generally accepted accounting principles. Furthermore,
all pro forma financial statements or information contained in the Offering
Circular have been prepared by management of the Borrower from the historical
financial statements referenced above, to reflect adjustments as if the
Transaction had occurred on the dates provided in the Offering Circular, based
on assumptions that management of the Borrower, on the Initial Borrowing Date,
believes are reasonable in the circumstances.
(b) (i) On and as of the Initial Borrowing Date, on a pro forma
basis after giving effect to the Transaction and all other transactions
contemplated by the Documents and to all Indebtedness (including the Loans)
being incurred or assumed, and Liens created by each Credit Party in connection
therewith, with respect to Holdings and the Borrower, individually, and each
such Person and its Subsidiaries taken as a whole, (x) the sum of the assets, at
a fair valuation, of each such Person, individually, and each such Person and
its Subsidiaries taken as a whole, will exceed its or their debts; (y) it has
not incurred and does not intend to incur, nor believes that it will incur,
debts beyond its ability to pay such debts as such debts mature; and (z) it will
have sufficient capital with which to conduct its business. For purposes of this
Section 7.05(b), "debt" means any liability on a claim and "claim" means (i)
right to payment, whether or not such a right is reduced to judgment,
liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed,
undisputed, legal, equitable, secured, or unsecured or (ii) right to an
equitable remedy for breach of performance if such breach gives rise to a
payment, whether or not such right to an equitable remedy is reduced to
judgment, fixed, contingent, matured, unmatured, disputed, undisputed, secured
or unsecured.
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(c) Except as fully disclosed in the financial statements delivered
pursuant to Section 7.05(a), there were as of the Initial Borrowing Date no
liabilities or obligations with respect to Holdings or any of its Subsidiaries
of any nature whatsoever (whether absolute, accrued, contingent or otherwise and
whether or not due) which, either individually or in the aggregate, would be
adversely material to the Business or Holdings and its Subsidiaries taken as a
whole or the Borrower. As of the Initial Borrowing Date, none of the Credit
Parties knows of any basis for the assertion against it of any liability or
obligation of any nature that is not fully disclosed in the financial statements
delivered pursuant to Section 7.05(a) which, either individually or in the
aggregate, could be materially adverse to Holdings and its Subsidiaries taken as
a whole or the Borrower.
(d) On and as of the Initial Borrowing Date, the Projections set
forth on Schedule X hereto which have been delivered to the Administrative Agent
and the Banks on or prior to the Initial Borrowing Date have been prepared on a
basis consistent with the financial statements referred to in Section 7.05(a),
and are based on good faith estimates and assumptions believed by management of
Holdings to be reasonable and attainable as of the date of such Projections, and
there are no statements or conclusions in any of the Projections which are based
upon or include information known to Holdings or any of its Subsidiaries to be
misleading or which fail to take into account material information regarding the
matters reported therein. On the Initial Borrowing Date, Holdings believes that
the Projections were reasonable and attainable.
(e) After giving effect to the Transaction (but for this purpose
assuming that the Transaction had occurred prior to May 26, 1996), since May 26,
1996 there has been (x) if this representation is being made (or deemed made) on
or prior to the Initial Borrowing Date, no material adverse change in the
operations, properties, financial condition or prospects of the Business,
Holdings and its Subsidiaries taken as a whole or the Borrower and (y) if this
representation is being made (or deemed made) at any time after the Initial
Borrowing Date, no Material Adverse Effect.
7.06 Litigation. There are no actions, suits or proceedings pending
or, to the best knowledge of Holdings and the Borrower, threatened (i) with
respect to any Credit Document or (ii) that could reasonably be expected to have
a Material Adverse Effect.
7.07 True and Complete Disclosure. All factual information (taken as
a whole) furnished by or on behalf of Holdings or the Borrower in writing to any
of the Agents or any Bank (including, without limitation, all information
contained in the Documents or in the Offering Circular) for purposes of or in
connection with this Agreement, the other Credit Documents or any transaction
contemplated herein or therein is, and all other such factual information (taken
as a whole) hereafter furnished by or on behalf of Holdings or the Borrower in
writing to any of the Agents or any Bank will be, true and
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accurate in all material respects on the date as of which such information is
dated or certified and not incomplete by omitting to state any fact necessary to
make such information (taken as a whole) not misleading in any material respect
at such time in light of the circumstances under which such information was
provided.
7.08 Use of Proceeds; Margin Regulations. (a) All proceeds of the
Term Loans shall be used by the Borrower (i) to effect the Recapitalization
Transaction and (ii) to pay fees and expenses related to the Recapitalization
Transaction.
(b) All proceeds of all Revolving Loans and all Swingline Loans
incurred after the Initial Borrowing Date shall be used for the Borrower's
general corporate and working capital purposes (excluding the purposes described
in preceding Section 7.08(a)).
(c) No part of the proceeds of any Loan will be used to purchase or
carry any Margin Stock or to extend credit for the purpose of purchasing or
carrying any Margin Stock. Neither the making of any Loan nor the use of the
proceeds thereof nor the occurrence of any other Credit Event will violate or be
inconsistent with the provisions of Regulation G, T, U or X of the Board of
Governors of the Federal Reserve System.
7.09 Tax Returns and Payments. Each of Holdings and each of its
Subsidiaries has filed all federal income tax returns and all other material tax
returns, domestic and foreign, required to be filed by it and has paid all
material taxes and assessments payable by it which have become due, except for
those contested in good faith and adequately disclosed and fully provided for on
the financial statements of Holdings and its Subsidiaries in accordance with
generally accepted accounting principles. Holdings and each of its Subsidiaries
have at all times paid, or have provided adequate reserves (in the good faith
judgment of the management of Holdings) for the payment of, all federal, state
and foreign income taxes applicable for all prior fiscal years and for the
current fiscal year to date. There is no action, suit, proceeding,
investigation, audit, or claim now pending or, to the knowledge of Holdings or
any of its Subsidiaries, threatened by any authority regarding any taxes
relating to Holdings or any of its Subsidiaries which could be reasonably
expected to have a Material Adverse Effect. As of the Initial Borrowing Date,
neither Holdings nor any of its Subsidiaries has entered into an agreement or
waiver or been requested to enter into an agreement or waiver extending any
statute of limitations relating to the payment or collection of taxes of
Holdings or any of its Subsidiaries, or is aware of any circumstances that would
cause the taxable years or other taxable periods of Holdings or any of its
Subsidiaries not to be subject to the normally applicable statute of
limitations.
7.10 Compliance with ERISA. (i) Schedule VII sets forth, as of the
Initial Borrowing Date, each Plan; each Plan (and each related trust, insurance
contract or fund)
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is in substantial compliance with its terms and with all applicable laws,
including without limitation ERISA and the Code; each Plan (and each related
trust, if any) which is intended to be qualified under Section 401(a) of the
Code has received a determination letter from the Internal Revenue Service to
the effect that it meets the requirements of Sections 401(a) and 501(a) of the
Code; no Reportable Event has occurred; no Plan which is a multiemployer plan
(as defined in Section 4001(a)(3) of ERISA) is insolvent or in reorganization;
no Plan has an Unfunded Current Liability; no Plan which is subject to Section
412 of the Code or Section 302 of ERISA has an accumulated funding deficiency,
within the meaning of such sections of the Code or ERISA, or has applied for or
received a waiver of an accumulated funding deficiency or an extension of any
amortization period, within the meaning of Section 412 of the Code or Section
303 or 304 of ERISA; to the best knowledge of Holdings or any Subsidiary of
Holdings, all contributions required to be made with respect to a Plan have been
or will be timely made; neither Holdings nor any Subsidiary of Holdings nor any
ERISA Affiliate has incurred any material liability (including any indirect,
contingent or secondary liability) to or on account of a Plan pursuant to
Section 409, 502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of
ERISA or Section 401(a)(29), 4971 or 4975 of the Code or expects to incur any
such liability under any of the foregoing sections with respect to any Plan; to
the best knowledge of Holdings or any Subsidiary of Holdings, no condition
exists which presents a material risk to Holdings or any Subsidiary of Holdings
or any ERISA Affiliate of incurring a liability to or on account of a Plan
pursuant to the foregoing provisions of ERISA and the Code; no proceedings have
been instituted to terminate or appoint a trustee to administer any Plan which
is subject to Title IV of ERISA; to the best knowledge of Holdings or any
Subsidiary of Holdings, no action, suit, proceeding, hearing, audit or
investigation with respect to the administration, operation or the investment of
assets of any Plan (other than routine claims for benefits) is pending, or, to
the best knowledge of Holdings or any Subsidiary of Holdings, expected or
threatened; using actuarial assumptions and computation methods consistent with
Part 1 of subtitle E of Title IV of ERISA, the aggregate liabilities of Holdings
and its Subsidiaries and its ERISA Affiliates to all Plans which are
multiemployer plans (as defined in Section 4001(a)(3) of ERISA) in the event of
a complete withdrawal therefrom, as of the close of the most recent fiscal year
of each such Plan ended prior to the date of the most recent Credit Event, would
not exceed $200,000; each group health plan (as defined in Section 607(1) of
ERISA or Section 4980B(g)(2) of the Code) which covers or has covered employees
or former employees of Holdings, any Subsidiary of Holdings, or any ERISA
Affiliate has at all times been operated in material compliance with the
provisions of Part 6 of subtitle B of Title I of ERISA and Section 4980B of the
Code; no lien imposed under the Code or ERISA on the assets of Holdings or any
Subsidiary of Holdings or any ERISA Affiliate exists or is likely to arise on
account of any Plan; and Holdings and its Subsidiaries may cease contributions
to or terminate any employee benefit plan maintained by any of them without
incurring any material liability.
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(ii) Each Foreign Pension Plan has been maintained in substantial
compliance with its terms and with the requirements of any and all applicable
laws, statutes, rules, regulations and orders and has been maintained, where
required, in good standing with applicable regulatory authorities. All
contributions required to be made with respect to a Foreign Pension Plan have
been or will be timely made. Neither Holdings nor any of its Subsidiaries has
incurred any obligation in connection with the termination of or withdrawal from
any Foreign Pension Plan. Except as otherwise disclosed in Note 4 to the
financial statements audited by KPMG Peat Marwick, LLP, as described in Section
7.05(a), the excess of the present value of the accrued benefit liabilities
(whether or not vested) under each Foreign Pension Plan, determined as of the
end of Holdings' most recently ended fiscal year on the basis of actuarial
assumptions, each of which is reasonable, over the current value of the assets
of each such Foreign Pension Plan allocable to such benefit liabilities does
not, in the aggregate, have a Material Adverse Effect.
7.11 The Security Documents. (a) The provisions of the Security
Agreement are effective to create in favor of the Collateral Agent for the
benefit of the Secured Creditors a legal, valid and enforceable security
interest in all right, title and interest of the Credit Parties in the Security
Agreement Collateral described therein, and the Security Agreement, upon the
filing of Form UCC-1 financing statements or the appropriate equivalent (which
filings, if this representation is being made more than 10 days after the
Initial Borrowing Date, have been made), create a fully perfected first lien on,
and security interest in, all right, title and interest in all of the Security
Agreement Collateral described therein, subject to no other Liens other than
Permitted Liens, to the extent a security interest in such collateral can be
perfected by the filing of a financing statement. The recordation of the
Assignment of Security Interest in U.S. Patents and Trademarks in the form
attached to the Security Agreement in the United States Patent and Trademark
Office together with filings on Form UCC-1 made pursuant to the Security
Agreement will be effective when recorded or filed (which recordings or filings,
if this representation is being made more than 10 days after the Initial
Borrowing Date, have been made), under applicable law, to perfect the security
interest granted to the Collateral Agent in the trademarks and patents covered
by the Security Agreement and the recordation of the Assignment of Security
Interest in U.S. Copyrights in the form attached to the Security Agreement with
the United States Copyright Office together with filings on Form UCC-1 made
pursuant to the Security Agreement will be effective when recorded or filed
(which recordings or filings, if this representation is being made more than 10
days after the Initial Borrowing Date, have been made) under federal law to
perfect the security interest granted to the Collateral Agent in the copyrights
covered by the Security Agreement. Each of the Credit Parties party to the
Security Agreement has good and valid title to all Security Agreement Collateral
described therein, free and clear of all Liens except those described above in
this clause (a).
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(b) The security interests created in favor of the Collateral Agent,
as pledgee, for the benefit of the Secured Creditors under the Pledge Agreement
constitute first priority perfected security interests in the Pledged Securities
described in the Pledge Agreement, subject to no security interests of any other
Person. No filings or recordings are required in order to perfect (or maintain
the perfection or priority of) the security interests created in the Pledged
Securities and the proceeds thereof under the Pledge Agreement.
(c) The Mortgages create, as security for the obligations purported
to be secured thereby, a valid and enforceable perfected security interest in
and mortgage lien on all of the Mortgaged Properties in favor of the Collateral
Agent (or such other trustee as may be required or desired under local law) for
the benefit of the Secured Creditors, superior to and prior to the rights of all
third persons (except that the security interest and mortgage lien created in
the Mortgaged Properties may be subject to the Permitted Encumbrances related
thereto) and subject to no other Liens (other than Permitted Liens). Schedule
III contains a true and complete list of each parcel of Real Property owned or
leased by the Borrower and its Subsidiaries on the Effective Date, and the type
of interest therein held by the Borrower or such Subsidiary. The Borrower and
each of its Subsidiaries have good and indefeasible title to all fee-owned
Mortgaged Properties and valid leasehold title to all Leaseholds, in each case
free and clear of all Liens except those described in the first sentence of this
subsection (c).
7.12 Representations and Warranties in Documents. All
representations and warranties set forth in the other Documents were true and
correct in all material respects at the time as of which such representations
and warranties were made (or deemed made), provided that to the extent the
representations and warranties in the Recapitalization Documents are made by
Persons other than the Credit Parties and the CVC Permitted Holders, then the
representations and warranties so made by such Persons shall be deemed to be
true and correct in all material respects for purposes of this Section 7.12
unless the aggregate effect of all misrepresentations made by such Persons in
the Recapitalization Documents are such as would evidence a material adverse
change in the operations, properties, condition (financial or otherwise) or
prospects of the Business from that which would have applied if all
representations made by such Persons in the Recapitalization Documents had been
true and correct in all respects.
7.13 Properties. Holdings, the Borrower and each of their respective
Subsidiaries have good and valid title to all properties owned by them,
including all property reflected in the most recent balance sheet of the
Business referred to in Section 7.05(a) and in the pro forma balance sheet
referred to in Section 5.18 (except as sold or otherwise disposed of since the
date of such balance sheet in the ordinary course of business), free and clear
of all Liens, other than (i) as referred to in the balance sheet or in the notes
thereto or in the pro forma balance sheet or (ii) Permitted Liens otherwise
permitted by
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Section 9.01. On the Effective Date, Schedule III sets forth a true and complete
description of all Real Property owned or leased by the Borrower and/or its
Subsidiaries and sets forth the direct owner or lessee thereof.
7.14 Capitalization. (a) On the Initial Borrowing Date and after
giving effect to the Transaction, the authorized capital stock of Holdings shall
consist of 30,000,000 shares of Class A Holdings Common Stock, 7,300,000 of
which shall be issued and outstanding, 30,000,000 shares of Class B Holdings
Common Stock, 8,300,000 of which shall be issued and outstanding, and 70,000
shares of Holdings Series A Preferred Stock, all of which shall be issued and
outstanding. All such outstanding shares have been duly and validly issued, are
fully paid and non-assessable and have been issued free of preemptive rights,
except for the preemptive rights set forth in the Securities Purchase and
Holders Agreement. Except as set forth on Schedule XI, on the Initial Borrowing
Date, Holdings does not have outstanding any securities convertible into or
exchangeable for its capital stock or outstanding any rights to subscribe for or
to purchase, or any options for the purchase of, or any agreement providing for
the issuance (contingent or otherwise) of, or any calls, commitments or claims
of any character relating to, its capital stock.
(b) On the Initial Borrowing Date and after giving effect to the
Transaction, the authorized capital stock of the Borrower shall consist of 1,000
shares of Borrower Common Stock, 100 of which shall be issued and outstanding
and delivered for pledge pursuant to the Pledge Agreement. All such outstanding
shares of common stock have been duly and validly issued, are fully paid and
nonassessable and are free of preemptive rights. As of the Initial Borrowing
Date, the Borrower does not have outstanding any securities convertible into or
exchangeable for its capital stock or outstanding any rights to subscribe for or
to purchase, or any options for the purchase of, or any agreements providing for
the issuance (contingent or otherwise) of, or any calls, commitments or claims
of any character relating to, its capital stock.
7.15 Subsidiaries. After giving effect to the Transaction, Holdings
will have no Subsidiaries other than the Borrower and its Subsidiaries. After
giving effect to the Transaction, the Borrower will have no Subsidiaries other
than (i) those Subsidiaries listed on Schedule VIII and (ii) new Subsidiaries
created in compliance with Section 9.14. An accurate organization chart, showing
the ownership structure of Holdings and each of its Subsidiaries on the Initial
Borrowing Date, and after giving effect to the Transaction, is set forth on
Schedule XII.
7.16 Compliance with Statutes, etc. Each of Holdings, the Borrower
and its Subsidiaries is in compliance with all applicable statutes, regulations
and orders of, and all applicable restrictions imposed by, all governmental
bodies, domestic or foreign, in respect of the conduct of its business and the
ownership of its property (including applicable
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statutes, regulations, orders and restrictions relating to environmental
standards and controls), except such noncompliances as could not, individually
or in the aggregate, reasonably be expected to have a Material Adverse Effect.
7.17 Investment Company Act. None of Holdings, the Borrower or any
of their respective Subsidiaries is an "investment company" or a company
"controlled" by an "investment company," within the meaning of the Investment
Company Act of 1940, as amended.
7.18 Public Utility Holding Company Act. None of Holdings, the
Borrower or any of their respective Subsidiaries is a "holding company," or a
"subsidiary company" of a "holding company," or an "affiliate" of a "holding
company" or of a "subsidiary company" of a "holding company" within the meaning
of the Public Utility Holding Company Act of 1935, as amended.
7.19 Environmental Matters. (a) Holdings, the Borrower and each of
their respective Subsidiaries have complied with, and on the date of each Credit
Event will be in compliance with, all applicable Environmental Laws and the
requirements of any permits issued under such Environmental Laws. There are no
pending or, to the best knowledge of Holdings and the Borrower after due
inquiry, past or threatened Environmental Claims against Holdings, the Borrower
or any of their respective Subsidiaries or any Real Property owned or operated
by Holdings, the Borrower or any of their respective Subsidiaries. There are no
facts, circumstances, conditions or occurrences in respect of any Real Property
owned or operated by Holdings, the Borrower or any of their respective
Subsidiaries that, to the best knowledge of Holdings or the Borrower after due
inquiry, could reasonably be expected (i) to form the basis of an Environmental
Claim against Holdings, the Borrower or any of their respective Subsidiaries or
any such Real Property, or (ii) to cause any such Real Property to be subject to
any restrictions on the ownership, occupancy, use or transferability of such
Real Property by Holdings, the Borrower or any of their respective Subsidiaries
under any applicable Environmental Law.
(b) Hazardous Materials have not at any time been generated, used,
treated or stored on, or transported to or from, any Real Property owned or
operated by Holdings, the Borrower or any of their respective Subsidiaries where
such generation, use, treatment or storage has violated or could reasonably be
expected to violate any Environmental Law. Hazardous Materials, to the best
knowledge of Holdings and the Borrower, have not been Released on or from any
Real Property owned or operated by Holdings, the Borrower or any of their
respective Subsidiaries where such Release has violated or could reasonably be
expected to violate any applicable Environmental Law.
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(c) Notwithstanding anything to the contrary in this Section 7.19,
the representations made in this Section 7.19 shall only be untrue if the
aggregate effect of all failures and noncompliances of the types described above
could reasonably be expected to have a Material Adverse Effect.
7.20 Labor Relations. Except as set forth on Schedule IX, none of
Holdings, the Borrower nor any of their respective Subsidiaries is engaged in
any unfair labor practice that could reasonably be expected to have a material
adverse effect on Holdings and its Subsidiaries taken as a whole or the Borrower
and there is (i) no unfair labor practice complaint pending against Holdings,
the Borrower or any of their respective Subsidiaries or, to the best knowledge
of Holdings or the Borrower, threatened against any of them, before the National
Labor Relations Board, and no material grievance or arbitration proceeding
arising out of or under any collective bargaining agreement is so pending
against Holdings, the Borrower or any of their respective Subsidiaries or, to
the best knowledge of Holdings or the Borrower, threatened against any of them,
(ii) no strike, labor dispute, slowdown or stoppage pending against Holdings,
the Borrower or any of their respective Subsidiaries or, to the best knowledge
of Holdings or the Borrower, threatened against Holdings, the Borrower or any of
their respective Subsidiaries and (iii) to the best knowledge of Holdings and
the Borrower, no union representation proceeding is pending with respect to the
employees of Holdings or the Borrower or any of their respective Subsidiaries,
except (with respect to any matter specified in clause (i), (ii) or (iii) above,
either individually or in the aggregate) such as could not reasonably be
expected to have a Material Adverse Effect.
7.21 Patents, Licenses, Franchises and Formulas. Each of Holdings,
the Borrower and their respective Subsidiaries owns all material patents,
trademarks, permits, service marks, trade names, copyrights, licenses,
franchises and formulas, or rights with respect to the foregoing, and has
obtained assignments of all leases and other rights of whatever nature,
necessary for the present conduct of its business, without any known conflict
with the rights of others which, or the failure to own or obtain which, as the
case may be, would be reasonably likely to result in a Material Adverse Effect.
7.22 Indebtedness. Schedule V sets forth a true and complete list of
all Indebtedness (excluding (i) the Senior Subordinated Notes, (ii) the Seller
Note and (iii) the Loans and Letters of Credit) of Holdings, the Borrower and
their respective Subsidiaries as of the Initial Borrowing Date and which is to
remain outstanding after giving effect to the Transaction (the "Existing
Indebtedness"), in each case showing the aggregate principal amount thereof and
the name of the respective borrower and any other entity which directly or
indirectly guaranteed such debt.
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7.23 Transaction. At the time of consummation thereof, the
Transaction shall have been consummated in all material respects in accordance
with the terms of the respective Documents and all applicable laws. At the time
of consummation of the Transaction, all necessary material consents and
approvals of, and filings and registrations with, and all other actions in
respect of, all governmental agencies, authorities or instrumentalities required
in order to make or consummate the Transaction will have been obtained, given,
filed or taken and are or will be in full force and effect (or effective
judicial relief with respect thereto has been obtained). All applicable waiting
periods with respect thereto have or, prior to the time when required, will
have, expired without, in all such cases, any action being taken by any
competent authority which restrains, prevents, or imposes material adverse
conditions upon the Transaction. Additionally, there does not exist any
judgment, order or injunction prohibiting or imposing material adverse
conditions upon the Transaction, or the occurrence of any Credit Event or the
performance by Holdings or the Borrower of its obligations under the respective
Credit Documents. All actions taken by Holdings and the Borrower pursuant to or
in furtherance of the Transaction have been taken in all material respects in
compliance with the respective Documents and all applicable laws.
7.24 Special Purpose Corporations. Holdings was formed for the
purpose of effecting the Recapitalization Transaction and, prior to the
consummation thereof, had no material assets or liabilities except in connection
therewith. Holdings engages in no business activities other than the employment
of management of the Borrower, except in connection with its ownership of the
capital stock of the Borrower and liabilities incident thereto.
SECTION 8. Affirmative Covenants. Holdings and the Borrower hereby
covenant and agree that on and after the Effective Date and until the Total
Commitments and all Letters of Credit have terminated and the Loans, Notes and
Unpaid Drawings, together with interest, Fees and all other obligations incurred
hereunder and thereunder, are paid in full:
8.01 Information Covenants. Holdings and/or the Borrower will
furnish to the Administrative Agent (with sufficient copies for each of the
Banks) and the Administrative Agent will promptly thereafter furnish to each
Bank:
(a) Monthly Reports. Within 30 days after the end of each fiscal
month of Holdings, the consolidated balance sheets of Holdings and its
consolidated Subsidiaries (and Unrestricted Subsidiaries to the extent
required to be consolidated with Holdings for financial reporting purposes
in accordance with GAAP) as at the end of such month and the related
consolidated statements of income (including consolidating income
statements by each of the Borrower's Logic, Memory and
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Discrete Power and Signal Technologies Business Units, as well as booking,
billing and backlog information related to such Business Units) and
retained earnings and statement of cash flows for such month and for the
elapsed portion of the fiscal year ended with the last day of such month,
in each case setting forth comparative figures for the corresponding month
in the prior fiscal year.
(b) Quarterly Financial Statements. Within 45 days after the close
of the first three quarterly accounting periods in each fiscal year of
Holdings, (i) the consolidated and consolidating balance sheets of
Holdings and its Consolidated Subsidiaries as at the end of such quarterly
accounting period and the related consolidated and consolidating
statements of income (including consolidating income statements by each of
the Borrower's Logic, Memory and Discrete Power and Signal Technologies
Business Units, as well as booking, billing and backlog information
related to such Business Units) and cash flows, in each case for such
quarterly accounting period and for the elapsed portion of the fiscal year
ended with the last day of such quarterly accounting period, and in each
case, setting forth comparative figures for the related periods in the
prior fiscal year, after the delivery of the first budget pursuant to
Section 8.01(e), and the budgeted figures for such quarterly periods as
set forth in the respective budget delivered pursuant to Section 8.01(e),
all of which shall be certified by the Chief Financial Officer or
Treasurer of Holdings, subject to normal year-end audit adjustments and
(ii) management's discussion and analysis of the important operational and
financial developments during the fiscal quarter and year-to-date periods.
(c) Annual Financial Statements. Within 90 days after the close of
each fiscal year of Holdings, (i) the consolidated and consolidating
balance sheets of Holdings and its consolidated Subsidiaries (and
Unrestricted Subsidiaries to the extent required to be consolidated with
Holdings for financial reporting purposes in accordance with GAAP) as at
the end of such fiscal year and the related consolidated and consolidating
statements of income (including consolidating income statements by each of
the Borrower's Logic, Memory and Discrete Power and Signal Technologies
Business Units, as well as booking, billing and backlog information
related to such Business Units) and retained earnings and of cash flows
for such fiscal year setting forth comparative figures for the preceding
fiscal year and certified (x) in the case of such consolidated financial
statements, by KPMG Peat Marwick, LLP, or such other independent certified
public accountants of recognized national standing reasonably acceptable
to the Administrative Agent, together with a report of such accounting
firm stating that in the course of its regular audit of the financial
statements of Holdings and its Subsidiaries, which audit was conducted in
accordance with generally accepted auditing standards, such accounting
firm obtained no knowledge of any Default or Event of Default which
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has occurred and is continuing or, if in the opinion of such accounting
firm such a Default or Event of Default has occurred and is continuing, a
statement as to the nature thereof, and (y) in the case of such
consolidating financial statements, by the Chief Financial Officer or
Treasurer of Holdings, and (ii) management's discussion and analysis of
the important operational and financial developments during such fiscal
year.
(d) Management Letters. Promptly after the receipt thereof by
Holdings, the Borrower or any of their respective Subsidiaries, a copy of
any "management letter" received by any such Person from its certified
public accountants and the management's responses thereto.
(e) Budgets. No later than 30 days following the commencement of the
first day of each fiscal year of Holdings, a budget in form satisfactory
to the Agents (including budgeted statements of income by each of the
Borrower's Logic, Memory and Discrete Power and Signal Technologies
Business Units and sources and uses of cash and balance sheets) prepared
by Holdings for (x) each of the twelve months of such fiscal year prepared
in detail and (y) each of the five years immediately following such fiscal
year prepared in summary form, in each case, of Holdings and its
Subsidiaries, accompanied by the statement of the Chief Financial Officer
or Treasurer of Holdings to the effect that, to the best of his knowledge,
the budget is a reasonable estimate for the period covered thereby.
(f) Officer's Certificates. At the time of the delivery of the
financial statements provided for in Section 8.01(a), (b) and (c), a
certificate of the Chairman of the Board, the President, Chief Financial
Officer or the Treasurer of the Borrower to the effect that, to the best
of such officer's knowledge, no Default or Event of Default has occurred
and is continuing or, if any Default or Event of Default has occurred and
is continuing, specifying the nature and extent thereof, which certificate
shall, in the case of any such financial statements delivered in respect
of a period ending on the last day of a fiscal quarter or year of
Holdings, (x) set forth the calculations required to establish whether the
Borrower was in compliance with the provisions of Sections 4.02(f), (g)
and (h) (but with respect to Section 4.02(g) only to the extent delivered
with the financial statements required by Sections 8.01(c)), 9.05, 9.07
and 9.08 through 9.10, inclusive, at the end of such fiscal quarter or
year, as the case may be and (y) if delivered with the financial
statements required by Section 8.01(c), set forth the amount of Excess
Cash Flow for the respective Excess Cash Payment Period.
(g) Notice of Default or Litigation. Promptly, and in any event
within three Business Days in the case of item (i) below or five Business
Days in the case of
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item (ii) below after an officer of Holdings or the Borrower obtains
knowledge thereof, notice of (i) the occurrence of any event which
constitutes a Default or Event of Default and (ii) any litigation or
governmental investigation or proceeding pending or threatened (x) against
Holdings, the Borrower or any of their respective Subsidiaries which could
reasonably be expected to have a Material Adverse Effect, (y) with respect
to any Indebtedness in excess of $2,500,000 of Holdings, the Borrower or
any of their respective Subsidiaries or (z) with respect to any Document.
(h) Other Reports and Filings. Promptly, copies of all financial
information, proxy materials and other information and reports, if any,
which Holdings, the Borrower or any of their respective Subsidiaries shall
file with the Securities and Exchange Commission or any successor thereto
(the "SEC") or deliver to holders of its Indebtedness pursuant to the
terms of the documentation governing such Indebtedness (or any trustee,
agent or other representative therefor).
(i) Environmental Matters. Promptly upon, and in any event within
ten Business Days after, an officer of Holdings, the Borrower or any of
their respective Subsidiaries obtains knowledge thereof, notice of one or
more of the following environmental matters which occurs after the Initial
Borrowing Date, unless such environmental matters could not, individually
or when aggregated with all other such environmental matters, be
reasonably expected to have a Material Adverse Effect:
(i) any Environmental Claim pending or threatened in writing
against Holdings, the Borrower or any of their respective
Subsidiaries or any Real Property owned or operated by Holdings, the
Borrower or any of their respective Subsidiaries;
(ii) any condition or occurrence on or arising from any Real
Property owned or operated by Holdings, the Borrower or any of their
respective Subsidiaries that (a) results in noncompliance by
Holdings, the Borrower or any of their respective Subsidiaries with
any applicable Environmental Law or (b) could reasonably be expected
to form the basis of an Environmental Claim against Holdings, the
Borrower or any of their respective Subsidiaries or any such Real
Property;
(iii) any condition or occurrence on any Real Property owned
or operated by Holdings, the Borrower or any of their respective
Subsidiaries that could reasonably be expected to cause such Real
Property to be subject to any restrictions on the ownership,
occupancy, use or transferability by
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Holdings, the Borrower or any of their respective Subsidiaries of
such Real Property under any Environmental Law; and
(iv) the taking of any removal or remedial action in response
to the actual or alleged presence of any Hazardous Material on any
Real Property owned or operated by Holdings, the Borrower or any of
their respective Subsidiaries as required by any Environmental Law
or any governmental or other administrative agency; provided that in
any event Holdings and/or the Borrower shall deliver to the
Administrative Agent all material notices received by it or any of
their respective Subsidiaries from any government or governmental
agency under, or pursuant to, CERCLA.
All such notices shall describe in reasonable detail the nature of the
claim, investigation, condition, occurrence or removal or remedial action
and Holdings', the Borrower's or such Subsidiary's response thereto. In
addition, the Borrower will provide the Banks with copies of all material
communications with any government or governmental agency and all material
communications with any Person (other than Holdings', the Borrower's or
any Subsidiary's attorneys) relating to any Environmental Claim of which
notice is required to be given pursuant to this Section 8.01(i), and such
detailed reports of any such Environmental Claim as may reasonably be
requested by the Banks.
(j) Annual Meetings with Banks. At the request of Administrative
Agent, Holdings shall within 120 days after the close of each fiscal year
of Holdings hold a meeting at a time and place selected by Holdings and
acceptable to the Agents with all of the Banks at which meeting shall be
reviewed the financial results of the previous fiscal year and the
financial condition of Holdings and its Subsidiaries and the budgets
presented for the current fiscal year of Holdings and its Subsidiaries.
(k) Other Information. From time to time, such other information or
documents (financial or otherwise) with respect to Holdings, the Borrower
or their respective Subsidiaries as any Agent (whether acting on its own
or at the request of any Bank) may reasonably request in writing.
8.02 Books, Records and Inspections. Holdings and the Borrower will,
and will cause each of their respective Subsidiaries to, keep proper books of
record and account in which full, true and correct entries in conformity with
generally accepted accounting principles and all requirements of law shall be
made of all dealings and transactions in relation to its business and
activities. Holdings and the Borrower will, and will cause each of their
respective Subsidiaries to, permit officers and designated representatives of
any of the Agents or any Bank to visit and inspect, during regular business
hours and under
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guidance of officers of Holdings, the Borrower or such Subsidiary, any of the
properties of Holdings and the Borrower or such Subsidiary, and to examine the
books of account of Holdings and the Borrower or such Subsidiary and discuss the
affairs, finances and accounts of Holdings, the Borrower or such Subsidiary
with, and be advised as to the same by, its and their officers and independent
accountants, all upon reasonable advance notice and at such reasonable times and
intervals and to such reasonable extent as such Agent or such Bank may request.
8.03 Maintenance of Property; Insurance. (a) Schedule VI sets forth
a true and complete listing of all insurance maintained by Holdings, the
Borrower and their respective Subsidiaries as of the Effective Date. Holdings
and the Borrower will, and will cause each of their respective Subsidiaries to,
(i) keep all property necessary in its business in good working order and
condition (ordinary wear and tear and loss or damage by casualty or condemnation
excepted), (ii) maintain insurance on all its property in at least such amounts
and against at least such risks as is consistent and in accordance with industry
practice and (iii) furnish to each Bank, upon written request, full information
as to the insurance carried. In addition to the requirements of the immediately
preceding sentence, Holdings and the Borrower will at all times cause insurance
of the types described in Schedule VI to be maintained (with the same scope of
coverage as that described in Schedule VI) at levels which are at least as great
as the respective amount described opposite the respective type of insurance on
Schedule VI under the column headed "Minimum Amount Required to be Maintained".
(b) Holdings and the Borrower will, and will cause their respective
Subsidiaries to, at all times keep their respective property insured in favor of
the Collateral Agent, and all policies or certificates (or certified copies
thereof) with respect to such insurance (and any other insurance maintained by
Holdings, the Borrower or any of their respective Subsidiaries) (i) shall be
endorsed to the Collateral Agent's satisfaction for the benefit of the
Collateral Agent (including, without limitation, by naming the Collateral Agent
as loss payee or as an additional insured), (ii) shall state that such insurance
policies shall not be cancelled without 30 days' prior written notice thereof by
the respective insurer to the Collateral Agent, (iii) shall provide that the
respective insurers irrevocably waive any and all rights of subrogation with
respect to the Collateral Agent and the Secured Creditors, (iv) shall contain
the standard non-contributing mortgage clause endorsement in favor of the
Collateral Agent with respect to hazard liability insurance, (v) shall, except
in the case of public liability insurance, provide that any losses shall be
payable notwithstanding (A) any act or neglect of Holdings, the Borrower or any
of their respective Subsidiaries, (B) the occupation or use of the properties
for purposes more hazardous than those permitted by the terms of the respective
policy if such coverage is obtainable at commercially reasonable rates and is of
the kind from time to time customarily insured against by Persons owning or
using similar property and in such amounts as are customary, (C) any foreclosure
or
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other proceeding relating to the insured properties or (D) any change in the
title to or ownership or possession of the insured properties and (vi) shall be
deposited with the Collateral Agent.
(c) If Holdings, the Borrower or any of their respective
Subsidiaries shall fail to maintain all insurance in accordance with this
Section 8.03, or if Holdings, the Borrower or any of their respective
Subsidiaries shall fail to so endorse and deposit all policies or certificates
with respect thereto, the Administrative Agent and/or the Collateral Agent shall
have the right (but shall be under no obligation), upon thirty days advance
notice to Holdings, the Borrower or any of their respective Subsidiaries, as the
case may be, to procure such insurance and the Borrower agrees to reimburse the
Administrative Agent or the Collateral Agent as the case may be, for all costs
and expenses of procuring such insurance.
8.04 Corporate Franchises. Holdings and the Borrower will, and will
cause each of their respective Subsidiaries to, do or cause to be done, all
things necessary to preserve and keep in full force and effect its existence and
its material rights, franchises, licenses and patents used in its business;
provided, however, that nothing in this Section 8.04 shall prevent (i) sales of
assets, consolidations or mergers by or involving Holdings, the Borrower or any
of their respective Subsidiaries in accordance with Section 9.02, (ii) the
withdrawal by Holdings, the Borrower or any of their respective Subsidiaries of
their qualification as a foreign corporation in any jurisdiction where such
withdrawal could not reasonably be expected to have a Material Adverse Effect or
(iii) the abandonment by Holdings, the Borrower or any of their respective
Subsidiaries of any rights, franchises, licenses and patents that the Borrower
reasonably determines are not useful to its business.
8.05 Compliance with Statutes, etc. Holdings and the Borrower will,
and will cause each of their respective Subsidiaries to, comply with all
applicable statutes, regulations and orders of, and all applicable restrictions
imposed by, all governmental bodies, domestic or foreign, in respect of the
conduct of its business and the ownership of its property, except such
noncompliances as could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
8.06 Compliance with Environmental Laws. (a) Holdings and the
Borrower will comply, and will cause each of their respective Subsidiaries to
comply, in all material respects with all Environmental Laws applicable to the
ownership or use of its Real Property now or hereafter owned or operated by
Holdings, the Borrower or any of their respective Subsidiaries, will within a
reasonable time-period pay or cause to be paid all costs and expenses incurred
in connection with such compliance (except to the extent being contested in good
faith), and will keep or cause to be kept all such Real Property free and clear
of any Liens imposed pursuant to such Environmental Laws. None of Holdings,
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the Borrower nor any of their respective Subsidiaries will generate, use, treat,
store, release or dispose of, or permit the generation, use, treatment, storage,
release or disposal of Hazardous Materials on any Real Property now or hereafter
owned or operated by Holdings, the Borrower or any of their respective
Subsidiaries, or transport or permit the transportation of Hazardous Materials
to or from any such Real Property except in material compliance with all
applicable Environmental Laws and reasonably required in connection with the
operation, use and maintenance of any such Real Property or otherwise in
connection with their businesses.
(b) At the written request of the Administrative Agent or the
Required Banks, which request shall specify in reasonable detail the basis
therefor, at any time and from time to time, the Borrower will provide, at the
Borrower's sole cost and expense, an environmental site assessment report
concerning any Real Property now or hereafter owned or operated by Holdings, the
Borrower or any of their respective Subsidiaries, prepared by an environmental
consulting firm reasonably acceptable to the Administrative Agent, indicating
the presence or absence of Hazardous Materials and the potential cost of any
removal or remedial action in connection with any Hazardous Materials on such
Real Property; provided, that such request may be made only if (i) there has
occurred and is continuing an Event of Default, (ii) the Administrative Agent or
the Required Banks reasonably believe that Holdings, the Borrower or any such
Real Property is not in compliance with Environmental Law and such circumstances
could reasonably be expected to have a Material Adverse Effect, or (iii)
circumstances exist that reasonably could be expected to form the basis of a
material Environmental Claim against Holdings, the Borrower or any such Real
Property. If the Borrower fails to provide the same within 90 days after such
request was made, the Administrative Agent may order the same, and the Borrower
shall grant and hereby grants to the Administrative Agent and the Banks and
their agents access to such Real Property and specifically grants the
Administrative Agent and the Banks an irrevocable non-exclusive license, subject
to the rights of tenants, to undertake such an assessment, all at the Borrower's
expense.
8.07 ERISA. As soon as reasonably possible and, in any event, within
ten (10) days after Holdings, the Borrower or any of their respective
Subsidiaries or any ERISA Affiliate knows or has reason to know of the
occurrence of any of the following, Holdings or the Borrower will deliver to
each of the Banks a certificate of the chief financial officer of Holdings or
the Borrower setting forth the full details as to such occurrence and the
action, if any, that Holdings, the Borrower, such Subsidiary or such ERISA
Affiliate is required or proposes to take, together with any notices required or
proposed to be given to or filed with or by Holdings, the Borrower, the
Subsidiary, the ERISA Affiliate, the PBGC, a Plan participant or the Plan
administrator with respect thereto: that a Reportable Event has occurred (except
to the extent that Holdings or the Borrower has previously delivered to the
Banks a certificate and notices (if any) concerning
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such event pursuant to the next clause hereof); that a contributing sponsor (as
defined in Section 4001(a)(13) of ERISA) of a Plan subject to Title IV of ERISA
is subject to the advance reporting requirement of PBGC Regulation Section
4043.61 (without regard to subparagraph (b)(1) thereof), and an event described
in subsection .62, .63, .64, .65, .66, .67 or .68 of PBGC Regulation Section
4043 is reasonably expected to occur with respect to such Plan within the
following 30 days; that an accumulated funding deficiency, within the meaning of
Section 412 of the Code or Section 302 of ERISA, has been incurred or an
application may be or has been made for a waiver or modification of the minimum
funding standard (including any required installment payments) or an extension
of any amortization period under Section 412 of the Code or Section 303 or 304
of ERISA with respect to a Plan; that any contribution required to be made with
respect to a Plan or Foreign Pension Plan has not been timely made; that a Plan
has been or may be reasonably expected to be terminated, reorganized,
partitioned or declared insolvent under Title IV of ERISA; that a Plan has an
Unfunded Current Liability; that proceedings may be reasonably expected to be or
have been instituted to terminate or appoint a trustee to administer a Plan
which is subject to Title IV of ERISA; that a proceeding has been instituted
pursuant to Section 515 of ERISA to collect a delinquent contribution to a Plan;
that Holdings, the Borrower, any of their respective Subsidiaries or any ERISA
Affiliate will or may reasonably expect to incur any liability (including any
indirect, contingent, or secondary liability) to or on account of the
termination of or withdrawal from a Plan under Section 4062, 4063, 4064, 4069,
4201, 4204 or 4212 of ERISA or with respect to a Plan under Section 401(a)(29),
4971, 4975 or 4980 of the Code or Section 409 or 502(i) or 502(l) of ERISA or
with respect to a group health plan (as defined in Section 607(1) of ERISA or
Section 4980B(g)(2) of the Code) under Section 4980B of the Code; or that
Holdings, the Borrower, or any of their respective Subsidiaries may incur any
material liability pursuant to any employee welfare benefit plan (as defined in
Section 3(1) of ERISA) that provides benefits to retired employees or other
former employees (other than as required by Section 601 of ERISA) or any Plan or
any Foreign Pension Plan. Upon request, the Borrower will deliver to any of the
Banks (i) a complete copy of the annual report (on Internal Revenue Service Form
5500-series) of each Plan (including, to the extent required, the related
financial and actuarial statements and opinions and other supporting statements,
certifications, schedules and information) required to be filed with the
Internal Revenue Service and (ii) copies of any records, documents or other
information that must be furnished to the PBGC with respect to any Plan pursuant
to Section 4010 of ERISA. In addition to any certificates or notices delivered
to the Banks pursuant to the first sentence hereof, copies of annual reports and
any records, documents or other information required to be furnished to the
PBGC, and any material notices received by Holdings, the Borrower, any of their
respective Subsidiaries or any ERISA Affiliate with respect to any Plan or
Foreign Pension Plan shall be delivered to the Banks no later than ten (10) days
after the date such annual report has been filed with the Internal Revenue
Service or such records,
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documents and/or information has been furnished to the PBGC or such notice has
been received by Holdings, the Borrower, the Subsidiary or the ERISA Affiliate,
as applicable.
8.08 End of Fiscal Years; Fiscal Quarters. Holdings shall cause (i)
each of its, and each of its Subsidiaries', fiscal years to end on the Sunday
closest to the last day in May of each year and (ii) its fiscal quarters to end
in a manner consistent therewith.
8.09 Performance of Obligations. Each of Holdings and the Borrower
will, and will cause each of its Subsidiaries to, perform all of its obligations
under the terms of each mortgage, indenture, security agreement and other debt
instrument by which it is bound, except such non-performances as could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
8.10 Payment of Taxes. Each of Holdings and the Borrower will pay
and discharge, and will cause each of their respective Subsidiaries to pay and
discharge, all taxes, assessments and governmental charges or levies imposed
upon it or upon its income or profits, or upon any properties belonging to it,
prior to the date on which penalties attach thereto, and all lawful claims for
sums that have become due and payable which, if unpaid, might become a Lien not
otherwise permitted under Section 9.01(i), provided, that none of Holdings, the
Borrower nor any of their respective Subsidiaries shall be required to pay any
such tax, assessment, charge, levy or claim which is being contested in good
faith and by proper proceedings if it has maintained adequate reserves with
respect thereto in accordance with GAAP.
8.11 Ownership of Subsidiaries. Holdings shall at all times own 100%
of the outstanding capital stock of the Borrower. The Borrower shall directly or
indirectly own (except to the extent permitted by Section 9.13(b)(iii)) 100% of
the capital stock of each Subsidiary of Holdings other than the Borrower.
8.12 Additional Security; Further Assurances; Surveys. (a) Holdings
and the Borrower will, and will cause each of their respective Domestic
Wholly-Owned Subsidiaries to, grant to the Collateral Agent security interests
and mortgages (an "Additional Mortgage") in such Real Property (excluding
leaseholds of Real Property where the fair market value of the respective
leasehold interest is less than $1,000,000) of Holdings, the Borrower or any of
their respective Domestic Wholly-Owned Subsidiaries as are not covered by the
original Mortgages, to the extent acquired after the Effective Date, and as may
be requested from time to time by the Administrative Agent or the Required Banks
(each such Real Property, an "Additional Mortgaged Property"). All such
Additional Mortgages shall be granted pursuant to documentation substantially in
the form of the Mortgages delivered to the Administrative Agent on the Effective
Date or in such other form as is reasonably satisfactory to the Administrative
Agent and shall constitute valid and
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enforceable perfected Liens superior to and prior to the rights of all third
Persons and subject to no other Liens except as are permitted by Section 9.01 at
the time of perfection thereof. The Additional Mortgages or instruments related
thereto shall be duly recorded or filed in such manner and in such places as are
required by law to establish, perfect, preserve and protect the Liens in favor
of the Collateral Agent required to be granted pursuant to the Additional
Mortgages and all taxes, fees and other charges payable in connection therewith
shall be paid in full.
(b) Holdings and the Borrower will, and will cause each of their
respective Domestic Wholly-Owned Subsidiaries to, at the expense of the
Borrower, make, execute, endorse, acknowledge, file and/or deliver to the
Collateral Agent from time to time such vouchers, invoices, schedules,
confirmatory assignments, conveyances, financing statements, transfer
endorsements, powers of attorney, certificates, real property surveys, reports
and other assurances or instruments and take such further steps relating to the
Collateral covered by any of the Security Documents as the Collateral Agent may
reasonably require pursuant to this Section 8.12. Additionally, upon the request
of the Collateral Agent or the Required Banks, Holdings and the Borrower shall
take, or cause to be taken, action as may be requested in order to perfect (or
maintain the perfection of) the security interests (or take any analogous
actions under the applicable provisions of local law in order to protect such
security interests) in any Collateral located outside the U.S., in each case to
the extent such actions are permitted to be taken under the laws of the
applicable jurisdictions and so long as no Default or Event of Default exists,
the requested actions will not result in any material costs (including
additional taxes) or material burdens in the conduct of the Borrower's business,
in each case in relation to the benefit to be received. Furthermore, Holdings
and the Borrower shall cause to be delivered to the Collateral Agent such
opinions of counsel, title insurance and other related documents as may be
reasonably requested by the Collateral Agent to assure itself that this Section
8.12 has been complied with.
(c) Holdings and the Borrower agree to cause each Domestic
Wholly-Owned Subsidiary established or created in accordance with Section 9.14
to execute and deliver, (i) in the case of the first such Subsidiary so
established or created (unless a Subsidiaries Guaranty has been executed and
delivered prior to such date pursuant to Section 5.10), the Subsidiaries
Guaranty and (ii) otherwise, a guaranty of all Obligations and all obligations
under Interest Rate Protection or Other Hedging Agreements in substantially the
form of the Subsidiaries Guaranty.
(d) The Borrower agrees to pledge and deliver, or cause to be
pledged and delivered, all of the capital stock of each new Subsidiary
(excluding that portion of the voting stock of any Foreign Subsidiary which
would be in excess of 65% of the total outstanding voting stock of such Foreign
Subsidiary) established or created after the
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Effective Date, to the extent owned by Holdings, the Borrower or any Domestic
Wholly-Owned Subsidiary, to the Collateral Agent for the benefit of the Secured
Creditors pursuant to the Pledge Agreement.
(e) Holdings and the Borrower will cause each Domestic Wholly-Owned
Subsidiary established or created in accordance with Section 9.14 to grant to
the Collateral Agent a first priority (subject to Permitted Liens) Lien on
property (tangible and intangible) of such Subsidiary upon terms and with
exceptions similar to those set forth in the Security Documents as appropriate,
and satisfactory in form and substance to the Borrower, the Administrative Agent
and Required Banks. Holdings and the Borrower shall cause each such Domestic
Wholly-Owned Subsidiary, at its own expense, to execute, acknowledge and
deliver, or cause the execution, acknowledgement and delivery of, and thereafter
register, file or record in any appropriate governmental office, any document or
instrument reasonably deemed by the Collateral Agent to be necessary or
desirable for the creation and perfection of the foregoing Liens. Holdings and
the Borrower will cause each of such Domestic Wholly-Owned Subsidiaries to take
all actions reasonably requested by the Administrative Agent (including, without
limitation, the filing of UCC-1's) in connection with the granting of such
security interests.
(f) The security interests required to be granted pursuant to this
Section 8.12 shall be granted pursuant to security documentation (which shall be
substantially similar to the Security Documents already executed and delivered
by the Borrower or its Subsidiaries, as applicable) or otherwise satisfactory in
form and substance to the Collateral Agent and the Borrower and shall constitute
valid and enforceable perfected security interests prior to the rights of all
third Persons and subject to no other Liens except such Liens as are permitted
by Section 9.01. The Additional Security Documents and other instruments related
thereto shall be duly recorded or filed in such manner and in such places and at
such times as are required by law to establish, perfect, preserve and protect
the Liens, in favor of the Collateral Agent for the benefit of the respective
Secured Creditors, required to be granted pursuant to the Additional Security
Documents and all taxes, fees and other charges payable in connection therewith
shall be paid in full by the Borrower. At the time of the execution and delivery
of the Additional Security Documents, the Borrower shall cause to be delivered
to the Collateral Agent such opinions of counsel, Mortgage Policies, title
surveys, real estate appraisals and other related documents as may be reasonably
requested by the Agents or the Required Banks to assure themselves that this
Section 8.12 has been complied with.
(g) Each of Holdings and the Borrower agrees that each action
required above by Section 8.12 (a) or (b) shall be completed as soon as
possible, but in no event later than 90 days after such action is requested to
be taken by the Administrative Agent or the Required Banks. Each of Holdings and
the Borrower further agrees that each action
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required by Section 8.12(c), (d), (e) and (f) with respect to the creation or
acquisition of a new Subsidiary shall be completed contemporaneously with (or,
in the case of any documents or instruments to be registered, filed or recorded,
within 10 days of) the creation of such new Subsidiary.
8.13 Interest Rate Protection. No later than the 60th day after the
Initial Borrowing Date, the Borrower shall enter into, and for a minimum of
three years thereafter maintain, Interest Rate Protection Agreements acceptable
to the Agents establishing a fixed or maximum interest rate acceptable to the
Agents for an aggregate amount with respect to the Term Loans outstanding from
time to time as is equal to 30% of the aggregate principal amount of Term Loans
then outstanding.
8.14 Foreign Subsidiaries Security. If following a change in the
relevant sections of the Code or the regulations, rules, rulings, notices or
other official pronouncements issued or promulgated thereunder, counsel for the
Borrower acceptable to the Administrative Agent and the Required Banks does not
within 30 days after a request from the Administrative Agent or the Required
Banks deliver to the Administrative Agent evidence, in form and substance
satisfactory to the Administrative Agent and the Required Banks, with respect to
any Foreign Subsidiary which has not already had all of its stock pledged
pursuant to the Pledge Agreement that a pledge of 66-2/3% or more of the total
combined voting power of all classes of capital stock of such Foreign Subsidiary
entitled to vote, would cause the undistributed earnings of such Foreign
Subsidiary as determined for Federal income tax purposes to be treated as a
deemed dividend to such Foreign Subsidiary's United States parent for Federal
income tax purposes, then that portion of such Foreign Subsidiary's outstanding
capital stock not theretofore pledged pursuant to the Pledge Agreement shall be
pledged to the Collateral Agent for the benefit of the Secured Creditors
pursuant to the Pledge Agreement (or another pledge agreement in substantially
similar form, if needed), to the extent that the entering into such Pledge
Agreement is permitted by the laws of the respective foreign jurisdiction and
with all documents delivered pursuant to this Section 8.14 to be in form and
substance reasonably satisfactory to the Administrative Agent and the Required
Banks.
8.15 Maintenance of Corporate Separateness. Holdings will, and will
cause each of its Subsidiaries and Unrestricted Subsidiaries to, satisfy
customary corporate formalities, including the holding of regular board of
directors' and shareholders' meetings or action by directors or shareholders
without a meeting and the maintenance of corporate offices and records. Neither
Holdings nor any of its Subsidiaries shall make any payment to a creditor of any
Unrestricted Subsidiaries in respect of any liability of any Unrestricted
Subsidiaries, and no bank account of any Unrestricted Subsidiary shall be
commingled with any bank account of Holdings or any of its Subsidiaries. Any
financial statements distributed to any creditors of any Unrestricted
Subsidiaries shall clearly establish or
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indicate the corporate separateness of such Unrestricted Subsidiary from
Holdings and its Subsidiaries. Finally, neither Holdings nor any of its
Subsidiaries shall take any action, or conduct its affairs in a manner, which is
likely to result in the corporate existence of Holdings or any of its
Subsidiaries or Unrestricted Subsidiaries being ignored, or in the assets and
liabilities of Holdings or any of its Subsidiaries being substantively
consolidated with those of any other such Person or any Unrestricted Subsidiary
in a bankruptcy, reorganization or other insolvency proceeding.
SECTION 9. Negative Covenants. Holdings and the Borrower covenant
and agree that on and after the Effective Date and until the Total Commitments
and all Letters of Credit have terminated and the Loans, Notes and Unpaid
Drawings, together with interest, Fees and all other Obligations incurred
hereunder and thereunder, are paid in full:
9.01 Liens. Holdings will not, and will not permit any of its
Subsidiaries to, create, incur, assume or suffer to exist any Lien upon or with
respect to any property or assets (real or personal, tangible or intangible) of
Holdings or any of its Subsidiaries, whether now owned or hereafter acquired, or
sell any such property or assets subject to an understanding or agreement,
contingent or otherwise, to repurchase such property or assets (including sales
of accounts receivable with recourse to Holdings or any of its Subsidiaries), or
assign any right to receive income or permit the filing of any financing
statement under the UCC or any other similar notice of Lien under any similar
recording or notice statute; provided that the provisions of this Section 9.01
shall not prevent the creation, incurrence, assumption or existence of the
following (Liens described below are herein referred to as "Permitted Liens"):
(i) inchoate Liens for taxes, assessments or governmental charges or
levies not yet due and payable or Liens for taxes, assessments or
governmental charges or levies being contested in good faith and by
appropriate proceedings for which adequate reserves have been established
in accordance with generally accepted accounting principles in the United
States (or the equivalent thereof in any country in which a Foreign
Subsidiary is doing business, as applicable);
(ii) Liens in respect of property or assets of the Borrower or any
of its Subsidiaries imposed by law, which were incurred in the ordinary
course of business and do not secure Indebtedness for borrowed money, such
as carriers', warehousemen's, materialmen's and mechanics' liens and other
similar Liens arising in the ordinary course of business, and (x) which do
not in the aggregate materially detract from the value of the property or
assets of Holdings and its Subsidiaries taken as a whole or the Borrower
and do not materially impair the use thereof in the operation of the
business of Holdings and its Subsidiaries taken as a whole or the Borrower
or (y) which are being contested in good faith by appropriate proceed-
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ings, which proceedings (or orders entered in connection with such
proceedings) have the effect of preventing the forfeiture or sale of the
property or assets subject to any such Lien;
(iii) Liens in existence on the Effective Date which are listed, and
the property subject thereto described, in Schedule IV, but only to the
respective date, if any, set forth in such Schedule IV for the removal and
termination of any such Liens, plus renewals and extensions of such Liens
to the extent set forth on Schedule IV, provided that (x) the aggregate
principal amount of the Indebtedness, if any, secured by such Liens does
not increase from that amount outstanding at the time of any such renewal
or extension and (y) any such renewal or extension does not encumber any
additional assets or properties of Holdings or any of its Subsidiaries;
(iv) Permitted Encumbrances;
(v) Liens created pursuant to the Security Documents;
(vi) licenses, leases or subleases granted to other Persons in the
ordinary course of business not materially interfering with the conduct of
the business of Holdings and its Subsidiaries taken as a whole;
(vii) Liens upon assets of the Borrower and its Subsidiaries subject
to Capitalized Lease Obligations to the extent permitted by Section 9.04,
provided that (x) such Liens only serve to secure the payment of
Indebtedness arising under such Capitalized Lease Obligation and (y) the
Lien encumbering the asset giving rise to the Capitalized Lease Obligation
does not encumber any other asset (other than proceeds thereof) of the
Borrower or any Subsidiary of the Borrower;
(viii) Liens placed upon assets used in the ordinary course of
business of the Borrower or any of its Subsidiaries at the time of
acquisition thereof by the Borrower or any such Subsidiary or within 90
days thereafter to secure Indebtedness incurred to pay all or a portion of
the purchase price thereof, provided that (x) the aggregate outstanding
principal amount of all Indebtedness secured by Liens permitted by this
clause (viii) shall not at any time exceed $2,500,000 and (y) in all
events, the Lien encumbering the assets so acquired does not encumber any
other asset (other than proceeds thereof) of the Borrower or such
Subsidiary;
(ix) easements, rights-of-way, restrictions (including zoning
restrictions), covenants, encroachments, protrusions and other similar
charges or encumbrances, and minor title deficiencies, in each case
whether now or hereafter in existence, not
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securing Indebtedness and not materially interfering with the conduct of
the business of the Holdings and its Subsidiaries taken as a whole or the
Borrower;
(x) Liens arising from precautionary UCC financing statement filings
regarding operating leases entered into by the Borrower or any of its
Subsidiaries in the ordinary course of business;
(xi) Liens arising out of judgments or awards in respect of which
the Borrower or any of its Subsidiaries shall in good faith be prosecuting
an appeal or proceedings for review in respect of which there shall have
been secured a subsisting stay of execution pending such appeal or
proceedings, provided that the aggregate amount of all such judgments or
awards (and any cash and the fair market value of any property subject to
such Liens) does not exceed $1,000,000 at any time outstanding;
(xii) statutory and common law landlords' liens under leases or
subleases to which the Borrower or any of its Subsidiaries is a party;
(xiii) Liens (other than any Lien imposed by ERISA) (x) incurred or
deposits made in the ordinary course of business in connection with
workers' compensation, unemployment insurance and other types of social
security, (y) to secure the performance of tenders, statutory obligations
(other than excise taxes), surety, stay, customs and appeal bonds,
statutory bonds, bids, leases, government contracts, trade contracts,
performance and return of money bonds and other similar obligations
(exclusive of obligations for the payment of borrowed money) or (z)
arising by virtue of deposits made in the ordinary course of business to
secure liability for premiums to insurance carriers, provided that the
aggregate amount of deposits at any time pursuant to sub-clause (y) and
sub-clause (z) shall not exceed $500,000 in the aggregate;
(xiv) any interest or title of a lessor, sublessor, licensee or
licensor under any lease or license agreement permitted by this Agreement;
(xv) Liens in favor of customs and revenue authorities arising as a
matter of law to secure the payment of customs duties in connection with
the importation of goods;
(xvi) Liens arising out of conditional sale, title retention,
consignment or similar arrangements for the sale of goods entered into by
the Borrower or any of its Subsidiaries in the ordinary course of business
in accordance with the past practices of the Borrower and its
Subsidiaries;
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(xvii) Liens on assets of Foreign Subsidiaries, provided that (x)
such Liens do not extend to, or encumber, assets which constitute
Collateral or the capital stock of the Borrower or any of its Subsidiaries
and (y) such Liens extending to the assets of any Foreign Subsidiary
secure only Indebtedness incurred by such Foreign Subsidiary pursuant to
Section 9.04(xiv); and
(xviii) Liens not otherwise permitted by the foregoing clauses (i)
through (xvii) to the extent attaching to properties and assets with an
aggregate fair value not in excess of, and securing liabilities not in
excess of, $10,000,000 in the aggregate at any time outstanding.
9.02 Consolidation, Merger, Purchase or Sale of Assets, etc.
Holdings will not, and will not permit any of its Subsidiaries to, wind up,
liquidate or dissolve its affairs or enter into any transaction of merger or
consolidation, or convey, sell, lease or otherwise dispose of (or agree to do
any of the foregoing at any future time) all or any part of its property or
assets, or enter into any sale-leaseback transactions, or purchase or otherwise
acquire (in one or a series of related transactions) any part of the property or
assets (other than purchases or other acquisitions of inventory, materials,
equipment and intangible assets in the ordinary course of business) of any
Person (or agree to do any of the foregoing at any future time), except that:
(i) Capital Expenditures by the Borrower and its Subsidiaries shall
be permitted to the extent not in violation of Section 9.07;
(ii) each of the Borrower and its Subsidiaries may (x) in the
ordinary course of business, sell, lease or otherwise dispose of any
assets which, in the reasonable judgment of such Person, are obsolete,
worn out or otherwise no longer useful in the conduct of such Person's
business and (y) sell, lease or otherwise dispose of any other assets,
provided that the aggregate Net Sale Proceeds of all assets subject to
sales or other dispositions pursuant to this clause (ii) shall not exceed
$5,000,000 in any four fiscal quarters of the Borrower;
(iii) investments may be made to the extent permitted by Section
9.05;
(iv) each of the Borrower and its Subsidiaries may lease (as lessee)
real or personal property in the ordinary course of business (so long as
any such lease does not create a Capitalized Lease Obligation except to
the extent permitted by Section 9.04);
(v) each of the Borrower and its Subsidiaries may make sales or
transfers of inventory in the ordinary course of business and consistent
with past practices
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(including without limitation sales or transfers of inventory by the
Borrower to its Subsidiaries);
(vi) the Borrower and its Subsidiaries may sell or discount, in each
case without recourse and in the ordinary course of business, overdue
accounts receivable arising in the ordinary course of business, but only
in connection with the compromise or collection thereof consistent with
customary industry practice (and not as part of any bulk sale);
(vii) licenses or sublicenses by the Borrower and its Subsidiaries
of software, trademarks and other intellectual property in the ordinary
course of business and which do not materially interfere with the business
of Holdings and its Subsidiaries taken as a whole or the Borrower shall be
permitted;
(viii) the Asset Transfer shall be permitted; and
(ix) the Borrower or any Domestic Wholly-Owned Subsidiary of the
Borrower may transfer assets or lease to or acquire or lease assets from
the Borrower or any other Domestic Wholly-Owned Subsidiary or any Domestic
Wholly-Owned Subsidiary may be merged into the Borrower (as long as the
Borrower is the surviving corporation of such merger as a Wholly-Owned
Subsidiary of) or any other Domestic Wholly-Owned Subsidiary of the
Borrower.
To the extent the Required Banks waive the provisions of this Section 9.02 with
respect to the sale of any Collateral, or any Collateral is sold as permitted by
this Section 9.02, such Collateral (unless sold to Holdings or a Subsidiary of
Holdings) shall be sold free and clear of the Liens created by the Security
Documents, and the Administrative Agent and Collateral Agent shall be authorized
to take any actions deemed appropriate in order to effect the foregoing.
9.03 Dividends. Holdings shall not, and shall not permit any of its
Subsidiaries to, authorize, declare or pay any Dividends with respect to
Holdings or any of its Subsidiaries, except that:
(i) any Subsidiary of the Borrower (x) may pay cash Dividends to the
Borrower or any Wholly-Owned Subsidiary of the Borrower and (y) if such
Subsidiary is not a Wholly-Owned Subsidiary, may pay cash Dividends to its
shareholders generally so long as the Borrower or its respective Subsidiary
which owns the equity interest or interests in the Subsidiary paying such
Dividends receives at least its proportionate share thereof (based upon its
relative holdings of equity interests in the Subsidiary paying such Dividends
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and taking into account the relative preferences, if any, of the various classes
of equity interests in such Subsidiary);
(ii) so long as there shall exist no Default or Event of Default (both
before and after giving effect to the payment thereof), Holdings may repurchase
outstanding shares of its common stock (or options to purchase such common
stock) following the death, disability, retirement or termination of employment
of employees, officers or directors of Holdings or any of its Subsidiaries,
provided that (x) all amounts used to effect such repurchases are obtained by
Holdings from a substantially concurrent issuance of its common stock (or
options to purchase such common stock) to other employees, members of
management, executive officers or directors of Holdings or any of its
Subsidiaries or (y) to the extent the proceeds used to effect any repurchase
pursuant to this clause (y) are not obtained as described in preceding clause
(x), the aggregate amount of Dividends paid by Holdings pursuant to this clause
(ii) (exclusive of amounts paid as described pursuant to preceding clause (x))
shall not exceed $1,000,000 in any fiscal year of Holdings, provided that, in
the event that the maximum amount which is permitted to be expended in respect
of Dividends during any fiscal year pursuant to this clause (ii)(y) is not fully
expended during such fiscal year, the maximum amount which may be expended
during the immediately succeeding fiscal year pursuant to this clause (ii)(y)
shall be increased by such unutilized amount;
(iii) the Borrower may pay cash Dividends to Holdings for the purpose of
paying, so long as all proceeds thereof are promptly used by Holdings to pay,
its operating expenses incurred in the ordinary course of business and other
corporate overhead costs and expenses (including, without limitation, legal and
accounting expenses and similar expenses), provided that the aggregate amount of
Dividends paid by Holdings pursuant to this clause (iii) shall not exceed
$500,000 in any fiscal year of Holdings;
(iv) the Borrower may pay cash Dividends to Holdings for the purpose of
paying, so long as all proceeds thereof are promptly used by Holdings to pay,
franchise taxes and federal, state and local income taxes and interest and
penalties with respect thereto, if any, payable by Holdings, provided that any
refund shall be promptly returned by Holdings to the Borrower;
(v) the Borrower may pay cash Dividends to Holdings for the purpose of
enabling Holdings to pay the Dividends referred to in clause (ii) above, so long
as all proceeds thereof are promptly used by Holdings to pay such Dividends; and
(vi) the exchange of Holdings Junior Subordinated Debentures for Holdings
Series A Preferred Stock, to the extent permitted as provided in Section
9.04(xv), shall be permitted.
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9.04 Indebtedness. Holdings will not, and will not permit any of its
Subsidiaries to, contract, create, incur, assume or suffer to exist any
Indebtedness, except:
(i) Indebtedness incurred pursuant to this Agreement and the other
Credit Documents;
(ii) Indebtedness of the Borrower pursuant to the Senior
Subordinated Notes in an aggregate principal amount not to exceed
$300,000,000 less the aggregate amount of all repayments of Senior
Subordinated Notes effected after the Initial Borrowing Date;
(iii) Existing Indebtedness shall be permitted to the extent
actually outstanding on the Initial Borrowing Date and as the same is
listed on Schedule V, but no refinancings or renewals thereof;
(iv) accrued expenses and trade accounts payable incurred in the
ordinary course;
(v) Indebtedness under Interest Rate Protection Agreements entered
into in compliance with Section 8.13, and such other non-speculative
Interest Rate Protection Agreements which may be entered into from time to
time by the Borrower and which the Borrower in good faith believes will
provide protection against fluctuations in interest rates with respect to
outstanding floating rate Indebtedness then outstanding, and permitted to
remain outstanding, pursuant to the other provisions of this Section 9.04;
(vi) Indebtedness evidenced by Capitalized Lease Obligations to the
extent permitted pursuant to Section 9.07, provided that in no event shall
the aggregate principal amount of Capitalized Lease Obligations permitted
by this clause (vi) exceed $5,000,000 at any time outstanding;
(vii) Indebtedness subject to Liens permitted under Section
9.01(viii), so long as the outstanding amount of such Indebtedness does
not exceed the amount provided in said Section 9.01(viii);
(viii) intercompany Indebtedness of the Borrower and its
Subsidiaries outstanding to the extent permitted by Section 9.05(vii)
and/or (x);
(ix) in addition to any Indebtedness permitted by the preceding
clause (viii), Indebtedness of any Wholly-Owned Subsidiary to the Borrower
or another Wholly-Owned Subsidiary constituting the purchase price in
respect of intercompany
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transfers of goods made in the ordinary course of business to the extent
not constituting Indebtedness for borrowed money;
(x) Indebtedness evidenced by Other Hedging Agreements entered into
pursuant to Section 9.05(vi);
(xi) Indebtedness of Holdings pursuant to the Seller Note in an
aggregate principal amount not to exceed $77,000,000 plus any accrued and
unpaid interest thereon, less the aggregate amount of all repayments of
principal thereon effected after the Initial Borrowing Date;
(xii) Indebtedness under performance bonds, letter of credit
obligations to provide security for worker's compensation claims and bank
overdrafts, in each case incurred in the ordinary course of business,
provided that any obligations arising in connection with such bank
overdraft Indebtedness is extinguished within five Business Days;
(xiii) the Assumed Liabilities;
(xiv) Indebtedness incurred by Foreign Subsidiaries (which shall not
be directly or indirectly guaranteed by Holdings, the Borrower or any
Domestic Subsidiaries of Holdings or the Borrower) incurred from time to
time after the Initial Borrowing Date so long as the aggregate principal
amount of all indebtedness incurred pursuant to this clause (xiv) at any
time outstanding does not exceed the remainder of (x) $25,000,000 less (y)
the aggregate principal amount of all Indebtedness of Foreign Subsidiaries
then outstanding pursuant to clause (iii) of this Section 9.04;
(xv) Indebtedness of Holdings constituting junior subordinated
debentures issued in exchange for the Holdings Series A Preferred Stock
pursuant to the terms of such Holdings Series A Preferred Stock ("Holdings
Junior Subordinated Debentures"), so long as (x) Level 1 pricing shall be
in effect both before and after giving effect to the incurrence of such
Indebtedness, (y) such Indebtedness shall in no event be incurred to
exchange in the aggregate more than 50% of the Holdings Series A Preferred
Stock issued on or prior to the Initial Borrowing Date and (z) the
Holdings Junior Subordinated Debentures shall be in the form provided in
the certificate of incorporation of Holdings as in effect on the Initial
Borrowing Date; and
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(xvi) additional Indebtedness of the Borrower and its Subsidiaries to
the extent not permitted by the foregoing clauses of this Section 9.04 not
to exceed $10,000,000 in aggregate principal amount at any time
outstanding.
9.05 Advances, Investments and Loans. Holdings will not, and will
not permit any of its Subsidiaries to, directly or indirectly, lend money or
credit or make advances to any Person, or purchase or acquire any stock,
obligations or securities of, or any other interest in, or make any capital
contribution to, any other Person, or purchase or own a futures contract or
otherwise become liable for the purchase or sale of currency or other
commodities at a future date in the nature of a futures contract, or hold any
cash or Cash Equivalents, except that the following shall be permitted:
(i) the Borrower and its Subsidiaries may acquire and hold accounts
receivables owing to any of them;
(ii) the Borrower and its Subsidiaries may acquire and hold cash and
Cash Equivalents, provided that during any time that Revolving Loans of
Non-Defaulting Banks or Swingline Loans are outstanding, the aggregate
amount of cash and Cash Equivalents permitted to be held by the Borrower
and its Domestic Subsidiaries shall not exceed $5,000,000 for any period
of ten consecutive days;
(iii) the Borrower and its Subsidiaries may make loans and advances
in the ordinary course of business to their respective employees so long
as the aggregate principal amount thereof at any time outstanding
(determined without regard to any write-downs or write-offs of such loans
and advances) shall not exceed $3,000,000;
(iv) the Borrower may enter into Interest Rate Protection Agreements
to the extent permitted in Section 9.04(v);
(v) the Recapitalization Transaction may be effected on the Initial
Borrowing Date and, in connection therewith, Holdings may effect the
Holdings Contribution;
(vi) the Borrower may enter into and perform its obligations under
Other Hedging Agreements entered into in the ordinary course of business
and so long as any such Other Hedging Agreement is not speculative in
nature and is (x) related to income derived from foreign operations of the
Borrower or any Subsidiary or otherwise related to purchases permitted
hereunder from foreign suppliers or (y) entered into to protect the
Borrower and/or its Subsidiaries against fluctuations in the prices of raw
materials used in their businesses;
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(vii) any Wholly-Owned Subsidiary may make intercompany loans to the
Borrower or any Wholly-Owned Subsidiary and the Borrower may make
inter-company loans and advances to any Wholly-Owned Subsidiary, provided
that any promissory notes evidencing such intercompany loans shall be
pledged (and delivered) by the Borrower or the respective Domestic
Wholly-Owned Subsidiary that is the lender of such intercompany loan as
Collateral pursuant to the applicable Pledge Agreement, further provided,
that (x) neither the Borrower nor any Domestic Subsidiaries of the
Borrower may make loans to any Foreign Subsidiaries of the Borrower
pursuant to this clause (vii) and (y) any loans made by any Foreign
Subsidiaries to the Borrower or any of its Domestic Subsidiaries pursuant
to this clause (vii) shall be subordinated to the obligations of the
Credit Parties pursuant to subordination provisions in substantially the
form of Exhibit M hereto;
(viii) the Borrower and it Subsidiaries may sell or transfer assets
to the extent permitted by Section 9.02;
(ix) the Borrower may establish Subsidiaries to the extent permitted
by Section 9.14; and
(x) the Borrower and its Domestic Wholly-Owned Subsidiaries may make
loans and advances to, or other investments in, Foreign Subsidiaries of
the Borrower so long as the aggregate amount of any loans, advances or
other investments at any time outstanding (determined without regard to
any write-downs or write-offs thereof) pursuant to this clause (x) shall
not exceed $20,000,000;
(xi) in addition to investments permitted by clauses (i) through (x)
above, the Borrower and its Wholly-Owned Subsidiaries may make investments
in Unrestricted Subsidiaries and/or Joint Ventures, so long as the
aggregate amount invested pursuant to this clause (x) does not exceed
$10,000,000 during any fiscal year of the Borrower and $20,000,000 in the
aggregate.
9.06 Transactions with Affiliates. Holdings will not, and will not
permit any of its Subsidiaries to, enter into any transaction or series of
related transactions, whether or not in the ordinary course of business, with
any Affiliate of Holdings or any of its Subsidiaries, other than in the ordinary
course of business and on terms and conditions substantially as favorable to
Holdings or such Subsidiary as would reasonably be obtained by Holdings or such
Subsidiary at that time in a comparable arm's-length transaction with a Person
other than an Affiliate, except that:
(i) Dividends may be paid to the extent provided in Section 9.03;
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(ii) loans may be made and other transactions may be entered into
between the Borrower and its Subsidiaries to the extent permitted by
Sections 9.04 and 9.05;
(iii) customary fees may be paid to non-officer directors of
Holdings;
(iv) Borrower may pay management fees to Holdings from time to time
in an amount not in excess of Holdings' compensation expenses for its
employees;
(v) Holdings and its Subsidiaries may enter into the Operating
Agreements; and
(vi) the Recapitalization Transaction shall be effected.
9.07 Capital Expenditures. (a) Holdings will not, and will not
permit any of its Subsidiaries to, make any Capital Expenditures, except that
(x) during the period (taken as one accounting period) from the Effective Date
through and including May 25, 1997, the Borrower and its Subsidiaries may make
Capital Expenditures in an aggregate amount not to exceed $10,000,000, (y)
during the fiscal year ended May 24, 1998 (taken as one accounting period), the
Borrower and its Subsidiaries may make Capital Expenditures in an aggregate
amount not to exceed $50,000,000 and (z) during each fiscal year thereafter
(taken as one accounting period), the Borrower and its Subsidiaries may make
Capital Expenditures in an aggregate amount not to exceed $60,000,000.
(b) Notwithstanding anything to the contrary contained in clause (a)
above, to the extent that the aggregate amount of Capital Expenditures made by
the Borrower and its Subsidiaries pursuant to Section 9.07(a) (except as set
forth in clause (x) thereof) in any fiscal year of the Borrower (beginning with
the fiscal year ended May 24, 1998) are less than (x) $50,000,000 (or
$60,000,000 in the case of a fiscal year beginning after May 24, 1998), the
amount of such difference, but in no case more than $10,000,000, may be carried
forward and used to make Capital Expenditures in the immediately succeeding
fiscal year (after the full amount of Capital Expenditures otherwise permitted
to be made under Section 9.07(a) in such fiscal year, without regard to the
provisions of this clause (b), have been made), provided that amounts once
carried forward to such succeeding fiscal year shall lapse and terminate at the
end of such fiscal year.
(c) In addition to the Capital Expenditures permitted pursuant to
preceding clauses (a) and (b) the Borrower and its Subsidiaries may make
additional Capital Expenditures consisting of the reinvestment of proceeds of
Recovery Events not required to be applied to prepay the Loans pursuant to
Section 4.02(h).
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9.08 Consolidated Interest Coverage Ratio. Holdings will not permit
the Consolidated Interest Coverage Ratio for any period of four consecutive
fiscal quarters (or, if shorter, the period beginning on the first day of the
fiscal year beginning on, or closest to, May 26, 1997 and ended on the last day
of a fiscal quarter ended thereafter), in each case taken as one accounting
period, ended on the last day of a fiscal quarter described below to be less
than the amount set forth opposite such fiscal quarter below:
Fiscal Quarter Ended
In, or Closest to Ratio
-------------------- -----
August, 1997 2.6:1.0
November, 1997 2.6:1.0
February, 1998 2.6:1.0
May, 1998 3.0:1.0
August, 1998 3.0:1.0
November, 1998 3.0:1.0
February, 1999 3.0:1.0
May, 1999
and thereafter 3.5:1.0
9.09 Consolidated Fixed Charge Coverage Ratio. Holdings will not
permit the Consolidated Fixed Charge Coverage Ratio for any period of four
consecutive fiscal quarters (or, if shorter, the period beginning on the first
day of the fiscal year beginning on, or closest to, May 26, 1997 and ending on
the last day of a fiscal quarter ended thereafter), in each case taken as one
accounting period, ended on the last day of any fiscal quarter set forth below
to be less than the amount set forth opposite such fiscal quarter below:
Fiscal Quarter Ended
In, or Closest to Ratio
-------------------- -----
August, 1997 1.1:1.0
November, 1997 1.1:1.0
February, 1998 1.1:1.0
May, 1998
and thereafter 1.2:1.0
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9.10 Maximum Leverage Ratio. Holdings will not permit the Leverage
Ratio at any time during a fiscal quarter set forth below to be greater than the
ratio set forth opposite such fiscal quarter below:
Fiscal Quarter
Ended In Ratio
-------------- -----
August, 1997 3.5:1.0
November, 1997 3.5:1.0
February, 1998 3.5:1.0
May, 1998 3.0:1.0
August, 1998 3.0:1.0
November, 1998 3.0:1.0
February, 1999 3.0:1.0
May, 1999 3.0:1.0
August, 1999 3.0:1.0
November, 1999 3.0:1.0
February, 2000 3.0:1.0
May, 2000
and thereafter 2.5:1.0
9.11 Limitation on Modifications of Indebtedness; Modifications of
Certificate of Incorporation, By-Laws and Certain Other Agreements; etc.
Holdings will not, and will not permit any of its Subsidiaries to, (i) amend or
modify, or permit the amendment or modification of, any provision of the
Existing Indebtedness or of any agreement (including, without limitation, any
purchase agreement, indenture, loan agreement or security agreement) relating
thereto other than any amendments or modifications to the Existing Indebtedness
which do not in any way adversely affect the interests of the Banks and are
otherwise permitted under Section 9.04(iii), (ii) make (or give any notice in
respect of) any payment of any nature whatsoever (whether principal, interest or
otherwise) with respect to, or any payment (including without limitation any
prepayment) on or redemption or acquisition for value of, the Seller Note
(except that a redemption required by the first sentence of Section 4(c) of the
Seller Note shall be permitted to the extent required in accordance with the
terms of such first sentence as in effect on the Effective Date and so long as
all proceeds used to make such payment are received from an initial Public
Equity Offering (as such term is defined in the Seller Note) by Holdings) or any
Holdings Junior Subordinated Debentures, (iii) make (or give any notice in
respect thereof) any voluntary or optional payment or prepayment on or
redemption or acquisition for value of, or any prepayment or redemption as a
result of any asset sale, change of control or similar event of, any Senior
Subordinated Notes, (iv) amend or modify, or permit the amendment or
modification of, any provision of any Senior Subordinated Notes, the
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Seller Note or (after the issuance thereof) any Holdings Junior Subordinated
Debentures or any agreement (including, without limitation, any Senior
Subordinated Note Document) relating thereto other than amendments or
modifications which do not in any way adversely affect the interests of the
Banks and which are effected to make technical corrections to the respective
documentation, (v) amend or modify, or permit the amendment or modification of,
the Recapitalization Agreement, the Asset Purchase Agreement, any Operating
Agreement or any other Recapitalization Document, except for amendments or
modifications which are not in any way adverse in any material respect to the
interests of the Banks or (vi) amend, modify or change its Certificate of
Incorporation (including, without limitation, by the filing or modification of
any certificate of designation) or By-Laws, or any agreement entered into by it,
with respect to its capital stock (including any Shareholders' Agreement), or
enter into any new agreement with respect to its capital stock, other than any
amendments, modifications or changes pursuant to this clause (vi) or any such
new agreements pursuant to this clause (vi) which do not in any way adversely
affect in any material respect the interests of the Banks, provided that nothing
in this clause (vi) shall prevent Holdings or any of its Subsidiaries from
amending its Certificate of Incorporation or By-Laws to provide indemnification
to any officer or director of Holdings or any such Subsidiary to the maximum
extent permitted by the law of its jurisdiction of incorporation and provided
that Holdings may issue such capital stock as is not prohibited by Section 9.13
and may amend its Certificate of Incorporation to authorize any such capital
stock. Without limiting the foregoing provisions, it is understood and agreed by
all parties hereto that (i) for purposes of Section 1 of the Seller Note, the
provisions of clause (ii) of the immediately preceding sentence prohibit the
payment of interest on the Seller Note in cash and (ii) for purposes of Section
4(f) of the Seller Note, the provisions of clause (ii) of the immediately
preceding sentence prohibit all partial or total redemptions of the Seller Note,
except to the extent expressly otherwise provided in said clause (ii).
9.12 Limitation on Certain Restrictions on Subsidiaries. The
Borrower will not, and will not permit any of its Subsidiaries to, directly or
indirectly, create or otherwise cause or suffer to exist or become effective any
encumbrance or restriction on the ability of any such Subsidiary to (a) pay
dividends or make any other distributions on its capital stock or any other
interest or participation in its profits owned by the Borrower or any Subsidiary
of the Borrower, or pay any Indebtedness owed to the Borrower or a Subsidiary of
the Borrower, (b) make loans or advances to the Borrower or any of the
Borrower's Subsidiaries or (c) transfer any of its properties or assets to the
Borrower or any of the Borrower's Subsidiaries, except for such encumbrances or
restrictions existing under or by reason of (i) applicable law, (ii) this
Agreement and the other Credit Documents, (iii) the Senior Subordinated Note
Documents, (iv) customary provisions restricting subletting or assignment of any
lease governing a leasehold interest of the Borrower or a Subsidiary of the
Borrower, (v) customary provisions restricting assignment of any agreement
entered into by the Borrower or a Subsidiary of the Borrower in the ordinary
course of business, (vi)
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any holder of a Permitted Lien may restrict the transfer of the asset or assets
subject thereto and (vii) restrictions which are not more restrictive than those
contained in this Agreement contained in any documents governing any
Indebtedness incurred after the Effective Date in accordance with the provisions
of this Agreement.
9.13 Limitation on Issuance of Capital Stock. (a) Holdings will not
issue any capital stock which is not Qualified Capital Stock.
(b) Holdings will not permit any of its Subsidiaries to issue any
capital stock (including by way of sales of treasury stock) or any options or
warrants to purchase, or securities convertible into, capital stock, except (i)
for transfers and replacements of then outstanding shares of capital stock, (ii)
for stock splits, stock dividends and additional issuances which do not decrease
the percentage ownership of Holdings or any of its Subsidiaries in any class of
the capital stock of such Subsidiary, (iii) in the case of Foreign Subsidiaries
of the Borrower, to qualify directors to the extent required by applicable law,
and (iv) Subsidiaries of the Borrower formed after the Effective Date pursuant
to Section 9.14 may issue capital stock to the Borrower or the respective
Subsidiary of the Borrower which is to own such stock in accordance with the
requirements of Section 8.11. All capital stock issued in accordance with this
Section 9.13(b) shall, to the extent required by the Pledge Agreement, be
delivered to the Collateral Agent for pledge pursuant to the Pledge Agreement.
9.14 Limitation on Creation of Subsidiaries. Neither Holdings nor
the Borrower shall establish, create or acquire any additional Subsidiaries
without the prior written consent of the Required Banks; provided that the
Borrower may establish or create one or more Wholly-Owned Subsidiaries of the
Borrower without such consent so long as (i) 100% of the capital stock of any
new Domestic Subsidiary (or all capital stock of any new Foreign Subsidiary
which is owned by any Credit Party, except that not more than 65% of the voting
stock of any such Foreign Subsidiary shall be required to be so pledged) is upon
the creation or establishment of any such new Subsidiary pledged and delivered
to the Collateral Agent for the benefit of the Secured Creditors under the
Pledge Agreement and (ii) upon the creation or establishment of any such new
Domestic Subsidiary such Domestic Subsidiary executes the Additional Security
Documents and guaranty required to be executed by it in accordance with Section
8.12.
9.15 Business. (a) Holdings shall engage in no business activities
and shall have no assets or liabilities, other than (x) its ownership of the
capital stock of the Borrower and liabilities incident thereto, including its
liabilities pursuant to the Pledge Agreement and its guarantee pursuant to
Section 14.01 and its guarantee of the Senior Subordinated Notes, (y) its
obligations pursuant to the Seller Note and the Holdings
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Series A Preferred Stock and (z) its employment of members of management of the
Borrower.
(b) The Borrower will not, and will not permit any of its
Subsidiaries to, engage (directly or indirectly) in any business other than the
business in which the Borrower and its Subsidiaries are engaged on the Effective
Date and other businesses reasonably related thereto.
9.16 Designated Senior Indebtedness. In no event shall the Borrower
designate any indebtedness as "Designated Senior Indebtedness" for purposes of
the Senior Subordinated Note Indenture unless the Required Banks specifically
consent thereto in writing.
SECTION 10. Events of Default. Upon the occurrence of any of the
following specified events (each an "Event of Default"):
10.01 Payments. The Borrower shall (i) default in the payment when
due of any principal of any Loan or any Note or (ii) default, and such default
shall continue unremedied for three or more Business Days, in the payment when
due of any Unpaid Drawings or interest on any Loan or Note, or any Fees or any
other amounts owing hereunder or thereunder; or
10.02 Representations, etc. Any representation, warranty or
statement made by any Credit Party herein or in any other Credit Document or in
any certificate delivered pursuant hereto or thereto shall prove to be untrue in
any material respect on the date as of which made or deemed made; or
10.03 Covenants. Holdings or the Borrower shall (i) default in the
due performance or observance by it of any term, covenant or agreement contained
in Section 8.01(g)(i), 8.08, 8.11 or Section 9 or (ii) default in the due
performance or observance by it of any other term, covenant or agreement
contained in this Agreement and such default shall continue unremedied for a
period of 30 days after written notice to the Borrower by any Agent or any of
the Banks; or
10.04 Default Under Other Agreements. Holdings, the Borrower or any
of their respective Subsidiaries shall (i) default in any payment of any
Indebtedness (other than the Obligations) beyond the period of grace, if any,
provided in the instrument or agreement under which such Indebtedness was
created or (ii) default in the observance or performance of any agreement or
condition relating to any Indebtedness (other than the Obligations) or contained
in any instrument or agreement evidencing, securing or relating thereto, or any
other event shall occur or condition exist, the effect of which default or
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other event or condition is to cause, or to permit the holder or holders of such
Indebtedness (or a trustee or agent on behalf of such holder or holders) to
cause (determined without regard to whether any notice is required), any such
Indebtedness to become due prior to its stated maturity (other than, in the case
of the Seller Note, as a result of a redemption required by the first sentence
of Section 4(c) of the Seller Note and permitted to be paid pursuant to Section
9.11(ii)), or (iii) any Indebtedness (other than the Obligations) of Holdings,
the Borrower or any of their respective Subsidiaries shall be declared to be due
and payable, or required to be prepaid other than by a regularly scheduled
required prepayment, prior to the stated maturity thereof, (other than, in the
case of the Seller Note, as a result of a redemption required by the first
sentence of Section 4(c) of the Seller Note and permitted to be paid pursuant to
Section 9.11(ii)), provided that (x) it shall not be a Default or Event of
Default under this Section 10.04 unless the aggregate principal amount of all
Indebtedness as described in preceding clauses (i) through (iii), inclusive, is
at least $5,000,000; or
10.05 Bankruptcy, etc. Holdings, the Borrower or any of their
respective Subsidiaries shall commence a voluntary case concerning itself under
Title 11 of the United States Code entitled "Bankruptcy," as now or hereafter in
effect, or any successor thereto (the "Bankruptcy Code"); or an involuntary case
is commenced against Holdings, the Borrower or any of their respective
Subsidiaries and the petition is not controverted within 15 days, or is not
dismissed within 60 days, after commencement of the case; or a custodian (as
defined in the Bankruptcy Code) is appointed for, or takes charge of, all or
substantially all of the property of Holdings, the Borrower or any of their
respective Subsidiaries or Holdings, the Borrower or any of their respective
Subsidiaries commences any other proceeding under any reorganization,
arrangement, adjustment of debt, relief of debtors, dissolution, insolvency or
liquidation or similar law of any jurisdiction whether now or hereafter in
effect relating to Holdings, the Borrower or any of their respective
Subsidiaries or there is commenced against Holdings, the Borrower or any of
their respective Subsidiaries any such proceeding which remains undismissed for
a period of 60 days, or Holdings, the Borrower or any of their respective
Subsidiaries is adjudicated insolvent or bankrupt; or any order of relief or
other order approving any such case or proceeding is entered; or Holdings, the
Borrower or any of their respective Subsidiaries suffers any appointment of any
custodian or the like for it or any substantial part of its property to continue
undischarged or unstayed for a period of 60 days; or Holdings, the Borrower or
any of their respective Subsidiaries makes a general assignment for the benefit
of creditors; or any corporate action is taken by Holdings, the Borrower or any
of their respective Subsidiaries for the purpose of effecting any of the
foregoing; or
10.06 ERISA. (a) Any Plan shall fail to satisfy the minimum funding
standard required for any plan year or part thereof under Section 412 of the
Code or Section 302 of ERISA or a waiver of such standard or extension of any
amortization period
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is sought or granted under Section 412 of the Code or Section 303 or 304 of
ERISA, a Reportable Event shall have occurred, a contributing sponsor (as
defined in Section 4001(a)(13) of ERISA) of a Plan subject to Title IV of ERISA
shall be subject to the advance reporting requirement of PBGC Regulation Section
4043.61 (without regard to subparagraph (b)(1) thereof) and an event described
in subsection .62, .63, .64, .65, .66, .67 or .68 of PBGC Regulation Section
4043 shall be reasonably expected to occur with respect to such Plan within the
following 30 days, any Plan which is subject to Title IV of ERISA shall have had
or is reasonably likely to have a trustee appointed to administer such Plan, any
Plan which is subject to Title IV of ERISA is, shall have been or is reasonably
likely to be terminated or to be the subject of termination proceedings under
ERISA, any Plan shall have an Unfunded Current Liability, a contribution
required to be made with respect to a Plan or a Foreign Pension Plan has not
been timely made, Holdings or any Subsidiary of Holdings or any ERISA Affiliate
has incurred or is reasonably likely to incur any liability to or on account of
a Plan under Section 409, 502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201,
4204 or 4212 of ERISA or Section 401(a)(29), 4971 or 4975 of the Code or on
account of a group health plan (as defined in Section 607(1) of ERISA or Section
4980B(g)(2) of the Code) under Section 4980B of the Code, or Holdings, or any of
its Subsidiaries has incurred or is reasonably likely to incur liabilities
pursuant to one or more employee welfare benefit plans (as defined in Section
3(1) of ERISA) that provide benefits to retired employees or other former
employees (other than as required by Section 601 of ERISA) or Plans or Foreign
Pension Plans; (b) there shall result from any such event or events the
imposition of a lien, the granting of a security interest, or a liability or a
material risk of incurring a liability; and (c) such lien, security interest or
liability, individually, and/or in the aggregate, in the opinion of the Required
Banks, has had, or could reasonably be expected to have, a Material Adverse
Effect; or
10.07 Security Documents. At any time after the execution and
delivery thereof, any of the Security Documents shall cease to be in full force
and effect, or shall cease in any material respect to give the Collateral Agent
for the benefit of the Secured Creditors the Liens, rights, powers and
privileges purported to be created thereby (including, without limitation, a
perfected security interest in, and Lien on, all of the Collateral (excluding
(i) assets valued at up to $250,000 in the aggregate, (ii) cash proceeds of any
such Collateral to the extent same are not required to be paid to, or deposited
with, the Collateral Agent pursuant to the respective Security Document and
(iii) inventory (including work-in-process), which, in the ordinary course of
business, is located outside of the U.S. or any territories thereof and is
temporarily in transit or held pending the completion or sale thereof (except to
the extent Holdings and the Borrower have failed to comply, following the
request of the Collateral Agent or the Required Banks, with the requirements of
the second sentence of Section 8.12(b)); provided that if the Borrower is
notified by the Administrative Agent of a lack of perfection with respect to any
of the Collateral, the Borrower will take such steps as are necessary or
advisable to perfect the Collateral Agent's
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security interest in such Collateral)), in favor of the Collateral Agent,
superior to and prior to the rights of all third Persons (except as permitted by
Section 9.01), and subject to no other Liens (except as permitted by Section
9.01), or any Credit Party shall default in the due performance or observance of
any term, covenant or agreement on its part to be performed or observed pursuant
to any of the Security Documents and such default shall continue beyond any
grace period specifically applicable thereto pursuant to the terms of such
Security Document; or
10.08 Guaranty. Any Guaranty or any provision thereof shall cease to
be in full force or effect as to the relevant Guarantor (unless such Guarantor
is no longer a Subsidiary by virtue of a liquidation, sale, merger or
consolidation permitted by Section 9.02), or any Guarantor or Person acting by
or on behalf of such Guarantor shall deny or disaffirm such Guarantor's
obligations under the relevant Guaranty, or any Guarantor shall default in the
due performance or observance of any term, covenant or agreement on its part to
be performed or observed pursuant to its Guaranty; or
10.09 Judgments. One or more judgments or decrees shall be entered
against Holdings, the Borrower or any of their respective Subsidiaries involving
in the aggregate for Holdings, the Borrower and their respective Subsidiaries a
liability (not paid or fully covered by a reputable and solvent insurance
company) and such judgments and decrees either shall be final and non-appealable
or shall not be vacated, discharged or stayed or bonded pending appeal for any
period of 60 consecutive days, and the aggregate amount of all such judgments to
the extent not covered by insurance exceeds $1,000,000; or
10.10 Change of Control. A Change of Control shall occur;
then, and in any such event, and at any time thereafter, if any Event of Default
shall then be continuing, the Administrative Agent, upon the written request of
the Required Banks, shall by written notice to the Borrower, take any or all of
the following actions, without prejudice to the rights of any Agent, any Bank or
the holder of any Note to enforce its claims against any Credit Party (provided
that, if an Event of Default specified in Section 10.05 shall occur with respect
to the Borrower, the result which would occur upon the giving of written notice
by the Administrative Agent to the Borrower as specified in clauses (i) and (ii)
below shall occur automatically without the giving of any such notice): (i)
declare the Total Commitments terminated, whereupon all Commitments of each Bank
shall forthwith terminate immediately and any Commitment Commission shall
forthwith become due and payable without any other notice of any kind; (ii)
declare the principal of and any accrued interest in respect of all Loans and
the Notes and all Obligations owing hereunder and thereunder to be, whereupon
the same shall become, forthwith due and payable without presentment, demand,
protest or other notice of any kind, all of which are hereby waived
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by each Credit Party; (iii) terminate any Letter of Credit, which may be
terminated, in accordance with its terms; (iv) direct the Borrower to pay (and
the Borrower agrees that upon receipt of such notice, or upon the occurrence of
an Event of Default specified in Section 10.05 with respect to the Borrower, it
will pay) to the Collateral Agent at the Payment Office such additional amount
of cash, to be held as security by the Collateral Agent, as is equal to the
aggregate Stated Amount of all Letters of Credit issued for the account of the
Borrower and then outstanding; (v) enforce, as Collateral Agent, all of the
Liens and security interests created pursuant to the Security Documents; and
(vi) apply any cash collateral as provided in Section 4.02.
SECTION 11. Definitions and Accounting Terms.
11.01 Defined Terms. As used in this Agreement, the following terms
shall have the following meanings (such meanings to be equally applicable to
both the singular and plural forms of the terms defined):
"Additional Collateral" shall mean all property (whether real or
personal) in which security interests are granted (or have been purported to be
granted) (and continue to be in effect at the time of determination) pursuant to
Section 8.12.
"Additional Mortgage" shall have the meaning provided in Section
8.12(a).
"Additional Mortgaged Property" shall have the meaning provided in
Section 8.12(a).
"Additional Security Documents" shall mean all mortgages, pledge
agreements, security agreements and other security documents entered into
pursuant to Section 8.12 with respect to Additional Collateral.
"Adjusted Certificate of Deposit Rate" shall mean, on any day, the
sum (rounded to the nearest 1/100 of 1%) of (1) the rate obtained by dividing
(x) the most recent weekly average dealer offering rate for negotiable
certificates of deposit with a three-month maturity in the secondary market as
published in the most recent Federal Reserve System publication entitled "Select
Interest Rates," published weekly on Form H.15 as of the date hereof, or if such
publication or a substitute containing the foregoing rate information shall not
be published by the Federal Reserve System for any week, the weekly average
offering rate determined by the Administrative Agent on the basis of quotations
for such certificates received by it from three certificate of deposit dealers
in New York of recognized standing or, if such quotations are unavailable, then
on the basis of other sources reasonably selected by the Administrative Agent,
by (y) a percentage equal to 100% minus the stated maximum rate of all reserve
requirements as specified in Regulation D
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applicable on such day to a three-month certificate of deposit of a member bank
of the Federal Reserve System in excess of $100,000 (including, without
limitation, any marginal, emergency, supplemental, special or other reserves),
plus (2) the then daily net annual assessment rate as estimated by the
Administrative Agent for determining the current annual assessment payable by
the Administrative Agent to the Federal Deposit Insurance Corporation for
insuring three-month certificates of deposit.
"Adjusted Consolidated Net Income" for any period shall mean
Consolidated Net Income for such period plus, without duplication, the sum of
the amount of all net non-cash charges (including, without limitation,
depreciation, amortization, deferred tax expense and non-cash interest expense,
but excluding any net non-cash charges reflected in Adjusted Consolidated
Working Capital) and net non-cash losses which were included in arriving at
Consolidated Net Income for such period less the sum of the amount of all net
non-cash gains (exclusive of items reflected in Adjusted Consolidated Working
Capital) included in arriving at Consolidated Net Income for such period.
"Adjusted Consolidated Working Capital" at any time shall mean
Consolidated Current Assets (but excluding therefrom all cash and Cash
Equivalents) less Consolidated Current Liabilities.
"Adjusted Percentage" shall mean (x) at a time when no Bank Default
exists, for each Bank, such Bank's Percentage and (y) at a time when a Bank
Default exists (i) for each Bank that is a Defaulting Bank, zero and (ii) for
each Bank that is a Non-Defaulting Bank, the percentage determined by dividing
such Bank's Revolving Loan Commitment at such time by the Adjusted Total
Revolving Loan Commitment at such time, it being understood that all references
herein to Revolving Loan Commitments and the Adjusted Total Revolving Loan
Commitment at a time when the Total Revolving Loan Commitment or Adjusted Total
Revolving Loan Commitment, as the case may be, has been terminated shall be
references to the Revolving Loan Commitments or Adjusted Total Revolving Loan
Commitment, as the case may be, in effect immediately prior to such termination,
provided that (A) no Bank's Adjusted Percentage shall change upon the occurrence
of a Bank Default from that in effect immediately prior to such Bank Default if
after giving effect to such Bank Default, and any repayment of Revolving Loans
and Swingline Loans at such time pursuant to Section 4.02(a) or otherwise, the
sum of (i) the aggregate outstanding principal amount of Revolving Loans of all
Non-Defaulting Banks plus (ii) the aggregate outstanding principal amount of
Swingline Loans plus (iii) the Letter of Credit Outstandings, exceed the
Adjusted Total Revolving Loan Commitment; (B) the changes to the Adjusted
Percentage that would have become effective upon the occurrence of a Bank
Default but that did not become effective as a result of the preceding clause
(A) shall become effective on the first date after the occurrence of the
relevant Bank Default on which the sum of (i) the aggregate outstanding
principal amount of the Revolving Loans of all Non-Defaulting Banks plus (ii)
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the aggregate outstanding principal amount of Swingline Loans plus (iii) the
Letter of Credit Outstandings is equal to or less than the Adjusted Total
Revolving Loan Commitment; and (C) if (i) a Non-Defaulting Bank's Adjusted
Percentage is changed pursuant to the preceding clause (B) and (ii) any
repayment of such Bank's Revolving Loans, or of Unpaid Drawings with respect to
Letters of Credit or of Swingline Loans, that were made during the period
commencing after the date of the relevant Bank Default and ending on the date of
such change to its Adjusted Percentage must be returned to the Borrower as a
preferential or similar payment in any bankruptcy or similar proceeding of the
Borrower, then the change to such Non-Defaulting Bank's Adjusted Percentage
effected pursuant to said clause (B) shall be reduced to that positive change,
if any, as would have been made to its Adjusted Percentage if (x) such
repayments had not been made and (y) the maximum change to its Adjusted
Percentage would have resulted in the sum of the outstanding principal of
Revolving Loans made by such Bank plus such Bank's new Adjusted Percentage of
the outstanding principal amount of Swingline Loans and of Letter of Credit
Outstandings equalling such Bank's Revolving Loan Commitment at such time.
"Adjusted Total Revolving Loan Commitment" shall mean at any time the
Total Revolving Loan Commitment less the aggregate Revolving Loan Commitments of
all Defaulting Banks.
"Administrative Agent" shall have the meaning provided in the first
paragraph of this Agreement, and shall include any successor thereto.
"Affiliate" shall mean, with respect to any Person, any other Person
(including, for purposes of Section 9.06 only, all directors, officers and
partners of such Person) directly or indirectly controlling, controlled by, or
under direct or indirect common control with, such Person; provided, however,
that for purposes of Section 9.06, an Affiliate of Holdings shall include any
Person that directly or indirectly owns more than 5% of any class of the capital
stock of Holdings and any officer or director of Holdings or any of its
Subsidiaries. A Person shall be deemed to control another Person if such Person
possesses, directly or indirectly, the power to direct or cause the direction of
the management and policies of such other Person, whether through the ownership
of voting securities, by contract or otherwise.
"Agent" shall have the meaning set forth in the first paragraph of
this Agreement.
"Agreement" shall mean this Credit Agreement, as modified,
supplemented, amended, restated, extended, renewed or replaced from time to
time.
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"Applicable Margin" shall mean (i) in the case of Tranche B Term
Loans maintained as (x) Base Rate Loans, 2.00% and (y) Eurodollar Loans, 3.00%
and (ii) in the case of Revolving Loans and Tranche A Term Loans, during each
Margin Adjustment Period beginning after the Initial Borrowing Date, the
percentage per annum set forth below opposite the respective Level indicated to
have been achieved on the applicable Start Date for such Margin Adjustment
Period (as shown on the respective officer's certificate delivered pursuant to
Section 8.01(f)) in accordance with the Requirements for the various Levels
specified in the table below:
Applicable Applicable
Margin for Margin for
Base Rate Eurodollar
Level Requirements Loans Loans
- --------------------------------------------------------------------------------
1 For the Margin Adjustment Test Period last 0% 1.00%
ended, the Leverage Ratio was less than or
equal to 1.50:1.00 on the last day of such
Margin Adjustment Test Period and the
Consolidated Interest Coverage Ratio for such
Margin Adjustment Test Period was greater than
or equal to 5.00:1.00.
2 For the Margin Adjustment Test Period last 0.50% 1.50%
ended, the Requirements for Level 1, as set
forth above, were not met, and the Leverage
Ratio was less than or equal to 2.00:1.00 on
the last day of such Margin Adjustment Test
Period and the Consolidated Interest Coverage
Ratio for such Margin Adjustment Test Period
was greater than or equal to 4.00:1.00
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Applicable Applicable
Margin for Margin for
Base Rate Eurodollar
Level Requirements Loans Loans
- --------------------------------------------------------------------------------
3 For the Margin Adjustment Test Period last 1.00% 2.00%
ended, the Requirements for Levels 1 and 2, as
set forth above, were not met, and the
Leverage Ratio was less than 2.25:1.00 on the
last day of such Margin Adjustment Test Period
and the Consolidated Interest Coverage Ratio
for such Margin Adjustment Test Period was
greater than or equal to 3.50:1.00
4 Level 4 pricing shall apply at all times when 1.50% 2.50%
the Requirements set forth above for Levels 1
through 3 are not met
; provided, however, that Level 4 pricing shall also apply (x) from the period
from the Initial Borrowing Date to but excluding the first day of the first
Margin Adjustment Period occurring after the Initial Borrowing Date and (y) at
any time when any Default or Event of Default is in existence.
"Asset Purchase Agreement" shall mean the Asset Purchase Agreement,
dated as of March 11, 1997, between the Borrower and NSC.
"Asset Transfer" shall have the meaning provided in Section 5.06(b).
"Assignment and Assumption Agreement" shall mean the Assignment and
Assumption Agreement substantially in the form of Exhibit L (appropriately
completed).
"Assumed Liabilities" shall mean those liabilities in respect of the
Business which are being assumed by the Borrower pursuant to Section 2.3 of the
Asset Purchase Agreement.
"Bank" shall mean each financial institution listed on Schedule I, as
well as any Person which becomes a "Bank" hereunder pursuant to 13.04(b).
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"Bank Default" shall mean (i) the refusal (which has not been
retracted) of a Bank to make available its portion of any Borrowing (including
any Mandatory Borrowing) or to fund its portion of any unreimbursed payment
under Section 2.03(c) or (ii) a Bank having notified in writing the Borrower
and/or the Administrative Agent that it does not intend to comply with its
obligations under Section 1.01(c) or Section 2.
"Bankruptcy Code" shall have the meaning provided in Section 10.05.
"Base Rate" shall mean for any day, a rate of interest per annum
equal to the higher of (i) the Prime Lending Rate for such day and (ii) the sum
of the Adjusted Certificate of Deposit Rate for such day plus 1/2 of 1% per
annum.
"Base Rate Loan" shall mean (i) each Swingline Loan and (ii) each
Loan designated or deemed designated as such by the Borrower at the time of the
incurrence thereof or conversion thereto.
"Borrower" shall have the meaning set forth in the first paragraph of
this Agreement.
"Borrower Common Stock" shall mean the common stock of the Borrower.
"Borrowing" shall mean the borrowing of one Type of Loan of a single
Tranche from all the Banks (other than any Bank which has not funded its share
of a Borrowing in accordance with this Agreement) having Commitments of the
respective Tranche (or from the Swingline Bank in the case of Swingline Loans)
on a given date (or resulting from a conversion or conversions on such date)
having in the case of Eurodollar Loans the same Interest Period, provided that
Base Rate Loans incurred pursuant to Section 1.10(b) shall be considered part of
the related Borrowing of Eurodollar Loans. It is understood that there may be
more than one Borrowing outstanding pursuant to a given Tranche.
"BTCo" shall mean Bankers Trust Company in its individual capacity.
"Business" shall mean NSC's Logic, Memory and Discrete Power and
Signal Technologies Business Units as historically conducted and accounted for
(including Flash Memory, but excluding Public Networks, Programmable Products
and Mil Logic Products).
"Business Day" shall mean (i) with respect to any borrowing, payment
or rate selection of Eurodollar Loans, a day (other than a Saturday or Sunday)
on which banks generally are open in New York for the conduct of substantially
all of their commercial lending activities and on which dealings in United
States dollars are carried on in the London interbank market and (ii) for all
other purposes, a day (other than a Saturday or
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Sunday) on which banks generally are open in New York for the conduct
of substantially all of their commercial lending activities.
"Capital Expenditures" shall mean, with respect to any Person, all
expenditures by such Person which should be capitalized in accordance with
generally accepted accounting principles, including all such expenditures with
respect to fixed or capital assets (including, without limitation, expenditures
for maintenance and repairs which should be capitalized in accordance with
generally accepted accounting principles) and the amount of Capitalized Lease
Obligations incurred by such Person.
"Capitalized Lease Obligations" of any Person shall mean all rental
obligations which, under generally accepted accounting principles, are or will
be required to be capitalized on the books of such Person, in each case taken at
the amount thereof accounted for as indebtedness in accordance with such
principles.
"Cash Equivalents" shall mean, as to any Person, (i) securities
issued or directly and fully guaranteed or insured by the United States or any
agency or instrumentality thereof (provided that the full faith and credit of
the United States is pledged in support thereof) having maturities of not more
than one year from the date of acquisition, (ii) time deposits and certificates
of deposit of any commercial bank having, or which is the principal banking
subsidiary of a bank holding company organized under the laws of the United
States, any State thereof, the District of Columbia or any foreign jurisdiction
having capital, surplus and undivided profits aggregating in excess of
$200,000,000, with maturities of not more than one year from the date of
acquisition by such Person, (iii) repurchase obligations with a term of not more
than 90 days for underlying securities of the types described in clause (i)
above entered into with any bank meeting the qualifications specified in clause
(ii) above, (iv) commercial paper issued by any Person incorporated in the
United States rated at least A-1 or the equivalent thereof by Standard & Poor's
Corporation or at least P-1 or the equivalent thereof by Moody's Investors
Service, Inc. and in each case maturing not more than one year after the date of
acquisition by such Person, (v) investments in money market funds substantially
all of whose assets are comprised of securities of the types described in
clauses (i) through (iv) above and (vi) demand deposit accounts maintained in
the ordinary course of business.
"CERCLA" shall mean the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as the same may be amended from time to
time, 42 U.S.C. Section 9601 et seq.
"Change of Control" shall mean (i) Holdings shall at any time cease
to own 100% of the capital stock of the Borrower; (ii) at any time a "Change of
Control" under and as defined in the Senior Subordinated Note Indenture, the
Seller Note or in any
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documentation relating to any Indebtedness refinancing all or any part thereof
shall have occurred; (iii) at any time prior to the consummation of a Qualified
Public Offering, and for any reason whatsoever, (x) the CVC Permitted Holders
shall own less than 40% of the then outstanding Voting Stock at such time or (y)
the CVC Permitted Holders and the Management Investors, taken together, shall
own less than a majority or the outstanding Voting Stock of Holdings; (iv) at
any time after the consummation of a Qualified Public Offering, and for any
reason whatsoever, (x) the CVC Permitted Holders shall own less than 20% of the
outstanding Voting Stock of Holdings or (y) any "Person" or "group" (as such
terms are used in Sections 13(d) and 14(d) of the Exchange Act), excluding the
CVC Permitted Holders, is or shall become the "beneficial owner" (as defined in
Rules 13(d)-3 and 13(d)-5 under the Exchange Act), directly or indirectly, of a
greater percentage of the Voting Stock of Holdings than is owned by the CVC
Permitted Holders at such time; or (v) at any time the Board of Directors of
Holdings shall cease to consist of a majority of Continuing Directors.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time, and the regulations promulgated and rulings issued thereunder.
Section references to the Code are to the Code, as in effect at the date of this
Agreement and any subsequent provisions of the Code, amendatory thereof,
supplemental thereto or substituted therefor.
"Collateral" shall mean all property (whether real or personal) with
respect to which any security interests have been granted (or purported to be
granted) pursuant to any Security Document, including, without limitation, all
Pledge Agreement Collateral, all Security Agreement Collateral, all Mortgaged
Properties, all cash and Cash Equivalents delivered as collateral pursuant to
Section 4.02 or 10 hereof and all Additional Collateral, if any.
"Collateral Agent" shall mean the Administrative Agent acting as
collateral agent for the Secured Creditors pursuant to the Security Documents.
"Commitment" shall mean any of the commitments of any Bank, i.e.,
whether the Tranche A Term Loan Commitment, Tranche B Term Loan Commitment or
Revolving Loan Commitment.
"Commitment Commission" shall have the meaning provided in Section
3.01(a).
"Common Management Fund" shall mean with respect to any Person, a
fund under common control with such Person.
"Consolidated Current Assets" shall mean, at any time, the
consolidated current assets of Holdings and its Consolidated Subsidiaries.
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"Consolidated Current Liabilities" shall mean, at any time, the
consolidated current liabilities of Holdings and its Consolidated Subsidiaries
at such time, but excluding (i) the current portion of any Indebtedness under
this Agreement and any other long-term Indebtedness which would otherwise be
included therein, (ii) accrued but unpaid interest with respect to the
Indebtedness described in clause (i), and (iii) the current portion of
Indebtedness constituting Capitalized Lease Obligations.
"Consolidated EBIT" shall mean, for any period, the Consolidated Net
Income for such period, before interest expense and provision for taxes based on
income and without giving effect to any extraordinary gains or losses or gains
or losses from sales of assets other than inventory sold in the ordinary course
of business.
"Consolidated EBITDA" shall mean, for any period, Consolidated EBIT,
adjusted by adding thereto the amount of all amortization of intangibles and
depreciation, in each case that were deducted in arriving at Consolidated EBIT
for such period.
"Consolidated Fixed Charge Coverage Ratio" for any period shall mean
the ratio of Consolidated EBITDA to Consolidated Fixed Charges for such period.
"Consolidated Fixed Charges" for any period shall mean the sum,
without duplication, of (i) Consolidated Interest Expense for such period, (ii)
the amount of all Capital Expenditures made by Holdings and its Subsidiaries
during such period (other than Capital Expenditures to the extent made pursuant
to Section 9.07(c)), (iii) all cash payments in respect of taxes made during
such period (net of any cash refunds actually received during such period) and
(iv) the scheduled principal amount of all amortization payments on all
Indebtedness (including without limitation the principal component of all
Capitalized Lease Obligations) of Holdings and its Subsidiaries for such period
(as determined on the first day of the respective period).
"Consolidated Indebtedness" shall mean, as at any date of
determination, the aggregate stated balance sheet amount of all Indebtedness
(but including in any event the then outstanding principal amount of all Loans,
all Senior Subordinated Notes, all Capitalized Lease Obligations and all Letter
of Credit Outstandings) of Holdings and its Subsidiaries on a consolidated basis
as determined in accordance with GAAP; provided that Indebtedness outstanding
pursuant to (x) the Seller Note, (y) the Holdings Junior Subordinated Debentures
and (z) trade payables incurred in the ordinary course of business shall be
excluded in determining Consolidated Indebtedness.
"Consolidated Interest Coverage Ratio" shall mean, for any period,
the ratio of (i) Consolidated EBITDA for such period to (ii) Consolidated
Interest Expense for such period.
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"Consolidated Interest Expense" shall mean, for any period, the total
consolidated interest expense of Holdings and its Consolidated Subsidiaries for
such period (calculated without regard to any limitations on the payment
thereof) plus, without duplication, that portion of Capitalized Lease
Obligations of Holdings and its Consolidated Subsidiaries representing the
interest factor for such period, but excluding (i) the amortization of any
deferred financing costs incurred in connection with this Agreement or the
issuance of the Senior Subordinated Notes and (ii) any interest expense in
respect of (x) the Seller Note and (y) the Holdings Junior Subordinated
Debentures.
"Consolidated Net Income" shall mean, for any period, the
consolidated net after tax income of Holdings and its Consolidated Subsidiaries
determined in accordance with GAAP.
"Consolidated Subsidiaries" shall mean, as to any Person, all
Subsidiaries of such Person which are consolidated with such Person for
financial reporting purposes in accordance with GAAP. Notwithstanding anything
to the contrary contained in this Agreement (and except for purposes of the
definition of Unrestricted Subsidiary), an Unrestricted Subsidiary shall be
deemed not to be a Subsidiary of the Borrower or any of its other Subsidiaries
for purposes of this Agreement.
"Contingent Obligation" shall mean, as to any Person, any obligation
of such Person guaranteeing or intended to guarantee any Indebtedness, leases,
dividends or other obligations ("primary obligations") of any other Person (the
"primary obligor") in any manner, whether directly or indirectly, including,
without limitation, any obligation of such Person, whether or not contingent,
(i) to purchase any such primary obligation or any property constituting direct
or indirect security therefor, (ii) to advance or supply funds (x) for the
purchase or payment of any such primary obligation or (y) to maintain working
capital or equity capital of the primary obligor or otherwise to maintain the
net worth or solvency of the primary obligor, (iii) to purchase property,
securities or services primarily for the purpose of assuring the owner of any
such primary obligation of the ability of the primary obligor to make payment of
such primary obligation or (iv) otherwise to assure or hold harmless the holder
of such primary obligation against loss in respect thereof; provided, however,
that the term Contingent Obligation shall not include endorsements of
instruments for deposit or collection in the ordinary course of business and any
products warranties extended in the ordinary course of business. The amount of
any Contingent Obligation shall be deemed to be an amount equal to the stated or
determinable amount of the primary obligation in respect of which such
Contingent Obligation is made (or, if the less, the maximum amount of such
primary obligation for which such Person may be liable pursuant to the terms of
the instrument evidencing such Contingent Obligation) or, if not stated or
determinable, the maximum reasonably anticipated liability in respect thereof
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(assuming such Person is required to perform thereunder) as determined by such
Person in good faith.
"Continuing Directors" shall mean the (i) directors of Holdings on
the Initial Borrowing Date and (ii) each other director, if (x) such director's
nomination for election to the Board of Directors of Holdings is recommended by
a majority of the then Continuing Directors or (y) such director became a member
of the Board of Directors pursuant to, and in accordance with, Article V of the
Securities Purchase and Holders Agreement prior to the termination of the voting
agreements pursuant to Section 5.7 of the Securities Purchase and Holders
Agreement.
"Credit Documents" shall mean this Agreement and, after the execution
and delivery thereof pursuant to the terms of this Agreement, each Note, each
Security Document and the Subsidiaries Guaranty and, after the execution and
delivery thereof, each additional guaranty or security document executed
pursuant to Section 8.12.
"Credit Event" shall mean the making of any Loan or the issuance of
any Letter of Credit.
"Credit Party" shall mean Holdings, the Borrower, each Subsidiary
Guarantor and any other Subsidiary which at any time executes and delivers any
Credit Document as required by this Agreement.
"CVC" shall mean Citicorp Venture Capital, Ltd.
"CVC Permitted Holders" shall mean (i) CVC, (ii) any officer,
employee or director of CVC or any trust, partnership or other entity
established solely for the benefit of such officers, employees or directors and
(iii) Sterling (or any successor) so long as CVC, employees, officers and
directors of CVC and corporations, partnerships and other entities at least a
majority of the equity in which is held in the aggregate by CVC and its
employees, officers and directors, hold no less than a majority of the aggregate
economic interests in Sterling or such successor.
"Debt Agreements" shall have the meaning provided in Section 5.05.
"Default" shall mean any event, act or condition which with notice or
lapse of time, or both, would constitute an Event of Default.
"Defaulting Bank" shall mean any Bank with respect to which a Bank
Default is in effect.
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"Disqualified Stock" shall mean any capital stock which, by its terms
(or by the terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event, (i) matures (excluding any
maturity as the result of an optional redemption by the issuer thereof) or is
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or
is redeemable at the option of the holder thereof, in whole or in part, on or
prior to the first anniversary of the Tranche B Term Loan Maturity Date, or (ii)
is convertible into or exchangeable (unless at the sole option of the issuer
thereof) for (a) debt securities or (b) any capital stock referred to in (i)
above, in each case at any time prior to the first anniversary of the Tranche B
Term Loan Maturity Date, or (iii) otherwise contains terms which are materially
more restrictive (or provide the holders thereof materially greater rights) than
the Holdings Series A Preferred Stock in the form issued on or prior to the
Initial Borrowing Date.
"Dividend" with respect to any Person shall mean that such Person has
declared or paid a dividend or returned any equity capital to its stockholders
or authorized or made any other distribution, payment or delivery of property
(other than common stock of such Person) or cash to its stockholders as such, or
redeemed, retired, purchased or otherwise acquired, directly or indirectly, for
a consideration any shares of any class of its capital stock outstanding on or
after the Effective Date (or any options or warrants issued by such Person with
respect to its capital stock), or set aside any funds for any of the foregoing
purposes, or shall have permitted any of its Subsidiaries to purchase or
otherwise acquire for a consideration any shares of any class of the capital
stock of such Person outstanding on or after the Effective Date (or any options
or warrants issued by such Person with respect to its capital stock). Without
limiting the foregoing, "Dividends" with respect to any Person shall also
include all payments made or required to be made by such Person with respect to
any stock appreciation rights, plans, equity incentive or achievement plans or
any similar plans or setting aside of any funds for the foregoing purposes.
"Documentation Agent" shall have the meaning provided in the first
paragraph of this Agreement.
"Documents" shall mean the Credit Documents and the Recapitalization
Documents.
"Dollars" and the sign "$" shall each mean lawful money of the United
States.
"Domestic Subsidiary" shall mean each Subsidiary of the Borrower that
is incorporated or organized in the United States of America, any State thereof,
the United States Virgin Islands or Puerto Rico.
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"Domestic Wholly-Owned Subsidiary" shall mean each Domestic
Subsidiary which is a Wholly-Owned Subsidiary of the Borrower.
"Drawing" shall have the meaning provided in Section 2.04(b).
"Effective Date" shall have the meaning provided in Section 13.10.
"Eligible Transferee" shall mean and include a commercial bank,
insurance company, financial institution, fund or other Person which regularly
purchases interests in loans or extensions of credit of the types made pursuant
to this Agreement, any other Person which would constitute a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act as
in effect on the Effective Date or other "accredited investor" (as defined in
Regulation D of the Securities Act).
"Employee Benefit Plans" shall have the meaning provided in Section
5.05.
"Environmental Claims" means any and all administrative, regulatory
or judicial actions, suits, demands, demand letters, directives, claims, liens,
notices of noncompliance or violation, investigations or proceedings relating in
any way to any Environmental Law or any permit issued, or any approval given,
under any such Environmental Law (hereafter, "Claims"), including, without
limitation, (a) any and all Claims by governmental or regulatory authorities for
enforcement, cleanup, removal, response, remedial or other actions or damages
pursuant to any applicable Environmental Law, and (b) any and all Claims by any
third party seeking damages, contribution, indemnification, cost recovery,
compensation or injunctive relief in connection with alleged injury or threat of
injury to health, safety or the environment due to the presence of Hazardous
Materials.
"Environmental Law" means any applicable Federal, state, foreign or
local statute, law, rule, regulation, ordinance, code, binding and enforceable
guideline, binding and enforceable written policy and rule of common law now or
hereafter in effect and in each case as amended, and any judicial or
administrative interpretation thereof, including any judicial or administrative
order, consent decree or judgment, to the extent binding on Holdings, the
Borrower or any of their respective Subsidiaries, relating to the environment,
employee health and safety or Hazardous Materials, including, without
limitation, CERCLA; RCRA; the Federal Water Pollution Control Act, 33 U.S.C.
Section 1251 et seq.; the Toxic Substances Control Act, 15 U.S.C. Section
2601 et seq.; the Clean Air Act, 42 U.S.C. Section 7401 et seq.; the Safe
Drinking Water Act, 42 U.S.C. Section 3803 et seq.; the Oil Pollution Act of
1990, 33 U.S.C. Section 2701 et seq.; the Emergency Planning and the
Community Right-to-Know Act of 1986, 42 U.S.C. Section 11001 et seq., the
Hazardous Material Transportation Act, 49 U.S.C. Section 1801 et seq. and the
Occupational Safety and Health Act, 29 U.S.C. Section 651 et seq. (to the
extent it regulates occupational exposure to Hazardous Materials); and
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any state and local or foreign counterparts or equivalents, in each case as
amended from time to time.
"Equity Contribution" shall mean the equity contributions made in
Holdings on or prior to the Initial Borrowing Date as contemplated by Sections
5.06(c) and (d).
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations promulgated and rulings
issued thereunder. Section references to ERISA are to ERISA, as in effect at the
date of this Agreement and any subsequent provisions of ERISA, amendatory
thereof, supplemental thereto or substituted therefor.
"ERISA Affiliate" shall mean each person (as defined in Section 3(9)
of ERISA) which together with Holdings or a Subsidiary of Holdings would be
deemed to be a "single employer" within the meaning of Section 414(b), (c), (m)
or (o) of the Code.
"Eurodollar Loan" shall mean each Loan (excluding Swingline Loans)
designated as such by the Borrower at the time of the incurrence thereof or
conversion thereto.
"Eurodollar Rate" shall mean the sum of (i) the quotient of (a) the
rate determined by the Administrative Agent to be the rate at which deposits in
U.S. dollars are offered by BTCo to first-class banks in the London interbank
market at approximately 11 a.m. (London time) two Business Days prior to the
first day of the Interest Period applicable to such Eurodollar Loan, in the
approximate amount of BTCo's relevant Eurodollar Loan and having a maturity
approximately equal to the Interest Period applicable to such Eurodollar Loan
divided by (b) a percentage equal to 100% minus the then stated maximum rate of
all reserve requirements (including, without limitation, any marginal,
emergency, supplemental, special or other reserves required by applicable law)
applicable to any member bank of the Federal Reserve System in respect of
Eurocurrency funding or liabilities as defined in Regulation D (or any successor
category of liabilities under Regulation D). The Eurodollar Rate shall be
rounded to the next higher multiple of 1/100 of 1% if the rate is not such a
multiple.
"Event of Default" shall have the meaning provided in Section 10.
"Excess Cash Flow" shall mean, for any period, the remainder of (a)
the sum of (i) Adjusted Consolidated Net Income for such period, (ii) the
decrease, if any, in Adjusted Consolidated Working Capital from the first day to
the last day of such period, (iii) the Net Sale Proceeds of asset sales to the
extent such proceeds are excluded under Section 4.02(f) by the operation of
clause (v) thereof and (iv) any amount of permitted
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Capital Expenditures carried forward into the respective period pursuant to the
provisions of Section 9.07(b), to the extent such amount has lapsed and
terminated during (or at the end of) such period pursuant to the proviso to
Section 9.07(b), minus (b) the sum of (i) the amount of Capital Expenditures
made by the Borrower and its Subsidiaries on a consolidated basis during such
period pursuant to and in accordance with Section 9.07(a) (but without giving
effect to any Capital Expenditures made during such period as a result of, or
pursuant to, Section 9.07(b) or to Capital Expenditures made pursuant to Section
9.07(c)), in each case except to the extent financed with the proceeds of
Indebtedness or pursuant to Capitalized Lease Obligations or to the extent
constituting a reinvestment of Net Sale Proceeds of asset sales under Section
4.02(f)(iv), (ii) the aggregate amount of permanent principal payments of
Indebtedness for borrowed money of the Borrower and its Subsidiaries and the
permanent repayment of the principal component of Capitalized Lease Obligations
of the Borrower and its Subsidiaries (excluding (1) payments with proceeds of
asset sales, (2) payments with the proceeds of other Indebtedness or equity and
(3) payments of Loans or other Obligations, provided that repayments of Loans
shall be deducted in determining Excess Cash Flow if such repayments were (x)
required as a result of a Scheduled Repayment under Section 4.02(b) or (c) (but
not as a reduction to the amount of Scheduled Repayments pursuant to another
provision of this Agreement) or (y) made as a voluntary prepayment pursuant to
Section 4.01 with internally generated funds (but in the case of a voluntary
prepayment of Revolving Loans or Swingline Loans, only to the extent accompanied
by a voluntary reduction to the Total Revolving Loan Commitment)) during such
period; (iii) the increase, if any, in Adjusted Consolidated Working Capital
from the first day to the last day of such period and (iv) if any amount
representing permitted Capital Expenditures is being carried forward from such
period into a subsequent period pursuant to the provisions of Section 9.07(b),
the amount being so carried forward to a subsequent period.
"Excess Cash Flow Conversion Time" shall have the meaning provided in
Section 4.02(g).
"Excess Cash Payment Date" shall mean the date occurring 90 days
after the last day of each fiscal year of Holdings (beginning with its fiscal
year ending in May 1998).
"Excess Cash Payment Period" shall mean, with respect to the
repayment required on each Excess Cash Payment Date, the immediately preceding
fiscal year of Holdings.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Existing Indebtedness" shall have the meaning provided in Section
7.22.
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"Facing Fee" shall have the meaning provided in Section 3.01(c).
"Federal Funds Rate" shall mean, for any day, an interest rate per
annum equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers on such day, as published for such day (or, if such day is not a
Business Day, for the immediately preceding Business Day) by the Federal Reserve
Bank of New York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations at approximately 11 a.m. (New York
time) on such day on such transactions received by the Administrative Agent from
three Federal funds brokers of recognized standing selected by the
Administrative Agent in its sole discretion.
"Fees" shall mean all amounts payable pursuant to or referred to in
Section 3.01.
"Foreign Pension Plan" shall mean any plan, fund (including, without
limitation, any superannuation fund) or other similar program established or
maintained outside the United States of America by Holdings or any one or more
of its Subsidiaries primarily for the benefit of employees of Holdings or such
Subsidiaries residing outside the United States of America, which plan, fund or
other similar program provides, or results in, retirement income, a deferral of
income in contemplation of retirement or payments to be made upon termination of
employment, and which plan is not subject to ERISA or the Code.
"Foreign Subsidiary" shall mean each Subsidiary of the Borrower that
is incorporated or organized under the laws of any jurisdiction other than the
United States of America, any State thereof, the United States Virgin Islands or
Puerto Rico.
"GAAP" shall have the meaning provided in Section 13.07(a).
"Guaranteed Creditors" shall mean and include each of the Agents, the
Collateral Agent, the Banks and each party (other than any Credit Party) party
to an Interest Rate Protection Agreement or Other Hedging Agreement to the
extent such party constitutes a Secured Creditor under the Security Documents.
"Guaranteed Obligations" shall mean all obligations of the Borrower
(i) to each Bank for the full and prompt payment when due (whether at the stated
maturity, by acceleration or otherwise) of the principal and interest on each
Note issued by the Borrower to such Bank, and Loans made, under the Credit
Agreement and all reimbursement obligations and Unpaid Drawings with respect to
Letters of Credit, together with all the other obligations and liabilities
(including, without limitation, indemnities, fees and interest thereon) of the
Borrower to such Bank now existing or hereafter incurred under, arising out
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of or in connection with the Credit Agreement or any other Credit
Document and the due performance and compliance with all the terms, conditions
and agreements contained in the Credit Documents by the Borrower and (ii) to
each Bank and each Affiliate of a Bank which enters into an Interest Rate
Protection or Other Hedging Agreement with the Borrower, which by its express
terms are entitled to the benefit of the Guaranty pursuant to Section 14 with
the written consent of Holdings, the full and prompt payment when due (whether
by acceleration or otherwise) of all obligations of the Borrower owing under any
such Interest Rate Protection or Other Hedging Agreement, whether now in
existence or hereafter arising, and the due performance and compliance with all
terms, conditions and agreements contained therein.
"Guarantor" shall mean Holdings and each Subsidiary Guarantor.
"Guaranty" shall mean the guaranty issued by Holdings pursuant to
Section 14 hereof, the Subsidiaries Guaranty and any other guarantee executed
and delivered by a Subsidiary of the Borrower pursuant to Section 8.12.
"Hazardous Materials" means (a) any petroleum or petroleum products,
radioactive materials, asbestos in any form that is or could become friable,
urea formaldehyde foam insulation, transformers or other equipment that contain
dielectric fluid containing levels of polychlorinated biphenyls, and radon gas;
(b) any chemicals, materials or substances defined as or included in the
definition of "hazardous substances," "hazardous waste," "hazardous materials,"
"extremely hazardous substances," "restricted hazardous waste," "toxic
substances," "toxic pollutants," "contaminants," or "pollutants," or words of
similar import, under any applicable Environmental Law; and (c) any other
chemical, material or substance, exposure to which is prohibited, limited or
regulated by any governmental authority under Environmental Laws.
"Holdings" shall have the meaning provided in the first paragraph of
this Agreement.
"Holdings Common Stock" shall mean common stock of Holdings.
"Holdings Contribution" shall have the meaning provided in Section
5.06(e).
"Holdings Junior Subordinated Debentures" shall have the meaning
provided in Section 9.04(xv).
"Holdings Series A Preferred Stock" shall mean shares of Holding's
12% Series A Cumulative Compounding Preferred Stock.
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"Indebtedness" shall mean, as to any Person, without duplication, (i)
all indebtedness (including principal, interest, fees and charges) of such
Person for borrowed money or for the deferred purchase price of property or
services, (ii) the maximum amount available to be drawn under all letters of
credit issued for the account of such Person and all unpaid drawings in respect
of such letters of credit, (iii) all Indebtedness of the types described in
clause (i), (ii), (iv), (v), (vi) or (vii) of this definition secured by any
Lien on any property owned by such Person, whether or not such Indebtedness has
been assumed by such Person (to the extent of the value of the respective
property), (iv) the aggregate amount required to be capitalized under leases
under which such Person is the lessee, (v) all obligations of such person to pay
a specified purchase price for goods or services, whether or not delivered or
accepted, i.e., take-or-pay and similar obligations, (vi) all Contingent
Obligations of such Person and (vii) all obligations under any Interest Rate
Protection Agreement or Other Hedging Agreement or under any similar type of
agreement.
"Initial Borrowing Date" shall mean the date occurring on or after
the Effective Date on which the initial Borrowing of Term Loans hereunder
occurs.
"Initial Public Offering" shall mean an underwritten initial public
offering of common stock of, and by, Holdings pursuant to a registration
statement filed with the Securities and Exchange Commission in accordance with
the Securities Act.
"Interest Determination Date" shall mean, with respect to any
Eurodollar Loan, the second Business Day prior to the commencement of any
Interest Period relating to such Eurodollar Loan.
"Interest Period" shall have the meaning provided in Section 1.09.
"Interest Rate Protection Agreement" shall mean any interest rate
swap agreement, interest rate cap agreement, interest collar agreement, interest
rate hedging agreement, interest rate floor agreement or other similar agreement
or arrangement.
"Issuing Bank" shall mean the Administrative Agent and any Bank which
at the request of the Borrower and with the consent of the Administrative Agent
(which shall not be unreasonably withheld) agrees, in such Bank's sole
discretion, to become an Issuing Bank for the purpose of issuing Letters of
Credit pursuant to Section 2.
"Joint Venture" shall mean any Person in which Holdings, the Borrower
and its Subsidiaries own, directly or indirectly, more than 5% but 50% or less
of the equity interests.
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"L/C Supportable Indebtedness" shall mean (i) obligations of the
Borrower or its Subsidiaries incurred in the ordinary course of business with
respect to insurance obligations and workers' compensation, surety bonds and
other similar statutory obligations and (ii) such other obligations of the
Borrower or any of its Subsidiaries as are permitted to exist pursuant to the
terms of this Agreement.
"Leaseholds" of any Person means all the right, title and interest of
such Person as lessee or licensee in, to and under leases or licenses of land,
improvements and/or fixtures.
"Letter of Credit" shall have the meaning provided in Section
2.01(a).
"Letter of Credit Fee" shall have the meaning provided in Section
3.01(b).
"Letter of Credit Outstandings" shall mean, at any time, the sum of
(i) the aggregate Stated Amount of all outstanding Letters of Credit and (ii)
the amount of all Unpaid Drawings.
"Letter of Credit Request" shall have the meaning provided in Section
2.02(a).
"Level 1" shall have the meaning provided in the definition of
Applicable Margin.
"Level 4" shall have the meaning provided in the definition of
Applicable Margin.
"Leverage Ratio" shall mean, at any date of determination, the ratio
of Consolidated Indebtedness on such date to Consolidated EBITDA for the Test
Period last ended; provided that in the case of a Test Period ended before the
last day of the fiscal year ended in 1998, for purposes of the Leverage Ratio
only, Consolidated EBITDA for such Test Period shall be multiplied by a fraction
the numerator of which is 365 and the denominator of which is the number of days
actually elapsed during the respective Test Period.
"Lien" shall mean any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other), preference,
priority or other security agreement of any kind or nature whatsoever
(including, without limitation, any conditional sale or other title retention
agreement, any financing or similar statement or notice filed under the UCC or
any other similar recording or notice statute, and any lease having
substantially the same effect as any of the foregoing).
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"Loan" shall mean each Tranche A Term Loan, each Tranche B Term Loan,
each Revolving Loan and each Swingline Loan.
"Majority Banks" of any Tranche shall mean those Non-Defaulting Banks
which would constitute the Required Banks under, and as defined in, this
Agreement if all outstanding Obligations of the other Tranches under this
Agreement were repaid in full and all Commitments with respect thereto were
terminated.
"Management Agreements" shall have the meaning provided in Section
5.05.
"Management Investors" shall mean Kirk P. Pond, Joseph R. Martin and
certain other key employees of the Borrower who purchase Holdings Common Stock
and/or Holdings Preferred Stock pursuant to the Securities Purchase and Holders
Agreement.
"Mandatory Borrowing" shall have the meaning provided in Section
1.01(e).
"Margin Adjustment Period" shall mean each period which shall
commence on a date occurring after the first anniversary of the Initial
Borrowing Date on which the financial statements are delivered pursuant to
Section 8.01(b) or (c) for a fiscal quarter or year, as the case may be, which
ends at least one year after the Initial Borrowing Date and which Margin
Adjustment Period shall end on the earlier of (i) the date of actual delivery of
the next financial statements pursuant to Section 8.01(b) or (c) and (ii) the
latest date on which the next financial statements are required to be delivered
pursuant to Section 8.01(b) or (c).
"Margin Adjustment Test Period" shall mean, with respect to each
Margin Adjustment Period, the Test Period ended on the last day of the fiscal
quarter or year, as the case may be, for which financial statements were last
delivered or required to be delivered pursuant to Section 8.01(b) or (c).
"Margin Stock" shall have the meaning provided in Regulation U.
"Material Adverse Effect" shall mean a material adverse effect on the
business, operations, property, assets, liabilities, condition (financial or
otherwise) or prospects of Holdings and its Subsidiaries taken as a whole or the
Borrower.
"Maturity Date" shall mean, with respect to any Tranche of Loans, the
Tranche A Term Loan Maturity Date, the Tranche B Term Loan Maturity Date, the
Revolving Loan Maturity Date or the Swingline Expiry Date, as the case may be.
"Maximum Swingline Amount" shall mean $5,000,000.
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"Mortgage" shall have the meaning provided in Section 5.13 and, after
the execution and delivery thereof, shall include each Additional Mortgage.
"Mortgage Policies" shall have the meaning provided in Section 5.13.
"Mortgaged Property" shall have the meaning provided in Section 5.13
and, after the execution and delivery of any Additional Mortgage, shall include
the respective Additional Mortgaged Property.
"NSC" shall mean National Semiconductor Corporation, a Delaware
corporation.
"Net Sale Proceeds" shall mean for any sale of assets, the gross cash
proceeds (including any cash received by way of deferred payment pursuant to a
promissory note, receivable or otherwise, but only as and when received)
received from any sale of assets, net of (i) reasonable transaction costs
(including, without limitation, any underwriting, brokerage or other customary
selling commissions and reasonable legal, advisory and other fees and expenses,
including title and recording expenses, associated therewith), (ii) payments of
unassumed liabilities relating to the assets sold at the time of, or within 90
days after, the date of such sale, (iii) the amount of such gross cash proceeds
required to be used to repay any Indebtedness (other than Indebtedness of the
Banks pursuant to this Agreement) which is secured by the respective assets
which were sold, and (iv) the estimated marginal increase in income taxes which
will be payable by Holdings' consolidated group with respect to the fiscal year
in which the sale occurs as a result of such sale.
"Non-Defaulting Bank" shall mean and include each Bank other than a
Defaulting Bank.
"Note" shall mean each Tranche A Term Note, each Tranche B Term Note,
each Revolving Note and the Swingline Note.
"Notice of Borrowing" shall have the meaning provided in Section
1.03.
"Notice of Conversion" shall have the meaning provided in Section
1.06.
"Notice Office" shall mean the office of the Administrative Agent
located at 130 Liberty Street, New York, NY 10006, Attention: Anthony Logrippo,
or such other office as the Administrative Agent may hereafter designate in
writing as such to the other parties hereto.
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"Obligations" shall mean all amounts owing to any of the Agents, the
Collateral Agent or any Bank pursuant to the terms of this Agreement or any
other Credit Document.
"Operating Agreements" shall mean the Technology Licensing and
Transfer Agreement, Transition Services Agreement, Fairchild Foundry Services
Agreement, Revenue Side Letter, Fairchild Assembly Services Agreement, National
Foundry Services Agreement, National Assembly Services Agreement, Mil/Aero Wafer
Services Agreement, Shared Facilities Agreement, Shared Services Agreement and
Shared Services and Occupancy Agreement, all of which as defined in the
Recapitalization Agreement.
"Offering Circular" shall mean the Offering Circular dated March 6,
1997, and prepared in connection with the Senior Subordinated Notes.
"Other Hedging Agreement" shall mean any foreign exchange contracts,
currency swap agreements, commodity agreements or other similar agreements or
arrangements designed to protect against the fluctuations in currency or
commodity values.
"Participant" shall have the meaning provided in Section 2.03(a).
"Payment Office" shall mean the office of the Administrative Agent
located at 130 Liberty Street, New York, New York 10006, or such other office as
the Administrative Agent may hereafter designate in writing as such to the other
parties hereto.
"PBGC" shall mean the Pension Benefit Guaranty Corporation
established pursuant to Section 4002 of ERISA, or any successor thereto.
"Percentage" of any Bank at any time shall mean a fraction (expressed
as a percentage) the numerator of which is the Revolving Loan Commitment of such
Bank at such time and the denominator of which is the Total Revolving Loan
Commitment at such time, provided that if the Percentage of any Bank is to be
determined after the Total Revolving Loan Commitment has been terminated, then
the Percentages of the Banks shall be determined immediately prior (and without
giving effect) to such termination.
"Permitted Encumbrance" shall mean, with respect to any Mortgaged
Property, such exceptions to title as are set forth in the title insurance
policy or title commitment delivered with respect thereto, provided that in the
case of any Additional Mortgaged Property, all such exceptions shall also be
acceptable to the Administrative Agent in its reasonable discretion.
"Permitted Liens" shall have the meaning provided in Section 9.01.
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"Person" shall mean any individual, partnership, joint venture, firm,
corporation, association, trust or other enterprise or any government or
political subdivision or any agency, department or instrumentality thereof.
"Plan" shall mean any pension plan as defined in Section 3(2) of
ERISA, which is maintained or contributed to by (or to which there is an
obligation to contribute of) Holdings or a Subsidiary of Holdings or an ERISA
Affiliate, and each such plan for the five year period immediately following the
latest date on which Holdings, or a Subsidiary of Holdings or an ERISA Affiliate
maintained, contributed to or had an obligation to contribute to such plan.
"Pledge Agreement" shall have the meaning provided in Section 5.11.
"Pledge Agreement Collateral" shall mean all "Collateral" as defined
in each of the Pledge Agreements.
"Pledged Securities" shall mean "Pledged Securities" as defined in
the Pledge Agreement.
"Prime Lending Rate" shall mean the rate which BTCo announces from
time to time as its prime lending rate, the Prime Lending Rate to change when
and as such prime lending rate changes. The Prime Lending Rate is a reference
rate and does not necessarily represent the lowest or best rate actually charged
to any customer. BTCo may make commercial loans or other loans at rates of
interest at, above or below the Prime Lending Rate.
"Projections" shall mean the projections set forth on Schedule X
hereto.
"Purchase Price Note" shall mean, collectively, demand promissory
notes in the aggregate principal amount of approximately $400,960,000] issued by
the Borrower and its Subsidiaries to NSC and its Subsidiaries.
"Purchased Assets" shall mean all of the assets, properties and
rights which are primarily used in the conduct of the Business and which are
being transferred to the Borrower pursuant to Section 2.1 of the Asset Purchase
Agreement.
"Qualified Capital Stock" of any Person shall mean any capital stock
of such Person which is not Disqualified Stock; provided that in any event the
Holdings Series A Preferred Stock in the form issued on or prior to the Initial
Borrowing Date shall constitute Qualified Capital Stock.
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"Qualified Public Offering" shall mean an underwritten public
offering of common stock of, and by, Holdings pursuant to a registration
statement filed with the Securities and Exchange Commission in accordance with
the Securities Act, which public equity offering results in gross proceeds to
Holdings of not less than $50,000,000; provided, however, that Holdings
contributes to the common equity of the Company the net cash proceeds from such
underwritten public offering.
"Quarterly Payment Date" shall mean the last Business Day of
February, May, August and November occurring after the Initial Borrowing Date.
"RCRA" shall mean the Resource Conservation and Recovery Act, as the
same may be amended from time to time, 42 U.S.C. ss. 6901 et seq.
"Real Property" of any Person shall mean all the right, title and
interest of such Person in and to land, improvements and fixtures, including
Leaseholds.
"Recapitalization Agreement" shall mean the Agreement and Plan of
Recapitalization, dated as of January 24, 1997, between Sterling and NSC, as in
effect on the Initial Borrowing Date and as the same may be amended, modified or
supplemented from time to time pursuant to the terms hereof and thereof.
"Recapitalization Documents" shall mean the Recapitalization
Agreement and all other documents entered into or delivered in connection with
the Recapitalization Agreement (including, without limitation, the Asset
Purchase Agreement and the Operating Agreements.
"Recapitalization Transaction" shall mean, collectively, the
transactions to occur on or prior to the Closing (as defined in the
Recapitalization Agreement) pursuant to the Recapitalization Documents,
including without limitation (x) the consummation of (i) the Asset Transfer,
(ii) the Equity Contribution, (iii) the Holdings Contribution and (iv) the
repayment in full of the Purchase Price Note and (y) the payment of all fees and
expenses to be paid on or prior to such Closing or the Initial Borrowing Date
and owing in connection with the foregoing.
"Recovery Event" shall mean the receipt by the Holdings or any of its
Subsidiaries of any cash insurance proceeds or condemnation award payable (i) by
reason of theft, loss, physical destruction or damage, condemnation action or
conveyance in lieu thereof or any other similar event with respect to any
property or assets of the Borrower or any of its Subsidiaries, (ii) under any
policy of insurance required to be maintained under Section 8.03 or (iii) by any
condemning authority (or any authority receiving a conveyance in lieu of
condemning the subject property).
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"Register" shall have the meaning provided in Section 13.17.
"Regulation D" shall mean Regulation D of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or a portion thereof establishing reserve requirements.
"Regulation G" shall mean Regulation G of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or a portion thereof.
"Regulation T" shall mean Regulation T of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or a portion thereof.
"Regulation U" shall mean Regulation U of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or a portion thereof.
"Regulation X" shall mean Regulation X of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or a portion thereof.
"Related Business" shall mean the business of designing, developing
and manufacturing of logic, discrete and memory semiconductors conducted by the
Borrower and its Subsidiaries (or, if the reference is to an Unrestricted
Subsidiary, by such Unrestricted Subsidiary) and any and all related businesses
in support of and ancillary to or reasonably related to such business of
designing, developing and manufacturing of logic, discrete and memory
semiconductors.
"Release" means any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, dumping, disposing or
migration into the environment.
"Replaced Bank" shall have the meaning provided in Section 1.13.
"Replacement Bank" shall have the meaning provided in Section 1.13.
"Reportable Event" shall mean an event described in Section 4043(c)
of ERISA with respect to a Plan that is subject to Title IV of ERISA other than
those events as to which the 30-day notice period is waived under subsection
.22, .23, .25, .27 or .28 of PBGC Regulation Section 4043.
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"Required Banks" shall mean Non-Defaulting Banks, the sum of whose
outstanding Term Loans (or, if prior to the Initial Borrowing Date, Term Loan
Commitments) and Revolving Loan Commitments (or after the termination thereof,
outstanding Revolving Loans and Adjusted Percentage of Swingline Loans and
Letter of Credit Outstandings) represent an amount greater than 50% of the sum
of all outstanding Term Loans (or, if prior to the Initial Borrowing Date, Term
Loan Commitments) of Non-Defaulting Banks and the Adjusted Total Revolving Loan
Commitment (or after the termination thereof, the sum of the then total
outstanding Revolving Loans of Non-Defaulting Banks and the aggregate Adjusted
Percentages of all Non-Defaulting Banks of the total outstanding Swingline Loans
and Letter of Credit Outstandings at such time).
"Returns" shall have the meaning provided in Section 7.09.
"Revolving Loan" shall have the meaning provided in Section 1.01(c).
"Revolving Loan Commitment" shall mean, for each Bank, the amount set
forth opposite such Bank's name in Schedule I hereto directly below the column
entitled "Revolving Loan Commitment," as same may be (x) reduced from time to
time pursuant to Sections 3.02, 3.03, 4.02 and/or 10 or (y) adjusted from time
to time as a result of assignments to or from such Bank pursuant to Section 1.13
or 13.04(b).
"Revolving Loan Maturity Date" shall mean March 11, 2002.
"Revolving Note" shall have the meaning provided in Section 1.05(a).
"Scheduled Repayments" shall mean Tranche A Scheduled Repayments and
Tranche B Scheduled Repayments.
"SEC" shall have the meaning provided in Section 8.01(h).
"Section 4.04(b)(ii) Certificate" shall have the meaning provided in
Section 4.04(b).
"Secured Creditors" shall have the meaning assigned that term in the
Security Documents.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Securities Purchase and Holders Agreement" shall mean the Securities
Purchase and Holders Agreement, dated as of March 11, 1997, among Holdings,
Sterling, NSC and the Management Investors.
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"Security Agreement" shall have the meaning provided in Section 5.12.
"Security Agreement Collateral" shall mean all "Collateral" as
defined in the Security Agreement.
"Security Document" shall mean the Pledge Agreement, the Security
Agreement, each Mortgage and, after the execution and delivery thereof, each
Additional Mortgage and each Additional Security Document.
"Seller Note" shall mean the promissory note issued by Holdings to
NSC in the principal amount of $77,000,000 pursuant to the Recapitalization
Agreement, which promissory note shall be in the form delivered to the Agents on
or prior to the Initial Borrowing Date (which promissory note shall be in the
form of Exhibit 1-A to the Recapitalization Agreement, with any insertions or
modifications thereto to be identified to the Agents and to be satisfactory to
them (which, in any event, shall not adversely affect the interests of the
Banks)).
"Senior Subordinated Note Documents" shall mean the Senior
Subordinated Notes, the Senior Subordinated Note Indenture and all other
documents executed and delivered with respect to the Senior Subordinated Notes
or Senior Subordinated Note Indenture.
"Senior Subordinated Note Indenture" shall mean the indenture dated
as of March 11, 1997, between the Borrower and the Senior Subordinated Note
Indenture Trustee, as in effect on the Effective Date and as thereafter amended
from time to time in accordance with the requirements thereof and of this
Agreement.
"Senior Subordinated Note Indenture Trustee" shall mean United States
Trust Company of New York.
"Senior Subordinated Notes" shall mean the Borrower's 10-1/8% Senior
Subordinated Notes due 2007 issued pursuant to the Senior Subordinated Note
Indenture and any notes issued by the Borrower in exchange for, and as
contemplated by, the Senior Subordinated Notes with substantially identical
terms as the Senior Subordinated Notes.
"Senior Subordinated Notes Term Sheet" shall have the meaning
provided in Section 5.07(a).
"Shareholders' Agreements" shall have the meaning provided in Section
5.05.
"Standby Letter of Credit" shall have the meaning provided in Section
2.01(a).
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"Stated Amount" of each Letter of Credit shall, at any time, mean the
maximum amount available to be drawn thereunder (in each case determined without
regard to whether any conditions to drawing could then be met).
"Start Date" shall mean, with respect to any Margin Adjustment
Period, the first day of such Margin Adjustment Period.
"Sterling" shall mean Sterling Holding Company, LLC, a Delaware
limited liability company.
"Subsidiaries Guaranty" shall mean the Subsidiaries Guaranty in the
form of Exhibit G (appropriately completed), and, after the execution and
delivery thereof, as modified, supplemented or amended from time to time.
"Subsidiary" shall mean, as to any Person, (i) any corporation more
than 50% of whose stock of any class or classes having by the terms thereof
ordinary voting power to elect a majority of the directors of such corporation
(irrespective of whether or not at the time stock of any class or classes of
such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time owned by such Person and/or one or
more Subsidiaries of such Person and (ii) any partnership, association, joint
venture or other entity in which such Person and/or one or more Subsidiaries of
such Person has more than a 50% equity interest at the time. Notwithstanding the
foregoing (and except for purposes of the definition of Unrestricted Subsidiary
contained herein) an Unrestricted Subsidiary shall be deemed not to be a
Subsidiary of the Borrower or any of its other Subsidiaries for purposes of this
Agreement.
"Subsidiary Guarantor" shall mean each Subsidiary of the Borrower
designated as a "Subsidiary Guarantor" on Schedule VIII hereto or which executes
a guarantee after the Initial Borrowing Date pursuant to Section 8.12.
"Supermajority Banks" of any Tranche shall mean those Non-Defaulting
Banks which would constitute the Required Banks under, and as defined in, this
Agreement if (x) all outstanding Obligations of the other Tranches under this
Agreement were repaid in full and all Commitments with respect thereto were
terminated and (y) the percentage "50%" contained therein were changed to
"66-2/3%".
"Swingline Bank" shall mean BTCo.
"Swingline Expiry Date" shall mean the date which is two Business
Days prior to the Revolving Loan Maturity Date.
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"Swingline Loan" shall have the meaning provided in Section 1.01(d).
"Swingline Note" shall have the meaning provided in Section 1.05(a).
"Syndication Agent" shall have the meaning provided in the first
paragraph of this Agreement.
"Syndication Date" shall mean that date upon which the Administrative
Agent determines in its sole discretion (and notifies the Borrower) that the
primary syndication (and resultant addition of institutions as Banks pursuant to
Section 13.04) has been completed.
"Tax Sharing Agreement" shall have the meaning provided in Section
5.05.
"Taxes" shall have the meaning provided in Section 4.04(a).
"Term Loan" shall mean each Tranche A Term Loan and the Tranche B
Term Loan.
"Term Loan Commitment" shall mean each Tranche A Term Loan Commitment
and each Tranche B Term Loan Commitment, with the Term Loan Commitment of any
Bank at any time to equal the sum of its Tranche A Term Loan Commitment and
Tranche B Term Loan Commitment as then in effect.
"Test Period" shall mean each period of four consecutive fiscal
quarters of the Borrower (or, if shorter, the period beginning on the first day
of the fiscal year beginning on, or closest to, May 26, 1997 and ending on the
last day of a fiscal quarter of the Borrower ended thereafter), in each case
taken as one accounting period, ended after the first day of the fiscal year
beginning on, or closest to, May 26, 1997.
"Total Commitments" shall mean, at any time, the sum of the
Commitments of each of the Banks.
"Total Revolving Loan Commitment" shall mean, at any time, the sum of
the Revolving Loan Commitments of each of the Banks.
"Total Term Loan Commitment" shall mean, at any time, the sum of the
Total Tranche A Term Loan Commitment and Total Tranche B Term Loan Commitment.
"Total Tranche A Term Loan Commitment" shall mean, at any time, the
sum of the Tranche A Term Loan Commitments of each of the Banks.
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"Total Tranche B Term Loan Commitment" shall mean, at any time, the
sum of the Tranche B Term Loan Commitments of each of the Banks.
"Total Unutilized Revolving Loan Commitment" shall mean, at any time,
an amount equal to the remainder of (x) the then Total Revolving Loan
Commitment, less (y) the sum of the aggregate principal amount of Revolving
Loans and Swingline Loans then outstanding plus the then aggregate amount of
Letter of Credit Outstandings.
"Trade Letter of Credit" shall have the meaning provided in Section
2.01(a).
"Tranche" shall mean the respective facility and commitments utilized
in making Loans hereunder, with there being four separate Tranches, i.e.,
Tranche A Term Loans, Tranche B Term Loans, Revolving Loans and Swingline Loans.
"Tranche A Scheduled Repayment" shall have the meaning provided in
Section 4.02(b).
"Tranche A Scheduled Repayment Date" shall have the meaning provided
in Section 4.02(b).
"Tranche A Term Loan" shall have the meaning provided in Section
1.01(a).
"Tranche A Term Loan Commitment" shall mean, for each Bank, the
amount set forth opposite such Bank's name in Schedule I hereto directly below
the column entitled "Tranche A Term Loan Commitment", as same may be (x) reduced
from time to time pursuant to Sections 3.03, 4.02 and/or 10 or (y) adjusted from
time to time as a result of assignments to or from such Bank pursuant to Section
1.13 or 13.04.
"Tranche A Term Loan Maturity Date" shall mean March 11, 2002.
"Tranche A Term Note" shall have the meaning provided in Section
1.05(a).
"Tranche B Scheduled Repayment" shall have the meaning provided in
Section 4.02(c).
"Tranche B Scheduled Repayment Date" shall have the meaning provided
in Section 4.02(c).
"Tranche B Term Loan" shall have the meaning provided in Section
1.01(b).
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"Tranche B Term Loan Commitment" shall mean, for each Bank, the
amount set forth opposite such Bank's name in Schedule I hereto directly below
the column entitled "Tranche B Term Loan Commitment", as same may be (x) reduced
from time to time pursuant to Sections 3.03, 4.02 and/or 10 or (y) adjusted from
time to time as a result of assignments to or from such Bank pursuant to Section
1.13 or 13.04(b).
"Tranche B Term Loan Maturity Date" shall mean March 11, 2003.
"Tranche B Term Note" shall have the meaning provided in Section
1.05(a).
"Transaction" shall mean, collectively, (i) the Recapitalization
Transaction, (ii) the incurrence of Loans and the issuance of the Senior
Subordinated Notes and the Seller Note on the Initial Borrowing Date and (iii)
the payment of fees and expenses owing in connection with the foregoing.
"Type" shall mean the type of Loan determined with regard to the
interest option applicable thereto, i.e., whether a Base Rate Loan or a
Eurodollar Loan.
"UCC" shall mean the Uniform Commercial Code as from time to time in
effect in the relevant jurisdiction.
"Unfunded Current Liability" of any Plan shall mean the amount, if
any, by which the actuarial present value of the accumulated plan benefits under
the Plan as of the close of its most recent plan year, determined in accordance
with actuarial assumptions at such time consistent with Statement of Financial
Accounting Standards No. 87, exceeds the market value of the assets allocable
thereto.
"United States" and "U.S." shall each mean the United States of
America.
"Unpaid Drawing" shall have the meaning provided for in Section
2.04(a).
"Unrestricted Subsidiary" shall mean any Subsidiary of the Borrower
that, at the time of determination, shall be an Unrestricted Subsidiary (as
designated by the Borrower, as provided below) provided that such Subsidiary
does not and shall not engage, to any substantial extent, in any line or lines
of business activity other than a Related Business. The Borrower may designate
any Person to be an Unrestricted Subsidiary if (a) no Default or Event of
Default is existing or will occur as a consequence thereof, (b) either (x) such
Subsidiary, at the time of designation thereof, has no assets (except assets
which could be invested in such Unrestricted Subsidiary at the time of
designation as described in the immediately succeeding sentence) or (y) such
Subsidiary is designated an "Unrestricted Subsidiary" at the time of the
acquisition thereof by the Borrower, in the case
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of Subsidiaries acquired after the Effective Date and (c) such Subsidiary does
not own any equity interests in, or hold any Lien on any property of, the
Borrower or any other Subsidiary (excluding other Unrestricted Subsidiaries).
Any such designation shall also be deemed to constitute an investment pursuant
to Section 9.05(xi) in an amount equal to a percentage equal to the Borrower's
and its Subsidiaries' percentage ownership interest of such Subsidiary of the
sum of the net assets (with assets other than cash and Cash Equivalents valued
at fair market value) of such Subsidiary at the time of the designation (which
investment must be permitted to be made in accordance with the requirements of
Section 9.05(xi)), unless the designation is made pursuant to clause (b)(y) of
the first sentence of this definition, in which case the amount of consideration
paid by the Borrower and its Subsidiaries to effect such acquisition shall be
included as such an investment. The Borrower may designate any Unrestricted
Subsidiary to be a Subsidiary, provided that no Default or Event of Default is
existing or will occur as a consequence thereof. Each such designation shall be
evidenced by filing with the Administrative Agent a certified copy of the
resolution giving effect to such designation and an officers' certificate of the
Chairman of the Board, the President, any Vice President or the Treasurer of the
Borrower certifying that such designation complied with the foregoing
conditions.
"Unutilized Revolving Loan Commitment" with respect to any Bank, at
any time, shall mean such Bank's Revolving Loan Commitment at such time less the
sum of (i) the aggregate outstanding principal amount of Revolving Loans made by
such Bank and (ii) such Bank's Adjusted Percentage of the Letter of Credit
Outstandings in respect of Letters of Credit issued under this Agreement.
"Voting Stock" shall mean any class or classes of capital stock of
Holdings pursuant to which the holders thereof have the general voting power
under ordinary circumstances to elect at least a majority of the Board of
Directors of Holdings.
"Wholly-Owned Subsidiary" shall mean, as to any Person, (i) any
corporation 100% of whose capital stock (other than director's qualifying
shares) is at the time owned by such Person and/or one or more Wholly-Owned
Subsidiaries of such Person and (ii) any partnership, association, joint venture
or other entity in which such Person and/or one or more Wholly-Owned
Subsidiaries of such Person has a 100% equity interest at such time.
SECTION 12. The Agents.
12.01 Appointment. The Banks hereby designate Bankers Trust Company
as Administrative Agent (for purposes of this Section 12, the term
"Administrative Agent" shall include Bankers Trust Company (and/or any of its
affiliates) in its capacity as Collateral Agent pursuant to the Security
Documents) to act as specified herein and in the other Credit Documents. The
Banks hereby designate Credit Suisse First Boston as
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Syndication Agent and Canadian Imperial Bank of Commerce as Documentation Agent
to act as specified herein and in the other Credit Documents. Each Bank hereby
irrevocably authorizes, and each holder of any Note by the acceptance of such
Note shall be deemed irrevocably to authorize, the Agents to take such action on
its behalf under the provisions of this Agreement, the other Credit Documents
and any other instruments and agreements referred to herein or therein and to
exercise such powers and to perform such duties hereunder and thereunder as are
specifically delegated to or required of the respective Agent by the terms
hereof and thereof and such other powers as are reasonably incidental thereto.
Each of the Agents may perform any of its duties hereunder by or through its
respective officers, directors, agents, employees or affiliates.
12.02 Nature of Duties. No Agent shall have any duties or
responsibilities except those expressly set forth in this Agreement and the
Security Documents. None of the Agents nor any of their respective officers,
directors, agents, employees or affiliates shall be liable for any action taken
or omitted by it or them hereunder or under any other Credit Document or in
connection herewith or therewith, unless caused by such Person's gross
negligence or willful misconduct. The duties of each Agent shall be mechanical
and administrative in nature; no Agent shall have by reason of this Agreement or
any other Credit Document a fiduciary relationship in respect of any Bank or the
holder of any Note; and nothing in this Agreement or any other Credit Document,
expressed or implied, is intended to or shall be so construed as to impose upon
any Agent any obligations in respect of this Agreement or any other Credit
Document except as expressly set forth herein or therein.
12.03 Lack of Reliance on the Agents. Independently and without
reliance upon any Agent, each Bank and the holder of each Note, to the extent it
deems appropriate, has made and shall continue to make (i) its own independent
investigation of the financial condition and affairs of Holdings and its
Subsidiaries in connection with the making and the continuance of the Loans and
the taking or not taking of any action in connection herewith and (ii) its own
appraisal of the creditworthiness of Holdings and its Subsidiaries and, except
as expressly provided in this Agreement, no Agent shall have any duty or
responsibility, either initially or on a continuing basis, to provide any Bank
or the holder of any Note with any credit or other information with respect
thereto, whether coming into its possession before the making of the Loans or at
any time or times thereafter. No Agent shall be responsible to any Bank or the
holder of any Note for any recitals, statements, information, representations or
warranties herein or in any document, certificate or other writing delivered in
connection herewith or for the execution, effectiveness, genuineness, validity,
enforceability, perfection, collectability, priority or sufficiency of this
Agreement or any other Credit Document or the financial condition of Holdings
and its Subsidiaries or be required to make any inquiry concerning either the
performance or observance of any of the terms, provisions or conditions of this
Agreement or any other Credit Document, or
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the financial condition of Holdings and its Subsidiaries or the existence or
possible existence of any Default or Event of Default.
12.04 Certain Rights of the Agents. If any Agent shall request
instructions from the Required Banks with respect to any act or action
(including failure to act) in connection with this Agreement or any other Credit
Document, such Agent shall be entitled to refrain from such act or taking such
action unless and until such Agent shall have received instructions from the
Required Banks; and such Agent shall not incur liability to any Person by reason
of so refraining. Without limiting the foregoing, no Bank or the holder of any
Note shall have any right of action whatsoever against any Agent as a result of
such Agent acting or refraining from acting hereunder or under any other Credit
Document in accordance with the instructions of the Required Banks.
12.05 Reliance. Each Agent shall be entitled to rely, and shall be
fully protected in relying, upon any note, writing, resolution, notice,
statement, certificate, telex, teletype or telecopier message, cablegram,
radiogram, order or other document or telephone message signed, sent or made by
any Person that such Agent believed to be the proper Person, and, with respect
to all legal matters pertaining to this Agreement and any other Credit Document
and its duties hereunder and thereunder, upon advice of counsel selected by such
Agent.
12.06 Indemnification. To the extent any Agent is not reimbursed and
indemnified by the Borrower the Banks will reimburse and indemnify such Agent,
in proportion to their respective "percentages" as used in determining the
Required Banks (without regard to the existence of any Defaulting Banks), for
and against any and all liabilities, obligations, losses, damages, penalties,
claims, actions, judgments, costs, expenses or disbursements of whatsoever kind
or nature which may be imposed on, asserted against or incurred by such Agent in
performing its respective duties hereunder or under any other Credit Document,
in any way relating to or arising out of this Agreement or any other Credit
Document; provided that no Bank shall be liable for any portion of such liabili-
ties, obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting from such Agent's gross negligence or
willful misconduct.
12.07 Each Agent in its Individual Capacity. With respect to its
obligation to make Loans under this Agreement, each Agent shall have the rights
and powers specified herein for a "Bank" and may exercise the same rights and
powers as though it were not performing the duties specified herein; and the
term "Banks," "Required Banks," "holders of Notes" or any similar terms shall,
unless the context clearly otherwise indicates, include each Agent in its
individual capacity. Each Agent may accept deposits from, lend money to, and
generally engage in any kind of banking, trust or other business with any Credit
Party or any Affiliate of any Credit Party as if they were not performing the
duties
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specified herein, and may accept fees and other consideration from the Borrower
or any other Credit Party for services in connection with this Agreement and
otherwise without having to account for the same to the Banks.
12.08 Holders. The Administrative Agent may deem and treat the payee
of any Note as the owner thereof for all purposes hereof unless and until a
written notice of the assignment, transfer or endorsement thereof, as the case
may be, shall have been filed with the Administrative Agent. Any request,
authority or consent of any Person who, at the time of making such request or
giving such authority or consent, is the holder of any Note shall be conclusive
and binding on any subsequent holder, transferee, assignee or indorsee, as the
case may be, of such Note or of any Note or Notes issued in exchange therefor.
12.09 Resignation by the Agents. (a) The Administrative Agent may
resign from the performance of all its functions and duties hereunder and/or
under the other Credit Documents at any time by giving 15 Business Days' prior
written notice to the Borrower and the Banks. Such resignation shall take effect
upon the appointment of a successor Administrative Agent pursuant to clauses (b)
and (c) below or as otherwise provided below. Each other Agent may resign from
the performance of all of its functions and duties hereunder and/or under the
other Credit Documents at any time by giving notice to the Borrower, the
Administrative Agent and the Banks. Such resignation shall take effect upon
delivery of such notice.
(b) Upon any such notice of resignation by the Administrative Agent,
the Banks shall appoint a successor Administrative Agent hereunder or thereunder
who shall be a commercial bank or trust company reasonably acceptable to the
Borrower.
(c) If a successor Administrative Agent shall not have been so
appointed within such 15 Business Day period, the Administrative Agent, with the
consent of the Borrower (which shall not be unreasonably withheld or delayed),
shall then appoint a commercial bank or trust company with capital and surplus
of not less than $500,000,000 as successor Administrative Agent who shall serve
as Administrative Agent hereunder or thereunder until such time, if any, as the
Banks appoint a successor Administrative Agent as provided above.
(d) If no successor Administrative Agent has been appointed pursuant
to clause (b) or (c) above by the 25th Business Day after the date such notice
of resignation was given by the Administrative Agent, the Administrative Agent's
resignation shall become effective and the Agents (if one or more so agrees), or
if there are no Agents or no Agent so agrees, then the Required Banks, shall
thereafter perform all the duties of the Administrative Agent hereunder and/or
under any other Credit Document until such time, if any, as the Required Banks
appoint a successor Administrative Agent as provided above.
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SECTION 13. Miscellaneous.
13.01 Payment of Expenses, etc. The Borrower shall: (i) whether or
not the transactions herein contemplated are consummated, pay all reasonable
out-of-pocket costs and expenses of the Agents (including, without limitation,
the reasonable fees and disbursements of White & Case and local counsel) in
connection with the preparation, execution and delivery of this Agreement and
the other Credit Documents and the documents and instruments referred to herein
and therein and any amendment, waiver or consent relating hereto or thereto, of
the Agents in connection with their syndication efforts with respect to this
Agreement and of the Agents and, following and during the continuation of an
Event of Default, each of the Banks in connection with the enforcement of this
Agreement and the other Credit Documents and the documents and instruments
referred to herein and therein (including, without limitation, the reasonable
fees and disbursements of counsel (including in-house counsel) for the Agents
and, following and during the continuation of an Event of Default, for each of
the Banks); (ii) pay and hold each of the Banks harmless from and against any
and all present and future stamp, excise and other similar taxes with respect to
the foregoing matters and save each of the Banks harmless from and against any
and all liabilities with respect to or resulting from any delay or omission
(other than to the extent attributable to such Bank) to pay such taxes; and
(iii) indemnify the Agents and each Bank, and each of their respective officers,
directors, trustees, employees, representatives and agents from and hold each of
them harmless against any and all liabilities, obligations (including removal or
remedial actions), losses, damages, penalties, claims, actions, judgments,
suits, costs, expenses and disbursements (including reasonable attorneys' and
consultants' fees and disbursements) incurred by, imposed on or assessed against
any of them as a result of, or arising out of, or in any way related to, or by
reason of, (a) any investigation, litigation or other proceeding (whether or not
the Agents or any Bank is a party thereto) related to the entering into and/or
performance of this Agreement or any other Credit Document or the use of any
Letter of Credit or the proceeds of any Loans hereunder or the consummation of
any transactions contemplated herein (including, without limitation, the
Transaction), or in any other Credit Document or the exercise of any of their
rights or remedies provided herein or in the other Credit Documents, or (b) the
actual or alleged presence of Hazardous Materials in the air, surface water or
groundwater or on the surface or subsurface of any Real Property owned or at any
time operated by Holdings or any of its Subsidiaries, the generation, storage,
transportation, handling or disposal of Hazardous Materials at any location,
whether or not owned or operated by Holdings or any of its Subsidiaries, the
non-compliance of any Real Property with foreign, federal, state and local laws,
regulations, and ordinances (including applicable permits thereunder) applicable
to any Real Property, or any Environmental Claim asserted against Holdings, any
of its Subsidiaries or any Real Property owned or at any time operated by
Holdings or any of its Subsidiaries, including, in each case, without
limitation, the reasonable fees and disbursements of counsel and other
consultants incurred in connection with any such
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investigation, litigation or other proceeding (but excluding any losses,
liabilities, claims, damages or expenses to the extent incurred by reason of the
gross negligence or willful misconduct of the Person to be indemnified). To the
extent that the undertaking to indemnify, pay or hold harmless the Agents or any
Bank set forth in the preceding sentence may be unenforceable because it is
violative of any law or public policy, the Borrower shall make the maximum
contribution to the payment and satisfaction of each of the indemnified
liabilities which is permissible under applicable law.
13.02 Right of Setoff. In addition to any rights now or hereafter
granted under applicable law or otherwise, and not by way of limitation of any
such rights, upon the occurrence of an Event of Default, each Bank is hereby
authorized at any time or from time to time, without presentment, demand,
protest or other notice of any kind to Holdings or the Borrower or to any other
Person, any such notice being hereby expressly waived, to set off and to
appropriate and apply any and all deposits (general or special) and any other
Indebtedness at any time held or owing by such Bank (including, without
limitation, by branches and agencies of such Bank wherever located) to or for
the credit or the account of Holdings, the Borrower or any Subsidiary Guarantor
but in any event excluding assets held in trust for any such Person against and
on account of the Obligations and liabilities of Holdings, the Borrower or such
Subsidiary Guarantor, as applicable, to such Bank under this Agreement or under
any of the other Credit Documents, including, without limitation, all interests
in Obligations purchased by such Bank pursuant to Section 13.06(b), and all
other claims of any nature or description arising out of or connected with this
Agreement or any other Credit Document, irrespective of whether or not such Bank
shall have made any demand hereunder and although said Obligations, liabilities
or claims, or any of them, shall be contingent or unmatured.
13.03 Notices. Except as otherwise expressly provided herein, all
notices and other communications provided for hereunder shall be in writing
(including telex or telecopier communication) and mailed, telexed, telecopied or
delivered: if to Holdings, at Holdings' address specified opposite its signature
below; if to the Borrower, at the Borrower's address specified opposite its
signature below; if to any Bank, at its address specified opposite its name on
Schedule II below; and if to the Administrative Agent, at its Notice Office; or,
as to any Credit Party or any of the Agents, at such other address as shall be
designated by such party in a written notice to the other parties hereto and, as
to each Bank, at such other address as shall be designated by such Bank in a
written notice to the Borrower and the Agents. All such notices and
communications shall, when mailed, telexed, telecopied or sent by overnight
courier, be effective when deposited in the mails or delivered to the overnight
courier, prepaid and properly addressed for delivery on such or the next
Business Day, or sent by telex or telecopier, except that notices and
communications to the Agents and the Borrower shall not be effective until
received by the Agents or the Borrower, as the case may be.
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13.04 Benefit of Agreement. (a) This Agreement shall be binding upon
and inure to the benefit of and be enforceable by the respective successors and
assigns of the parties hereto; provided, however, no Credit Party may assign or
transfer any of its rights, obligations or interest hereunder or under any other
Credit Document without the prior written consent of the Banks and, provided
further, that, although any Bank may transfer, assign or grant participations in
its rights hereunder, such Bank shall remain a "Bank" for all purposes hereunder
(and may not transfer or assign all or any portion of its Commitments hereunder
except as provided in Section 13.04(b)) and the transferee, assignee or
participant, as the case may be, shall not constitute a "Bank" hereunder and,
provided fur- ther, that no Bank shall transfer or grant any participation under
which the participant shall have rights to approve any amendment to or waiver of
this Agreement or any other Credit Document except to the extent such amendment
or waiver would (i) extend the final scheduled maturity of any Loan, Note or
Letter of Credit (unless such Letter of Credit is not extended beyond the
Revolving Loan Maturity Date) in which such participant is participating, or
reduce the rate or extend the time of payment of interest or Fees thereon
(except (x) in connection with a waiver of applicability of any post-default
increase in interest rates and (y) that any amendment or modification to the
financial definitions in this Agreement shall not constitute a reduction in the
rate of interest for purposes of this clause (i)) or reduce the principal amount
thereof, or increase the amount of the participant's participation over the
amount thereof then in effect (it being understood that a waiver of any Default
or Event of Default or of a mandatory reduction in the Total Commitments shall
not constitute a change in the terms of such participation, and that an increase
in any Commitment or Loan shall be permitted without the consent of any
participant if the participant's participation is not increased as a result
thereof), (ii) consent to the assignment or transfer by the Borrower of any of
its rights and obligations under this Agreement or (iii) release all or
substantially all of the Collateral under all of the Security Documents (except
as expressly provided in the Credit Documents) supporting the Loans hereunder in
which such participant is participating. In the case of any such participation,
the participant shall not have any rights under this Agreement or any of the
other Credit Documents (the participant's rights against such Bank in respect of
such participation to be those set forth in the agreement executed by such Bank
in favor of the participant relating thereto) and all amounts payable by the
Borrower hereunder shall be determined as if such Bank had not sold such
participation.
(b) Notwithstanding the foregoing, any Bank (or any Bank together
with one or more other Banks) may (x) assign all or a portion of its Revolving
Loan Commitment (and related outstanding Obligations hereunder) and/or its
outstanding Term Loans (or, if prior to the Initial Borrowing Date, Term Loan
Commitment) to its (i) parent company and/or any affiliate of such Bank which is
at least 50% owned by such Bank or its parent company or (ii) with the consent
of the Administrative Agent, a Common Management Fund or (iii) to one or more
Banks or (y) assign all, or if less than all, a portion equal to
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at least $5,000,000 in the aggregate for the assigning Bank or assigning Banks,
of such Revolving Loan Commitments and outstanding principal amount of Term
Loans (or, if prior to the Initial Borrowing Date, Term Loan Commitment)
hereunder to one or more Eligible Transferees, each of which assignees shall
become a party to this Agreement as a Bank by execution of an Assignment and
Assumption Agreement, provided that, (i) at such time Schedule I shall be deemed
modified to reflect the Commitments (and/or outstanding Term Loans, as the case
may be) of such new Bank and of the existing Banks, (ii) new Notes will be
issued, at the Borrower's expense, to such new Bank and to the assigning Bank
upon the request of such new Bank or assigning Bank, such new Notes to be in
conformity with the requirements of Section 1.05 (with appropriate
modifications) to the extent needed to reflect the revised Commitments (and/or
outstanding Term Loans, as the case may be), (iii) the consent of the
Administrative Agent shall be required in connection with any such assignment
(which consent shall not be unreasonably withheld) and (iv) the Administrative
Agent shall receive at the time of each such assignment, from the assigning or
assignee Bank, the payment of a non-refundable assignment fee of $3,500. To the
extent of any assignment pursuant to this Section 13.04(b), the assigning Bank
shall be relieved of its obligations hereunder with respect to its assigned
Commitments (it being understood that the indemnification provisions under this
Agreement (including, without limitation, Sections 1.10, 1.11, 2.05, 4.04, 13.01
and 13.06) shall survive as to such assigning Bank). At the time of each
assignment pursuant to this Section 13.04(b) to a Person which is not already a
Bank hereunder and which is not a United States person (as such term is defined
in Section 7701(a)(30) of the Code) for Federal income tax purposes, the
respective assignee Bank shall provide to the Borrower and the Agent the
appropriate Internal Revenue Service Forms (and, if applicable, a Section
4.04(b)(ii) Certificate) described in Section 4.04(b). To the extent that an
assignment of all or any portion of a Bank's Commitments and related outstanding
Obligations pursuant to Section 1.13 or this Section 13.04(b) would, at the time
of such assignment, result in increased costs under Section 1.10, 1.11 or 4.04
from those being charged by the respective assigning Bank prior to such
assignment, then the Borrower shall not be obligated to pay such increased costs
(although the Borrower shall be obligated to pay any other increased costs of
the type described above resulting from changes after the date of the respective
assignment).
(c) Nothing in this Agreement shall prevent or prohibit any Bank from
pledging its Loans and Notes hereunder to a Federal Reserve Bank in support of
borrowings made by such Bank from such Federal Reserve Bank and, with the
consent of the Borrower and the Administrative Agent, any Lender which is a fund
may pledge all or any portion of its Notes or Loans to a trustee for the benefit
of investors and in support of its obligation to such investors.
13.05 No Waiver; Remedies Cumulative. No failure or delay on the part
of any Agent or any Bank or any holder of any Note in exercising any right,
power or
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privilege hereunder or under any other Credit Document and no course of
dealing between the Borrower or any other Credit Party and any Agent or any Bank
or the holder of any Note shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, power or privilege hereunder or under
any other Credit Document preclude any other or further exercise thereof or the
exercise of any other right, power or privilege hereunder or thereunder. The
rights, powers and remedies herein or in any other Credit Document expressly
provided are cumulative and not exclusive of any rights, powers or remedies
which any Agent or any Bank or the holder of any Note would otherwise have. No
notice to or demand on any Credit Party in any case shall entitle any Credit
Party to any other or further notice or demand in similar or other circumstances
or constitute a waiver of the rights of any Agent or any Bank or the holder of
any Note to any other or further action in any circumstances without notice or
demand.
13.06 Payments Pro Rata. (a) Except as otherwise provided in this
Agreement, the Administrative Agent agrees that promptly after its receipt of
each payment from or on behalf of the Borrower in respect of any Obligations
hereunder, it shall distribute such payment to the Banks (other than any Bank
that has consented in writing to waive its pro rata share of any such payment)
pro rata based upon their respective shares, if any, of the Obligations with
respect to which such payment was received.
(b) Each of the Banks agrees that, if it should receive any amount
hereunder (whether by voluntary payment, by realization upon security, by the
exercise of the right of setoff or banker's lien, by counterclaim or cross
action, by the enforcement of any right under the Credit Documents, or
otherwise), which is applicable to the payment of the principal of, or interest
on, the Loans, Unpaid Drawings, Commitment Commission or Letter of Credit Fees,
of a sum which with respect to the related sum or sums received by other Banks
is in a greater proportion than the total of such Obligation then owed and due
to such Bank bears to the total of such Obligation then owed and due to all of
the Banks immediately prior to such receipt, then such Bank receiving such
excess payment shall purchase for cash without recourse or warranty from the
other Banks an interest in the Obligations of the respective Credit Party to
such Banks in such amount as shall result in a proportional participation by all
the Banks in such amount; provided that if all or any portion of such excess
amount is thereafter recovered from such Bank, such purchase shall be rescinded
and the purchase price restored to the extent of such recovery, but without
interest.
(c) Notwithstanding anything to the contrary contained herein, the
provisions of the preceding Sections 13.06(a) and (b) shall be subject to the
express provisions of this Agreement which require, or permit, differing
payments to be made to Non-Defaulting Banks as opposed to Defaulting Banks.
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13.07 Calculations; Computations. (a) The financial statements to be
furnished to the Banks pursuant hereto shall be made and prepared in accordance
with generally accepted accounting principles in the United States (or the
equivalent thereof in any country in which a Foreign Subsidiary is doing
business, as applicable) consistently applied throughout the periods involved
(except as set forth in the notes thereto or as otherwise disclosed in writing
by the Borrower to the Banks); provided that, except as otherwise specifically
provided herein, all computations of Excess Cash Flow and all computations
determining compliance with Sections 9.08 through 9.10, inclusive, shall utilize
accounting principles and policies in conformity with those used to prepare the
historical financial statements delivered to the Banks for the first fiscal year
of the Borrower ended after the Initial Borrowing Date pursuant to Section
8.01(c) (which annual financial statements shall be generally consistent with
the historical financial statements delivered to the Banks pursuant to Section
7.05(a), except as regards to inter-company transactions between the Borrower
and NSC) (with the foregoing generally accepted accounting principles, subject
to the preceding proviso, herein called "GAAP"). Notwithstanding anything to the
contrary contained herein, all computations determining compliance with Sections
9.08 through 9.10, inclusive, including definitions used therein, shall treat
Unrestricted Subsidiaries as if the same did not exist.
(b) All computations of interest, Commitment Commission and Fees
hereunder shall be made on the basis of a year of 360 days for the actual number
of days (including the first day but excluding the last day) occurring in the
period for which such interest, Commitment Commission or Fees are payable.
13.08 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF
JURY TRIAL. (a) THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL, EXCEPT AS OTHERWISE
PROVIDED IN CERTAIN OF THE MORTGAGES, BE CONSTRUED IN ACCORDANCE WITH AND BE
GOVERNED BY THE LAW OF THE STATE OF NEW YORK. ANY LEGAL ACTION OR PROCEEDING
WITH RESPECT TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT MAY BE BROUGHT IN
THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES FOR THE SOUTHERN
DISTRICT OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF
HOLDINGS AND THE BORROWER HEREBY IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT
OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE
AFORESAID COURTS. EACH OF HOLDINGS AND THE BORROWER HEREBY IRREVOCABLY
DESIGNATES, APPOINTS AND EMPOWERS CORPORATION SERVICE COMPANY, WITH OFFICES ON
THE DATE HEREOF AT 500 CENTRAL AVENUE, ALBANY, NEW YORK 12206 AS ITS
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DESIGNEE, APPOINTEE AND AGENT TO RECEIVE, ACCEPT AND ACKNOWLEDGE FOR AND ON ITS
BEHALF, AND IN RESPECT OF ITS PROPERTY, SERVICE OF ANY AND ALL LEGAL PROCESS,
SUMMONS, NOTICES AND DOCUMENTS WHICH MAY BE SERVED IN ANY SUCH ACTION OR
PROCEEDING. IF FOR ANY REASON SUCH DESIGNEE, APPOINTEE AND AGENT SHALL CEASE TO
BE AVAILABLE TO ACT AS SUCH, EACH CREDIT PARTY AGREES TO DESIGNATE A NEW
DESIGNEE, APPOINTEE AND AGENT IN THE STATE OF NEW YORK ON THE TERMS AND FOR THE
PURPOSES OF THIS PROVISION SATISFACTORY TO THE ADMINISTRATIVE AGENT UNDER THIS
AGREEMENT. EACH OF HOLDINGS AND THE BORROWER FURTHER IRREVOCABLY CONSENTS TO THE
SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR
PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL,
POSTAGE PREPAID, TO ANY CREDIT PARTY AT ITS ADDRESS SET FORTH OPPOSITE ITS
SIGNATURE BELOW, SUCH SERVICE TO BECOME EFFECTIVE 30 DAYS AFTER SUCH MAILING.
NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE AGENT UNDER THIS AGREEMENT, ANY
BANK OR THE HOLDER OF ANY NOTE TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY
LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST ANY CREDIT
PARTY IN ANY OTHER JURISDICTION.
(b) EACH OF HOLDINGS AND THE BORROWER HEREBY IRREVOCABLY WAIVES ANY
OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF
THE AFORESAID ACTIONS OR PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS
AGREEMENT OR ANY OTHER CREDIT DOCUMENT BROUGHT IN THE COURTS REFERRED TO IN
CLAUSE (a) ABOVE AND HEREBY FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD
OR CLAIM IN ANY SUCH COURT THAT ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY
SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
(c) EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES
ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING
OUT OF OR RELATING TO THIS AGREEMENT, THE OTHER CREDIT DOCUMENTS OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
13.09 Counterparts. This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall together
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constitute one and the same instrument. A set of counterparts executed by all
the parties hereto shall be lodged with the Borrower and the Administrative
Agent.
13.10 Effectiveness. This Agreement shall become effective on the
date (the "Effective Date") on which Holdings, the Borrower and each of the
Banks who are initially parties hereto shall have signed a counterpart hereof
(whether the same or different counterparts) and shall have delivered the same
to the Administrative Agent or, in the case of the Banks, shall have given to
the Administrative Agent telephonic (confirmed in writing), written or telex
notice (actually received) at such office that the same has been signed and
mailed to it. The Administrative Agent will give the Borrower and each Bank
prompt written notice of the occurrence of the Effective Date.
13.11 Headings Descriptive. The headings of the several sections and
subsections of this Agreement are inserted for convenience only and shall not in
any way affect the meaning or construction of any provision of this Agreement.
13.12 Amendment or Waiver; etc. (a) Neither this Agreement nor any
other Credit Document nor any terms hereof or thereof may be changed, waived,
discharged or terminated unless such change, waiver, discharge or termination is
in writing signed by the respective Credit Parties party thereto and the
Required Banks, provided that no such change, waiver, discharge or termination
shall, without the consent of each Bank (other than a Defaulting Bank) (with
Obligations being directly affected in the case of following clause (i)), (i)
extend the final scheduled maturity of any Loan or Note or extend the stated
maturity of any Letter of Credit beyond the Revolving Loan Maturity Date, or
reduce the rate or extend the time of payment of interest or Fees thereon
(except (x) in connection with the waiver of applicability of any post-default
increase in interest rates and (y) that any amendment or modification to the
financial definitions in this Agreement shall not constitute a reduction in the
rate of interest for purposes of this clause (i)), or reduce the principal
amount thereof (except to the extent repaid in cash), (ii) release all or
substantially all of the Collateral (except as expressly provided in the Credit
Documents) under all the Security Documents, (iii) amend, modify or waive any
provision of this Section 13.12, (iv) reduce the percentage specified in the
definition of Required Banks (it being understood that, with the consent of the
Required Banks, additional extensions of credit pursuant to this Agreement may
be included in the determination of the Required Banks on substantially the same
basis as the extensions of Term Loans and Revolving Loan Commitments are
included on the Effective Date) or (v) consent to the assignment or transfer by
the Borrower of any of its rights and obligations under this Agreement; provided
further, that no such change, waiver, discharge or termination shall (u)
increase the Commitments of any Bank over the amount thereof then in effect
without the consent of such Bank (it being understood that waivers or
modifications of conditions precedent, covenants, Defaults or Events of Default
or of a mandatory reduction in the Total Commitments shall not constitute an
increase of
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the Commitment of any Bank, and that an increase in the available portion of any
Commitment of any Bank shall not constitute an increase in the Commitment of
such Bank), (v) without the consent of BTCo or, in the case of Letters of
Credit, the respective Issuing Bank, amend, modify or waive any provision of
Section 2 or alter its rights or obligations with respect to Letters of Credit
or Swingline Loans, (w) without the consent of each Agent affected thereby,
amend, modify or waive any provision of Section 12 as same applies to such Agent
or any other provision as same relates to the rights or obligations of such
Agent, (x) without the consent of the Collateral Agent, amend, modify or waive
any provision relating to the rights or obligations of the Collateral Agent, (y)
without the consent of the Majority Banks of each Tranche which is being
allocated a lesser prepayment, repayment or commitment reduction as a result of
the actions described below (or without the consent of the Majority Banks of
each Tranche in the case of an amendment to the definition of Majority Banks),
amend the definition of Majority Banks (it being understood that, with the
consent of the Required Banks, additional extensions of credit pursuant to this
Agreement may be included in the determination of the Majority Banks on
substantially the same basis as the extensions of Term Loans and Revolving Loan
Commitments are included on the Effective Date) or alter the required
application of any prepayments or repayments (or commitment reductions), as
between the various Tranches, pursuant to Section 4.01 or 4.02 (excluding
Sections 4.02(b) and (c)) (although (x) the Required Banks may waive, in whole
or in part, any such prepayment, repayment or commitment reduction, so long as
the application, as amongst the various Tranches, of any such prepayment,
repayment or commitment reduction which is still required to be made is not
altered and (y) if additional Tranches of Term Loans are extended after the
Initial Borrowing Date with the consent of the Required Banks as required above,
such Tranches may be included on a pro rata basis (as is originally done with
the Tranche A Term Loans and Tranche B Term Loans) in the various prepayments or
repayments required pursuant to Sections 4.01 and 4.02 (excluding Sections
4.02(b) and (c) and any section providing Scheduled Repayments for any new
Tranche of Term Loans) or (z) without the consent of the Supermajority Banks of
the respective Tranche, reduce the amount of, or extend the date of, any
Scheduled Repayment applicable to such Tranche or, without the consent of the
Supermajority Banks of each Tranche, amend the definition of Supermajority Banks
(it being understood that, with the consent of the Required Banks, additional
extensions of credit pursuant to this Agreement may be included in the
determination of the Supermajority Banks on substantially the same basis as the
extensions of Term Loans and Revolving Loan Commitments are included on the
Effective Date).
(b) If, in connection with any proposed change, waiver, discharge or
termination to any of the provisions of this Agreement as contemplated by
clauses (i) through (v), inclusive, of the first proviso to Section 13.12(a),
the consent of the Required Banks is obtained but the consent of one or more of
such other Banks whose consent is required is not obtained, then the Borrower
shall have the right, so long as all non-
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consenting Banks whose individual consent is required are treated as described
in either clauses (A) or (B) below, to either (A) replace each such
non-consenting Bank or Banks (or, at the option of the Borrower if the
respective Bank's consent is required with respect to less than all Tranches of
Loans (or related Commitments), to replace only the respective Tranche or
Tranches of Commitments and/or Loans of the respective non-consenting Bank which
gave rise to the need to obtain such Bank's individual consent) with one or more
Replacement Banks pursuant to Section 1.13 so long as at the time of such
replacement, each such Replacement Bank consents to the proposed change, waiver,
discharge or termination or (B) terminate such non-consenting Bank's Revolving
Loan Commitment (if such Bank's consent is required as a result of its Revolving
Loan Commitment) and/or repay each Tranche of outstanding Term Loans of such
Bank which gave rise to the need to obtain such Bank's consent, in accordance
with Sections 3.02(b) and/or 4.01(iv), provided that, unless the Commitments are
terminated, and Loans repaid, pursuant to preceding clause (B) are immediately
replaced in full at such time through the addition of new Banks or the increase
of the Commitments and/or outstanding Loans of existing Banks (who in each case
must specifically consent thereto), then in the case of any action pursuant to
preceding clause (B) the Required Banks (determined before giving effect to the
proposed action) shall specifically consent thereto, provided further, that in
any event the Borrower shall not have the right to replace a Bank, terminate its
Revolving Loan Commitment or repay its Loans solely as a result of the exercise
of such Bank's rights (and the withholding of any required consent by such Bank)
pursuant to the second proviso to Section 13.12(a).
13.13 Survival. All indemnities set forth herein including, without
limitation, in Sections 1.10, 1.11, 2.05, 4.04, 13.01 and 13.06 shall, subject
to Section 13.15 (to the extent applicable), survive the execution, delivery and
termination of this Agreement and the Notes and the making and repayment of the
Loans.
13.14 Domicile of Loans. Each Bank may transfer and carry its Loans
at, to or for the account of any office, Subsidiary or Affiliate of such Bank.
Notwithstanding anything to the contrary contained herein, to the extent that a
transfer of Loans pursuant to this Section 13.14 would, at the time of such
transfer, result in increased costs under Section 1.10, 1.11, 2.05 or 4.04 from
those being charged by the respective Bank prior to such transfer, then the
Borrower shall not be obligated to pay such increased costs (although the
Borrower shall be obligated to pay any other increased costs of the type
described above resulting from changes after the date of the respective
transfer).
13.15 Limitation on Additional Amounts, Etc. Notwithstanding anything
to the contrary contained in Sections 1.10, 1.11, 2.05 or 4.04 of this
Agreement, unless a Bank gives notice to the Borrower that it is obligated to
pay an amount under any such Section within one year after the later of (x) the
date the Bank incurs the respective increased costs, Taxes, loss, expense or
liability, reduction in amounts received or
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receivable or reduction in return on capital or (y) the date such Bank has
actual knowledge of its incurrence of the respective increased costs, Taxes,
loss, expense or liability, reductions in amounts received or receivable or
reduction in return on capital, then such Bank shall only be entitled to be
compensated for such amount by the Borrower pursuant to said Section 1.10, 1.11,
2.05 or 4.04, as the case may be, to the extent the costs, Taxes, loss, expense
or liability, reduction in amounts received or receivable or reduction in return
on capital are incurred or suffered on or after the date which occurs one year
prior to such Bank giving notice to the Borrower that it is obligated to pay the
respective amounts pursuant to said Section 1.10, 1.11, 2.05 or 4.04, as the
case may be. This Section 13.15 shall have no applicability to any Section of
this Agreement other than said Sections 1.10, 1.11, 2.05 and 4.04.
13.16 Confidentiality. (a) Subject to the provisions of clause (b) of
this Section 13.16, each Bank agrees that it will use its best efforts not to
disclose without the prior consent of Holdings or the Borrower (other than to
its employees, auditors, advisors or counsel or to another Bank if the Bank or
such Bank's holding or parent company or board of trustees in its sole
discretion determines that any such party should have access to such
information, provided such Persons shall be subject to the provisions of this
Section 13.16 to the same extent as such Bank) any information with respect to
Holdings or any of its Subsidiaries which is now or in the future furnished
pursuant to this Agreement or any other Credit Document and which is designated
by Holdings to the Banks in writing as confidential, provided that any Bank may
disclose any such information (a) as has become generally available to the
public other than by virtue of a breach of this Section 13.16(a) by the
respective Bank, (b) as may be required or appropriate in any report, statement
or testimony submitted to any municipal, state or Federal regulatory body having
or claiming to have jurisdiction over such Bank or to the Federal Reserve Board
or the Federal Deposit Insurance Corporation or similar organizations (whether
in the United States or elsewhere) or their successors, (c) as may be required
or appropriate in respect to any summons or subpoena or in connection with any
litigation, (d) in order to comply with any law, order, regulation or ruling
applicable to such Bank, (e) to the Agents or the Collateral Agent and (f) to
any prospective or actual transferee or participant in connection with any
contemplated transfer or participation of any of the Notes or Commitments or any
interest therein by such Bank, provided that such prospective transferee agrees
to be bound by the confidentiality provisions contained in this Section 13.16.
(b) Each of Holdings and the Borrower hereby acknowledges and agrees
that each Bank may share with any of its affiliates any information related to
Holdings or any of its Subsidiaries (including, without limitation, any
nonpublic customer information regarding the creditworthiness of Holdings and
its Subsidiaries, provided such Persons shall be subject to the provisions of
this Section 13.16 to the same extent as such Bank).
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13.17 Register. The Borrower hereby designates the Administrative
Agent to serve as the Borrower's agent, solely for purposes of this Section
13.17, to maintain a register (the "Register") on which it will record the
Commitments from time to time of each of the Banks, the Loans made by each of
the Banks and each repayment in respect of the principal amount of the Loans of
each Bank. Failure to make any such recordation, or any error in such
recordation shall not affect the Borrower's obligations in respect of such
Loans. With respect to any Bank, the transfer of the Commitments of such Bank
and the rights to the principal of, and interest on, any Loan made pursuant to
such Commitments shall not be effective until such transfer is recorded on the
Register maintained by the Administrative Agent with respect to ownership of
such Commitments and Loans and prior to such recordation all amounts owing to
the transferor with respect to such Commitments and Loans shall remain owing to
the transferor. The registration of assignment or transfer of all or part of any
Commitments and Loans shall be recorded by the Administrative Agent on the
Register only upon the acceptance by the Administrative Agent of a properly
executed and delivered Assignment and Assumption Agreement pursuant to Section
13.04(b). Coincident with the delivery of such an Assignment and Assumption
Agreement to the Administrative Agent for acceptance and registration of
assignment or transfer of all or part of a Loan, or as soon thereafter as
practicable, the assigning or transferor Bank shall surrender the Note
evidencing such Loan, and thereupon one or more new Notes in the same aggregate
principal amount shall be issued to the assigning or transferor Bank and/or the
new Bank. The Borrower agrees to indemnify the Administrative Agent from and
against any and all losses, claims, damages and liabilities of whatsoever nature
which may be imposed on, asserted against or incurred by the Administrative
Agent in performing its duties under this Section 13.17.
13.18 Certain Prior Documents. Upon execution of this Agreement, all
rights and obligations of the Agents and Citicorp Venture Capital Ltd. under the
commitment letter and related documents attached as Exhibit 4.7B to the
Recapitalization Agreement are terminated; provided that all obligations set
forth in the fee letter related thereto are hereby expressly assumed by the
Borrower, and, as so assumed, shall continue in full force and effect.
SECTION 14. Holdings Guaranty.
14.01 The Holdings Guaranty. In order to induce the Agents and the
Banks to enter into this Agreement and to extend credit hereunder, to induce
Banks or any of their respective Affiliates to enter into the Interest Rate
Protection Agreements or other Hedging Agreements, and in recognition of the
direct benefits to be received by Holdings from the proceeds of the Loans, the
issuance of the Letters of Credit, and the entering into of Interest Rate
Protection Agreements or Other Hedging Agreements, Holdings hereby agrees with
the Guaranteed Creditors as follows: Holdings hereby unconditionally and
irrevocably
-135-
guarantees as primary obligor and not merely as surety the full and prompt
payment when due, whether upon maturity, acceleration or otherwise, of any and
all of the Guaranteed Obligations of the Borrower to the Guaranteed Creditors.
If any or all of the Guaranteed Obligations of the Borrower to the Guaranteed
Creditors becomes due and payable hereunder, Holdings irrevocably and
unconditionally promises to pay such indebtedness to the Guaranteed Creditors,
or order, on demand, together with any and all expenses which may be incurred by
the Guaranteed Creditors in collecting any of the Guaranteed Obligations. If
claim is ever made upon any Guaranteed Creditor for repayment or recovery of any
amount or amounts received in payment or on account of any of the Guaranteed
Obligations and any of the aforesaid payees repays all or part of said amount by
reason of (i) any judgment, decree or order of any court or administrative body
having jurisdiction over such payee or any of its property or (ii) any
settlement or compromise of any such claim effected by such payee with any such
claimant (including the Borrower), then and in such event Holdings agrees that
any such judgment, decree, order, settlement or compromise shall be binding upon
Holdings, notwithstanding any revocation of this Holdings Guaranty or other
instrument evidencing any liability of the Borrower, and Holdings shall be and
remain liable to the aforesaid payees hereunder for the amount so repaid or
recovered to the same extent as if such amount had never originally been
received by any such payee.
14.02 Bankruptcy. Additionally, Holdings unconditionally and
irrevocably guarantees the payment of any and all of the Guaranteed Obligations
of the Borrower to the Guaranteed Creditors whether or not due or payable by the
Borrower upon the occurrence of an Event of Default under any of the events
specified in Section 10.05, and unconditionally promises to pay such
indebtedness to the Guaranteed Creditors, or order, on demand, in lawful money
of the United States.
14.03 Nature of Liability. The liability of Holdings hereunder is
exclusive and independent of any security for or other guaranty of the
Guaranteed Obligations of the Borrower whether executed by Holdings, any other
guarantor or by any other party, and the liability of Holdings hereunder is not
affected or impaired by (a) any direction as to application of payment by the
Borrower or by any other party, or (b) any other continuing or other guaranty,
undertaking or maximum liability of a guarantor or of any other party as to the
Guaranteed Obligations of the Borrower, or (c) any payment on or in reduction of
any such other guaranty or undertaking, or (d) any dissolution, termination or
increase, decrease or change in personnel by the Borrower, or (e) any payment
made to any Guaranteed Creditor on the Guaranteed Obligations which any such
Guaranteed Creditor repays to the Borrower pursuant to court order in any
bankruptcy, reorganization, arrangement, moratorium or other debtor relief
proceeding, and Holdings waives any right to the deferral or modification of its
obligations hereunder by reason of any such proceeding.
-136-
14.04 Independent Obligation. The obligations of Holdings hereunder
are independent of the obligations of any other guarantor, any other party or
the Borrower, and a separate action or actions may be brought and prosecuted
against Holdings whether or not action is brought against any other guarantor,
any other party or the Borrower and whether or not any other guarantor, any
other party or the Borrower be joined in any such action or actions. Holdings
waives, to the full extent permitted by law, the benefit of any statute of
limitations affecting its liability hereunder or the enforcement thereof. Any
payment by the Borrower or other circumstance which operates to toll any statute
of limitations as to the Borrower shall operate to toll the statute of
limitations as to Holdings.
14.05 Authorization. Holdings authorizes the Guaranteed Creditors
without notice or demand (except as shall be required by applicable statute and
cannot be waived), and without affecting or impairing its liability hereunder,
from time to time to:
(a) change the manner, place or terms of payment of, and/or change or
extend the time of payment of, renew, increase, accelerate or alter, any
of the Guaranteed Obligations (including any increase or decrease in the
rate of interest thereon), any security therefor, or any liability
incurred directly or indirectly in respect thereof, and the Holdings
Guaranty herein made shall apply to the Guaranteed Obligations as so
changed, extended, renewed or altered;
(b) take and hold security for the payment of the Guaranteed
Obligations and sell, exchange, release, surrender, realize upon or
otherwise deal with in any manner and in any order any property by
whomsoever at any time pledged or mortgaged to secure, or howsoever
securing, the Guaranteed Obligations or any liabilities (including any of
those hereunder) incurred directly or indirectly in respect thereof or
hereof, and/or any offset thereagainst;
(c) exercise or refrain from exercising any rights against the
Borrower, any other Credit Party or others or otherwise act or refrain
from acting;
(d) release or substitute any one or more endorsers, guarantors, the
Borrower or other obligors;
(e) settle or compromise any of the Guaranteed Obligations, any
security therefor or any liability (including any of those hereunder)
incurred directly or indirectly in respect thereof or hereof, and may
subordinate the payment of all or any part thereof to the payment of any
liability (whether due or not) of the Borrower to its creditors other than
the Guaranteed Creditors;
-137-
(f) apply any sums by whomsoever paid or howsoever realized to any
liability or liabilities of the Borrower to the Guaranteed Creditors
regardless of what liability or liabilities of Holdings or the Borrower
remain unpaid;
(g) consent to or waive any breach of, or any act, omission or default
under, this Agreement or any of the instruments or agreements referred to
herein, or otherwise amend, modify or supplement this Agreement or any of
such other instruments or agreements; and/or
(h) take any other action which would, under otherwise applicable
principles of common law, give rise to a legal or equitable discharge of
Holdings from its liabilities under this Holdings Guaranty.
14.06 Reliance. It is not necessary for any Guaranteed Creditor to
inquire into the capacity or powers of the Borrower or the officers, directors,
partners or agents acting or purporting to act on their behalf, and any
Guaranteed Obligations made or created in reliance upon the professed exercise
of such powers shall be guaranteed hereunder.
14.07 Subordination. Any of the indebtedness of the Borrower now or
hereafter owing to Holdings is hereby subordinated to the Guaranteed Obligations
of the Borrower owing to the Guaranteed Creditors; and if the Administrative
Agent so requests at a time when an Event of Default exists, all such
indebtedness of the Borrower to Holdings shall be collected, enforced and
received by Holdings for the benefit of the Guaranteed Creditors and be paid
over to the Administrative Agent on behalf of the Guaranteed Creditors on
account of the Guaranteed Obligations of the Borrower to the Guaranteed
Creditors, but without affecting or impairing in any manner the liability of
Holdings under the other provisions of this Holdings Guaranty. Prior to the
transfer by Holdings of any note or negotiable instrument evidencing any of the
indebtedness of the Borrower to Holdings, Holdings shall mark such note or
negotiable instrument with a legend that the same is subject to this
subordination. Without limiting the generality of the foregoing, Holdings hereby
agrees with the Guaranteed Creditors that it will not exercise any right of
subrogation which it may at any time otherwise have as a result of this Holdings
Guaranty (whether contractual, under Section 509 of the Bankruptcy Code or
otherwise) until all Guaranteed Obligations have been irrevocably paid in full
in cash.
14.08 Waiver. (a) Holdings waives any right (except as shall be
required by applicable statute and cannot be waived) to require any Guaranteed
Creditor to (i) proceed against the Borrower, any other guarantor or any other
party, (ii) proceed against or exhaust any security held from the Borrower, any
other guarantor or any other party or (iii) pursue any other remedy in any
Guaranteed Creditor's power whatsoever. Holdings waives any defense based on or
arising out of any defense of the Borrower, any other guarantor
-138-
or any other party, other than payment in full of the Guaranteed Obligations,
based on or arising out of the disability of the Borrower, any other guarantor
or any other party, or the validity, legality or unenforceability of the
Guaranteed Obligations or any part thereof from any cause, or the cessation from
any cause of the liability of the Borrower other than payment in full of the
Guaranteed Obligations. The Guaranteed Creditors may, at their election,
foreclose on any security held by any Agent, the Collateral Agent or any other
Guaranteed Creditor by one or more judicial or nonjudicial sales, whether or not
every aspect of any such sale is commercially reasonable (to the extent such
sale is permitted by applicable law), or exercise any other right or remedy the
Guaranteed Creditors may have against the Borrower or any other party, or any
security, without affecting or impairing in any way the liability of Holdings
hereunder except to the extent the Guaranteed Obligations have been paid.
Holdings waives any defense arising out of any such election by the Guaranteed
Creditors, even though such election operates to impair or extinguish any right
of reimbursement or subrogation or other right or remedy of Holdings against the
Borrower or any other party or any security.
(b) Holdings waives all presentments, demands for performance,
protests and notices, including, without limitation, notices of nonperformance,
notices of protest, notices of dishonor, notices of acceptance of this Holdings
Guaranty, and notices of the existence, creation or incurring of new or
additional Guaranteed Obligations. Holdings assumes all responsibility for being
and keeping itself informed of the Borrower's financial condition and assets,
and of all other circumstances bearing upon the risk of nonpayment of the
Guaranteed Obligations and the nature, scope and extent of the risks which
Holdings assumes and incurs hereunder, and agrees that neither the Agents nor
any Bank shall have any duty to advise Holdings of information known to them
regarding such circumstances or risks.
14.09 Maximum Liability. It is the desire and intent of Holdings and
the Guaranteed Creditors that this Holdings Guaranty shall be enforced against
Holdings to the fullest extent permissible under the laws and public policies
applied in each jurisdiction in which enforcement is sought. If, however, and to
the extent that, the obligations of Holdings under this Holdings Guaranty shall
be adjudicated to be invalid or unenforceable for any reason (including, without
limitation, because of any applicable state or federal law relating to
fraudulent conveyances or transfers), then the amount of the Guaranteed
Obligations of Holdings shall be deemed to be reduced and Holdings shall pay the
maximum amount of the Guaranteed Obligations which would be permissible under
applicable law.
* * *
-139-
IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized officers to execute and deliver this Agreement as of the date first
above written.
Addresses:
333 Western Avenue FSC SEMICONDUCTOR CORPORATION
South Portland, ME 04106
Tel: (207) 775-8755 By
Fax: (207) 761-6020 ------------------------
Attention: Dan Boxer Name:
Title:
333 Western Avenue FAIRCHILD SEMICONDUCTOR
South Portland, ME 04106 CORPORATION
Tel: (207) 775-8755
Fax: (207) 761-6020
Attention: Dan Boxer By
-------------------------
Name:
Title:
BANKERS TRUST COMPANY,
Individually and as Administrative
Agent
By
-------------------------
Name:
Title:
CREDIT SUISSE FIRST BOSTON,
Individually and as Syndication Agent
By
-------------------------
Name:
Title:
By
-------------------------
Name:
Title:
CANADIAN IMPERIAL BANK OF COMMERCE,
Individually and as Documentation
Agent
By
-------------------------
Name:
Title:
ABN AMRO BANK, N.V.
By
-------------------------
Name:
Title:
By
-------------------------
Name:
Title:
THE FIRST NATIONAL BANK OF BOSTON
By
-------------------------
Name:
Title:
THE BANK OF NOVA SCOTIA
By
-------------------------
Name:
Title:
BANK OF SCOTLAND
By
-------------------------
Name:
Title:
BANK OF TOKYO-MITSUBISHI
By
-------------------------
Name:
Title:
BANQUE FRANCAISE DU COMMERCE
EXTERIEUR
By
-------------------------
Name:
Title:
CHANCELLOR SENIOR SECURED
MANAGEMENT
By
-------------------------
Name:
Title:
CORESTATES BANK, N.A.
By
-------------------------
Name:
Title:
DRESDNER BANK AG, New York Branch and
Grand Cayman Branch
By
-------------------------
Name:
Title:
By
-------------------------
Name:
Title:
SENIOR DEBT PORTFOLIO
By Boston Management and Research,
as Investment Advisor
By
-------------------------
Name:
Title:
FIRST SOURCE FINANCIAL LLP
By First Source Financial, Inc.,
its Agent/Manager
By
-------------------------
Name:
Title:
FLEET NATIONAL BANK
By
-------------------------
Name:
Title:
THE FUJI BANK, LIMITED
NEW YORK BRANCH
By
-------------------------
Name:
Title:
GENERAL ELECTRIC CAPITAL CORPORATION
By
-------------------------
Name:
Title:
KEYBANK NATIONAL ASSOCIATION
By
-------------------------
Name:
Title:
MERRILL LYNCH SENIOR FLOATING RATE
FUND, INC.
By
-------------------------
Name:
Title:
THE MITSUBISHI TRUST & BANKING
CORPORATION, LOS ANGELES AGENCY
By
-------------------------
Name:
Title:
PILGRIM AMERICA PRIME RATE TRUST
By
-------------------------
Name:
Title:
PNC BANK, NATIONAL ASSOCIATION
By
-------------------------
Name:
Title:
PRIME INCOME TRUST
By
-------------------------
Name:
Title:
VAN KAMPEN AMERICAN CAPITAL PRIME
RATE INCOME TRUST
By
-------------------------
Name:
Title:
SCHEDULE I
COMMITMENTS
Tranche A Term Tranche B Term Revolving
Bank Loan Commitment Loan Commitment Loan Commitment
- ---- --------------- --------------- ---------------
Bankers Trust Company $5,333,333.34 $15,000,000 $5,333,333.34
Credit Suisse First Boston 5,333,333.33 -- 5,333,333.33
Canadian Imperial Bank of 5,333,333.33 -- 5,333,333.33
Commerce
PNC Bank National Association 5,000,000 -- 5,000,000
Fleet National Bank 5,000,000 -- 5,000,000
The Fuji Bank, Limited New York 5,000,000 -- 5,000,000
Branch
Bank of Scotland 4,000,000 -- 4,000,000
ABN Amro Bank, N.V. 4,000,000 -- 4,000,000
First Source Financial LLP 4,000,000 -- 4,000,000
Corestates Bank, N.A. 4,000,000 -- 4,000,000
Bank of Tokyo-Mitsubishi 4,000,000 -- 4,000,000
The Bank of Nova Scotia 4,000,000 -- 4,000,000
The First National Bank of Boston 4,000,000 -- 4,000,000
General Electric Capital 4,000,000 -- 4,000,000
Corporation
Banque Francaise du Commerce 4,000,000 -- 4,000,000
Exterieur
The Mitsubishi Trust & Banking 4,000,000 -- 4,000,000
Corporation, Los Angeles Agency
Dresdner Bank AG, New York 4,000,000 -- 4,000,000
Branch and Grand Cayman Branch
SCHEDULE I
Page 2
Tranche A Term Tranche B Term Revolving
Bank Loan Commitment Loan Commitment Loan Commitment
- ---- --------------- --------------- ---------------
Van Kampen American Capital Prime -- $7,500,000 --
Rate Income Trust
Pilgrim America Prime Rate Trust -- 7,500,000 --
Prime Income Trust -- 7,500,000 --
Merrill Lynch Senior Floating Rate -- 7,500,000 --
Fund, Inc.
Totals $75,000,000 $45,000,000 $75,000,000
SCHEDULE II
BANK ADDRESSES
Bankers Trust Company 130 Liberty Street
New York, New York 10006
Telephone No.: (212) 250-4886
Telecopier No.: (212) 250-7218
Attention: Anthony Logrippo
Credit Suisse First Boston 11 Madison Avenue
New York, New York 10010
Telephone No.: (212) 325-9157
Telecopier No.: (212) 325-8309
Attention: Chris T. Horgan
Canadian Imperial 425 Lexington Avenue, 3rd Floor
Bank of Commerce New York, New York 10017
Telephone No.: (212) 885-4695
Telecopier No.: (212) 885-4933
Attention: Ed Levy
ABN Amro Bank, N.V. One Post Office Square
39th Floor
Boston, MA 02109
Tel: (617) 988-7935
Fax: (617) 988-7910
Attention: Chip Wahle
The First National Bank of Boston 100 Federal Street
High Technology Division
Mail Stop: 01-08-06
Boston, MA 02106
Tel: (617) 434-0819
Attention: Daniel Head, Jr.
The Bank of Nova Scotia 101 Federal Street
16th Floor
Boston, MA 02110
Tel: (617) 737-6310
Fax: (617) 951-2177
SCHEDULE II
Page 2
Attention: T.M. Pitcher
Bank of Scotland New York Branch
565 Fifth Avenue
New York, NY 10017
Tel: (212) 450-0871
Fax: (212) 557-9460
Attention: Annie Chin Tat
Bank of Tokyo-Mitsubishi 1251 Avenue of the Americas
New York, NY 10020
Tel: (212) 782-4268
Fax: (212) 782-4981
Attention: Nick Campbell
Banque Francaise du Commerce 645 Fifth Avenue
Exteriuer New York, NY 10022
Tel: (212) 872-5180
Fax: (212) 872-5045
Attention: Peter Harris
Chancellor Senior Secured 1166 Avenue of the Americas
Management New York, NY 10036
Tel: (212) 278-9563
Fax: (212) 278-9869
Attention: Stephen Alfieri
Corestates Bank, N.A. 1339 Chestnut Street
Philadelphia, PA 19107
Tel: (215) 973-2562
Fax: (215) 973-6680
Attention: Mark S. Supple
Dresdner Bank AG, New York 333 South Grand Avenue
Branch and Grand Cayman Suite 1700
Branch Los Angeles, CA 90071
Tel: (213) 473-5420
SCHEDULE II
Page 3
Fax: (213) 473-5450
Attention: Sid Jordan
Senior Debt Portfolio c/o Eaton Vance
24 Federal Street
Boston, MA 02110
Tel: (617) 654-8484
Fax: (617) 695-9594
Attention: Payson Swaffield
First Source Financial LLP 2850 West Golf Road
5th Floor
Rolling Meadows, IL 60008
Tel: (847) 734-2064
Fax: (847) 734-7910
Attention: Kelli Marti
Fleet National Bank One Federal Street
Mail Stop: MA PF DO3C
Boston, MA 02110
Tel: (617) 346-4853
Fax: (617) 346-4806
Attention: Eric VanderMel
The Fuji Bank, Limited Two World Trade Center
New York Branch New York, NY 10048
Tel: (212) 898-2073
Fax: (212) 912-0516
Attention: Mark Hanslin
General Electric 201 High Ridge Road
Capital Corporation Stamford, CT 06927
Tel: (203) 316-7582
Fax: (203) 316-7978
Attention: Mike McGonigle
Keybank National Association 127 Public Square
6th Floor
SCHEDULE II
Page 4
Cleveland, OH 44114
Tel: (216) 689-5562
Fax: (216) 689-4981
Attention: Michael Landimi
Merrill Lynch Senior Floating 800 Scudders Mill Road
Rate Fund, Inc. Plainsboro, NJ 08536
Tel: (609) 282-2092
Fax: (609) 282-2756
Attention: Anthony Clemente
The Mitsubishi Trust & Banking 801 South Figueroa Street
Corporation, Los Angeles Suite 2400
Agency Los Angeles, CA 90017
Tel: (213) 896-4658
Fax: (213) 687-4631
Attention: Rex Olson
Pilgrim America Prime Rate Trust Two Renaissance Square
Phoenix, AZ 85004
Tel: (602) 417-8257
Fax: (602) 417-8327
Attention: Tim Hunt
PNC Bank National Association 345 Park Avenue
New York, NY 10154
Tel: (212) 409-3724
Fax: (212) 409-3737
Attention: Mark Williams
Prime Income Trust c/o Dean Witter Intercapital
Two World Trade Center
New York, NY 10048
Tel: (212) 392-9034
Fax: (212) 392-5345
Attention: Peter Gewirtz
SCHEDULE II
Page 5
Van Kampen American Capital One Parkview Plaza
Prime Rate Income Trust Oakbrook Terrace, IL 60181
Tel: (630) 684-6438
Fax: (603) 684-6740
Attention: Jeffrey Maillet
SCHEDULE III
REAL PROPERTY
Occupant Interest Held Description
-------- ------------- -----------
Borrower *Fee Simple 333 Western Avenue
South Portland, Maine
Borrower *Fee Simple 3333 West 9000 South
West Jordan, Utah
Borrower Leasehold Lease dated November 13, 1995
between Mill Fabric Center,
lessor, and Borrower,
successor to National
Semiconductor Corporation, as
lessee, covering a portion of
a building located at 265
Western Avenue, South
Portland, Maine.
Borrower Leasehold Lease dated March __, 1997
between the Borrower and
National Semiconductor
Corporation covering building
10 at a facility owned by
National Semiconductor
Corporation located on Western
Avenue, South Portland, Maine.
Borrower Leasehold Lease dated March __, 1997
between the Borrower and
National Semiconductor
Corporation covering buildings
12 and 23 at a facility owned
by National Semiconductor
Corporation located on Western
Avenue, South Portland, Maine.
Borrower Leasehold Lease dated March __, 1997
between the Borrower and
National Semiconductor
Corporation, as owner and
Lessor, whereby the Borrower
leases a portion of each of
the facilities located at 2920
San Ysidro Way and 3697 Tahoe
Way in Santa Clara,
California.
Fairchild Semiconductor Leasehold Lease dated March 8, 1976
(Malaysia) Sdn. Bhd. under qualified (temporary)
("Fairchild Malaysia") title no. HS(D) 44, for
occupancy by Fairchild
Malaysia, successor to
National Semiconductor Penang
("NSEP"), covering the
property known as the EP1
Building located in the Bayan
Lepas Free Trade Zone, Penang,
Malaysia.
Fairchild Malaysia Leasehold Lease dated November 18, 1982,
under qualified (temporary)
title no. HS(D) 3400-MK12, for
occupancy by Fairchild
Malaysia, successor to NSEP,
covering the property known as
the EP2 Building located in
the Bayan Lepas Free Trade
Zone, Penang, Malaysia.
* Mortgaged Properties
SCHEDULE III
Page 7
REAL PROPERTY
Occupant Interest Held Description
-------- ------------- -----------
Fairchild Malaysia Leasehold Lease dated May 22, 1973,
under qualified (temporary)
title no. HS(D) 19, for
occupancy by Fairchild
Malaysia, successor to NSEP,
covering the property known as
the IP Building located in the
Bayan Lepas Free Trade Zone,
Penang, Malaysia.
Fairchild Malaysia Leasehold Lease between Sri Penang
Development Sdn. Bhd., as
landlord and Fairchild
Malaysia, successor to NSEP,
as tenant, known as the "Red
Lease" covering property
located in the Bayan Lepas
Free Trade Zone, Penang,
Malaysia.
Fairchild Malaysia Leasehold Agreement for Lease dated July
14, 1988, between Sri Pinang
Development Sdn. Bhd., as
landlord and Fairchild
Malaysia, successor to NSEP,
as tenant, known as the "Blue
Lease" covering property
located in the Bayan Lepas
Free Trade Zone, Penang,
Malaysia.
Fairchild Malaysia Leasehold Agreement for Lease dated July
14, 1988, between Sri Pinang
Development Sdn. Bhd., as
landlord and Fairchild
Malaysia, successor to
National Semiconductor
Technology Sdn. Bhd., as
tenant, known as the "Yellow
Lease" covering property
located in the Bayan Lepas
Free Trade Zone, Penang,
Malaysia.
Fairchild Semiconductor Leasehold Lease Agreement dated October
Hong Kong (Holdings) 10, 1979, between Philippine
Limited ("Fairchild Hong Economic Zone Authority
Kong") (successor to Export
Processing Zone Authority),
("PEZA") as landlord, and
Fairchild Hong Kong, successor
in interest to National
Semiconductor Hong Kong
Limited, as tenant, covering
lands in the Mactan Export
Processing Zone, Cebu,
Philippines.
SCHEDULE IV
EXISTING LEINS
See Attached
Schedule IV
===================================================================================================================================
Debtor Secured Party File No/Date Collateral
- -----------------------------------------------------------------------------------------------------------------------------------
1. Fairchild General Electric Credit Corporation 729329; 05/11/87 Specified leased Haworth Office System
equipment
- -----------------------------------------------------------------------------------------------------------------------------------
2. Fairchild General Electric Credit Corporation 742687; 08/03/87 Specified leased Haworth furniture and fixtures
- -----------------------------------------------------------------------------------------------------------------------------------
3. National GCA Leasing Corp. 775287; 03/29/88 Specified lease including but not limited to
various computer, manufacturing and test
equipment
- -----------------------------------------------------------------------------------------------------------------------------------
4. National Xerox Corporation 983404; 05/08/92 Xerox 5100 copier
- -----------------------------------------------------------------------------------------------------------------------------------
5. National CLG, Inc. 989921; 06/22/92 IBM 3174 - OIR Controller S/N: F0708 (lease)
- -----------------------------------------------------------------------------------------------------------------------------------
6. National Xerox Corporation 990769; 06/25/92 Xerox 5100 copier
- -----------------------------------------------------------------------------------------------------------------------------------
7. National Hewlett-Packard Company 1029496; 05/10/93 Specified leased Hewlett-Packard equipment
- -----------------------------------------------------------------------------------------------------------------------------------
8. National CLG, Inc. 1047344; 09/17/93 IBM 6262-D22 Printer S/N: 80304 (lease)
- -----------------------------------------------------------------------------------------------------------------------------------
9. National Digital Financial Services, a division of 1050643; 01/03/94 Specified leased (2) B2-66AMA - AE
General Electric Capital Corporation Refurbished 66AMA-AE, Vax 6000 Model 610
system and peripherals
- -----------------------------------------------------------------------------------------------------------------------------------
10. National Digital Financial Services, a division of 1086326; 07/18/94 8W512-AC Storage Work Array w/peripherals
General Electric Capital Corporation (lease)
- -----------------------------------------------------------------------------------------------------------------------------------
11. National Digital Financial Services, a division of 1086327; 07/18/94 (1) 66AMAEB-FAX 6610 with 512MB,
General Electric Capital Corporation DEMNAM, CIXCD-AB, VMS, UNLIM, DECNET,
EF, VAX Cluster, (2) MS65-DA - Memory
Boards
- -----------------------------------------------------------------------------------------------------------------------------------
12. National Hewlett-Packard Company 1094B29; 09/22/94 Specified leased equipment pursuant to
Financing Agreement No. 4144-67173
- -----------------------------------------------------------------------------------------------------------------------------------
13. National General Electric Capital Corp. 1106784; 12/22/94 Specified leased equipment pursuant to
Equipment Schedule No. 004 to Master Lease
Agreement
- -----------------------------------------------------------------------------------------------------------------------------------
14. National General Electric Capital Corp. 1106785; 12/22/94 Specified leased equipment pursuant to
Equipment Schedule No. 005 to Master Lease
Agreement
- -----------------------------------------------------------------------------------------------------------------------------------
15. National General Electric Capital Corp. 1106786; 12/22/94 Specified leased equipment pursuant to
Equipment Schedule No. 006 to Master Lease
Agreement
===============================================
Debtor Location
- -----------------------------------------------
1. Fairchild Me. Sec. of State
- -----------------------------------------------
2. Fairchild Me. Sec. of State
- -----------------------------------------------
3. National Me. Sec. of State
- -----------------------------------------------
4. National Me. Sec. of State
- -----------------------------------------------
5. National Me. Sec. of State
- -----------------------------------------------
6. National Me. Sec. of State
- -----------------------------------------------
7. National Me. Sec. of State
- -----------------------------------------------
8. National Me. Sec. of State
- -----------------------------------------------
9. National Me. Sec. of State
- -----------------------------------------------
10. National Me. Sec. of State
- -----------------------------------------------
11. National Me. Sec. of State
- -----------------------------------------------
12. National Me. Sec. of State
- -----------------------------------------------
13. National Me. Sec. of State
- -----------------------------------------------
14. National Me. Sec. of State
- -----------------------------------------------
15. National Me. Sec. of State
===================================================================================================================================
Debtor Secured Party File No/Date Collateral
- -----------------------------------------------------------------------------------------------------------------------------------
16. National General Electric Capital Corp. 1106787; 12/22/94 Specified leased equipment pursuant to
Equipment Schedule No. 008 to Master Lease
Agreement
- -----------------------------------------------------------------------------------------------------------------------------------
17. National General Electric Capital Corp. 1107014; 12/27/94 Specified leased equipment pursuant to
Equipment Schedule No. 007 to Master Lease
Agreement
- -----------------------------------------------------------------------------------------------------------------------------------
18. National General Electric Capital Corp. 1107015; 12/27/94 Specified leased equipment pursuant to
Equipment Schedule No. 001 to Master Lease
Agreement
- -----------------------------------------------------------------------------------------------------------------------------------
19. National General Electric Capital Corp. 1107016; 12/27/94 Specified leased equipment pursuant to
Equipment Schedule No. 003 to Master Lease
Agreement
- -----------------------------------------------------------------------------------------------------------------------------------
20. National General Electric Capital Corp. 1107099; 12/27/94 Specified leased equipment pursuant to
Equipment Schedule No. 002 to Master Lease
Agreement
- -----------------------------------------------------------------------------------------------------------------------------------
21. National Telogy, Inc. 1112240; 02/08/95 1 TEK TDS620 2Channel DSO (lease)
- -----------------------------------------------------------------------------------------------------------------------------------
22. National Princeton Credit Corporation (assigned to 1123529; 05/08/95 2 Data Products Model 3C Typhoon Laser
NarCrown Bank of Roseland, NJ) Printers (lease)
- -----------------------------------------------------------------------------------------------------------------------------------
23. National Hewlett-Packard Company 1127323; 06/01/95 Specified leased equipment pursuant to
Financing Agreement No. 412401804
- -----------------------------------------------------------------------------------------------------------------------------------
24. National Digital Financial Services, a division of 1129067; 06/14/95 IIS142-AF Storage Works Array with
General Electric Capital Corporation Peripherals (lease)
- -----------------------------------------------------------------------------------------------------------------------------------
25. National Copelco Capital, Inc. 1144477; 10/10/95 One (1) Karl Suss PM & Analytical Probes; (1)
Light Tight Enclosure without Base, (1)
Vibration Isolation Table; (1) Color CCTV
System (lease)
- -----------------------------------------------------------------------------------------------------------------------------------
26. National Copelco Capital, Inc. 1145389; 10/16/95 One (1) LTX ___________, Micromaster ____
VLSI Tester (lease)
- -----------------------------------------------------------------------------------------------------------------------------------
27. National Copelco Capital, Inc. 1155277; 01/02/95 One Oxford Instruments LINK ISIS Series 300
Microanalysis: System (lease)
- -----------------------------------------------------------------------------------------------------------------------------------
28. National IBM Credit Corporation 1163339; 03/08/96 All computer, information processing, and
other peripheral equipment and goods
referenced on IBM Supplement No. 250927
dated 02/21/96
===================================================
Debtor Location
- ---------------------------------------------------
16. National Me. Sec. of State
- ---------------------------------------------------
17. National Me. Sec. of State
- ---------------------------------------------------
18. National Me. Sec. of State
- ---------------------------------------------------
19. National Me. Sec. of State
- ---------------------------------------------------
20. National Me. Sec. of State
- ---------------------------------------------------
21. National Me. Sec. of State
- ---------------------------------------------------
22. National Me. Sec. of State
- ---------------------------------------------------
23. National Me. Sec. of State
- ---------------------------------------------------
24. National Me. Sec. of State
- ---------------------------------------------------
25. National Me. Sec. of State
- ---------------------------------------------------
26. National Me. Sec. of State
- ---------------------------------------------------
27. National Me. Sec. of State
- ---------------------------------------------------
28. National Me. Sec. of State
===================================================================================================================================
Debtor Secured Party File No/Date Collateral
- -----------------------------------------------------------------------------------------------------------------------------------
29. National Rave Financial Services, Inc. 1168807; 04/22/96 1 RPTOSEX1-110-128-P95 Rave Power Tower
with sun Original SPAR________ 5 11OMHzMicro
SPARCD Processor and Motherboard; 1
SSOS-25-CDB-MOD Media Only Desktop (Solaris
2.5)
- -----------------------------------------------------------------------------------------------------------------------------------
30. National Hewlett-Packard Company 1170076- 04/30/96 Specified leased equipment pursuant to
Financing Agreement No. 412404996
- -----------------------------------------------------------------------------------------------------------------------------------
31. National Digital Financial Services, a division of GE 1173167; 05/21/96 Specified leased equipment described in DFS
Capital Corp. Lease Agreement No. 9543834-030 dated
05/13/96
- -----------------------------------------------------------------------------------------------------------------------------------
32. National IBM Credit Corporation 1176402; 06/12/96 All computer information processing, and
other peripheral equipment and goods
referenced on IBM Supplement No. 260997
dated 05/14/96 (lease)
- -----------------------------------------------------------------------------------------------------------------------------------
33. National Avnet Computer, a division of Avnet, Inc. 1178227; 06/25/96 Specified leased equipment pursuant to
Agreement No. 6595504-002
- -----------------------------------------------------------------------------------------------------------------------------------
34. National Princeton Credit Corporation (assigned to 1183041; 07/31/96 Specified leased equipment pursuant to
NorCrown Bank) Equipment Schedule No. A-2
- -----------------------------------------------------------------------------------------------------------------------------------
35. National Princeton Credit Corp. (assigned to 1194015; 10/21/96 Specified leased equipment pursuant to
NorCrown Bank) Equipment Schedule A-3
- -----------------------------------------------------------------------------------------------------------------------------------
36. National Princeton Credit Corp. (assigned to 1194916; 10/21/96 Specified leased equipment pursuant to
NorCrown Bank) Equipment Schedule A-4
- -----------------------------------------------------------------------------------------------------------------------------------
37. National IBM Credit Corporation 1195346; 10/28/96 All computer, information processing, and
other peripheral equipment and goods
referenced on IBM Supplement No. 284139
dated 09/20/96 (lease)
- -----------------------------------------------------------------------------------------------------------------------------------
38. National Hewlett-Packard 1201479; 12/13/96 Leased computer equipment
- -----------------------------------------------------------------------------------------------------------------------------------
39. National IBM Credit Corporation 1208676; 2/13/97 Leased computer equipment
- -----------------------------------------------------------------------------------------------------------------------------------
40. Fairchild GECC Bk. 7936, Pg. 36 Haworth furniture and fixtures
- -----------------------------------------------------------------------------------------------------------------------------------
41. National CLG, Inc. Bk. 10962, Pg. 299 Computer equipment
- -----------------------------------------------------------------------------------------------------------------------------------
42. National Princeton Credit Corp. Bk. 11909, Pg. 128 Computer equipment
===================================================
Debtor Location
- ---------------------------------------------------
29. National Me. Sec. of State
- ---------------------------------------------------
30. National Me. Sec. of State
- ---------------------------------------------------
31. National Me. Sec. of State
- ---------------------------------------------------
32. National Me. Sec. of State
- ---------------------------------------------------
33. National Me. Sec. of State
- ---------------------------------------------------
34. National Me. Sec. of State
- ---------------------------------------------------
35. National Me. Sec. of State
- ---------------------------------------------------
36. National Me. Sec. of State
- ---------------------------------------------------
37. National Me. Sec. of State
- ---------------------------------------------------
38. National Me. Sec. of State
- ---------------------------------------------------
39. National Me. Sec. of State
- ---------------------------------------------------
40. Fairchild Cumberland
County, ME
- ---------------------------------------------------
41. National Cumberland
County, ME
- ---------------------------------------------------
42. National Cumberland
County, ME
===================================================================================================================================
Debtor Secured Party File No/Date Collateral
- -----------------------------------------------------------------------------------------------------------------------------------
43. National Princeton Credit Corp. Bk. 12639, Pg. 186 Computer equipment
- -----------------------------------------------------------------------------------------------------------------------------------
44. National Princeton Credit Corp. Bk. 12761, Pg. 32 Computer equipment
- -----------------------------------------------------------------------------------------------------------------------------------
45. National Princeton Credit Corp. Bk. 12761, Pg. 34 Computer equipment
- -----------------------------------------------------------------------------------------------------------------------------------
46. National Princeton Credit Corp. Bk. 12800, Pg. 290 Computer equipment
- -----------------------------------------------------------------------------------------------------------------------------------
47. National Equitable Lomas Leasing 2188190, 2/30/88 Various computer, manufacturing and ____
equipment and additional property leased
under Master Equipment Lease Agt. No 1-1-
60-094833-DD dated 3/9/88
- -----------------------------------------------------------------------------------------------------------------------------------
48. National Equitable Lomas Leasing 1/18/89 Partial release of statement # 188190.
Release of property listed under Rental
Schedule Nos. 27-31, 57-78, 81-86 and 9-11
under Master Equipment Lease Agt. No. 1-1-
60-094833-00 to AT&T Credit Corporation
- -----------------------------------------------------------------------------------------------------------------------------------
49. National Equitable Lomas Leasing 8/16/93 Continuation of 2188190
- -----------------------------------------------------------------------------------------------------------------------------------
50. National* Deutsch Bank AG Los Angeles Branch 448094; 8/2/95 Electronics equipment, computer equipment,
peripherals, office furniture and
telecommunications equipment described on
Collateral Schedule No. Dl to Master Security
Agt. dated 5/1/95
- -----------------------------------------------------------------------------------------------------------------------------------
51. National* Deutsch Bank AG Los Angeles Branch 1/27/97 Partial release of Statement #948094.
Equipment Ref. #27 and Ref. #28 from Exhibit
1 to Collateral Schedule D1
- -----------------------------------------------------------------------------------------------------------------------------------
52. National* Tokyo Leasing (U.S.A.) Inc. 451628; 8/31/95 Various electronic equipment wherever located
described on Collateral Schedule No. T to
Master Security Agt. dated 5/1/95
- -----------------------------------------------------------------------------------------------------------------------------------
53. National* Avnet Computer, Division of Avnet, Inc. 504198; 1/8/96 Equipment under Master Agt. Schedule
#6595504-001
- -----------------------------------------------------------------------------------------------------------------------------------
54. National* Avent Computer, Division of Avnet, Inc. 510983; 3/6/96 Equipment under Master Agt. Schedule
#6595504-02
- -----------------------------------------------------------------------------------------------------------------------------------
55. National* Avnet Computer, Division of Avnet, Inc. 510984; 3/6/96 Equipment under Master Agt. Schedule
#6595504-203
- -----------------------------------------------------------------------------------------------------------------------------------
56. National* Avnet Computer, Division of Avnet, Inc. 510985; 3/6/96 Equipment under Master Agt. Schedule
#6595504-201
- -----------------------------------------------------------------------------------------------------------------------------------
57. National* Avnet Computer, Division of Avnet, Inc. 526535; 7/3/96 Equipment under Master Agt. Schedule
#6595504-204
- -----------------------------------------------------------------------------------------------------------------------------------
58. National* Avnet Computer, Division of Avnet, Inc. 526536; 7/3/96 Equipment under Master Agt. Schedule
#6595504-205
- -----------------------------------------------------------------------------------------------------------------------------------
59. National* Avnet Computer, Division of Avnet, Inc. 526537; 7/3/96 Equipment under Master Agt. Schedule
#6595504-205
===================================================================================================================================
===================================================
Debtor Location
- ---------------------------------------------------
43. National Cumberland
County, ME
- ----------------------------------------------------
44. National Cumberland
County, ME
- ----------------------------------------------------
45. National Cumberland
County, ME
- ----------------------------------------------------
46. National Cumberland
County, ME
- ----------------------------------------------------
47. National State of Utah
- ----------------------------------------------------
48. National State of Utah
- ----------------------------------------------------
49. National State of Utah
- ----------------------------------------------------
50. National* State of Utah
- ----------------------------------------------------
51. National* State of Utah
- ----------------------------------------------------
52. National* State of Utah
- ----------------------------------------------------
53. National* State of Utah
- ----------------------------------------------------
54. National* State of Utah
- ----------------------------------------------------
55. National* State of Utah
- ----------------------------------------------------
56. National* State of Utah
- ----------------------------------------------------
57. National* State of Utah
- ----------------------------------------------------
58. National* State of Utah
- ----------------------------------------------------
59. National* State of Utah
====================================================
NOTE: UNLESS MARKED WITH AN ASTERISK "*", FILINGS ARE PROTECTIVE LEASE FILINGS
ONLY. NO ATTEMPT HAS BEEN MADE TO DETERMINE WHETHER PROPERTY SUBJECT TO
LEASE FILINGS IS BEING TRANSFERRED TO FAIRCHILD
SCHEDULE V
EXISTING INDEBTEDNESS
NONE
SCHEDULE VI
INSURANCE
BORROWER
MINIMUM AMOUNT
REQUIRED TO BE
CORE COVERAGE'S MAINTAINED DEDUCTIBLE
Directors & Officers $15,000,000 0 Non-Ind
Executive Risk $250,000 Corp. Reimb
Reliance
Property $800,000,000 $250,000
Zurich, Royal
Cargo $50,000,000 $ 15,000
St. Paul
BORROWER AND SUBSIDIARIES OF BORROWER
MINIMUM AMOUNT
REQUIRED TO BE
CORE COVERAGE'S MAINTAINED DEDUCTIBLE
Foreign Commercial General $1,000,000 | |
Liability/Auto/Excess Liability
AIU
Foreign Voluntary Worker's $1,000,000 | |
Comp.
AIU
General Liability $2,000,000/aggregate 1) $100,000/specific
St. Paul $1,000,000/occurrence 2) $500,000/aggregate
Auto Liability & Physical Damage $1,000,000 CSL Nil
St. Paul
Worker's Compensation Statutory Coverage A 1) $250,000/specific
Hanover $1,000,000 coverage B 2) $650,000/aggregate
Umbrella/Excess Liab. $1,000,000 N/A
St. Paul, CHUBB, Reliance
Electronics Manufacturers $15,000,000 1) $100,000/specific
Errors & Omissions 2) $500,000/aggregate
St. Paul
Business Interruption $800,000,000 $ 50,000 PD/BI Combined at
American guarantee Liab. (combined amount with Mfg.
Ins. Co. casualty insurance) $250,000 PD at Mfg. Sites
Royal/Sun Alliance Insurance $250,000 BI at Mfg. Sites
Co. $250,000 PD/BI on Boiler &
Machinery
5% of 100% PD value.
* As of the Effective Date, there are no policies in existence for Holdings,
except for the Executive Risk Reliance Directors and Officers' policy.
SCHEDULE VII
ERISA PLANS
1. The Fairchild Personal Savings and Retirement Plan
SCHEDULE VIII
SUBSIDIARIES
1. Fairchild Semiconductor (Malaysia) Sdn Bhd
2. Fairchild Semiconductor Hong Kong Limited
3. Fairchild Semiconductor Hong Kong (Holdings) Limited
4. Fairchild Semiconductor Japan K.K.
5. Fairchild Semiconductor Asia Pacific Pte Ltd.
6. Fairchild Semiconductor GmbH
7. Fairchild Semiconductor Limited
* There are no Subsidiary Guarantors
SCHEDULE IX
LABOR RELATIONS
None
SCHEDULE X
PROJECTIONS
SCHEDULE XI
SECURITIES
1. FSC Semiconductor Corporation Stock Option Plan
2. Agreement and Plan of Recapitalization dated January 24, 1997 between
Sterling Holding Company, LLC and National Semiconductor Corporation.
3. Securities Purchase and Holders Agreement by and among Holdings, Sterling
Holding Company, LLC, National Semiconductor Corporation, and the
individuals listed as "Management Investors" on Schedule I therein.
SCHEDULE XII
[ORGANIZATION CHART]
EXHIBIT A
NOTICE OF BORROWING
__________, 19__
Bankers Trust Company, as
Administrative Agent for the Banks
party to the Credit Agreement
referred to below
130 Liberty Street
New York, New York 10006
Attention: Anthony Logrippo
Ladies and Gentlemen:
The undersigned, Fairchild Semiconductor Corporation (the "Borrower"), refers to
the Credit Agreement, dated as of March 11, 1997 (as amended from time to time,
the "Credit Agreement", the terms defined therein being used herein as therein
defined), among FSC Semiconductor Corporation, the Borrower, various Banks from
time to time party thereto, you, as Administrative Agent for such Banks, Credit
Suisse First Boston, as Syndication Agent, and Canadian Imperial Bank of
Commerce, as Documentation Agent, and hereby gives you notice, irrevocably,
pursuant to Section 1.03(a) of the Credit Agreement, that the undersigned hereby
requests a Borrowing under the Credit Agreement, and in that connection sets
forth below the information relating to such Borrowing (the "Proposed
Borrowing") as required by Section 1.03(a) of the Credit Agreement:
(i) The Business Day of the Proposed Borrowing is _______________.*
(ii) The aggregate principal amount of the Proposed Borrowing is
$______________.
(iii) The Proposed Borrowing is to consist of [Tranche A Term Loans]
[Tranche B Term Loans] [Revolving Loans] [Swingline Loans].
(iv) The Loans to be made pursuant to the Proposed Borrowing shall
be initially maintained as [Base Rate Loans] [Eurodollar Loans].
(v) The initial Interest Period for the Proposed Borrowing is
________ month(s).**
- ----------
* Shall be a Business Day at least one Business Day in the case of Base Rate
Loans and three Business Days in the case of Eurodollar Loans, in each case,
after the date hereof.
** To be included for a Proposed Borrowing of Eurodollar Loans.
EXHIBIT A
Page 2
The undersigned hereby certifies that the following statements are
true and correct on the date hereof, and will be true and correct on the date of
the Proposed Borrowing:
(A) the representations and warranties contained in the Credit
Documents are and will be true and correct in all material respects, both
before and after giving effect to the Proposed Borrowing and to the
application of the proceeds thereof, as though made on such date (it being
understood and agreed that any representation or warranty which by its
terms is made as of a specified date shall be required to be true and
correct in all material respects only as of such specified date); and
(B) no Default or Event of Default has occurred and is continuing,
or would result from such Proposed Borrowing or from the application of
the proceeds thereof.
Very truly yours,
FAIRCHILD SEMICONDUCTOR CORPORATION
By
-----------------------------------
Name:
Title:
EXHIBIT B-1
TRANCHE A TERM NOTE
$_____________ New York, New York
March 11, 1997
FOR VALUE RECEIVED, FAIRCHILD SEMICONDUCTOR CORPORATION, a Delaware
corporation (the "Borrower"), hereby promises to pay to _____________________ or
its registered assigns (the "Bank"), in lawful money of the United States of
America in immediately available funds, at the office of Bankers Trust Company
(the "Administrative Agent") located at 130 Liberty Street, New York, N.Y. 10006
on the Tranche A Term Loan Maturity Date (as defined in the Agreement referred
to below) the principal sum of _________________________________ DOLLARS
($_____________) or, if less, the then unpaid principal amount of all Tranche A
Term Loans (as defined in the Agreement) made by the Bank pursuant to the
Agreement.
The Borrower promises also to pay interest on the unpaid principal
amount hereof in like money at said office from the date hereof until paid at
the rates and at the times provided in Section 1.08 of the Agreement.
This Note is one of the Tranche A Term Notes referred to in the
Credit Agreement, dated as of March 11, 1997, among FSC Semiconductor
Corporation, the Borrower, the lenders from time to time party thereto
(including the Bank), Bankers Trust Company, as Administrative Agent, Credit
Suisse First Boston, as Syndication Agent, and Canadian Imperial Bank of
Commerce, as Documentation Agent (as from time to time in effect, the
"Agreement"), and is entitled to the benefits thereof and of the other Credit
Documents (as defined in the Agreement). This Note is secured by the Security
Documents (as defined in the Agreement) and is entitled to the benefits of the
Guaranties (as defined in the Agreement). As provided in the Agreement, this
Note is subject to voluntary prepayment and mandatory repayment prior to the
Tranche A Term Loan Maturity Date, in whole or in part.
In case an Event of Default (as defined in the Agreement) shall
occur and be continuing, the principal of and accrued interest on this Note may
be declared to be due and payable in the manner and with the effect provided in
the Agreement.
The Borrower hereby waives presentment, demand, protest or notice of
any kind in connection with this Note.
EXHIBIT B-1
Page 2
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY
THE LAW OF THE STATE OF NEW YORK.
FAIRCHILD SEMICONDUCTOR
CORPORATION
By
-----------------------------------
Title:
EXHIBIT B-2
TRANCHE B TERM NOTE
$_____________ New York, New York
March 11, 1997
FOR VALUE RECEIVED, FAIRCHILD SEMICONDUCTOR CORPORATION, a Delaware
corporation (the "Borrower"), hereby promises to pay to _____________________ or
its registered assigns (the "Bank"), in lawful money of the United States of
America in immediately available funds, at the office of Bankers Trust Company
(the "Administrative Agent") located at 130 Liberty Street, New York, N.Y. 10006
on the Tranche B Term Loan Maturity Date (as defined in the Agreement referred
to below) the principal sum of ____________________________________ DOLLARS
($_____________) or, if less, the then unpaid principal amount of all Tranche B
Term Loans (as defined in the Agreement) made by the Bank pursuant to the
Agreement.
The Borrower promises also to pay interest on the unpaid principal
amount hereof in like money at said office from the date hereof until paid at
the rates and at the times provided in Section 1.08 of the Agreement.
This Note is one of the Tranche B Term Notes referred to in the
Credit Agreement, dated as of March 11, 1997, among FSC Semiconductor
Corporation, the Borrower, the lenders from time to time party thereto
(including the Bank), Bankers Trust Company, as Administrative Agent, Credit
Suisse First Boston, as Syndication Agent, and Canadian Imperial Bank of
Commerce, as Documentation Agent (as from time to time in effect, the
"Agreement"), and is entitled to the benefits thereof and of the other Credit
Documents (as defined in the Agreement). This Note is secured by the Security
Documents (as defined in the Agreement) and is entitled to the benefits of the
Guaranties (as defined in the Agreement). As provided in the Agreement, this
Note is subject to voluntary prepayment and mandatory repayment prior to the
Tranche B Term Loan Maturity Date, in whole or in part.
In case an Event of Default (as defined in the Agreement) shall
occur and be continuing, the principal of and accrued interest on this Note may
be declared to be due and payable in the manner and with the effect provided in
the Agreement.
EXHIBIT B-2
Page 2
The Borrower hereby waives presentment, demand, protest or notice of
any kind in connection with this Note.
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY
THE LAW OF THE STATE OF NEW YORK.
FAIRCHILD SEMICONDUCTOR
CORPORATION
By
-----------------------------------
Title:
EXHIBIT B-3
REVOLVING NOTE
$__________ New York, New York
March 11, 1997
FOR VALUE RECEIVED, FAIRCHILD SEMICONDUCTOR CORPORATION, a Delaware
corporation (the "Borrower"), hereby promises to pay to _____________ or its
registered assigns (the "Bank"), in lawful money of the United States of America
in immediately available funds, at the office of Bankers Trust Company (the
"Administrative Agent") located at 130 Liberty Street, New York, N.Y. 10006 on
the Revolving Loan Maturity Date (as defined in the Agreement referred to below)
the principal sum of ___________ DOLLARS ($__________) or, if less, the then
unpaid principal amount of all Revolving Loans (as defined in the Agreement)
made by the Bank pursuant to the Agreement.
The Borrower promises also to pay interest on the unpaid principal
amount hereof in like money at said office from the date hereof until paid at
the rates and at the times provided in Section 1.08 of the Agreement.
This Note is one of the Revolving Notes referred to in the Credit
Agreement, dated as of March 11, 1997, among FSC Semiconductor Corporation, the
Borrower, the lenders from time to time party thereto (including the Bank),
Bankers Trust Company, as Administrative Agent, Credit Suisse First Boston, as
Syndication Agent, and Canadian Imperial Bank of Commerce, as Documentation
Agent (as from time to time in effect, the "Agreement"), and is entitled to the
benefits thereof and the other Credit Documents (as defined in the Agreement).
This Note is secured by the Security Documents (as defined in the Agreement) and
is entitled to the benefits of the Guaranties (as defined in the Agreement). As
provided in the Agreement, this Note is subject to voluntary prepayment and
mandatory repayment prior to the Revolving Loan Maturity Date, in whole or in
part.
In case an Event of Default (as defined in the Agreement) shall
occur and be continuing, the principal of and accrued interest on this Note may
be declared to be due and payable in the manner and with the effect provided in
the Agreement.
EXHIBIT B-3
Page 2
The Borrower hereby waives presentment, demand, protest or notice of
any kind in connection with this Note.
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY
THE LAW OF THE STATE OF NEW YORK.
FAIRCHILD SEMICONDUCTOR
CORPORATION
By
-----------------------------------
Title:
EXHIBIT B-4
SWINGLINE NOTE
$5,000,000.00 New York, New York
March 11, 1997
FOR VALUE RECEIVED, FAIRCHILD SEMICONDUCTOR CORPORATION, a Delaware
corporation (the "Borrower"), hereby promises to pay to BANKERS TRUST COMPANY or
its registered assigns (the "Bank"), in lawful money of the United States of
America in immediately available funds, at the office of Bankers Trust Company
(the "Administrative Agent") located at 130 Liberty Street, New York, N.Y. 10006
on the Swingline Expiry Date (as defined in the Agreement referred to below) the
principal sum of FIVE MILLION DOLLARS ($5,000,000.00) or, if less, the then
unpaid principal amount of all Swingline Loans (as defined in the Agreement)
made by the Bank pursuant to the Agreement.
The Borrower promises also to pay interest on the unpaid principal
amount hereof in like money at said office from the date hereof until paid at
the rates and at the times provided in Section 1.08 of the Agreement.
This Note is the Swingline Note referred to in the Credit Agreement,
dated as of March 11, 1997 among FSC Semiconductor Corporation, the Borrower,
the lenders from time to time party thereto (including the Bank), Bankers Trust
Company, as Administrative Agent, Credit Suisse First Boston, as Syndication
Agent, and Canadian Imperial Bank of Commerce, as Documentation Agent (as from
time to time in effect, the "Agreement"), and is entitled to the benefits
thereof and of the other Credit Documents (as defined in the Agreement). This
Note is secured by the Security Documents (as defined in the Agreement) and is
entitled to the benefits of the Guaranties (as defined in the Agreement). As
provided in the Agreement, this Note is subject to voluntary prepayment and
mandatory repayment prior to the Swingline Expiry Date, in whole or in part.
In case an Event of Default (as defined in the Agreement) shall
occur and be continuing, the principal of and accrued interest on this Note may
be declared to be due and payable in the manner and with the effect provided in
the Agreement.
The Borrower hereby waives presentment, demand, protest or notice of
any kind in connection with this Note.
EXHIBIT B-4
Page 2
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY
THE LAW OF THE STATE OF NEW YORK.
FAIRCHILD SEMICONDUCTOR
CORPORATION
By
-----------------------------------
Title:
EXHIBIT C
LETTER OF CREDIT REQUEST
No. (1) Dated (2)
Bankers Trust Company, as Administrative Agent under the Credit Agreement (as
amended, modified or supplemented from time to time, the "Credit Agreement"),
dated as of March __, 1997, among FSC Semiconductor Corporation, Fairchild
Semiconductor Corporation, the Banks from time to time party thereto, Bankers
Trust Company, as Administrative Agent, Credit Suisse First Boston, as
Syndication Agent, and Canadian Imperial Bank of Commerce, as Documentation
Agent,
130 Liberty Street
New York, New York 10006
Attention: Anthony Logrippo
[Name and Address of applicable Issuing Bank
Attention: ______________________]
Dear Sirs:
We hereby request that [name of proposed Issuing Bank], in its
individual capacity, issue a [Standby] [Trade] Letter of Credit for the account
of the undersigned on (3) (the "Date of Issuance") in the aggregate stated
amount of (4). The requested Letter of Credit shall be denominated in Dollars.
For purposes of this Letter of Credit Request, unless otherwise
defined herein, all capitalized terms used herein which are defined in the
Credit Agreement shall have the respective meaning provided therein.
- --------
(1) Letter of Credit Request Number.
(2) Date of Letter of Credit Request.
(3) Date of Issuance which shall be at least five Business Days after the date
of this Letter of Credit Request (or such shorter period as is acceptable
to the respective Issuing Bank).
(4) Aggregate initial stated amount of Letter of Credit.
EXHIBIT C
Page 6
The beneficiary of the requested Letter of Credit will be (5), and
such Letter of Credit will be in support of (6) and will have a stated
expiration date of (7).
We hereby certify that:
(1) the representations and warranties contained in the Credit
Documents will be true and correct in all material respects on the Date of
Issuance, both before and after giving effect to the issuance of the
Letter of Credit requested hereby (it being understood and agreed that any
representation or warranty which by its terms is made as of a specified
date shall be required to be true and correct in all material respects
only as of such specified date); and
(2) no Default or Event of Default has occurred and is continuing
nor, after giving effect to the issuance of the Letter of Credit requested
hereby, would such a Default or an Event of Default occur.
Copies of all relevant documentation with respect to the supported
transaction are attached hereto.
FAIRCHILD SEMICONDUCTOR
CORPORATION
By
-----------------------------------
Title:
- --------
(5) Insert name and address of beneficiary.
(6) Insert description of L/C Supportable Indebtedness and describe obligation
to which it relates in the case of Standby Letters of Credit and a
description of the commercial transaction which is being supported in the
case of Trade Letters of Credit.
(7) Insert last date upon which drafts may be presented which may not be later
than (i) in the case of Trade Letters of Credit, the earlier of (x) the
date which occurs 180 days after the Date of Issuance or (y) the date
which is 30 days prior to the Revolving Loan Maturity Date or (ii) in the
case of Standby Letters of Credit, the earlier of (x) the date which
occurs 12 months after the Date of Issuance, or, if any such Standby
Letter of Credit is automatically extendable for successive periods of up
to 12 months, a date not beyond the tenth Business Day prior to the
Revolving Loan Maturity Date or (y) the tenth Business Day prior to the
Revolving Loan Maturity Date.
EXHIBIT D
Section 4.04(b)(ii) Certificate
Reference is hereby made to the Credit Agreement, dated as of March
11, 1997, among FSC Semiconductor Corporation, Fairchild Semiconductor
Corporation, the Banks party thereto from time to time, Bankers Trust Company,
as Administrative Agent, Credit Suisse First Boston, as Syndication Agent, and
Canadian Imperial Bank of Commerce, as Documentation Agent (the "Credit
Agreement"). Pursuant to the provisions of Section 4.04(b)(ii) of the Credit
Agreement, the undersigned hereby certifies that it is not a "bank" as such term
is used in Section 881(c)(3)(A) of the Internal Revenue Code of 1986, as
amended.
[NAME OF BANK]
By
-----------------------------------
Title:
March 11, 1997
To each of the Agents and each
of the Banks party to the Credit
Agreement referred to below
Ladies and Gentlemen:
We have acted as special counsel to FSC Semiconductor Corporation, a
Delaware corporation ("Holdings"), and Fairchild Semiconductor Corporation, a
Delaware corporation (the "Borrower"), in connection with the execution and
delivery of the Credit Agreement, dated as of March 11, 1997 (the "Credit
Agreement"), among Holdings, the Borrower, the financial institutions party
thereto (the "Banks"), Bankers Trust Company, as Administrative Agent, Credit
Suisse First Boston, as Syndication Agent, and Canadian Imperial Bank of
Commerce, as Documentation Agent, and the transactions contemplated thereby.
This opinion is being delivered pursuant to Section 5.03(i) of the Credit
Agreement. Unless otherwise indicated, capitalized terms used herein but not
otherwise defined herein shall have the respective meanings set forth in the
Credit Agreement.
In connection with this opinion, we have examined originals or
copies, certified or otherwise identified to our satisfaction, of such documents
as we have deemed necessary or appropriate as a basis for the opinions set forth
herein, including, without limitation, (a) the documents listed on Schedule I
hereto (the "Credit Documents"), (b) the documents listed on Schedule II hereto
(the "Recapitalization Documents"), (c) the documents listed on Schedule III
hereto (the "Senior Subordinated Note Documents" and together with the Credit
Documents and Recapitalization Documents, the "Documents") and (d) such other
public and corporate documents and records as we deem necessary or appropriate
in connection with this opinion.
In our examination we have assumed the genuineness of all signatures
(other than as to Holdings and the Borrower), the authenticity of all documents
submitted to us as originals, the conformity to original documents of all
documents submitted to us as certified or photostatic copies and the
authenticity of the originals of such copies. We have assumed that each party to
the Documents (other than the Borrower and Holdings) has the legal power and
authority to enter into and perform its obligations under such Documents, and
that such Documents have been duly authorized, executed and delivered by such
persons, and
To each of the Agents and each
of the Banks party to the Credit
Agreement referred to below
March 11, 1997
Page 2
that such Documents are the legal, valid and binding obligations of such
persons, enforceable against such persons in accordance with their terms.
Our opinions set forth herein are based on our consideration of only
those statutes, rules, regulations and judicial decisions which, in our
experience, are normally applicable to or normally relevant in connection with
transactions of the type contemplated by the Documents.
As to questions of fact not independently verified by us we have
relied, to the extent we deemed appropriate, upon representations and
certificates of officers of Holdings, the Borrower, the Borrower's Subsidiaries,
public officials and other appropriate persons. Whenever our opinion with
respect to the existence or absence of facts is indicated based on our knowledge
or awareness we are referring to the actual knowledge of the Dechert Price &
Rhoads attorneys who have given substantive attention to matters concerning the
Borrower and Holdings in connection with the transactions contemplated by the
Documents.
Based upon the foregoing, we are of the opinion that:
4. Each of the Borrower and Holdings (i) is a validly existing
corporation in good standing under the laws of the jurisdiction of its
incorporation, (ii) has the corporate power and corporate authority to own its
property and assets and to transact the business in which it is engaged and
presently proposes to engage and (iii) is duly qualified and is authorized to do
business and is in good standing in each jurisdiction set forth on Schedule IV
hereto.
5. Each of the Borrower and Holdings has the corporate power and
corporate authority to execute, deliver and perform the terms and provisions of
each of the Documents to which it is a party and has taken all necessary
corporate action to authorize the execution, delivery and performance by it of
each of such Documents. Each of the Borrower and Holdings has duly executed and
delivered each of the Documents to which it is a party and each of such
Documents (except the Documents referred to in Section 5.13 of the Credit
Agreement with respect to which no opinion is expressed) constitutes the legal,
valid and binding obligation of each of the Borrower and Holdings enforceable
against the Borrower or Holdings as the case may be in accordance with its
terms.
6. Neither the execution, delivery or performance by the Borrower or
Holdings of the Documents to which it is a party (including, without limitation,
the granting of Liens pursuant to the documents listed on Schedule V hereto (the
"Security Documents")), nor compliance by it with the terms and provisions
thereof, (a) will contravene any provision of any New York or federal law,
statute, rule or regulation (including, without limitation, Regulations G, T, U
and X of the Board of Governors of the Federal Reserve System) or any applicable
order, writ, injunction or decree of any court or governmental instrumentality,
(b) will conflict with or result in any breach of, any of the terms, covenants,
conditions or provisions of, or constitute a default under, or result in the
creation or imposition of (or the obligation to create or impose) any Lien
(except pursuant to the Security Documents) upon any of the properties or assets
of the Borrower and Holdings pursuant to the terms of any indenture, mortgage,
deed of trust, credit agreement or loan agreement, or any other material
agreement, contract or instrument known to us, to which either or both of the
Borrower and Holdings is a party or by which it or any of its property or assets
is bound or to which it may be subject (excluding, in the case of the
Recapitalization Documents, from the foregoing clauses (a) and (b) such
immaterial violations as shall not violate the provisions of the Credit
Agreement or otherwise be
To each of the Agents and each
of the Banks party to the Credit
Agreement referred to below
March 11, 1997
Page 3
reasonably expected to have (x) a material adverse effect on (I) the Transaction
or (II) the rights or remedies of the Agents or the Banks, or on the ability of
any Credit Party to perform its respective obligations to the Agents and the
Banks or (y) a Material Adverse Effect) or (c) will violate any provision of the
Certificate of Incorporation or By-Laws of the Borrower or Holdings.
7. No order, consent, approval, license, authorization, or
validation of, or filing, recording or registration with (except as have been
obtained or made and except for UCC filings and recordations which will be made
after the date hereof), or exemption by, any New York or federal governmental or
public body or authority, or any subdivision thereof, is required to authorize,
or is required in connection with, (a) the execution, delivery and performance
of (x) any Recapitalization Document by the Borrower or Holdings or (y) any
Credit Document or (b) the legality, validity, binding effect or enforceability
of any Credit Document.
8. To our knowledge, there are no actions, suits or proceedings
pending or threatened against the Borrower or Holdings (i) with respect to any
Credit Document or (ii) that could reasonably be expected to have a Material
Adverse Effect, and to our knowledge there does not exist any judgment, order or
injunction prohibiting or imposing material adverse conditions upon the
Transaction, the occurence of any Credit Event or the performance of Holdings or
the Borrower of their respective obligations under the Credit Documents.
9. None of Holdings, the Borrower or any of their respective
Subsidiaries is an "investment company" or a company "controlled" by an
"investment company", within the meaning of the Investment Company Act of 1940,
as amended.
10. None of Holdings, the Borrower or any of their respective
Subsidiaries is a "holding company," or a "subsidiary company" of a "holding
company", or an "affiliate" of a "holding company" or of a "subsidiary company"
of a "holding company" within the meaning of the Public Utility Holding Company
Act of 1935, as amended.
11. (a) After giving effect to the Transaction, the authorized
capital stock of Holdings consists of 30,000,000 shares of Class A Holdings
Common Stock, 7,191,120 of which are issued and outstanding, 30,000,000 shares
of Class B Holdings Common Stock, 8,408,880 of are issued and outstanding, and
70,000 shares of Holdings Series A Preferred Stock, all of which are issued and
outstanding. Based on our review of the Certificate of Incorporation and Bylaws
of Holdings, all such outstanding shares have been duly and validly issued, are
fully paid and non-assessable and have been issued free of preemptive rights,
except for the preemptive rights set forth in the Securities Purchase and
Holders Agreement. Except as set forth on Schedule XI to the Credit Agreement,
to our knowledge Holdings does not have outstanding any securities convertible
into or exchangeable for its capital stock or outstanding any rights to
subscribe for or to purchase, or any options for the purchase of, or any
agreement providing for the issuance (contingent or otherwise) of, or any calls,
commitments or claims of any character relating to, its capital stock.
(b) After giving effect to the Transaction, the authorized
capital stock of the Borrower consists of 1,000 shares of Borrower Common Stock,
100 of which are issued and outstanding and delivered for pledge pursuant to the
Pledge Agreement. All such outstanding shares of common stock have been duly and
validly issued, are fully paid and nonassessable and are free of preemptive
rights. To our knowledge the Borrower does not have outstanding any securities
convertible into or exchangeable for its capital stock or out-
To each of the Agents and each
of the Banks party to the Credit
Agreement referred to below
March 11, 1997
Page 4
standing any rights to subscribe for or to purchase, or any options for the
purchase of, or any agreements providing for the issuance (contingent or
otherwise) of, or any calls, commitments or claims of any character relating to,
its capital stock.
12. To our knowledge, after giving effect to the Transaction,
Holdings will have no Subsidiaries other than the Borrower and its Subsidiaries.
To our knowledge as of the date hereof, after giving effect to the Transaction,
the Borrower will have no Subsidiaries other than those Subsidiaries listed on
Schedule VIII to the Credit Agreement. To our knowledge, Schedule XII to the
Credit Agreement correctly sets forth, as of the date hereof and after giving
effect to the Transaction, the ownership structure of Holdings and each of its
Subsidiaries.
13. Each of Holdings and the Borrower is the record owner of all of
the Stock and Notes (as such terms are defined in the Pledge Agreement) as
listed on Annex A and Annex B to the Pledge Agreement under its respective name.
After giving effect to the delivery to the Collateral Agent of the Pledged Stock
and Pledged Notes listed on Annex A and Annex B to the Pledge Agreement (and in
respect of the Stock of Fairchild Semiconductor GmbH, after notarization in
accordance with German law) and assuming the continued possession at all times
hereafter by the Collateral Agent of (x) such Pledged Stock and Pledged Notes in
the State of New York and (y) duly executed stock powers and endorsements
related thereto), the security interest created in favor of the Collateral Agent
under the Pledge Agreement constitutes a valid and enforceable first priority
perfected security interest in all of the right, title and interest of Holdings
or the Borrower, as the case may be, in and to such Pledged Securities and
proceeds thereof in favor of the Pledgee for the benefit of the Secured
Creditors, subject to no Liens other than Permitted Liens. No filings or
recordings are required in order to perfect the security interest created under
the Pledge Agreement so long as the Collateral Agent, as Pledgee, is in
possession of such Pledged Securities.
14. Assuming that the representation made by each of Holdings and
the Borrower in Section 2.4 of the Security Agreement with respect to the
location of its chief executive office is and remains true and correct, under
the law of the State of New York, the perfection and priority of the security
interests granted by each of Holdings and Borrower in its Receivables,
Contracts, Contract Rights and General Intangibles (as defined in the Security
Agreement) are governed by the laws of the State in which each of Holdings' and
Borrower's chief executive office is located to the extent that said
Receivables, Contracts, Contract Rights and General Intangibles consist of
"accounts" and "general intangibles" as described in the UCC as in effect in the
State of New York.
15. The recordation of the Assignment of Security Interest in U.S.
Patents and Trademarks in the form attached to the Security Agreements in the
United States Patent and Trademark Office together with filings on form UCC-1
made pursuant to the Security Agreement will be effective, under applicable law,
to perfect the security interest granted to the Collateral Agent in the
trademarks and patents covered by the Security Agreement and the recordation of
the Assignment of Security Interest in U.S. Copyrights in the form attached to
the Security Agreement with the United States Copyright Office together with
filings on form UCC-1 made pursuant to the Security Agreement will be effective
under federal law to perfect the security interest granted to the Collateral
Agent in the copyrights covered by the Security Agreement except that we express
no opinion with respect to the perfection of any security interest in mask works
of the Borrower that have been deposited in the United States Copyright Office
absent an appropriate filing by the Banks with the United States Copyright
Office.
To each of the Agents and each
of the Banks party to the Credit
Agreement referred to below
March 11, 1997
Page 5
16. The subordination provisions of the Senior Subordinated Notes
are enforceable against the Borrower and the holders of the Senior Subordinated
Notes, and the Loans and all other Obligations under the Credit Agreement and
the other Credit Documents (including, without limitation, under the Guaranties)
and any Interest Rate Protection Agreement or Other Hedging Agreement (except as
related to commodities hedges) with any Other Creditor (as such term is defined
in the Security Agreement) are within the definition of "Senior Indebtedness"
included in such subordination provisions.
We are members of the Bar of the State of New York and we do not
hold ourselves out as being conversant with, and express no opinion as to, the
laws of any jurisdiction other than federal laws of the United States of
America, the law of the State of New York and the General Corporation Law of the
State of Delaware. Our opinions expressed above are subject to the
qualifications and limitations that (i) the availability of certain rights and
remedies may be limited by bankruptcy, insolvency, fraudulent conveyance,
fraudulent transfer, reorganization, moratorium and other similar laws and
decisions relating to or affecting debtor's obligations and creditor's rights
generally and by general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law); (ii) certain
provisions of the Documents that permit the Banks or others to take action or
make determinations, or to benefit from indemnities and similar undertakings,
may be subject to the requirement that such action be taken or such
determination be made, and that any action or inaction by the Banks and others
that may give rise to a request for payment under such undertakings be taken or
not taken, on a reasonable basis and in good faith; and (iii) certain remedial
provisions of the Documents may be limited by, or unenforceable under, the
statutes and judicial decisions of the courts of the United States of America
and other applicable jurisdictions, but, in our opinion, such statutes and
judicial decisions do not make the remedies set forth in the Documents as to
which we have opined in Paragraph 2 inadequate for the realization of the
practical benefits of the security intended to be provided thereby, except (A)
for the economic consequence of any delay which may be imposed thereby or result
therefrom and (B) that we express no opinion as to the rights of any of the
parties to the Documents to accelerate the due dates of any payment due
thereunder or to exercise other remedies available to them on the happening of a
non-material breach of any such document or agreement.
We have made no examination of and express no opinion with respect to: (i)
the title to, ownership of or rights in personal property or fixtures; (ii) the
accuracy or sufficiency of any descriptions of Collateral, or of any financing
statements intended to perfect any security interest in Collateral; (iii) the
validity or ownership of any trademarks, patents or licenses; (iv) the existence
or absence of any liens, charges or encumbrances on any Collateral; and (v)
except as expressly set forth in paragraphs 10 and 12, the perfection or the
priority of any lien or security interest.
In giving the opinion set forth in paragraph 10 above, we have assumed
that (i) the Collateral Agent has possession of certificates representing the
Pledged Stock accompanied by appropriate stock powers and possession of the
Pledged Notes duly endorsed by the payee thereof; (ii) the Collateral Agent has
no notice of any adverse claim with respect to the Pledged Stock or the Pledged
Notes as such term is used in Section 8-302 of the UCC; (iii) no part of the
Pledged Stock or the Pledged Notes is subject to a security interest that could
be perfected without possession pursuant to Sections 8-313 or 8-321 of the UCC
or that is perfected under the laws of another jurisdiction by means other than
possession, or constitutes the proceeds of any property subject to a third party
security interest; (iv) no Pledged Stock or Pledged Note is subject to a valid
claim of any person based upon wrongful transfer pursuant to Section 8-315 of
the UCC; and (v) the Pledged Stock and the Pledged Notes or the proceeds thereof
are not subject to (A) any lien of any government or any
To each of the Agents and each
of the Banks party to the Credit
Agreement referred to below
March 11, 1997
Page 6
agency or instrumentality thereof, including without limitation, any federal,
state or local tax lien, (B) any claims or any federal priority statute (31
U.S.C. ss. 3713), (C) any lien arising under the Employee Retirement Income
Security Act of 1974, as amended, or (D) any lien arising by operation of law
other than under the UCC (including without limitation any attachment or
execution lien) or other lien which does not require possession to take priority
over the security interests.
Without limiting the generality of the foregoing, no opinion is expressed
as to the legality, validity, binding nature or enforceability, of (i) the
availability of specific performance or the equitable remedies for noncompliance
with any of the provisions of the Documents; (ii) any self-help provisions;
(iii) provisions in the Documents purporting to waive the effect of applicable
laws; (iv) provisions that purport to establish evidentiary standards; (v)
provisions that provide for the enforceability of the remaining terms and
provisions of the applicable Document in circumstances in which certain other
terms and provisions of such Documents are illegal or unenforceable; (vi)
provisions that provide that certain rights or obligations are absolute or
unconditional; (vii) provisions related to waivers of remedies (or the delay or
omission of enforcement of remedies), disclaimers, liability limitations or
limitations on the obligations of the Banks in circumstances in which a failure
of condition or default by the Borrower is not material; (viii) provisions
related to releases or waivers of legal or equitable rights, discharges of
defenses, or reimbursement or indemnification in circumstances in which the
person seeking reimbursement or indemnification had breached its duties under
the applicable Document, or otherwise, or itself has been negligent; or (ix)
provisions which purport to authorize any person to sign or file financing
statements without the signature of the debtor (except to the extent that a
secured party may execute and file financing statements without the signature of
the debtor under Section 9-402(2) of the UCC).
This opinion speaks only as of the date hereof. We have no
obligation to advise the addressees (or any third party) of any changes in the
law or facts that may occur after the date of this opinion.
This opinion is being furnished only to the addressees and is solely
for their benefit and the benefit of their participants and assigns in
connection with the above transaction. This opinion may not be relied upon for
any other purpose, or relied upon by any other person, firm or corporation for
any purpose, without our prior written consent.
Very truly yours,
SCHEDULE I
CREDIT DOCUMENTS
1. Credit Agreement, dated as of March 11, 1997, among FSC Semiconductor
Corporation, a Delaware corporation ("Holdings"), Fairchild Semiconductor
Corporation, a Delaware corporation (the "Borrower"), the Banks party
thereto from time to time, Bankers Trust Company, as Administrative Agent
(in such capacity, the "Administrative Agent"), Credit Suisse First
Boston, as Syndication Agent (in such capacity, the "Syndication Agent"),
and Canadian Imperial Bank of Commerce, as Documentation Agent (in such
capacity, the "Documentation Agent" and, together with the Syndication
Agent and the Administrative Agent, each an "Agent" and collectively the
"Agents").
2. Tranche A Term Loan Notes dated March 11, 1997 issued by the Borrower
pursuant to the Credit Agreement to the banks originally party thereto
making Tranch A Term Loans in the aggregate principal amount of
Seventy-Five Million Dollars ($75,000,000).
3. Tranche B Term Loan Notes dated March 11, 1997 issued by the Borrower
pursuant to the Credit Agreement to the banks originally party thereto
making Tranch B Term Loans in the aggregate principal amount of Forty-Five
Million Dollars ($45,000,000).
4. Revolving Notes dated March 11, 1997 issued by the Borrower pursuant to
the Credit Agreement to the banks originally party thereto making
Revolving Loans in the aggregate principal amount of up to Seventy-Five
Million Dollars ($75,000,000).
5. Swingline Note dated March 11, 1997 issued by the Borrower in the original
principal amount of up to Five Million Dollars ($5,000,000) to Bankers
Trust Company ("Bankers Trust").
6. Pledge Agreement dated March 11, 1997 by and between the Borrower, as
Pledgor, Holdings, as an additional Pledgor, and Bankers Trust, as
Collateral Agent.
7. Security Agreement dated March 11, 1997 by and between the Borrower,
Holdings and Bankers Trust, as Collateral Agent.
8. Assignment of Security Interest in United States Trademarks and Patents
dated March 11, 1997 from the Borrower in favor of Bankers Trust, in
connection with the Security Agreement.
9. Assignment of Security Interest in United States Copyrights dated March
11, 1997 from the Borrower in favor of Bankers Trust, in connection with
the Security Agreement.
SCHEDULE II
RECAPITALIZATION DOCUMENTS
1. Agreement and Plan of Recapitalization made the 24th day of January, 1997,
between Sterling Holding Company, LLC, a Delaware limited liability
company ("Sterling"), and National Semiconductor Corporation, a Delaware
corporation ("NSC").
2. Asset Purchase Agreement by and between the Borrower and NSC.
3. Securities Purchase and Holders Agreement by and among Holdings, Sterling,
NSC and the individuals and trust(s) listed as "Management Investors" on
Schedule I thereto (collectively, the "Management Investors").
4. Demand Note dated March 11, 1997 issued by the Borrower to NSC in the
principal amount of $304,312,297.
5. 11.74% Subordinated Note due 2008 dated March 11, 1997 issued by Holdings
to NSC in the principal amount of Seventy-Seven Million Dollars
($77,000,000).
6. Technology Licensing and Transfer Agreement dated March 11, 1997 by and
between NSC and the Borrower.
7. Transition Services Agreement dated March 11, 1997 by and between NSC and
the Borrower.
8. Fairchild Foundry Services Agreement dated March 11, 1997 by and between
NSC and the Borrower.
9. Revenue Side Letter dated March 11, 1997 by and between NSC and the
Borrower.
10. National Foundry Services Agreement dated March 11, 1997 by and between
NSC and the Borrower.
11. National Assembly Services Agreement dated March 11, 1997 by and between
NSC and the Borrower.
12. Fairchild Assembly Services Agreement dated March 11, 1997 by and between
NSC and the Borrower.
13. Mil/Aero Wafer and Services Agreement dated March 11, 1997 by and between
NSC and the Borrower.
14. Shared Services and Occupancy Agreement dated March 11, 1997 by and
between NSC and the Borrower covering the use by NSC and the Borrower of
the facility in Santa Clara, California owned by NSC.
15. Shared Services Agreement dated March 11, 1997 by and between NSC and the
Borrower for the facility located at South Portland Maine.
16. Shared Facilities Agreement dated March 11, 1997 by and between NSC and
the Borrower covering the shared use of certain physical assets located at
the facility in South Portland, Maine.
17. Assumption Agreement dated March 11, 1997 by and between the Borrower and
NSC.
18. Bill of Sale dated March 11, 1997 by and between NSC and the Borrower.
19. Real Estate Lease dated March 11, 1997 between the Borrower, as lessor,
and NSC, as lessee, for premises located in West Jordan, Utah.
SCHEDULE III
SENIOR SUBORDINATED NOTE DOCUMENTS
1. Indenture (the "Indenture") between the Borrower and United States Trust
Company of New York, as trustee, dated March 11, 1997 relating to the
issuance of the Borrower's $300,000,000 aggregate principal amount of
10-1/8% Senior Subordinated Notes Due 2007.
2. Purchase Agreement dated March 6, 1997 by and among the Borrower,
Holdings, Credit Suisse First Boston Corporation ("Credit Suisse"), BT
Securities Corporation ("BT Securities") and CIBC Wood Gundy Securities
Corp. (together with Credit Suisse and BT Securities, the "Purchasers").
3. Registration Rights Agreement dated March 6, 1997 by and among the
Borrower and the Purchasers.
SCHEDULE IV
FOREIGN QUALIFICATIONS
Fairchild Semiconductor Corporation Maine
Alabama
California
Massachusetts
Texas
Utah
FSC Semiconductor Corporation none
SCHEDULE V
SECURITY DOCUMENTS
1. Security Agreement dated March 11, 1997 by and between the Borrower,
Holdings and Bankers Trust, as Collateral Agent providing for, among other
things, the grant by the Borrower to Bankers Trust, for the benefit of the
Secured Creditors, a security interest in certain Collateral.
2. Assignment of Security Interest in United States Trademarks and Patents
dated March 11, 1997 from the Borrower in favor of Bankers Trust.
3. Assignment of Security Interest in United States Copyrights dated March
11, 1997 from the Borrower in favor of Bankers Trust.
4. Pledge Agreement dated March 11, 1997 by and between the Borrower, as
Pledgor, Holdings, as an additional Pledgor and Bankers Trust as
Collateral Agent.
EXHIBIT F
FORM OF OFFICER'S CERTIFICATE
[NAME OF CREDIT PARTY]
Officers' Certificate
I, the undersigned, [Chairman of the Board/President/Vice
President/Treasurer] of [NAME OF CREDIT PARTY], a corporation organized and
existing under the laws of the State of Delaware (the "Company"), do hereby
certify, as such officer and not individually, that:
1. This Certificate is furnished pursuant to Section 5.04 of the
Credit Agreement, dated as of March 11, 1997, among [FSC Semiconductor
Corporation,] [Fairchild Semiconductor Corporation,] [the Company,] the Banks
from time to time party thereto, Bankers Trust Company, as Administrative Agent,
Credit Suisse First Boston, as Syndication Agent, and Canadian Imperial Bank of
Commerce, as Documentation Agent (such Credit Agreement, as in effect on the
date of this Certificate, being herein called the "Credit Agreement"). Unless
otherwise defined herein, capitalized terms used in this Certificate shall have
the meanings set forth in the Credit Agreement.
2. The following named individuals are elected officers of the
Company, each holds the office of the Company set forth opposite his name and
has held such office since __________, 19__.(1) The signature written opposite
the name and title of each such officer is his correct signature.
Name (2) Office Signature
--------------- ------------- -------------
--------------- ------------- -------------
--------------- ------------- -------------
--------------- ------------- -------------
3. Attached hereto as Exhibit A is a certified copy of the
Certificate of Incorporation of the Company as filed in the Office of the
Secretary of State of the State of Delaware on ___________, 19__, together with
all amendments thereto adopted through the date hereof.
- ----------
(1) Insert a date prior to the time of any corporate action relating to the
Credit Agreement or any other Credit Document.
(2) Include name, office and signature of each officer who will sign any Credit
Document, including the officer who will sign the certification at the end of
this Certificate.
EXHIBIT F
Page 2
4. Attached hereto as Exhibit B is a true and correct copy of the
By-Laws of the Company which were duly adopted, are in full force and effect on
the date hereof, and have been in effect since _____________, 19__.
5. Attached hereto as Exhibit C is a true and correct copy of
resolutions which were duly adopted on __________, 19__ [by unanimous written
consent of the Board of Directors of the Company], and said resolutions have not
been rescinded, amended or modified. Except as attached hereto as Exhibit C, no
resolutions have been adopted by the Board of Directors of the Company which
deal with the execution, delivery or performance of any of the Credit Documents
or any other Documents to which the Company is party.
[6. On the date hereof, all of the conditions in Sections 5.05,
5.06, 5.07, 5.08, 5.09, 5.15, 5.16, and 6.01 of the Credit Agreement have been
satisfied (except to the extent that any such condition is required to be
satisfactory to or determined by any Bank, the Required Banks and/or the
Agent).](3)
[6.][7.] On the date hereof, the representations and warranties
contained in the Credit Agreement and in the other Credit Documents to which the
Company is a party are true and correct in all material respects, both before
and after giving effect to each Credit Event to occur on the date hereof and the
application of the proceeds thereof (it being understood and agreed that any
representation or warranty which by its terms is made as of a specified date
shall be required to be true and correct in all material respects only as of
such specified date).
[7.][8.] On the date hereof, no Default or Event of Default has
occurred and is continuing under any Credit Document to which the Company is a
party or would result from the Credit Events to occur on the date hereof or from
the application of the proceeds thereof.
[8.][9.] There is no proceeding for the dissolution or liquidation
of the Company or, to the knowledge of the Company, threatening its existence.
IN WITNESS WHEREOF, I have hereunto set my hand this ___ day of
__________, 1997.
[NAME OF CREDIT PARTY]
------------------------------------
Name:
Title:
- ----------
(3) Insert bracketed item 6 in the Certificate delivered by the Borrower only.
EXHIBIT F
Page 3
[NAME OF CREDIT PARTY]
I, the undersigned, [Secretary/Assistant Secretary] of the Company, do hereby
certify, as such officer and not individually, that:
1. [Name of Person making above certifications] is the duly elected
and qualified [Chairman of the Board/President/Vice President/Treasurer] of the
Company and the signature above is his genuine signature.
2. The certifications made by [name of Person making above
certifications] in Items 2, 3, 4, 5 and [8] [9] above are true and correct.
IN WITNESS WHEREOF, I have hereunto set my hand this _____ day of
_________, 1997.
------------------------------------
Name:
Title:
EXHIBIT G
SUBSIDIARIES GUARANTY
GUARANTY, dated as of ___________, ____ (as amended, modified or
supplemented from time to time, this "Guaranty"), made by each of the
undersigned (each, a "Guarantor" and, together with any other entity that
becomes a party hereto pursuant to Section 25 hereof, the "Guarantors"), to
BANKERS TRUST COMPANY, as Collateral Agent, for the benefit of the Secured
Creditors (as defined below). Except as otherwise defined herein, terms used
herein and defined in the Credit Agreement (as defined below) shall be used
herein as therein defined.
W I T N E S S E T H :
WHEREAS, FSC Semiconductor Corporation ("Holdings"), Fairchild
Semiconductor Corporation (the "Borrower"), various lenders party thereto from
time to time (the "Banks"), Bankers Trust Company, as Administrative Agent
(together with any successor administrative agent, the "Administrative Agent"),
Credit Suisse First Boston, as Syndication Agent, and Canadian Imperial Bank of
Commerce, as Documentation Agent, have entered into a Credit Agreement, dated as
of March 11, 1997 (as amended, modified or supplemented from time to time, the
"Credit Agreement"), providing for the making of Loans to the Borrower and the
issuance of, and participation in, Letters of Credit for the account of the
Borrower, all as contemplated therein (the Banks, the Administrative Agent, the
Syndication Agent and the Documentation Agent are herein called the "Bank
Creditors");
WHEREAS, the Borrower may at any time and from time to time enter
into one or more Interest Rate Protection Agreements or Other Hedging Agreements
with one or more Banks or any affiliate thereof (each such Bank or affiliate,
even if the respective Bank subsequently ceases to be a Bank under the Credit
Agreement for any reason, together with such Bank's or affiliate's successors
and assigns, if any, collectively, the "Other Creditors," and together with the
Bank Creditors, the "Secured Creditors");
WHEREAS, each Guarantor is a Subsidiary of the Borrower;
WHEREAS, it is a condition to the making of Loans and issuing of
Letters of Credit under the Credit Agreement that each Guarantor shall have
executed and delivered this Guaranty; and
WHEREAS, each Guarantor will obtain benefits from the incurrence of
Loans by the Borrower and the issuance of Letters of Credit pursuant to the
Credit Agreement and the entering into of Interest Rate Protection Agreements or
Other Hedging Agreements and, accordingly, desires to execute this Guaranty in
order to (i) satisfy the conditions described in the preceding paragraph and
(ii) induce (x) the Banks to make Loans and issue Letters of Credit to the
EXHIBIT G
Page 2
Borrower and (y) the Other Creditors to enter into Interest Rate Protection
Agreements or Other Hedging Agreements with the Borrower;
NOW, THEREFORE, in consideration of the foregoing and other benefits
accruing to each Guarantor, the receipt and sufficiency of which are hereby
acknowledged, each Guarantor hereby makes the following representations and
warranties to the Secured Creditors and hereby covenants and agrees with each
Secured Creditor as follows:
6. Each Guarantor, jointly and severally, irrevocably and
unconditionally guarantees: (i) to the Bank Creditors the full and prompt
payment when due (whether at the stated maturity, by acceleration or otherwise)
of (x) the principal of and interest on the Notes issued by, and the Loans made
to, the Borrower under the Credit Agreement and all reimbursement obligations
and Unpaid Drawings with respect to Letters of Credit and (y) all other
obligations (including obligations which, but for the automatic stay under
Section 362(a) of the Bankruptcy Code, would become due) and liabilities owing
by the Borrower to the Bank Creditors under the Credit Agreement (including,
without limitation, indemnities, Fees and interest thereon (including any
interest accruing after the commencement of any bankruptcy, insolvency,
receivership or similar proceeding, whether or not such interest is an allowed
claim against the debtor in any such proceeding)) and the other Credit Documents
to which the Borrower is a party, whether now existing or hereafter incurred
under, arising out of or in connection with the Credit Agreement or any such
other Credit Document and the due performance and compliance with the terms of
the Credit Documents by the Borrower (all such principal, interest, liabilities
and obligations under this clause (i), except to the extent consisting of
obligations or liabilities with respect to Interest Rate Protection Agreements
or Other Hedging Agreements, being herein collectively called the "Credit
Document Obligations"); and (ii) to each Other Creditor the full and prompt
payment when due (whether at the stated maturity, by acceleration or otherwise)
of all obligations (including obligations which, but for the automatic stay
under Section 362(a) of the Bankruptcy Code, would become due) and liabilities
owing by the Borrower to one or more Other Creditors under any Interest Rate
Protection Agreements or Other Hedging Agreements, whether now in existence or
hereafter arising, and the due performance and compliance by the Borrower with
all terms, conditions and agreements contained therein (all such obligations and
liabilities being herein collectively called the "Other Obligations", and
together with the Credit Document Obligations are herein collectively called the
"Guaranteed Obligations"). Each Guarantor understands, agrees and confirms that
this Guaranty is a guarantee of payment and not of collection, and that the
Secured Creditors may enforce this Guaranty up to the full amount of the
Guaranteed Obligations against such Guarantor without proceeding against any
other Guarantor, the Borrower, against any security for the Guaranteed
Obligations, or under any other guaranty covering all or a portion of the
Guaranteed Obligations.
7. Additionally, each Guarantor, jointly and severally,
unconditionally and irrevocably, guarantees the payment of any and all
Guaranteed Obligations of the Borrower to the Secured Creditors whether or not
due or payable by the Borrower upon the occurrence in respect of the Borrower of
any of the events specified in Section 10.05 of the Credit Agreement, and
unconditionally and irrevocably, jointly and severally, promises to pay such
Guaranteed Obligations to the Secured Creditors, or order, on demand, in lawful
money of the United States.
EXHIBIT G
Page 3
8. The liability of each Guarantor hereunder is exclusive and
independent of any security for or other guaranty of the Guaranteed Obligations
of the Borrower whether executed by such Guarantor, any other Guarantor, any
other guarantor or by any other party, and the liability of each Guarantor
hereunder shall not be affected or impaired by (a) any direction as to
application of payment by the Borrower or by any other party, (b) any other
continuing or other guaranty, undertaking or maximum liability of a guarantor or
of any other party as to the Guaranteed Obligations of the Borrower, (c) any
payment on or in reduction of any such other guaranty or undertaking, (d) any
dissolution, termination or increase, decrease or change in personnel by the
Borrower, (e) any payment made to any Secured Creditor on the Guaranteed
Obligations which any Secured Creditor repays the Borrower pursuant to court
order in any bankruptcy, reorganization, arrangement, moratorium or other debtor
relief proceeding, and each Guarantor waives any right to the deferral or
modification of its obligations hereunder by reason of any such proceeding, (f)
any action or inaction by the Secured Creditors as contemplated in Section 6
hereof, or (g) any invalidity, irregularity or unenforceability of all or part
of the Guaranteed Obligations or of any security therefor.
9. The obligations of each Guarantor hereunder are independent of
the obligations of any other Guarantor, any other guarantor or the Borrower, and
a separate action or actions may be brought and prosecuted against each
Guarantor whether or not action is brought against any other Guarantor, any
other guarantor or the Borrower and whether or not any other Guarantor, any
other guarantor of the Borrower or the Borrower be joined in any such action or
actions. Each Guarantor waives, to the fullest extent permitted by law, the
benefit of any statute of limitations affecting its liability hereunder or the
enforcement thereof. Any payment by the Borrower or other circumstance which
operates to toll any statute of limitations as to the Borrower shall operate to
toll the statute of limitations as to each Guarantor.
10. Each Guarantor hereby waives (to the fullest extent permitted by
applicable law) notice of acceptance of this Guaranty and notice of any
liability to which it may apply, and waives promptness, diligence, presentment,
demand of payment, protest, notice of dishonor or nonpayment of any such
liabilities, suit or taking of other action by the Administrative Agent or any
other Secured Creditor against, and any other notice to, any party liable
thereon (including such Guarantor or any other guarantor or the Borrower).
11. Any Secured Creditor may (except as shall be required by
applicable statute and cannot be waived) at any time and from time to time
without the consent of, or notice to, any Guarantor, without incurring
responsibility to such Guarantor, without impairing or releasing the obligations
of such Guarantor hereunder, upon or without any terms or conditions and in
whole or in part:
A. change the manner, place or terms of payment of, and/or change or
extend the time of payment of, renew, increase, accelerate or alter, any
of the Guaranteed Obligations, any security therefor, or any liability
incurred directly or indirectly in respect thereof, and the guaranty
herein made shall apply to the Guaranteed Obligations as so changed,
extended, renewed or altered;
EXHIBIT G
Page 4
B. sell, exchange, release, surrender, realize upon or otherwise
deal with in any manner and in any order any property by whomsoever at any
time pledged or mortgaged to secure, or howsoever securing, the Guaranteed
Obligations or any liabilities (including any of those hereunder) incurred
directly or indirectly in respect thereof or hereof, and/or any offset
thereagainst;
C. exercise or refrain from exercising any rights against the
Borrower or others or otherwise act or refrain from acting;
D. settle or compromise any of the Guaranteed Obligations, any
security therefor or any liability (including any of those hereunder)
incurred directly or indirectly in respect thereof or hereof, and may
subordinate the payment of all or any part thereof to the payment of any
liability (whether due or not) of the Borrower to creditors of the
Borrower;
E. apply any sums by whomsoever paid or howsoever realized to any
liability or liabilities of the Borrower to the Secured Creditors
regardless of what liabilities of the Borrower remain unpaid;
F. consent to or waive any breach of, or any act, omission or
default under, any of the Interest Rate Protection Agreements or Other
Hedging Agreements, the Credit Documents or any of the instruments or
agreements referred to therein, or otherwise amend, modify or supplement
any of the Interest Rate Protection Agreements or Other Hedging
Agreements, the Credit Documents or any of such other instruments or
agreements;
G. act or fail to act in any manner referred to in this Guaranty
which may deprive such Guarantor of its right to subrogation against the
Borrower to recover full indemnity for any payments made pursuant to this
Guaranty; and/or
H. release or substitute any one or more endorsers, guarantors, the
Borrower or other obligors.
12. No invalidity, irregularity or unenforceability of all or any
part of the Guaranteed Obligations or of any security therefor shall affect,
impair or be a defense to this Guaranty, and this Guaranty shall be primary,
absolute and unconditional notwithstanding the occurrence of any event or the
existence of any other circumstances which might constitute a legal or equitable
discharge of a surety or guarantor except payment in full of the Guaranteed
Obligations.
13. This Guaranty is a continuing one and all liabilities to which
it applies or may apply under the terms hereof shall be conclusively presumed to
have been created in reliance hereon. No failure or delay on the part of any
Secured Creditor in exercising any right, power or privilege hereunder shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right, power or privilege hereunder preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The rights and
remedies herein expressly specified are
EXHIBIT G
Page 5
cumulative and not exclusive of any rights or remedies which any Secured
Creditor would otherwise have. No notice to or demand on any Guarantor in any
case shall entitle such Guarantor to any other further notice or demand in
similar or other circumstances or constitute a waiver of the rights of any
Secured Creditor to any other or further action in any circumstances without
notice or demand. It is not necessary for any Secured Creditor to inquire into
the capacity or powers of the Borrower or any of its Subsidiaries or the
officers, directors, partners or agents acting or purporting to act on its
behalf, and any indebtedness made or created in reliance upon the professed
exercise of such powers shall be guaranteed hereunder.
14. Any indebtedness of the Borrower now or hereafter held by any
Guarantor is hereby subordinated to the Guaranteed Obligations; and such
indebtedness of the Borrower to any Guarantor, if the Administrative Agent,
after an Event of Default has occurred and is continuing, so requests, shall be
collected, enforced and received by such Guarantor as trustee for the Secured
Creditors and be paid over to the Administrative Agent for the benefit of the
Secured Creditors on account of the Guaranteed Obligations, but without
affecting or impairing in any manner the liability of such Guarantor under the
other provisions of this Guaranty. Prior to the transfer by any Guarantor of any
note or negotiable instrument evidencing any indebtedness of the Borrower to
such Guarantor, such Guarantor shall mark such note or negotiable instrument
with a legend that the same is subject to this subordination. Without limiting
the generality of the foregoing, each Guarantor hereby agrees with the Secured
Creditors that it will not exercise any right of subrogation which it may at any
time otherwise have as a result of this Guaranty (whether contractual, under
Section 509 of the Bankruptcy Code or otherwise) until all Guaranteed
Obligations have been irrevocably paid in full in cash.
15. A. Each Guarantor waives any right (except as shall be required
by applicable statute or law and cannot be waived) to require the Secured
Creditors to: (i) proceed against the Borrower, any other Guarantor, any other
guarantor of the Borrower or any other party; (ii) proceed against or exhaust
any security held from the Borrower, any other Guarantor, any other guarantor of
the Borrower or any other party; or (iii) pursue any other remedy in the Secured
Creditors' power whatsoever. Each Guarantor waives (to the fullest extent
permitted by applicable law) any defense based on or arising out of any defense
of the Borrower, any other Guarantor, any other guarantor of the Borrower or any
other party other than payment in full of the Guaranteed Obligations, including,
without limitation, any defense based on or arising out of the disability of the
Borrower, any other Guarantor, any other guarantor of the Borrower or any other
party, or the unenforceability of the Guaranteed Obligations or any part thereof
from any cause, or the cessation from any cause of the liability of the Borrower
other than payment in full of the Guaranteed Obligations. The Secured Creditors
may, at their election, foreclose on any security held by the Administrative
Agent, the Collateral Agent or the other Secured Creditors by one or more
judicial or nonjudicial sales, whether or not every aspect of any such sale is
commercially reasonable (to the extent such sale is permitted by applicable
law), or exercise any other right or remedy the Secured Creditors may have
against the Borrower or any other party, or any security, without affecting or
impairing in any way the liability of any Guarantor hereunder except to the
extent the Guaranteed Obligations have been paid in full. Each Guarantor waives
any defense arising out of any such election by the Secured Creditors, even
though such election operates to impair or extinguish any
EXHIBIT G
Page 6
right of reimbursement or subrogation or other right or remedy of such Guarantor
against the Borrower or any other party or any security.
B. Each Guarantor waives all presentments, demands for performance,
protests and notices, including, without limitation, notices of nonperformance,
notices of protest, notices of dishonor, notices of acceptance of this Guaranty,
and notices of the existence, creation or incurring of new or additional
indebtedness. Each Guarantor assumes all responsibility for being and keeping
itself informed of the Borrower's financial condition and assets, and of all
other circumstances bearing upon the risk of nonpayment of the Guaranteed
Obligations and the nature, scope and extent of the risks which such Guarantor
assumes and incurs hereunder, and agrees that the Secured Creditors shall have
no duty to advise any Guarantor of information known to them regarding such
circumstances or risks.
16. The Secured Creditors agree that this Guaranty may be enforced
only by the action of the Administrative Agent or the Collateral Agent, in each
case acting upon the instructions of the Required Banks (or, after the date on
which all Credit Document Obligations have been paid in full, the holders of at
least a majority of the outstanding Other Obligations) and that no other Secured
Creditor shall have any right individually to seek to enforce or to enforce this
Guaranty or to realize upon the security to be granted by the Security
Documents, it being understood and agreed that such rights and remedies may be
exercised by the Administrative Agent or the Collateral Agent or the holders of
at least a majority of the outstanding Other Obligations, as the case may be,
for the benefit of the Secured Creditors upon the terms of this Guaranty and the
Security Documents. The Secured Creditors further agree that this Guaranty may
not be enforced against any director, officer, employee, or stockholder of any
Guarantor (except to the extent such stockholder is also a Guarantor hereunder).
17. In order to induce the Banks to make Loans and issue Letters of
Credit pursuant to the Credit Agreement, and in order to induce the Other
Creditors to execute, deliver and perform the Interest Rate Protection
Agreements or Other Hedging Agreements, each Guarantor represents, warrants and
covenants that:
A. Such Guarantor (i) is a duly organized and validly existing
corporation in good standing under the laws of the jurisdiction of its
incorporation, (ii) has the corporate power and authority to own its
property and assets and to transact the business in which it is engaged
and presently proposes to engage and (iii) is duly qualified and is
authorized to do business and is in good standing in each jurisdiction
where the conduct of its business requires such qualification except for
failures to be so qualified which, individually or in the aggregate, could
not reasonably be expected to have a Material Adverse Effect.
B. Such Guarantor has the corporate power and authority to execute,
deliver and perform the terms and provisions of this Guaranty and each
other Credit Document to which it is a party and has taken all necessary
corporate action to authorize the execution, delivery and performance by
it of each such Credit Document. Such Guarantor has duly executed and
delivered this Guaranty and each other Credit Document to which it is a
party, and each such Credit Document constitutes the legal, valid and
binding
EXHIBIT G
Page 7
obligation of such Guarantor enforceable in accordance with its terms,
except to the extent that the enforceability thereof may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other
similar laws generally affecting creditors' rights and by equitable
principles (regardless of whether enforcement is sought in equity or at
law).
C. Neither the execution, delivery or performance by such Guarantor
of this Guaranty or any other Credit Document to which it is a party, nor
compliance by it with the terms and provisions hereof and thereof, (i)
will contravene any provision of any applicable law, statute, rule or
regulation, or any applicable order, writ, injunction or decree of any
court or governmental instrumentality, (ii) will conflict with or result
in any breach of any of the terms, covenants, conditions or provisions of,
or constitute a default under, or result in the creation or imposition of
(or the obligation to create or impose) any Lien (except pursuant to the
Security Documents) upon any of the property or assets of such Guarantor
or any of its Subsidiaries pursuant to the terms of any indenture,
mortgage, deed of trust, loan agreement, credit agreement, or any other
material agreement or other instrument to which such Guarantor or any of
its Subsidiaries is a party or by which it or any of its property or
assets is bound or to which it may be subject or (iii) will violate any
provision of the certificate of incorporation or by-laws (or equivalent
organizational documents) of such Guarantor or any of its Subsidiaries.
D. No order, consent, approval, license, authorization or validation
of, or filing, recording or registration with (except as have been
obtained or made), or exemption by, any governmental or public body or
authority, or any subdivision thereof, is required to authorize, or is
required in connection with, (i) the execution, delivery and performance
of this Guaranty or any other Credit Document to which such Guarantor is a
party or (ii) the legality, validity, binding effect or enforceability of
this Guaranty or any other Credit Document to which such Guarantor is a
party.
E. There are no actions, suits or proceedings (private or
governmental) pending or, to the best knowledge of such Guarantor,
threatened (i) with respect to any Credit Documents to which such
Guarantor is a party or (ii) with respect to such Guarantor that could
reasonably be expected to (a) have a Material Adverse Effect or (b)
materially and adversely affect the rights or remedies of the Secured
Creditors or the ability of such Guarantor to perform its respective
obligations to the Secured Creditors hereunder and under the other Credit
Documents to which it is a party.
18. Each Guarantor covenants and agrees that on and after the date
hereof and until the termination of the Total Commitments and all Interest Rate
Protection Agreements or Other Hedging Agreements and when no Note or Letter of
Credit remains outstanding and all Guaranteed Obligations have been paid in
full, such Guarantor shall take, or will refrain from taking, as the case may
be, all actions that are necessary to be taken or not taken so that no violation
of any provision, covenant or agreement contained in Section 8 or 9 of the
Credit Agreement, and so that no Default or Event of Default, is caused by the
actions of such Guarantor or any of its Subsidiaries.
EXHIBIT G
Page 8
19. The Guarantors hereby jointly and severally agree to pay all
reasonable out-of-pocket costs and expenses of each Secured Creditor in
connection with the enforcement of this Guaranty and any amendment, waiver or
consent relating hereto (including, without limitation, the reasonable fees and
disbursements of counsel (including in-house counsel) employed by any of the
Secured Creditors).
20. Neither this Guaranty nor any provision hereof may be changed,
waived, discharged or terminated except with the written consent of each
Guarantor directly affected thereby and either (x) the Required Banks (or to the
extent required by Section 13.12 of the Credit Agreement, with the written
consent of each Bank) at all times prior to the time on which all Credit
Document Obligations have been paid in full or (y) the holders of at least a
majority of the outstanding Other Obligations at all times after the time on
which all Credit Document Obligations have been paid in full; provided, that any
change, waiver, modification or variance affecting the rights and benefits of a
single Class (as defined below) of Secured Creditors (and not all Secured
Creditors in a like or similar manner) shall require the written consent of the
Requisite Creditors (as defined below) of such Class of Secured Creditors (it
being understood that the addition or release of any Guarantor hereunder shall
not constitute a change, waiver, discharge or termination affecting any
Guarantor other than the Guarantor so added or released). For the purpose of
this Guaranty the term "Class" shall mean each class of Secured Creditors, i.e.,
whether (x) the Bank Creditors as holders of the Credit Document Obligations or
(y) the Other Creditors as the holders of the Other Obligations. For the purpose
of this Guaranty, the term "Requisite Creditors" of any Class shall mean each of
(x) with respect to the Credit Document Obligations, the Required Banks (or to
the extent required by Section 13.12 of the Credit Agreement, each Bank) and (y)
with respect to the Other Obligations, the holders of at least a majority of all
obligations outstanding from time to time under the Interest Rate Protection
Agreements or Other Hedging Agreements.
21. Each Guarantor acknowledges that an executed (or conformed) copy
of each of the Credit Documents and Interest Rate Protection Agreements or Other
Hedging Agreements has been made available to its principal executive officers
and such officers are familiar with the contents thereof.
22. In addition to any rights now or hereafter granted under
applicable law (including, without limitation, Section 151 of the New York
Debtor and Creditor Law) and not by way of limitation of any such rights, upon
the occurrence and during the continuance of an Event of Default (such term to
mean and include any "Event of Default" as defined in the Credit Agreement or
any payment default under any Interest Rate Protection Agreement or Other
Hedging Agreement continuing after any applicable grace period), each Secured
Creditor is hereby authorized at any time or from time to time, without notice
to any Guarantor or to any other Person, any such notice being expressly waived,
to set off and to appropriate and apply any and all deposits (general or
special) and any other indebtedness at any time held or owing by such Secured
Creditor to or for the credit or the account of such Guarantor but in any event
excluding assets held in trust for any such Person, against and on account of
the obligations and liabilities of such Guarantor to such Secured Creditor under
this Guaranty, irrespective of whether or not such Secured Creditor shall have
made any demand hereunder and although said obligations, liabilities, deposits
or claims, or any of them, shall be contingent or unmatured. Each Secured
Creditor acknowledges and agrees
EXHIBIT G
Page 9
that the provisions set forth in this Section 17 are subject to the sharing
provisions set forth in Section 13.06 of the Credit Agreement.
23. All notices, requests, demands or other communications pursuant
hereto shall be deemed to have been duly given or made when delivered to the
Person to which such notice, request, demand or other communication is required
or permitted to be given or made under this Guaranty, addressed to such party at
(i) in the case of any Bank Creditor, as provided in the Credit Agreement, (ii)
in the case of any Guarantor, at its address set forth opposite its signature
below and (iii) in the case of any Other Creditor, at such address as such Other
Creditor shall have specified in writing to the Guarantor; or in any case at
such other address as any of the Persons listed above may hereafter notify the
others in writing.
24. If claim is ever made upon any Secured Creditor for repayment or
recovery of any amount or amounts received in payment or on account of any of
the Guaranteed Obligations and any of the aforesaid payees repays all or part of
said amount by reason of (i) any judgment, decree or order of any court or
administrative body having jurisdiction over such payee or any of its property
or (ii) any settlement or compromise of any such claim effected in good faith by
such payee with any such claimant (including the Borrower), then and in such
event each Guarantor agrees that any such judgment, decree, order, settlement or
compromise shall be binding upon such Guarantor, notwithstanding any revocation
hereof or other instrument evidencing any liability of the Borrower, and such
Guarantor shall be and remain liable to the aforesaid payees hereunder for the
amount so repaid or recovered to the same extent as if such amount had never
originally been received by any such payee.
25. (A) THIS GUARANTY AND THE RIGHTS AND OBLIGATIONS OF THE SECURED
CREDITORS AND OF THE UNDERSIGNED HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK. Any legal action or proceeding
with respect to this Guaranty or any other Credit Document to which any
Guarantor is a party may be brought in the courts of the State of New York or of
the United States of America for the Southern District of New York, and, by
execution and delivery of this Guaranty, each Guarantor hereby irrevocably
accepts for itself and in respect of its property, generally and
unconditionally, the jurisdiction of the aforesaid courts. Each Guarantor hereby
irrevocably designates, appoints and empowers Corporation Service Company with
offices on the date hereof at 500 Central Avenue, Albany, New York 12206 as its
designee, appointee and agent to receive, accept and acknowledge for and on its
behalf, and in respect of its property, service of any and all legal process,
summons, notices and documents which may be served in any such action or
proceeding. If for any reason such designee, appointee and agent shall cease to
be available to act as such, each Guarantor agrees to designate a new designee,
appointee and agent in the State of New York on the terms and for the purposes
of this provision satisfactory to the Administrative Agent. Each Guarantor
further irrevocably consents to the service of process out of any of the
aforementioned courts in any such action or proceeding by the mailing of copies
thereof by registered or certified mail, postage prepaid, to such Guarantor at
its address set forth opposite its signature below, such service to become
effective 30 days after such mailing. Nothing herein shall affect the right of
any of the Secured Creditors to serve process in any other manner permitted by
EXHIBIT G
Page 10
law or to commence legal proceedings or otherwise proceed against each Guarantor
in any other jurisdiction.
(B) Each Guarantor hereby irrevocably waives any objection which it
may now or hereafter have to the laying of venue of any of the aforesaid actions
or proceedings arising out of or in connection with this Guaranty or any other
Credit Document to which such Guarantor is a party brought in the courts
referred to in clause (A) above and hereby further irrevocably waives and agrees
not to plead or claim in any such court that such action or proceeding brought
in any such court has been brought in an inconvenient forum.
(C) EACH GUARANTOR AND EACH SECURED CREDITOR (BY ITS ACCEPTANCE OF
THE BENEFITS OF THIS GUARANTY) HEREBY IRREVOCABLY WAIVES ALL RIGHTS TO A TRIAL
BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO
THIS GUARANTY, THE OTHER CREDIT DOCUMENTS TO WHICH SUCH GUARANTOR IS A PARTY OR
THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
26. In the event that all of the capital stock of one or more
Guarantors is sold or otherwise disposed of (except to Holdings or any of its
Subsidiaries) or liquidated in compliance with the requirements of Section 9.02
of the Credit Agreement (or such sale or other disposition or liquidation has
been approved in writing by the Required Banks) and the proceeds of such sale,
disposition or liquidation are applied in accordance with the provisions of the
Credit Agreement, to the extent applicable, such Guarantor shall be released
from this Guaranty and this Guaranty shall, as to each such Guarantor or
Guarantors, terminate, and have no further force or effect (it being understood
and agreed that the sale of one or more Persons that own, directly or
indirectly, all of the capital stock or partnership interests of any Guarantor
shall be deemed to be a sale of such Guarantor for the purposes of this Section
21).
27. Each Guarantor hereby confirms that it is its intention that
this Guaranty not constitute a fraudulent transfer or conveyance for purposes of
the Bankruptcy Code, the Uniform Fraudulent Conveyance Act or any similar
Federal or state law. To effectuate the foregoing intention, each Guarantor
hereby irrevocably agrees that the Guaranteed Obligations guaranteed by such
Guarantor shall be limited to such amount as will, after giving effect to such
maximum amount and all other (contingent or otherwise) liabilities of such
Guarantor that are relevant under such laws, and after giving effect to any
rights to contribution pursuant to any agreement providing for an equitable
contribution among such Guarantor and the other Guarantors, result in the
Guaranteed Obligations of such Guarantor in respect of such maximum amount not
constituting a fraudulent transfer or conveyance.
28. This Guaranty may be executed in any number of counterparts and
by the different parties hereto on separate counterparts, each of which when so
executed and delivered shall be an original, but all of which shall together
constitute one and the same instrument. A set of counterparts executed by all
the parties hereto shall be lodged with the Borrower and the Administrative
Agent.
EXHIBIT G
Page 11
29. All payments made by any Guarantor hereunder will be made
without setoff, counterclaim or other defense, and on the same basis as payments
are made by the Borrower under Sections 4.03 and 4.04 of the Credit Agreement.
30. It is understood and agreed that any Subsidiary of the Borrower
that is required to execute a counterpart of this Guaranty after the date hereof
pursuant to the Credit Agreement shall automatically become a Guarantor
hereunder by executing a counterpart hereof and delivering the same to the
Administrative Agent.
* * *
EXHIBIT G
Page 12
IN WITNESS WHEREOF, each Guarantor has caused this Guaranty to be
executed and delivered as of the date first above written.
Address: [SUBSIDIARY GUARANTOR],
as a Guarantor
Attention:
Telephone No.: By
Facsimile No.: --------------------------------
Title:
Accepted and Agreed to:
BANKERS TRUST COMPANY,
as Administrative
Agent and Collateral Agent
By
-----------------------------------------------------------------------------
Title:
EXHIBIT H
PLEDGE AGREEMENT
PLEDGE AGREEMENT, dated as of March 11, 1997 (as amended, modified
or supplemented from time to time, this "Agreement") made by each of the
undersigned (each a "Pledgor" and, together with any other entity that becomes a
party hereto pursuant to Section 23 hereof, the "Pledgors"), to BANKERS TRUST
COMPANY, as Collateral Agent (the "Pledgee"), for the benefit of the Secured
Creditors (as defined below). Except as otherwise defined herein, capitalized
terms used herein and defined in the Credit Agreement (as defined below) shall
be used herein as therein defined.
W I T N E S S E T H :
WHEREAS, FSC Semiconductor Corporation ("Holdings"), Fairchild
Semiconductor Corporation (the "Borrower"), various lenders from time to time
party thereto (the "Banks"), Bankers Trust Company, as Administrative Agent
(together with any successor administrative agent, the "Administrative Agent"),
Credit Suisse First Boston, as Syndication Agent (the "Syndication Agent"), and
Canadian Imperial Bank of Commerce, as Documentation Agent (the "Documentation
Agent"), have entered into a Credit Agreement, dated as of March 11, 1997 (the
"Credit Agreement"), providing for the making of Loans and the issuance of, and
participation in, Letters of Credit as contemplated therein (as used herein, the
term "Credit Agreement" means the Credit Agreement described above in this
paragraph, as the same may be amended, modified, extended, renewed, replaced,
restated or supplemented from time to time, and including any agreement
extending the maturity of, or restructuring the Indebtedness under such
agreement or any successor agreements) (the Banks, the Administrative Agent, the
Syndication Agent, the Documentation Agent and the Pledgee are herein called the
"Bank Creditors");
WHEREAS, the Borrower may at any time and from time to time enter
into one or more Interest Rate Protection Agreements or Other Hedging Agreements
with one or more Banks or any affiliate thereof (each such Bank or affiliate,
even if the respective Bank subsequently ceases to be a Bank under the Credit
Agreement for any reason, together with such Bank's or affiliate's successors
and assigns, if any, collectively, the "Other Creditors," and together with the
Bank Creditors, the "Secured Creditors");
WHEREAS, pursuant to Section 14 of the Credit Agreement, Holdings
has guaranteed to the Secured Creditors the payment when due of all the
Guaranteed Obligations as described therein;
WHEREAS, pursuant to the Subsidiaries Guaranty, each Subsidiary
Guarantor has jointly and severally guaranteed to the Secured Creditors the
payment when due of all Guaranteed Obligations as described therein;
EXHIBIT H
Page 2
WHEREAS, it is a condition to the making of Loans and the issuance
of Letters of Credit under the Credit Agreement that each Pledgor shall have
executed and delivered this Agreement; and
WHEREAS, each Pledgor will obtain benefits from the incurrence of
Loans and the issuance of Letters of Credit under the Credit Agreement and the
entering into of Interest Rate Protection Agreements or Other Hedging Agreements
and, accordingly, each Pledgor desires to enter into this Agreement in order to
satisfy the conditions described in the preceding paragraph;
NOW, THEREFORE, in consideration of the foregoing and other benefits
accruing to each Pledgor, the receipt and sufficiency of which are hereby
acknowledged, each Pledgor hereby makes the following representations and
warranties to the Pledgee for the benefit of the Secured Creditors and hereby
covenants and agrees with the Pledgee for the benefit of the Secured Creditors
as follows:
1. SECURITY FOR OBLIGATIONS. This Agreement is made by each Pledgor
for the benefit of the Secured Creditors to secure:
(i) the full and prompt payment when due (whether at the stated
maturity, by acceleration or otherwise) of all obligations and liabilities
(including obligations which, but for the automatic stay under Section
362(a) of the Bankruptcy Code, would become due) of such Pledgor to the
Bank Creditors, whether now existing or hereafter incurred under, arising
out of, or in connection with the Credit Agreement and the other Credit
Documents to which such Pledgor is a party (including without limitation
(x) in the case of the Borrower, all such obligations and indebtedness of
the Borrower under the Credit Agreement and (y) in the case of each other
Pledgor, all such obligations and indebtedness under the Guaranty to which
such Pledgor is a party) and the due performance and compliance by such
Pledgor with all of the terms, conditions and agreements contained in the
Credit Agreement and such other Credit Documents (all such obligations and
liabilities under this clause (i), except to the extent consisting of
obligations or indebtedness with respect to Interest Rate Protection
Agreements or Other Hedging Agreements, being herein collectively called
the "Credit Document Obligations");
(ii) the full and prompt payment when due (whether at the stated
maturity, by acceleration or otherwise) of all obligations and liabilities
(including obligations which, but for the automatic stay under Section
362(a) of the Bankruptcy Code, would become due) owing by such Pledgor to
the Other Creditors under, or with respect to, any Interest Rate
Protection Agreement or Other Hedging Agreement, whether such Interest
Rate Protection Agreement or Other Hedging Agreement is now in existence
or hereafter arising, and the due performance and compliance by such
Pledgor with all of the terms, conditions and agreements contained therein
(all such obligations and liabilities described in this clause (ii) being
herein collectively called the "Other Obligations");
(iii) any and all sums advanced by the Pledgee in order to preserve
the Collateral (as hereinafter defined) or preserve its security interest
in the Collateral (to the extent provided for in the Credit Documents);
EXHIBIT H
Page 3
(iv) in the event of any proceeding for the collection or
enforcement of any indebtedness, obligations, or liabilities of such
Pledgor referred to in clauses (i), (ii) and (iii) above, after an Event
of Default (as such term is defined in the Security Agreement) shall have
occurred and be continuing, the reasonable expenses of retaking, holding,
preparing for sale or lease, selling or otherwise disposing of or
realizing on the Collateral, or of any exercise by the Pledgee of its
rights hereunder, together with reasonable attorneys' fees and court
costs; and
(v) all amounts paid by any Secured Creditor as to which such
Secured Creditor has the right to reimbursement under Section 11 of this
Agreement.
All such obligations, liabilities, sums and expenses set forth in clauses (i)
through (v) of this Section 1 being herein collectively called the
"Obligations," it being acknowledged and agreed that the "Obligations" shall
include extensions of credit of the types described above, whether outstanding
on the date of this Agreement or extended from time to time after the date of
this Agreement.
2. DEFINITION OF STOCK, NOTES, SECURITIES, ETC. As used herein: (i)
the term "Stock" shall mean (x) with respect to corporations incorporated under
the laws of the United States or any State or territory thereof (each a
"Domestic Corporation"), all of the issued and outstanding shares of capital
stock of any Domestic Corporation at any time owned by each Pledgor and (y) with
respect to corporations not Domestic Corporations (each a "Foreign
Corporation"), all of the issued and outstanding shares of capital stock at any
time owned by any Pledgor of any Foreign Corporation, provided that, subject to
Section 8.15 of the Credit Agreement, such Pledgor shall not be required to
pledge hereunder, and nothing herein shall be deemed to constitute a pledge
hereunder of, more than 65% of the total combined voting power of all classes of
capital stock of any Foreign Corporation entitled to vote; (ii) the term "Notes"
shall mean all promissory notes from time to time issued to, or held by, each
Pledgor; and (iii) the term "Securities" shall mean all of the Stock and Notes.
Each Pledgor represents and warrants that on the date hereof (i) each Subsidiary
of such Pledgor, and the direct ownership thereof, is listed in Annex A hereto;
(ii) the Stock held by such Pledgor consists of the number and type of shares of
the stock of the corporations as described in Annex A hereto; (iii) such Stock
constitutes that percentage of the issued and outstanding capital stock of the
issuing corporation as is set forth in Annex A hereto; (iv) the Notes held by
such Pledgor consist of the promissory notes described in Annex B hereto where
such Pledgor is listed as the Lender; (v) such Pledgor is the holder of record
and sole beneficial owner of the Stock and the Notes held by such Pledgor and
there exist no options or preemption rights in respect of any of such Stock; and
(vi) on the date hereof, such Pledgor owns no other Securities.
3. PLEDGE OF SECURITIES, ETC.
3.1. Pledge. To secure the Obligations of such Pledgor and for the
purposes set forth in Section 1 hereof, each Pledgor hereby (i) grants to the
Pledgee a security interest in all of the Collateral (as defined herein) owned
by such Pledgor, (ii) pledges and deposits as security with the Pledgee the
Securities owned by such Pledgor on the date hereof, and delivers to the Pledgee
certificates or instruments therefor, duly endorsed in blank by such Pledgor in
the case of Notes and accompanied by undated stock powers duly executed in blank
by such Pledgor (and accompanied by
EXHIBIT H
Page 4
any transfer tax stamps required in connection with the pledge of such
Securities) in the case of Stock, or such other instruments of transfer as are
reasonably acceptable to the Pledgee and (iii) hypothecates, mortgages, charges
and sets over to the Pledgee all of such Pledgor's right, title and interest in
and to such Securities (and in and to the certificates or instruments evidencing
such Securities), to be held by the Pledgee upon the terms and conditions set
forth in this Agreement.
3.2. Subsequently Acquired Securities. If any Pledgor shall acquire
(by purchase, stock dividend or otherwise) any additional Securities at any time
or from time to time after the date hereof, such Pledgor will promptly
thereafter pledge and deposit such Securities (or certificates or instruments
representing such Securities) as security with the Pledgee and deliver to the
Pledgee certificates or instruments therefor, duly endorsed in blank in the case
of such Notes, and accompanied by undated stock powers duly executed in blank by
such Pledgor (and accompanied by any transfer tax stamps required in connection
with the pledge of such Securities) in the case of such Stock, or such other
instruments of transfer as are reasonably acceptable to the Pledgee, and will
promptly thereafter deliver to the Pledgee a certificate executed by a principal
executive officer of such Pledgor describing such Securities and certifying that
the same has been duly pledged with the Pledgee hereunder. Subject to Section
8.15 of the Credit Agreement, no Pledgor shall be required at any time to pledge
hereunder any Stock which is more than 65% of the total combined voting power of
all Classes of Capital Stock of any Foreign Subsidiary entitled to vote.
3.3. Uncertificated Securities. Notwithstanding anything to the
contrary contained in Sections 3.1 and 3.2 hereof, if any Securities (whether
now owned or hereafter acquired) are uncertificated securities, the relevant
Pledgor shall promptly notify the Pledgee thereof, and shall promptly take all
actions required to perfect the security interest of the Pledgee under
applicable law (including, in any event, under Sections 8-313 and 8-321 of the
New York Uniform Commercial Code, if applicable). Each Pledgor further agrees to
take such actions as the Pledgee deems reasonably necessary or desirable to
effect the foregoing and to permit the Pledgee to exercise any of its rights and
remedies hereunder.
3.4. Definitions of Pledged Stock; Pledged Notes; Pledged Securities
and Collateral. All Stock at any time pledged or required to be pledged
hereunder is hereinafter called the "Pledged Stock;" all Notes at any time
pledged or required to be pledged hereunder are hereinafter called the "Pledged
Notes;" all Pledged Stock and Pledged Notes together are called the "Pledged
Securities;" and the Pledged Securities, together with all proceeds thereof,
including any securities and moneys received and at the time held by the Pledgee
hereunder, are hereinafter called the "Collateral."
4. APPOINTMENT OF SUB-AGENTS; ENDORSEMENTS, ETC. The Pledgee shall
have the right to appoint one or more sub-agents for the purpose of retaining
physical possession of the Pledged Securities, which may be held (in the
discretion of the Pledgee) in the name of the relevant Pledgor, endorsed or
assigned in blank or in favor of the Pledgee or any nominee or nominees of the
Pledgee or a sub-agent appointed by the Pledgee.
5. VOTING, ETC., WHILE NO EVENT OF DEFAULT. Unless and until there
shall have occurred and be continuing an Event of Default, each Pledgor shall be
entitled to exercise any and all voting and other consensual rights pertaining
to the Pledged Securities owned by it, and to give consents, waivers or
ratifications in respect thereof, provided, that no vote shall be cast or
EXHIBIT H
Page 5
any consent, waiver or ratification given or any action taken which would
violate or be inconsistent with any of the terms of this Agreement, the Credit
Agreement, any other Credit Document or any Interest Rate Protection Agreement
or Other Hedging Agreement (collectively, the "Secured Debt Agreements"). All
such rights of each Pledgor to vote and to give consents, waivers and
ratifications shall cease in case an Event of Default has occurred and is
continuing, and Section 7 hereof shall become applicable.
6. DIVIDENDS AND OTHER DISTRIBUTIONS. Unless and until there shall
have occurred and be continuing an Event of Default, all cash dividends and
distributions payable in respect of the Pledged Stock and all payments in
respect of the Pledged Notes shall be paid to the respective Pledgor. The
Pledgee shall be entitled to receive directly, and to retain as part of the
Collateral:
(i) all other or additional stock or other securities (other than
cash) paid or distributed by way of dividend or otherwise, as the case may
be, in respect of the Pledged Stock;
(ii) all other or additional stock or other securities paid or
distributed in respect of the Pledged Stock by way of stock-split,
spin-off, split-up, reclassification, combination of shares or similar
rearrangement; and
(iii) all other or additional stock or other securities or property
which may be paid in respect of the Collateral by reason of any
consolidation, merger, exchange of stock, conveyance of assets,
liquidation or similar corporate reorganization.
Nothing contained in this Section 6 shall limit or restrict in any way the
Pledgee's right to receive proceeds of the Collateral in any form in accordance
with Section 3 of this Agreement. All dividends, distributions or other payments
which are received by any Pledgor contrary to the provisions of this Section 6
and Section 7 hereof shall be received in trust for the benefit of the Pledgee,
shall be segregated from other property or funds of such Pledgor and shall be
promptly paid over to the Pledgee as Collateral in the same form as so received
(with any necessary endorsement).
7. REMEDIES IN CASE OF EVENTS OF DEFAULT. If there shall have
occurred and be continuing an Event of Default, then and in every such case, the
Pledgee shall be entitled to (i) exercise all of the rights, powers and remedies
(whether vested in it by this Agreement, any other Secured Debt Agreement or by
law) for the protection and enforcement of its rights in respect of the
Collateral, (ii) exercise all the rights and remedies of a secured party under
the Uniform Commercial Code and (iii) without limitation, exercise the following
rights, which each Pledgor hereby agrees to be commercially reasonable:
(a) to receive all amounts payable in respect of the Collateral
otherwise payable under Section 6 hereof to the Pledgor;
(b) to transfer all or any part of the Collateral into the Pledgee's
name or the name of its nominee or nominees;
EXHIBIT H
Page 6
(c) to accelerate any Pledged Note which may be accelerated in
accordance with its terms, and take any other action to collect upon any
Pledged Note (including, without limitation, to make any demand for
payment thereon);
(d) to vote all or any part of the Pledged Stock (whether or not
transferred into the name of the Pledgee) and give all consents, waivers
and ratifications in respect of the Collateral and otherwise act with
respect thereto as though it were the outright owner thereof (each Pledgor
hereby irrevocably constituting and appointing the Pledgee the proxy and
attorney-in-fact of such Pledgor, with full power of substitution to do
so); and
(e) at any time and from time to time to sell, assign and deliver,
or grant options to purchase, all or any part of the Collateral, or any
interest therein, at any public or private sale, without demand of
performance, advertisement or notice of intention to sell or of the time
or place of sale or adjournment thereof or to redeem or otherwise (all of
which are hereby waived by each Pledgor), for cash, on credit or for other
property, for immediate or future delivery without any assumption of
credit risk, and for such price or prices and on such terms as the Pledgee
in its absolute discretion may determine, provided that at least 10 days'
prior notice of the time and place of any such sale shall be given to such
Pledgor. The Pledgee shall not be obligated to make any such sale of
Collateral regardless of whether any such notice of sale has theretofore
been given. Each Pledgor hereby waives and releases to the fullest extent
permitted by law any right or equity of redemption with respect to the
Collateral, whether before or after sale hereunder, and all rights, if
any, of marshalling the Collateral and any other security for the
Obligations or otherwise. At any such sale, unless prohibited by
applicable law, the Pledgee on behalf of the Secured Creditors may bid for
and purchase all or any part of the Collateral so sold free from any such
right or equity of redemption. Neither the Pledgee nor any other Secured
Creditor shall be liable for failure to collect or realize upon any or all
of the Collateral or for any delay in so doing nor shall any of them be
under any obligation to take any action whatsoever with regard thereto.
8. REMEDIES, ETC., CUMULATIVE. Each and every right, power and
remedy of the Pledgee provided for in this Agreement or any other Secured Debt
Agreement, or now or hereafter existing at law or in equity or by statute shall
be cumulative and concurrent and shall be in addition to every other such right,
power or remedy. The exercise or beginning of the exercise by the Pledgee or any
other Secured Creditor of any one or more of the rights, powers or remedies
provided for in this Agreement or any other Secured Debt Agreement or now or
hereafter existing at law or in equity or by statute or otherwise shall not
preclude the simultaneous or later exercise by the Pledgee or any other Secured
Creditor of all such other rights, powers or remedies, and no failure or delay
on the part of the Pledgee or any other Secured Creditor to exercise any such
right, power or remedy shall operate as a waiver thereof. No notice to or demand
on any Pledgor in any case shall entitle it to any other or further notice or
demand in similar or other circumstances or constitute a waiver of any of the
rights of the Pledgee or any other Secured Creditor to any other or further
action in any circumstances without notice or demand. The Secured Creditors
agree that this Agreement may be enforced only by the action of the Pledgee
acting upon the instructions of the Required Banks (or, after the date on which
all Credit Document Obligations have been paid in full, the holders of at least
the majority of the outstanding Other Obligations) and that no other
EXHIBIT H
Page 7
Secured Creditor shall have any right individually to seek to enforce or to
enforce this Agreement or to realize upon the security to be granted hereby, it
being understood and agreed that such rights and remedies may be exercised by
the Pledgee or the holders of at least a majority of the outstanding Other
Obligations, as the case may be, for the benefit of the Secured Creditors upon
the terms of this Agreement.
9. APPLICATION OF PROCEEDS. (a) All moneys collected by the Pledgee
upon any sale or other disposition of the Collateral, together with all other
moneys received by the Pledgee hereunder, shall be applied to the payment of the
Obligations in the manner provided in Section 7.4 of the Security Agreement.
(b) It is understood and agreed that the Pledgors shall remain
jointly and severally liable to the extent of any deficiency between the amount
of the proceeds of the Collateral hereunder and the aggregate amount of the
Obligations.
10. PURCHASERS OF COLLATERAL. Upon any sale of the Collateral by the
Pledgee hereunder (whether by virtue of the power of sale herein granted,
pursuant to judicial process or otherwise), the receipt of the Pledgee or the
officer making the sale shall be a sufficient discharge to the purchaser or
purchasers of the Collateral so sold, and such purchaser or purchasers shall not
be obligated to see to the application of any part of the purchase money paid
over to the Pledgee or such officer or be answerable in any way for the
misapplication or nonapplication thereof.
11. INDEMNITY. Each Pledgor jointly and severally agrees (i) to
indemnify and hold harmless the Pledgee in such capacity and each other Secured
Creditor and their respective successors, assigns, employees, agents and
servants (individually an "Indemnitee," and collectively the "Indemnitees") from
and against any and all claims, demands, losses, judgments and liabilities
(including liabilities for penalties) of whatsoever kind or nature, and (ii) to
reimburse each Indemnitee for all costs and expenses, including reasonable
attorneys' fees, in each case growing out of or resulting from this Agreement or
the exercise by any Indemnitee of any right or remedy granted to it hereunder or
under any other Secured Debt Agreement (but excluding any claims, demands,
losses, judgments and liabilities or expenses to the extent incurred by reason
of gross negligence or willful misconduct of such Indemnitee). In no event shall
the Pledgee be liable, in the absence of gross negligence or willful misconduct
on its part, for any matter or thing in connection with this Agreement other
than to account for moneys actually received by it in accordance with the terms
hereof. If and to the extent that the obligations of any Pledgor under this
Section 11 are unenforceable for any reason, such Pledgor hereby agrees to make
the maximum contribution to the payment and satisfaction of such obligations
which is permissible under applicable law.
12. FURTHER ASSURANCES; POWER-OF-ATTORNEY. (a) Each Pledgor agrees
that it will join with the Pledgee in executing and, at such Pledgor's own
expense, file and refile under the Uniform Commercial Code or other applicable
law such financing statements, continuation statements and other documents in
such offices as the Pledgee may deem necessary and wherever required by law in
order to perfect and preserve the Pledgee's security interest in the Collateral
and hereby authorizes the Pledgee to file financing statements and amendments
thereto relative to all or any part of the Collateral without the signature of
such Pledgor where permitted
EXHIBIT H
Page 8
by law, and agrees to do such further acts and things and to execute and deliver
to the Pledgee such additional conveyances, assignments, agreements and
instruments as the Pledgee may reasonably require or deem necessary to carry
into effect the purposes of this Agreement or to further assure and confirm unto
the Pledgee its rights, powers and remedies hereunder.
(b) Each Pledgor hereby appoints the Pledgee such Pledgor's
attorney-in-fact, with full authority in the place and stead of such Pledgor and
in the name of such Pledgor or otherwise, from time to time after the occurrence
and during the continuance of an Event of Default, in the Pledgee's discretion
to take any action and to execute any instrument which the Pledgee may deem
necessary or advisable to accomplish the purposes of this Agreement.
13. THE PLEDGEE AS AGENT. The Pledgee will hold in accordance with
this Agreement all items of the Collateral at any time received under this
Agreement. It is expressly understood and agreed by each Secured Creditor that
by accepting the benefits of this Agreement each such Secured Creditor
acknowledges and agrees that the obligations of the Pledgee as holder of the
Collateral and interests therein and with respect to the disposition thereof,
and otherwise under this Agreement, are only those expressly set forth in this
Agreement. The Pledgee shall act hereunder on the terms and conditions set forth
herein and in Section 12 of the Credit Agreement.
14. TRANSFER BY THE PLEDGORS. No Pledgor will sell or otherwise
dispose of, grant any option with respect to, or mortgage, pledge or otherwise
encumber any of the Collateral or any interest therein (except as may be
permitted in accordance with the terms of the Credit Agreement).
15. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE
PLEDGORS. Each Pledgor represents, warrants and covenants that (i) it is the
legal, record and beneficial owner of, and has good and marketable title to, all
Pledged Securities pledged by it hereunder, subject to no Lien (except the Lien
created by this Agreement and other Permitted Liens); (ii) it has full corporate
power, authority and legal right to pledge all the Pledged Securities pledged by
it pursuant to this Agreement; (iii) this Agreement has been duly authorized,
executed and delivered by such Pledgor and constitutes a legal, valid and
binding obligation of such Pledgor enforceable in accordance with its terms,
except to the extent that the enforceability thereof may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws generally affecting creditors' rights and by equitable principles
(regardless of whether enforcement is sought in equity or at law); (iv) no
consent of any other party (including, without limitation, any stockholder or
creditor of such Pledgor or any of its Subsidiaries) and no consent, license,
permit, approval or authorization of, exemption by, notice or report to, or
registration, filing or declaration with (except as have been obtained or made),
any governmental authority is required to be obtained by such Pledgor in
connection with the execution, delivery or performance of this Agreement, the
validity or enforceability of this Agreement, the perfection or enforceability
of the Pledgee's security interest in the Collateral or except for compliance
with or as may be required by applicable securities laws, the exercise by the
Pledgee of any of its rights or remedies provided herein; (v) the execution,
delivery and performance of this Agreement by such Pledgor will not violate any
provision of any applicable law or regulation or of any order, judgment, writ,
award or decree of any court, arbitrator or governmental authority, domestic or
foreign, applicable to such Pledgor, or of the certificate of incorporation or
by-laws (or equivalent organizational documents) of such Pledgor or
EXHIBIT H
Page 9
of any securities issued by such Pledgor or any of its Subsidiaries, or of any
mortgage, indenture, lease, deed of trust, loan agreement, credit agreement or
other material agreement, contract, or instrument to which such Pledgor or any
of its Subsidiaries is a party or which purports to be binding upon such Pledgor
or any of its Subsidiaries or upon any of their respective assets and will not
result in the creation or imposition of (or the obligation to create or impose)
any lien or encumbrance on any of the assets of such Pledgor or any of its
Subsidiaries except as contemplated by this Agreement; (vi) all the shares of
Stock have been duly and validly issued, are fully paid and non-assessable and
are subject to no options to purchase or similar rights; (vii) each of the
Pledged Notes constitutes, or when executed by the obligor thereof will
constitute, the legal, valid and binding obligation of such obligor, enforceable
in accordance with its terms, except to the extent that the enforceability
thereof may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws generally affecting creditors' rights and by
equitable principles (regardless of whether enforcement is sought in equity or
at law); and (viii) the pledge, assignment and delivery to the Pledgee of the
Securities (other than uncertificated securities) pursuant to this Agreement
creates a valid and perfected first priority Lien in the Securities, and the
proceeds thereof, subject to no other Lien or to any agreement purporting to
grant to any third party a Lien on the property or assets of the Pledgor which
would include the Securities. Each Pledgor covenants and agrees that it will
defend the Pledgee's right, title and security interest in and to the Securities
and the proceeds thereof against the claims and demands of all persons
whomsoever in accordance with the Credit Documents; and such Pledgor covenants
and agrees that it will have like title to and right to pledge any other
property at any time hereafter pledged to the Pledgee as Collateral hereunder
and will likewise defend the right thereto and security interest therein of the
Pledgee and the Secured Creditors.
16. PLEDGORS' OBLIGATIONS ABSOLUTE, ETC. The obligations of each
Pledgor under this Agreement shall be absolute and unconditional and shall
remain in full force and effect without regard to, and shall not be released,
suspended, discharged, terminated or otherwise affected by, any circumstance or
occurrence whatsoever, including, without limitation: (i) any renewal,
extension, amendment or modification of or addition or supplement to or deletion
from any Secured Debt Agreement or any other instrument or agreement referred to
therein, or any assignment or transfer of any thereof; (ii) any waiver, consent,
extension, indulgence or other action or inaction under or in respect of any
such agreement or instrument including, without limitation, this Agreement;
(iii) any furnishing of any additional security to the Pledgee or its assignee
or any acceptance thereof or any release of any security by the Pledgee or its
assignee; (iv) any limitation on any party's liability or obligations under any
such instrument or agreement or any invalidity or unenforceability, in whole or
in part, of any such instrument or agreement or any term thereof; or (v) any
bankruptcy, insolvency, reorganization, composition, adjustment, dissolution,
liquidation or other like proceeding relating to any Pledgor or any Subsidiary
of any Pledgor, or any action taken with respect to this Agreement by any
trustee or receiver, or by any court, in any such proceeding, whether or not
such Pledgor shall have notice or knowledge of any of the foregoing.
17. REGISTRATION, ETC. (a) If there shall have occurred and be
continuing an Event of Default then, and in every such case, upon receipt by any
Pledgor from the Pledgee of a written request or requests that such Pledgor
cause any registration, qualification or compliance under any Federal or state
securities law or laws to be effected with respect to all or any part of the
Pledged Stock, such Pledgor as soon as practicable and at its expense will cause
such registration
EXHIBIT H
Page 10
to be effected (and be kept effective) and will cause such qualification and
compliance to be declared effected (and be kept effective) as may be so
requested and as would permit or facilitate the sale and distribution of such
Pledged Stock, including, without limitation, registration under the Securities
Act of 1933, as then in effect (or any similar statute then in effect),
appropriate qualifications under applicable blue sky or other state securities
laws and appropriate compliance with any other government requirements,
provided, that the Pledgee shall furnish to such Pledgor such information
regarding the Pledgee as such Pledgor may reasonably request in writing and as
shall be required in connection with any such registration, qualification or
compliance. Such Pledgor will cause the Pledgee to be kept advised in writing as
to the progress of each such registration, qualification or compliance and as to
the completion thereof, will furnish to the Pledgee such number of prospectuses,
offering circulars or other documents incident thereto as the Pledgee from time
to time may reasonably request, and will indemnify the Pledgee, each other
Secured Creditor and all others participating in the distribution of such
Pledged Stock against all claims, losses, damages and liabilities caused by any
untrue statement (or alleged untrue statement) of a material fact contained
therein (or in any related registration statement, notification or the like) or
by any omission (or alleged omission) to state therein (or in any related
registration statement, notification or the like) a material fact required to be
stated therein or necessary to make the statements therein not misleading,
except insofar as the same may have been caused by an untrue statement or
omission based upon information furnished in writing to such Pledgor by the
Pledgee or such other Secured Creditor expressly for use therein.
(b) If at any time when the Pledgee shall determine to exercise its
right to sell all or any part of the Pledged Securities pursuant to Section 7
hereof, and such Pledged Securities or the part thereof to be sold shall not,
for any reason whatsoever, be effectively registered under the Securities Act of
1933, as then in effect, the Pledgee may, in its sole and absolute discretion,
sell such Pledged Securities or part thereof by private sale in such manner and
under such circumstances as the Pledgee may deem necessary or advisable in order
that such sale may legally be effected without such registration. Without
limiting the generality of the foregoing, in any such event the Pledgee, in its
sole and absolute discretion (i) may proceed to make such private sale
notwithstanding that a registration statement for the purpose of registering
such Pledged Securities or part thereof shall have been filed under such
Securities Act, (ii) may approach and negotiate with a single possible purchaser
to effect such sale, and (iii) may restrict such sale to a purchaser who will
represent and agree that such purchaser is purchasing for its own account, for
investment, and not with a view to the distribution or sale of such Pledged
Securities or part thereof. In the event of any such sale, the Pledgee shall
incur no responsibility or liability for selling all or any part of the Pledged
Securities at a price which the Pledgee, in its sole and absolute discretion, in
good faith deems reasonable under the circumstances, notwithstanding the
possibility that a substantially higher price might be realized if the sale were
deferred until after registration as aforesaid.
18. TERMINATION; RELEASE. (a) After the Termination Date (as defined
below), this Agreement and the security interest created hereby shall terminate
(provided that all indemnities set forth herein including, without limitation,
in Section 11 hereof shall survive any such termination), and the Pledgee, at
the request and expense of any Pledgor, will execute and deliver to such Pledgor
a proper instrument or instruments acknowledging the satisfaction and
termination of this Agreement, and will duly assign, transfer and deliver to
such Pledgor (without recourse and without any representation or warranty) such
of the Collateral as has not theretofore been sold or
EXHIBIT H
Page 11
otherwise applied or released pursuant to this Agreement, together with any
moneys at the time held by the Pledgee or any of its sub-agents hereunder. As
used in this Agreement, "Termination Date" shall mean the date upon which the
Total Commitments and all Interest Rate Protection Agreements or Other Hedging
Agreements have been terminated, no Note under the Credit Agreement is
outstanding (and all Loans have been repaid in full), all Letters of Credit have
been terminated and all Obligations then owing have been paid in full.
(b) In the event that any part of the Collateral is sold (except to
Holdings or any of its Subsidiaries) in connection with a sale permitted by
Section 9.02 of the Credit Agreement or otherwise released pursuant to the
Credit Agreement or at the direction of the Required Banks (or all Banks if
required by Section 13.12 of the Credit Agreement) and the proceeds of such sale
or sales or from such release are applied in accordance with the provisions of
Section 4.02 of the Credit Agreement, to the extent required to be so applied,
the Pledgee, at the request and expense of any Pledgor, will duly assign,
transfer and deliver to such Pledgor (without recourse and without any
representation or warranty) such of the Collateral (and releases therefor) as is
then being (or has been) so sold or released and has not theretofore been
released pursuant to this Agreement.
(c) At any time that a Pledgor desires that the Pledgee assign,
transfer and deliver Collateral (and releases therefor) as provided in Section
18(a) or (b) hereof, it shall deliver to the Pledgee a certificate signed by an
executive officer of such Pledgor stating that the release of the respective
Collateral is permitted pursuant to such Section 18(a) or (b).
(d) The Pledgee shall have no liability whatsoever to any other
Secured Creditor as the result of any release of Collateral by it in accordance
with this Section 18.
19. NOTICES, ETC. All notices and communications hereunder shall be
sent or delivered by mail, telex, telecopy or overnight courier service and all
such notices and communications shall, when mailed, telexed, telecopied or sent
by overnight courier, be effective when deposited in the mails or delivered to
the overnight courier, prepaid and properly addressed for delivery on such or
the next Business Day, or sent by telex or telecopier, except that notices and
communications to the Pledgee shall not be effective until received by the
Pledgee. All notices and other communications shall be in writing and addressed
as follows:
(a) if to any Pledgor, at the address set forth opposite its
signature below;
(b) if to the Pledgee, at:
Bankers Trust Company
130 Liberty Street
New York, New York 10006
Telephone No.: (212) 250-4886
Telecopier No.: (212) 250-7218
Attention: Anthony Logrippo
EXHIBIT H
Page 12
(c) if to any Bank Creditor, either (x) to the Administrative Agent,
at the address of the Administrative Agent specified in the Credit
Agreement or (y) at such address as such Bank Creditor shall have
specified in the Credit Agreement;
(d) if to any Other Creditor, at such address as such Other Creditor
shall have specified in writing to the Pledgors and the Pledgee;
or at such other address as shall have been furnished in writing by any Person
described above to the party required to give notice hereunder.
20. WAIVER; AMENDMENT. None of the terms and conditions of this
Agreement may be changed, waived, modified or varied in any manner whatsoever
unless in writing duly signed by each Pledgor directly affected thereby and the
Pledgee (with the written consent of either (x) the Required Banks (or all of
the Banks, to the extent required by Section 13.12 of the Credit Agreement) at
all times prior to the time on which all Credit Document Obligations have been
paid in full or (y) the holders of at least a majority of the outstanding Other
Obligations at all times after the time on which all Credit Document Obligations
have been paid in full); provided, that any change, waiver, modification or
variance affecting the rights and benefits of a single Class (as defined below)
of Secured Creditors (and not all Secured Creditors in a like or similar manner)
shall also require the written consent of the Requisite Creditors (as defined
below) of such affected Class. For the purpose of this Agreement, the term
"Class" shall mean each class of Secured Creditors, i.e., whether (i) the Bank
Creditors as holders of the Credit Document Obligations or (ii) the Other
Creditors as the holders of the Other Obligations. For the purpose of this
Agreement, the term "Requisite Creditors" of any Class shall mean each of (i)
with respect to the Credit Document Obligations, the Required Banks and (ii)
with respect to the Other Obligations, the holders of 51% of all obligations
outstanding from time to time under the Interest Rate Protection Agreements or
Other Hedging Agreements.
21. MISCELLANEOUS. This Agreement shall be binding upon the parties
hereto and their respective successors and assigns and shall inure to the
benefit of and be enforceable by each of the parties hereto and its successors
and assigns. THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH
AND GOVERNED BY THE LAW OF THE STATE OF NEW YORK. The headings in this Agreement
are for purposes of reference only and shall not limit or define the meaning
hereof. This Agreement may be executed in any number of counterparts, each of
which shall be an original, but all of which shall constitute one instrument. In
the event that any provision of this Agreement shall prove to be invalid or
unenforceable, such provision shall be deemed to be severable from the other
provisions of this Agreement which shall remain binding on all parties hereto.
22. RECOURSE. This Agreement is made with full recourse to the
Pledgors and pursuant to and upon all the representations, warranties, covenants
and agreements on the part of the Pledgors contained herein and in the other
Secured Debt Agreements and otherwise in writing in connection herewith or
therewith.
23. ADDITIONAL PLEDGORS. It is understood and agreed that no
Domestic Subsidiaries of the Borrower exist on the date hereof. Any such
Subsidiary established
EXHIBIT H
Page 13
or created after the date hereof and that is required to execute a counterpart
of this Agreement pursuant to the Credit Agreement shall automatically become a
Pledgor hereunder by executing a counterpart hereof and delivering the same to
the Pledgee.
* * *
EXHIBIT H
Page 14
IN WITNESS WHEREOF, each Pledgor and the Pledgee have caused this
Agreement to be executed by their duly elected officers duly authorized as of
the date first above written.
Addresses:
333 Western Avenue FSC SEMICONDUCTOR CORPORATION,
South Portland, ME 04106 as a Pledgor
Telephone No.: (207) 775-8755
Telecopier No.: (207) 761-6020
Attention: Dan Boxer By
---------------------------------
Title:
333 Western Avenue FAIRCHILD SEMICONDUCTOR
South Portland, ME 04106 CORPORATION,
Telephone No.: (207) 775-8755 as a Pledgor
Telecopier No.: (207) 761-6020
Attention: Dan Boxer
By
---------------------------------
Title:
130 Liberty Street BANKERS TRUST COMPANY,
New York, New York 10006 as Pledgee
Telephone No.: (212) 250-4886
Facsimile No.: (212) 250-7218
Attention: Anthony Logrippo By
---------------------------------
Title:
ANNEX A
to
Pledge Agreement
LIST OF STOCK
I. FSC Semiconductor Corporation
Percentage of
Outstanding Shares
Name of Issuing Number of of
Corporation Type of Shares Shares Capital Stock
- ----------- -------------- ------ -------------
Fairchild Semiconductor Common par value 100 100%
Corporation $.01 per share
II. Fairchild Semiconductor Corporation
Percentage of
Outstanding Shares
Name of Issuing Number of of
Corporation Type of Shares Shares Capital Stock
- ----------- -------------- ------ -------------
ANNEX B
to
Pledge Agreement
LIST OF NOTES
I. FSC Semiconductor Corporation
Principal Amount Maturity Date
Obligor (if any) (if any)
- ------- -------- --------
II. Fairchild Semiconductor Corporation
Principal Amount Maturity Date
Obligor (if any) (if any)
- ------- -------- --------
EXHIBIT I
================================================================================
SECURITY AGREEMENT
among
FSC SEMICONDUCTOR CORPORATION,
FAIRCHILD SEMICONDUCTOR CORPORATION,
CERTAIN SUBSIDIARIES OF
FAIRCHILD SEMICONDUCTOR CORPORATION,
and
BANKERS TRUST COMPANY,
as Collateral Agent
================================================================================
Dated as of March 11, 1997
================================================================================
TABLE OF CONTENTS
ARTICLE I SECURITY INTERESTS...................................... 2
1.1. Grant of Security Interests................................. 2
1.2. Power of Attorney........................................... 3
ARTICLE II GENERAL REPRESENTATIONS, WARRANTIES AND
COVENANTS............................................. 3
2.1. Necessary Filings........................................... 3
2.2. No Liens.................................................... 4
2.3. Other Financing Statements.................................. 4
2.4. Chief Executive Office; Records............................. 4
2.5. Location of Inventory and Equipment......................... 5
2.6. Recourse.................................................... 5
2.7. Trade Names; Change of Name................................. 6
ARTICLE III SPECIAL PROVISIONS CONCERNING RECEIVABLES;
CONTRACT RIGHTS; INSTRUMENTS.......................... 6
3.1. Additional Representations and Warranties................... 6
3.2. Maintenance of Records...................................... 7
3.3. Direction to Account Debtors; Contracting Parties; etc...... 7
3.4. Modification of Terms; etc.................................. 8
3.5. Collection.................................................. 8
3.6. Instruments................................................. 8
3.7. Assignors Remain Liable Under Receivables................... 9
3.8. Assignors Remain Liable Under Contracts..................... 9
3.9. Further Actions............................................. 9
ARTICLE IV SPECIAL PROVISIONS CONCERNING TRADEMARKS................ 10
4.1. Additional Representations and Warranties................... 10
4.2. Licenses and Assignments.................................... 10
4.3. Infringements............................................... 10
4.4. Preservation of Marks....................................... 11
4.5. Maintenance of Registration................................. 11
4.6. Future Registered Marks..................................... 11
4.7. Remedies.................................................... 11
ARTICLE V SPECIAL PROVISIONS CONCERNING PATENTS,
COPYRIGHTS AND TRADE SECRETS.......................... 12
5.1. Additional Representations and Warranties................... 12
5.2. Licenses and Assignments.................................... 12
5.3. Infringements............................................... 12
5.4. Maintenance of Patents or Copyrights........................ 13
5.5. Prosecution of Patent or Copyright Application.............. 13
(i)
5.6. Other Patents or Copyrights................................. 13
5.7. Remedies.................................................... 13
ARTICLE VI PROVISIONS CONCERNING ALL COLLATERAL.................... 14
6.1. Protection of Collateral Agent's Security................... 14
6.2. Warehouse Receipts Non-negotiable........................... 14
6.3. Further Actions............................................. 14
6.4. Financing Statements........................................ 15
ARTICLE VII REMEDIES UPON OCCURRENCE OF EVENT OF DEFAULT............ 15
7.1. Remedies; Obtaining the Collateral Upon Default............. 15
7.2. Remedies; Disposition of the Collateral..................... 17
7.3. Waiver of Claims............................................ 17
7.4. Application of Proceeds..................................... 18
7.5. Remedies Cumulative......................................... 21
7.6. Discontinuance of Proceedings............................... 21
ARTICLE VIII INDEMNITY............................................... 22
8.1. Indemnity................................................... 22
8.2. Indemnity Obligations Secured by Collateral; Survival....... 23
ARTICLE IX DEFINITIONS............................................. 23
ARTICLE X MISCELLANEOUS........................................... 28
10.1. Notices.................................................... 28
10.2. Waiver; Amendment.......................................... 29
10.3. Obligations Absolute....................................... 29
10.4. Successors and Assigns..................................... 30
10.5. Headings Descriptive....................................... 30
10.6. Governing Law.............................................. 30
10.7. Assignor's Duties.......................................... 30
10.8. Termination; Release....................................... 31
10.9. Counterparts............................................... 32
10.10. Severability.............................................. 32
10.11. The Collateral Agent...................................... 32
10.12. Benefit of Agreement...................................... 32
10.13. Additional Assignors...................................... 32
ANNEX A Schedule of Chief Executive Offices and
Other Record Locations
ANNEX B Schedule of Inventory and Equipment Locations
ANNEX C Schedule of Trade and Fictitious Names
ANNEX D Schedule of Marks
ANNEX E Schedule of Patents and Applications
ANNEX F Schedule of Copyrights and Applications
(ii)
ANNEX G Assignment of Security Interest in United
States Trademarks and Patents
ANNEX H Assignment of Security Interest in
United States Copyrights
(iii)
EXHIBIT I
SECURITY AGREEMENT
SECURITY AGREEMENT, dated as of March 11, 1997, among each of the
undersigned (each an "Assignor" and, together with any other entity that becomes
a party hereto pursuant to Section 10.13 hereof, the "Assignors") and Bankers
Trust Company, as Collateral Agent (the "Collateral Agent"), for the benefit of
the Secured Creditors (as defined below). Except as otherwise defined herein,
capitalized terms used herein and defined in the Credit Agreement (as defined
below) shall be used herein as therein defined.
W I T N E S S E T H :
WHEREAS, FSC Semiconductor Corporation ("Holdings"), Fairchild
Semiconductor Corporation (the "Borrower"), various lenders from time to time
party thereto (the "Banks"), Bankers Trust Company, as Administrative Agent
(together with any successor administrative agent, the "Administrative Agent"),
Credit Suisse First Boston, as Syndication Agent (the "Syndication Agent") and
Canadian Imperial Bank of Commerce, as Documentation Agent (the "Documentation
Agent") have entered into a Credit Agreement, dated as of the date hereof (the
"Credit Agreement"), providing for the making of Loans and the issuance of, and
participation in, Letters of Credit, as contemplated therein (as used herein,
the term "Credit Agreement" means the Credit Agreement described above in this
paragraph as the same may be amended, modified, extended, renewed, replaced,
restated or supplemented from time to time, and including any agreement
extending the maturity of, or restructuring the Indebtedness under such
agreement or any successor agreement) (the Banks, the Administrative Agent, the
Syndication Agent, the Documentation Agent and the Collateral Agent are herein
called the "Bank Creditors");
WHEREAS, the Borrower may at any time and from time to time enter
into one or more Interest Rate Protection Agreements or Other Hedging Agreements
with one or more Banks or any affiliate thereof (each such Bank or affiliate,
even if the respective Bank subsequently ceases to be a Bank under the Credit
Agreement for any reason, together with such Bank's or affiliate's successors
and assigns, if any, collectively, the "Other Creditors," and together with the
Bank Creditors, the "Secured Creditors");
WHEREAS, pursuant to Section 14 of the Credit Agreement, Holdings
has guaranteed to the Secured Creditors the payment when due of all Guaranteed
Obligations as described therein;
WHEREAS, pursuant to the Subsidiaries Guaranty, each Subsidiary
Guarantor has jointly and severally guaranteed to the Secured Creditors the
payment when due of all Guaranteed Obligations as described therein;
EXHIBIT I
Page 3
WHEREAS, it is a condition precedent to the making of Loans and the
issuance of Letters of Credit under the Credit Agreement that each Assignor
shall have executed and delivered this Agreement; and
WHEREAS, each Assignor will obtain benefits from the incurrence of
Loans and the issuance of Letters of Credit under the Credit Agreement and the
entering into of Interest Rate Protection Agreements or Other Hedging Agreements
and, accordingly, each Assignor desires to execute this Agreement to satisfy the
conditions described in the preceding paragraph;
NOW, THEREFORE, in consideration of the foregoing and other benefits
accruing to each Assignor, the receipt and sufficiency of which are hereby
acknowledged, each Assignor hereby makes the following representations and
warranties to the Collateral Agent for the benefit of the Secured Creditors and
hereby covenants and agrees with the Collateral Agent for the benefit of the
Secured Creditors as follows:
ARTICLE 31.
SECURITY INTERESTS
A. Grant of Security Interests. 1. As security for the prompt and
complete payment and performance when due of all of its Obligations, each
Assignor does hereby assign and transfer unto the Collateral Agent, and does
hereby pledge and grant to the Collateral Agent for the benefit of the Secured
Creditors, a continuing security interest of first priority (subject only to
Permitted Liens existing on the date hereof or otherwise having priority under
applicable law) in all of the right, title and interest of such Assignor in, to
and under all of the following, whether now existing or hereafter from time to
time acquired: (i) each and every Receivable, (ii) all Contracts, together with
all Contract Rights arising thereunder, (iii) all Inventory, (iv) all Equipment,
(v) all Marks, together with the registrations and right to all renewals
thereof, and the goodwill of the business of such Assignor symbolized by the
Marks, (vi) all Patents and Copyrights, and all reissues, renewals or extensions
thereof, (vii) all computer programs of such Assignor and all intellectual
property rights therein and all other proprietary information of such Assignor,
including, but not limited to, trade secrets, (viii) all other Goods, General
Intangibles, Chattel Paper, Documents, Instruments and other assets of such
Assignor, (ix) the Cash Collateral Account and all moneys, securities and
Instruments deposited or required to be deposited in such Cash Collateral
Account and (x) all Proceeds and products of any and all of the foregoing (all
of the above, collectively, the "Collateral").
2. The security interest of the Collateral Agent under this
Agreement extends to all Collateral of the kind which is the subject of this
Agreement which any Assignor may acquire at any time during the continuation of
this Agreement.
EXHIBIT I
Page 4
B. Power of Attorney. Each Assignor hereby constitutes and appoints
the Collateral Agent its true and lawful attorney, irrevocably, with full power
after the occurrence of and during the continuance of an Event of Default (in
the name of such Assignor or otherwise) to act, require, demand, receive,
compound and give acquittance for any and all moneys and claims for moneys due
or to become due to such Assignor under or arising out of the Collateral, to
endorse any checks or other instruments or orders in connection therewith and to
file any claims or take any action or institute any proceedings which the
Collateral Agent may deem to be necessary or advisable to protect the interests
of the Secured Creditors, which appointment as attorney is coupled with an
interest.
ARTICLE 32.
GENERAL REPRESENTATIONS, WARRANTIES AND COVENANTS
Each Assignor represents, warrants and covenants, which
representations, warranties and covenants shall survive execution and delivery
of this Agreement, as follows:
A. Necessary Filings. All filings, registrations and recordings in
any jurisdiction in the U.S. (other than filings or recordings in respect of
vehicles for which a filing under the UCC will fail to perfect a security
interest) necessary or appropriate to create, preserve and perfect the security
interest granted by such Assignor to the Collateral Agent hereby in respect of
the Collateral have been accomplished or will be accomplished within 10 Business
Days from the date hereof and upon such filings, registrations or recordations,
the security interest granted to the Collateral Agent pursuant to this Agreement
in and to the Collateral creates a perfected security interest therein prior to
the rights of all other Persons therein (subject only to Permitted Liens
existing on the date hereof or otherwise having priority under applicable law)
and is entitled to all the rights, priorities and benefits afforded by the
Uniform Commercial Code or other relevant law as enacted in any relevant
jurisdiction in the United States to perfected security interests, in each case
to the extent that the Collateral consists of the type of property in which a
security interest may be perfected by filing a financing statement under the
Uniform Commercial Code as enacted in any relevant jurisdiction in the United
States or in the United States Patent and Trademark Office or the United States
Copyright Office.
B. No Liens. Such Assignor is, and as to Collateral acquired by it
from time to time after the date hereof such Assignor will be, the owner of, or
has rights in, all Collateral free from any Lien, security interest, encumbrance
or other right, title or interest of any other Person (other than Permitted
Liens), and such Assignor shall defend the Collateral to the extent of its
rights therein against all claims and demands of all Persons at any time
claiming the same or any interest therein adverse to the Collateral Agent.
C. Other Financing Statements. As of the date hereof, there is no
financing statement (or similar statement or instrument of registration under
the law of any jurisdiction) covering or purporting to cover any interest of any
kind in the Collateral (other than in respect of Permitted Liens), and so long
as the Total Commitment has not been terminated or any Letter of
EXHIBIT I
Page 5
Credit or Note remains outstanding or any of the Obligations remain unpaid or
any Interest Rate Protection Agreement or Other Hedging Agreement remains in
effect or any Obligations are owed with respect thereto, such Assignor will not
execute or authorize to be filed in any public office any financing statement
(or similar statement or instrument of registration under the law of any
jurisdiction) or statements relating to the Collateral, except financing
statements filed or to be filed in respect of and covering the security
interests granted hereby by such Assignor or as permitted by the Credit
Agreement.
D. Chief Executive Office; Records. The chief executive office of
such Assignor is located, as of the date hereof, at the address or addresses
indicated on Annex A hereto for such Assignor. Such Assignor will not move its
chief executive office except to such new location as such Assignor may
establish in accordance with the last sentence of this Section 2.4. The
originals of all documents evidencing all Receivables and Contract Rights and
Trade Secret Rights of such Assignor and the only original books of account and
records of such Assignor relating thereto are, and will continue to be, kept at
such chief executive office, at one or more of the other record locations set
forth on Annex A hereto or at such new locations as such Assignor may establish
in accordance with the last sentence of this Section 2.4. All Receivables and
Contract Rights of such Assignor are, and will continue to be, maintained at,
and controlled and directed (including, without limitation, for general
accounting purposes) from, the office locations described above or such new
location established in accordance with the last sentence of this Section 2.4.
No Assignor shall establish new locations for such offices until (i) it shall
have given to the Collateral Agent not less than 15 days' prior written notice
of its intention to do so, clearly describing such new location and providing
such other information in connection therewith as the Collateral Agent may
reasonably request, (ii) with respect to such new location, it shall have taken
all action, reasonably satisfactory to the Collateral Agent, to maintain the
security interest of the Collateral Agent in the Collateral intended to be
granted hereby at all times fully perfected and in full force and effect and
(iii) the Collateral Agent shall have received evidence that all other actions
(including, without limitation, the payment of all filing fees and taxes, if
any, payable in connection with such filings) have been taken, in order to
perfect (and maintain the perfection and priority of) the security interest
granted hereby.
E. Location of Inventory and Equipment. All Inventory and Equipment
held on the date hereof by each Assignor is located at one of the locations
shown on Annex B hereto for such Assignor. Each Assignor agrees that all
Inventory and Equipment now held or subsequently acquired by it shall be kept at
(or shall be in transport to) any one of the locations shown on Annex B hereto,
or such new location as such Assignor may establish in accordance with the last
sentence of this Section 2.5. Any Assignor may establish a new location for
Inventory and Equipment if (i) it shall have given to the Collateral Agent not
less than 15 days' prior written notice of its intention so to do, clearly
describing such new location and providing such other information in connection
therewith as the Collateral Agent may request, (ii) with respect to such new
location, it shall have taken all action reasonably satisfactory to the
Collateral Agent to maintain the security interest of the Collateral Agent in
the Collateral intended to be granted hereby at all times fully perfected and in
full force and effect (provided that to the extent that inventory (including
work-in-process) is temporarily in transit or held pending the completion or
sale thereof at any new location, such Assignor shall not be required to take
any action otherwise required by this clause (ii)) and (iii) the Collateral
Agent shall have received evidence that all other actions
EXHIBIT I
Page 6
(including, without limitation, the payment of all filing fees and taxes, if
any, payable in connection with such filings) have been taken, in order to
perfect (and maintain the perfection and priority of) the security interest
granted hereby.
F. Recourse. This Agreement is made with full recourse to each
Assignor and pursuant to and upon all the warranties, representations, covenants
and agreements on the part of such Assignor contained herein, in the other
Credit Documents, in the Interest Rate Protection Agreements or Other Hedging
Agreements and otherwise in writing in connection herewith or therewith.
G. Trade Names; Change of Name. No Assignor has or operates in any
jurisdiction under, or in the preceding 12 months has had or has operated in any
jurisdiction under, any trade names, fictitious names or other names except its
legal name and such other trade or fictitious names as are listed on Annex C
hereto for such Assignor. No Assignor shall change its legal name or assume or
operate in any jurisdiction under any trade, fictitious or other name except
those names listed on Annex C hereto for such Assignor and new names established
in accordance with the last sentence of this Section 2.7. No Assignor shall
assume or operate in any jurisdiction under any new trade, fictitious or other
name until (i) it shall have given to the Collateral Agent not less than 15
days' prior written notice of its intention so to do, clearly describing such
new name and the jurisdictions in which such new name shall be used and
providing such other information in connection therewith as the Collateral Agent
may request, (ii) with respect to such new name, it shall have taken all action
to maintain the security interest of the Collateral Agent in the Collateral
intended to be granted hereby at all times fully perfected and in full force and
effect and (iii) the Collateral Agent shall have received evidence that all
other actions (including, without limitation, the payment of all filing fees and
taxes, if any, payable in connection with such filings) have been taken, in
order to perfect (and maintain the perfection and priority of) the security
interest granted hereby.
ARTICLE 33.
SPECIAL PROVISIONS CONCERNING
RECEIVABLES; CONTRACT RIGHTS; INSTRUMENTS
A. Additional Representations and Warranties. As of the time when
each of its Receivables arises, each Assignor shall be deemed to have
represented and warranted that each such Receivable, and all records, papers and
documents delivered to the Collateral Agent relating thereto (if any) are what
they purport to be, and that all papers and documents (if any) relating thereto
(i) will represent the genuine, legal, valid and binding obligation of the
account debtor evidencing indebtedness unpaid and owed by the respective account
debtor arising out of the performance of labor or services or the sale or lease
and delivery of the merchandise listed therein, or both, (ii) will be the only
original writings evidencing and embodying such obligation of the account debtor
named therein (other than copies created for general accounting purposes), (iii)
will evidence true and valid obligations, and, to such Assignor's knowledge,
enforceable in accordance with their respective terms, except to the extent that
the enforceability thereof may be limited by applicable bankruptcy,
EXHIBIT I
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insolvency, reorganization, moratorium or other similar laws generally affecting
creditors' rights and by equitable principles (regardless of whether enforcement
is sought in equity or at law) and (iv) will be in compliance and will conform
in all material respects with all applicable federal, state and local laws and
applicable laws of any relevant foreign jurisdiction.
B. Maintenance of Records. Each Assignor will keep and maintain at
its own cost and expense accurate and complete records of its Receivables and
Contracts, including, but not limited to, the originals of all documentation
(including each Contract) with respect thereto, records of all payments
received, all credits granted thereon, all merchandise returned and all other
dealings therewith, and such Assignor will make the same available to the
Collateral Agent for inspection, on such Assignor's premises and at such
Assignor's own cost and expense, from time to time as the Collateral Agent may
reasonably request. Upon the occurrence and during the continuance of an Event
of Default, at the request of the Collateral Agent, such Assignor shall, at its
own cost and expense, deliver all tangible evidence of its Receivables and
Contract Rights (including, without limitation, all documents evidencing the
Receivables and all Contracts) and such books and records to the Collateral
Agent or to its representatives (copies of which evidence and books and records
may be retained by such Assignor). Upon the occurrence and during the
continuance of an Event of Default, if the Collateral Agent so directs, such
Assignor shall legend, in form and manner satisfactory to the Collateral Agent,
its Receivables and the Contracts, as well as books, records and documents (if
any) of such Assignor evidencing or pertaining to such Receivables and Contracts
with an appropriate reference to the fact that such Receivables and Contracts
have been assigned to the Collateral Agent and that the Collateral Agent has a
security interest therein.
C. Direction to Account Debtors; Contracting Parties; etc. Upon the
occurrence and during the continuance of an Event of Default, if the Collateral
Agent so directs any Assignor, such Assignor agrees (x) to cause all payments on
account of the Receivables and Contracts to be made directly to the Cash
Collateral Account, (y) that the Collateral Agent may, at its option, directly
notify the obligors with respect to any Receivables and/or under any Contracts
to make payments with respect thereto as provided in the preceding clause (x)
and (z) that the Collateral Agent may enforce collection of any such Receivables
and Contracts and may adjust, settle or compromise the amount of payment
thereof, in the same manner and to the same extent as such Assignor. Without
notice to or assent by any Assignor, the Collateral Agent may apply any or all
amounts then in, or thereafter deposited in, the Cash Collateral Account in the
manner provided in Section 7.4 of this Agreement. The costs and expenses
(including attorneys' fees) of collection, whether incurred by an Assignor or
the Collateral Agent, shall be borne by the relevant Assignor.
D. Modification of Terms; etc. Except in the ordinary course of
business and except as may be permitted by and in accordance with the provisions
of the Credit Agreement, no Assignor shall rescind or cancel any indebtedness
evidenced by any Receivable or under any Contract, or modify any term thereof or
make any adjustment with respect thereto, or extend or renew the same, or
compromise or settle any dispute, claim, suit or legal proceeding relating
thereto, or sell any Receivable or Contract, or interest therein, without the
prior written consent of the Collateral Agent. Each Assignor will duly fulfill
all obligations on its part to be fulfilled under or in connection with the
Receivables and Contracts and will do nothing to impair the rights of the
Collateral Agent in the Receivables or Contracts.
EXHIBIT I
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E. Collection. Each Assignor shall cause to be collected from the
account debtor named in each of its Receivables or obligor under any Contract,
as and when due (including, without limitation, amounts which are delinquent,
such amounts to be collected in accordance with generally accepted lawful
collection procedures) any and all amounts owing under or on account of such
Receivable or Contract, and apply promptly upon receipt thereof all such amounts
as are so collected to the outstanding balance of such Receivable or under such
Contract, except that, prior to the occurrence of an Event of Default, any
Assignor may allow in the ordinary course of business as adjustments to amounts
owing under its Receivables and Contracts (i) an extension or renewal of the
time or times of payment, or settlement for less than the total unpaid balance,
which such Assignor finds appropriate in accordance with reasonable business
judgment and (ii) a refund or credit due as a result of returned or damaged
merchandise or improperly performed services or for other reasons which such
Assignor finds appropriate in accordance with reasonable business judgment. The
reasonable costs and expenses (including, without limitation, attorneys' fees)
of collection, whether incurred by an Assignor or the Collateral Agent, shall be
borne by the relevant Assignor.
F. Instruments. If any Assignor owns or acquires any Instrument,
such Assignor will within 10 Business Days notify the Collateral Agent thereof,
and upon request by the Collateral Agent will promptly deliver such Instrument
(other than checks payable to any Assignor and processed in the ordinary course
of business) to the Collateral Agent appropriately endorsed to the order of the
Collateral Agent as further security hereunder.
G. Assignors Remain Liable Under Receivables. Anything herein to the
contrary notwithstanding, the Assignors shall remain liable under each of the
Receivables to observe and perform all of the conditions and obligations to be
observed and performed by them thereunder, all in accordance with the terms of
any agreement giving rise to such Receivables. Neither the Collateral Agent nor
any other Secured Creditor shall have any obligation or liability under any
Receivable (or any agreement giving rise thereto) by reason of or arising out of
this Agreement or the receipt by the Collateral Agent or any other Secured
Creditor of any payment relating to such Receivable pursuant hereto, nor shall
the Collateral Agent or any other Secured Creditor be obligated in any manner to
perform any of the obligations of any Assignor under or pursuant to any
Receivable (or any agreement giving rise thereto), to make any payment, to make
any inquiry as to the nature or the sufficiency of any payment received by them
or as to the sufficiency of any performance by any party under any Receivable
(or any agreement giving rise thereto), to present or file any claim, to take
any action to enforce any performance or to collect the payment of any amounts
which may have been assigned to them or to which they may be entitled at any
time or times.
H. Assignors Remain Liable Under Contracts. Anything herein to the
contrary notwithstanding, the Assignors shall remain liable under each of the
Contracts to observe and perform all of the conditions and obligations to be
observed and performed by them thereunder, all in accordance with and pursuant
to the terms and provisions of each Contract. Neither the Collateral Agent nor
any other Secured Creditor shall have any obligation or liability under any
Contract by reason of or arising out of this Agreement or the receipt by the
Collateral Agent or any other Secured Creditor of any payment relating to such
contract pursuant hereto, nor shall the
EXHIBIT I
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Collateral Agent or any other Secured Creditor be obligated in any manner to
perform any of the obligations of any Assignor under or pursuant to any
Contract, to make any payment, to make any inquiry as to the nature or the
sufficiency of any performance by any party under any Contract, to present or
file any claim, to take any action to enforce any performance or to collect the
payment of any amounts which may have been assigned to them or to which they may
be entitled at any time or times.
I. Further Actions. Each Assignor will, at its own expense, make,
execute, endorse, acknowledge, file and/or deliver to the Collateral Agent from
time to time such vouchers, invoices, schedules, confirmatory assignments,
conveyances, financing statements, transfer endorsements, powers of attorney,
certificates, reports and other assurances or instruments and take such further
steps relating to its Receivables, Contracts, Instruments and other property or
rights covered by the security interest hereby granted, as the Collateral Agent
may reasonably require.
ARTICLE 34.
SPECIAL PROVISIONS CONCERNING TRADEMARKS
A. Additional Representations and Warranties. Each Assignor
represents and warrants that it is the true and lawful owner of or otherwise has
the right to use the Marks listed in Annex D hereto for such Assignor and that
said listed Marks include all United States marks and applications for
registrations of United States marks in the United States Patent and Trademark
Office that such Assignor owns or uses in connection with its business as of the
date hereof and that said registrations are valid, subsisting and have not been
cancelled. Each Assignor represents and warrants that it owns, is licensed to
use or otherwise has the right to use all material Marks that it uses. Each
Assignor further warrants that it is aware of no third party claim that any
aspect of such Assignor's present or contemplated business operations infringes
or will infringe any trademark, service mark or trade name. Each Assignor
represents and warrants that it is the true and lawful owner of or otherwise has
the right to use all U.S. trademark registrations and applications listed in
Annex D hereto and that said registrations are valid, subsisting, have not been
cancelled and that such Assignor is not aware of any third-party claim that any
of said registrations is invalid or unenforceable, or is not aware that there is
any reason that any of said registrations is invalid or unenforceable, or is not
aware that there is any reason that any of said applications will not pass to
registration. Each Assignor hereby grants to the Collateral Agent an absolute
power of attorney to sign, upon the occurrence and during the continuance of an
Event of Default, any document which may be required by the United States Patent
and Trademark Office in order to effect an absolute assignment of all right,
title and interest of such Assignor in each Mark, and record the same.
B. Licenses and Assignments. Except as otherwise permitted by the
Credit Agreement or this Agreement, each Assignor hereby agrees not to divest
itself of any right under any Mark absent prior written approval of the
Collateral Agent.
C. Infringements. Each Assignor agrees, promptly upon learning
thereof, to notify the Collateral Agent in writing of the name and address of,
and to furnish such pertinent
EXHIBIT I
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information that may be available with respect to, any party who such Assignor
believes is infringing or diluting or otherwise violating in any material
respect any of such Assignor's rights in and to any significant Mark, or with
respect to any party claiming that such Assignor's use of any significant Mark
violates in any material respect any property right of that party. Each Assignor
further agrees, unless otherwise agreed by the Collateral Agent, to prosecute
any Person infringing any significant Mark owned by such Assignor in accordance
with reasonable business practices.
D. Preservation of Marks. Each Assignor agrees to use its
significant Marks in interstate commerce during the time in which this Agreement
is in effect, sufficiently to preserve such Marks as trademarks or service marks
under the laws of the United States.
E. Maintenance of Registration. Each Assignor shall, at its own
expense, diligently process all documents required to maintain trademark
registrations, including but not limited to affidavits of use and applications
for renewals of registration in the United States Patent and Trademark Office
for all of its significant registered Marks, and shall pay all fees and
disbursements in connection therewith and shall not abandon any such filing of
affidavit of use or any such application of renewal prior to the exhaustion of
all administrative and judicial remedies without prior written consent of the
Collateral Agent.
F. Future Registered Marks. If any Mark registration issues
hereafter to any Assignor as a result of any application now or hereafter
pending before the United States Patent and Trademark Office, within 30 days of
receipt of such certificate, such Assignor shall deliver to the Collateral Agent
a copy of such certificate, and an assignment for security in such Mark, to the
Collateral Agent and at the expense of such Assignor, confirming the assignment
for security in such Mark to the Collateral Agent hereunder, the form of such
security to be substantially the same as the form hereof.
G. Remedies. If an Event of Default shall occur and be continuing,
the Collateral Agent may, by written notice to the relevant Assignor, take any
or all of the following actions: (i) declare the entire right, title and
interest of such Assignor in and to each of the Marks and the goodwill of the
business associated therewith, together with all trademark rights and rights of
protection to the same, vested in the Collateral Agent for the benefit of the
Secured Creditors, in which event such rights, title and interest shall
immediately vest, in the Collateral Agent for the benefit of the Secured
Creditors, and the Collateral Agent shall be entitled to exercise the power of
attorney referred to in Section 4.1 hereof to execute, cause to be acknowledged
and notarized and record said absolute assignment with the applicable agency;
(ii) take and use or sell the Marks and the goodwill of such Assignor's business
symbolized by the Marks and the right to carry on the business and use the
assets of such Assignor in connection with which the Marks have been used; (iii)
in connection with the exercise of any of the other remedies provided for in
this Agreement or any other Security Document, direct such Assignor to refrain,
in which event such Assignor shall refrain, from using the Marks in any manner
whatsoever, directly or indirectly, and, if requested by the Collateral Agent,
change such Assignor's corporate name to eliminate therefrom any use of any
Mark; and (iv) direct such Assignor to execute such other and further documents
that the Collateral Agent may reasonably request to further confirm the
foregoing and to transfer ownership of the Marks and registrations and any
pending trademark application in the United States Patent and Trademark Office
to the Collateral Agent.
EXHIBIT I
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ARTICLE 35.
SPECIAL PROVISIONS CONCERNING
PATENTS, COPYRIGHTS AND TRADE SECRETS
A. Additional Representations and Warranties. Each Assignor
represents and warrants that it is the true and lawful owner or licensee of all
rights in (i) all United States trade secrets and proprietary information
necessary to operate the business of such Assignor (the "Trade Secret Rights"),
(ii) the Patents listed in Annex E hereto for such Assignor and that said
Patents include all United States patents and applications for United States
patents that such Assignor owns as of the date hereof and (iii) the Copyrights
listed in Annex F hereto for such Assignor and that said Copyrights constitute
all the United States copyrights registered with the United States Copyright
Office and applications to United States copyrights that such Assignor now owns.
Each Assignor further warrants that it has no knowledge of any third party claim
that any aspect of such Assignor's present or contemplated business operations
infringes or will infringe any patent or any copyright or such Assignor has
misappropriated any trade secret or proprietary information. Each Assignor
hereby grants to the Collateral Agent an absolute power of attorney to sign,
upon the occurrence and during the continuance of any Event of Default, any
document which may be required by the United States Patent and Trademark Office
or United States Copyright Office, as the case may be, in order to effect an
absolute assignment of all right, title and interest in each Patent and
Copyright, and to record the same.
B. Licenses and Assignments. Except as otherwise permitted by the
Credit Agreement, each Assignor hereby agrees not to divest itself of any right
under any Patent or Copyright absent prior written approval of the Collateral
Agent.
C. Infringements. Each Assignor agrees, promptly upon learning
thereof, to furnish the Collateral Agent in writing with all pertinent
information available to such Assignor with respect to any infringement,
contributing infringement or active inducement to infringe in any significant
Patent or Copyright or to any claim that the practice of any significant Patent
or the use of any significant Copyright violates any property right of a third
party, or with respect to any misappropriation of any significant Trade Secret
Right or any claim that practice of any significant Trade Secret Right violates
any property right of a third party. Each Assignor further agrees, absent
direction of the Collateral Agent to the contrary, diligently to prosecute any
Person infringing any significant Patent or Copyright or any Person
misappropriating any significant Trade Secret Right to the extent that such
Assignor reasonably believes that such infringement is material to its business.
D. Maintenance of Patents or Copyrights. At its own expense, each
Assignor shall make timely payment of all post-issuance fees required to
maintain in force rights under each significant Patent or Copyright, absent
prior written consent of the Collateral Agent.
E. Prosecution of Patent or Copyright Application. At its own
expense, each Assignor shall diligently prosecute all applications for (i)
significant Patents listed in Annex E hereto and (ii) significant Copyrights
listed in Annex F hereto, in each case for such Assignor.
EXHIBIT I
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F. Other Patents or Copyrights. Within 30 days of the acquisition or
issuance of a Patent or Copyright or of filing of an application for a Patent or
Copyright, the relevant Assignor shall deliver to the Collateral Agent a copy of
said certificate or registration of, or application for, said Patent or
Copyright, as the case may be, with an assignment for security as to such Patent
or Copyright, as the case may be, to the Collateral Agent and at the expense of
such Assignor, confirming the assignment for security, the form of such
assignment for security to be substantially the same as the form attached
hereto.
G. Remedies. If an Event of Default shall occur and be continuing,
the Collateral Agent may by written notice to the relevant Assignor, take any or
all of the following actions: (i) declare the entire right, title, and interest
of such Assignor in each of the Patents and Copyrights vested in the Collateral
Agent for the benefit of the Secured Creditors, in which event such right,
title, and interest shall immediately vest in the Collateral Agent for the
benefit of the Secured Creditors, in which case the Collateral Agent shall be
entitled to exercise the power of attorney referred to in Section 5.1 hereof to
execute, cause to be acknowledged and notarized and to record said absolute
assignment with the applicable agency; (ii) in connection with the exercise of
any of the other remedies provided for in this Agreement or any other Security
Document, take and practice or sell the Patents and Copyrights; (iii) in
connection with the exercise of any of the other remedies provided for in this
Agreement or any other Security Document, direct such Assignor to refrain, in
which event such Assignor shall refrain, from practicing the Patents and
Copyrights directly or indirectly; and (iv) direct such Assignor to execute such
other and further documents as the Collateral Agent may request further to
confirm the foregoing and to transfer ownership of the Patents and Copyrights to
the Collateral Agent for the benefit of the Secured Creditors.
ARTICLE 36.
PROVISIONS CONCERNING ALL COLLATERAL
A. Protection of Collateral Agent's Security. Each Assignor will do
nothing to impair the rights of the Collateral Agent in the Collateral (other
than (i) as a result of Equipment which is temporarily in transit or held
pending repair thereof or (ii) as otherwise permitted under the Credit
Documents). Each Assignor will at all times keep its Inventory and Equipment
insured in favor of the Collateral Agent, at such Assignor's own expense to the
extent and in the manner provided in the Credit Agreement; all policies or
certificates with respect to such insurance (and any other insurance maintained
by such Assignor) (i) shall be endorsed to the Collateral Agent's satisfaction
for the benefit of the Collateral Agent (including, without limitation, by
naming the Collateral Agent as additional insured or loss payee), (ii) shall
state that such insurance policies shall not be cancelled or revised without at
least 30 days' prior written notice thereof by the insurer to the Collateral
Agent and (iii) shall provide that the respective insurers irrevocably waive any
and all rights of subrogation with respect to the Collateral Agent and the
Secured Creditors. The Collateral Agent shall, at the time such proceeds of such
insurance are distributed to the Secured Creditors, apply such proceeds in
accordance with Section 7.4 hereof (it being understood that the receipt and
distribution of such proceeds shall be subject to the provisions of Section 4.02
of the Credit Agreement). Each Assignor assumes all liability and responsibility
in connection with the Collateral acquired by it and the liability of such
Assignor to pay the Obligations shall in no way
EXHIBIT I
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be affected or diminished by reason of the fact that such Collateral may be
lost, destroyed, stolen, damaged or for any reason whatsoever unavailable to
such Assignor.
B. Warehouse Receipts Non-negotiable. Each Assignor agrees that if
any warehouse receipt or receipt in the nature of a warehouse receipt is issued
with respect to any of its Inventory, such Assignor shall request that such
warehouse receipt or receipt in the nature thereof shall not be "negotiable" (as
such term is used in Section 7-104 of the Uniform Commercial Code as in effect
in any relevant jurisdiction or under other relevant law).
C. Further Actions. Each Assignor will, at its own expense, make,
execute, endorse, acknowledge, file and/or deliver to the Collateral Agent from
time to time such lists, descriptions and designations of its Collateral,
warehouse receipts, receipts in the nature of warehouse receipts, bills of
lading, documents of title, vouchers, invoices, schedules, confirmatory
assignments, conveyances, financing statements, transfer endorsements, powers of
attorney, certificates, reports and other assurances or instruments and take
such further steps relating to the Collateral and other property or rights
covered by the security interest hereby granted, which the Collateral Agent
reasonably deems appropriate or advisable to perfect, preserve or protect its
security interest in the Collateral.
D. Financing Statements. Each Assignor agrees to execute and deliver
to the Collateral Agent such financing statements, in form reasonably acceptable
to the Collateral Agent, as the Collateral Agent may from time to time request
or as are necessary or desirable in the opinion of the Collateral Agent to
establish and maintain a valid, enforceable and first priority perfected
security interest, subject only to Permitted Liens, in the Collateral as
provided herein and in the other rights and security contemplated hereby all in
accordance with the Uniform Commercial Code as enacted in any and all relevant
jurisdictions or any other relevant law. Each Assignor will pay any applicable
filing fees, recordation taxes and related expenses relating to its Collateral.
Each Assignor hereby authorizes the Collateral Agent to file any such financing
statements without the signature of such Assignor where permitted by law.
ARTICLE 37.
REMEDIES UPON OCCURRENCE OF EVENT OF DEFAULT
A. Remedies; Obtaining the Collateral Upon Default. Each Assignor
agrees that, if any Event of Default shall have occurred and be continuing, then
and in every such case, the Collateral Agent, in addition to any rights now or
hereafter existing under applicable law, shall have all rights as a secured
creditor under the Uniform Commercial Code in all relevant jurisdictions and
may:
(i) personally, or by agents or attorneys, immediately take
possession of the Collateral or any part thereof, from such Assignor or
any other Person who then has possession of any part thereof with or
without notice or process of law, and for that purpose may enter upon such
Assignor's premises where any of the Collateral is located and remove the
same and use in connection with such removal any and all services,
supplies, aids and other facilities of such Assignor;
EXHIBIT I
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(ii) instruct the obligor or obligors on any agreement, instrument
or other obligation (including, without limitation, the Receivables and
the Contracts) constituting the Collateral to make any payment required by
the terms of such agreement, instrument or other obligation directly to
the Collateral Agent and may exercise any and all remedies of such
Assignor in respect of such Collateral;
(iii) withdraw all moneys, securities and instruments in the Cash
Collateral Account for application to the Obligations in accordance with
Section 7.4 hereof;
(iv) sell, assign or otherwise liquidate any or all of the
Collateral or any part thereof in accordance with Section 7.2 hereof, or
direct the relevant Assignor to sell, assign or otherwise liquidate any or
all of the Collateral or any part thereof, and, in each case, take
possession of the proceeds of any such sale or liquidation;
(v) take possession of the Collateral or any part thereof, by
directing the relevant Assignor in writing to deliver the same to the
Collateral Agent at any place or places designated by the Collateral Agent
in which event such Assignor shall at its own expense:
(x) forthwith cause the same to be moved to the place or
places so designated by the Collateral Agent and there delivered to
the Collateral Agent;
(y) store and keep any Collateral so delivered to the
Collateral Agent at such place or places pending further action by
the Collateral Agent as provided in Section 7.2 hereof;
(z) while the Collateral shall be so stored and kept, provide
such guards and maintenance services as shall be necessary to
protect the same and to preserve and maintain them in good
condition; and
(vi) license or sublicense, whether on an exclusive or nonexclusive
basis, any Marks, Patents and Copyrights included in the Collateral for
such term and on such conditions and in such manner as the Collateral
Agent shall in its sole judgment determine;
it being understood that each Assignor's obligation so to deliver the Collateral
is of the essence of this Agreement and that, accordingly, upon application to a
court of equity having jurisdiction, the Collateral Agent shall be entitled to a
decree requiring specific performance by such Assignor of said obligation. The
Secured Creditors agree that this Agreement may be enforced only by the action
of the Administrative Agent or the Collateral Agent, in each case acting upon
the instructions of the Required Banks (or, after the date on which all Credit
Document Obligations have been paid in full, the holders of at least the
majority of the outstanding Other Obligations) and that no other Secured
Creditor shall have any right individually to seek to enforce or to enforce this
Agreement or to realize upon the security to be granted hereby, it being
understood and agreed that such rights and remedies may be exercised by the
Administrative Agent or the Collateral Agent or the holders of at least a
majority of the outstanding Other Obligations, as the case maybe, for the
benefit of the Secured Creditors upon the terms of this Agreement.
EXHIBIT I
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B. Remedies; Disposition of the Collateral. Any Collateral
repossessed by the Collateral Agent under or pursuant to Section 7.1 hereof and
any other Collateral whether or not so repossessed by the Collateral Agent, may
be sold, assigned, leased or otherwise disposed of under one or more contracts
or as an entirety, and without the necessity of gathering at the place of sale
the property to be sold, and in general in such manner, at such time or times,
at such place or places and on such terms as the Collateral Agent may, in
compliance with any mandatory requirements of applicable law, determine to be
commercially reasonable. Any of the Collateral may be sold, leased or otherwise
disposed of, in the condition in which the same existed when taken by the
Collateral Agent or after any overhaul or repair at the expense of the relevant
Assignor which the Collateral Agent shall determine to be commercially
reasonable. Any such disposition which shall be a private sale or other private
proceedings permitted by such requirements shall be made upon not less than 10
days' written notice to the relevant Assignor specifying the time at which such
disposition is to be made and the intended sale price or other consideration
therefor, and shall be subject, for the 10 days after the giving of such notice,
to the right of the relevant Assignor or any nominee of such Assignor to acquire
the Collateral involved at a price or for such other consideration at least
equal to the intended sale price or other consideration so specified. Any such
disposition which shall be a public sale permitted by such requirements shall be
made upon not less than 10 days' written notice to the relevant Assignor
specifying the time and place of such sale and, in the absence of applicable
requirements of law, shall be by public auction (which may, at the Collateral
Agent's option, be subject to reserve), after publication of notice of such
auction not less than 10 days prior thereto in two newspapers in general
circulation in the City of New York. To the extent permitted by any such
requirement of law, the Collateral Agent and the other Secured Creditors may bid
for and become the purchaser of the Collateral or any item thereof, offered for
sale in accordance with this Section without accountability to the relevant
Assignor. If, under mandatory requirements of applicable law, the Collateral
Agent shall be required to make disposition of the Collateral within a period of
time which does not permit the giving of notice to the relevant Assignor as
hereinabove specified, the Collateral Agent need give such Assignor only such
notice of disposition as shall be reasonably practicable in view of such
mandatory requirements of applicable law. Each Assignor agrees to do or cause to
be done all such other acts and things as may be reasonably necessary to make
such sale or sales of all or any portion of the Collateral valid and binding and
in compliance with any and all applicable laws, regulations, orders, writs,
injunctions, decrees or awards of any and all courts, arbitrators or
governmental instrumentalities, domestic or foreign, having jurisdiction over
any such sale or sales, all at such Assignor's expense.
C. Waiver of Claims. Except as otherwise provided in this Agreement,
EACH ASSIGNOR HEREBY WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE LAW, NOTICE
AND JUDICIAL HEARING IN CONNECTION WITH THE COLLATERAL AGENT'S TAKING POSSESSION
OR THE COLLATERAL AGENT'S DISPOSITION OF ANY OF THE COLLATERAL, and each
Assignor hereby further waives, to the extent permitted by law:
(i) all damages occasioned by the Collateral Agent's taking of
possession of any of the Collateral except any damages which are the
direct result of the Collateral Agent's gross negligence or willful
misconduct;
(ii) all other requirements as to the time, place and terms of sale
or other requirements with respect to the enforcement of the Collateral
Agent's rights hereunder; and
EXHIBIT I
Page 16
(iii) all rights of redemption, appraisement, valuation, stay,
extension or moratorium now or hereafter in force under any applicable law
in order to prevent or delay the enforcement of this Agreement or the
absolute sale of the Collateral or any portion thereof, and each Assignor,
for itself and all who may claim under it, insofar as it or they now or
hereafter lawfully may, hereby waives the benefit of all such laws.
Any sale of, or the grant of options to purchase, or any other realization upon,
any Collateral shall operate to divest all right, title, interest, claim and
demand, either at law or in equity, of the relevant Assignor therein and
thereto, and shall be a perpetual bar both at law and in equity against such
Assignor and against any and all Persons claiming or attempting to claim the
Collateral so sold, optioned or realized upon, or any part thereof, from,
through and under such Assignor.
D. Application of Proceeds. 1. All moneys collected by the
Collateral Agent (or, to the extent the Pledge Agreement, the Mortgages or
Additional Security Documents require proceeds of collateral under such Security
Documents to be applied in accordance with the provisions of this Agreement, the
Pledgee or Mortgagee under such other Security Document) upon any sale or other
disposition of the Collateral, together with all other moneys received by the
Collateral Agent hereunder, shall be applied as follows:
a. first, to the payment of all Obligations owing the Collateral
Agent of the type provided in clauses (iii) and (iv) of the definition of
Obligations;
b. second, to the extent proceeds remain after the application
pursuant to the preceding clause (i), an amount equal to the outstanding
Primary Obligations shall be paid to the Secured Creditors as provided in
Section 7.4(e) hereof, with each Secured Creditor receiving an amount
equal to its outstanding Primary Obligations or, if the proceeds are
insufficient to pay in full all such Primary Obligations, its Pro Rata
Share (as defined below) of the amount remaining to be distributed;
c. third, to the extent proceeds remain after the application
pursuant to the preceding clauses (i) and (ii), an amount equal to the
outstanding Secondary Obligations shall be paid to the Secured Creditors
as provided in Section 7.4(e) hereof, with each Secured Creditor receiving
an amount equal to its outstanding Secondary Obligations or, if the
proceeds are insufficient to pay in full all such Secondary Obligations,
its Pro Rata Share of the amount remaining to be distributed; and
d. fourth, to the extent proceeds remain after the application
pursuant to the preceding clauses (i), (ii) and (iii) and following the
termination of this Agreement pursuant to Section 10.8 hereof, to the
relevant Assignor or, to the extent directed by such Assignor or a court
of competent jurisdiction, to whomever may be lawfully entitled to receive
such surplus.
2. For purposes of this Agreement, (x) "Pro Rata Share" shall mean,
when calculating a Secured Creditor's portion of any distribution or amount,
that amount (expressed as a percentage) equal to a fraction the numerator of
which is the then unpaid amount of such Secured Creditor's Primary Obligations
or Secondary Obligations, as the case may be, and the denominator of which is
the then outstanding amount of all Primary Obligations or Secondary Obligations,
as the
EXHIBIT I
Page 17
case may be, (y) "Primary Obligations" shall mean (i) in the case of the
Credit Document Obligations, all principal of, and interest on, all Loans, all
Unpaid Drawings theretofore made (together with all interest accrued thereon),
and the aggregate Stated Amounts of all Letters of Credit issued under the
Credit Agreement, and all Fees and (ii) in the case of the Other Obligations,
all amounts due under the Interest Rate Protection Agreements or Other Hedging
Agreements (other than indemnities, fees (including, without limitation,
attorneys' fees) and similar obligations and liabilities) and (z) "Secondary
Obligations" shall mean all Obligations other than Primary Obligations.
3. When payments to Secured Creditors are based upon their
respective Pro Rata Shares, the amounts received by such Secured Creditors
hereunder shall be applied (for purposes of making determinations under this
Section 7.4 only) (i) first, to their Primary Obligations (with the amount to be
applied by any Secured Creditor to its Primary Obligations to be applied (x)
first, to interest and (y) second, to any other Primary Obligations) and (ii)
second, to their Secondary Obligations. If any payment to any Secured Creditor
of its Pro Rata Share of any distribution would result in overpayment to such
Secured Creditor, such excess amount shall instead be distributed in respect of
the unpaid Primary Obligations or Secondary Obligations, as the case may be, of
the other Secured Creditors, with each Secured Creditor whose Primary
Obligations or Secondary Obligations, as the case may be, have not been paid in
full to receive an amount equal to such excess amount multiplied by a fraction
the numerator of which is the unpaid Primary Obligations or Secondary
Obligations, as the case may be, of such Secured Creditor and the denominator of
which is the unpaid Primary Obligations or Secondary Obligations, as the case
may be, of all Secured Creditors entitled to such distribution.
4. Each of the Secured Creditors agrees and acknowledges that if the
Bank Creditors are to receive a distribution on account of undrawn amounts with
respect to Letters of Credit issued under the Credit Agreement (which shall only
occur after all outstanding Loans and Unpaid Drawings with respect to such
Letters of Credit have been paid in full), such amounts shall be paid to the
Administrative Agent under the Credit Agreement and held by it, for the equal
and ratable benefit of the Bank Creditors, as cash security for the repayment of
Obligations owing to the Bank Creditors as such. If any amounts are held as cash
security pursuant to the immediately preceding sentence, then upon the
termination of all outstanding Letters of Credit, and after the application of
all such cash security to the repayment of all Obligations owing to the Bank
Creditors after giving effect to the termination of all such Letters of Credit,
if there remains any excess cash, such excess cash shall be returned by the
Administrative Agent to the Collateral Agent for distribution in accordance with
Section 7.4(a) hereof.
5. Except as set forth in Section 7.4(c) hereof, all payments
required to be made to the Bank Creditors hereunder shall be made to the
Administrative Agent under the Credit Agreement for the account of the Bank
Creditors and all payments required to be made to the Other Creditors hereunder
shall be made directly to the respective Other Creditor.
6. For purposes of applying payments received in accordance with
this Section 7.4, the Collateral Agent shall be entitled to rely upon (i) the
Administrative Agent under the Credit Agreement and (ii) the Other Creditors for
a determination (which the Administrative Agent, each Other Creditor and the
Secured Creditors agree (or shall agree) to provide upon request of the
Collateral Agent) of the outstanding Obligations owed to the Bank Creditors or
the Other Creditors,
EXHIBIT I
Page 18
as the case may be. Unless it has actual knowledge (including by way of written
notice from a Bank Creditor or an Other Creditor) to the contrary, the
Administrative Agent under the Credit Agreement, in furnishing information
pursuant to the preceding sentence, and the Collateral Agent, in acting
hereunder, shall be entitled to assume that (x) no Secondary Obligations are
owing to any Bank Creditor or Other Creditor and (y) no Interest Rate Protection
Agreement or Other Hedging Agreement, or Other Obligations in respect thereof,
are in existence.
7. It is understood that the Assignors shall remain jointly and
severally liable to the extent of any deficiency between the amount of the
proceeds of the Collateral and the aggregate amount of the sums referred to in
clause (a) of this Section 7.4 with respect to the relevant Assignor.
E. Remedies Cumulative. Each and every right, power and remedy
hereby specifically given to the Collateral Agent shall be in addition to every
other right, power and remedy specifically given under this Agreement, the
Interest Rate Protection Agreements or Other Hedging Agreements, the other
Credit Documents or now or hereafter existing at law, in equity or by statute
and each and every right, power and remedy whether specifically herein given or
otherwise existing may be exercised from time to time or simultaneously and as
often and in such order as may be deemed expedient by the Collateral Agent. All
such rights, powers and remedies shall be cumulative and the exercise or the
beginning of the exercise of one shall not be deemed a waiver of the right to
exercise any other or others. No delay or omission of the Collateral Agent in
the exercise of any such right, power or remedy and no renewal or extension of
any of the Obligations shall impair any such right, power or remedy or shall be
construed to be a waiver of any Default or Event of Default or an acquiescence
therein. No notice to or demand on any Assignor in any case shall entitle it to
any other or further notice or demand in similar or other circumstances or
constitute a waiver of any of the rights of the Collateral Agent to any other or
further action in any circumstances without notice or demand. In the event that
the Collateral Agent shall bring any suit to enforce any of its rights hereunder
and shall be entitled to judgment, then in such suit the Collateral Agent may
recover expenses, including attorneys' fees, and the amounts thereof shall be
included in such judgment.
F. Discontinuance of Proceedings. In case the Collateral Agent shall
have instituted any proceeding to enforce any right, power or remedy under this
Agreement by foreclosure, sale, entry or otherwise, and such proceeding shall
have been discontinued or abandoned for any reason or shall have been determined
adversely to the Collateral Agent, then and in every such case the relevant
Assignor, the Collateral Agent and each holder of any of the Obligations shall
be restored to their former positions and rights hereunder with respect to the
Collateral subject to the security interest created under this Agreement, and
all rights, remedies and powers of the Collateral Agent shall continue as if no
such proceeding had been instituted.
ARTICLE 38.
INDEMNITY
A. Indemnity. 1. Each Assignor jointly and severally agrees to
indemnify, reimburse and hold the Collateral Agent, each other Secured Creditor
and their respective succes-
EXHIBIT I
Page 19
sors, permitted assigns, employees, agents and servants (hereinafter in this
Section 8.1 referred to individually as "Indemnitee," and collectively as
"Indemnitees") harmless from any and all liabilities, obligations, damages,
injuries, penalties, claims, demands, actions, suits, judgments and any and all
costs, expenses or disbursements (including attorneys' fees and expenses) (for
the purposes of this Section 8.1 the foregoing are collectively called
"expenses") of whatsoever kind and nature imposed on, asserted against or
incurred by any of the Indemnitees in any way relating to or arising out of this
Agreement, any Interest Rate Protection Agreement or Other Hedging Agreement,
any other Credit Document or any other document executed in connection herewith
or therewith or in any other way connected with the administration of the
transactions contemplated hereby or thereby or the enforcement of any of the
terms of, or the preservation of any rights under any thereof, or in any way
relating to or arising out of the manufacture, ownership, ordering, purchase,
delivery, control, acceptance, lease, financing, possession, operation,
condition, sale, return or other disposition, or use of the Collateral
(including, without limitation, latent or other defects, whether or not
discoverable), the violation of the laws of any country, state or other
governmental body or unit, any tort (including, without limitation, claims
arising or imposed under the doctrine of strict liability, or for or on account
of injury to or the death of any Person (including any Indemnitee), or property
damage), or contract claim; provided that no Indemnitee shall be indemnified
pursuant to this Section 8.1(a) for losses, damages or liabilities to the extent
caused by the gross negligence or willful misconduct of such Indemnitee. Each
Assignor agrees that upon written notice by any Indemnitee of the assertion of
such a liability, obligation, damage, injury, penalty, claim, demand, action,
suit or judgment, the relevant Assignor shall assume full responsibility for the
defense thereof. Each Indemnitee agrees to use its best efforts to promptly
notify the relevant Assignor of any such assertion of which such Indemnitee has
knowledge.
2. Without limiting the application of Section 8.1(a) hereof, each
Assignor agrees, jointly and severally, to pay, or reimburse the Collateral
Agent for any and all fees, costs and expenses of whatever kind or nature
incurred in connection with the creation, preservation or protection of the
Collateral Agent's Liens on, and security interest in, the Collateral,
including, without limitation, all fees and taxes in connection with the
recording or filing of instruments and documents in public offices, payment or
discharge of any taxes or Liens upon or in respect of the Collateral, premiums
for insurance with respect to the Collateral and all other fees, costs and
expenses in connection with protecting, maintaining or preserving the Collateral
and the Collateral Agent's interest therein, whether through
judicial proceedings or otherwise, or in defending or prosecuting any actions,
suits or proceedings arising out of or relating to the Collateral.
3. Without limiting the application of Section 8.1(a) or (b) hereof,
each Assignor agrees, jointly and severally, to pay, indemnify and hold each
Indemnitee harmless from and against any loss, costs, damages and expenses which
such Indemnitee may suffer, expend or incur in consequence of or growing out of
any misrepresentation by any Assignor in this Agreement, any Interest Rate
Protection Agreement or Other Hedging Agreement, any other Credit Document or in
any writing contemplated by or made or delivered pursuant to or in connection
with this Agreement, any Interest Rate Protection Agreement or Other Hedging
Agreement, or any other Credit Document.
4. If and to the extent that the obligations of any Assignor under
this Section 8.1 are unenforceable for any reason, such Assignor hereby agrees
to make the maximum contribution to the payment and satisfaction of such
obligations which is permissible under applicable law.
EXHIBIT I
Page 20
B. Indemnity Obligations Secured by Collateral; Survival. Any
amounts paid by any Indemnitee as to which such Indemnitee has the right to
reimbursement shall constitute Obligations secured by the Collateral. The
indemnity obligations of each Assignor contained in this Article VIII shall
continue in full force and effect notwithstanding the full payment of all the
Notes issued under the Credit Agreement, the termination of all Interest Rate
Protection Agreements or Other Hedging Agreements and the payment of all other
Obligations and notwithstanding the discharge thereof.
ARTICLE 39.
DEFINITIONS
The following terms shall have the meanings herein specified. Such
definitions shall be equally applicable to the singular and plural forms of the
terms defined.
"Administrative Agent" shall have the meaning provided in the
recitals to this Agreement.
"Agreement" shall mean this Security Agreement, as the same may be
modified, supplemented or amended from time to time in accordance with its
terms.
"Assignor" shall have the meaning provided in the first paragraph of
this Agreement.
"Bank Creditors" shall have the meaning provided in the recitals to
this Agreement.
"Banks" shall have the meaning provided in the recitals to this
Agreement.
"Borrower" shall have the meaning provided in the recitals to this
Agreement.
"Cash Collateral Account" shall mean a non-interest bearing cash
collateral account maintained with, and in the sole dominion and control of, the
Collateral Agent for the benefit of the Secured Creditors.
"Chattel Paper" shall have the meaning provided in the Uniform
Commercial Code as in effect on the date hereof in the State of New York.
"Class" shall have the meaning provided in Section 10.2 of this
Agreement.
"Collateral" shall have the meaning provided in Section 1.1(a) of
this Agreement.
"Collateral Agent" shall have the meaning provided in the first
paragraph of this Agreement.
"Contract Rights" shall mean all rights of any Assignor (including,
without limitation, all rights to payment) under each Contract.
EXHIBIT I
Page 21
"Contracts" shall mean all contracts between any Assignor and one or
more additional parties (including, without limitation, any Interest Rate
Protection Agreement or Other Hedging Agreement), but excluding any contract to
the extent that the terms thereof prohibit (after giving effect to any approvals
or waivers) the assignment of, or granting a security interest in, such contract
(it being understood and agreed, however, that notwithstanding the foregoing,
all rights to payment for money due or to become due pursuant to any such
excluded contract shall be subject to the security interests created by this
Agreement).
"Copyrights" shall mean any United States or foreign copyright owned
by any Assignor, including any registrations of any Copyrights, in the United
States Copyright Office or the equivalent thereof in any foreign country, as
well as any application for a United States copyright registration now or
hereafter made with the United States Copyright Office by any Assignor.
"Credit Agreement" shall have the meaning provided in the recitals
to this Agreement.
"Credit Document Obligations" shall have the meaning provided in the
definition of "Obligations" in this Article IX.
"Default" shall mean any event which, with notice or lapse of time,
or both, would constitute an Event of Default.
"Documents" shall have the meaning provided in the Uniform
Commercial Code as in effect on the date hereof in the State of New York.
"Equipment" shall mean any "equipment," as such term is defined in
the Uniform Commercial Code as in effect on the date hereof in the State of New
York, now or hereafter owned by any Assignor and, in any event, shall include,
but shall not be limited to, all machinery, equipment, furnishings, movable
trade fixtures and vehicles now or hereafter owned by any Assignor 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.
"Event of Default" shall mean any Event of Default under, and as
defined in, the Credit Agreement and shall in any event, without limitation,
include any payment default on any of the Obligations after the expiration of
any applicable grace period.
"General Intangibles" shall have the meaning provided in the Uniform
Commercial Code as in effect on the date hereof in the State of New York.
"Goods" shall have the meaning provided in the Uniform Commercial
Code as in effect on the date hereof in the State of New York.
"Indemnitee" shall have the meaning provided in Section 8.1 of this
Agreement.
"Instrument" shall have the meaning provided in the Uniform
Commercial Code as in effect on the date hereof in the State of New York.
EXHIBIT I
Page 22
"Inventory" shall mean merchandise, inventory and goods, and all
additions, substitutions and replacements thereof, wherever located, together
with all goods, supplies, incidentals, packaging materials, labels, materials
and any other items used or usable in manufacturing, processing, packaging or
shipping same; in all stages of production -- from raw materials through
work-in-process to finished goods -- and all products and proceeds of whatever
sort and wherever located and any portion thereof which may be returned,
rejected, reclaimed or repossessed by the Collateral Agent from any Assignor's
customers, and shall specifically include all "inventory" as such term is
defined in the Uniform Commercial Code as in effect on the date hereof in the
State of New York, now or hereafter owned by any Assignor.
"Liens" shall mean any security interest, mortgage, pledge, lien,
claim, charge, encumbrance, title retention agreement, lessor's interest in a
financing lease or analogous instrument, in, of, or on any Assignor's property.
"Marks" shall mean all right, title and interest in and to any
United States or foreign trademarks, service marks and trade names now held or
hereafter acquired by any Assignor, including any registration of any trademarks
and service marks, or the equivalent thereof in any foreign country, in the
United States Patent and Trademark Office and any trade dress including logos
and/or designs used by any Assignor in the United States or any foreign country.
"Obligations" shall mean (i) the full and prompt payment when due
(whether at the stated maturity, by acceleration or otherwise) of all
obligations (including obligations which, but for the automatic stay under
Section 362(a) of the Bankruptcy Code, would become due) and liabilities of each
Assignor, now existing or hereafter incurred under, arising out of or in
connection with any Credit Document to which it is a party and the due
performance and compliance by each Assignor with the terms of each such Credit
Document (all such obligations and liabilities under this clause (i), except to
the extent consisting of obligations or indebtedness with respect to Interest
Rate Protection Agreements or Other Hedging Agreements, being herein
collectively called the "Credit Document Obligations"); (ii) the full and prompt
payment when due (whether at the stated maturity, by acceleration or otherwise)
of all obligations (including obligations which, but for the automatic stay
under Section 362(a) of the Bankruptcy Code, would become due) and liabilities
of each Assignor now existing or hereafter incurred under, arising out of or in
connection with any Interest Rate Protection Agreement or Other Hedging
Agreement with the Secured Creditors including, in the case of Assignors other
than the Borrower, all obligations of such Assignor under the Guaranty to which
such Assignor is a party in respect of Interest Rate Protection Agreements or
Other Hedging Agreements (all such obligations and liabilities under this clause
(ii) being herein collectively called the "Other Obligations"); (iii) any and
all sums advanced by the Collateral Agent in order to preserve the Collateral or
preserve its security interest in the Collateral; (iv) in the event of any
proceeding for the collection or enforcement of any indebtedness, obligations,
or liabilities of any Assignor referred to in clauses (i) and (ii) above, after
an Event of Default shall have occurred and be continuing, the reasonable
expenses of re-taking, holding, preparing for sale or lease, selling or
otherwise disposing of or realizing on the Collateral, or of any exercise by the
Collateral Agent of its rights hereunder, together with reasonable attorneys'
fees and court costs; and (v) all amounts paid by any Indemnitee as to which
such Indemnitee has the right to reimbursement under Section 8.1 of this
Agreement.
"Other Creditors" shall have the meaning provided in the recitals to
this Agreement.
EXHIBIT I
Page 23
"Other Obligations" shall have the meaning provided in the
definition of "Obligations" in this Article IX.
"Patents" shall mean any United States or foreign patent to which
any Assignor now or hereafter has title and any divisions or continuations
thereof, as well as any application for a United States or foreign patent now or
hereafter made by any Assignor.
"Primary Obligations" shall have the meaning provided in Section
7.4(b) of this Agreement.
"Proceeds" shall have the meaning provided in the Uniform Commercial
Code as in effect in the State of New York on the date hereof or under other
relevant law and, in any event, shall include, but not be limited to, (i) any
and all proceeds of any insurance, indemnity, warranty or guaranty payable to
the Collateral Agent or any Assignor from time to time with respect to any of
the Collateral, (ii) any and all payments (in any form whatsoever) made or due
and payable to any Assignor from time to time in connection with any
requisition, confiscation, condemnation, seizure or forfeiture of all or any
part of the Collateral by any governmental authority (or any person acting under
color of governmental authority) and (iii) any and all other amounts from time
to time paid or payable under or in connection with any of the Collateral.
"Pro Rata Share" shall have the meaning provided in Section 7.4(b)
of this Agreement.
"Receivables" shall mean any "account" as such term is defined in
the Uniform Commercial Code as in effect on the date hereof in the State of New
York, now or hereafter owned by any Assignor and, in any event, shall include,
but shall not be limited to, all of such Assignor's rights to payment for goods
sold or leased or services performed by such Assignor, whether now in existence
or arising from time to time hereafter, including, without limitation, rights
evidenced by an account, note, contract, security agreement, chattel paper, or
other evidence of indebtedness or security, together with (a) all security
pledged, assigned, hypothecated or granted to or held by such Assignor to secure
the foregoing, (b) all of any Assignor's right, title and interest in and to any
goods, the sale of which gave rise thereto, (c) all guarantees, endorsements and
indemnifications on, or of, any of the foregoing, (d) all powers of attorney for
the execution of any evidence of indebtedness or security or other writing in
connection therewith, (e) all books, records, ledger cards, and invoices
relating thereto, (f) all evidences of the filing of financing statements and
other statements and the registration of other instruments in connection
therewith and amendments thereto, notices to other creditors or secured parties,
and certificates from filing or other registration officers, (g) all credit
information, reports and memoranda relating thereto and (h) all other writings
related in any way to the foregoing.
"Requisite Creditors" shall have the meaning provided in Section
10.2 of this Agreement.
"Secondary Obligations" shall have the meaning provided in Section
7.4(b) of this Agreement.
EXHIBIT I
Page 24
"Secured Creditors" shall have the meaning provided in the recitals
to this Agreement.
"Termination Date" shall have the meaning provided in Section 10.8
of this Agreement.
"Trade Secret Rights" shall have the meaning provided in Section 5.1
of this Agreement.
ARTICLE 40.
MISCELLANEOUS
A. Notices. Except as otherwise specified herein, all notices,
requests, demands or other communications to or upon the respective parties
hereto shall be deemed to have been duly given or made when delivered to the
party to which such notice, request, demand or other communication is required
or permitted to be given or made under this Agreement, addressed:
1. if to any Assignor, at its address set forth opposite its
signature below;
2. if to the Collateral Agent:
Bankers Trust Company
130 Liberty Street
New York, NY 10006
Telephone No.: (212) 250-4886
Telecopier No.: (212) 250-7218
Attention: Anthony Logrippo
3. if to any Bank Creditor (other than the Collateral Agent), at
such address as such Bank Creditor shall have specified in the Credit
Agreement;
4. if to any Other Creditor, at such address as such Other Creditor
shall have specified in writing to each Assignor and the Collateral Agent;
or at such other address as shall have been furnished in writing by any Person
described above to the party required to give notice hereunder.
B. Waiver; Amendment. None of the terms and conditions of this
Agreement may be changed, waived, modified or varied in any manner whatsoever
unless in writing duly signed by each Assignor directly affected thereby and the
Collateral Agent (with the consent of either (x) the Required Banks or, to the
extent required by Section 13.12 of the Credit Agreement, all of the Banks, at
all times prior to the time on which all Credit Document Obligations have been
paid in full or (y) the holders of at least a majority of the outstanding Other
Obligations at all times after the time on which all Credit Document Obligations
have been paid in full); provided, that any change, waiver, modification or
variance affecting the rights and benefits of a single Class of Secured
EXHIBIT I
Page 25
Creditors (and not all Secured Creditors in a like or similar manner) shall also
require the written consent of the Requisite Creditors of such Class of Secured
Creditors. For the purpose of this Agreement, the term "Class" shall mean each
class of Secured Creditors, i.e., whether (x) the Bank Creditors as holders of
the Credit Document Obligations or (y) the Other Creditors as the holders of the
Other Obligations. For the purpose of this Agreement, the term "Requisite
Creditors" of any Class shall mean each of (x) with respect to the Credit
Document Obligations, the Required Banks and (y) with respect to the Other
Obligations, the holders of at least a majority of all obligations outstanding
from time to time under the Interest Rate Protection Agreements or Other Hedging
Agreements.
C. Obligations Absolute. The obligations of each Assignor hereunder
shall remain in full force and effect without regard to, and shall not be
impaired by, (a) any bankruptcy, insolvency, reorganization, arrangement,
readjustment, composition, liquidation or the like of such Assignor; (b) any
exercise or non-exercise, or any waiver of, any right, remedy, power or
privilege under or in respect of this Agreement, any other Credit Document or
any Interest Rate Protection Agreement or Other Hedging Agreement; (c) any
renewal, extension, amendment or modification of or addition or supplement to or
deletion from any Credit Document or any Interest Rate Protection Agreement or
Other Hedging Agreement or any security for any of the Obligations; (d) any
waiver, consent, extension, indulgence or other action or inaction under or in
respect of any such agreement or instrument including, without limitation, this
Agreement; (e) any furnishing of any additional security to the Collateral Agent
or its assignee or any acceptance thereof or any release of any security by the
Collateral Agent or its assignee; or (f) any limitation on any party's liability
or obligations under any such instrument or agreement or any invalidity or
unenforceability, in whole or in part, of any such instrument or agreement or
any term thereof; whether or not any Assignor shall have notice or knowledge of
any of the foregoing.
D. Successors and Assigns. This Agreement shall be binding upon each
Assignor and its successors and assigns and shall inure to the benefit of the
Collateral Agent and each other Secured Creditor and their respective successors
and assigns; provided, that no Assignor may transfer or assign any or all of its
rights or obligations hereunder without the prior written consent of the
Collateral Agent. All agreements, statements, representations and warranties
made by each Assignor herein or in any certificate or other instrument delivered
by such Assignor or on its behalf under this Agreement shall be considered to
have been relied upon by the Secured Creditors and shall survive the execution
and delivery of this Agreement, the other Credit Documents and the Interest Rate
Protection Agreements or Other Hedging Agreements regardless of any
investigation made by the Secured Creditors or on their behalf.
E. Headings Descriptive. The headings of the several sections of
this Agreement are inserted for convenience only and shall not in any way affect
the meaning or construction of any provision of this Agreement.
F. Governing Law. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY
THE LAW OF THE STATE OF NEW YORK.
G. Assignor's Duties. It is expressly agreed, anything herein
contained to the contrary notwithstanding, that each Assignor shall remain
liable to perform all of the obligations,
EXHIBIT I
Page 26
if any, assumed by it with respect to the Collateral and the Collateral Agent
shall not have any obligations or liabilities with respect to any Collateral by
reason of or arising out of this Agreement, nor shall the Collateral Agent be
required or obligated in any manner to perform or fulfill any of the obligations
of any Assignor under or with respect to any Collateral.
H. Termination; Release. 1. After the Termination Date, this
Agreement shall terminate (provided that all indemnities set forth herein
including, without limitation, in Section 8.1 hereof shall survive such
termination) and the Collateral Agent, at the request and expense of the
respective Assignor, will promptly execute and deliver to such Assignor a proper
instrument or instruments (including Uniform Commercial Code termination
statements on form UCC-3) acknowledging the satisfaction and termination of this
Agreement, and will duly assign, transfer and deliver to such Assignor (without
recourse and without any representation or warranty) such of the Collateral as
may be in the possession of the Collateral Agent and as has not theretofore been
sold or otherwise applied or released pursuant to this Agreement. As used in
this Agreement, "Termination Date" shall mean the date upon which the Total
Commitments and all Interest Rate Protection Agreements or Other Hedging
Agreements have been terminated, no Note under the Credit Agreement is
outstanding (and all Loans have been repaid in full), and all Letters of Credit
have been terminated and all Obligations then owing have been paid in full.
2. In the event that any part of the Collateral is sold (except to
Holdings or any of its Subsidiaries) in connection with a sale permitted by
Section 9.02 of the Credit Agreement or otherwise released at the direction of
the Required Banks (or all Banks if required by Section 13.12 of the Credit
Agreement) and the proceeds of such sale or sales or from such release are
applied in accordance with the provisions of Section 4.02 of the Credit
Agreement, to the extent required to be so applied, such Collateral will be sold
free and clear of the Liens created by this Agreement and the Collateral Agent,
at the request and expense of the relevant Assignor, will duly assign, transfer
and deliver to such Assignor (without recourse and without any representation or
warranty) such of the Collateral as is then being (or has been) so sold or
released and has not theretofore been released pursuant to this Agreement and
will promptly execute and deliver to such Assignor a proper instrument or
instruments (including UCC termination statements on form UCC-3) acknowledging
the release of such Collateral pursuant to this Agreement.
3. At any time that an Assignor desires that the Collateral Agent
take any action to acknowledge or give effect to any release of Collateral
pursuant to the foregoing Section 10.8(a) or (b), as the case may be, it shall
deliver to the Collateral Agent a certificate signed by an executive officer of
such Assignor stating that the release of the respective Collateral is permitted
pursuant to such Section 10.8(a) or (b), as the case may be.
4. The Collateral Agent shall have no liability whatsoever to any
other Secured Creditor as a result of any release of Collateral by it in
accordance with this Section 10.8.
I. Counterparts. This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument.
EXHIBIT I
Page 27
J. Severability. Any provision of this Agreement which is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
K. The Collateral Agent. The Collateral Agent will hold in
accordance with this Agreement all items of the Collateral at any time received
under this Agreement. It is expressly understood and agreed that the obligations
of the Collateral Agent as holder of the Collateral and interests therein and
with respect to the disposition thereof, and otherwise under this Agreement, are
only those expressly set forth in this Agreement and Section 12 of the Credit
Agreement. The Collateral Agent shall act hereunder and thereunder on the terms
and conditions set forth herein and in Section 12 of the Credit Agreement.
L. Benefit of Agreement. This Agreement shall be binding upon the
parties hereto and their respective successors and assigns and shall inure to
the benefit of and be enforceable by each of the parties hereto and its
successors and assigns.
M. Additional Assignors. It is understood and agreed that no
Domestic Subsidiaries of the Borrower exist on the date hereof. Any such
Subsidiary established or created after the date hereof and that is required to
execute a counterpart of this Agreement pursuant to the Credit Agreement shall
automatically become an Assignor hereunder by executing a counterpart hereof and
delivering the same to the Collateral Agent.
* * *
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed and delivered by their duly authorized officers as of the date first
above written.
Addresses:
333 Western Avenue FSC SEMICONDUCTOR CORPORATION,
South Portland, ME 04106 as an Assignor
Telephone No.: (207) 775-8755
Telecopier No.: (207) 761-6020
Attention: Dan Boxer By
----------------------------
Title:
333 Western Avenue FAIRCHILD SEMICONDUCTOR
South Portland, ME 04106 CORPORATION, as an Assignor
Telephone No.: (207) 775-8755
Telecopier No.: (207) 761-6020
Attention: Dan Boxer By
----------------------------
Title:
BANKERS TRUST COMPANY,
as Collateral Agent
130 Liberty Street
New York, New York 10006 By
Telephone No.: (212) 250-4886 ----------------------------
Telecopier No.: (212) 250-7218 Title:
Attention: Anthony Logrippo
ANNEX A
to
SECURITY AGREEMENT
SCHEDULE OF CHIEF EXECUTIVE OFFICES
AND OTHER RECORD LOCATIONS
ANNEX B
to
SECURITY AGREEMENT
SCHEDULE OF INVENTORY AND EQUIPMENT LOCATIONS
ANNEX C
to
SECURITY AGREEMENT
SCHEDULE OF TRADE AND FICTITIOUS NAMES
ANNEX D
to
SECURITY AGREEMENT
SCHEDULE OF MARKS
ANNEX E
to
SECURITY AGREEMENT
SCHEDULE OF PATENTS AND APPLICATIONS
ANNEX F
to
SECURITY AGREEMENT
SCHEDULE OF COPYRIGHTS AND APPLICATIONS
ANNEX G
to
SECURITY AGREEMENT
ASSIGNMENT OF SECURITY INTEREST
IN UNITED STATES TRADEMARKS AND PATENTS
FOR GOOD AND VALUABLE CONSIDERATION, receipt and sufficiency of
which are hereby acknowledged, [Name of Assignor], a __________ corporation (the
"Assignor") with principal offices at ____________________________, hereby
assigns and grants to Bankers Trust Company, as Collateral Agent, with principal
offices at 130 Liberty Street, New York, New York 10006 (the "Assignee"), a
security interest in (i) all of the Assignor's right, title and interest in and
to the United States trademarks, trademark registrations and trademark
applications (the "Marks") set forth on Schedule A attached hereto, (ii) all of
the Assignor's right, title and interest in and to the United States patents and
pending patent applications (the "Patents") set forth on Schedule B attached
hereto, in each case together with (iii) all Proceeds (as such term is defined
in the Security Agreement referred to below) and products of the Marks and
Patents, (iv) the goodwill of the businesses with which the Marks are associated
and (v) all causes of action arising prior to or after the date hereof for
infringement of any of the Marks and Patents or unfair competition regarding the
same.
THIS ASSIGNMENT OF SECURITY INTEREST is made to secure the
satisfactory performance and payment of all the Obligations of the Assignor, as
such term is defined in the Security Agreement among the Assignor, the other
assignors from time to time party thereto and the Assignee, dated as of March
11, 1997 (as amended from time to time, the "Security Agreement"). Upon the
occurrence of the Termination Date (as defined in the Security Agreement), the
Assignee shall, upon such satisfaction, execute, acknowledge, and deliver to the
Assignor an instrument in writing releasing the security interest in the Marks
and Patents acquired under this Assignment of Security Interest.
This Assignment of Security Interest has been granted in conjunction
with the security interest granted to the Assignee under the Security Agreement.
The rights and remedies
ANNEX G
Page 2
of the Assignee with respect to the security interest granted herein are without
prejudice to, and are in addition to those set forth in the Security Agreement,
all terms and provisions of which are incorporated herein by reference. In the
event that any provisions of this Assignment of Security Interest are deemed to
conflict with the Security Agreement, the provisions of the Security Agreement
shall govern.
IN WITNESS WHEREOF, the undersigned have executed this Assignment of
Security Interest as of the ____ day of _________, 199__.
[NAME OF ASSIGNOR], Assignor
By_____________________________
Name:
Title:
BANKERS TRUST COMPANY,
as Collateral Agent, Assignee
By_____________________________
Name:
Title:
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this ____ day of _________, 199_, before me personally came
_________________________ who, being by me duly sworn, did state as follows:
that [s]he is _______________ of [Name of Assignor], that [s]he is authorized to
execute the foregoing Assignment of Security Interest on behalf of said
corporation and that [s]he did so by authority of the Board of Directors of said
corporation.
-------------------------
Notary Public
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this ____ day of _________, 199_, before me personally came
_____________________________ who, being by me duly sworn, did state as follows:
that [s]he is __________________ of Bankers Trust Company, that [s]he is
authorized to execute the foregoing Assignment of Security Interest on behalf of
said corporation and that [s]he did so by authority of the Board of Directors of
said corporation.
-------------------------
Notary Public
SCHEDULE A
MARK REG. NO. REG. DATE
SCHEDULE B
PATENT PATENT NO. ISSUE DATE
ANNEX H
ASSIGNMENT OF SECURITY INTEREST
IN UNITED STATES COPYRIGHTS
WHEREAS, [Name of Assignor], a _______________ corporation (the
"Assignor"), having its chief executive office at , ________________________ ,
is the owner of all right, title and interest in and to the United States
copyrights and associated United States copyright registrations and applications
for registration set forth in Schedule A attached hereto;
WHEREAS, BANKERS TRUST COMPANY, as Collateral Agent, having its
principal offices at 130 Liberty Street, New York, New York 10006 (the
"Assignee"), desires to acquire a security interest in, and lien upon, all of
Assignor's right, title and interest in and to Assignor's copyrights and
copyright registrations and applications therefor; and
WHEREAS, the Assignor is willing to assign and grant to the Assignee
a security interest in, and lien upon, the copyrights and copyright
registrations and applications therefor described above.
NOW, THEREFORE, for good and valuable consideration, the sufficiency
and receipt of which is hereby acknowledged, and subject to the terms and
conditions of the Security Agreement, dated as of March 11, 1997, made by the
Assignor, the other assignors from time to time party thereto and the Assignee
(as amended from time to time, the "Security Agreement"), the Assignor hereby
assigns and grants to the Assignee a security interest in, and lien upon, all of
Assignor's right, title and interest in and to Assignor's copyrights and
copyright registrations and applications therefor set forth in Schedule A
attached hereto (the "Copyrights"), together with (i) all Proceeds (as such term
is defined in the Security Agreement referred to below) of the
ANNEX H
Page 2
Copyrights, and (ii) all causes of action arising prior to or after the date
hereof for infringement of any Copyright.
This Assignment of Security Interest is made to secure the
satisfactory performance and payment of all Obligations (as such term is defined
in the Security Agreement) of the Assignor and shall be effective as of the date
of the Security Agreement. Upon the occurrence of the Termination Date (as such
term is defined in the Security Agreement), the Assignee shall, upon such
satisfaction, execute, acknowledge, and deliver to Assignor an instrument in
writing releasing the security interest in the Copyrights acquired under this
Assignment of Security Interest.
This Assignment of Security Interest has been granted in conjunction
with the security interest granted to the Assignee under the Security Agreement.
The rights and remedies of the Assignee with respect to the security interest
granted herein are without prejudice to, and are in addition to those set forth
in the Security Agreement, all terms and provisions of which are incorporated
herein by reference. In the event that any provisions of this Assignment are
deemed to conflict with the Security Agreement, the provisions of the Security
Agreement shall govern.
ANNEX H
Page 3
IN WITNESS WHEREOF, the undersigned have executed this Assignment of
Security Interest at New York, New York as of the __ day of ____________, 199_.
[NAME OF ASSIGNOR], Assignor
By_______________________________
Name:
Title:
BANKERS TURST COMPANY,
as Collateral Agent, Assignee
By_______________________________
Name:
Title:
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this __ day of ________, 199_ before me personally came
_______________, who being duly sworn, did depose and say that [s]he is
___________________ of [Name of Assignor], that [s]he is authorized to execute
the foregoing Assignment of Security Interest on behalf of said corporation and
that [s]he did so by authority of the Board of Directors of said corporation.
----------------------------------
Notary Public
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this __ day of ________, 199_ before me personally came
_______________, who being duly sworn, did depose and say that [s]he is
_______________ of Bankers Trust Company, that [s]he is authorized to execute
the foregoing Assignment of Security Interest on behalf of said corporation and
that [s]he did so by authority of the Board of Directors of said corporation.
---------------------------------
Notary Public
SCHEDULE A
COPYRIGHTS
REGISTRATION PUBLICATION
NUMBERS DATE COPYRIGHT TITLE
EXHIBIT J
FORM OF CONSENT LETTER
[Letterhead of Agent for Service of Process]
[Date]
To the Agent and the
Banks party to the
Credit Agreement referred
to below:
Ladies and Gentlemen:
Reference is made to the Credit Agreement, dated as of March 11,
1997, among FSC Semiconductor Corporation ("Holdings"), Fairchild Semiconductor
Corporation (the "Borrower"), the various Banks from time to time party thereto,
Bankers Trust Company, as Administrative Agent (the "Administrative Agent"),
Credit Suisse First Boston, as Syndication Agent and Canadian Imperial Bank of
Commerce, as Documentation Agent (as such Credit Agreement may be modified,
supplemented or amended from time to time, the "Credit Agreement").
Each of Holdings and the Borrower, pursuant to Section 13.08 of the
Credit Agreement, and each Subsidiary Guarantor pursuant to Section 20 of the
Subsidiaries Guaranty has irrevocably designated, appointed and empowered the
undersigned, Corporation Service Company, with offices currently located at 500
Central Avenue, Albany, New York 12206, as its authorized designee, appointee
and agent to receive, accept and acknowledge for and on its behalf, and in
respect of its property, service of any and all legal process, summons, notices
and documents which may be served in any such legal action or proceeding with
respect to the Credit Agreement or any other Credit Document (as defined in the
Credit Agreement) in the courts of the State of New York or of the United States
of America for the Southern District of New York.
The undersigned hereby informs you that it irrevocably accepts such
appointment as agent as set forth in the above-referenced Sections of the
respective Credit Documents and agrees with you that the undersigned (i) shall
inform the Administrative Agent promptly in writing of any change of its address
in the State of New York, (ii) shall perform its obligations as such process
agent in accordance with the provisions of such Sections and (iii) shall forward
promptly to Holdings or the Borrower, as the case may be, any legal process
received by the undersigned in its capacity as process agent.
EXHIBIT J
Page 2
As process agent, the undersigned, and its successor or successors,
agree to discharge the above-mentioned obligations and will not refuse
fulfillment of such obligations under the above-referenced Sections of the
respective Credit Documents.
Very truly yours,
CORPORATION SERVICE COMPANY
By_______________________________
Title:
EXHIBIT K
OFFICER'S SOLVENCY CERTIFICATE
I, the undersigned, Chief Financial Officer of [FSC Semiconductor
Corporation] [and] [Fairchild Semiconductor Corporation], do hereby certify on
behalf of [FSC Semiconductor Corporation] [and] [Fairchild Semiconductor
Corporation] that:
1. This Certificate is furnished to the Agents and the Banks
pursuant to Section 5.17 of the Credit Agreement, dated as of March 11, 1997
among FSC Semiconductor Corporation ("Holdings"), Fairchild Semiconductor
Corporation (the "Borrower"), various lenders from time to time party thereto
(the "Banks"), Bankers Trust Company, as Administrative Agent (together with any
successor administrative agent, the "Administrative Agent"), Credit Suisse First
Boston, as Syndication Agent (the "Syndication Agent") and Canadian Imperial
Bank of Commerce, as Documentation Agent (the "Documentation Agent" and,
together with the Administrative Agent and the Syndication Agent, collectively,
the "Agents") (such Credit Agreement, as in effect on the date of this
Certificate, being herein called the "Credit Agreement"). Unless otherwise
defined herein, capitalized terms used in this Certificate shall have the
meanings set forth in the Credit Agreement.
2. For purposes of this Certificate, the terms below shall have the
following definitions:
(a) "Fair Value"
The amount at which the assets, in their entirety, of Holdings and
its Subsidiaries (on a consolidated basis) and the Borrower (on a
stand-alone basis), as applicable, would change hands between a
willing buyer and a willing seller, within a commercially reasonable
period of time, each having reasonable knowledge of the relevant
facts, with neither being under any compulsion to act.
(b) "Present Fair Saleable Value"
The amount that could be obtained by an independent willing seller
from an independent willing buyer if the assets of Holdings and its
Subsidiaries (on a consolidated basis) and the Borrower (on
EXHIBIT K
Page 2
a stand-alone basis), as applicable, are sold with reasonable
promptness under normal selling conditions in a current market.
(c) "New Financing"
The Indebtedness incurred or to be incurred by Holdings and its
Subsidiaries under the Credit Documents (assuming the full
utilization by the Borrower of the Total Commitments under the
Credit Agreement) and the other Documents and all other financings
contemplated by the Documents, in each case after giving effect to
the Transaction and the incurrence of all financings contemplated
therewith.
(d) "Stated Liabilities"
The recorded liabilities (including contingent liabilities) that
would be recorded in accordance with generally accepted accounting
principles ("GAAP") of Holdings and its Subsidiaries (on a
consolidated basis) and the Borrower (on a stand-alone basis), in
each case at March 11, 1997 after giving effect to the Transaction,
determined in accordance with GAAP consistently applied, together
with, (x) the net change in long-term debt (including current
maturities) between May 26, 1996 and the date hereof and (y) without
duplication, the amount of all New Financing.
(e) "Identified Contingent Liabilities"
The maximum estimated amount of liabilities reasonably likely to
result from pending litigation, asserted claims and assessments,
guaranties, uninsured risks (after taking into account the effect of
any indemnity therefor and the likelihood of payment thereunder) and
other contingent liabilities of each of Holdings and its
Subsidiaries (on a consolidated basis) and the Borrower (on a
stand-alone basis), as applicable, after giving effect to the
Transaction (exclusive of such contingent liabilities to the extent
reflected in Stated Liabilities), as set forth on Annex A hereto.
EXHIBIT K
Page 3
(f) "Will be able to pay its Stated Liabilities and Identified
Contingent Liabilities, as they mature"
For the period from the date hereof through March 11, 2003, each of
Holdings and its Subsidiaries (on a consolidated basis) and the
Borrower (on a stand-alone basis), as applicable, will have
sufficient assets and cash flow to pay their respective Stated
Liabilities and Identified Contingent Liabilities as those
liabilities mature or otherwise become payable.
(g) "Does not have Unreasonably Small Capital"
For the period from the date hereof through March 11, 2003, each of
Holdings and its Subsidiaries (on a consolidated basis) and the
Borrower (on a stand-alone basis), as applicable after consummation
of the Transaction and all Indebtedness (including the Loans) being
incurred or assumed and Liens created by the Borrower and its
Subsidiaries in connection therewith, is a going concern and has
sufficient capital to ensure that it will continue to be a going
concern.
3. For purposes of this Certificate, I, or officers of the Borrower
under my direction and supervision, have performed the following procedures as
of and for the periods set forth below.
(a) I have reviewed the financial statements (including the pro forma
financial statements) and Projections referred to in Sections
7.05(a) and (d) of the Credit Agreement.
(b) I have made inquiries of certain officials of Holdings and its
Subsidiaries, who have responsibility for financial and accounting
matters regarding (i) the existence and amount of Identified
Contingent Liabilities associated with the business of Holdings and
its Subsidiaries and (ii) whether the unaudited combined balance
sheets and related combined statements of operations referred to in
Section 7.05(a) of the Credit Agreement are in conformity with GAAP
applied on a basis substantially consistent with that of the audited
financial statements as at May 26, 1996.
EXHIBIT K
Page 4
(c) I have knowledge of and have reviewed to my satisfaction the Credit
Documents and the other Documents, and the respective Schedules and
Exhibits thereto.
(d) With respect to Identified Contingent Liabilities, I:
1. inquired of certain officials of Holdings and its
Subsidiaries, who have responsibility for legal, financial and
accounting matters as to the existence and estimated liability
with respect to all contingent liabilities known to them;
2. confirmed with officers of Holdings and its Subsidiaries that,
to the best of such officers' knowledge, (i) all appropriate
items were included in Stated Liabilities or the listing of
Identified Contingent Liabilities and that (ii) the amounts
relating thereto were the maximum estimated amount of
liabilities reasonably likely to result therefrom as of the
date hereof; and
3. I hereby certify that, to the best of my knowledge, Annex A
hereto constitutes a true and complete list of all material
liabilities that may arise from any pending litigation,
asserted claims and assessments, guarantees, uninsured risks
(after taking into account the effect of any indemnity
therefor and the likelihood of payment thereunder) and other
contingent liabilities of Holdings and its Subsidiaries
(exclusive of such contingent liabilities to the extent
reflected in Stated Liabilities), and with respect to each
such item sets forth the estimable maximum liability with
respect thereto.
(e) I have examined the Projections relating to Holdings and its
Subsidiaries which have been previously delivered to the Banks and
considered the effect thereon of any changes since the date of the
preparation thereof on the results projected therein. After such
review, I hereby certify that in my opinion the Projections are
reasonable and attainable, and that the Projections support the
conclusions contained in paragraph 4 below.
EXHIBIT K
Page 5
(f) I have made inquiries of certain officers of Holdings and its
Subsidiaries who have responsibility for financial reporting and
accounting matters regarding whether they were aware of any events
or conditions that, as of the date hereof, would cause either of
Holdings and its Subsidiaries (on a consolidated basis) or the
Borrower (on a stand-alone basis), after giving effect to the
Transaction and the related financing transactions (including the
incurrence of the New Financing), to (i) have assets with a Fair
Value or Present Fair Saleable Value that are less than the sum of
Stated Liabilities and Identified Contingent Liabilities; (ii) have
Unreasonably Small Capital; or (iii) not be able to pay its Stated
Liabilities and Identified Contingent Liabilities as they mature or
otherwise become payable.
4. Based on and subject to the foregoing, I hereby certify on behalf
of each of Holdings and its Subsidiaries (on a consolidated basis) and the
Borrower (on a stand-alone basis) that, after giving effect to the Transaction
and the related financing transactions (including the incurrence of the New
Financing), it is my informed opinion that (a) the Fair Value and Present Fair
Saleable Value of the assets of each of Holdings and its Subsidiaries (on a
consolidated basis) and the Borrower (on a stand-alone basis) exceed its Stated
Liabilities and Identified Contingent Liabilities; (b) each of Holdings and its
Subsidiaries (on a consolidated basis) and the Borrower (on a stand-alone basis)
does not have Unreasonably Small Capital; and (c) each of Holdings and its
Subsidiaries (on a consolidated basis) and the Borrower (on a stand-alone basis)
will be able to pay its Stated Liabilities and Identified Contingent
Liabilities, as they mature or otherwise become payable.
EXHIBIT K
Page 6
IN WITNESS WHEREOF, I have hereto set my hand this ___ day of March,
1997.
[FSC SEMICONDUCTOR
CORPORATION]
[FAIRCHILD SEMICONDUCTOR
CORPORATION]
By__________________________
Title:
ANNEX A
IDENTIFIED CONTINGENT LIABILITIES
Pursuant to the Asset Purchase Agreement dated March 11, 1997 between the
Borrower and National Semiconductor Corporation, the Borrower assumed the
following contingent liabilities:
1. Heather Baker v. National Semiconductor Corporation, Cumberland County,
Maine Superior Court, Case No. CV-95-1171. Claim for approximately
$300,000 resulting from termination of independent contractor in South
Portland.
2. Mark Fortin v. National Semiconductor Corporation, Maine Human Rights
Commission, Charge No. E96-0210. Claim for approximately $300,000
regarding termination of employment; alleging discrimination.
3. Paul Filarowski v. National Semiconductor Corporation, Boston Area Office
of EEOC, Charge No. 161970014. Claim for approximately $300,000 in
connection with termination of employment; alleging age discrimination.
4. Empire Computer & Components, Inc. v. Pioneer Technology Group, Santa
Clara, California Superior Court, Case No. CV-75-5410. Claim for
approximately $2.1 million against National Semiconductor Corporation
("National") distributor ("Distributor") for breach of contract. National
has agreed to indemnify Distributor. On October 8, 1996, the plaintiff
served a verified notice on the defendant that plaintiff was striking from
its complaint for $10 million for loss of business reputation.
EXHIBIT L
ASSIGNMENT AND ASSUMPTION AGREEMENT
Date: _______ __, 19__
Reference is made to the Credit Agreement described in Item 2 of
Annex I hereto (as such Credit Agreement may hereafter be amended, supplemented
or otherwise modified from time to time, the "Credit Agreement"). Unless defined
in Annex I hereto, terms defined in the Credit Agreement are used herein as
therein defined. _____________________ (the "Assignor") and _________________
(the "Assignee") hereby agree as follows:
1. The Assignor hereby sells and assigns to the Assignee without
recourse and without representation or warranty (other than as expressly
provided herein), and the Assignee hereby purchases and assumes from the
Assignor, that interest in and to all of the Assignor's rights and obligations
under the Credit Agreement as of the date hereof which represents the percentage
interest specified in Item 4 of Annex I hereto (the "Assigned Share") of all of
the outstanding rights and obligations under the Credit Agreement relating to
the facilities listed in Item 4 of Annex I hereto, including, without
limitation, [(v) in the case of any assignment of all or any portion of the
Total Tranche A Term Loan Commitment, all rights and obligations with respect to
the Assigned Share of such Total Tranche A Term Loan Commitment,](1) [(w) in the
case of any assignment of all or any portion of the Tranche B Term Loan
Commitment, all rights and obligations with respect to the Assigned Share of
such Total Tranche B Term Loan Commitment,](2) (x) in the case of any assignment
of outstanding Tranche A Term Loans, all rights and obligations with respect to
the Assigned Share of such Tranche A Term Loans, (y) in the case of any
assignment of outstanding Tranche B Term Loans, all rights and obligations with
respect to the Assigned Share of such outstanding Tranche B Term Loans, and (z)
in the case of any assignment of all or any portion of the Total Revolving Loan
Commitment, all rights and obligations with respect to the Assigned Share of
such Total Revolving Loan Commitment and of any outstanding Revolving
- ----------
(1) Delete bracketed language in Assignment and Assumption Agreements executed
after the termination of the Total Tranche A Term Loan Commitment.
(2) Delete bracketed language in Assignment and Assumption Agreements executed
after the termination of the Total Tranche B Term Loan Commitment.
EXHIBIT L
Page 2
Loans and Letters of Credit. After giving effect to such sale and assignment,
the Assignee's Revolving Loan Commitment[, Tranche A Term Loan Commitment](3) [,
Tranche B Term Loan Commitment](4) and the amount of the outstanding Term Loans
owing to the Assignee will be as set forth in Item 4 of Annex I hereto.
2. The Assignor (i) represents and warrants that it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any adverse claim; (ii) makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with the Credit Agreement
or the other Credit Documents or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of the Credit Agreement or the
other Credit Documents or any other instrument or document furnished pursuant
thereto; and (iii) makes no representation or warranty and assumes no
responsibility with respect to the financial condition of Holdings, the Borrower
or any of its Subsidiaries or the performance or observance by Holdings, the
Borrower or any of its Subsidiaries of any of their obligations under the Credit
Agreement or the other Credit Documents to which they are a party or any other
instrument or document furnished pursuant thereto.
3. The Assignee (i) confirms that it has received a copy of the
Credit Agreement and the other Credit Documents, together with copies of the
financial statements referred to therein and such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into this Assignment and Assumption Agreement; (ii) agrees
that it will, independently and without reliance upon the Administrative Agent,
the Assignor or any other Bank or Agent and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under the Credit Agreement;
(iii) confirms that it is an Eligible Transferee under Section 13.04(b) of the
Credit Agreement; (iv) appoints and authorizes the Administrative Agent and the
Collateral Agent to take such action as agent on its behalf and to exercise such
powers under the Credit Agreement and the other Credit Documents as are
delegated to the Administrative Agent and the Collateral Agent, as the case may
be, by the terms thereof, together with such powers as are reasonably incidental
thereto; [and] (v) agrees that it will perform in accordance with their terms
all of the obligations which by the terms of the Credit Agreement
- ----------
(3) Delete bracketed language in Assignment and Assumption Agreements executed
after the termination of the Total Tranche A Term Loan Commitment.
(4) Delete bracketed language in Assignment and Assumption Agreements executed
after the termination of the Total Tranche B Term Loan Commitment. 5 Include if
the Assignee is organized under the laws of a jurisdiction outside of the United
States.
EXHIBIT L
Page 3
are required to be performed by it as a Bank[; and (vii) to the extent legally
entitled to do so, attaches the forms described in Section 13.04(b) of the
Credit Agreement](5).
4. Following the execution of this Assignment and Assumption
Agreement by the Assignor and the Assignee, an executed original hereof
(together with all attachments) will be delivered to the Administrative Agent.
This Assignment and Assumption Agreement shall be effective, unless otherwise
specified in Item 5 of Annex I hereto (the "Settlement Date"), upon the receipt
of the consent of the Administrative Agent to the extent required by Section
13.04(b) of the Credit Agreement, receipt by the Administrative Agent of the
administrative fee referred to in such Section 13.04(b), and the registration of
the transfer as provided by Section 13.17 of the Credit Agreement.
5. Upon the Settlement Date of this Assignment and Assumption
Agreement, (i) the Assignee shall be a party to the Credit Agreement and, to the
extent provided in this Assignment and Assumption Agreement, have the rights and
obligations of a Bank thereunder and under the other Credit Documents and (ii)
the Assignor shall, to the extent provided in this Assignment and Assumption
Agreement, relinquish its rights and be released from its obligations under the
Credit Agreement and the other Credit Documents except with respect to
indemnification provisions under the Credit Agreement (including without
limitation, Sections 1.10, 1.11, 2.05, 4.04, 13.01 and 13.06).
6. It is agreed that the Assignee shall be entitled to (x) all
interest on the Assigned Share of the Loans at the rates specified in Item 6 of
Annex I; (y) all Commitment Commission (if applicable) on the Assigned Share of
the Total Revolving Loan Commitment and/or Total Term Loan Commitment (if not
theretofore terminated) at the rate specified in Item 7 of Annex I hereto; and
(z) all Letter of Credit Fees (if applicable) on the Assignee's participation in
all Letters of Credit at the rate specified in Item 8 of Annex I hereto, which,
in each case, accrue on and after the Settlement Date, such interest and, if
applicable, Commitment Commission and Letter of Credit Fees, to be paid by the
Administrative Agent directly to the Assignee. It is further agreed that all
payments of principal made on the Assigned Share of the Loans which occur on and
after the Settlement Date will be paid directly by the Administrative Agent to
the Assignee. Upon the Settlement Date, the Assignee shall pay to the Assignor
an amount specified by the Assignor in writing which represents the Assigned
Share of the principal amount of the respective Loans made by the Assignor
pursuant to the
- ----------
(5) Include if the Assignee is organized under the laws of a jurisdiction
outside of the United States.
EXHIBIT L
Page 4
Credit Agreement which are outstanding on the Settlement Date, and which are
being assigned hereunder. The Assignor and the Assignee shall make all
appropriate adjustments in payments under the Credit Agreement for periods prior
to the Settlement Date directly between themselves.
7. THIS ASSIGNMENT AND ASSUMPTION AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
EXHIBIT L
Page 5
IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized officers to execute and deliver this Assignment and Assumption
Agreement, as of the date first above written, such execution also being made on
Annex I hereto.
Accepted this ____ day [NAME OF ASSIGNOR]
of _______, 19__ as Assignor
By
-----------------------------
Title:
[NAME OF ASSIGNEE]
as Assignee
By
-----------------------------
Title:
Acknowledged:
BANKERS TRUST COMPANY
as Administrative Agent
By
--------------------------------
Title:
ANNEX FOR ASSIGNMENT AND ASSUMPTION AGREEMENT
ANNEX I
1. Borrower: Fairchild Semiconductor Corporation.
2. Name and Date of Credit Agreement:
Credit Agreement, dated as of March 11, 1997 among FSC Semiconductor
Corporation, Fairchild Semiconductor Corporation, the Banks party
thereto from time to time, Bankers Trust Company, as Administrative
Agent, Credit Suisse First Boston, as Syndication Agent, and
Canadian Imperial Bank of Commerce, as Documentation Agent .
3. Date of Assignment Agreement:
4. Amounts (as of date of item #3 above):
[Total [Total Outstanding Outstanding
Tranche A Tranche B Principal of Principal of Revolving
Term Loan Term Loan Tranche A Tranche B Loan
Commitment Commitment Term Term Commitment
---------- ---------- ----- ---- ----------
Loans Loans
----- -----
a. Aggregate Amount for all
Banks $---------- $---------- $---------- $---------- $---------
b. Assigned Share _________% _________% _________% _________% _________%
c. Amount of Assigned Share $________] $________] $__________ $__________ $_________
(6) (7) -
- --------
(6) This column should be deleted in the case of Assignment and Assumption
Agreements executed after the termination of the Total Tranche A Term Loan
Commitment.
(7) This column should be deleted in the case of Assignment and Assumption
Agreements executed after the termination of the Total Tranche B Term Loan
Commitment.
Annex I
Page 2
5. Settlement Date:
6. Rate of Interest As set forth in Section 1.08
to the Assignee: of the Credit Agreement (unless
otherwise agreed to by the Assignor
and the Assignee)(8)
7. Commitment As set forth in Section 3.01(a) of the Credit
Commission to Agreement (unless otherwise agreed to by the
the Assignee: Assignor and the Assignee)(9)
8. Letter of Credit As set forth in Section 3.01(b)
Fees to the of the Credit Agreement (unless
Assignee: otherwise agreed to by the Assignor
and the Assignee)(10)
- ----------
(8) The Borrower and the Administrative Agent shall direct the entire amount of
the interest to the Assignee at the rate set forth in Section 1.08 of the Credit
Agreement, with the Assignor and Assignee effecting the agreed upon sharing of
the interest through payments by the Assignee to the Assignor.
(9) Insert "Not Applicable" in lieu of text if no portion of the Total Revolving
Loan Commitment is being assigned. The Borrower and the Administrative Agent
shall direct the entire amount ofthe Commitment Commission to the Assignee at
the rate set forth in Section 3.01(a) of the Credit Agreemenmt, with the
Assignor and the Assignee effecting the agreed upon sharing of Commitment
Commission through payment by the Assignee to the Assignor.
(10) Insert "Not Applicable" in lieu of text if no portion of the Total
Revolving Loan Commitment is being assigned. Otherwise, the Borrower and the
Administrative Agent shall direct the entire amount of the Letter of Credit Fees
to the Assignee at the rate set forth in Section 3.10(b) of the Credit
Agreement, with the Assignor and the Assignee effecting the agreed upon sharing
of Letter of Credit Fees through payment by the Assignee to the Assignor.
Annex I
Page 3
9. Notice:
ASSIGNOR:
---------------------
---------------------
---------------------
Attention:
Telephone:
Telecopier:
Reference:
ASSIGNEE:
Senior Debt Portfolio
---------------------
---------------------
---------------------
Attention:
Telephone:
Telecopier:
Reference:
Payment Instructions:
ASSIGNOR:
---------------------
---------------------
---------------------
Attention:
Reference:
Annex I
Page 4
ASSIGNEE:
---------------------
---------------------
---------------------
Attention:
Reference:
Accepted and Agreed:
[NAME OF ASSIGNEE] [NAME OF ASSIGNOR]
By By
----------------------- ----------------------
----------------------- ----------------------
(Print Name and Title) (Print Name and Title)
EXHIBIT M
SUBORDINATION PROVISIONS
Each promissory note evidencing Indebtedness (as defined in the
Credit Agreement to which this Exhibit M is attached) incurred by Fairchild
Semiconductor Corporation, a Delaware corporation, (the "Borrower") or any of
its Domestic Subsidiaries, owing to any of the Borrower's Foreign Subsidiaries
shall have the following subordination provisions attached as Annex A thereto,
and shall include in the text of such promissory note the language: "THE
INDEBTEDNESS EVIDENCED BY THIS NOTE IS SUBORDINATE AND JUNIOR IN RIGHT OF
PAYMENT TO ALL SENIOR INDEBTEDNESS (AS DEFINED IN ANNEX A HERETO) TO THE EXTENT
PROVIDED IN ANNEX A."
ANNEX A
TO PROMISSORY NOTE
- --------------------------------------------------------------------------------
Section 1.01. Subordination of Liabilities. [Name of Company] (the
"Company"), for itself, its successors and assigns, covenants and agrees and
each holder of the promissory note to which this Annex A is attached (the
"Note") by its acceptance thereof likewise covenants and agrees that the payment
of the principal of, and interest on, and all other amounts owing in respect of,
the Note is hereby expressly subordinated, to the extent and in the manner
hereinafter set forth, to the prior payment in full of Senior Indebtedness (as
defined in Section 1.07) in cash. The provisions of this Annex A shall
constitute a continuing offer to all persons who, in reliance upon such
provisions, become holders of, or continue to hold, Senior Indebtedness, and
such provisions are made for the benefit of the holders of Senior Indebtedness,
and such holders are hereby made obligees hereunder to the same extent as if
their names were written herein as such, and they and/or each of them may
proceed to enforce such provisions.
Section 1.02. Company Not to Make Payments with Respect to Notes in
Certain Circumstances. (a) Upon the maturity of any Senior Indebtedness
(including interest thereon or fees or any other amounts owing in respect
thereof), whether at stated maturity, by acceleration or otherwise, all
principal thereof and premium, if any, and interest thereon or fees or any other
amounts owing in respect thereof, in each case to the extent due and owing at
such time, shall first be paid in full in cash, or such payment duly provided
for in cash or in a manner satisfactory
EXHIBIT M
Page 2
to the holder or holders of such Senior Indebtedness, before any payment is made
on account of the principal of (including installments thereof), or interest on,
or any amount otherwise owing in respect of, the Note. Each holder of the Note
hereby agrees that, so long as an Event of Default (as defined below), or event
which with notice or lapse of time or both would constitute an Event of Default,
in respect of any Senior Indebtedness exists, it will not ask, demand, sue for,
or otherwise take, accept or receive, any amounts owing in respect of the Note.
As used herein, the term "Event of Default" shall mean any Event of Default,
under and as defined in, the relevant documentation governing any Senior
Indebtedness which has arisen as a result of the failure to make any payments
with respect to Senior Indebtedness or as a result of any bankruptcy, insolvency
or similar proceeding with respect to the Company, and in any event shall
include any payment default with respect to any Senior Indebtedness.
(b) In the event that notwithstanding the provisions of the
preceding subsection (a) of this Section 1.02, the Company shall make any
payment on account of the principal of, or interest on, or amounts otherwise
owing in respect of, the Note at a time when payment is not permitted by said
subsection (a), such payment shall be held by the holder of the Note, in trust
for the benefit of, and shall be paid forthwith over and delivered to, the
holders of Senior Indebtedness or their representative or representatives under
the agreements pursuant to which the Senior Indebtedness may have been issued,
as their respective interests may appear, for application pro rata to the
payment of all Senior Indebtedness remaining unpaid to the extent necessary to
pay all Senior Indebtedness in full in cash in accordance with the terms of such
Senior Indebtedness, after giving effect to any concurrent payment or
distribution to or for the holders of Senior Indebtedness. Without in any way
modifying the provisions of this Annex A or affecting the subordination effected
hereby, if such notice is not given, the Company shall give the holder of the
Note prompt written notice of any maturity of Senior Indebtedness after which
such Senior Indebtedness remains unsatisfied.
Section 1.03. Note Subordinated to Prior Payment of all Senior
Indebtedness on Dissolution, Liquidation or Reorganization of Company. Upon any
distribution of assets of the Company upon any dissolution, winding up,
liquidation or reorganization of the Company (whether in bankruptcy, insolvency
or receivership proceedings or upon an assignment for the benefit of creditors
or otherwise):
EXHIBIT M
Page 3
(a) the holders of all Senior Indebtedness shall first be
entitled to receive payment in full in cash or in a manner
satisfactory to the holder or holders of such Senior Indebtedness of
the principal thereof, premium, if any, and interest (including,
without limitation, all interest accruing after the commencement of
any bankruptcy, insolvency, receivership or similar proceeding at
the rate provided in the governing documentation whether or not such
interest is an allowed claim in such proceeding) and all other
amounts due thereon before the holder of the Note is entitled to
receive any payment on account of the principal of or interest on or
any other amount owing in respect of the Note;
(b) any payment or distributions of assets of the Company of
any kind or character, whether in cash, property or securities to
which the holder of the Note would be entitled except for the
provisions of this Annex A, shall be paid by the liquidating trustee
or agent or other person making such payment or distribution,
whether a trustee or agent, directly to the holders of Senior
Indebtedness or their representative or representatives under the
agreements pursuant to which the Senior Indebtedness may have been
issued, to the extent necessary to make payment in full of all
Senior Indebtedness remaining unpaid, after giving effect to any
concurrent payment or distribution to the holders of such Senior
Indebtedness; and
(c) in the event that, notwithstanding the foregoing
provisions of this Section 1.03, any payment or distribution of
assets of the Company of any kind or character, whether in cash,
property or securities, shall be received by the holder of the Note
on account of principal of, or interest or other amounts due on, the
Note before all Senior Indebtedness is paid in full in cash or in a
manner satisfactory to the holder or holders of such Senior
Indebtedness, or effective provisions made for its payment, such
payment or distribution shall be received and held in trust for and
shall be paid over to the holders of the Senior Indebtedness
remaining unpaid or unprovided for or their representative or
representatives under the agreements pursuant to which the Senior
Indebtedness may have been issued, for application to the payment of
such Senior Indebtedness until all such Senior Indebtedness shall
have been paid in full in cash or in a manner satisfactory to the
holder or holders of such Senior Indebtedness, after giving effect
to any concurrent payment or distribution to the holders of such
Senior Indebtedness.
EXHIBIT M
Page 4
Without in any way modifying the provisions of this Annex A or
affecting the subordination effected hereby, if such notice is not given, the
Company shall give prompt written notice to the holder of the Note of any
dissolution, winding up, liquidation or reorganization of the Company (whether
in bankruptcy, insolvency or receivership proceedings or upon an assignment for
the benefit of creditors or otherwise).
Section 1.04. Subrogation. Subject to the prior payment in full of
all Senior Indebtedness in cash, the holder of the Note shall be subrogated to
the rights of the holders of Senior Indebtedness to receive payments or
distributions of assets of the Company applicable to the Senior Indebtedness
until all amounts owing on the Note shall be paid in full, and for the purpose
of such subrogation no payments or distributions to the holders of the Senior
Indebtedness by or on behalf of the Company or by or on behalf of the holder of
the Note by virtue of this Annex A which otherwise would have been made to the
holder of the Note, shall be deemed to be payment by the Company to or on
account of the Senior Indebtedness, it being understood that the provisions of
this Annex A are and are intended solely for the purpose of defining the
relative rights of the holder of the Note, on the one hand, and the holders of
the Senior Indebtedness, on the other hand.
Section 1.05. Obligation of the Company Unconditional. Nothing
contained in this Annex A or in the Note is intended to or shall impair, as
between the Company and the holder of the Note, the obligation of the Company,
which is absolute and unconditional, to pay to the holder of the Note the
principal of and interest on the Note as and when the same shall become due and
payable in accordance with their terms, or is intended to or shall affect the
relative rights of the holder of the Note and creditors of the Company other
than the holders of the Senior Indebtedness, nor shall anything herein or
therein prevent the holder of the Note from exercising all remedies otherwise
permitted by applicable law, subject to the rights, if any, under this Annex A
of the holders of Senior Indebtedness in respect of cash, property, or
securities of the Company received upon the exercise of any such remedy. Upon
any distribution of assets of the Company referred to in this Annex A, the
holder of the Note shall be entitled to rely upon any order or decree made by
any court of competent jurisdiction in which such dissolution, winding up,
liquidation or reorganization proceedings are pending, or a certificate of the
liquidating trustee or agent or other person making any distribution to the
holder of the Note, for the purpose of ascertaining the persons entitled to
participate in such distribution, the holders of the Senior Indebtedness and
other
EXHIBIT M
Page 5
indebtedness of the Company, the amount thereof or payable thereon, the amount
or amounts paid or distributed thereon and all other facts pertinent thereto or
to this Annex A.
Section 1.06. Subordination Rights not Impaired by Acts or Omissions
of Company or Holders of Senior Indebtedness. No right of any present or future
holders of any Senior Indebtedness to enforce subordination as herein provided
shall at any time in any way be prejudiced or impaired by an act or failure to
act on the part of the Company or by any act or failure to act in good faith by
any such holder, or by any noncompliance by the Company with the terms and
provisions of the Note, regardless of any knowledge thereof which any such
holder may have or be otherwise charged with. The holders of the Senior
Indebtedness may, without in any way affecting the obligations of the holder of
the Note with respect thereto, at any time or from time to time and in their
absolute discretion, change the manner, place or terms of payment of, change or
extend the time of payment of, or renew or alter, any Senior Indebtedness, or
amend, modify or supplement any agreement or instrument governing or evidencing
such Senior Indebtedness or any other document referred to therein, or exercise
or refrain from exercising any other of their rights under the Senior
Indebtedness including, without limitation, the waiver of a default thereunder
and the release of any collateral securing such Senior Indebtedness, all without
notice to or assent from the holder of the Note.
Section 1.07. Senior Indebtedness. (a) The term "Senior
Indebtedness" shall mean all Obligations (as defined below) (i) of the Borrower
and/or its Subsidiaries (as defined below) under, or with respect to, the Credit
Agreement (as defined below) and any renewal, extension, restatement or
refunding thereof and (ii) of the Borrower and/or its Subsidiaries in respect of
all Interest Rate Protection or Other Hedging Agreements (as defined below) with
Other Creditors (as defined below).
(b) As used in this Agreement, the terms set forth below shall have
the respective meanings provided below:
"Credit Agreement" shall mean the Credit Agreement, dated as of
March 11, 1997, among [the Company] [Fairchild Semiconductor Corporation], FSC
Semiconductor Corporation, various financial institutions from time to time
party thereto (the "Banks"), Bankers Trust Company, as Administrative Agent,
Credit Suisse First Boston, as Syndication Agent, and Canadian Imperial Bank of
EXHIBIT M
Page 6
Commerce, as Documentation Agent, together with the related documents thereto
(including, without limitation, the term loans and revolving loans thereunder,
any guarantees and security documents), as same may be amended, modified,
extended, renewed, replaced, restated, supplemented or refinanced from time to
time, and including any agreement extending the maturity of, refinancing or
restructuring all or any portion of, the indebtedness under such agreement or of
any successor agreements.
"Interest Rate Protection Agreement" shall have the meaning provided
in the Credit Agreement.
"Obligations" shall mean any principal, interest, premium,
penalties, fees, expenses, indemnities and other liabilities and obligations
payable under the documentation governing any Senior Indebtedness (including,
without limitation, all interest accruing after the commencement of any
bankruptcy, insolvency, receivership or similar proceeding at the rate provided
in the governing documentation, whether or not such interest is an allowed claim
in such proceeding).
"Other Creditors" shall mean any Bank or Affiliate thereof which
enters into, or which participates in, the extension of Interest Rate Protection
Agreements or Other Hedging Agreements (even if the respective Bank ceases to be
a Bank under the Credit Agreement for any reason) and their subsequent assigns,
if any, in all such cases in their capacity as creditors with respect to
Interest Rate Protection or Other Hedging Agreements.
"Other Hedging Agreement" shall have the meaning provided in the
Credit Agreement.
"Subsidiary" shall have the meaning provided in the Credit
Agreement.