EXECUTION COPY 03/02/98
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VISHAY INTERTECHNOLOGY, INC.
SHORT TERM REVOLVING CREDIT AGREEMENT
DATED AS OF MARCH 2, 1998
COMERICA BANK,
AS ADMINISTRATIVE AGENT
NATIONSBANC MONTGOMERY SECURITIES LLC,
AS SYNDICATION AGENT
AND
CREDIT LYONNAIS NEW YORK BRANCH,
AS DOCUMENTATION AGENT
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TABLE OF CONTENTS
Page
1. DEFINITIONS.............................................................................................1
2. REVOLVING CREDIT.......................................................................................22
2.1 Commitment....................................................................................22
2.2 Accrual of Interest and Maturity; Evidence of Indebtedness....................................22
2.3 Requests for and Refundings and Conversions of Advances.......................................23
2.4 Disbursement of Advances......................................................................26
2.5 Reserved......................................................................................27
2.6 Prime-based Interest Payments.................................................................27
2.7 Eurocurrency-based Interest Payments..........................................................28
2.8 Interest Payments on Conversions..............................................................28
2.9 Interest on Default...........................................................................28
2.10 Prepayment....................................................................................28
2.11 Determination, Denomination and Redenomination of Alternative
Currency Advances.............................................................................29
2.12 Prime-based Advance in Absence of Election or Upon Default....................................29
2.13 Revolving Credit Facility Fee.................................................................30
2.14 Currency Appreciation; Mandatory Reduction of Indebtedness....................................30
2.15 Optional Reduction or Termination of Revolving Credit Aggregate
Commitment....................................................................................31
2.16 Extensions of Revolving Credit Maturity Date..................................................32
2.17 Application of Advances.......................................................................33
3. Reserved...............................................................................................33
4. MARGIN ADJUSTMENTS.....................................................................................33
4.1 Margin Adjustments............................................................................33
5. CONDITIONS.............................................................................................34
5.1 Execution of this Agreement and the other Loan Documents......................................34
5.2 Corporate Authority...........................................................................34
5.3 Company Guaranty..............................................................................34
5.4 Subsidiary Guaranties.........................................................................34
5.5 Stock Pledge of Shares Issued by Significant Subsidiaries.....................................34
5.6 Representations and Warranties -- All Parties.................................................35
5.7 Compliance with Certain Documents and Agreements..............................................35
5.8 Opinion of Counsel............................................................................35
5.9 Company's Certificate.........................................................................35
5.10 Payment of Agent's and Other Fees.............................................................35
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TABLE OF CONTENTS
(Continued)
Page
5.11 Long Term Revolving Credit Agreement..........................................................36
5.12 Outstanding Indebtedness Terminated...........................................................36
5.13 TEMIC Acquisition.............................................................................36
5.14 Regulation U Requirements.....................................................................36
5.15 Other Documents and Instruments...............................................................36
5.16 Continuing Conditions.........................................................................36
6. REPRESENTATIONS AND WARRANTIES.........................................................................37
6.1 Corporate Existence...........................................................................37
6.2 Due Authorization - Company...................................................................37
6.3 Due Authorization -- Subsidiaries.............................................................37
6.4 Title to Material Property....................................................................38
6.5 Encumbrances..................................................................................38
6.6 Subsidiaries..................................................................................38
6.7 Taxes.........................................................................................38
6.8 No Defaults...................................................................................38
6.9 Compliance with Laws..........................................................................38
6.10 Enforceability of Agreement and Loan Documents................................................39
6.11 Non-contravention -- Company..................................................................39
6.12 Non-contravention -- Other Parties............................................................39
6.13 No Litigation -- Company......................................................................39
6.14 No Litigation -- Other Parties................................................................40
6.15 Consents, Approvals and Filings, Etc..........................................................40
6.16 Agreements Affecting Financial Condition......................................................40
6.17 No Investment Company; No Margin Stock........................................................41
6.18 ERISA.........................................................................................41
6.19 Environmental Matters and Safety Matters......................................................41
6.20 Accuracy of Information.......................................................................42
7. AFFIRMATIVE COVENANTS..................................................................................43
7.1 Preservation of Existence, Etc................................................................43
7.2 Keeping of Books..............................................................................43
7.3 Reporting Requirements........................................................................43
7.4 Tangible Net Worth............................................................................45
7.5 Leverage Ratio................................................................................45
7.6 Fixed Charge Coverage Ratio...................................................................45
7.7 Inspections...................................................................................45
7.8 Taxes.........................................................................................45
7.9 Further Assurances............................................................................46
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TABLE OF CONTENTS
(Continued)
Page
7.10 Insurance.....................................................................................46
7.11 Indemnification...............................................................................46
7.12 Governmental and Other Approvals..............................................................46
7.13 Compliance with Contractual Obligations and Laws..............................................47
7.14 ERISA.........................................................................................47
7.15 Environmental Matters.........................................................................48
7.16 Post-Closing Pledges and Guaranties; Future Subsidiaries......................................49
7.17 Foreign Subsidiaries Security.................................................................50
7.18 Reserved......................................................................................50
7.19 German Drop Down..............................................................................50
7.20 Vishay Israel.................................................................................50
7.21 Use of Proceeds...............................................................................51
8. NEGATIVE COVENANTS.....................................................................................51
8.1 Capital Structure, Business Objects or Purpose................................................51
8.2 Limitations on Fundamental Changes............................................................51
8.3 Guaranties....................................................................................52
8.4 Debt..........................................................................................52
8.5 Liens.........................................................................................54
8.6 Dividends.....................................................................................54
8.7 Investments...................................................................................54
8.8 Accounts Receivable...........................................................................56
8.9 Transactions with Affiliates..................................................................56
8.10 Operations of Vishay Israel...................................................................56
8.11 Prohibition Against Certain Restrictions......................................................56
8.12 Amendment of the TEMIC Acquisition Agreement or Lite-On Documents.............................56
9. DEFAULTS...............................................................................................57
9.1 Events of Default.............................................................................57
9.2 Exercise of Remedies..........................................................................59
9.3 Rights Cumulative.............................................................................59
9.4 Waiver by Company and Permitted Borrowers of Certain Laws; JURY
WAIVER........................................................................................59
9.5 Waiver of Defaults............................................................................60
9.6 Cross-Default.................................................................................60
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TABLE OF CONTENTS
(Continued)
Page
10. PAYMENTS, RECOVERIES AND COLLECTIONS...................................................................60
10.1 Payment Procedure.............................................................................60
10.2 Application of Proceeds.......................................................................62
10.3 Pro-rata Recovery.............................................................................62
10.4 Set Off.......................................................................................62
11. CHANGES IN LAW OR CIRCUMSTANCES; INCREASED COSTS.......................................................63
11.1 Reimbursement of Prepayment Costs.............................................................63
11.2 Eurocurrency Lending Office...................................................................64
11.3 Availability of Alternative Currency..........................................................64
11.4 Refunding Advances in Same Currency...........................................................64
11.5 Circumstances Affecting Eurocurrency-based Rate Availability..................................64
11.6 Laws Affecting Eurocurrency-based Advance Availability........................................65
11.7 Increased Cost of Eurocurrency-based Advances.................................................65
11.8 Indemnity.....................................................................................66
11.9 Judgment Currency.............................................................................67
11.10 Capital Adequacy and Other Increased Costs....................................................67
11.11 Substitution of Lenders.......................................................................68
12. AGENTS.................................................................................................68
12.1 Appointment of Agent..........................................................................68
12.2 Deposit Account with Agent....................................................................69
12.3 Exculpatory Provisions........................................................................69
12.4 Successor Agent...............................................................................69
12.5 Loans by Agents...............................................................................69
12.6 Credit Decisions..............................................................................70
12.7 Notices by Agent..............................................................................70
12.8 Agent's Fees..................................................................................70
12.9 Nature of Agency..............................................................................70
12.10 Authority of Agent to Enforce This Agreement..................................................70
12.11 Indemnification...............................................................................71
12.12 Knowledge of Default..........................................................................71
12.13 Agent's Authorization; Action by Lenders......................................................71
12.14 Enforcement Actions by the Agent..............................................................71
12.15 Managers and Lead Managers....................................................................72
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TABLE OF CONTENTS
(Continued)
Page
13. MISCELLANEOUS..........................................................................................72
13.1 Accounting Principles.........................................................................72
13.2 Consent to Jurisdiction.......................................................................72
13.3 Law of Michigan...............................................................................73
13.4 Interest......................................................................................73
13.5 Closing Costs; Other Costs....................................................................73
13.6 Notices.......................................................................................74
13.7 Further Action................................................................................74
13.8 Successors and Assigns; Assignments and Participations........................................74
13.9 Indulgence....................................................................................77
13.10 Counterparts..................................................................................77
13.11 Amendment and Waiver..........................................................................77
13.12 Taxes and Fees................................................................................78
13.13 Confidentiality...............................................................................78
13.14 Withholding Taxes.............................................................................78
13.15 ERISA Restrictions............................................................................79
13.16 Effective Date................................................................................80
13.17 Severability..................................................................................80
13.18 Table of Contents and Headings; Construction of Certain Provisions............................81
13.19 Independence of Covenants.....................................................................81
13.20 Reliance on and Survival of Various Provisions................................................81
13.21 Complete Agreement............................................................................81
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TABLE OF CONTENTS
(Continued)
SCHEDULES
Schedule 1.1 - Percentages and Allowances
Schedule 1.3 - TEMIC Parties
Schedule 1.5 - TEMIC Subsidiaries
Schedule 1.6 - Permitted Borrower Sublimit
Schedule 1.7 - Stock Option Plans
Schedule 4.1 - Pricing Matrix
Schedule 5.5 - Subsidiaries
Schedule 6.6 - Subsidiaries
Schedule 6.6A - Significant Subsidiaries to be Guarantors
Schedule 6.6B - Significant Subsidiaries whose Share Capital to be Pledged
Schedule 6.13 - Litigation - Company
Schedule 6.14 - Litigation - Other Parties
Schedule 7.15 - Environmental Auditors
Schedule 7.16 - Post Closing Pledges and Guaranties
Schedule 8.3 - Guaranties of Indebtedness
Schedule 8.5 - Existing Liens
Schedule 8.7 - Existing Investments
EXHIBITS
FORM OF REQUEST FOR REVOLVING CREDIT ADVANCE.....................................................................A
FORM OF REVOLVING CREDIT NOTE -- COMPANY.......................................................................B-1
FORM OF REVOLVING CREDIT NOTE -- PERMITTED BORROWERS...........................................................B-2
RESERVED.........................................................................................................C
FORM OF COMPLIANCE CERTIFICATE...................................................................................D
FORM OF ASSIGNMENT AGREEMENT.....................................................................................E
RESERVED.........................................................................................................F
FORM OF VISHAY GUARANTY........................................................................................G-1
FORM OF DOMESTIC GUARANTY......................................................................................G-2
FORM OF PERMITTED FOREIGN BORROWERS GUARANTY...................................................................G-3
FORM OF PERMITTED BORROWER ADDENDUM..............................................................................H
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SHORT TERM REVOLVING CREDIT AGREEMENT
THIS SHORT TERM REVOLVING CREDIT AGREEMENT ("Agreement") is made as of
the 2nd day of March, 1998 by and among the Lenders signatory hereto
(individually, "Lender", and collectively "Lenders"), Comerica Bank, as
administrative agent for the Lenders (in such capacity, "Agent"), Vishay
Intertechnology, Inc., a Delaware corporation ("Company") and the Permitted
Borrowers (as defined below) from time to time signatory hereto.
RECITALS:
A. Company has requested that the Lenders extend to it and to the
Permitted Borrowers credit in the aggregate amount of up to Two Hundred Seventy
Five Million Dollars ($275,000,000) consisting of the Revolving Credit (as
defined below), on the terms and conditions set forth herein.
B. The Lenders are prepared to extend such credit, as aforesaid, but
only on the terms and conditions set forth in this Agreement.
NOW THEREFORE, COMPANY, PERMITTED BORROWERS, AGENT, AND THE
LENDERS AGREE:
1. DEFINITIONS
For the purposes of this Agreement the following terms will have the
following meanings:
"Advance(s)" shall mean, as the context may indicate, a borrowing
requested by Company or by a Permitted Borrower, and made by Lenders under
Section 2.1 of this Agreement, as the case may be (including without limitation
any readvance, refunding or conversion of such borrowing pursuant to Section 2.3
hereof) and shall include, as applicable, a Eurocurrency-based Advance, and a
Prime-based Advance.
"Affiliate" shall mean, with respect to any Person, any other Person or
group acting in concert in respect of the first Person that, directly or
indirectly, through one or more intermediaries, controls, or is controlled by,
or is under common control with such first Person. For purposes of this
definition, "control" (including, with correlative meanings, the terms
"controlled by" and "under common control with"), as used with respect to any
Person or group of Persons, shall mean the possession, directly or indirectly,
of the power to direct or cause the direction of management and policies of such
Person, whether through the ownership of voting securities or by contract or
otherwise.
"Agent" shall mean Comerica Bank, a Michigan banking corporation,
acting as administrative agent hereunder or any successor administrative agent
appointed in accordance with Section 12.4 hereof.
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"Agents" shall mean Agent and Syndication Agent.
"Agent's Correspondent" shall mean for Advances in eurodollars, Agent's
Grand Cayman Branch (or for the account of said branch office, at Agent's main
office in Detroit, Michigan, United States); for Advances in other Alternative
Currencies, at such bank or banks as Agent may from time to time designate by
written notice to Company, the Permitted Borrowers and the Lenders.
"Agent's Fees" shall mean those fees and expenses required to be paid
by Company to Agent under Section 12.8 hereof.
"Alternate Base Rate" shall mean, for any day, an interest rate per
annum equal to the Federal Funds Effective Rate in effect on such day, plus one
percent (1%).
"Alternative Currency" shall mean each of the following currencies, as
applicable hereunder: French Francs ("FF"), Japanese Yen ("(Y)"), Deutsche Marks
("DM"), British Pounds Sterling ("Sterling") and, subject to availability and to
the terms and conditions of this Agreement, such other freely convertible
foreign currencies (which, when referred to herein or in any of the Loan
Documents, shall be referred to using the currency codes in effect from time to
time under ISO International Standard 4217, or any such successor publication or
standard) as requested by the Company or the Permitted Borrowers and acceptable
to Agent and the Lenders, in their reasonable discretion.
"Applicable Fee Percentage" shall mean, as of any date of determination
thereof, the applicable percentage used to calculate certain of the fees due and
payable hereunder, determined by reference to the appropriate columns in the
Pricing Matrix attached to this Agreement as Schedule 4.1.
"Applicable Interest Rate" shall mean the Eurocurrency-based Rate and
the Prime-based Rate as selected by Company or a Permitted Borrower from time to
time subject to the terms and conditions of this Agreement.
"Applicable Margin" shall mean, as of any date of determination
thereof, the applicable interest rate margin, determined by reference to the
appropriate columns in the Pricing Matrix attached to this Agreement as Schedule
4.1.
"Assignment Agreement" shall have the meaning ascribed to such term in
Section 13.8(c) hereof.
"Authorized Officer" shall mean the Vice Chairman, Director of
Corporate Treasury, CFO, or the Director Corporate Controller of the Company or
any applicable Subsidiary, as the case may be, or any person otherwise
designated by the Company or such Subsidiary, as the case may be, as having the
authority to act for the Company or such Subsidiary in the particular instance.
"Business Day" shall mean any day on which commercial banks are open
for domestic and international business (including dealings in foreign exchange)
in Dallas, Detroit, London, New
2
York and (except with respect to any Prime-based Advances) Frankfurt am Main,
and if funds are to be paid or made available in any Alternative Currency, on
such day in the place where such funds are to be paid or made available.
"Capital Expenditures" shall mean, without duplication, any amounts
paid or accrued for a period in respect of any purchase or other acquisition for
value of fixed or capital assets net of the cash proceeds of any grant received
during such period by the Company or any of its Subsidiaries from the government
of Israel (or any agency or political subdivision thereof) under the Israeli
Capital Investment Act, up to the aggregate amount of capital additions in
Israel during such period; provided that, in no event shall Capital Expenditures
include amounts expended in respect of normal repair and maintenance of plant
facilities, machinery, fixtures and other like capital assets utilized in the
ordinary conduct of business (to the extent such amounts would not be
capitalized in preparing a balance sheet determined in accordance with GAAP).
"Closing Fee" shall mean that certain fee payable to the Lenders in
connection with the execution and delivery of the Loan Agreements in the amounts
(based on final allocations) set forth in the letter supplementing the Offering
Memorandum.
"Collateral" shall mean all property or rights in which a security
interest, mortgage, lien or other encumbrance for the benefit of the Lenders is
or has been granted or arises or has arisen, under or in connection with this
Agreement, the other Loan Documents, or otherwise.
"Company" is defined in the Preamble.
"Company Guaranty" shall mean that certain amended and restated
guaranty of all of the Indebtedness outstanding from the Permitted Borrowers,
executed and delivered by the Company to the Agent, on behalf of the Lenders, in
the form annexed hereto as Exhibit G-1, as of the date hereof, as amended or
otherwise modified from time to time.
"Contractual Obligation" shall mean, as to any Person, any provision of
any security issued by such Person or of any agreement, instrument or
undertaking to which such Person is a party or by which it or any of its
property is bound.
"Consolidated" or "Consolidating" shall, when used with reference to
any financial information pertaining to (or when used as a part of any defined
term or statement pertaining to the financial condition of) Company and its
Subsidiaries mean the accounts of Company and its Subsidiaries determined on a
consolidated or consolidating basis, as the case may be, all determined as to
principles of consolidation and, except as otherwise specifically required by
the definition of such term or by such statements, as to such accounts, in
accordance with GAAP, applied on a consistent basis and consistent with the
financial statements, if any, as at and for the fiscal year ended December 31,
1997.
"Consolidated EBITDA" shall mean the Net Income of the Company and its
Consolidated Subsidiaries for any period adjusted (A) to include the Net Income
of any Person accrued during such period but prior to the date it became a
Subsidiary of the Company or is merged into or
3
consolidated with the Company and (B) to exclude, without duplication, the
following items of income or expense to the extent that such items are included
in the calculation of such Net Income all on a Consolidated basis (adjusted as
set forth in clause (A) hereof): (a) Interest Expense, (b) any non-cash expenses
and charges, (c) total income tax expense, (d) depreciation expense, (e) the
expense associated with amortization of intangible and other assets, (f)
non-cash provisions for reserves for discontinued operations, (g) any
extraordinary, unusual or non-recurring gains or losses or charges or credits,
(h) any gain or loss associated with the sale or write-down of assets, (i) any
gain or loss from or attributable to minority interests and (j) any gain or loss
accounted for by the equity method of accounting (except in the case of income
to the extent of the amount of cash dividends or cash distributions paid to the
Company or any Subsidiary by the entity accounted for by the equity method of
accounting).
"Counsel's Memorandum" is defined in the definition of German Drop
Down.
"Covenant Compliance Report" shall mean the report to be furnished by
the Company to the Agent, substantially in the form attached hereto as Exhibit
D, as such exhibit may be amended or otherwise modified from time to time by the
Required Lenders, and certified by the chief financial officer of the Company
pursuant to Section 7.3(c), hereof, for the purpose of monitoring the Company's
and each Permitted Borrower's compliance herewith and to notify the Lenders of
the acquisition or creation of new Subsidiaries.
"Current Dollar Equivalent" shall mean, as of any applicable date of
determination, with respect to any Advance made, issued or carried in an
Alternative Currency, the amount of Dollars which is equivalent to the then
outstanding principal amount of such Advance at the most favorable spot exchange
rate determined by the Agent to be available to it for the sale of Dollars for
such Alternative Currency for delivery at approximately 11:00 A.M. (Detroit
time) two (2) Business Days after such date. Alternative Currency equivalents of
Advances in Dollars (to the extent used herein) shall be determined by Agent in
a manner consistent herewith.
"Dale Electronics" shall mean Dale Electronics, Inc., a Delaware
corporation and a Subsidiary of the Company.
"Debt" shall mean, as of any applicable date of determination, all
items of indebtedness, obligation or liability of a Person, whether matured or
unmatured, liquidated or unliquidated, direct or indirect, absolute or
contingent, joint or several, that should be classified as liabilities on a
balance sheet and/or in accompanying footnotes in accordance with GAAP.
"Default" shall mean any event which, with the giving of notice or the
passage of time, or both, would constitute an Event of Default.
"DM Loan Agreement" shall mean that certain Amended and Restated Vishay
Electronic/VBG DM 40,000,000 Revolving Credit and DM 9,506,000 Term Loan
Agreement, dated as of July 18, 1994, among Vishay Europe (then known as Vishay
Beteiligungs GmbH), certain financial institutions and Agent, as amended.
4
"Dollar Amount" shall mean (i) with respect to each Advance made,
issued or carried (or to be made, issued or carried) in Dollars, the principal
amount thereof and (ii) with respect to each Advance made, issued or carried (or
to be made or carried) in an Alternative Currency, the amount of Dollars which
is equivalent to the principal amount of such Advance at the most favorable spot
exchange rate determined by the Agent to be available to it for the sale of
Dollars for such Alternative Currency at approximately 11:00 A.M. (Detroit time)
two (2) Business Days before such Advance is made or issued (or to be made or
issued), as such Dollar Amount may be adjusted from time to time pursuant to
Section 2.11 hereof. When used with respect to any Alternative Currency portion
of an Advance being repaid or remaining outstanding at any time or with respect
to any other sum expressed in an Alternative Currency, "Dollar Amount" shall
mean the amount of Dollars which is equivalent to the principal amount of such
Advance, or the amount so expressed in such Alternative Currency, at the most
favorable spot exchange rate determined by the Agent to be available to it for
the sale of Dollars for such Alternative Currency at the relevant time.
Alternative Currency amounts of Advances made, carried or expressed in Dollars
(to the extent used herein) shall be determined by Agent in a manner consistent
herewith.
"Dollars" and the sign "$" shall mean lawful money of the United States
of America.
"Domestic Advance" shall mean any Advance other than a
Eurocurrency-based Advance or any other Advance denominated in an Alternative
Currency.
"Domestic Guaranty" shall mean that certain guaranty of all
Indebtedness outstanding from the Company and the Permitted Borrowers, executed
and delivered (or to be executed and delivered) by each of the Significant
Domestic Subsidiaries (whether by execution thereof, or by execution of the
Joinder Agreement attached as "Exhibit A" to the form of such Guaranty), to the
Agent, on behalf of the Lenders, in the form annexed hereto as Exhibit G-2, as
amended from time to time.
"Domestic Permitted Borrower" shall mean any Permitted Borrower which
is a Domestic Subsidiary.
"Domestic Subsidiary" shall mean any Subsidiaries of the Company
incorporated under the laws of the United States of America, or any state,
territory, possession or other political subdivision thereof which is a domestic
Subsidiary for purposes of Section 956 of the Internal Revenue Code; and
"Domestic Subsidiaries" shall mean any or all of them.
"EBITDA" shall mean, of any Person, for any period, the Net Income of
such Person for such period adjusted to exclude, without duplication, the
following items of income or expense to the extent that such items are included
in the calculation of such Net Income: (a) Interest Expense, (b) any non-cash
expenses and charges, (c) total income tax expense, (d) depreciation expense,
(e) the expense associated with amortization of intangible and other assets, (f)
non-cash provisions for reserves for discontinued operations, (g) any
extraordinary, unusual or non-recurring gains or losses or charges or credits,
(h) any gain or loss associated with the sale or write-down of assets, (i) any
gain or loss from or attributable to minority interests and (j) any gain or loss
accounted for by the equity method of accounting (except in the case of income
to the extent of the amount of cash
5
dividends or cash distributions paid to such Person or any Subsidiary of such
Person by the entity accounted for by the equity method of accounting).
"Effective Date" shall mean the date on which all of the conditions
precedent set forth in Sections 5.1 through 5.15 hereof have been satisfied.
"Environmental Auditors" shall mean, when selected or retained by the
Company or the Agents, as the case may be hereunder, such counsel, engineering
or testing firms or other experienced, reputable environmental consultants
reasonably acceptable to the Required Lenders.
"Environmental Audits" shall mean those environmental audits conducted
in connection with the TEMIC Acquisition and set forth on Schedule 7.15 hereto.
"Equity Offering" shall mean the issuance and sale for cash, on or
after the date hereof, by Company or any of its Subsidiaries of additional
capital stock or other equity interests.
"Equity Offering Adjustment" shall mean that amount to be added to the
minimum Tangible Net Worth required to be maintained under Section 7.4 hereof
consisting of an amount equal to seventy-five percent (75%) of each Equity
Offering conducted by the Company or any of its Subsidiaries, net of costs of
issuance, on and after January 1, 1998, on a cumulative basis.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended, or any successor act or code, and the regulations in effect from
time to time thereunder.
"ERISA Affiliate" shall mean any trade or business (whether or not
incorporated) which is under common control with the Company within the meaning
of Section 4001 of ERISA or is part of a group which includes the Company and
would be treated as a single employer under Section 414 of the Internal Revenue
Code.
"Eurocurrency Rate" shall mean with respect to each Eurocurrency-based
Advance carried in any Alternative Currency (and each Eurocurrency-Interest
Period pertaining thereto) the per annum interest rate determined by the Agent
to be the offered rate for deposits in such currency with a term comparable to
such Interest Period that appears on the applicable Telerate Page at
approximately 11:00 a.m., London time, two Business Days prior to the beginning
of such Interest Period; provided, however, that if at any time for any reason
such offered rate for any such currency does not appear on a Telerate Page,
"Eurocurrency Rate" shall mean, with respect to each such Advance denominated in
such currency, the per annum interest rate at which deposits in the relevant
currency are offered to Agent's Eurocurrency Lending Office by other prime banks
in the eurocurrency market in an amount comparable to the relevant
Eurocurrency-based Advance and for a period equal to the relevant
Eurocurrency-Interest Period at approximately 11:00 A.M. Detroit time two (2)
Business Days prior to the first day of such Eurocurrency-Interest Period.
"Eurocurrency-based Advance" shall mean any Advance which bears
interest at the Eurocurrency-based Rate.
6
"Eurocurrency-based Rate" shall mean a per annum interest rate which is
equal to the sum of the Applicable Margin (subject, if applicable, to adjustment
under Section 4.1 hereof), plus the quotient of:
(A) (a) in the case of Eurocurrency-based Advances carried in
Dollars, the Eurodollar Rate, or
(b) in the case of Eurocurrency-based Advances carried in
an Alternative Currency, the Eurocurrency Rate,
divided by
(B) a percentage equal to 100% minus the maximum rate on such
date at which Agent is required to maintain reserves on
'Eurocurrency Liabilities' as defined in and pursuant to
Regulation D of the Board of Governors of the Federal
Reserve System or, if such regulation or definition is
modified, and as long as Agent is required to maintain
reserves against a category of liabilities which includes
eurocurrency deposits or includes a category of assets
which includes eurocurrency loans, the rate at which such
reserves are required to be maintained on such category,
all as conclusively determined by the Agent (absent manifest error), such sum to
be rounded upward, if necessary, to the nearest whole multiple of 1/16th of 1%.
"Eurocurrency-Interest Period" shall mean an interest period of one,
two, three or six months (or any lesser or greater number of days agreed to in
advance by Company or a Permitted Borrower, Agent and the Lenders) as selected
by Company or such Permitted Borrower, as applicable, for a Eurocurrency-based
Advance pursuant to Section 2.3 or 2.5 hereof, as the case may be.
"Eurocurrency Lending Office" shall mean, (a) with respect to the
Agent, Agent's office located at its Grand Caymans Branch or such other branch
of Agent, domestic or foreign, as it may hereafter designate as its Eurocurrency
Lending Office by written notice to Company, the Permitted Borrowers and the
Lenders and (b) as to each of the Lenders, its office, branch or affiliate
located at its address set forth on the signature pages hereof (or identified
thereon as its Eurocurrency Lending Office), or at such other office, branch or
affiliate of such Lender as it may hereafter designate as its Eurocurrency
Lending Office by written notice to Company and Agent.
"Eurodollar Rate" shall mean with respect to each Eurocurrency-based
Advance carried in Dollars (and each Eurocurrency-Interest Period pertaining
thereto) the per annum interest rate at which deposits in dollars are offered to
Agent's Eurocurrency Lending Office by other prime banks in the eurocurrency
market in an amount comparable to the relevant Eurocurrency-based Advance and
for a period equal to the relevant Eurocurrency-Interest Period at approximately
11:00 A.M. Detroit time two (2) Business Days prior to the first day of such
Eurocurrency-Interest Period.
"Event of Default" shall mean any of the events specified in Section
9.1 hereof.
7
"Federal Funds Effective Rate" shall mean, for any day, a fluctuating
interest rate per annum equal to the weighted average of the rates on overnight
Federal funds transactions with members of the Federal Reserve System arranged
by Federal funds brokers, as published for such day (or, if such day is not a
Business Day, for the next preceding Business Day) by the Federal Reserve Bank
of New York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations for such day on such transactions
received by Agent from three Federal funds brokers of recognized standing
selected by it.
"Fee Letter" shall mean the fee letter in effect from time to time
among Company and the Agent hereunder, as amended from time to time.
"Fees" shall mean the Agent's Fees, the Closing Fee, the Revolving
Credit Facility Fee, the Syndication Fee and the other fees and charges payable
hereunder.
"Fixed Charge Coverage Ratio" shall mean, with respect to the Company
and its Consolidated Subsidiaries, as of any date of determination, a ratio, (i)
the numerator of which shall be equal to Consolidated EBITDA for the preceding
four fiscal quarters ending on the date of determination, minus Capital
Expenditures during such period and (ii) the denominator of which shall be the
Interest Expense of the Company and its Consolidated Subsidiaries for such
period, in each case determined in accordance with GAAP.
"Foreign Subsidiary" shall mean any of the Company's Subsidiaries,
other than a Domestic Subsidiary; and "Foreign Subsidiaries" shall mean any or
all of them.
"GAAP" shall mean generally accepted accounting principles in the
United States of America, as in effect from time to time, consistently applied.
"German Drop Down" shall mean the completion of the "drop down"
procedure outlined in the memorandum of Company's German counsel dated February
24, 1998 ("Counsel's Memorandum") and in Schedule 1.5 hereto with respect to the
IC Business, the Discrete Business (as defined in Counsel's Memorandum) and the
other TEMIC Foreign Subsidiaries, as confirmed by an opinion of Company's German
Counsel.
"Governmental Obligations" means noncallable direct general obligations
of the United States of America or obligations the payment of principal of and
interest on which is unconditionally guaranteed by the United States of America.
"Guaranty Obligation" shall mean each and any guaranty or other
guaranty obligation by the Company or any Subsidiary of the Debt of any other
Person (excluding endorsements of instruments for deposit or collection in the
ordinary course of business), including without limitation any and all
agreements, contingent or otherwise to support the obligation of such other
Person, whether or not denominated as a guaranty, any letter of credit
reimbursement obligations and any other agreement or undertaking which would
constitute a guaranty for purposes of GAAP.
8
"Guaranties" shall mean the Company Guaranty and the Domestic Guaranty
and "Guaranty" shall mean each or all of them.
"Guarantor(s)" shall mean each Significant Subsidiary which is required
by the Lenders to guarantee the obligations of the Company and/or the Permitted
Borrowers hereunder and under the other Loan Documents.
"Hazardous Material" shall mean and include any hazardous, toxic or
dangerous waste, substance or material defined as such in (or for purposes of)
the Hazardous Material Laws.
"Hazardous Material Law(s)" shall mean all laws, codes, ordinances,
rules, regulations, orders, decrees and directives issued by any federal, state,
provincial, local, foreign or other governmental or quasi-governmental authority
or body (or any agency, instrumentality or political subdivision thereof)
pertaining to Hazardous Material on or about any facilities owned, leased or
operated by Company or any of its Subsidiaries, or any portion thereof
including, without limitation, those relating to soil, surface, subsurface
ground water conditions and the condition of the ambient air; and any state and
local laws and regulations pertaining to Hazardous Material and/or asbestos; any
so-called "superfund" or "superlien" law; and any other federal, state,
provincial, foreign or local statute, law, ordinance, code, rule, regulation,
order or decree regulating, relating to, or imposing liability or standards of
conduct concerning, any hazardous, toxic or dangerous waste, substance or
material, as now or at any time hereafter in effect.
"Hedging Obligation(s)" shall mean Interest Rate Protection Agreements
and any foreign currency exchange agreements (including without limitation
foreign currency hedges and swaps) or other foreign exchange transactions, or
any combination of such transactions or agreements or any option with respect to
any such transactions or agreements entered into between Company and/or any of
its Subsidiaries and a Lender or an Affiliate of a Lender to manage existing or
anticipated foreign exchange risk and not for speculative purposes.
"Hereof", "hereto", "hereunder" and similar terms shall refer to this
Agreement in its entirety and not to any particular paragraph or provision of
this Agreement.
"IC Business" shall mean that portion of the Temic Semiconductor
Business involving the design, marketing and manufacturing of integrated
circuits, including "Communication ICs", "Automotive ICs", "MDPs" and "Asics"
but not "Power ICs" (as such terms are understood in the industry), as conducted
through TEMIC Semiconductor GmbH and its direct and indirect subsidiaries,
acquired by Company pursuant to the TEMIC Acquisition.
"IC Adjustment" shall mean the adjustment to the Tangible Net Worth
floor required to be maintained under Section 7.4 hereof determined (in
accordance with GAAP) as of the last day of the fiscal quarter in which the IC
Transfer shall occur in the amount of the change in Tangible Net Worth (whether
positive or negative) which results from such sale, such that if, as a result of
the IC Transfer, the Tangible Net Worth shall increase, the amount of said
increase shall be added to the Tangible Net Worth required to be maintained
hereunder and if the Tangible Net Worth shall
9
decrease as a result of such transfer, the amount of Tangible Net Worth required
to be maintained hereunder shall be decreased by such amount.
"IC Transfer" shall mean the transfer of the IC Business (pursuant to
the German Drop Down or otherwise) for aggregate consideration paid in cash or
by the assumption of Debt existing on the date of the transfer (and not incurred
in contemplation thereof) in an amount not less than $110,000,000 (or the
equivalent thereof in an Alternative Currency) or, in the case of a transfer of
any part of the IC Business, the pro rata portion of such sum based on the value
of the part so transferred, as reasonably determined by the Company, such
consideration to be received on or before the effective date of such transfer
and otherwise on reasonable or customary terms for sales of comparable property
or assets, as determined by Company in its reasonable discretion.
"Indebtedness" shall mean all indebtedness and liabilities, whether
direct or indirect, absolute or contingent, owing by Company or any of the
Permitted Borrowers to the Lenders (or any of them) or to the Agent, in any
manner and at any time, under this Agreement or the Loan Documents, due or
hereafter to become due, now owing or that may hereafter be incurred by the
Company, any of the Permitted Borrowers or any of the Subsidiaries to, or
acquired by, the Lenders (or any of them) or by Agent, and all net obligations
with respect to Hedging Obligations entered into between Company and/or any of
its Subsidiaries and a Lender or an Affiliate of a Lender and any judgments that
may hereafter be rendered on such indebtedness or any part thereof, with
interest according to the rates and terms specified, or as provided by law, and
any and all consolidations, amendments, renewals, replacements or extensions of
any of the foregoing.
"Intercompany Loan" shall mean any loan (or advance in the nature of a
loan) by the Company or any Subsidiary to another Subsidiary, provided that each
such loan or advance is subordinated in right of payment and priority to the
Indebtedness on terms and conditions satisfactory to Agent and the Required
Lenders.
"Intercompany Loans, Advances or Investments" shall mean any
Intercompany Loan, and any advance or investment by the Company or any
Subsidiary (including without limitation any guaranty of obligations or
indebtedness to third parties) to or in another Subsidiary.
"Intercompany Notes" shall mean the promissory notes issued or to be
issued by any Subsidiary to Company or to any Significant Domestic Subsidiary to
evidence an Intercompany Loan.
"Interest Expense" shall mean, for any Person and with respect to any
period, the sum of the amount of interest paid or accrued in respect of such
period, determined in accordance with GAAP.
"Interest Period" shall mean a Eurocurrency-Interest Period commencing
on the day a Eurocurrency-based Advance is made, or on the effective date of an
election of the Eurocurrency-based Rate made under Section 2.3 hereof, as the
case may be; provided, however that (i) any Interest Period which would
otherwise end on a day which is not a Business Day shall end on the next
succeeding Business Day, except that as to a Eurocurrency-Interest Period, if
the next succeeding Business Day falls in another calendar month, such
Eurocurrency-Interest Period shall
10
end on the next preceding Business Day, and (ii) when a Eurocurrency-Interest
Period begins on a day which has no numerically corresponding day in the
calendar month during which such Eurocurrency-Interest Period is to end, it
shall end on the last Business Day of such calendar month, and (iii) no Interest
Period shall extend beyond the Revolving Credit Maturity Date.
"Interest Rate Protection Agreement(s)" shall mean any interest rate,
swap, cap, floor, collar, forward rate agreement or other rate protection
transaction, or any combination of such transactions or agreements or any option
with respect to any such transactions or agreements now existing or hereafter
entered into by Company or any of its Subsidiaries to manage existing or
anticipated interest rate risk and not for speculative purposes.
"Internal Revenue Code" shall mean the Internal Revenue Code of 1986,
as amended from time to time, and the regulations promulgated thereunder.
"Investment" shall mean any loan or advance by Company or any of its
Subsidiaries to, or any other loan, advance or investment by Company or any of
its Subsidiaries in, any Person (including without limitation, any Subsidiary of
Company), without offset, reduction or other adjustment, whether such loan,
advance or investment shall be in the nature of an investment in shares of stock
or other capital or securities, general or limited partnership, limited
liability company or joint venture interests, evidences of indebtedness or
otherwise.
"Joinder Agreement" shall mean a joinder agreement in the form attached
as Exhibit A to the form of the Domestic Guaranty, to be executed and delivered
by any Person required to be a Guarantor pursuant to Section 7.16 of this
Agreement.
"Joint Venture" shall mean any corporation, partnership, association,
joint stock company, limited liability company, partnership, business trust or
other combined enterprise, other than a Subsidiary, in which (or to which) the
Company or any of its Subsidiaries has made a loan, investment or advance or has
an ownership stake or interest, whether in the nature of Share Capital or
otherwise (but expressly excluding Permitted Investments) to fund a business
enterprise.
"Lender(s)" shall mean each of the Lenders signatory hereto and any
assignee which becomes a Lender pursuant to Section 13.8(c) hereof.
"Leverage Ratio" shall mean, as of any date of determination, with
respect to the Company and its Consolidated Subsidiaries, the ratio of (a) Total
Indebtedness as of such day to (b) Consolidated EBITDA for the four consecutive
fiscal quarters then ending.
"Lien" shall mean any pledge, assignment, hypothecation, mortgage,
security interest, deposit arrangement, option, trust receipt, conditional sale
or title retaining contract, sale and leaseback transaction, or any other type
of lien, charge or encumbrance, whether based on common law, statute or
contract.
"Lite-On Documents" shall mean the Lite-On Joint Venture Agreement, the
Stock Purchase Agreement dated as of April 25,1997 by and among the Company and
the shareholders of LPSC,
11
the Stock Appreciation Right Agreement dated as of July 17, 1997 by and between
the Company and Lite-On Joint Venture, and such other material agreements as
entered among such parties (or their affiliates) pursuant thereto or in
connection therewith, each as amended (subject to the terms hereof) from time to
time.
"Lite-On Joint Venture Agreement" shall mean the Joint Venture
Agreement dated as of April 25, 1997 by and between the Company and Lite-On
Joint Venture, a company formed under the laws of Taiwan, relating to the
acquisition by the Company of LPSC, as amended (subject to the terms hereof),
from time to time.
"Loan Agreements" shall mean this Agreement and the Long Term Revolving
Credit Agreement.
"Loan Documents" shall mean collectively, this Agreement, the
Guaranties, the Pledge Agreements, Hedging Obligations entered into between
Company and/or any of its Subsidiaries and a Lender or an Affiliate of a Lender,
and any other documents, instruments or agreements executed pursuant to or in
connection with any such document, or this Agreement as such documents may be
amended or otherwise modified from time to time.
"Long Term Revolving Credit Agreement" shall mean that certain Long
Term Revolving Credit Agreement dated as of the date hereof among the Company,
the Permitted Borrowers, certain financial institutions and the Agent, as
amended or otherwise modified from time to time.
"LPSC" shall mean Lite-On Power Semiconductor Corporation, a company
formed under the laws of Taiwan.
"Multiemployer Plan" shall mean any multiemployer plan within the
meaning of Section 4001(a)(3) of ERISA.
"Net Income" shall mean the net income (or loss) of a Person for any
period determined in accordance with GAAP.
"Net Income Adjustment" shall mean that amount to be added to the
minimum Tangible Net Worth required to be maintained under Section 7.4 hereof
consisting of fifty percent (50%) of Company's Consolidated Net Income for each
of the Company's fiscal quarters ending after March 31, 1998 (in each case, only
if a positive number), on a cumulative basis.
"New Equity" shall mean capital stock or other equity interests issued
and sold for cash on or after the date of this Agreement, by Company or any of
its Subsidiaries, excluding capital stock issued by any Subsidiary to Company to
evidence additional equity Investments by Company in its Subsidiaries and
excluding the proceeds of any stock issued and sold to employees (other than as
part of a public offering).
"Notes" shall mean the Revolving Credit Notes or any or all of the
Revolving Credit Notes, as the context indicates, and in the absence of such
indication, all such notes.
12
"Offering Memorandum" shall mean the Offering Memorandum to the Lenders
dated January, 1998.
"Pamela Holdings" shall mean Pamela Verwaltungsgesellschaft mbH, a
company organized under the laws of the Federal Republic of Germany, one hundred
percent (100%) of the share capital of which is owned (directly or indirectly)
by Company.
"PBGC" shall mean the Pension Benefit Guaranty Corporation under ERISA,
or any successor corporation.
"Pension Plan" shall mean each employee pension benefit plan, as
defined in Section 3(2) of ERISA, of the Company or an ERISA Affiliate but only
to the extent such Pension Plan is subject to ERISA, as provided in Section 4 of
ERISA, and is subject to Section 412 of the Internal Revenue Code and Section
302 of ERISA other than a Multiemployer Plan.
"Percentage" shall mean, with respect to any Lender, its percentage
share, as set forth on Schedule 1.1 hereto, of the Revolving Credit, as such
Schedule may be revised from time to time by Agent in accordance with Section
13.8(d) hereof.
"Permitted Acquisition" shall mean any acquisition by the Company or
any of its Subsidiaries of assets, businesses or business interests or shares of
stock or other ownership interests of or in any Person, conducted while no
Default or Event of Default has occurred and is continuing hereunder (both
before and after giving effect thereto) in accordance with the following
requirements:
(a) Such acquisition is of a business or Person primarily engaged in a
line of business in which the Company or any Subsidiary is permitted to engage
under Section 8.1(b) hereof;
(b) The board of directors (or other Person(s) exercising similar
functions) of the seller of the assets or issuer of the shares of stock or other
ownership interests being acquired shall have approved such transaction or
recommended that such transaction be approved;
(c) in the event that the value of such proposed new acquisition,
computed on the basis of total acquisition consideration paid or incurred, or to
be paid or incurred, by the Company or its Subsidiaries with respect thereto,
including all indebtedness which is assumed or to which such assets, businesses
or business or ownership interests or shares, or any Person so acquired, is
subject, but excluding the value of any common shares transferred as a part of
such acquisition, shall be
(i) greater than or equal to Fifty Million Dollars
($50,000,000), determined as of the date of such acquisition, then not
less than fifteen (15) nor more than ninety (90) days prior to the date
each such proposed acquisition is scheduled to be consummated, the
Company provides written notice thereof to Agent, accompanied by (A)
the term sheet, purchase agreement and, when available, drafts of all
material documents pertaining to such proposed acquisition, (B)
historical financial information (including, but not limited to, income
statements, balance sheets and cash flows) covering either the three
most recent
13
complete fiscal years of the acquisition target prior to the effective
date of the acquisition or the entire credit history of the acquisition
target, whichever period is shorter, and the quarterly financial
statements of the acquisition target for the fiscal quarter then ending
(provided however that, if the financial information referred to in
this subparagraph (B) is not available, Company shall furnish Agent
with financial information otherwise reasonably satisfactory to the
Required Lenders) and (C) Pro Forma Projected Financial Information, or
(ii) less than Fifty Million Dollars ($50,000,000) but greater
than or equal to Ten Million Dollars ($10,000,000), then not less than
ten (10) Business Days after date each such proposed acquisition has
been consummated, the Company provides written notice thereof to Agent
(with certified copies of all material documents pertaining to such
acquisition);
whereupon Agent shall promptly upon its receipt thereof distribute copies of all
notices and other materials received from Company under this clause (c) to each
Lender; and
(d) within thirty (30) days after any such acquisition has been
completed, the Company, its Subsidiaries and any of the other business entities
involved in such acquisition shall execute or cause to be executed, and provide
or cause to be provided to Agent, any Loan Documents required under Section 7.16
hereof.
"Permitted Borrower Addendum" shall mean an addendum substantially in
the form attached hereto as Exhibit H, to be executed and delivered by each
Permitted Borrower which becomes a party to this Agreement after the date
hereof, as such Exhibit may be amended from time to time.
"Permitted Borrower Sublimit" shall mean the maximum aggregate amount
of Advances available at any time to each of the Permitted Borrowers hereunder,
as set forth on Schedule 1.6 hereof.
"Permitted Borrower(s)" shall mean any 100% Domestic Subsidiary which,
after the Effective Date and with the prior written approval of the Lenders,
becomes a party hereto pursuant to Section 2.1(a) hereof.
"Permitted Company Encumbrances" shall mean, in addition to Permitted
Encumbrances, those liens and encumbrances of the Company identified in Schedule
8.5, hereto.
"Permitted Currencies" shall mean Dollars or any Alternative Currency.
"Permitted Encumbrances" shall mean, with respect to any Person:
(a) liens for taxes not yet due and payable or which are being
contested in good faith by appropriate proceedings diligently pursued,
provided that such provision for the payment of all such taxes known to
such Person has been made on the books of such Person as may be
required by GAAP;
14
(b) mechanics', materialmen's, banker's, carriers',
warehousemen's and similar liens and encumbrances arising in the
ordinary course of business and securing obligations of such Person
that are not overdue for a period of more than 60 days or are being
contested in good faith by appropriate proceedings diligently pursued,
provided that in the case of any such contest (i) any proceedings
commenced for the enforcement of such liens and encumbrances shall have
been duly suspended; and (ii) such provision for the payment of such
liens and encumbrances has been made on the books of such Person as may
be required by GAAP;
(c) liens arising in connection with worker's compensation,
unemployment insurance, old age pensions (subject to the applicable
provisions of this Agreement) and social security benefits which are
not overdue or are being contested in good faith by appropriate
proceedings diligently pursued, provided that in the case of any such
contest (i) any proceedings commenced for the enforcement of such liens
shall have been duly suspended; and (ii) such provision for the payment
of such liens has been made on the books of such Person as may be
required by GAAP;
(d) (i) liens incurred in the ordinary course of business to
secure the performance of statutory obligations arising in connection
with progress payments or advance payments due under contracts with the
United States or any foreign government or any agency thereof entered
into in the ordinary course of business and (ii) liens incurred or
deposits made in the ordinary course of business to secure the
performance of statutory obligations, bids, leases, fee and expense
arrangements with trustees and fiscal agents and other similar
obligations (exclusive of obligations incurred in connection with the
borrowing of money, any lease-purchase arrangements or the payment of
the deferred purchase price of property), provided that full provision
for the payment of all such obligations set forth in clauses (i) and
(ii) has been made on the books of such Person as may be required by
GAAP; and
(e) any minor imperfections of title, including but not
limited to easements, covenants, rights-of-way or other similar
restrictions, which, either individually or in the aggregate do not
materially adversely affect the present or future use of the property
to which they relate, which would have a material adverse effect on the
sale or lease of such property, or which would render title thereto
unmarketable.
"Permitted Encumbrances of the Subsidiaries" shall mean, in addition to
Permitted Encumbrances, those liens and encumbrances of the Subsidiaries
identified in Schedule 8.5, hereto.
"Permitted Investments" shall mean:
(a) Governmental Obligations;
(b) Obligations of a state of the United States, the District
of Columbia or any possession of the United States, or any political
subdivision thereof, which are described in Section 103(a) of the
Internal Revenue Code and are rated in any of the highest 3 major
rating categories as determined by at least one nationally recognized
rating agency; or
15
secured, as to payments of principal and interest, by a letter of
credit provided by a financial institution or insurance provided by a
bond insurance company which itself or its debt is rated in the highest
3 major rating categories as determined by at least one Rating Agency;
(c) Banker's acceptances, commercial accounts, certificates of
deposit, or depository receipts issued by a bank, trust company,
savings and loan association, savings bank or other financial
institution whose deposits are insured by the Federal Deposit Insurance
Corporation and whose reported capital and surplus equal at least
$500,000,000;
(d) commercial paper with a minimum rating of "A-1" (or
better) by S&P or "P- 1" (or better) by Moody's, full faith and credit
direct obligations of the United States of America or, with respect to
the Foreign Subsidiaries, of the central government of the applicable
jurisdiction, or any agency thereof, certificates of deposit, and other
short term investments (each of a duration of one year or less),
maintained by the Company or any of its Subsidiaries consistent with
the present investment practices of such parties (as classified in the
current financial statements of such parties);
(e) Secured repurchase agreements against obligations itemized
in paragraph (a) above, and executed by a bank or trust company or by
members of the association of primary dealers or other recognized
dealers in United States government securities, the market value of
which must be maintained at levels at least equal to the amounts
advanced and repurchase agreements entered into with counterparties
having ratings in either of the highest two rating categories by
Moody's or S&P, or the highest rating category by Fitch Investor
Services, Duff & Phelps or Thompson Bank Watch and providing for
underlying securities to be held by a third party;
(f) Any fund or other pooling arrangement which exclusively
purchases and holds the investments itemized in (a) through (e) above;
and
(g) other short term investments (excluding investments in
Subsidiaries, Affiliates or Joint Ventures) made or maintained by any
Foreign Subsidiary outside of the United States of America in the
ordinary course of its business, consistent with the present investment
practices of the Company and its Subsidiaries as of the date hereof
(generally, and as to the individual and aggregate amounts and other
terms thereof).
"Permitted Siliconix Merger" shall mean the merger or other
amalgamation of Vishay TEMIC Holdings (and any of its Subsidiaries) or Pamela
Holdings (or any of its Subsidiaries) into Siliconix, but only after Siliconix
has become a 100% Subsidiary.
"Permitted Transfer" shall mean (i) any disposition of inventory or
worn out or obsolete machinery, equipment or other such personal property in the
ordinary course of business, (ii) the transfer by Company or its Subsidiaries to
Vishay Israel or its wholly-owned direct subsidiaries existing under the laws of
Israel of machinery and equipment in an aggregate amount (valued on the basis of
the book value of such property on the date of acquisition thereof) of up to
Fifty Million Dollars ($50,000,000) from and after the date hereof, (iii) the IC
Transfer, and (iv) the transfer to
16
Siliconix by Pamela Holdings or any other Subsidiary of the TEMIC Foreign
Subsidiaries, or all or any portion of the assets owned by the TEMIC Foreign
Subsidiaries, on the date of consummation of the TEMIC Acquisition; provided
that, both before and after any such transfer, no Default or Event of Default
(whether or not related to such transfer), has occurred and is continuing under
this Agreement or any of the other Loan Documents.
"Permitted Transferee" shall mean a "Permitted Transferee" as defined
in the Company's current Certificate of Incorporation, and any subsequent
amendment of the definition of such term approved by the Required Lenders.
"Person" shall mean an individual, corporation, partnership, limited
liability company, trust, incorporated or unincorporated organization, joint
venture, joint stock company, or a government or any agency or political
subdivision thereof or other entity of any kind.
"Pledge Agreement(s)" shall mean the various stock pledge agreements,
including any nantissements, notarial deeds, pledges of financial instrument
accounts, or other local law pledges (and any of them) executed and delivered
concurrently herewith or to be executed or delivered pursuant to Sections 5.5
and/or 7.16 hereof and, except with respect to those Pledge Agreements executed
by or covering the share capital of a Significant Foreign Subsidiary, on behalf
of any Lenders or their Affiliates (or any of them) under any Hedging
Obligations, all by the Company and its Significant Subsidiaries in favor of the
Agent, for and on behalf of the Lenders under this Agreement and the lenders
under the Long Term Revolving Credit Agreement in form satisfactory to Agent and
the Lenders, in their reasonable discretion, as amended or otherwise modified
from time to time.
"Prime Rate" shall mean the per annum interest rate established by
Agent as its prime rate for its borrowers as such rate may vary from time to
time, which rate is not necessarily the lowest rate on loans made by Agent at
any such time.
"Prime-based Advance" shall mean an Advance which bears interest at the
Prime-based Rate.
"Prime-based Rate" shall mean that rate of interest which is the
greater of (i) the Prime Rate or (ii) the Alternate Base Rate.
"Prior Credit Agreement" shall mean that certain Amended and Restated
Vishay Intertechnology, Inc. Credit Agreement dated as of July 18, 1994, among
Company, certain financial institutions and Agent, as amended, which Prior
Credit Agreement shall have no further effect or validity from and after the
Effective Date.
"Pro Forma Projected Financial Information" shall mean, as to any
proposed acquisition, a statement executed by an Authorized Officer of the
Company (supported by reasonable detail) setting forth the total consideration
to be paid or incurred in connection with the proposed acquisition and, pro
forma combined projected financial information for the Company and its
Consolidated Subsidiaries and the acquisition target (if applicable), consisting
of projected opening
17
balance sheets and covenant calculations as of the proposed effective date of
the acquisition or the closing date and as of the end of at least the next
succeeding three (3) fiscal years of Company following the acquisition and
projected statements of income, balance sheets and cash flow statements for each
of those years, including sufficient detail to permit calculation of the amounts
and the financial covenants described in Sections 7.4 through 7.6 hereof, as
projected as of the effective date of the acquisition and for those fiscal years
and accompanied by (i) a statement setting forth a calculation of the ratios and
amounts so described and (ii) a statement in reasonable detail specifying all
material assumptions underlying the projections.
"Prohibited Transaction" shall mean any transaction involving a Pension
Plan which constitutes a "prohibited transaction" under Section 406 of ERISA or
Section 4975 of the Internal Revenue Code.
"Rating Agency" shall mean Fitch Investor Services, Inc., or Standard &
Poor's Ratings Group, or Moody's Investor Service, Inc., or any of their
respective successors, or any other nationally recognized rating agency, and
"Rating Agencies" shall be the collective reference to any or all of the
foregoing.
"Register" is defined in Section 13.8(f) hereof.
"Remaining Siliconix Acquisition" shall mean the purchase or other
acquisition by Company or any of its Domestic Subsidiaries of all or any portion
of the shares of stock of Siliconix.
"Reportable Event" shall mean a "reportable event" within the meaning
of Section 4043 of ERISA and the regulations promulgated thereunder, which is
material to the Company and its Subsidiaries, taken as a whole.
"Request for Advance" shall mean a Request for Revolving Credit
Advance.
"Request for Revolving Credit Advance" shall mean a request for
Revolving Credit Advance issued by the Company or by a Permitted Borrower and
countersigned by the Company under Section 2.3(c) hereof, as the case may be, in
the form attached annexed hereto as Exhibit A, as such form may be amended or
otherwise modified from time to time.
"Required Lenders" shall mean at any time Lenders holding 51% of the
aggregate principal amount of the Indebtedness then outstanding hereunder or, if
no Indebtedness is then outstanding, Lenders holding 51% of the Percentages.
"Revalidation Date" shall mean the last day of the first calendar
quarter to end at least sixty (60) days following the date of the Effective
Date.
"Revolving Credit" shall mean the revolving credit loan to be advanced
to the Company or a Permitted Borrower by the Lenders pursuant to Section 2
hereof, in an aggregate amount (subject to the terms hereof), not to exceed, at
any one time outstanding, the Revolving Credit Aggregate Commitment.
18
"Revolving Credit Aggregate Commitment" shall mean Two Hundred
Seventy-Five Million Dollars ($275,000,000), subject to any reductions in or
termination of the Revolving Credit Aggregate Commitment under Section 2.15 or
9.2 hereof.
"Revolving Credit Facility Fee" shall mean the facility fee payable to
Agent for distribution to the Lenders pursuant to Section 2.13, hereof.
"Revolving Credit Maturity Date" shall mean the earlier to occur of (i)
March 1, 1999, as such date may be extended from time to time pursuant to
Section 2.16 hereof, and (ii) the date on which the Revolving Credit Aggregate
Commitment shall be terminated pursuant to Section 2.15 or 9.2 hereof.
"Revolving Credit Notes" shall mean the revolving credit notes which
may be issued by Company or a Permitted Borrower at the request of a Lender
pursuant to Section 2.2(e) hereof in the form annexed to this Agreement as
Exhibit B-1 or B-2, as the case may be, as such Notes may be amended, renewed,
replaced or extended from time to time.
"Shares", "share capital", "capital stock", "stock" and words of
similar import shall mean and refer to the equity capital interest under
applicable law of any Person in a corporation or other business entity,
howsoever such interest is created or arises, whether such capital consists of
common stock, preferred stock or preference shares, or other stock, and whether
such capital is evidenced by a certificate, share register entry or otherwise.
"Significant Domestic Subsidiaries" shall mean those Domestic
Subsidiaries identified as such on Schedule 6.6A hereto, and any Domestic
Subsidiaries which become Significant Subsidiaries subsequent to the date
hereof.
"Significant Foreign Subsidiaries" shall mean those Foreign
Subsidiaries identified as such on Schedule 6.6A hereto, and any Foreign
Subsidiaries which become Significant Subsidiaries subsequent to the date
hereof.
"Significant Subsidiary" shall mean, on the Effective Date, those
Subsidiaries identified as Significant Subsidiaries on Schedule 6.6A hereto (for
purposes of determining the required Guarantors hereunder) and Schedule 6.6B
hereto (for purposes of determining those Subsidiaries whose share capital is
required to be encumbered by a Pledge Agreement hereunder), and thereafter shall
mean the Significant Subsidiaries as of the Effective Date and all other
Subsidiaries, whether existing as of the Effective Date or created or acquired
by the Company thereafter, except any Subsidiary:
(a) the total assets of which, on an individual basis, on
any date of determination, are less than $5,000,000; and
(b) which has, as of the most recent fiscal quarter then
ending, for the four preceding fiscal quarters, an EBITDA of less
than $1,000,000;
19
provided however that, notwithstanding the foregoing, Vishay Israel shall not be
considered a Significant Subsidiary hereunder and each of Siliconix and LPSC
shall not be considered Significant Subsidiaries hereunder unless and until
becoming 100% Subsidiaries.
"Siliconix" shall mean Siliconix Incorporated, a Delaware corporation.
"Stockholder's Equity" shall mean (i) legal capital consisting of
common or preferred stock, (ii) paid-in capital to the extent of the excess over
par or stated value paid for capital stock and that created by a corporate
readjustment and (iii) retained earnings consisting of cumulative Net Income
reduced by dividends declared or paid.
"Stock Option Plan" shall mean each employee stock option or other
employee incentive plan listed on Schedule 1.7 hereto pursuant to which stock of
the Company is distributed to directors, officers and/or employees of the
Company or its Subsidiaries and other similar plans adopted by the Company or
any Subsidiary subsequent to the date hereof in the ordinary course of business.
"Stock Option Plan Debt" shall mean Debt issued by any Subsidiary to
the Company in exchange for stock in the Company to be distributed pursuant to a
Stock Option Plan, provided that (i) no payments of principal or interest may be
made under such Debt so long as this Agreement or any of the Loan Documents
remains outstanding, and (ii) such Debt shall be subordinated to the
Indebtedness in all respects on terms and conditions reasonably satisfactory to
the Agent and the Required Lenders.
"Subsidiary(ies)" shall mean any corporation, association, joint stock
company, limited liability company, partnership or business trust of which more
than fifty percent (50%) of the outstanding voting stock or other ownership
interests is owned either directly or indirectly by Company or one or more of
its Subsidiaries or by Company and one or more of its Subsidiaries, or the
management of which is otherwise controlled, directly, or indirectly through one
or more intermediaries, or both, by Company and/or its Subsidiaries. "100%
Subsidiary(ies)" shall mean any of the Company's Subsidiaries whose stock (other
than directors' or qualifying shares to the extent required under applicable
law) or other ownership interests is owned 100% by any other 100% Subsidiary
and/or the Company, and shall also include Vishay Israel.
"Syndication Fee" shall mean those certain fees payable to the Agents
in the amount set forth in the Fee Letter dated January 7, 1998.
"Tangible Net Worth" shall mean, as of any date of determination, the
total common shareholders' equity of the Company and its Subsidiaries on a
Consolidated basis, together with the amount, if any, of preferred stock which
is classified as part of shareholders' equity, as reflected on the most recent
regularly prepared quarterly balance sheet of the Company and such Subsidiaries,
which balance sheet shall be prepared in accordance with GAAP, minus the book
amount of intangible assets including, without limitation, such items as
goodwill, trademarks, trade names, copyrights, patents, licenses and rights in
any intangible assets, and unamortized debt discount and expense, as of such
date determined in accordance with GAAP, but excluding the effects of the
20
currency translation adjustment and of the pension adjustment under the
additional minimum liability section of FASB 87.
"TEMIC Acquisition" shall mean the acquisition by the Company, subject
to the terms hereof, of the TEMIC Semiconductor Business, including, without
limitation, not less than eighty percent (80%) of the common shares of Siliconix
issued and outstanding on the date of the TEMIC Acquisition, for the price and
on the terms set forth in the TEMIC Acquisition Agreement.
"TEMIC Acquisition Agreement" shall mean that certain agreement and
notarial deed governing the acquisition of the TEMIC Semiconductor Business
entered into between the TEMIC Parties, as sellers, and the Company, Pamela
Holdings and Vishay TEMIC Holdings, as purchasers, dated as of December 16,
1997, as amended (subject to the terms hereof) from time to time.
"TEMIC Foreign Subsidiaries" shall mean those Foreign Subsidiaries
created or acquired by the Company pursuant to the TEMIC Acquisition.
"TEMIC Parties" shall mean those sellers of the TEMIC Semiconductor
Business identified in Schedule 1.3 hereto and signatories to the TEMIC
Acquisition Agreement.
"TEMIC Semiconductor Business" shall mean the business of, among other
things, designing, marketing and manufacturing discrete electronic devices and
integrated circuits and designing, marketing and manufacturing power and analog
semiconductor products.
"TEMIC Subsidiaries" shall mean those Subsidiaries created or acquired
by the Company pursuant to the TEMIC Acquisition, as set forth on Schedule 1.5
hereof.
"Total Indebtedness" shall mean, with respect to the Company and its
Consolidated Subsidiaries, as of any date of determination, the sum, without
duplication, of (a) the aggregate outstanding principal amounts of (i) Advances
of the Revolving Credit outstanding as of such date, and (ii) any other
revolving credit and other short-term and long-term indebtedness of the Company
and its Subsidiaries and any obligations under any letters of credit issued and
outstanding under the Long Term Credit Agreement as of such date, (b) the
aggregate outstanding principal amount of all long-term and short-term
indebtedness of the Company and its Subsidiaries as of such date and (c) all
other interest-bearing indebtedness of the Company and its Subsidiaries, whether
short-term or long-term, as of such date.
"Vishay Europe" shall mean Vishay Europe GmbH, a company organized
under the laws of the Federal Republic of Germany, formerly known as Vishay
Beteiligungs GmbH.
"Vishay Electronic" shall mean Vishay Electronic GmbH, a company
organized under the laws of the Federal Republic of Germany.
"Vishay TEMIC Holdings" shall mean Vishay TEMIC Semiconductor
Acquisition Holdings Corp., a Delaware corporation, one hundred percent (100%)
of the share capital of which is owned (directly or indirectly) by Company.
21
"Vishay Israel" shall mean Vishay Israel Limited, a corporation
organized under the laws of Israel and a Subsidiary of the Company.
"Vishay Stock Plans" shall mean that certain 1986 Employee Stock Plan
of Vishay Intertechnology, Inc., adopted by the board of directors of the
Company on February 27, 1986, as such plan may be amended from time to time, and
the Stock Option Plan, and any successor plans thereto.
2. REVOLVING CREDIT
2.1 Commitment. Subject to the terms and conditions of this Agreement
(including without limitation Section 2.3 hereof), each Lender severally and for
itself alone agrees to make Advances of the Revolving Credit in any one or more
of the Permitted Currencies to the Company or to any of the Permitted Borrowers
from time to time on any Business Day during the period from the Effective Date
hereof until (but excluding) the Revolving Credit Maturity Date in an aggregate
amount, based on the Dollar Amount of any Advances outstanding in Dollars and
the Current Dollar Equivalent of any Advances outstanding in Alternative
Currencies, not to exceed at any one time outstanding such Lender's Percentage
of the Revolving Credit Aggregate Commitment. Except as provided in Section 2.12
hereof, for purposes of this Agreement, Advances in Alternative Currencies shall
be determined, denominated and redenominated as set forth in Section 2.11
hereof. Subject to the terms and conditions set forth herein, advances,
repayments and readvances may be made under the Revolving Credit. Advances of
the Revolving Credit shall be subject to the following additional conditions and
limitations:
(a) A Permitted Borrower shall not be entitled to request an
Advance of the Revolving Credit hereunder until (i) it has become a party to
this Agreement, either by execution and delivery of this Agreement, or by
execution and delivery of a Permitted Borrower Addendum to this Agreement and
(ii) it has become a party to the applicable Guaranty either by execution and
delivery of such Guaranty or by execution an delivery of a Joinder Agreement to
such Guaranty, and accompanied in each case by authority documents, legal
opinions and other supporting documents as required by Agent and the Required
Lenders hereunder.
2.2 Accrual of Interest and Maturity; Evidence of Indebtedness. (a) The
Company and each Permitted Borrower hereby unconditionally promises to pay to
the Agent for the account of each Lender the then unpaid principal amount of
each Revolving Credit Advance of such Lender on the Revolving Credit Maturity
Date and on such other dates and in such other amounts as may be required from
time to time pursuant to this Agreement.
(b) Each Lender shall maintain in accordance with its usual practice an
account or accounts evidencing indebtedness of the Company and each Permitted
Borrower to the appropriate lending office of such Lender resulting from each
Revolving Credit Advance made by such lending office of such Lender from time to
time, including the amounts of principal and interest payable thereon and paid
to such Lender from time to time under this Agreement.
22
(c) The Agent shall maintain the Register pursuant to Section 13.8(f),
and a subaccount therein for each Lender, in which Register and subaccounts
(taken together) shall be recorded (i) the amount and applicable Permitted
Currency of each Revolving Credit Advance made hereunder, the type thereof and
each Interest Period applicable to any Eurocurrency-based Advance, (ii) the
amount of any principal or interest due and payable or to become due and payable
from the Company or the applicable Permitted Borrower, as the case may be, to
each Lender hereunder in respect of the Revolving Credit Advances and (iii) both
the amount of any sum received by the Agent hereunder from the Company or the
applicable Permitted Borrower in respect of the Revolving Credit Advances and
each Lender's share thereof.
(d) The entries made in the Register and the accounts of each Lender
maintained pursuant to paragraphs (b) and (c) of this Section 2.1 shall absent
manifest error, to the extent permitted by applicable law, be conclusive
evidence of the existence and amounts of the obligations of the Company and the
Permitted Borrowers therein recorded; provided, however, that the failure of any
Lender or the Agent to maintain the Register or any such account, as applicable,
or any error therein, shall not in any manner affect the obligation of each of
the Company and each Permitted Borrower to repay the Revolving Credit Advances
(and all other amounts owing with respect thereto) made to the Company or such
Permitted Borrower by such Lender in accordance with the terms of this
Agreement.
(e) The Company agrees that, upon written request to the Administrative
Agent (with a copy to the Company) by any Lender, the Company and each of the
Permitted Borrowers will execute and deliver, to such Lender, at the Company's
(or such Permitted Borrower's) own expense, a Revolving Credit Note of each of
the Company and each of the Permitted Borrowers evidencing the outstanding
Revolving Credit Advances owing to such Lender; provided, that the delivery of
such Revolving Credit Notes shall not be a condition precedent to the Effective
Date.
2.3 Requests for and Refundings and Conversions of Advances. Company or
a Permitted Borrower (with the countersignature of Company hereunder) may
request an Advance of the Revolving Credit, refund any such Advance in the same
type of Advance or convert any such Advance to any other type of Advance of the
Revolving Credit only after delivery to Agent of a Request for Revolving Credit
Advance executed by an Authorized Officer of Company or of such Permitted
Borrower (with the countersignature of an Authorized Officer of the Company),
subject to the following and to the remaining provisions hereof:
(a) each such Request for Revolving Credit Advance shall set
forth the information required on the Request for Advance form annexed
hereto as Exhibit A-1, including without limitation:
(i) the proposed date of such Advance, which must be a
Business Day;
(ii) whether such Advance is a refunding or conversion of
an outstanding Advance;
23
(iii) whether such Advance is to be a Prime-based Advance
or a Eurocurrency-based Advance, and, except in the
case of a Prime-based Advance, the first Interest
Period applicable thereto; and
(iv) in the case of a Eurocurrency-based Advance, the
Permitted Currency in which such Advance is to be
made.
(b) each such Request for Revolving Credit Advance shall be
delivered to Agent by 12:00 noon (Detroit time) three (3) Business Days
prior to the proposed date of Advance, except in the case of a
Prime-based Advance, for which the Request for Advance must be
delivered by 12:00 noon (Detroit time) on such proposed date;
(c) on the proposed date of such Advance, the Dollar Amount of
the principal amount of such requested Advance, plus the Dollar Amount
of the principal amount of any other Advances of the Revolving Credit
being requested on such date, plus the principal amount of all other
Advances of the Revolving Credit then outstanding hereunder, in each
case whether to Company or the Permitted Borrowers (using the Current
Dollar Equivalent of any such Advances outstanding in any Alternative
Currency, determined pursuant to the terms hereof as of the date of
such requested Advance), shall not exceed the Revolving Credit
Aggregate Commitment;
(d) in the case of a Permitted Borrower, on the proposed date
of such Advance, the principal amount of the Advance of the Revolving
Credit being requested by such Permitted Borrower (determined and
tested as aforesaid), plus the principal amount of any other Advances
of the Revolving Credit being requested by such Permitted Borrower on
such date, plus the principal amount of any other Advances of the
Revolving Credit then outstanding to such Permitted Borrower hereunder
(determined as aforesaid), shall not exceed the applicable Permitted
Borrower Sublimit;
(e) in the case of a Prime-based Advance, the principal amount
of the initial funding of such Advance, as opposed to any refunding or
conversion thereof, shall be at least $10,000,000;
(f) in the case of a Eurocurrency-based Advance, the principal
amount of such Advance, plus the amount of any other outstanding
Advance of the Revolving Credit to be then combined therewith having
the same Applicable Interest Rate and Interest Period, if any, shall be
at least Fifteen Million Dollars ($15,000,000) or the equivalent
thereof in an Alternative Currency (or a larger integral multiple of
One Million Dollars ($1,000,000), or the equivalent thereof in the
applicable Alternative Currency) and at any one time there shall not be
in effect more than (x) for Advances to Company, ten (10) Applicable
Interest Rates and Interest Periods, and (y) for Advances to each
Permitted Borrower five (5) Applicable Interest Rates and Interest
Periods for each such currency;
(g) a Request for Revolving Credit Advance, once delivered to
Agent, shall not be revocable by Company or the Permitted Borrowers;
24
(h) each Request for Revolving Credit Advance shall constitute
a certification by the Company and the applicable Permitted Borrower,
if any, as of the date thereof that:
(i) both before and after such Advance, the
obligations of the Company and the Permitted
Borrowers set forth in this Agreement and
the other Loan Documents to which such
Persons are parties are valid, binding and
enforceable obligations of the Company and
the Permitted Borrowers, as the case may be;
(ii) all conditions to Advances of the Revolving
Credit have been satisfied, and shall remain
satisfied to the date of such Advance (both
before and after giving effect to such
Advance);
(iii) there is no Default or Event of Default in
existence, and none will exist upon the
making of such Advance (both before and
after giving effect to such Advance);
(iv) the representations and warranties contained
in this Agreement and the other Loan
Documents are true and correct in all
material respects and shall be true and
correct in all material respects as of the
making of such Advance (both before and
after giving effect to such Advance); and
(v) the execution of such Request for Advance
will not violate the material terms and
conditions of any material contract,
agreement or other borrowing of Company or
the Permitted Borrowers.
Agent, acting on behalf of the Lenders, may, at its option, lend under
this Section 2 upon the telephone request of an Authorized Officer of
Company or a Permitted Borrower and, in the event Agent, acting on
behalf of the Lenders, makes any such Advance upon a telephone request,
the requesting officer shall fax to Agent, on the same day as such
telephone request, a Request for Advance. Company and Permitted
Borrowers hereby authorize Agent to disburse Advances under this
Section 2.3 pursuant to the telephone instructions of any person
purporting to be a person identified by name on a written list of
persons authorized by the Company and delivered to Agent prior to the
date of such request to make Requests for Advance on behalf of the
Company and the Permitted Borrowers. Notwithstanding the foregoing, the
Company and each Permitted Borrower acknowledge that Company and each
such Permitted Borrower shall bear all risk of loss resulting from
disbursements made upon any telephone request. Each telephone request
for an Advance shall constitute a certification of the matters set
forth in the Request for Revolving Credit Advance form as of the date
of such requested Advance.
25
2.4 Disbursement of Advances.
(a) Upon receiving any Request for Revolving Credit Advance
from Company or a Permitted Borrower under Section 2.3 hereof, Agent
shall promptly notify each Lender by wire, telex or telephone
(confirmed by wire, telecopy or telex) of the amount and currency of
such Advance to be made and the date such Advance is to be made by said
Lender pursuant to its Percentage of such Advance. Unless such Lender's
commitment to make Advances of the Revolving Credit hereunder shall
have been suspended or terminated in accordance with this Agreement,
each such Lender shall make available the amount of its Percentage of
each Advance in immediately available funds in the currency of such
Advance to Agent, as follows:
(i) for Domestic Advances, at the office of
Agent located at One Detroit Center,
Detroit, Michigan 48226, not later than 3:00
p.m. (Detroit time) on the date of such
Advance; and
(ii) for Eurocurrency-based Advances, at the
Agent's Correspondent for the account of the
Eurocurrency Lending Office of the Agent,
not later than 12 noon (the time of the
Agent's Correspondent) on the date of such
Advance.
(b) Subject to submission of an executed Request for Revolving
Credit Advance by Company or a Permitted Borrower (with the
countersignature of the Company as aforesaid) without exceptions noted
in the compliance certification therein, Agent shall make available to
Company or to the applicable Permitted Borrower, as the case may be,
the aggregate of the amounts so received by it from the Lenders in like
funds and currencies:
(i) for Domestic Advances, not later than 4:00
p.m. (Detroit time) on the date of such
Advance by credit to an account of Company
or such Permitted Borrower maintained with
Agent or to such other account or third
party as Company or such Permitted Borrower
may reasonably direct; and
(ii) for Eurocurrency-based Advances, not later
than 4:00 p.m. (the time of the Agent's
Correspondent) on the date of such Advance,
by credit to an account of Company or such
Permitted Borrower maintained with Agent's
Correspondent or to such other account or
third party as Company or such Permitted
Borrower may reasonably direct.
(c) Agent shall deliver the documents and papers received by
it for the account of each Lender to such Lender or upon its order.
Unless Agent shall have been notified by any Lender prior to the date
of any proposed Advance that such Lender does not intend to make
available to Agent such Lender's Percentage of such Advance, Agent may
assume that such Lender has made such amount available to Agent on such
date and in such currency, as aforesaid and may, in reliance upon such
assumption, make available to Company or to
26
the applicable Permitted Borrower, as the case may be, a corresponding
amount. If such amount is not in fact made available to Agent by such
Lender, as aforesaid, Agent shall be entitled to recover such amount on
demand from such Lender. If such Lender does not pay such amount
forthwith upon Agent's demand therefor, the Agent shall promptly notify
Company, and Company or the applicable Permitted Borrower shall pay
such amount to Agent. Agent shall also be entitled to recover from such
Lender or Company or the applicable Permitted Borrower, as the case may
be, but without duplication, interest on such amount in respect of each
day from the date such amount was made available by Agent to Company or
such Permitted Borrower, as the case may be, to the date such amount is
recovered by Agent, at a rate per annum equal to:
(i) in the case of such Lender, for the first two (2)
Business Days such amount remains unpaid, with
respect to Domestic Advances, the Federal Funds
Effective Rate, and with respect to Eurocurrency-
based Advances, Agent's aggregate marginal cost
(including the cost of maintaining any required
reserves or deposit insurance and of any fees,
penalties, overdraft charges or other costs or
expenses incurred by Agent as a result of such
failure to deliver funds hereunder) of carrying such
amount and thereafter, at the rate of interest then
applicable to such Revolving Credit Advances; and
(ii) in the case of Company or such Permitted Borrower,
the rate of interest then applicable to such Advance
of the Revolving Credit.
The obligation of any Lender to make any Advance of the Revolving
Credit hereunder shall not be affected by the failure of any other
Lender to make any Advance hereunder, and no Lender shall have any
liability to the Company or any of its Subsidiaries, the Agent, any
other Lender, or any other party for another Lender's failure to make
any loan or Advance hereunder.
2.5 Reserved.
2.6 Prime-based Interest Payments. Interest on the unpaid balance of
all Prime-based Advances of the Revolving Credit from time to time outstanding
shall accrue from the date of such Advance to the Revolving Credit Maturity Date
(and until paid), at a per annum interest rate equal to the Prime-based Rate,
and shall be payable in immediately available funds with respect to Advances of
the Revolving Credit, quarterly commencing on the first day of the calendar
quarter next succeeding the calendar month during which the initial Advance of
the Revolving Credit is made and on the first day of each calendar quarter
thereafter. Interest accruing at the Prime-based Rate shall be computed on the
basis of a 360 day year and assessed for the actual number of days elapsed, and
in such computation effect shall be given to any change in the interest rate
resulting from a change in the Prime-based Rate on the date of such change in
the Prime-based Rate.
27
2.7 Eurocurrency-based Interest Payments.
Interest on each Eurocurrency-based Advance of the Revolving Credit
shall accrue at its Applicable Interest Rate and shall be payable in immediately
available funds on the last day of the Interest Period applicable thereto (and,
if any Interest Period shall exceed three months, then on the last Business Day
of the third month of such Interest Period, and at three month intervals
thereafter). Interest accruing at the Eurocurrency-based Rate shall be computed
on the basis of a 360 day year (except that any such Advances made in Sterling
or any other Alternative Currency with respect to which applicable law or market
custom so requires shall be calculated based on a 365 day year, or as otherwise
required under applicable law or market custom) and assessed for the actual
number of days elapsed from the first day of the Interest Period applicable
thereto to but not including the last day thereof. Interest due on a
Eurocurrency-based Advance made in an Alternative Currency shall be paid in such
Alternative Currency.
2.8 Interest Payments on Conversions. Notwithstanding anything to the
contrary in the preceding sections, all accrued and unpaid interest on any
Advance converted pursuant to Section 2.3 hereof shall be due and payable in
full on the date such Advance is converted.
2.9 Interest on Default. In the event and so long as any Event of
Default under Section 9.1(a) or 9.1(b) shall exist, interest shall be payable
daily on all Eurocurrency-based Advances of the Revolving Credit from time to
time outstanding at a per annum rate equal to the Applicable Interest Rate plus
three percent (3%) for the remainder of the then existing Interest Period, if
any, and at all other such times, with respect to Prime-based Advances from time
to time outstanding, at a per annum rate equal to the Prime-based Rate plus
three percent (3%), and, with respect to Eurocurrency-based Advances thereof in
any Alternative Currency from time to time outstanding, (i) at a per annum rate
calculated by the Agent, whose determination shall be conclusive absent manifest
error, on a daily basis, equal to three percent (3%) above the interest rate per
annum at which one (1) day deposits (or, if such amount due remains unpaid for
more than three (3) Business Days, then for such other period of time as the
Agent may elect which shall in no event be longer than six (6) months) in the
relevant eurocurrency in the amount of such overdue payment due to the Agent are
offered by the Agent's Eurocurrency Lending Office for the applicable period
determined as provided above, or (ii) if at any such time such deposits are not
offered by Eurocurrency Lending Office, then at a rate per annum equal to three
percent (3%) above the rate determined by the Agent to be its aggregate marginal
cost (including the cost of maintaining any required reserves or deposit
insurance) of carrying the amount of such Eurocurrency-based Advance.
2.10 Prepayment. Company or the Permitted Borrowers may prepay all or
part of the outstanding balance of any Prime-based Advance(s) of the Revolving
Credit at any time, provided that the amount of any partial prepayment shall be
at least One Million Dollars ($1,000,000) and, after giving effect to any such
partial prepayment, the aggregate balance of Prime-based Advance(s) of the
Revolving Credit remaining outstanding, if any, shall be at least Five Million
Dollars ($5,000,000). Subject to Section 11.1 hereof, Company or the Permitted
Borrowers may prepay all or part of any Eurocurrency-based Advance (subject to
not less than two (2) Business Days' notice to Agent) provided that the amount
of any such partial prepayment shall be at least One Million Dollars
($1,000,000), or the Current Dollar Equivalent thereof in an Alternative
Currency, and, after
28
giving effect to any such partial prepayment, the unpaid portion of such Advance
which is refunded or converted under Section 2.3 hereof shall be at least
Fifteen Million Dollars ($15,000,000) or the Current Dollar Equivalent thereof
in an Alternative Currency. Any prepayment made in accordance with this Section
shall be subject to Section 11.1 hereof, but otherwise without premium, penalty
or prejudice to the right to readvance under the terms of this Agreement.
2.11 Determination, Denomination and Redenomination of Alternative
Currency Advances. Whenever, pursuant to any provision of this Agreement:
(a) an Advance of the Revolving Credit is initially funded, as
opposed to any refunding or conversion thereof, in an Alternative Currency, the
amount to be advanced hereunder will be the equivalent in such Alternative
Currency of the Dollar Amount of such Advance;
(b) an existing Advance of the Revolving Credit denominated in
an Alternative Currency is to be refunded, in whole or in part, with an Advance
denominated in the same Alternative Currency, the amount of the new Advance
shall be continued in the amount of the Alternative Currency so refunded;
(c) an existing Advance of the Revolving Credit denominated in
an Alternative Currency is to be converted, in whole or in part, to an Advance
denominated in another Alternative Currency, the amount of the new Advance shall
be that amount of the Alternative Currency of the new Advance which may be
purchased, using the most favorable spot exchange rate determined by Agent to be
available to it for the sale of Dollars for such other Alternative Currency at
approximately 11:00 a.m. (Detroit time) two (2) Business Days prior to the last
day of the Eurocurrency Interest Period applicable to the existing Advance, with
the Dollar Amount of the existing Advance, or portion thereof being converted;
and
(d) an existing Advance of the Revolving Credit denominated in
an Alternative Currency is to be converted, in whole or in part, to an Advance
denominated in Dollars, the amount of the new Advance shall be the Dollar Amount
of the existing Advance, or portion thereof being converted (determined as
aforesaid).
2.12 Prime-based Advance in Absence of Election or Upon Default. If,
(a) as to any outstanding Eurocurrency-based Advance of the Revolving Credit,
Agent has not received payment of all outstanding principal and accrued interest
on the last day of the Interest Period applicable thereto, or does not receive a
timely Request for Advance meeting the requirements of Section 2.3 hereof with
respect to the refunding or conversion of such Advance, or (b) subject to
Section 2.9 hereof, if on such day a Default or an Event of Default shall have
occurred and be continuing, then the principal amount thereof which is not then
prepaid in the case of a Eurocurrency-based Advance shall, absent a contrary
election of the Required Lenders, be converted automatically to a Prime-based
Advance and the Agent shall thereafter promptly notify Company of said action.
If a Eurocurrency-based Advance converted hereunder is payable in an Alternative
Currency, the Prime-based Advance shall be in an amount equal to the Dollar
Amount of such Eurocurrency-based Advance at such time and the Agent and the
Lenders shall use said Prime-based Advance to fund payment of the Alternative
Currency obligation, all subject to the provisions of Section 2.14 hereof.
29
The Company and the Permitted Borrowers, if applicable, shall reimburse the
Agent and the Lenders on demand for any costs incurred by the Agent or any of
the Lenders, as applicable, resulting from the conversion pursuant to this
Section 2.12 of Eurocurrency-based Advances payable in an Alternative Currency
to Prime-based Advances.
2.13 Revolving Credit Facility Fee. From the Effective Date to the
Revolving Credit Maturity Date, the Company shall pay to the Agent, for
distribution to the Lenders (as set forth below), a Revolving Credit Facility
Fee determined by multiplying the Applicable Fee Percentage per annum times the
Revolving Credit Aggregate Commitment then applicable under Section 2.15 hereof
(whether used or unused) computed on a daily basis. The Revolving Credit
Facility Fee shall be payable quarterly in arrears commencing April 1, 1998 (in
respect of the prior calendar quarter or portion thereof), and on the first day
of each calendar quarter thereafter and on the Revolving Credit Maturity Date,
and shall be computed on the basis of a year of three hundred sixty (360) days
and assessed for the actual number of days elapsed. Whenever any payment of the
Revolving Credit Facility Fee shall be due on a day which is not a Business Day,
the date for payment thereof shall be extended to the next Business Day. Upon
receipt of such payment Agent shall make prompt payment to each Lender of its
share of the Revolving Credit Facility Fee based upon its respective Percentage.
2.14 Currency Appreciation; Mandatory Reduction of Indebtedness.
(a) Revolving Credit Aggregate Commitment. If at any time and for any
reason, the aggregate principal amount of all Advances of the Revolving Credit
hereunder to the Company and to the Permitted Borrowers made in Dollars and the
aggregate Current Dollar Equivalent of all Advances of the Revolving Credit
outstanding hereunder to the Company and to the Permitted Borrowers in any
Alternative Currency, as of such time exceeds the Revolving Credit Aggregate
Commitment (as used in this clause (a), the "Excess"), the Company and the
Permitted Borrowers shall:
(i) immediately repay that portion of such Indebtedness then
carried as a Prime-based Advance, if any, by the Dollar Amount of such
Excess, and/or reduce any pending request for an Advance in Dollars on
such day by the Dollar Amount of the Excess, to the extent thereof; and
(ii) on the last day of each Interest Period of any
Eurocurrency-based Advance outstanding as of such time, until the
necessary reductions of Indebtedness under this Section 2.14(a) have
been fully made, repay the Indebtedness carried in such Advances and/or
reduce any requests for refunding or conversion of such Advances
submitted (or to be submitted) by the Company or the applicable
Permitted Borrower in respect of such Advances, by the amount in
Dollars or the applicable Alternative Currency, as the case may be, of
the Excess, to the extent thereof.
Compliance with this Section 2.14(a) shall be tested on a daily or other basis
satisfactory to Agent in its sole discretion, provided that, so long as no
Default or Event of Default has occurred and is continuing, at any time while
the aggregate Advances of the Revolving Credit available to be
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borrowed hereunder (based on the Revolving Credit Aggregate Commitment then in
effect) equal or exceed Fifty Million Dollars ($50,000,000), compliance with
this Section 2.14(a) shall be tested as of the last day of each calendar
quarter. Notwithstanding the foregoing, upon the occurrence and during the
continuance of any Default or Event of Default, or if any Excess remains after
recalculating said Excess based on ninety-five percent (95%) of the Current
Dollar Equivalent of any Advances denominated in Alternative Currencies (and one
hundred percent (100%) of any Advances denominated in Dollars), Company and the
Permitted Borrowers shall be obligated immediately to reduce the foregoing
Indebtedness hereunder by an amount sufficient to eliminate such Excess.
(b) Permitted Borrower Sublimit. If at any time and for any reason with
respect to any Permitted Borrower, the aggregate principal amount (tested in the
manner set forth in clause (a) above) of all Advances of the Revolving Credit
outstanding hereunder to such Permitted Borrower, which Advances are made or to
be made, in Dollars and ninety percent (90%) of the aggregate Current Dollar
Equivalent of all such Advances hereunder for the account of such Permitted
Borrower in any Alternative Currency as of such time, exceeds the applicable
Permitted Borrower Sublimit (as used in this clause (b), then in each case, such
Permitted Borrower shall
(i) immediately repay that portion of the Indebtedness
outstanding to such Permitted Borrower then carried as a Prime-based
Advance, if any, by the Dollar Amount of such Excess, and/or reduce on
such day any pending request for an Advance in Dollars submitted by
such Permitted Borrower by the Dollar Amount of such Permitted Borrower
Excess, to the extent thereof; and
(ii) on the last day of each Interest Period of any
Eurocurrency-based Advance outstanding to such Permitted Borrower as of
such time, until the necessary reductions of Indebtedness under this
Section 2.14(b) have been fully made, repay such Indebtedness carried
in such Advances and/or reduce any requests for refunding or conversion
of such Advances submitted (or to be submitted) by such Permitted
Borrower in respect of such Advances, by the amount in Dollars or the
applicable Alternative Currency, as the case may be, of such Permitted
Borrower Excess, to the extent thereof.
Provided that no Default or Event of Default has occurred and is continuing,
each Permitted Borrower's compliance with this Section 2.14(b) shall be tested
as of the last day of each calendar quarter or, upon the written request of the
Company from time to time, as of the last day of each calendar month, provided
the Company furnishes Agent with current monthly financial statements complying
with the requirements set forth in subparagraphs (i) and (ii) of Section 7.3(c)
hereof. Upon the occurrence and during the continuance of any Default or Event
of Default, compliance with this Section 2.14(b) shall be tested on a daily or
other basis satisfactory to Agent in its sole discretion.
2.15 Optional Reduction or Termination of Revolving Credit Aggregate
Commitment. Provided that no Default or Event of Default has occurred and is
continuing, the Company may upon at least five Business Days' prior written
notice to the Agent, permanently reduce the Revolving Credit Aggregate
Commitment in whole at any time, or in part from time to time, without premium
31
or penalty, provided that: (i) each partial reduction of the Revolving Credit
Aggregate Commitment shall be in an aggregate amount equal to Twenty Million
Dollars ($20,000,000) or a larger integral multiple of One Million Dollars
($1,000,000); (ii) each reduction shall be accompanied by the payment of the
Revolving Credit Facility Fee, if any, accrued to the date of such reduction;
(iii) the Company or any Permitted Borrower, as applicable, shall prepay in
accordance with the terms hereof the amount, if any, by which the aggregate
unpaid principal amount of Advances (using the Current Dollar Equivalent of any
such Advance outstanding in any Alternative Currency) of the Revolving Credit,
exceeds the amount of the Revolving Credit Aggregate Commitment as so reduced,
together with interest thereon to the date of prepayment; and (iv) if the
termination or reduction of the Revolving Credit Aggregate Commitment requires
the prepayment of a Eurocurrency-based Advance, the termination or reduction may
be made only on the last Business Day of the then current Interest Period
applicable to such Eurocurrency-based Advance. Reductions of the Revolving
Credit Aggregate Commitment and any accompanying prepayments of Advances of the
Revolving Credit shall be distributed by Agent to each Lender in accordance with
such Lender's Percentage thereof, and will not be available for reinstatement by
or readvance to the Company or any Permitted Borrower. Any reductions of the
Revolving Credit Aggregate Commitment hereunder shall reduce each Lender's
portion thereof proportionately (based on the applicable Percentages), and shall
be permanent and irrevocable. Any payments made pursuant to this Section shall
be applied first to outstanding Prime-based Advances under the Revolving Credit,
and then to Eurocurrency-based Advances of the Revolving Credit.
2.16 Extensions of Revolving Credit Maturity Date. Provided that no
Default or Event of Default has occurred and is continuing, Company may, by
written notice to Agent and each Lender (which notice shall be irrevocable and
which shall not be deemed effective unless actually received by Agent and each
Lender):
(a) prior to August 1, 1998, but not before July 1, 1998,
request that the Lenders extend the then applicable Revolving Credit
Maturity Date to June 1, 1999 (such request, the "Initial Request");
and
(b) prior to May 18th, but not before April 18th, of each year
beginning in 1999 (if the Initial Request is made by the Company and
approved by the Lenders) or prior to November 1 but not before October
1 of each year beginning in 1998 (if the Initial Request is not made by
the Company or is not approved by the Lenders), request that the
Lenders extend the then applicable Revolving Credit Maturity Date to a
date that is 364 days later than the Revolving Credit Maturity Date
then in effect (each such request, a "Subsequent Request").
Each Lender shall, not later than thirty (30) calendar days following the date
of its receipt of the Initial Request or any Subsequent Request, as the case may
be, give written notice to the Agent stating whether such Lender is willing to
extend the Revolving Credit Maturity Date as requested, such consent to be in
the sole discretion of such Lender. If Agent has received the aforesaid written
approvals of such Initial Request or such Subsequent Request, as the case may
be, from each of the Lenders, then, effective on (but not before) August 31,
1998 (in the case of the Initial Request) and the then applicable Revolving
Credit Maturity Date (in the case of any Subsequent Request),
32
provided that no Default or Event of Default has occurred and is continuing and
none of the Lenders has withdrawn its approval, in writing, prior to such date,
(A) the Revolving Credit Maturity Date shall be so extended, in the case of the
Initial Request to June 1, 1999, and in the case of all Subsequent Requests, for
an additional period of 364 days, (B) the term Revolving Credit Maturity Date
shall mean such extended date and (C) Agent shall promptly notify the Company
and the Lenders that such extension has occurred. If (i) any Lender gives the
Agent written notice that it is unwilling to extend the Revolving Credit
Maturity Date as requested or (ii) any Lender fails to provide written approval
to Agent of the Initial Request or any Subsequent Request, as the case may be,
within thirty (30) calendar days of the date of Agent's receipt of such Initial
Request or any Subsequent Request, as the case may be, or (iii) withdraws its
approval in writing prior to the Revolving Credit Maturity Date then in effect
then (x) the Lenders shall be deemed to have declined to extend the Revolving
Credit Maturity Date, (y) the then-current Revolving Credit Maturity Date shall
remain in effect (with no further right on the part of Company, to request
extensions thereof under this Section 2.16, unless such non-extension relates to
the Initial Request) and (z) the commitments of the Lenders to make Advances of
the Revolving Credit hereunder shall terminate on the Revolving Credit Maturity
Date then in effect, and Agent shall promptly notify Company and the Lenders
thereof.
2.17 Application of Advances. Advances of the Revolving Credit shall be
available, subject to the terms hereof, to fund working capital needs, the TEMIC
Acquisition or other general corporate purposes of the Company and the Permitted
Borrowers.
3. Reserved.
4. MARGIN ADJUSTMENTS.
4.1 Margin Adjustments. Adjustments to the Applicable Margin and the
Applicable Fee Percentages, based on Schedule 4.1, shall be implemented on a
quarterly basis as follows:
(a) Such adjustments shall be given prospective effect only,
effective as to all Advances outstanding hereunder and the Applicable
Fee Percentage, upon the date of delivery of the financial statements
under Sections 7.3(b) and 7.3(c) hereunder, in each case establishing
applicability of the appropriate adjustment, in each case with no
retroactivity or claw-back. In the event Company fails timely to
deliver the financial statements required under Section 7.3(b) or
7.3(c), then from the date delivery of such financial statements was
required until such financial statements are delivered, the margins and
fee percentages shall be at the highest level on the Pricing Matrix
attached to this Agreement as Schedule 4.1.
(b) From the Effective Date until the required date of
delivery under Section 7.3(c) of the Company's financial statements for
the fiscal quarter ending June 30, 1998, the margins and fee
percentages shall be those set forth under the Level III column of the
Pricing Matrix attached to this Agreement as Schedule 4.1, unless the
Leverage Ratio, as determined in financial statements delivered prior
to such date, is greater than or equal to 3:1, in which event the
margins and fee percentages shall be those under Level IV.
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5. CONDITIONS. The obligations of Lenders to make Advances pursuant to
this Agreement are subject to the following conditions, provided however that
Sections 5.1 through 5.10 below shall only apply to the initial Advances
hereunder:
5.1 Execution of this Agreement and the other Loan Documents. The
Company (on or before the Effective Date) and the Permitted Borrowers (prior to
requesting any Advance hereunder), shall have executed and delivered to the
Agents for the account of each Lender, this Agreement (including all schedules,
exhibits, certificates, opinions, financial statements and other documents to be
delivered pursuant hereto) and the other Loan Documents, and, this Agreement and
the other Loan Documents shall be in full force and effect.
5.2 Corporate Authority. Agents shall have received (i) certified
copies of resolutions of the Board of Directors of the Company and each of the
Significant Subsidiaries party to any Loan Document evidencing approval of the
form of this Agreement and each of the other Loan Documents to which such Person
is a party and authorizing the execution and delivery thereof and, if
applicable, the borrowing of Advances hereunder; (ii) (A) certified copies of
the Company's, and the Significant Subsidiaries' articles of incorporation and
bylaws or other constitutional documents certified as true and complete as of a
recent date by the appropriate official of the jurisdiction of incorporation of
each such entity (or, if unavailable in such jurisdiction, by a responsible
officer of such entity); and (B) a certificate of good standing from the state
or other jurisdictions of the Company's incorporation, and from the applicable
states of incorporation or other jurisdictions of the Significant Subsidiaries
and from every state or other jurisdiction in which the Company, or any of such
Significant Subsidiaries is qualified to do business, if issued by such
jurisdictions, subject to the limitations (as to qualification and authorization
to do business) contained in Section 6.1, hereof.
5.3 Company Guaranty. The Company shall have furnished, executed and
delivered to Agent the Company Guaranty in form and substance satisfactory to
Agents and the Lenders.
5.4 Subsidiary Guaranties. Each of the Significant Domestic
Subsidiaries shall have furnished, executed and delivered to Agent, the Domestic
Guaranty in form and substance satisfactory to Agents and the Lenders.
5.5 Stock Pledge of Shares Issued by Significant Subsidiaries.
(a) The Pledge Agreements shall have been executed and delivered by
Company and any Significant Domestic Subsidiaries required hereunder to be party
thereto as of the Effective Date; and
(b) The Company and each of the Significant Subsidiaries shall have
executed and delivered to Agent, prior to or concurrently with the initial
borrowing hereunder, a Pledge Agreement or Pledge Agreements covering (i) 65% of
the share capital of each Foreign Significant Subsidiary listed on Schedule 5.5
hereto to secure the Indebtedness of the Company and any Domestic Permitted
Borrowers and the Indebtedness (as such term is defined therein) of such parties
under the Long Term Revolving Credit Agreement and 100% of the share capital of
each such Foreign Significant Subsidiary to secure the Indebtedness (as such
term is defined therein) of the
34
Foreign Permitted Borrowers under the Long Term Revolving Credit Agreement and
(ii) 100% of the share capital of each Domestic Significant Subsidiary listed on
Schedule 5.5 hereto to secure the Indebtedness of the Company and Permitted
Borrowers and the Indebtedness (as such term is defined therein) of such parties
under the Long Term Revolving Credit Agreement, in each case in form and
substance satisfactory to Agents together with stock certificates and stock
powers executed in blank (if issued under applicable law) and the Company shall
take or cause to be taken all such steps as are necessary or advisable under
applicable law to perfect the liens granted thereby and to assure that such
Liens are first in priority.
5.6 Representations and Warranties -- All Parties. The representations
and warranties made by the Company, each of the Significant Subsidiaries or any
other party to any of the Loan Documents under this Agreement or any of the
other Loan Documents (excluding the Agents and the Lenders), and the
representations and warranties of any of the foregoing which are contained in
any certificate, document or financial or other statement furnished at any time
hereunder or thereunder or in connection herewith or therewith shall have been
true and correct in all material respects when made and shall be true and
correct in all material respects on and as of the date of the making of the
initial Advance hereunder.
5.7 Compliance with Certain Documents and Agreements. The Company and
the Significant Subsidiaries (and any of their respective Subsidiaries or
Affiliates) shall have each performed and complied with all agreements and
conditions contained in this Agreement, the other Loan Documents, or any
agreement or other document executed hereunder or thereunder and required to be
performed or complied with by each of them (as of the applicable date) and none
of such parties shall be in default in the performance or compliance with any of
the terms or provisions hereof or thereof.
5.8 Opinion of Counsel. The Company and each of the Significant
Subsidiaries shall furnish Agent, with signed copies for each Lender (and
addressed to each of the Lenders), opinions of counsel given upon the express
instructions of the Company and such Significant Subsidiaries, dated the date
hereof, and covering such matters as required by and otherwise satisfactory in
form and substance to the Agents and each of the Lenders.
5.9 Company's Certificate. The Agents shall have received a certificate
of a responsible senior officer of Company, dated the date of the making of the
initial Advances hereunder, stating that the conditions of paragraphs 5.1, 5.6,
5.7, 5.11, 5.12, 5.13 and 5.15(a) through (c) hereof have been fully satisfied.
5.10 Payment of Agent's and Other Fees. Company shall have paid to
Agent, for distribution to the Lenders hereunder (based on the Percentages in
effect under the Prior Credit Agreement) the Facility Fee accrued under the
Prior Credit Agreement to the Effective Date of this Agreement. In addition,
Company shall have paid to the Agents, for distribution to the Lenders hereunder
based on the Percentages, the Closing Fee, and to the Agents (for Agents' sole
accounts), the Agents Fees' and all costs and expenses required hereunder.
35
5.11 Long Term Revolving Credit Agreement. The Company and the
applicable Significant Subsidiaries shall have executed and delivered the Long
Term Revolving Credit Agreement (including all schedules, exhibits,
certificates, opinions, financial statements and other documents to be delivered
pursuant hereto) and the other Long Term Loan Documents to which each such
Person is a party, and the Short Term Revolving Credit Agreement and the other
Long Term Loan Documents shall be in full force and effect.
5.12 Outstanding Indebtedness Terminated. All indebtedness under the DM
Loan Agreement and under the Prior Credit Agreement, together with all interest,
all prepayment premiums and other amounts due and payable with respect thereto,
shall have been paid in full (including, to the extent necessary, from proceeds
of the initial Advance) and the related commitments terminated; and all Liens
securing payment of any such indebtedness have been released.
5.13 TEMIC Acquisition. The Agent shall have received a certified copy
(duly executed) of the TEMIC Acquisition Agreement, together with copies of the
other material acquisition documents executed and delivered pursuant thereto.
The TEMIC Acquisition Agreement shall be in form and substance satisfactory to
the Agent and the Lenders and shall have been duly authorized, executed and
delivered by each of the parties thereto and shall be in full force and effect.
No term or provision of the TEMIC Acquisition Agreement shall have been
modified, and no condition to consummation of the TEMIC Acquisition shall have
been waived, in either case in a manner detrimental to the Company, by any of
the parties thereto. The Company and the TEMIC Parties shall have in all
material respects done and performed such acts and observed such covenants which
each is required to do or perform under the TEMIC Acquisition Agreement and in
order to consummate the TEMIC Acquisition on or prior to the Effective Date, and
the TEMIC Acquisition shall have been consummated.
5.14 Regulation U Requirements. The Agent shall have received, on
behalf of the Lenders, a purpose statement on FR Form U-1 referred to in
Regulation U in form and substance satisfactory to the Agent and the Lenders to
the extent required in connection with the TEMIC Acquisition or otherwise under
applicable law. Furthermore, on or prior to the Effective Date, the Agent shall
have completed (on behalf of each of the Lenders) a Federal Reserve Form U-1,
such Form U-1 having been reviewed and approved by each of the Lenders and
otherwise being in form and substance satisfactory to Company and the Agent.
5.15 Other Documents and Instruments. The Agents shall have received,
with a photocopy for each Lender, such other instruments and documents as the
Required Lenders may reasonably request in writing in connection with the making
of Advances hereunder, and all such instruments and documents shall be
satisfactory in form and substance to the Agents and the Required Lenders.
5.16 Continuing Conditions. The obligations of the Lenders to make any
of the Advances or loans under this Agreement, including but not limited to the
initial Advances of the Revolving Credit hereunder, shall be subject to the
following continuing conditions:
36
(a) No Default or Event of Default shall have occurred and be
continuing as of the making of the proposed Advance (both before and after
giving effect thereto);
(b) The representations and warranties contained in this
Agreement and the other Loan Documents are true and correct in all material
respects as of the making of the applicable Advance; and
(c) There shall have been no material adverse change in the
condition (financial or otherwise), properties, business, results or operations
of the Company or its Subsidiaries (taken as a whole) from December 31, 1997 (or
any subsequent December 31st, if the Agent determines, with the concurrence of
the Required Lenders, based on the Company's financial statements for such
subsequent fiscal year that no material adverse change has occurred during such
year, such determination being made solely for purposes of determining the
applicable date under this paragraph) to the date of the proposed Advance
hereunder.
6. REPRESENTATIONS AND WARRANTIES
Company and the Permitted Borrowers represent and warrant and such
representations and warranties as applicable shall be deemed to be continuing
representations and warranties during the entire life of this Agreement:
6.1 Corporate Existence. Each of the Company and each of the
Subsidiaries (excluding the TEMIC Foreign Subsidiaries until the Revalidation
Date) is a corporation duly organized and validly existing in good standing
under the laws of the applicable jurisdiction of organization, charter or
incorporation; each of the Company and each of the Subsidiaries (excluding the
TEMIC Foreign Subsidiaries until the Revalidation Date) is duly qualified and
authorized to do business as a corporation or foreign corporation in each
jurisdiction where the character of its assets or the nature of its activities
makes such qualification necessary, except where such failure to qualify and be
authorized to do business will not have a material adverse impact on the Company
and its Subsidiaries, taken as a whole.
6.2 Due Authorization - Company. Execution, delivery and performance of
this Agreement, the other Loan Documents, the TEMIC Acquisition Agreement, and
any other documents and instruments required under or in connection with this
Agreement, and extensions of credit to the Company are within its corporate
powers, have been duly authorized, are not in contravention of law or the terms
of the Company's articles of incorporation or bylaws, and, except as have been
previously obtained or as referred to in Section 6.15, below, do not require the
consent or approval, material to the transactions contemplated by this
Agreement, or the Loan Documents, or the TEMIC Acquisition Agreement, of any
governmental body, agency or authority.
6.3 Due Authorization -- Subsidiaries. Execution, delivery and
performance of this Agreement, the other Loan Documents, and any other documents
and instruments required under or in connection with this Agreement by each of
the Significant Subsidiaries, and extensions of credit to Permitted Borrowers,
are (or will be, on the applicable date of delivery of such Loan Documents)
within their respective corporate powers, have been (or will be, as aforesaid)
duly
37
authorized, are not (or will not be, as aforesaid) in contravention of law or
the terms of articles of incorporation or bylaws or other organic documents of
the parties thereto, as applicable, and, except as have been previously obtained
(or as referred to in Section 6.15, below), do not (or will not, as aforesaid)
require the consent or approval, material to the transactions contemplated by
this Agreement, or the other Loan Documents, or the TEMIC Acquisition Agreement,
of any governmental body, agency or authority.
6.4 Title to Material Property. Each of the Company and each of the
Subsidiaries (excluding the TEMIC Foreign Subsidiaries until the Revalidation
Date) has good and valid title to the Material Property owned by it, which
property (individually or in the aggregate) is material to the business or
operations of the Company and its Subsidiaries, taken as a whole, excluding
imperfections in title not material to the ownership, use and/or enjoyment of
any such property.
6.5 Encumbrances. There are no security interests in, Liens, mortgages
or other encumbrances on and no financing statements on file with respect to any
property of Company or any of the Subsidiaries, except for those Liens permitted
under Section 8.5 hereof.
6.6 Subsidiaries. As of the Effective Date, there are no directly or
indirectly owned Subsidiaries of the Company, except for those Subsidiaries
identified in Schedule 6.6, attached hereto.
6.7 Taxes. The Company and its Subsidiaries (excluding the TEMIC
Foreign Subsidiaries until the Revalidation Date) each has filed on or before
their respective due dates, all federal, state and foreign tax returns which are
required to be filed or has obtained extensions for filing such tax returns and
is not delinquent in filing such returns in accordance with such extensions and
has paid all taxes which have become due pursuant to those returns or pursuant
to any assessments received by any such party, as the case may be, to the extent
such taxes have become due, except to the extent such tax payments are being
actively contested in good faith by appropriate proceedings and with respect to
which adequate provision has been made on the books of the Company or its
Subsidiaries, as applicable, as may be required by GAAP.
6.8 No Defaults. There exists no default under the provisions of any
instrument evidencing any permitted Debt of the Company or its Subsidiaries
(excluding the TEMIC Foreign Subsidiaries until the Revalidation Date) or
connected with any of the Permitted Company Encumbrances or the Permitted
Encumbrances of the Subsidiaries, or of any agreement relating thereto, except
where such default would not have a material adverse effect on the Company and
its Subsidiaries taken as a whole and would not violate this Agreement or any of
the other Loan Documents according to the terms thereof.
6.9 Compliance with Laws. The Company and its Subsidiaries each has
complied with all applicable laws, including without limitation, Hazardous
Material Laws, to the extent that failure to comply therewith would materially
interfere with the conduct of the business of the Company or any of its
Subsidiaries taken as a whole, or would have a material adverse effect upon
Company or any of its Subsidiaries taken as a whole, or upon any property
(whether personal or real) owned by any of them.
38
6.10 Enforceability of Agreement and Loan Documents. (a) This Agreement
and each of the other Loan Documents to which the Company is a party, including
without limitation, the TEMIC Acquisition Agreement and all other certificates,
agreements and documents executed and delivered by Company under or in
connection herewith or therewith have each been duly executed and delivered by
duly Authorized Officers of the Company and constitute the valid and binding
obligations of the Company, enforceable in accordance with their respective
terms, except as enforcement thereof may be limited by applicable bankruptcy,
reorganization, insolvency, moratorium or similar laws affecting the enforcement
of creditor's rights generally and by general principles of equity (whether
enforcement is sought in a proceeding in equity or at law).
(b) This Agreement and each of the other Loan Documents to
which any of the Subsidiaries is a party, and all certificates, documents and
agreements executed in connection herewith or therewith by the Subsidiaries have
each been duly executed and delivered by duly Authorized Officers of the
applicable Subsidiary and constitute the valid and binding obligations of the
Subsidiaries, enforceable in accordance with their respective terms, except as
enforcement thereof may be limited by applicable bankruptcy, reorganization,
insolvency, moratorium or similar laws affecting the enforcement of creditors'
rights generally and by general principles of equity (whether enforcement is
sought in a proceeding in equity or at law).
6.11 Non-contravention -- Company. The execution, delivery and
performance of this Agreement and the other Loan Documents and any other
documents and instruments required under or in connection with this Agreement by
the Company are not in contravention of the terms of any indenture, material
agreement or material undertaking to which the Company is a party or by which it
or its properties are bound or affected, except to the extent such terms have
been waived or are not material to the transactions contemplated by this
Agreement and the other Loan Documents or the TEMIC Acquisition Agreement or to
the financial performance of the Company and its Subsidiaries, taken as a whole.
6.12 Non-contravention -- Other Parties. The execution, delivery and
performance of this Agreement, those other Loan Documents signed by any of the
Subsidiaries, and any other documents and instruments required under or in
connection with this Agreement by any of the Subsidiaries are not in
contravention of the terms of any indenture, material agreement or material
undertaking to which any of the Subsidiaries is a party or by which it or its
properties are bound or affected, except to the extent such terms have been
waived or are not material to the transaction contemplated by this Agreement,
the TEMIC Acquisition Agreement, and the other Loan Documents or to the
financial performance of the Company and its Subsidiaries, taken as a whole.
6.13 No Litigation -- Company. There is no suit, action, proceeding,
including, without limitation, any bankruptcy proceeding, or governmental
investigation pending against or, to the best knowledge of the Company,
threatened or otherwise affecting the Company (other than any suit, action or
proceeding in which the Company is the plaintiff and in which no counterclaim or
cross-claim against Company has been filed), nor has the Company or any of its
officers or directors been subject to any suit, action, proceeding or
governmental investigation as a result of which any such officer or director is
or may be entitled to indemnification by Company, except as otherwise disclosed
in Schedule 6.13 attached hereto and except for miscellaneous suits, actions and
39
proceedings which have a reasonable likelihood of being adversely determined,
and which suits, if resolved adversely to the Company would not in the aggregate
have a material adverse effect on the Company and its Subsidiaries, taken as a
whole. Except as so disclosed, there is not outstanding against the Company any
judgment, decree, injunction, rule, or order of any court, government,
department, commission, agency, instrumentality or arbitrator, nor, to the best
knowledge of the Company, is the Company in violation of any applicable law,
regulation, ordinance, order, injunction, decree or requirement of any
governmental body or court where such violation would have a material adverse
effect on the Company and its Subsidiaries, taken as a whole.
6.14 No Litigation -- Other Parties. There is no suit, action,
proceeding (other than any suit, action or proceeding in which any such party is
the plaintiff and in which no counterclaim or cross-claim against any such party
has been filed), including, without limitation, any bankruptcy proceeding, or
governmental investigation pending against or, to the best knowledge of the
Company, threatened or otherwise affecting any of the Subsidiaries (excluding
the TEMIC Foreign Subsidiaries until the Revalidation Date) nor has any such
party or any of its officers or directors been subject to any suit, action,
proceeding or governmental investigation as a result of which any such officer
or director is or may be entitled to indemnification by such party, except as
otherwise disclosed in Schedule 6.14 attached hereto and except for
miscellaneous suits, actions and proceedings which have a reasonable likelihood
of being adversely determined, which suits, if resolved adversely to such party,
would not in the aggregate have a material adverse effect on the Company and its
Subsidiaries, taken as a whole. Except as so disclosed, there is not outstanding
against any such party any judgment, decree, injunction, rule, or order of any
court, government, department, commission, agency, instrumentality or arbitrator
nor, to the best knowledge of the Company, is any such party in violation of any
applicable law, regulation, ordinance, order, injunction, decree or requirement
of any governmental body or court where such violation would have a material
adverse effect on the Company and its Subsidiaries, taken as a whole.
6.15 Consents, Approvals and Filings, Etc. Except as have been
previously obtained, no authorization, consent, approval, license, qualification
or formal exemption from, nor any filing, declaration or registration with, any
court, governmental agency or regulatory authority or any securities exchange or
any other person or party (whether or not governmental) is required in
connection with the execution, delivery and performance: (i) by the Company, of
this Agreement, any of the other Loan Documents to which it is a party, the
TEMIC Acquisition Agreement, or any other documents or instruments to be
executed and/or delivered by the Company in connection therewith or herewith; or
(ii) by each of the Subsidiaries, of this Agreement, the other Loan Documents to
which it is a party or any other documents or instruments to be executed and/or
delivered by the Subsidiaries in connection therewith or herewith. All such
authorizations, consents, approvals, licenses, qualifications, exemptions,
filings, declarations and registrations which have previously been obtained or
made, as the case may be, are in full force and effect and are not the subject
of any attack, or to the knowledge of the Company, threatened attack (in any
material respect) by appeal or direct proceeding or otherwise.
6.16 Agreements Affecting Financial Condition. Neither the Company, nor
any of its Subsidiaries (excluding the TEMIC Foreign Subsidiaries until the
Revalidation Date) is, as of the Effective Date, party to any agreement or
instrument or subject to any charter or other corporate
40
restriction which materially adversely affects the financial condition or
operations of the Company and its Subsidiaries, taken as a whole.
6.17 No Investment Company; No Margin Stock. None of the Company, nor
any of the Subsidiaries is engaged principally, or as one of its important
activities, directly or indirectly, in the business of extending credit for the
purpose of purchasing or carrying margin stock. Other than the acquisition of
shares of Siliconix pursuant to the TEMIC Acquisition, none of the proceeds of
any of the Advances will be used by the Company or any of the Subsidiaries to
purchase or carry margin stock or will be made available by the Company or any
of the Subsidiaries in any manner to any other Person to enable or assist such
Person in purchasing or carrying margin stock. Terms for which meanings are
provided in Regulation U of the Board of Governors of the Federal Reserve System
or any regulations substituted therefor, as from time to time in effect, are
used in this paragraph with such meanings. None of the Company, nor any of the
Subsidiaries is an "investment company" within the meaning of the Investment
Company Act of 1940, as amended.
6.18 ERISA. Neither a Reportable Event which is material to the Company
and its Subsidiaries, taken as a whole, nor an Accumulated Funding Deficiency
(herein as defined in Section 412 of the Internal Revenue Code or Section 302 of
ERISA) has occurred during the five-year period prior to the date on which this
representation is made or deemed made with respect to any Pension Plan. Each
Pension Plan has complied in all material respects with the applicable
provisions of ERISA and the Internal Revenue Code and any applicable regulations
thereof (and, if applicable, any comparable foreign law provisions), except to
the extent that any noncompliance, individually or in the aggregate, would not
have a material adverse effect upon the Company and its Subsidiaries, taken as a
whole. No termination of a Pension Plan has occurred, and no Lien in favor of
the PBGC or a Pension Plan has arisen, during such five-year period. Neither the
Company nor any ERISA Affiliate has had a complete or partial withdrawal from
any Multiemployer Plan within the five year period prior to the date of this
Agreement, nor does the Company or any ERISA Affiliate presently intend to
completely or partially withdraw from any Multiemployer Plan. To the best of
Company's knowledge, no such Multiemployer Plan is in bankruptcy or
reorganization or insolvent. There is no pending or, to the best of Company's
knowledge, threatened litigation or investigation questioning the form or
operation of any Pension Plan, nor, to the best of the Company's knowledge, is
there any basis for any such litigation or investigation which if adversely
determined could have a material adverse effect upon the Company and its
Subsidiaries, taken as a whole, as of the valuation date most closely preceding
the date of this Agreement.
6.19 Environmental Matters and Safety Matters. (a) The Company and each
Subsidiary (excluding TEMIC Foreign Subsidiaries until the Revalidation Date) is
in compliance with all federal, state, provincial and local laws, ordinances and
regulations relating to safety and industrial hygiene or to the environmental
condition, including without limitation all applicable Hazardous Materials Laws
in jurisdictions in which the Company or any such Subsidiary owns or operates, a
facility or site, or arranges for disposal or treatment of hazardous substances,
solid waste, or other wastes, accepts for transport any hazardous substances,
solid wastes or other wastes or holds any interest in real property or
otherwise, except for matters which, individually or in the aggregate, would not
have a material adverse effect upon the financial condition or business of the
Company and its Subsidiaries, taken as a whole.
41
(b) All federal, state, provincial, local and foreign permits,
licenses and authorizations required for present or (to the best of the
Company's knowledge) past use of the facilities and other properties or
activities of the Company and each Subsidiary (including the TEMIC Subsidiaries)
have been obtained, are presently in effect, and there is and has been full
compliance with all such permits, licenses or authorizations, except, in all
cases, where the failure to comply with the foregoing would not have a material
adverse effect on the Company and its Subsidiaries taken as a whole.
(c) No demand, claim, notice, suit (in law or equity), action,
administrative action, investigation or inquiry (including, without limitation,
the listing of any property by any domestic or foreign governmental entity which
identifies sites for remedial, clean-up or investigatory action) whether brought
by any governmental authority, private person or entity or otherwise, arising
under, relating to or in connection with any applicable Hazardous Materials Laws
is pending or, to the best of the Company's knowledge, threatened against the
Company or any of its Subsidiaries (excluding TEMIC Foreign Subsidiaries until
the Revalidation Date) any real property in which the Company or any such
Subsidiary holds or, to the best of the Company's knowledge, has held an
interest or any present or, to the best of the Company's knowledge, past
operation of the Company or any such Subsidiary, except for such matters which,
individually or in the aggregate, would not have a material adverse effect on
the financial condition or business of the Company and its Subsidiaries, taken
as a whole.
(d) Neither the Company nor any of its Subsidiaries (excluding
TEMIC Foreign Subsidiaries until the Revalidation Date) whether with respect to
present or, to the best of the Company's knowledge, past operations or
properties, (i) is, to the best of the Company's knowledge, the subject of any
federal or state investigation evaluating whether any remedial action is needed
to respond to a release of any toxic substances, radioactive materials,
hazardous wastes or related materials into the environment, (ii) has received
any notice of any toxic substances, radioactive materials, hazardous waste or
related materials in, or upon any of its properties in violation of any
applicable Hazardous Materials Laws, or (iii) knows of any basis for any such
investigation or notice, or for the existence of such a violation, except for
such matters which, individually or in the aggregate, would not have a material
adverse effect on the financial condition or business of the Company and its
Subsidiaries, taken as a whole.
(e) No release, threatened release or disposal of hazardous
waste, solid waste or other wastes is occurring or has occurred on, under or to
any real property in which the Company or any of its Subsidiaries (excluding
TEMIC Foreign Subsidiaries until the Revalidation Date) holds any interest or
performs any of its operations, in violation of any applicable Hazardous
Materials Laws, except for any such matters which, individually or in the
aggregate, would not have a material adverse effect on the financial condition
or business of the Company and its Subsidiaries, taken as a whole.
6.20 Accuracy of Information. Each of the Company's audited or
unaudited financial statements furnished to Agents and the Lenders by the
Company prior to the date of this Agreement (including without limitation any
draft financial statements in respect of the reporting period ending December
31, 1997 furnished by the Company), is complete and correct in all material
respects and
42
fairly presents the financial condition of the Company and its Subsidiaries,
taken as a whole, and the results of their operations for the periods covered
thereby; any projections of operations for future years previously furnished by
Company to Agents or the Lenders have been prepared as the Company's good faith
estimate of such future operations, taking into account all relevant facts and
matters known to Company; since December 31, 1997 there has been no material
adverse change in the financial condition of the Company or its Subsidiaries,
taken as a whole; neither the Company, nor any of its Subsidiaries (excluding
the TEMIC Foreign Subsidiaries until the Revalidation Date) has any contingent
obligations (including any liability for taxes) not disclosed by or reserved
against in the December 31, 1997 balance sheet (a draft of which has been
provided to the Lenders prior to the Effective Date) which is likely to have a
material adverse effect on the Company and its Subsidiaries, taken as a whole.
7. AFFIRMATIVE COVENANTS
Company and each of the Permitted Borrowers covenants and agrees that
it will, and, as applicable, it will cause its Subsidiaries to, so long as any
of the Lenders are committed to make any Advances under this Agreement and
thereafter so long as any Indebtedness remains outstanding under this Agreement:
7.1 Preservation of Existence, Etc.
Except as otherwise specifically permitted hereunder, preserve and
maintain its corporate existence and such of its rights, licenses, and
privileges as are material to the business and operations conducted by it; and
qualify and remain qualified to do business in each jurisdiction in which such
qualification is material to the business and operations or ownership of
properties, in each case of the Company and its Subsidiaries, taken as a whole.
7.2 Keeping of Books. Keep proper books of record and account in which
full and correct entries shall be made of all of its financial transactions and
its assets and businesses so as to permit the presentation of financial
statements prepared in accordance with GAAP.
7.3 Reporting Requirements. Furnish Agent with copies for each Lender:
(a) as soon as possible, and in any event within five (5)
calendar days after becoming aware of the occurrence of each Default or
Event of Default, a written statement of the chief financial officer of
the Company (or in his/her absence, a responsible senior officer)
setting forth details of such Event of Default or event and the action
which the Company has taken or has caused to be taken or proposes to
take or cause to be taken with respect thereto;
(b) as soon as available, and in any event within one hundred
twenty (120) days after and as of the end of each of Company's fiscal
years, a detailed Consolidated audit report of Company certified to by
independent certified public accountants satisfactory to Lenders
together with an unaudited Consolidating report of Company and its
Subsidiaries certified by the chief financial officer of Company (or in
his/her absence, a responsible
43
senior officer) as to consistency (with prior financial reports and
accounting periods), accuracy and fairness of presentation, and a
Covenant Compliance Report;
(c) as soon as available, and in any event within sixty (60)
days after and as of the end of each of the first three quarters of
each year, Consolidated and Consolidating balance sheet and statement
of profit and loss and surplus reconciliation of Company and its
Subsidiaries certified by the chief financial officer of Company (or in
his/her absence, a responsible senior officer) as to consistency (with
prior financial reports and accounting periods), accuracy and fairness
of presentation, and a Covenant Compliance Report.
(d) as soon as possible, and in any event within five (5)
calendar days after becoming aware (i) of any material adverse change
in the financial condition of the Company, any of its Subsidiaries or
any of the Permitted Borrowers, a certificate of the chief financial
officer of Company (or in his/her absence, a responsible senior
officer) setting forth the details of such change or (ii) of the taking
by the Internal Revenue Service or any foreign taxing jurisdiction of a
tax position (verbal or written) which could have a materially adverse
effect upon the Company or any of its Subsidiaries (or any such tax
position taken by the Company or any of its Subsidiaries) setting forth
the details of such position and the financial impact thereof;
(e)(i) so long as any material obligations of the TEMIC
Parties under the TEMIC Acquisition Agreement are outstanding, the
financial reports of the TEMIC Parties, if and to the extent provided
to the Company, as and when received; and (ii), as soon as available,
and in any event, within sixty (60) days after the date hereof, opening
balance sheets and other financial reports of each of the Subsidiaries
certified as aforesaid;
(f)(i) as soon as available, the Company's 8-K, 10-Q and 10-K
Reports filed with the federal Securities and Exchange Commission, and
in any event, with respect to the 10-Q Report, within sixty (60) days
of the end of each of the Company's fiscal quarters, and with respect
to the 10-K Report, within one hundred twenty (120) days after and as
of the end of each of Company's fiscal years; (ii) as soon as
available, copies of all filings, reports or other documents filed by
the Company or any of its Subsidiaries with the federal Securities and
Exchange Commission or other federal regulatory or taxing agencies or
authorities in the United States, or comparable agencies or authorities
in England, Canada, France, Germany, the Netherlands or Israel, or any
stock exchanges in such jurisdictions; and (iii) as soon as available,
so long as any obligations of the TEMIC Parties under the TEMIC
Acquisition Agreement are outstanding, the 8-K (to the extent provided
to or received by the Company), 10-Q, 10-K and all other filings by the
TEMIC Parties with the federal Securities and Exchange Commission;
(g) promptly as issued, all press releases, notices to
shareholders and all other material communications transmitted (i) by
the Company or any of its Subsidiaries or (ii) by the TEMIC Parties so
long as any obligations of the TEMIC Parties under the TEMIC
Acquisition Agreement are outstanding (but only to the extent such
communications are
44
provided to the Company) to the general public or to the trade or
industry in which the Company or the TEMIC Parties, as the case may
be, is engaged;
(h) together with the financial statements delivered pursuant
to Section 7.3(b) hereof, annual financial projections for the Company
and its Significant Subsidiaries covering the period at least through
Revolving Credit Maturity Date then in effect and otherwise in form and
content reasonably acceptable to the Agent and the Lenders; and
(i) promptly, and in form to be satisfactory to Agent and the
requesting Lender or Lenders, such other information as Agent or any of
the Lenders (acting through Agent) may request from time to time.
7.4 Tangible Net Worth. Maintain, and cause its Subsidiaries to
maintain, as of the last day of each fiscal quarter, beginning with the fiscal
quarter ending March 31, 1998, Tangible Net Worth which on a Consolidated basis
will at no time be less than the greater of 85% of Tangible Net Worth on March
31, 1998 or Four Hundred Million ($400,000,000), plus the sum of the Net Income
Adjustment and the Equity Offering Adjustment and plus or minus, as the case may
be, the IC Adjustment.
7.5 Leverage Ratio. Maintain, as of the last day of each fiscal
quarter, a Leverage Ratio of not more than 3.25 to 1.0.
7.6 Fixed Charge Coverage Ratio. Maintain, as of the last day of each
fiscal quarter, a Fixed Charge Coverage Ratio of not less than 2.0 to 1.0.
7.7 Inspections. Permit Agent and each Lender, through their authorized
attorneys, accountants and representatives to examine Company's and each of the
Subsidiaries' books, accounts, records, ledgers and assets and properties of
every kind and description wherever located at all reasonable times during
normal business hours, upon oral or written request of Agent; and permit Agent
and each Lender or their authorized representatives, at reasonable times and
intervals, to visit all of its offices, discuss its financial matters with its
officers and independent certified public accountants, and by this provision
Company authorizes such accountants to discuss the finances and affairs of
Company and its Subsidiaries (provided that Company is given an opportunity to
participate in such discussions) and examine any of its or their books and other
corporate records. An examination of the records or properties of Company or any
of its Subsidiaries may require revealment of proprietary and/or confidential
data and information, and the Agent and each of the Lenders agrees upon request
of the inspected party to execute a confidentiality agreement (satisfactory to
Agent or the inspecting Lender, as the case may be, and such party) on behalf of
the Agent or such inspecting Lender and all parties making such inspections or
examinations under its authorization; provided however that such confidentiality
agreement shall not prohibit Agent from revealing such information to Lenders or
prohibit the inspecting Lender from revealing such information to Agent or
another Lender.
7.8 Taxes. Pay and discharge all taxes and other governmental charges,
and all material contractual obligations calling for the payment of money,
before the same shall become overdue,
45
unless and to the extent only that such payment is being contested in good faith
by appropriate proceedings and is reserved for, as required by GAAP on its
balance sheet, or where the failure to pay any such matter could not have a
material adverse effect on the Company and its Subsidiaries, taken as a whole.
7.9 Further Assurances. Execute and deliver or cause to be executed and
delivered within a reasonable time following Agent's request, and at the
Company's expense, such other documents or instruments as Agent may reasonably
require to effectuate more fully the purposes of this Agreement or the other
Loan Documents.
7.10 Insurance. Maintain insurance coverage on its physical assets and
against other business risks in such amounts and of such types as are
customarily carried by companies similar in size and nature, and in the event of
acquisition of additional property, real or personal, or of occurrence of
additional risks of any nature, increase such insurance coverage in such manner
and to such extent as prudent business judgment and then current practice would
dictate; and with all said policies or copies thereof, including all
endorsements thereon and those required hereunder, to be deposited with the
Agent.
7.11 Indemnification. With respect to the Company, indemnify and save
each Agent and the Lenders harmless from all reasonable loss, cost, damage,
liability or expenses, including reasonable attorneys' fees and disbursements,
incurred by each of the Agents and the Lenders by reason of an Event of Default
or enforcing the obligations of the Company or the Permitted Borrowers under
this Agreement, or the other Loan Documents, or in the prosecution or defense of
any action or proceeding concerning any matter growing out of or connected with
this Agreement, or any of the other Loan Documents or any mortgage, stock pledge
or security agreement released by Agents or the Lenders from time to time
hereunder, or relating in any way to the imposition (or attempted imposition) on
Agents or Lenders (or any of them) of any liability for the violation of or
non-compliance by any Person (or purported violation or non-compliance) with
Hazardous Material Laws, other than in any case resulting from the gross
negligence or willful misconduct of Agents or the Lenders; and, with respect to
each of the Permitted Borrowers, indemnify and save each Agent and the Lenders
harmless from all reasonable loss, cost, damage, liability or expenses,
including reasonable attorneys' fees and disbursements, incurred by each of the
Agents and the Lenders with respect to a Permitted Borrower by reason of an
Event of Default or enforcing the obligations of the Permitted Borrowers under
this Agreement, or the other Loan Documents or in the prosecution or defense of
any action or proceeding concerning any matter growing out of or connected with
this Agreement, or any of the other Loan Documents or any mortgage, stock pledge
or security agreement released by Agents or the Lenders from time to time
hereunder, or relating in any way to the imposition (or attempted imposition) on
Agents or Lenders (or any of them) of any liability for the violation of or
non-compliance by any Person (or purported violation or non-compliance) with
Hazardous Material Laws, other than in any case resulting from the gross
negligence or willful misconduct of Agents or the Lenders.
7.12 Governmental and Other Approvals. Apply for, obtain and/or
maintain in effect, as applicable, all material authorizations, consents,
approvals, licenses, qualifications, exemptions, filings, declarations and
registrations (whether with any court, governmental agency, regulatory
46
authority, securities exchange or otherwise) which are necessary in connection
with the execution, delivery and performance: (i) by the Company, of this
Agreement, the Loan Documents, or any other documents or instruments to be
executed and/or delivered by the Company in connection therewith or herewith;
and (ii) by each of the Significant Subsidiaries, of this Agreement and the Loan
Documents.
7.13 Compliance with Contractual Obligations and Laws. Comply in all
material respects with all Contractual Obligations, and with all applicable
laws, rules, regulations and orders of any governmental authority, whether
federal, state, local or foreign (including without limitation Hazardous
Materials Laws), in effect from time to time, except to the extent that failure
to comply therewith could not reasonably be expected to have, individually or in
the aggregate, a material adverse effect on the business, operations, property
or financial or other condition of the Company or the Permitted Borrowers and
their respective Subsidiaries, taken as a whole, and could not reasonably be
expected to materially adversely affect the ability of the Company or any of the
Significant Subsidiaries to perform their respective obligations under any of
the Loan Documents to which they are a party.
7.14 ERISA. Comply in all material respects with all requirements
imposed by ERISA as presently in effect or hereafter promulgated or the Internal
Revenue Code (or comparable laws in applicable jurisdictions outside the United
States of America relating to foreign pension plans) and promptly notify Lenders
upon the occurrence of any of the following events:
(a) the termination of any Pension Plan pursuant to Subtitle C of
Title IV of ERISA or otherwise (other than any defined contribution plan not
subject to Section 412 of the Code and any Multiemployer Plan);
(b) the appointment of a trustee by a United States District Court
to administer any Pension Plan pursuant to ERISA;
(c) the commencement by the PBGC, or any successor thereto, of any
proceeding to terminate any Pension Plan;
(d) the failure of the Company or any ERISA Affiliate to make any
payment in respect of any Pension Plan required under Section 412 of the
Internal Revenue Code;
(e) the withdrawal of the Company or any ERISA Affiliate from any
Multiemployer Plan;
(f) the occurrence of an Accumulated Funding Deficiency or a
Reportable Event; or
(g) the occurrence of a Prohibited Transaction which could have a
material adverse effect upon the Company and its Subsidiaries, taken as a whole.
47
7.15 Environmental Matters.
(a) (i) Not permit any of its property (whether real or personal, or
any portion thereof) to be involved in the use, generation, manufacture,
storage, disposal or transportation of Hazardous Material, except in compliance
with Hazardous Material Laws, and (ii) keep and maintain all of its other
property (whether real or personal, and any portion thereof) in compliance with,
and shall not cause or permit any activity at or condition of the Collateral, or
any of its other property (whether real or personal, or any portion thereof) to
be in violation of any Hazardous Material Laws, unless the failure to comply
therewith or violation thereof will not materially adversely affect the Company
and its Subsidiaries, taken as a whole.
(b) Promptly notify the Agent in writing of: (i) any and all
enforcement, cleanup, removal or other governmental or regulatory actions
instituted or completed pursuant to any applicable Hazardous Material Laws; (ii)
any and all claims made by any Person against the Company, any of its
Subsidiaries, the Permitted Borrowers or the TEMIC Parties, or any of its other
property (whether real or personal, or any portion thereof) relating to damage,
contribution, cost recovery, compensation, loss or injury resulting from any
Hazardous Material (provided that, until the TEMIC Acquisition, notification to
Agent of claims against the TEMIC Parties shall not be required except for
claims of which Company has actual knowledge) which could reasonably be expected
to have a material adverse effect on the Company and its Subsidiaries, taken as
a whole; and (iii) Company's discovery of any occurrence or condition on any
real property or fixtures constituting a part of, adjoining or in the vicinity
of any of its property that could cause any such property (or any part thereof)
to be subject to any material restrictions on the ownership, occupancy,
transferability or use thereof under any Hazardous Material Laws. The Agent, on
behalf of the Lenders, shall have the right to join and participate in, as a
party if it or they so elect, any legal proceedings or actions initiated in
connection with any of the matters described in subparagraphs (b) (i) or (b)
(ii), above, and the Company agrees to pay the Agent's reasonable attorneys fees
in connection therewith.
(c) Take any material remedial action as may be required under
applicable law in response to the presence of any Hazardous Material on, under,
or about any of its property (whether real or personal, or any part thereof),
and, pursuant thereto, may enter into settlement agreements, consent decrees, or
other compromises in respect of any of the matters described in subparagraphs
(b) (i) through (iii), above, provided that, in each case, Company has given
Lenders not less than thirty (30) days prior written notice thereof.
(d) With respect to the properties and operations of TEMIC, commence
and diligently proceed to completion with the necessary remedial, corrective or
other actions identified in the Environmental Audits, as applicable, or as
required under the TEMIC Acquisition Agreement, and cause the TEMIC Parties (to
the extent of their respective obligations under the TEMIC Acquisition
Agreement) to do so, according to the time periods specified therein, or if no
time periods are so specified, as soon as reasonably practicable; provided that
Company's obligations under this subparagraph (d) shall not reduce or otherwise
affect Company's other obligations hereunder.
48
(e) Agent may retain (on its own behalf and on behalf of the Lenders,
but at Company's sole expense) such Environmental Auditors as reasonably
necessary to evaluate and/or confirm Company's environmental responses, reports
or other matters, including Company's compliance with Hazardous Material Laws
generally, under this Section 7.15, or elsewhere herein.
7.16 Post-Closing Pledges and Guaranties; Future Subsidiaries.
(a)(i) With respect to the share capital (or other ownership interests)
of each Significant Foreign Subsidiary listed on Schedule 7.16 hereto as soon as
reasonably practicable, but in any event prior to the applicable date specified
on Schedule 7.16 hereto, execute and deliver, or cause to be executed and
delivered, to the Agent a Pledge encumbering, subject to Section 7.17 hereof,
65% of the share capital of each such Foreign Significant Subsidiary to secure
the Indebtedness of the Company and the Domestic Permitted Borrowers and the
Indebtedness (as such term is defined therein) of such parties under the Long
Term Revolving Credit Agreement and 100% of the share capital of each such
Significant Foreign Subsidiary to secure the Indebtedness of the Foreign
Permitted Borrowers under the (as such term is defined therein) Long Term
Revolving Credit Agreement; in each case in form satisfactory to the Agent and
the Required Lenders, in their reasonable discretion, together with such
supporting documentation, including without limitation corporate authority
items, certificates and opinions of counsel, as reasonably required by the Agent
and the Required Lenders and the Company shall take, or cause to be taken, such
steps as are necessary or advisable under applicable law to perfect the liens
granted under clause (a)(ii) hereof;
(b) With respect to each Person which becomes a Significant Domestic
Subsidiary subsequent to the Effective Date, within thirty days of the date such
Person is created, acquired or otherwise becomes a Significant Subsidiary
(whichever first occurs), cause such new Significant Domestic Subsidiary to
execute and deliver to the Agent, a Joinder Agreement whereby such Significant
Domestic Subsidiary becomes obligated as a Guarantor under the Domestic
Guaranty;
(c) With respect to the share capital (or other ownership interests) of
each Person, which becomes a Foreign Significant Subsidiary subsequent to the
Effective Date, within sixty days of the date such Person is created, acquired
or becomes a Significant Subsidiary (whichever first occurs), the Company shall
execute, or cause to be executed, and deliver to the Agent a Pledge Agreement
encumbering subject to Section 7.17 hereof, with a first priority Lien 65% of
the share capital of each such Significant Foreign Subsidiary to secure the
Indebtedness of the Company and the Domestic Permitted Borrowers and the
Indebtedness (as such term is defined therein) of such parties under the Long
Term Revolving Credit Agreement and 100% of the share capital of each such
Foreign Significant Subsidiary to secure the Indebtedness (as such term is
defined therein) of the Foreign Permitted Borrowers under the Long Term
Revolving Credit Agreement;
(d) With respect to the share capital (or other ownership interests) of
each Person, which becomes a Domestic Significant Subsidiary subsequent to the
Effective Date, within thirty days of the date such Person is created, acquired
or becomes a Significant Subsidiary (whichever first occurs), the Company shall
execute, or cause to be executed, and deliver to the Agent a stock pledge
encumbering hereof, 100% of the share capital of each such Significant Domestic
Subsidiary to
49
secure the Indebtedness of the Company and the Permitted Borrowers and the
Indebtedness (as such term is defined therein) of such parties under the Long
Term Revolving Credit Agreement;
in each case in form satisfactory to the Agent and the Required Lenders, in
their reasonable discretion, together with such supporting documentation,
including without limitation corporate authority items, certificates and
opinions of counsel, as reasonably required by the Agent and the Required
Lenders and the Company shall take, or cause to be taken, such steps as are
necessary or advisable under applicable law to perfect the liens granted under
clauses (c) and (d) hereof.
7.17 Foreign Subsidiaries Security. If, following a change in the
relevant sections of the Internal Revenue Code or the regulations, rules,
rulings, notices or other official pronouncements issued or promulgated
thereunder, counsel for the Company and the Permitted Borrowers acceptable to
the Required Lenders does not within 30 days after a request from the Agent or
the Required Lenders deliver evidence, in form and substance mutually
satisfactory to the Required Lenders and the Company, that, with respect to each
Significant Foreign Subsidiary whose entire share capital, to the extent owned,
directly or indirectly, by the Company has not been encumbered in favor of the
Lenders (a) 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 and (b)
the entering into a guaranty in substantially the form of the Domestic Guaranty
by such Significant Foreign Subsidiary, in either such case would cause the
undistributed earnings of such Significant Foreign Subsidiary as determined for
Federal income tax purposes to be treated as a deemed dividend to such
Significant Foreign Subsidiary's United States parent for Federal income tax
purposes, then in the case of a failure to deliver the evidence described in
clause (a) above, that portion of such Significant Foreign Subsidiary's
outstanding capital stock so issued by such Significant Foreign Subsidiary not
theretofore pledged pursuant to a Pledge Agreement shall be pledged to the Agent
for the benefit of the Lenders pursuant to a Pledge Agreement (or another pledge
agreement in substantially similar form, if needed) and, in the case of failure
to deliver the evidence described in clause (b) above, such Significant Foreign
Subsidiary shall execute and deliver the Domestic Guaranty (or another guaranty
in substantially the same form, if needed), in each case to the extent that
entering into a Pledge Agreement or such Guaranty is permitted under the laws of
the respective foreign jurisdiction and all such documents delivered pursuant to
this Section 7.17 shall be satisfactory to the Required Lenders.
7.18 Reserved.
7.19 German Drop Down. Within one hundred eighty (180) days after the
Effective Date, cause the German Drop Down to be completed, substantially on the
basis set forth in Counsel's Memorandum and in all respects in compliance with
the terms and conditions of this Agreement.
7.20 Vishay Israel. Within forty-five (45) days following the end of
each fiscal year ending after the Effective Date, cause Vishay Israel to request
from Israel's Comptroller of Foreign Exchange authorization to increase the
limit on the Pledge Agreement executed and delivered by Vishay Israel
encumbering the shares of Vishay Europe, to the extent of any increases after
the Effective Date in the amount of Vishay Israel's investment in Vishay Europe
and as soon as reasonably practicable following receipt of such approval,
execute and deliver an amendment in
50
form satisfactory to the Agent and the Required Lenders, in their reasonable
discretion, together with such supporting documentation, including without
limitation corporate authority items, certificates and opinions of counsel, as
reasonably required by the Agent and the Required Lenders and the Company shall
take, or cause to be taken, such steps as are necessary or advisable under
applicable law to perfect the liens granted under such Pledge Agreement as
amended thereby.
7.21 Use of Proceeds. The Advances of the Revolving Credit made to the
Company or any Permitted Borrower shall be used by Company or such Permitted
Borrower solely for general corporate purposes, including without limitation
working capital and acquisitions (including the TEMIC Acquisition). None of the
proceeds of the Advances made under this Agreement will be used in violation of
any applicable law or regulation including, without limitation, Regulation U of
the Board of Governors of the Federal Reserve System.
8. NEGATIVE COVENANTS
Company and each of the Permitted Borrowers covenant and agree that, so
long as any of the Lenders are committed to make any Advances under this
Agreement and thereafter so long as any Indebtedness remains outstanding, it
will not, and it will not allow its Subsidiaries, to:
8.1 Capital Structure, Business Objects or Purpose. Except as otherwise
specifically permitted under this Agreement,
(a) purchase, acquire or redeem any of its capital stock,
except for non-vested stock granted to participants under the Vishay
Stock Plans; and
(b) make any material change in its capital structure or
general business objects or purpose or enter into any business,
directly or through any Subsidiary, except for those businesses in
which the Company and its Subsidiaries are engaged on the date of this
Agreement or other businesses in the electronic components industry or
which are directly related thereto.
8.2 Limitations on Fundamental Changes. Enter into any transaction of
merger, consolidation or amalgamation, or purchase or otherwise acquire or
become obligated for the purchase of all or substantially all of the assets,
business interests or shares of capital stock of any Person or in any other
manner effectuate or attempt to effectuate an expansion of present business by
acquisition or liquidate, wind up or dissolve itself (or suffer any liquidation
or dissolution), or convey, sell, lease, assign, transfer or otherwise dispose
of, all, substantially all or any part of its property, business or assets, or
make any material change in its present method of conducting business, except:
(a) any Subsidiary may be merged or consolidated with or into the
Company (so long as Company shall be the continuing or surviving corporation);
any Domestic Subsidiary may be merged or consolidated with or into any 100%
Domestic Subsidiary (so long as such 100% Domestic Subsidiary shall be the
continuing or surviving corporation); and any Foreign Subsidiary may be merged
or consolidated with or into any 100% Domestic Subsidiary or into any 100%
51
Foreign Subsidiary (excluding Vishay Israel) so long as such 100% Domestic
Subsidiary or such 100% Foreign Subsidiary shall be the continuing or surviving
corporation);
(b) any Subsidiary may sell, lease, transfer or otherwise dispose
of any or all of its assets (upon voluntary liquidation or otherwise) to the
Company;
(c) any Domestic Subsidiary may sell, lease, transfer or otherwise
dispose of any or all of its assets (upon voluntary liquidation or otherwise) to
any other Domestic Subsidiary which is a 100% Subsidiary and any Foreign
Subsidiary may sell, lease, transfer or otherwise dispose of any or all of its
assets (upon voluntary liquidation or otherwise) to any Domestic Subsidiary or
to any other Foreign Subsidiary (excluding Vishay Israel), provided that such
Subsidiary is a 100% Subsidiary;
(d) any Person other than a Subsidiary may merge or consolidate
with and into the Company or any 100% Subsidiary (excluding Vishay Israel) so
long as (i) the Company or such 100% Subsidiary shall be the surviving
corporation and (ii) immediately before and immediately after giving effect to
such merger or consolidation, no Default or Event of Default shall have occurred
and be continuing;
(e) Permitted Transfers;
(f) other sales, transfers or other dispositions of any assets of
the Company and its Subsidiaries from and after the Effective Date in an
aggregate amount not to exceed (i) 15% of Tangible Net Worth in any fiscal year
and (ii) 20% of Tangible Net Worth for any period of three consecutive fiscal
years (or portion thereof) beginning with fiscal year 1998, determined on the
basis of Tangible Net Worth for the fiscal quarter ending immediately prior to
the date of determination;
(g) Permitted Acquisitions; and
(h) the Permitted Siliconix Merger.
8.3 Guaranties. Guarantee, endorse, or otherwise become liable for or
upon the obligations of others, except by endorsement of cash items for deposit
in the ordinary course of business and except for (i) the Guaranties, (ii) the
guaranties executed pursuant to the Long Term Revolving Credit Agreement, (iii)
guaranties by the Company of Hedging Obligations entered into by any Foreign
Subsidiary, (iv) performance guaranties given by Company pursuant to the TEMIC
Acquisition Documents, and (v) guaranties of indebtedness as set forth on
Schedule 8.3 attached hereto or as permitted under Section 8.7(f) hereof.
8.4 Debt. Become or remain obligated for any Debt for borrowed money,
or for any Debt incurred in connection with the acquisition of any property,
real or personal, tangible or intangible, except:
(a) Indebtedness to Lenders (or their Affiliates) hereunder;
52
(b) Indebtedness under the Long Term Revolving Credit Agreement;
(c) current unsecured trade, utility or non-extraordinary accounts
payable arising in the ordinary course of business and any unsecured letters of
credit undertaken by such parties in the ordinary course of business outside the
United States of America (and necessary under local customs and practices) to
support such accounts payable;
(d) purchase money Debt for fixed assets (including capitalized
leases or other non-cancelable leases having a term of 12 months or longer),
provided that the aggregate amount of all such purchase money Debt outstanding
at any time shall not exceed seven and one-half percent (7.5%) of Tangible Net
Worth;
(e) any Debt assumed pursuant to an acquisition conducted in
compliance with this Agreement, provided that such Debt was not entered into,
extended or renewed in contemplation of such acquisition and provided further
that the aggregate amount of all such Debt at any time outstanding shall not
exceed six percent (6%) of Tangible Net Worth;
(f) Debt to third parties in an aggregate amount at any time
outstanding not to exceed $55,000,000; provided that such Debt be issued and at
all times maintained on a pari passu basis with the Indebtedness, or on a basis
subordinate thereto, and pursuant to documentation containing covenants not more
restrictive in the aggregate than the covenants contained in this Agreement (as
determined by the Agent and Required Lenders in their reasonable discretion) and
provided further, however, that immediately before and immediately after such
Debt is incurred, and giving effect thereto, no Default or Event of Default has
occurred and is continuing (it being understood that for purposes of this
Section 8.4(f), the granting of Liens which are permitted under Section 8.5
hereof shall not be deemed to constitute the entry into more restrictive
covenants or to be other than on a pari passu basis);
(g) Intercompany Loans, but only to the extent permitted under the
other applicable terms and limitations of this Agreement, including but not
limited to Section 8.7 hereof;
(h) unsecured Debt issued under Rule 144 of the Securities Act of
1933 or pursuant to a private placement in an aggregate amount for all such Debt
issued under this subparagraph (but without giving effect to any repayments or
principal reductions thereof) not to exceed Two Hundred Million Dollars
($200,000,000); provided that such Debt be issued and all times maintained on a
pari passu basis with the Indebtedness, or on a basis subordinate thereto, and
pursuant to documentation containing covenants not more restrictive in the
aggregate than the covenants contained in this Agreement (as determined by the
Agent and the Required Lenders in their reasonable discretion); provided
further, however, that immediately before and immediately after such Debt is
incurred, and giving effect thereto, no Default or Event of Default has occurred
and is continuing; and provided further that prior to or concurrently with the
issuance of such Debt, the Revolving Credit Aggregate Commitment is permanently
reduced by an amount equal to not less than 75% of the proceeds of such Debt,
net of normal and customary expenses of issuance payable to third parties;
53
(i) unsecured Debt incurred by LPSC and not covered by a
Guaranty Obligation, Hedging Obligations and Stock Option Plan Debt.
8.5 Liens. Permit or suffer any Lien to exist on any of its properties,
real, personal or mixed, tangible or intangible, whether now owned or hereafter
acquired, except:
(a) Liens in favor of the Agent, as security for the Indebtedness
hereunder, for the indebtedness under the Long Term Revolving Credit Agreement
and for indebtedness under any Hedging Obligations;
(b) purchase money security interests in fixed assets to secure
purchase money Debt permitted under Section 8.4(d) hereof, provided that such
security interest is created substantially contemporaneously with the
acquisition of such fixed assets and does not extend to any property other than
the fixed assets so financed;
(c) any lien securing third-party indebtedness assumed pursuant to
any Permitted Acquisition conducted in compliance with this Agreement, provided
that such lien is limited to the property so acquired and was not entered into,
extended or renewed in contemplation of such acquisition;
(d) Permitted Company Encumbrances and Permitted Encumbrances of
the Subsidiaries; and
(e) Liens securing Debt otherwise permitted hereunder, provided
that the aggregate principal amount of all such Debt which is secured by a Lien
shall not exceed Five Million Dollars ($5,000,000).
8.6 Dividends. Declare or pay any dividends on or make any other
distribution with respect to (whether by reduction of Stockholder's Equity or
otherwise) any shares of its capital stock, except for stock dividends and
except for (a) cash dividends by any 100% Subsidiary to the Company or any other
100% Subsidiary which has executed a Guaranty hereunder, (b) dividends paid in
cash or in kind by any Subsidiary which is not a 100% Subsidiary or by any Joint
Venture, provided that such dividends are paid to each holder of share capital
therein (including Company or any of its other Subsidiaries) on a pro rata basis
(based on the relative amounts of share capital held by each such holder) and
provided further that such dividends are paid to the Company or its other
Subsidiaries on substantially the same (or better) terms as (and
contemporaneously with) any dividends paid to Persons other than the Company and
its Subsidiaries, (c) cash dividends by Vishay Europe which are reinvested in
Vishay Europe by its shareholders in compliance with Section 8.7 hereof and (d)
cash dividends by Vishay Electronic which are reinvested in Vishay Electronic by
Vishay Europe in compliance with Section 8.7, hereof.
8.7 Investments. Make or allow to remain outstanding any investment
(whether such investment shall be of the character of investment in shares of
stock, evidences of indebtedness or other securities or otherwise) in, or any
loans or advances to, any Person, firm, corporation or other entity or
association, other than:
54
(a) Company's equity ownership interests in the Subsidiaries as of
the Effective Date;
(b) Additional cash investment in Vishay Europe by its
shareholders or in Vishay Electronic by Vishay Europe, which is applied by
Vishay Europe or Vishay Electronic, as the case may be, concurrently with such
investment to reduce its Indebtedness under this Agreement or the Long Term
Revolving Credit Agreement, in substantially the amount of such additional
investment;
(c) The existing investments, loans and/or advances in or to
Subsidiaries set forth on Schedule 8.7 hereto, in addition to any other matters
set forth in this Section 8.7;
(d) Intercompany Loans, Advances, or Investments made on or after
the Effective Date to Company, or by Company or any Subsidiary to Company or any
100% Subsidiary (excluding Vishay Israel), provided that both before and after
giving effect to any such loans, advances or investments, no Default or Event of
Default has occurred and is continuing under this Agreement;
(e) Intercompany Loans, Advances or Investments made on or after
the Effective Date by Company or any Subsidiary to Vishay Israel or to any
Subsidiary which does not constitute a 100% Subsidiary other than Siliconix
(provided that any Intercompany Loan included therein be evidenced by and funded
under an Intercompany Note encumbered pursuant to a Pledge Agreement), without
regard to any repayment of such loans, advances or investments (other than the
repayment or recovery of capital or principal), provided that at the time any
such loan, advance or investment is made (before and after giving effect
thereto) no Default or Event of Default has occurred and is continuing and
provided further that the aggregate amount of all such loans, advances and
investments shall not exceed, at any time outstanding, 10% of Tangible Net
Worth;
(f) Intercompany Loans to Siliconix, but only to the extent
evidenced by and funded under an Intercompany Note encumbered pursuant to a
Pledge Agreement, provided that both before and after giving effect to any such
loans, advances or investments, no Default or Event of Default has occurred and
is continuing under this Agreement;
(g) loans, advances or investments made on or after the Effective
Date (without regard to any repayment of such loans, advances or investments,
other than the repayment of capital or principal) to any Joint Venture or other
Person, including without limitation guaranties by the Company or any Subsidiary
(valued on the basis of the aggregate amount of indebtedness covered by a
guaranty) of third-party indebtedness of any such Joint Venture or other Person,
which loans, advances or investments are not otherwise permitted under this
Section 8.7, in an aggregate amount at any time outstanding not to exceed five
percent (5%) of Tangible Net Worth;
(h) the TEMIC Acquisition and the Remaining Siliconix Acquisition,
subject in each case to the terms and conditions of this Agreement;
(i) investments, whether by acquisition of shares of Capital
Stock, indebtedness or other obligations or security of, any Person (other than
a Subsidiary or an Affiliate) which is a
55
customer of the Company or any Subsidiary, which investment was made in exchange
for amounts owed by such customer to the Company or any Subsidiary (and incurred
in the ordinary course of business) or as an advance on the provision of goods
and services in the ordinary course of business;
(j) Hedging Obligations and guaranties by the Company of Hedging
Obligations entered into by any Foreign Subsidiary; and
(k) Permitted Investments.
In valuing any investments, loans and advances for the purpose of applying the
limitations set forth in this Section 8.7 (except as otherwise expressly
provided herein), such investments, loans and advances shall be taken at the
original cost thereof, without allowance for any subsequent write-offs or
appreciation or depreciation therein, but less any amount repaid or recovered on
account of capital or principal.
8.8 Accounts Receivable. Sell or assign any account, note or trade
acceptance receivable, except to Agent on behalf of the Lenders.
8.9 Transactions with Affiliates. Enter into any transaction with any
of its or their stockholders or officers or its or their affiliates, except in
the ordinary course of business and on terms not less favorable than would be
usual and customary in similar transactions between Persons dealing at arm's
length.
8.10 Operations of Vishay Israel. Permit the normal manufacturing or
other operations of Vishay Israel (or of Company or any of its other
Subsidiaries conducted in Israel) to be interrupted, stopped or delayed for any
period of fourteen (14) consecutive days, excluding regularly scheduled
vacations and holidays in the ordinary course of such operations.
8.11 Prohibition Against Certain Restrictions. (a) Enter into or
otherwise become subject to any agreement or arrangement (excluding this
Agreement) with any lender or other third party (i) which prohibits, restricts
or otherwise limits the ability of Company to make loans, advances or
investments to its Subsidiaries or which prohibits, restricts or otherwise
limits the ability of any Subsidiary to make loans, advances or investments in
any other Subsidiary (ii) which prohibits, restricts or otherwise limits the
ability of any Subsidiary to declare or pay any dividends on or make any other
distribution with respect to any shares of its capital stock, or (iii) which
prohibits, restricts or otherwise limits the execution, delivery or performance
by Company or any Subsidiary of any guaranty, indemnity or similar undertaking
in favor of Agent or the Lenders.
(b) Enter into any agreement, document or instrument which would
restrict or prevent Company and its Subsidiaries from granting Agent on behalf
of Lenders liens upon, security interests in and pledges of their respective
assets which are senior in priority to all other Liens.
8.12 Amendment of the TEMIC Acquisition Agreement or Lite-On Documents.
Amend, modify or otherwise alter (or suffer to be amended, modified or altered)
any of the material terms and conditions of the TEMIC Acquisition Agreement or
the Lite-On Documents in any respect
56
which is materially adverse to the Company, as determined by Company in its
reasonable discretion, without the prior written approval of Agent and the
Required Lenders; provided that promptly following any amendment to any of such
documents, Company shall provide Agent with copies of such amendments, for
distribution to the Lenders.
9. DEFAULTS
9.1 Events of Default. Any of the following events is an "Event of
Default":
(a) non-payment when due of the principal or interest of any
Advance in accordance with the terms thereof or of any reimbursement
obligation under Section 3.6 hereof, and in the case of interest
payments, continuance thereof for three (3) days;
(b) default in the payment of any money by Company or any of
the Permitted Borrowers under this Agreement (other than as set forth
in subsection (a), above) or the other Loan Documents, and continuance
thereof for three (3) days of the date the same is due and payable;
(c) default in the observance or performance of any of the
other conditions, covenants or agreements set forth in this Agreement
or any of the other Loan Documents by any party thereto (provided that,
with respect to the covenants set forth in Sections 7.8, 7.10, 7.12,
7.13 and 7.14 hereof, such event has continued for thirty (30)
consecutive days) or the occurrence of any other default or Event of
Default, as the case may be hereunder or thereunder;
(d) any representation or warranty made by Company or any of
the Permitted Borrowers herein or in any instrument submitted pursuant
hereto or by any other party to the Loan Documents proves untrue in any
material adverse respect when made; provided that, with respect to any
misrepresentation or breach of warranty arising subsequent to the date
hereof under Sections 6.7, 6.8, 6.13 through 6.15 and 6.18 of this
Agreement solely by virtue of the nature of the representations and
warranties hereunder as continuing, (i) as to Section 6.8, hereof, any
applicable cure period existing in respect of such matters shall have
expired and (ii) as to the remaining Sections of this Agreement
specified in this subparagraph (d), such misrepresentation or breach of
warranty hereunder shall have continued for a period of thirty (30)
consecutive days;
(e) any provision of any Guaranty, or any Pledge Agreement
shall at any time for any reason (other than in accordance with its
terms or the terms of this Agreement) cease to be valid and binding and
enforceable against the Company or the Significant Subsidiaries, as
applicable, or the validity, binding effect or enforceability thereof
shall be contested by any Person, or the Company or any of the
Significant Subsidiaries shall deny that it has any or further
liability or obligation under any Guaranty, or any Pledge Agreement, as
applicable, or any Guaranty, or any Pledge Agreement shall be
terminated, invalidated or set aside or in any way cease to give or
provide to the Lenders and the Agent the benefits purported to be
created thereby;
57
(f) default in the payment of any other obligation of Company,
its Subsidiaries or any of the Permitted Borrowers for borrowed money
in excess of Ten Million Dollars ($10,000,000) (or the equivalent
thereof in an Alternative Currency), individually or in the aggregate;
or default in the observance or performance of any conditions,
covenants or agreements related or given with respect to any other
obligations for borrowed money in an aggregate amount in excess of Ten
Million Dollars ($10,000,000) (or the equivalent thereof in an
Alternative Currency), which is sufficient to permit the holder thereof
to accelerate the maturity of such obligation;
(g) the rendering of any judgment or judgments for the payment
of money in excess of the sum of Ten Million Dollars ($10,000,000) (or
the Alternative Currency equivalent thereof) in the aggregate against
Company, any of its Subsidiaries or any of the Permitted Borrowers, and
such judgments shall remain unpaid, unvacated, unbonded or unstayed by
appeal or otherwise for a period of thirty (30) consecutive days,
except as covered by adequate insurance with a reputable carrier and an
action is pending in which an active defense is being made with respect
thereto;
(h) any Person shall engage in any Prohibited Transaction
involving any Pension Plan, (ii) any Accumulated Funding Deficiency,
whether or not waived, shall exist with respect to any Pension Plan or
any Lien in favor of the PBGC or a Pension Plan shall arise on the
assets of the Company or any ERISA Affiliate, (iii) a Reportable Event
shall occur with respect to, or proceedings shall commence to have a
trustee appointed, or a trustee shall be appointed, to administer or to
terminate, any Single Employer Plan, (iv) any Single Employer Plan
shall terminate for purposes of Title IV of ERISA or (v) the Company or
any ERISA Affiliate shall, or in the reasonable opinion of the Required
Lenders is likely to, incur any liability in connection with a
withdrawal from, or the insolvency, bankruptcy or reorganization of, a
Multiemployer Plan and in each case in clauses (i) through (v) above,
(x) a period of sixty (60) days, or more, has elapsed from the
occurrence of such event or condition and (y) such event or condition,
together with all other such events or conditions, if any, could
reasonably be expected to subject the Company or any of its
Subsidiaries to any tax, penalty or other liabilities in the aggregate
material in relation to the business, operations, property or financial
or other condition of the Company and its Subsidiaries taken as a
whole;
(i) (A) any one Person or group of Persons acting in concert
shall acquire or control, directly or indirectly, whether by ownership,
proxy, voting trust or otherwise, twenty percent (20%) or more of the
voting power of the issued and outstanding stock of Company, other than
(x) any Person or group of Persons beneficially owning, directly or
indirectly, as of the date hereof capital stock of the Company with
twenty percent (20%) or more of such voting power or (y) any Permitted
Transferee; or (B) individuals who constitute the Continuing Directors
cease for any reason to constitute at least a majority of the Company's
directors (for purposes of this Section 9.1(i)(B), "Continuing
Director" means any director who is currently a director and any
director who is nominated or elected by a majority of Continuing
Directors who are then directors);
58
(j) If a creditors' committee shall have been appointed for
the business of Company or any of its Subsidiaries; or if Company or
any of its Subsidiaries shall have made a general assignment for the
benefit of creditors or shall have been adjudicated bankrupt, or shall
have filed a voluntary petition in bankruptcy or for reorganization or
to effect a plan or arrangement with creditors or shall fail to pay its
debts generally as such debts become due in the ordinary course of
business (except as contested in good faith and for which adequate
reserves are made in such party's financial statements); or shall file
an answer to a creditor's petition or other petition filed against it,
admitting the material allegations thereof for an adjudication in
bankruptcy or for reorganization; or shall have applied for or
permitted the appointment of a receiver or trustee or custodian for any
of its property or assets; or such receiver, trustee or custodian shall
have been appointed for any of its property or assets (otherwise than
upon application or consent of Company, or any of its Subsidiaries) and
such appointment has not been dismissed or stayed within thirty (30)
days from the date of appointment or if an order for relief or
otherwise approving any petition for reorganization of Company or any
of its Subsidiaries shall be entered; or if an involuntary petition is
filed against Company or any of its Subsidiaries and shall not be
dismissed or stayed within thirty (30) days from the date of filing
thereof.
9.2 Exercise of Remedies. If an Event of Default has occurred and is
continuing hereunder: (a) the Agent shall, if directed to do so by the Required
Lenders, declare any commitment of the Lenders to extend credit hereunder
immediately terminated; (b) the Agent shall, if directed to do so by the
Required Lenders, declare the entire unpaid Indebtedness immediately due and
payable, without presentment, notice or demand, all of which are hereby
expressly waived by Company and the Permitted Borrowers; (c) upon the occurrence
of any Event of Default specified in Section 9.1(j) above, and notwithstanding
the lack of any declaration by Agent under the preceding clause (a) or (b), the
Lenders' commitments to extend credit hereunder shall immediately and
automatically terminate and the entire unpaid Indebtedness shall become
automatically due and payable without presentment, notice or demand; and (d) the
Agent shall, if directed to do so by the Required Lenders or the Lenders, as
applicable (subject to the terms hereof), exercise any remedy permitted by this
Agreement, the other Loan Documents or law.
9.3 Rights Cumulative. No delay or failure of Agent and/or Lenders in
exercising any right, power or privilege hereunder shall affect such right,
power or privilege, nor shall any single or partial exercise thereof preclude
any other or further exercise thereof, or the exercise of any other power, right
or privilege. The rights of Lenders under this Agreement are cumulative and not
exclusive of any right or remedies which Lenders would otherwise have.
9.4 Waiver by Company and Permitted Borrowers of Certain Laws; JURY
WAIVER. To the extent permitted by applicable law, Company and each of the
Permitted Borrowers hereby agree to waive, and do hereby absolutely and
irrevocably waive and relinquish the benefit and advantage of any valuation,
stay, appraisement, extension or redemption laws now existing or which may
hereafter exist, which, but for this provision, might be applicable to any sale
made under the judgment, order or decree of any court, on any claim for interest
on any principal of any Advance, AND FURTHER HEREBY IRREVOCABLY AGREE TO WAIVE
THE RIGHT TO TRIAL BY JURY WITH RESPECT TO ANY AND ALL ACTIONS OR PROCEEDINGS IN
WHICH
59
AGENT OR THE LENDERS (OR ANY OF THEM), ON THE ONE HAND, AND THE COMPANY OR ANY
OF THE PERMITTED BORROWERS, ON THE OTHER HAND, ARE PARTIES, WHETHER OR NOT SUCH
ACTIONS OR PROCEEDINGS ARISE OUT OF THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS,
OR OTHERWISE. These waivers have been voluntarily given, with full knowledge of
the consequences thereof.
9.5 Waiver of Defaults. No Event of Default shall be waived by the
Lenders except in a writing signed by an officer of the Agent in accordance with
Section 13.11 hereof. No single or partial exercise of any right, power or
privilege hereunder, nor any delay in the exercise thereof, shall preclude any
other or further exercise of the Lenders' rights by Agent. No waiver of any
Event of Default shall extend to any other or further Event of Default. No
forbearance on the part of the Agent in enforcing any of the Lenders' rights
shall constitute a waiver of any of their rights. Company and the Permitted
Borrowers expressly agree that this Section may not be waived or modified by the
Lenders or Agent by course of performance, estoppel or otherwise.
9.6 Cross-Default. In addition to the other Events of Default specified
herein, any default in the observance, payment or performance of or failure to
comply with, after allowance for any applicable cure period, any of the
conditions, covenants or agreements of Company or the Permitted Borrowers under
the Long Term Credit Agreement or any of the other Long Term Loan Documents, or
any security agreements in relation thereto, shall be an Event of Default under
the provisions of this Agreement entitling Agent, with the consent of the
Required Lenders (without notice or any cure period except as expressly provided
herein or therein), to exercise any and all rights and remedies provided hereby.
Any Event of Default shall also constitute a default under all other instruments
securing this or any other present or future borrowings, or any agreements in
relation thereto, entitling Agent and the Lenders to exercise any and all rights
and remedies provided therein.
10. PAYMENTS, RECOVERIES AND COLLECTIONS.
10.1 Payment Procedure.
(a) All payments by Company and/or by any of the Permitted
Borrowers of principal of, or interest on, Advances of the Revolving
Credit or Fees shall be made without setoff or counterclaim on the date
specified for payment under this Agreement not later than 11:00 a.m.
(Detroit time) in Dollars in immediately available funds to Agent, for
the ratable account of the Lenders, at Agent's office located at One
Detroit Center, Detroit, Michigan 48226, in respect of Domestic
Advances or Fees payable in Dollars. Payments made in respect of any
Advance in any Alternative Currency or any Fees payable in any
Alternative Currency shall be made in such Alternative Currency in
immediately available funds for the account of Agent's Eurocurrency
Lending Office, at the Agent's Correspondent, for the ratable account
of the Lenders, not later than 11:00 a.m. (the time of Agent's
Correspondent). Upon receipt of each such payment, the Agent shall make
prompt payment to each Lender, or, in respect of Eurocurrency-based
Advances, such Lender's Eurocurrency Lending Office, in like funds and
currencies, of all amounts received by it for the account of such
Lender.
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(b) Unless the Agent shall have been notified by the Company
prior to the date on which any payment to be made by the Company or any
of the Permitted Borrowers is due that the Company or such Permitted
Borrower does not intend to remit such payment, the Agent may, in its
discretion, assume that the Company or such Permitted Borrower has
remitted such payment when so due and the Agent may, in reliance upon
such assumption, make available to each Lender on such payment date an
amount equal to such Lender's share of such assumed payment. If the
Company or any of the Permitted Borrowers has not in fact remitted such
payment to the Agent, each Lender shall forthwith on demand repay to
the Agent in the applicable currency the amount of such assumed payment
made available to such Lender, together with the interest thereon, in
respect of each day from and including the date such amount was made
available by the Agent to such Lender to the date such amount is repaid
to the Agent at a rate per annum equal to (i) for Prime-based Advances,
the Federal Funds Effective Rate, as the same may vary from time to
time, and (ii) with respect to Eurocurrency-based Advances, Agent's
aggregate marginal cost (including the cost of maintaining any required
reserves or deposit insurance and of any fees, penalties, overdraft
charges or other costs or expenses incurred by Agent) of carrying such
amount.
(c) Whenever any payment to be made hereunder (other than
payments in respect of any Eurocurrency-based Advance) shall otherwise
be due on a day which is not a Business Day, such payment shall be made
on the next succeeding Business Day and such extension of time shall be
included in computing interest, if any, in connection with such
payment. Whenever any payment of principal of, or interest on, a
Eurocurrency-based Advance shall be due on a day which is not a
Business Day the date of payment thereof shall be extended to the next
succeeding Business Day unless as a result thereof it would fall in the
next calendar month, in which case it shall be shortened to the next
preceding Business Day and, in the case of a payment of principal,
interest thereon shall be payable for such extended or shortened time,
if any.
(d) All payments to be made by the Company or the Permitted
Borrowers under this Agreement shall be made without set-off or
counterclaim, as aforesaid, and without deduction for or on account of
any present or future withholding or other taxes of any nature imposed
by any governmental authority or of any political subdivision thereof
or any federation or organization of which such governmental authority
may at the time of payment be a member, unless Company or any of the
Permitted Borrowers, as the case may be, is compelled by law to make
payment subject to such tax. In such event, Company and such Permitted
Borrower shall:
(i) pay to the Agent for Agent's own account
and/or, as the case may be, for the account
of the Lenders such additional amounts as
may be necessary to ensure that the Agent
and/or such Lender or Lenders receive a net
amount in the applicable Permitted Currency
equal to the full amount which would have
been receivable had payment not been made
subject to such tax; and
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(ii) remit such tax to the relevant taxing
authorities according to applicable law, and
send to the Agent such certificates or
certified copy receipts as the Agent or any
Lender shall reasonably require as proof of
the payment by the Company or such Permitted
Borrower of any such taxes payable by the
Company or such Permitted Borrower.
As used herein, the terms "tax", "taxes" and "taxation" include all
taxes, levies, imposts, duties, charges, fees, deductions and withholdings and
any restrictions or conditions resulting in a charge together with interest (and
any taxes payable upon the amounts paid or payable pursuant to this Section
10.1) thereon and fines and penalties with respect thereto which may be imposed
by reason of any violation or default with respect to the law regarding such
tax, assessed as a result of or in connection with the transactions in any
Alternative Currency hereunder, or the payment and/or receipt of funds in any
Alternative Currency hereunder, or the payment or delivery of funds into or out
of any jurisdiction other than the United States (whether assessed against
Company, the Permitted Borrower, Agent or any of the Lenders).
10.2 Application of Proceeds. Subject to the Pledge Agreements, but
notwithstanding anything to the contrary in this Agreement or other Loan
Document, after an Event of Default, the proceeds of any offsets, voluntary
payments by the Company or the Permitted Borrowers or others and any other sums
received or collected in respect of the Indebtedness, shall be applied, first,
to payment of principal and interest of outstanding Advances in such order and
manner as determined by the Required Lenders (subject, however, to the
applicable Percentages of the Revolving Credit held by each of the Lenders),
next, to any other Indebtedness on a pro rata basis, and then, if there is any
excess, to the Company or the Permitted Borrowers, as the case may be. The
application of such proceeds and other sums to the outstanding Indebtedness
hereunder shall be based on each Lender's Percentage of the aggregate
Indebtedness.
10.3 Pro-rata Recovery. If any Lender shall obtain any payment or other
recovery (whether voluntary, involuntary, by application of offset or otherwise)
on account of principal of, or interest on, any of the outstanding Advances in
excess of its pro rata share of payments then or thereafter obtained by all
Lenders upon principal of and interest on all outstanding Advances, such Lender
shall purchase from the other Lenders such participations in the outstanding
Advances held by them as shall be necessary to cause such purchasing Lender to
share the excess payment or other recovery ratably in accordance with the
Percentages of the Revolving Credit with each of them; provided, however, that
if all or any portion of the excess payment or other recovery is thereafter
recovered from such purchasing holder, the purchase shall be rescinded and the
purchase price restored to the extent of such recovery, but without interest.
10.4 Set Off. Upon the occurrence and during the continuance of any
Event of Default, each Lender may at any time and from time to time, without
notice to the Company but subject to the provisions of Section 10.3 hereof, (any
requirement for such notice being expressly waived by the Company) set off and
apply against any and all of the obligations of the Company or any Permitted
Borrower now or hereafter existing under this Agreement, whether owing to such
Lender or any other Lender or the Agent, any and all deposits (general or
special, time or demand, provisional or final) at any time held and other
indebtedness at any time owing by such Lender to
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or for the credit or the account of the Company or such Permitted Borrower and
any property of the Company or such Permitted Borrower from time to time in
possession of such Lender, irrespective of whether or not such deposits held or
indebtedness owing by such Lender may be contingent and unmatured. Promptly
following any such setoff, such Lender shall give written notice to Agent and to
Company and the applicable Permitted Borrower of the occurrence thereof. Each of
the Company and each Permitted Borrower hereby grants to the Lenders and the
Agent a lien on and security interest in all such deposits, indebtedness and
property as collateral security for the payment and performance of all of the
obligations of the Company and the Permitted Borrowers under this Agreement. The
rights of each Lender under this Section 10.4 are in addition to the other
rights and remedies (including, without limitation, other rights of setoff)
which such Lender may have.
11. CHANGES IN LAW OR CIRCUMSTANCES; INCREASED COSTS.
11.1 Reimbursement of Prepayment Costs. If Company or any Permitted
Borrower makes any payment of principal with respect to any Eurocurrency-based
Advance on any day other than the last day of the Interest Period applicable
thereto (whether voluntarily, by acceleration, or otherwise), or if Company or
any Permitted Borrower converts or refunds (or attempts to convert or refund)
any such Advance on any day other than the last day of the Interest Period
applicable thereto; or if Company or any Permitted Borrower fails to borrow,
refund or convert into any Eurocurrency-based Advance after notice has been
given by Company or such Permitted Borrower to Agent in accordance with the
terms hereof requesting such Advance, or if Company or any Permitted Borrower
fails to make any payment of principal or interest in respect of a
Eurocurrency-based Advance when due, Company and the applicable Permitted
Borrower shall reimburse Agent for itself and/or on behalf of any Lender, as the
case may be, on demand for any resulting loss, cost or expense incurred
(excluding the loss of any Applicable Margin) by Agent and Lenders, as the case
may be as a result thereof, including, without limitation, any such loss, cost
or expense incurred in obtaining, liquidating, employing or redeploying deposits
from third parties, whether or not Agent and Lenders, as the case may be, shall
have funded or committed to fund such Advance. Such amount payable by Company to
Agent for itself and/or on behalf of any Lender, as the case may be, may
include, without limitation, an amount equal to the excess, if any, of (a) the
amount of interest which would have accrued on the amount so prepaid, or not so
borrowed, refunded or converted, for the period from the date of such prepayment
or of such failure to borrow, refund or convert, through the last day of the
relevant Interest Period, at the applicable rate of interest for said Advance(s)
provided under this Agreement, over (b) the amount of interest (as reasonably
determined by Agent and Lenders, as the case may be) which would have accrued to
Agent and Lenders, as the case may be, on such amount by placing such amount on
deposit for a comparable period with leading banks in the interbank eurocurrency
market. Calculation of any amounts payable to any Lender under this paragraph
shall be made as though such Lender shall have actually funded or committed to
fund the relevant Advance through the purchase of an underlying deposit in an
amount equal to the amount of such Advance and having a maturity comparable to
the relevant Interest Period; provided, however, that any Lender may fund any
Eurocurrency-based Advance in any manner it deems fit and the foregoing
assumptions shall be utilized only for the purpose of the calculation of amounts
payable under this paragraph. Upon the written request of Company, Agent and
Lenders shall deliver to Company a certificate setting forth the basis for
determining such losses, costs and expenses, which certificate shall be
conclusively presumed correct, absent manifest error.
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11.2 Eurocurrency Lending Office. For any Advance to which the
Eurocurrency-based Rate is applicable, if Agent or a Lender, as applicable,
shall designate a Eurocurrency Lending Office which maintains books separate
from those of the rest of Agent or such Lender, Agent or such Lender, as the
case may be, shall have the option of maintaining and carrying the relevant
Advance on the books of such Eurocurrency Lending Office.
11.3 Availability of Alternative Currency. The Agent and the Lenders
shall not be required to make any Advance in an Alternative Currency if, at any
time prior to making such Advance, the Agent or the Required Lenders (after
consultation with Agent) shall determine, in its or their sole discretion, that
(i) deposits in the applicable Alternative Currency in the amounts and
maturities required to fund such Advance will not be available to the Agent and
the Lenders; (ii) a fundamental change has occurred in the foreign exchange or
interbank markets with respect to the applicable Alternative Currency
(including, without limitation, changes in national or international financial,
political or economic conditions or currency exchange rates or exchange
controls); or (iii) it has become otherwise materially impractical for the Agent
or the Lenders, as applicable, to make such Advance in the applicable
Alternative Currency. The Agent or the applicable Lender, as the case may be,
shall promptly notify the Company and Lenders of any such determination.
11.4 Refunding Advances in Same Currency. If pursuant to any provisions
of this Agreement, the Company or any of the Permitted Borrowers repays one or
more Advances and on the same day borrows an amount in the same currency, the
Agent shall apply the proceeds of such new borrowing to repay the principal of
the Advance or Advances being repaid and only an amount equal to the difference
(if any) between the amount being borrowed and the amount being repaid shall be
remitted by the Agent to the Company or such Permitted Borrower, or by the
Company or such Permitted Borrower to the Agent, as the case may be.
11.5 Circumstances Affecting Eurocurrency-based Rate Availability. If
with respect to any Interest Period, Agent or the Required Lenders (after
consultation with Agent) shall determine that, by reason of circumstances
affecting the foreign exchange and interbank markets generally, deposits in
eurodollars or in any applicable Alternative Currency, as the case may be, in
the applicable amounts are not being offered to the Agent or such Lenders for
such Interest Period, then Agent shall forthwith give notice thereof to the
Company and the Permitted Borrowers. Thereafter, until Agent notifies Company
and the Permitted Borrowers that such circumstances no longer exist, (i) the
obligation of Lenders to make Eurocurrency-based Advances (other than in any
applicable Alternative Currency with respect to which deposits are available, as
required hereunder), and the right of Company and the Permitted Borrowers to
convert an Advance to or refund an Advance as a Eurocurrency-based Advance, as
the case may be (other than in any applicable Alternative Currency with respect
to which deposits are available, as required hereunder), shall be suspended, and
(ii) the Company and the Permitted Borrowers shall repay in full (or cause to be
repaid in full) the then outstanding principal amount of each such
Eurocurrency-based Advance covered hereby in the applicable Permitted Currency,
together with accrued interest thereon, any amounts payable under Sections 11.1
and 11.8 hereof, and all other amounts payable hereunder on the last day of the
then current Interest Period applicable to such Advance. Upon the date for
repayment as aforesaid and unless Company notifies Agent to the contrary within
two (2) Business Days after receiving a
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notice from Agent pursuant to this Section, such outstanding principal amount
shall be converted to a Prime-based Advance as of the last day of such Interest
Period.
11.6 Laws Affecting Eurocurrency-based Advance Availability. If, after
the date of this Agreement, the introduction of, or any change in, any
applicable law, rule or regulation or in the interpretation or administration
thereof by any governmental authority charged with the interpretation or
administration thereof, or compliance by any of the Lenders (or any of their
respective Eurocurrency Lending Offices) with any request or directive (whether
or not having the force of law) of any such authority, shall make it unlawful or
impossible for any of the Lenders (or any of their respective Eurocurrency
Lending Offices) to honor its obligations hereunder to make or maintain any
Advance with interest at the Eurocurrency-based Rate, or in an Alternative
Currency, such Lender shall forthwith give notice thereof to Company and to
Agent. Thereafter, (a) the obligations of Lenders to make Eurocurrency-based
Advances or Advances in any such Alternative Currency and the right of Company
or any Permitted Borrower to convert an Advance into or refund an Advance as a
Eurocurrency-based Advance or as an Advance in any such Alternative Currency
shall be suspended and thereafter Company and the Permitted Borrowers may select
as Applicable Interest Rates or as Alternative Currencies only those which
remain available and which are permitted to be selected hereunder, and (b) if
any of the Lenders may not lawfully continue to maintain an Advance to the end
of the then current Interest Period applicable thereto as a Eurocurrency-based
Advance or in such Alternative Currency, the applicable Advance shall
immediately be converted to a Prime-based Advance (in the Dollar Amount thereof)
and the Prime-based Rate shall be applicable thereto for the remainder of such
Interest Period. For purposes of this Section, a change in law, rule,
regulation, interpretation or administration shall include, without limitation,
any change made or which becomes effective on the basis of a law, rule,
regulation, interpretation or administration presently in force, the effective
date of which change is delayed by the terms of such law, rule, regulation,
interpretation or administration.
11.7 Increased Cost of Eurocurrency-based Advances. If the adoption
after the date of this Agreement of, or any change after the date of this
Agreement in, any applicable law, rule or regulation of or in the interpretation
or administration thereof by any governmental authority, central bank or
comparable agency charged with the interpretation or administration thereof, or
compliance by Agent or any of the Lenders (or any of their respective
Eurocurrency Lending Offices) with any request or directive (whether or not
having the force of law) made by any such authority, central bank or comparable
agency after the date hereof:
(a) shall subject any of the Lenders (or any of their
respective Eurocurrency Lending Offices) to any tax, duty or other
charge with respect to any Advance or shall change the basis of
taxation of payments to any of the Lenders (or any of their respective
Eurocurrency Lending Offices) of the principal of or interest on any
Advance or any other amounts due under this Agreement in respect
thereof (except for changes in the rate of tax on the overall net
income of any of the Lenders or any of their respective Eurocurrency
Lending Offices imposed by the jurisdiction in which such Lender's
principal executive office or Eurocurrency Lending Office is located);
or
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(b) shall impose, modify or deem applicable any reserve
(including, without limitation, any imposed by the Board of Governors
of the Federal Reserve System), special deposit or similar requirement
against assets of, deposits with or for the account of, or credit
extended by, any of the Lenders (or any of their respective
Eurocurrency Lending Offices) or shall impose on any of the Lenders (or
any of their respective Eurocurrency Lending Offices) or the foreign
exchange and interbank markets any other condition affecting any
Advance;
and the result of any of the foregoing is to increase the costs to any of the
Lenders of maintaining any part of the Indebtedness hereunder as a
Eurocurrency-based Advance or as an Advance in any Alternative Currency or to
reduce the amount of any sum received or receivable by any of the Lenders under
this Agreement in respect of a Eurocurrency-based Advance or any Advance in an
Alternative Currency, whether with respect to Advances to Company or to any of
the Permitted Borrowers, then such Lender shall promptly notify Agent, and Agent
(or such Lender, as aforesaid) shall promptly notify Company and Permitted
Borrowers of such fact and demand compensation therefor and, within fifteen (15)
days after such notice, Company agrees to pay to such Lender such additional
amount or amounts as will compensate such Lender or Lenders for such increased
cost or reduction. Agent will promptly notify Company and the Permitted
Borrowers of any event of which it has knowledge which will entitle Lenders to
compensation pursuant to this Section, or which will cause Company or Permitted
Borrowers to incur additional liability under Sections 11.1 and 11.8 hereof,
provided that Agent shall incur no liability whatsoever to the Lenders, Company
or Permitted Borrowers in the event it fails to do so. A certificate of Agent
(or such Lender, if applicable) setting forth the basis for determining such
additional amount or amounts necessary to compensate such Lender or Lenders
shall be conclusively presumed to be correct save for manifest error. For
purposes of this Section, a change in law, rule, regulation, interpretation,
administration, request or directive shall include, without limitation, any
change made or which becomes effective on the basis of a law, rule, regulation,
interpretation, administration, request or directive presently in force, the
effective date of which change is delayed by the terms of such law, rule,
regulation, interpretation, administration, request or directive.
11.8 Indemnity. The Company will indemnify Agent and each of the
Lenders against any loss or expense (but excluding loss of any Applicable
Margin) which may arise or be attributable to the Agent's and each Lender's
obtaining, liquidating or employing deposits or other funds acquired to effect,
fund or maintain the Advances (a) as a consequence of any failure by the Company
or any of the Permitted Borrowers to make any payment when due of any amount due
hereunder in connection with a Eurocurrency-based Advance, (b) due to any
failure of the Company or any Permitted Borrower to borrow, refund or convert on
a date specified therefor in a Request for Advance or (c) due to any payment,
prepayment or conversion of any Eurocurrency-based Advance on a date other than
the last day of the Interest Period for such Advance. Such loss or expense shall
be calculated based upon the present value, as applicable, of payments due from
the Company or such Permitted Borrower with respect to a deposit obtained by the
Agent or any of the Lenders in order to fund such Advance to the Company or to
such Permitted Borrower. The Agent's and each Lender's, as applicable,
calculations of any such loss or expense shall be furnished to the Company and
shall be conclusive, absent manifest error.
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11.9 Judgment Currency. The obligation of the Company and Permitted
Borrowers to make payments of the principal of and interest on the outstanding
Advances and any other amounts payable hereunder in the currency specified for
such payment herein shall not be discharged or satisfied by any tender, or any
recovery pursuant to any judgment, which is expressed in or converted into any
other currency, except to the extent that such tender or recovery shall result
in the actual receipt by each of the Lenders of the full amount of the
particular Permitted Currency expressed to be payable herein. The Agent shall,
using all amounts obtained or received from the Company and from Permitted
Borrowers pursuant to any such tender or recovery in payment of principal of and
interest on the outstanding Advances, promptly purchase the applicable Permitted
Currency at the most favorable spot exchange rate determined by the Agent to be
available to it. The obligation of the Company and the Permitted Borrowers to
make payments in the applicable Permitted Currency shall be enforceable as an
alternative or additional cause of action solely for the purpose of recovering
in the applicable Permitted Currency the amount, if any, by which such actual
receipt shall fall short of the full amount of the Permitted Currency expressed
to be payable herein.
11.10 Capital Adequacy and Other Increased Costs. In the event that
after the Effective Date the adoption of or any change in any applicable law,
treaty, rule or regulation (whether domestic or foreign) now or hereafter in
effect and whether or not presently applicable to any Lender or Agent, or any
interpretation or administration thereof by any governmental authority charged
with the interpretation or administration thereof, or compliance by any Lender
or Agent with any guideline, request or directive of any such authority (whether
or not having the force of law), including any risk based capital guidelines,
affects or would affect the amount of capital required or expected to be
maintained by such Lender or Agent (or any corporation controlling such Lender
or Agent) and such Lender or Agent, as the case may be, determines that the
amount of such capital is increased by or based upon the existence of such
Lender's or Agent's obligations or Advances hereunder and such increase has the
effect of reducing the rate of return on such Lender's or Agent's (or such
controlling corporation's) capital as a consequence of such obligations or
Advances hereunder to a level below that which such Lender or Agent (or such
controlling corporation) could have achieved but for such circumstances (taking
into consideration its policies with respect to capital adequacy) by an amount
deemed by such Lender or Agent to be material (collectively, "Increased Costs"),
then Agent or such Lender shall notify the Company, and thereafter the Company
shall pay to such Lender or Agent, as the case may be, from time to time, upon
request by such Lender or Agent, additional amounts sufficient to compensate
such Lender or Agent (or such controlling corporation) for any increase in the
amount of capital and reduced rate of return which such Lender or Agent
reasonably determines to be allocable to the existence of such Lender's or
Agent's obligations or Advances hereunder; provided, however that the Company
shall not be obligated to reimburse any Lender for any Increased Costs pursuant
to this Section 11.10 unless such Lender notifies Company and the Agent within
180 days after such affected Lender has obtained actual knowledge of such
Increased Costs (but in any event within 365 days after such affected Lender is
required to comply with the applicable change in law). A statement as to the
amount of such compensation, prepared in good faith and in reasonable detail by
such Lender or Agent, as the case may be, shall be submitted by such Lender or
by Agent to the Company, reasonably promptly after becoming aware of any event
described in this Section 11.10 and shall be conclusive, absent manifest error
in computation.
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11.11 Substitution of Lenders. If (a) the obligation of any Lender to
make Eurocurrency-based Advances has been suspended pursuant to Section 11.5 or
11.6 or (b) any Lender has demanded compensation under Section 11.1 or 11.7, (in
each case, an "Affected Lender"), then Company shall have the right (subject to
Section 13.8 hereof), with the assistance of the Agent, to seek a substitute
lender or lenders (which may be one or more of the Lenders (the "Purchasing
Lender" or "Purchasing Lenders") to purchase the Advances of the Revolving
Credit and assume the commitments under this Agreement of such Affected Lender.
The Affected Lender shall be obligated to sell its Advances of the Revolving
Credit and assign its commitments to such Purchasing Lender or Purchasing
Lenders within fifteen days after receiving notice from Company requiring it to
do so, at an aggregate price equal to the outstanding principal amount thereof,
plus unpaid interest accrued thereon up to but excluding the date of the sale.
In connection with any such sale, and as a condition thereof, Company shall pay
to the Affected Lender all fees accrued for its account hereunder to but
excluding the date of such sale, plus, if demanded by the Affected Lender within
ten Business Days after such sale, (i) the amount of any compensation which
would be due to the Affected Lender under Section 11.1 if Company (or the
applicable Permitted Borrower) has prepaid the outstanding Eurocurrency-based
Advances of the Affected Lender on the date of such sale and (ii) any additional
compensation accrued for its account under 3.4, 11.7 and 11.10 to but excluding
said date. Upon such sale, the Purchasing Lender or Purchasing Lenders shall
assume the Affected Lender's commitment, and the Affected Lender shall be
released from its obligations hereunder to a corresponding extent. If any
Purchasing Lender is not already one of the Lenders, the Affected Lender, as
assignor, such Purchasing Lender, as assignee, Company and the Agent, shall
enter into an Assignment Agreement pursuant to Section 13.8 hereof, whereupon
such Purchasing Lender shall be a Lender party to this Agreement, shall be
deemed to be an assignee hereunder and shall have all the rights and obligations
of a Lender with a Percentage equal to its ratable share of the then applicable
Revolving Credit Aggregate Commitment. In connection with any assignment
pursuant to this Section 11.11, Company or the Purchasing Lender shall pay to
the Agent the administrative fee for processing such assignment referred to in
Section 13.8.
12. AGENTS
12.1 Appointment of Agent. Each Lender appoints and authorizes the
Agent to act on behalf of such Lender under the Loan Documents and appoints and
authorizes the Agents to exercise such powers hereunder and thereunder as are
specifically delegated to or required of the Agents, as the case may be, by the
terms hereof and thereof, together with such powers as may be reasonably
incidental thereto. Each Lender agrees (which agreement shall survive any
termination of this Agreement) to reimburse Agent for all reasonable
out-of-pocket expenses (including in-house and outside attorneys' fees) incurred
by Agent hereunder or in connection herewith or with an Event of Default or in
enforcing the obligations of Company or any of the Permitted Borrowers under
this Agreement or the other Loan Documents or any other instrument executed
pursuant hereto (to the extent of Agent's powers hereunder or thereunder, as
aforesaid), and for which Agent is not reimbursed by Company or such Permitted
Borrower, pro rata according to such Lender's Percentage, but excluding any such
expenses resulting from the gross negligence or willful misconduct of such
Agent, as applicable. Agent shall not be required to take any action under the
Loan Documents, or to prosecute or defend any suit in respect of the Loan
Documents, unless indemnified to their respective satisfaction by the Lenders
against loss, costs, liability and expense
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(excluding liability resulting from its gross negligence or willful misconduct).
If any indemnity furnished to Agent shall become impaired, it may call for
additional indemnity and cease to do the acts indemnified against until such
additional indemnity is given.
12.2 Deposit Account with Agent. Each of Company and the Permitted
Borrowers hereby authorizes Agent to charge its general deposit account, if any,
maintained with Agent for the amount of any principal, interest, or other
amounts or costs due under this Agreement when the same becomes due and payable
under the terms of this Agreement.
12.3 Exculpatory Provisions. The Agent agrees to exercise its rights
and powers, and to perform its duties, as an agent hereunder and under the other
Loan Documents in accordance with its usual customs and practices in bank-agency
transactions, but only upon and subject to the express terms and conditions of
this Section 12 (and no implied covenants or other obligations shall be read
into this Agreement against the Agent); neither the Agent nor any of its
directors, officers, employees or agents shall be liable to any Lender for any
action taken or omitted to be taken by it or them under this Agreement or any
document executed pursuant hereto, or in connection herewith or therewith,
except for its or their own willful misconduct or gross negligence, nor be
responsible for any recitals or warranties herein or therein, or for the
effectiveness, enforceability, validity or due execution of this Agreement or
any document executed pursuant hereto, or any security thereunder, or to make
any inquiry respecting the performance by Company, any of its Subsidiaries or
any of the Permitted Borrowers of its obligations hereunder or thereunder. Agent
shall not have, or be deemed to have, a fiduciary relationship with any Lender
by reason of this Agreement. Agent shall be entitled to rely upon advice of
counsel concerning legal matters and upon any notice, consent, certificate,
statement or writing which it believes to be genuine and to have been presented
by a proper person.
12.4 Successor Agent. The Agent may resign as such at any time upon at
least 30 days prior notice to Company and all Lenders. If Agent at any time
shall resign or if a vacancy shall occur in the office of the Agent for any
other reason, Required Lenders shall, by written instrument, appoint a successor
Agent (consisting of any other Lender or financial institution satisfactory to
such Required Lenders) which shall thereupon become Agent hereunder and shall be
entitled to receive from the prior agent such documents of transfer and
assignment as such successor agent may reasonably request. Such successor Agent
shall succeed to all of the rights and obligations of the retiring agent as if
originally named. The retiring agent shall duly assign, transfer and deliver to
such successor Agent all moneys at the time held by the retiring agent hereunder
after deducting therefrom its expenses for which it is entitled to be
reimbursed. Upon such succession of any such successor agent, the retiring agent
shall be discharged from its duties and obligations hereunder, except for its
gross negligence or willful misconduct arising prior to its retirement
hereunder, and the provisions of this Section 12 shall continue in effect for
its benefit in respect of any actions taken or omitted to be taken by it while
it was acting as an agent hereunder.
12.5 Loans by Agents. Each of the Agents shall have the same rights and
powers with respect to the credit extended by it as any Lender and may exercise
the same as if it were not an agent hereunder, and the term "Lender" and, when
appropriate, "holder" shall include the Agents in their respective individual
capacities.
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12.6 Credit Decisions. Each Lender acknowledges that it has,
independently of Agents and each other Lender and based on the financial
statements of Company, the Permitted Borrowers and the Subsidiaries and such
other documents, information and investigations as it has deemed appropriate,
made its own credit decision to extend credit hereunder from time to time. Each
Lender also acknowledges that it will, independently of Agents and each other
Lender and based on such other documents, information and investigations as it
shall deem appropriate at any time, continue to make its own credit decisions as
to exercising or not exercising from time to time any rights and privileges
available to it under this Agreement or any document executed pursuant hereto.
12.7 Notices by Agent. Agent shall give prompt notice to each Lender of
its receipt of each notice or request required or permitted to be given to Agent
by Company or a Permitted Borrower pursuant to the terms of this Agreement and
shall promptly distribute to the Lenders any reports received from the Company
or any of its Subsidiaries or any of the Permitted Borrowers under the terms
hereof, or other material information or documents received by Agent, in its
capacity Agent, from the Company, its Subsidiaries or the Permitted Borrowers.
12.8 Agent's Fees. Until the Indebtedness has been repaid and
discharged in full and no commitment to fund any loan hereunder is outstanding,
the Company shall pay to the Agent, as applicable, an agency fee(s) set forth
(or to be set forth from time to time) in the Fee Letter on the terms set forth
therein. The Agent's Fees described in this Section 12.8 shall not be refundable
under any circumstances.
12.9 Nature of Agency. The appointment of Agents as Agent and
Syndication Agent, respectively, is for the convenience of Lenders, Company and
the Permitted Borrowers in making Advances of the Revolving Credit or any other
Indebtedness of Company or the Permitted Borrowers hereunder, collecting fees,
and principal and interest on the Indebtedness, and otherwise administering this
Agreement and the other Loan Documents according to the express terms hereof and
thereof. No Lender is purchasing any Indebtedness from Agents (or either of
them) and this Agreement is not intended to be a purchase or participation
agreement (except to the extent of risk participations acquired pursuant to
Section 3.6(c) hereof).
12.10 Authority of Agent to Enforce This Agreement. Each Lender,
subject to the terms and conditions of this Agreement (including, without
limitation, any required approval or direction of the Required Lenders or the
Lenders, as applicable, to be obtained by or given to the Agent hereunder),
authorizes the Agent with full power and authority as attorney-in-fact to
institute and maintain actions, suits or proceedings for the collection of the
Indebtedness and enforcement of this Agreement and the other Loan Documents and
to file such proofs of debt or other documents as may be necessary to have the
claims of the Lenders allowed in any proceeding relative to the Company, any of
its Subsidiaries, any of the Permitted Borrowers or its creditors or affecting
its properties, and to take such other actions which Agent considers to be
necessary or desirable for the protection, collection and enforcement of the
Indebtedness, this Agreement or the other Loan Documents, but in each case only
to the extent of any required approval or direction of the Required Lenders or
the Lenders, as applicable, obtained by or given to the Agent hereunder.
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12.11 Indemnification. The Lenders agree to indemnify each of the
Agents in their respective capacities as such, to the extent not reimbursed by
the Company or the Permitted Borrowers, pro rata according to their respective
Percentages, from and against any and all claims, liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, and reasonable
out-of-pocket expenses or disbursements of any kind or nature whatsoever which
may be imposed on, incurred by, or asserted against the Agents in any way
relating to or arising out of this Agreement or any of the other Loan Documents
or any action taken or omitted to be taken or suffered in good faith by the
Agents, or either of them, as the case may be, hereunder, provided that no
Lender shall be liable to Agent or Syndication Agent, as the case may be, for
any portion of any of the foregoing items resulting from the gross negligence or
willful misconduct of such agent, or any of its officers, employees, directors
or agents.
12.12 Knowledge of Default. It is expressly understood and agreed that
Agent shall be entitled to assume that no Default or Event of Default has
occurred and is continuing, unless the officers of such agent immediately
responsible for matters concerning this Agreement shall have actual (rather than
constructive) knowledge of such occurrence or shall have been notified in
writing by Company or a Lender that the Company or such Lender considers that a
Default or an Event of Default has occurred and is continuing, and specifying
the nature thereof. Upon obtaining actual knowledge of any Default or Event of
Default as described above, the Agent shall promptly, but in any event within
three (3) Business Days after obtaining actual knowledge thereof, notify each
Lender of such Default or Event of Default and the action, if any, the Agent
proposes be taken with respect thereto.
12.13 Agent's Authorization; Action by Lenders. Except as otherwise
expressly provided herein, whenever the Agent is authorized and empowered
hereunder on behalf of the Lenders to give any approval or consent, or to make
any request, or to take any other action, on behalf of the Lenders (including
without limitation the exercise of any right or remedy hereunder or under the
other Loan Documents), the Agent shall be required to give such approval or
consent, or to make such request or to take such other action only when so
requested in writing by the Required Lenders or the Lenders, as applicable
hereunder. Action that may be taken by Required Lenders or all of the Lenders,
as the case may be (as provided for hereunder), may be taken (i) pursuant to a
vote at a meeting (which may be held by telephone conference call) as to which
all of the Lenders have been given reasonable advance notice (subject to the
requirement that amendments, waivers or consents under Section 13.11 hereof be
made in writing by the Required Lenders or all the Lenders, as applicable), or
(ii) pursuant to the written consent of the requisite Percentages of the Lenders
as required hereunder, provided that all of the Lenders are given reasonable
advance notice of the requests for such consent.
12.14 Enforcement Actions by the Agent. Except as otherwise expressly
provided under this Agreement or in any of the other Loan Documents and subject
to the terms hereof, Agent will take such action, assert such rights and pursue
such remedies under this Agreement and the other Loan Documents as the Required
Lenders or all of the Lenders, as the case may be (as provided for hereunder),
shall direct. Except as otherwise expressly provided in any of the Loan
Documents, Agent will not (and will not be obligated to) take any action, assert
any rights or pursue any remedies under this Agreement or any of the other Loan
Documents in violation or contravention
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of any express direction or instruction of the Required Lenders or all of the
Lenders, as the case may be (as provided for hereunder). Agent may refuse (and
will not be obligated) to take any action, assert any rights or pursue any
remedies under this Agreement or any of the other Loan Documents in the absence
of the express written direction and instruction of the Required Lenders or all
of the Lenders, as the case may be (as provided for hereunder). In the event
Agent fails, within a commercially reasonable time, to take such action, assert
such rights, or pursue such remedies as the Required Lenders or all of the
Lenders, as the case may be (as provided for hereunder), shall direct in
conformity with this Agreement, the Required Lenders or all of the Lenders, as
the case may be (as provided for hereunder), shall have the right to take such
action, to assert such rights, or pursue such remedies on behalf of all of the
Lenders unless the terms hereof otherwise require the consent of all the Lenders
to the taking of such actions (in which event all of the Lenders must join in
such action). Except as expressly provided above or elsewhere in this Agreement
or the other Loan Documents, no Lender (other than the Agent, acting in its
capacity as Agent) shall be entitled to take any enforcement action of any kind
under any of the Loan Documents.
12.15 Managers and Lead Managers. Credit Lyonnais New York Branch has
been designated by the Company as "Documentation Agent", NationsBanc Montgomery
Securities LLC has been designated by the Company as "Syndication Agent" and
Barclay's Capital, CoreStates Bank N.A. and Fleet National Bank have been
designated by the Company as "Managing Agents" under this Agreement. Other than
its rights and remedies as a Lender hereunder, such Documentation Agent,
Syndication Agent and each such Managing Agent shall have no administrative,
collateral or other rights or responsibilities, provided, however, that each
such Documentation Agent, Syndication Agent and each Managing Agent shall be
entitled to the benefits afforded to the Agents under Sections 12.5 and 12.6
hereof.
13. MISCELLANEOUS
13.1 Accounting Principles. Where the character or amount of any asset
or liability or item of income or expense is required to be determined or any
consolidation or other accounting computation is required to be made for the
purposes of this Agreement, it shall be done in accordance with GAAP.
13.2 Consent to Jurisdiction. Each of the Company and the Permitted
Borrowers hereby irrevocably submits to the non-exclusive jurisdiction of any
United States Federal or Michigan state court sitting in Detroit in any action
or proceeding arising out of or relating to this Agreement or any of the other
Loan Documents and each of the Company and the Permitted Borrowers hereby
irrevocably agrees that all claims in respect of such action or proceeding may
be heard and determined in any such United States Federal or Michigan state
court. Each of the Permitted Borrowers irrevocably appoints the Company as its
agent for service of process. Each of the Company and the Permitted Borrowers
irrevocably consents to the service of any and all process in any such action or
proceeding brought in any court in or of the State of Michigan by the delivery
of copies of such process to the Company at its address specified on the
signature page hereto or by certified mail directed to such address. Nothing in
this Section shall affect the right of the Lenders and the Agent to serve
process in any other manner permitted by law or limit the right of the Lenders
or the Agent (or any of them) to bring any such action or proceeding against the
Company or the
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Permitted Borrowers or any of its or their property in the courts of any other
jurisdiction. Each of the Company and the Permitted Borrowers hereby irrevocably
waives any objection to the laying of venue of any such suit or proceeding in
the above described courts.
13.3 Law of Michigan. This Agreement has been delivered at Detroit,
Michigan, and shall be governed by and construed and enforced in accordance with
the laws of the State of Michigan, except as and to the extent expressed to the
contrary in any of the Loan Documents. Whenever possible each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be prohibited by or
invalid under applicable law, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Agreement.
13.4 Interest. In the event the obligation of the Company or any of the
Permitted Borrowers to pay interest on the principal balance of the outstanding
Advances is or becomes in excess of the maximum interest rate which the Company
or any Permitted Borrower is permitted by law to contract or agree to pay,
giving due consideration to the execution date of this Agreement, then, in that
event, the rate of interest applicable with respect to any Lender's Percentage
of the Revolving Credit, as applicable, shall be deemed to be immediately
reduced to such maximum rate and all previous payments in excess of the maximum
rate shall be deemed to have been payments in reduction of principal and not of
interest.
13.5 Closing Costs; Other Costs. Company shall pay or reimburse Agents
for their own accounts or on behalf of the Lenders for payment of, on demand (a)
all closing costs and expenses, including, by way of description and not
limitation, in-house and outside attorney fees and advances, appraisal and
accounting fees, title and lien search fees, and required travel costs, incurred
by Agents (and either of them) in connection with the commitment, consummation
and closing of the loans contemplated hereby, or in connection with any
refinancing or restructuring of the loans or advances provided under this
Agreement or the other Loan Documents, or any amendment thereof or waiver or
consent with respect thereto requested by Company; and (b) all stamp and other
taxes and fees payable or determined to be payable (by either of the Agents or
any Lender) in connection with the execution, delivery, filing or recording of
this Agreement and the Loan Documents and the consummation of the transactions
contemplated hereby, and any and all liabilities with respect to or resulting
from any delay in paying or omitting to pay such taxes or fees. Furthermore, all
reasonable costs and expenses, including without limitation attorney fees, and
costs and expenses to Environmental Auditors retained by Agent hereunder,
incurred by Agents (and either of them) in revising, preserving, protecting,
exercising or enforcing any of its or any of the Lenders' rights against Company
or any of the Permitted Borrowers, or otherwise incurred by Agents and by the
Lenders (using a single law firm retained by Agent, with the approval of the
Required Lenders) in connection with any Event of Default or the enforcement of
the loans (whether incurred through negotiations, legal proceedings or
otherwise), including by way of description and not limitation, such charges in
any court or bankruptcy proceedings or arising out of any claim or action by any
person against Agents (and either of them) or any Lender which would not have
been asserted were it not for the Agents' or such Lender's relationship with
Company and the Permitted Borrowers hereunder or otherwise, shall also be paid
by Company and the Permitted Borrowers. All of said
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amounts required to be paid by Company hereunder and not paid forthwith upon
demand, as aforesaid, shall bear interest, from the date incurred to the date
payment is received by Agents, as applicable, at the Prime-based Rate, plus
three percent (3%).
13.6 Notices. Except as otherwise expressly set forth in this
Agreement, all notices and other communications provided to any party hereto
under this Agreement or any other Loan Document shall be in writing and shall be
given by personal delivery, by mail, by reputable overnight courier, by telex or
by facsimile and addressed or delivered to it at its address set forth on the
Administrative Detail Forms on file with the Agent or at such other address as
may be designated by such party in a notice to the other parties that complies
as to delivery with the terms of this Section 13.6. Any notice, if personally
delivered or if mailed and properly addressed with postage prepaid and sent by
registered or certified mail, shall be deemed given when received or when
delivery is refused; any notice, if given to a reputable overnight courier and
properly addressed, shall be deemed given two (2) Business Days after the date
on which it was sent, unless it is actually received sooner by the named
addressee; and any notice, if transmitted by telex or facsimile, shall be deemed
given when received (answer back confirmed in the case of telexes and receipt
confirmed in the case of telecopies). Agents may, but, except as specifically
provided herein, shall not be required to, take any action on the basis of any
notice given to it by telephone, but the giver of any such notice shall promptly
confirm such notice in writing or by telex or facsimile, and such notice will
not be deemed to have been received until such confirmation is deemed received
in accordance with the provisions of this Section set forth above. If such
telephonic notice conflicts with any such confirmation, the terms of such
telephonic notice shall control.
13.7 Further Action. Company and the Permitted Borrowers, from time to
time, upon written request of Agents will make, execute, acknowledge and deliver
or cause to be made, executed, acknowledged and delivered, all such further and
additional instruments, and take all such further action, as may be required to
carry out the intent and purpose of this Agreement, and to provide for Advances
under this Agreement, according to the intent and purpose herein and therein
expressed.
13.8 Successors and Assigns; Assignments and Participations.
(a) This Agreement shall be binding upon and shall inure to
the benefit of Company and the Permitted Borrowers and the Lenders and their
respective successors and assigns.
(b) The foregoing shall not authorize any assignment by
Company or any of the Permitted Borrowers, of its rights or duties hereunder,
and no such assignment shall be made (or effective) without the prior written
approval of the Lenders.
(c) The Company, Permitted Borrowers and Agents acknowledge
that each of the Lenders may at any time and from time to time, subject to the
terms and conditions hereof (including Section 13.14 hereof), assign or grant
participations in such Lender's rights and obligations hereunder and under the
other Loan Documents to any commercial bank, savings and loan association,
insurance company, pension fund, mutual fund, commercial finance company or
other similar financial institution, the identity of which institution is
approved by Company and the
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Agent, such approval not to be unreasonably withheld or delayed; provided,
however, that (i) the approval of Company shall not be required upon the
occurrence and during the continuance of a Default or Event of Default and (ii)
the approval of Company and Agent shall not be required for any such sale,
transfer, assignment or participation to the Affiliate of an assigning Lender,
any other Lender or any Federal Reserve Bank. The Company and each of Permitted
Borrowers authorize each Lender to disclose to any prospective assignee or
participant, once approved by Company and Agent, any and all financial
information in such Lender's possession concerning the Company and such
Permitted Borrower which has been delivered to such Lender pursuant to this
Agreement; provided that each such prospective participant shall execute a
confidentiality agreement consistent with the terms of Section 13.13 hereof.
(d) Each assignment by a Lender of any portion of its rights
and/or obligations hereunder and under the other Loan Documents, other than
assignments to such Lender's Affiliates or to a Federal Reserve Bank under
Section 13.8(c)(ii) hereof, shall be made pursuant to an Assignment Agreement
("Assignment Agreement") substantially (as determined by Agent), in the form
attached hereto as Exhibit E (with appropriate insertions acceptable to Agent)
and shall be subject to the terms and conditions hereof, and to the following
restrictions:
(i) each partial assignment shall be made as an assignment
of a part of all of the assigning Lender's rights and
obligations hereunder;
(ii) each assignment shall be in a minimum amount of the
lesser of (x) Five Million Dollars ($5,000,000) and (y)
the entire remaining amount of assigning Lender's
interest in the Revolving Credit (and participations in
any outstanding Letters of Credit); provided however
that, after giving effect to such assignment, in no
event shall the entire remaining amount (if any) of
assigning Lender's interest in the Revolving Credit
(and participations in any outstanding Letters of
Credit) be less than $5,000,000;
(iii) no assignment shall be effective unless Agent has
received from the assignee (or from the assigning
Lender) an assignment fee of $3,500 for each such
assignment.
In connection with any assignment subject to this Section 13.8(d), Company, each
of the Permitted Borrowers and Agents shall be entitled to continue to deal
solely and directly with the assigning Lender in connection with the interest so
assigned until the Agent shall have received a notice of assignment duly
executed by the assigning Lender and an Assignment Agreement (with respect
thereto) duly executed by the assigning Lender and each assignee; and (y) the
assigning Lender shall have delivered to the Agent the original of each Note, if
any, issued to such Lender, held by the assigning Lender under this Agreement.
From and after the date on which the Agents shall notify Company and the Lender
which has accepted an assignment subject to this Section 13.8(d) that the
foregoing conditions shall have been satisfied and all consents (if any)
required shall have been given, the assignee thereunder shall be deemed to be a
party to this Agreement. To the extent that rights and obligations hereunder
shall have been assigned to such assignee as provided in such
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notice of assignment (and Assignment Agreement), such assignee shall have the
rights and obligations of a Lender under this Agreement and the other Loan
Documents (including without limitation the right to receive fees payable
hereunder in respect of the period following such assignment). In addition, the
assigning Lender, to the extent that rights and obligations hereunder shall have
been assigned by it as provided in such notice of assignment (and Assignment
Agreement), but not otherwise, shall relinquish its rights and be released from
its obligations under this Agreement and the other Loan Documents. Schedule 1.1
to this Agreement shall be deemed to be amended to reflect the applicable new
Percentages of the Lenders (including the assignee Lender), taking into account
such assignment.
(e) Each Lender agrees that any participation agreement
permitted hereunder shall comply with all applicable laws and shall be subject
to the following restrictions (which shall be set forth in the applicable
participation agreement):
(i) such Lender shall remain the holder of its interest in
the Indebtedness hereunder, notwithstanding any such
participation;
(ii) except as expressly set forth in this Section 13.8(e)
with respect to rights of setoff and the benefits of
Section 11 hereof, a participant shall have no direct
rights or remedies hereunder;
(iii) such Lender shall retain the sole right and
responsibility to enforce the obligations of the
Company and Permitted Borrowers relating to this
Agreement and the other Loan Documents, including,
without limitation, the right to proceed against any
Guarantors, or cause Agent to do so (subject to the
terms and conditions hereof), and the right to approve
any amendment, modification or waiver of any provision
of this Agreement without the consent of the
participant, except in the case of participations
granted to an Affiliate of such Lender and except for
those matters covered by Section 13.11(a) through (e)
and (h) hereof (provided that a participant may
exercise approval rights over such matters only on an
indirect basis, acting through such Lender, and
Company, Permitted Borrowers, Agent and the other
Lenders may continue to deal directly with such Lender
in connection with such Lender's rights and duties
hereunder).
Company and each of the Permitted Borrowers each agrees that each participant
shall be deemed to have the right of setoff under Section 10.4 hereof in respect
of its participation interest in amounts owing under this Agreement and the
other Loan Documents to the same extent as if the Indebtedness were owing
directly to it as a Lender under this Agreement, shall be subject to the pro
rata recovery provisions of Section 10.3 hereof and shall be entitled to the
benefits of Section 11 hereof. The amount, terms and conditions of any
participation shall be as set forth in the participation agreement between the
issuing Lender and the Person purchasing such participation, and the Company,
the Permitted Borrowers, the Agents and the other Lenders shall not have any
responsibility or obligation with respect thereto, or to any Person to whom any
such participation may be issued. No
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such participation shall relieve any issuing Lender of any of its obligations
under this Agreement or any of the other Loan Documents, and all actions
hereunder shall be conducted as if no such participation had been granted.
(f) The Agent shall maintain at its principal office a copy of
each Assignment Agreement delivered to it and a register (the "Register") for
the recordation of the names and addresses of the Lenders, the Percentages of
such Lenders and the principal amount of each type of Advance owing to each such
Lender from time to time. The entries in the Register shall be conclusive
evidence, absent manifest error, and the Company, the Permitted Borrowers, the
Agent, and the Lenders may treat each Person whose name is recorded in the
Register as the owner of the Advances recorded therein for all purposes of this
Agreement. The Register shall be available for inspection by the Company, the
Permitted Borrowers or any Lender upon reasonable notice to the Agent and a copy
of such information shall be provided to any such party on their prior written
request. The Agent shall give prompt written notice to the Company of the making
of any entry in the Register or any change in such entry.
(g) Nothing in this Agreement, or the other Loan Documents,
expressed or implied, is intended to or shall confer on any Person other than
the respective parties hereto and thereto and their successors and assignees and
participants permitted hereunder and thereunder any benefit or any legal or
equitable right, remedy or other claim under this Agreement, or the other Loan
Documents.
13.9 Indulgence. No delay or failure of Agents and the Lenders in
exercising any right, power or privilege hereunder shall affect such right,
power or privilege nor shall any single or partial exercise thereof preclude any
other or further exercise thereof, or the exercise of any other right, power or
privilege. The rights of Agents and the Lenders hereunder are cumulative and are
not exclusive of any rights or remedies which Agents and the Lenders would
otherwise have.
13.10 Counterparts. This Agreement may be executed in several
counterparts, and each executed copy shall constitute an original instrument,
but such counterparts shall together constitute but one and the same instrument.
13.11 Amendment and Waiver. No amendment or waiver of any provision of
this Agreement or any other Loan Document, or consent to any departure by the
Company or the Permitted Borrowers therefrom, shall in any event be effective
unless the same shall be in writing and signed by the Required Lenders (or
signed by the Agent at the direction of the Required Lenders), and then such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given; provided, however, that no amendment, waiver
or consent shall, unless in writing and signed by all the Lenders, do any of the
following: (a) increase any Lender's commitments hereunder, (b) reduce the
principal of, or interest on, the Advances or any Fees or other amounts payable
hereunder, (c) postpone any date fixed for any payment of principal of, or
interest on, the outstanding Advances or any Fees or other amounts payable
hereunder, (d) waive any Event of Default specified in Section 9.1(a) or (b)
hereof, (e) release or defer the granting or perfecting of a lien or security
interest in any collateral or release any guaranty or similar undertaking
provided by any Person or modify any indemnity provided to the Lenders,
hereunder
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or under the other Loan Documents, except as shall be otherwise expressly
provided in this Agreement or any other Loan Document, (f) take any action which
requires the signing of all Lenders pursuant to the terms of this Agreement or
any other Loan Document, (g) change the aggregate unpaid principal amount of the
outstanding Advances which shall be required for the Lenders or any of them to
take any action under this Agreement or any other Loan Document, (h) change this
Section 13.11, or (i) change the definition of "Required Lenders", "Interest
Periods", "Alternative Currencies", "Permitted Borrower" or "Percentage", and
provided further, however, that no amendment, waiver or consent hereunder shall,
unless in writing and signed by the Agents in addition to all the Lenders,
affect the rights or duties of the Agent under this Agreement or any other Loan
Document. All references in this Agreement to "Lenders" or "the Lenders" shall
refer to all Lenders, unless expressly stated to refer to Required Lenders.
13.12 Taxes and Fees. Should any tax (other than a tax based upon the
net income of any Lender or Agents (or either of them) by any jurisdiction where
a Lender or Agent is located), recording or filing fee become payable in respect
of this Agreement or any of the other Loan Documents or any amendment,
modification or supplement hereof or thereof, the Company and each of the
Permitted Borrowers, jointly and severally, agrees to pay the same together with
any interest or penalties thereon and agrees to hold the Agent and the Lenders
harmless with respect thereto.
13.13 Confidentiality. Each Lender agrees that without the prior
consent of Company, it will not disclose (other than to its employees or to
employees of any of its Affiliates, to another Lender or to any of their
respective auditors or counsel) any information with respect to the Company or
any of its Subsidiaries or any of the Permitted Borrowers which is furnished
pursuant to the terms and conditions of this Agreement or any of the other Loan
Documents or which is designated (in writing) by Company or any of the Permitted
Borrowers to be confidential; provided that any Lender may disclose any such
information (a) as has become generally available to the public or has been
lawfully obtained by such Lender from any third party under no duty of
confidentiality to the Company or such Permitted Borrower known to such Lender
after reasonable inquiry, (b) as may be required or appropriate in any report,
statement or testimony submitted to, or in respect of any inquiry by, any
municipal, state or federal regulatory body having or claiming to have
jurisdiction over such Lender, including the Board of Governors of the Federal
Reserve System of the United States 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 of 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 Lender, and (e) to any
permitted transferee or assignee or to any approved participant of, or with
respect to, an interest in this Agreement and the other Loan Documents, as
aforesaid.
13.14 Withholding Taxes. If any Lender is not incorporated under the
laws of the United States or a state thereof, such Lender shall promptly (but in
any event prior to the initial payment of interest hereunder) deliver to the
Agent two executed copies of (i) Internal Revenue Service Form 1001 specifying
the applicable tax treaty between the United States and the jurisdiction of such
Lender's domicile which provides for the exemption from withholding on interest
payments to such Lender, (ii) Internal Revenue Service Form 4224 evidencing that
the income to be received by such Lender hereunder is effectively connected with
the conduct of a trade or business in the United
78
States or (iii) other evidence satisfactory to the Agent that such Lender is
exempt from United States income tax withholding with respect to such income;
provided, however, that such Lender shall not be required to deliver to Agent
the aforesaid forms or other evidence with respect to Advances to the Company or
any Domestic Subsidiary which subsequently becomes a Permitted Borrower
hereunder, if such Lender has assigned its interest in the Revolving Credit
(including any outstanding Advances thereunder and participations in Letters of
Credit issued hereunder) and any Notes issued to it by the Company, or any
Domestic Subsidiary (if any) which subsequently becomes a Permitted Borrower
hereunder, to an Affiliate which is incorporated under the laws of the United
States or a state thereof, and so notifies the Agent. Such Lender shall amend or
supplement any such form or evidence as required to insure that it is accurate,
complete and non-misleading at all times. Promptly upon notice from the Agent of
any determination by the Internal Revenue Service that any payments previously
made to such Lender hereunder were subject to United States income tax
withholding when made, such Lender shall pay to the Agent the excess of the
aggregate amount required to be withheld from such payments over the aggregate
amount actually withheld by the Agent. In addition, from time to time upon the
reasonable request and at the sole expense of the Company or the Permitted
Borrowers, each Lender and each of the Agents shall (to the extent it is able to
do so based upon applicable facts and circumstances), complete and provide the
Company or the Permitted Borrowers with such forms, certificates or other
documents as may be reasonably necessary to allow the Company or the Permitted
Borrowers, as applicable, to make any payment under this Agreement or the other
Loan Documents without any withholding for or on the account of any tax under
Section 10.1(d) hereof (or with such withholding at a reduced rate), provided
that the execution and delivery of such forms, certificates or other documents
does not adversely affect or otherwise restrict the right and benefits
(including without limitation economic benefits) available to such of the Lender
or the Agents, as the case may be, under this Agreement or any of the other Loan
Documents, or under or in connection with any transactions not related to the
transactions contemplated hereby.
13.15 ERISA Restrictions. To the extent any Advance hereunder is funded
by or on behalf of an insurance company, bank, or other Person deemed to hold
assets of any employee benefit plan subject to ERISA or other plan as defined in
and subject to the prohibited transaction provisions of Section 4975 of the
Internal Revenue Code pursuant to applicable Department of Labor regulations
(the "Plan Asset Regulations"), or any such plan acting on its own behalf, such
insurance company, bank, entity or plan warrants and represents that at least
one of the following statements is an accurate representation as to each source
of funds (a "Source") to be used by such insurance company, bank, entity or plan
to fund the Advance(s) hereunder:
(a) the Source consists of plan assets subject to the
discretionary authority or control of an in-house asset manager ("INHAM") as
such term is defined in Section IV(a) of Prohibited Transaction Class Exemption
96-23 (issued April 10, 1996) ("PTCE 96-23"), and the funding of the Advance(s)
hereunder is exempt under the provisions of PTCE 96-23; or
(b) the Source is an "insurance company general account" as
such term is defined in section V(e) of Prohibited Transaction Class Exemption
95-60 (issued July 12, 1995) ("PTCE 95- 60"), and the funding of the Advance(s)
hereunder is exempt under the provisions of PTCE 95-60; or
79
(c) the Source is either (x) an insurance company pooled
separate account, within the meaning of Prohibited Transaction Class Exemption
90-1 (issued January 29, 1990) ("PTCE 90- 1") or (y) a bank collective
investment fund, within the meaning of Prohibited Transaction Class Exemption
91-38 (issued July 12, 1991) ("PTCE 91-38") and, except as such insurance
company or bank has disclosed to the Company in writing pursuant to this
paragraph (ii), no plan or group of plans maintained by the same employer or
employee organization, beneficially owns more than 10% of all assets allocated
to such pooled separate account or collective investment fund; and, in either
such case, all records necessary to establish the availability of each exemption
by reason thereof will be maintained and made available as required by the terms
of such exemption; or
(d) the Source is an "investment fund" (within the meaning of
Part V of Prohibited Transaction Class Exemption 84-14 (issued March 13, 1984)
(the "QPAM Exemption")) managed by a "qualified professional asset manager"
("QPAM") within the meaning of Part V of the QPAM exemption) which has been
identified pursuant to this paragraph (iii), such that the funding of the
Advance(s) by or on behalf of such investment fund is exempt from the
application of the prohibited transaction rules of ERISA and Section 4975 of the
Internal Revenue Code, provided that no party to the transactions described in
this Agreement and no affiliate (within the meaning of Section V(c)(1) of the
QPAM Exemption) of such party has, or at any time during the immediately
preceding year exercised, the authority to appoint or terminate the identified
QPAM as manager of the assets of any employee benefit plan that has an interest
in such investment fund (which plans have been identified pursuant to this
paragraph (iii)) or to negotiate the terms of said QPAM's management agreement
on behalf of any such identified plan; or
(e) the Source is a "governmental plan" as defined in Title 1,
Section 3(32) of ERISA; or
(f) the Source is one or more "employee benefit plans" (or
other plan as defined in and subject to Section 4975 of the Internal Revenue
Code) or a separate account, trust fund, or other entity comprised of one or
more such plans (determined after giving effect to the Plan Asset Regulations)
each of which has been identified to the Company in writing pursuant to this
paragraph (v); or
(g) the Source does not include assets of any employee benefit
plan or other plan, other than a plan exempt from coverage under ERISA and from
the prohibited transactions of Section 4975 of the Internal Revenue Code.
13.16 Effective Date. This Agreement shall become effective upon the
Effective Date, and shall remain effective until the Indebtedness has been
repaid and discharged in full and no commitment to extend any credit hereunder
remains outstanding. Those Permitted Borrowers not signatories to this Agreement
on the Effective Date shall become obligated hereunder (and shall be deemed
parties to this Agreement) upon the execution and delivery, according to the
terms and conditions set forth in Section 2.1 hereof, of the Permitted Borrower
Addendum.
13.17 Severability. In case any one or more of the obligations of the
Company or any of the Permitted Borrowers under this Agreement, or any of the
other Loan Documents shall be invalid,
80
illegal or unenforceable in any jurisdiction, the validity, legality and
enforceability of the remaining obligations of the Company or such Permitted
Borrower shall not in any way be affected or impaired thereby, and such
invalidity, illegality or unenforceability in one jurisdiction shall not affect
the validity, legality or enforceability of the obligations of the Company or
such Permitted Borrower under this Agreement or any of the other Loan Documents
in any other jurisdiction.
13.18 Table of Contents and Headings; Construction of Certain
Provisions. The table of contents and the headings of the various subdivisions
hereof are for convenience of reference only and shall in no way modify or
affect any of the terms or provisions hereof. If any provision of this Agreement
or any of the other Loan Documents refers to any action to be taken by any
Person, or which such Person is prohibited from taking, such provision shall be
applicable whether such action is taken directly or indirectly by such Person,
whether or not expressly specified in such provision.
13.19 Independence of Covenants. Each covenant hereunder shall be given
independent effect (subject to any exceptions stated in such covenant) so that
if a particular action or condition is not permitted by any such covenant
(taking into account any such stated exception), the fact that it would be
permitted by an exception to, or would be otherwise within the limitations of,
another covenant shall not avoid the occurrence of a Default or an Event of
Default if such action is taken or such condition exists.
13.20 Reliance on and Survival of Various Provisions. All terms,
covenants, agreements, representations and warranties of the Company or any
party to any of the Loan Documents made herein or in any of the other Loan
Documents or in any certificate, report, financial statement or other document
furnished by or on behalf of the Company, any such party in connection with this
Agreement or any of the other Loan Documents shall be deemed to have been relied
upon by the Lenders, notwithstanding any investigation heretofore or hereafter
made by any Lender or on such Lender's behalf, and those covenants and
agreements of the Company and the Permitted Borrowers set forth in Section 11.8
hereof (together with any other indemnities of the Company or the Permitted
Borrowers contained elsewhere in this Agreement or in any of the other Loan
Documents and of Lenders set forth in Sections 12.1, 12.12 and 13.13 hereof
shall, notwithstanding anything to the contrary contained in this Agreement,
survive the repayment in full of the Indebtedness and the termination of any
commitments to make Advances hereunder.
13.21 Complete Agreement. This Agreement, the Notes, if issued, any
Requests for Advance hereunder, the other Loan Documents and any agreements,
certificates, or other documents given to secure the Indebtedness, contain the
entire agreement of the parties hereto, and none of the parties hereto shall be
bound by anything not expressed in writing.
[SIGNATURES FOLLOW ON SUCCEEDING PAGES]
81
WITNESS the due execution hereof as of the day and year first above
written.
COMPANY: AGENT:
VISHAY INTERTECHNOLOGY, INC. COMERICA BANK, As Agent
By: /s/ Richard N. Grubb By: /s/ Dan M. Roman
-------------------- ----------------
Richard N. Grubb Dan M. Roman
Its: Executive Vice President, Its: Vice President
Chief Financial Officer and Director One Detroit Center
63 Lincoln Highway 500 Woodward Avenue
Malvern, Pennsylvania 19355 Detroit, Michigan 48226
Attention:Corporate Finance
Signature Page For Short
Term Credit Agreement
BANKS:
COMERICA BANK, Individually, as Issuing
Bank and as Swing Line Bank
By: /s/ Dan M. Roman
----------------
Dan M. Roman
Its: Vice President
Signature Page For Short
Term Credit Agreement
CORESTATES BANK, N.A.
By: /s/ Randall R. Meck
-------------------
Randall R. Meck
Its: Assistant Vice President
Signature Page For Short
Term Credit Agreement
NATIONSBANK, N.A.
By: /s/ Sharon Ellis
-------------------
Sharon Ellis
Its: Vice President
Signature Page For Short
Term Credit Agreement
BHF-BANK AKTIENGESELLSCHAFT
By: /s/ Hans J. Scholz
----------------
Hans J. Scholz
Its: Vice President
By: /s/ John Sykes
----------------
John Sykes
Its: Assistant Vice President
Signature Page For Short
Term Credit Agreement
BANK HAPOALIM B.M.,
PHILADELPHIA BRANCH
By: /s/ Carl Kopfinger
----------------
Carl Kopfinger
Its: Vice President
By: /s/ F.J. McEntee
------------------
F.J. McEntee
Its: Vice President
Signature Page For Short
Term Credit Agreement
BANK LEUMI le-ISRAEL, B.M.
By: /s/ Y. Apelker
----------------
Y. Apelker
Its:
By: /s/ Mira Fink
----------------
Mira Fink
Its:
Signature Page For Short
Term Credit Agreement
PNC BANK, NATIONAL ASSOCIATION
By: /s/ Daniel K. Fitzpatrick
-------------------------
Daniel K. Fitzpatrick
Its: Vice President
Signature Page For Short
Term Credit Agreement
THE BANK OF TOKYO-MITSUBISHI, LTD.
NEW YORK BRANCH
By: /s/ Christopher P. Wilkens
--------------------------
Christopher P. Wilkens
Its: Atttorney-In-Fact
Signature Page For Short
Term Credit Agreement
SOCIETE GENERALE, NEW YORK
BRANCH
By: /s/ Michelle Martin
----------------
Michelle Martin
Its: Assistant Vice President
Signature Page For Short
Term Credit Agreement
FLEET NATIONAL BANK
By: /s/ Mike Barclay
----------------
Mike Barclay
Its: Assistant Vice President
Signature Page For Short
Term Credit Agreement
BARCLAYS BANK PLC
By: /s/ John Biestman
----------------
John Biestman
Its: Director
Signature Page For Short
Term Credit Agreement
ABN AMRO BANK NV
By: /s/ Brian Horgan
----------------
Brian Horgan
Its: Vice President
Signature Page For Short
Term Credit Agreement
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
By: /s/ Michael McCutchin
-----------------------
Michael McCutchin
Its: Managing Director
Signature Page For Short
Term Credit Agreement
THE BANK OF NOVA SCOTIA
By: /s/ J. Alan Edwards
--------------------
J. Alan Edwards
Its: Authorized Signatory
Signature Page For Short
Term Credit Agreement
THE FIRST NATIONAL BANK OF
CHICAGO
By: /s/ Amy L. Robbins
------------------
Amy L. Robbins
Its: Vice President
Signature Page For Short
Term Credit Agreement
WESTDEUTSCHE LANDESBANK
GIROZENTRALE, NEW YORK BRANCH
By: /s/ Alan S. Bookspan
---------------------
Alan S. Bookspan
Its: Vice President
By: /s/ Thomas Lee
----------------
Thomas Lee
Its: Associate
Signature Page For Short
Term Credit Agreement
BANK AUSTRIA AKTIENGESELLSCHAFT
By: /s/ Joseph A. Steiner
----------------
Joseph A. Steiner
Its: Senior Vice President
Signature Page For Short
Term Credit Agreement
THE BANK OF NEW YORK
By: /s/ Walter C. Parelli
---------------------
Walter C. Parelli
Its: Vice President
Signature Page For Short
Term Credit Agreement
BANQUE NATIONALE DE PARIS
By: /s/ Richard L. Sted
----------------
Richard L. Sted
Its: Senior Vice President
By: /s/ Thomas George
----------------
Thomas George
Its: Vice President
Signature Page For Short
Term Credit Agreement
CREDIT AGRICOLE INDOSUEZ
By: /s/ Craig Welch
----------------
Craig Welch
Its: First Vice President
By: /s/ Cheryl Solometo
-------------------
Cheryl Solometo
Its: Vice President
Signature Page For Short
Term Credit Agreement
KEYBANK NATIONAL ASSOCIATION
By: /s/ Karen A. Lee
-----------------
Karen A. Lee
Its: Vice President
Signature Page For Short
Term Credit Agreement
MELLON BANK, N.A.
By: /s/ Clifford Mull
------------------
Clifford Mull
Its: Assistant Vice President
Signature Page For Short
Term Credit Agreement
WACHOVIA BANK, N.A.
By: /s/ Adam T. Ogburn
------------------
Adam T. Ogburn
Its: Vice President
Signature Page For Short
Term Credit Agreement
KREDIETBANK N.V.
By: /s/ John E. Thierfelder
-----------------------
John E. Thierfelder
Its: Vice President
By: /s/ Robert Snauffer
-----------------------
Robert Snauffer
Its: Vice President
Signature Page For Short
Term Credit Agreement
NATEXIS BANQUE
By: /s/ Pieter J. Van Tulder
----------------
Pieter J. Van Tulder
Its: Vice President
By: /s/ John Rigo
----------------
John Rigo
Its: Assistant Vice President
Signature Page For Short
Term Credit Agreement
ISTITUTO BANCARIO SAN PAOLO DI
TORINO, S.p.A.
By: /s/ Luca Saachi
----------------
Luca Saachi
Its: Assistant Vice President
By: /s/ Carlo Persico
----------------
Carlo Persico
Its: DGM
Signature Page For Short
Term Credit Agreement
CREDIT LYONNAIS
By: /s/ Scott R. Chappelka
----------------------
Scott R. Chappelka
Its: Vice President
Signature Page For Short
Term Credit Agreement
SCHEDULE 1.1
Percentages
(Short Term Revolving Credit Agreement)
Lender Percentage Allocations
Comerica Bank 6.82% $18,750,000.00
Nations Bank 6.82% $18,750,000.00
Credit Lyonnais 5.91% $16,250,000.00
Barclays Capital 5.45% $15,000,000.00
CoreStates 5.45% $15,000,000.00
Fleet Bank 5.45% $15,000,000.00
ABN-AMRO 4.55% $12,500,000.00
BHF Bank 4.55% $12,500,000.00
Bank Hapoalim 4.55% $12,500,000.00
Bank Leumi 4.55% $12,500,000.00
Bank of America 4.55% $12,500,000.00
Bank of Nova Scotia 4.55% $12,500,000.00
FNBC 4.55% $12,500,000.00
West LB 4.55% $12,500,000.00
PNC Bank 3.18% $8,750,000.00
Bank Austria 2.27% $6,250,000.00
Bank of New York 2.27% $6,250,000.00
Bank of Tokyo-Mitsubishi 2.27% $6,250,000.00
Banque Nationale de Paris 2.27% $6,250,000.00
Credit Agricole Indosuez 2.27% $6,250,000.00
KeyBank National 2.27% $6,250,000.00
Association
Mellon Bank 2.27% $6,250,000.00
Societe Generale 2.27% $6,250,000.00
Wachovia Bank 2.27% $6,250,000.00
Kredietbank 1.36% $3,750,000.00
Natexis Banque BFCE 1.36% $3,750,000.00
San Paolo Bank 1.36% $3,750,000.00
SCHEDULE 4.1
PRICING MATRIX
Applicable Margin Grid
Vishay Intertechnology, Inc.
$275,000,000 Short Term Revolving Credit Facility
Basis for Pricing LEVEL I LEVEL II LEVEL III LEVEL IV
Leverage Ratio <2.0:1.0 >2.0:1.0 >2.5:1.0 >3.0:1.0
but but
<2.5:1.0 <3.0:1.0
Revolving Credit Facility Fee 0.125% 0.175% 0.20% 0.25%
Eurocurrency-based Margin 0.425% 0.475% 0.625% 0.875%
Prime-based Rate Margin 0 0 0 0
From the Effective Date until the required date of delivery under Section 7.3(c)
of the Company's financial statements for the fiscal quarter ending June 30,
1998, the margins and fee percentages shall be those set forth under the Level
III column, unless the Leverage Ratio, as determined in financial statements
delivered prior to such date, is greater than or equal to 3:1, in which event
the margins and fee percentages shall be those set forth under Level IV.
SCHEDULE 13.6
See Administrative Detail Forms addressed to Agent.