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CREDIT AGREEMENT
Dated as of December 23, 1993
among
CONNER PERIPHERALS, INC.,
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
as Agent
and
THE OTHER FINANCIAL INSTITUTIONS PARTY HERETO
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TABLE OF CONTENTS
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Page
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ARTICLE I
DEFINITIONS........................ 1
1.1 Defined Terms........................................... 1
1.2 Other Definitional Provisions........................... 23
ARTICLE II
THE CREDITS....................... 24
2.1 Amounts and Terms of Commitments........................ 24
2.2 Loan Accounts........................................... 25
2.3 Procedure for Borrowing................................. 25
2.4 Conversion and Continuation Elections................... 26
2.5 Voluntary Termination or Reduction of Commitments....... 28
2.6 Optional Prepayments.................................... 28
2.7 Mandatory Prepayment.................................... 29
2.8 Repayment............................................... 29
2.9 Interest................................................ 29
2.10 Fees................................................... 30
2.11 Computation of Fees and Interest....................... 30
2.12 Payments by the Company................................ 31
2.13 Payments by the Banks to the Agent..................... 32
2.14 Sharing of Payments, etc............................... 33
ARTICLE III
TAXES, YIELD PROTECTION AND ILLEGALITY.......... 33
3.1 Taxes................................................... 33
3.2 Illegality.............................................. 37
3.3 Increased Costs and Reduction of Return................. 37
3.4 Funding Losses.......................................... 38
3.5 Inability to Determine Rates............................ 39
3.6 Certificates of Banks................................... 39
ARTICLE IV
CONDITIONS PRECEDENT.................. 40
4.1 Conditions of Commitments............................... 40
(a) Credit Agreement................................. 40
(b) Resolutions; Incumbency.......................... 40
(c) Articles of Incorporation; By-laws
and Good Standing................................ 40
(d) Legal Opinions................................... 40
(e) Payment of Fees.................................. 41
(f) Certificate...................................... 41
(g) Financial Statements............................. 41
(h) Certified Documents.............................. 41
(i) Other Documents.................................. 41
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4.2 Conditions to all Borrowings............................ 41
(a) Notice of Borrowing.............................. 41
(b) Continuation of Representations and
Warranties....................................... 41
(c) No Existing Default.............................. 41
(d) No Material Adverse Change....................... 42
ARTICLE V
REPRESENTATIONS AND WARRANTIES............. 42
5.1 Corporate Existence and Power........................... 42
5.2 Corporate Authorization; No Contravention............... 43
5.3 Governmental Authorization.............................. 43
5.4 Binding Effect.......................................... 43
5.5 Litigation.............................................. 43
5.6 No Default.............................................. 44
5.7 ERISA Compliance........................................ 44
5.8 Use of Proceeds; Margin Regulations..................... 45
5.9 Title to Properties; Liens.............................. 45
5.10 Taxes................................................... 45
5.11 Financial Condition..................................... 45
5.12 Environmental Matters................................... 46
5.13 Regulatory Entities..................................... 46
5.14 No Burdensome Restrictions.............................. 47
5.15 Solvency................................................ 47
5.16 Labor Relations......................................... 47
5.17 Intellectual Property Matters........................... 47
5.18 Subsidiaries............................................ 48
5.19 Broker's; Transaction Fees.............................. 48
5.20 Insurance............................................... 48
5.21 Internal Control........................................ 48
5.22 Full Disclosure......................................... 48
ARTICLE VI
AFFIRMATIVE COVENANTS................. 49
6.1 Financial Statements.................................... 49
6.2 Certificates; Other Information......................... 50
6.3 Notices................................................. 50
6.4 Preservation of Corporate Existence, Etc................ 52
6.5 Maintenance of Property................................. 53
6.6 Insurance............................................... 53
6.7 Payment of Obligations.................................. 53
6.8 Compliance with Laws.................................... 53
6.9 Inspection of Property and Books and Records............ 54
6.10 Environmental Laws...................................... 55
6.11 Use of Proceeds......................................... 55
6.12 Internal Controls....................................... 55
6.13 Subordinated Debt Notices............................... 56
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ARTICLE VII
NEGATIVE COVENANTS..................... 56
7.1 Limitation on Liens..................................... 56
7.2 Dispositions of Assets.................................. 61
7.3 Consolidations and Mergers.............................. 65
7.4 Loans and Investments................................... 66
7.5 Limitation on Subsidiary Debt........................... 71
7.6 Transactions with Affiliates............................ 71
7.7 Compliance with ERISA................................... 71
7.8 Restricted Payments..................................... 72
7.9 Modified Quick Ratio.................................... 73
7.10 Leverage Ratio.......................................... 73
7.11 Minimum Tangible Net Worth.............................. 73
7.12 Losses in One Quarter................................... 74
7.13 Losses in Two Consecutive Quarters...................... 74
7.14 Change in Business...................................... 74
7.15 Accounting Changes...................................... 74
7.16 Indenture/Note Amendment................................ 74
7.17 Cessation of Business................................... 74
ARTICLE VIII
EVENTS OF DEFAULT................... 75
8.1 Event of Default........................................ 75
(a) Non-Payment...................................... 75
(b) Non-Payment of Other Amounts..................... 75
(c) Representation or Warranty....................... 75
(d) Specific Defaults................................ 75
(e) Other Defaults................................... 75
(f) Cross-Default.................................... 75
(g) Cross-Acceleration............................... 76
(h) Bankruptcy or Insolvency......................... 76
(i) Involuntary Proceedings.......................... 77
(j) ERISA............................................ 77
(k) Monetary Judgments............................... 78
(l) Non-Monetary Judgments........................... 78
(m) Invalidity of Subordination
Provisions....................................... 78
8.2 Remedies................................................ 78
8.3 Rights Not Exclusive.................................... 79
8.4 Certain Financial Covenant Defaults..................... 79
ARTICLE IX
THE AGENT....................... 79
9.1 Appointment and Authorization........................... 79
9.2 Delegation of Duties.................................... 79
9.3 Liability of Agent...................................... 80
9.4 Reliance by Agent....................................... 80
9.5 Notice of Default....................................... 81
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9.6 Credit Decision......................................... 81
9.7 Indemnification......................................... 82
9.8 Agent in Individual Capacity............................ 82
9.9 Successor Agent......................................... 82
ARTICLE X
MISCELLANEOUS...................... 83
10.1 Amendments and Waivers................................. 83
10.2 Notices................................................ 84
10.3 No Waiver; Cumulative Remedies......................... 84
10.4 Costs and Expenses..................................... 85
10.5 Indemnity.............................................. 85
10.6 Payments Set Aside..................................... 85
10.7 Successors and Assigns................................. 86
10.8 Assignments, Participations, etc....................... 86
10.9 Set-off................................................ 88
10.10 Termination of the Commitments under Existing Facility. 88
10.11 Notification of Addresses, Lending Offices, Etc........ 88
10.12 Counterparts........................................... 89
10.13 Severability........................................... 89
10.14 No Third Parties Benefited............................. 89
10.15 Governing Law and Jurisdiction......................... 89
10.16 Waiver of Jury Trial................................... 89
10.17 Entire Agreement....................................... 90
SCHEDULES
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Schedule 2.1(a) Commitments
Schedule 2.3(c) Payment Offices
Schedule 7.1 Permitted Liens
Schedule 7.4(h) Permissible Banks
Schedule 7.4(p) Investments
EXHIBITS
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Exhibit 2.3 Notice of Borrowing
Exhibit 2.4 Notice of Conversion/Continuation
Exhibit 4.1(d)(i) Opinion of Company's Counsel
Exhibit 6.1(b) Consolidating Statement Certificate
Exhibit 6.2(a) Compliance Certificate
Exhibit 6.13 Notice to Trustee
Exhibit 10.8(a) Assignment and Acceptance
CREDIT AGREEMENT
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THIS CREDIT AGREEMENT is entered into as of December 23, 1993, among CONNER
PERIPHERALS, INC., a Delaware corporation (the "Company"), the several financial
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institutions from time to time party to this Agreement (collectively, the
"Banks"; individually, a "Bank"), and BANK OF AMERICA NATIONAL TRUST AND SAVINGS
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ASSOCIATION, as agent for the Banks (the "Agent").
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WHEREAS, the Banks have agreed to make available to the Company a revolving
credit facility upon the terms and conditions set forth in this Agreement;
NOW, THEREFORE, in consideration of the mutual agreements, provisions and
covenants contained herein, the parties agree as follows:
ARTICLE I
DEFINITIONS
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1.1 Defined Terms. In addition to the terms defined elsewhere in this
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Agreement, the following terms have the following meanings:
"Affiliate" means, as to any Person, any other Person which, directly
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or indirectly, is in control of, is controlled by, or is under common
control with, such Person. A Person shall be deemed to control another
Person if the controlling Person possesses, directly or indirectly, the
power to direct or cause the direction of the management and policies of the
other Person, whether through the ownership of voting securities, by
contract or otherwise. Without limitation, any director, executive officer
or beneficial owner of ten percent (10%) or more of the equity of a Person
shall for the purposes of this Agreement, be deemed to control the other
Person.
"Agent" means Bank of America National Trust and Savings Association in
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its capacity as agent for the Banks hereunder, and any successor agent.
"Agent-Related Persons" means BofA and any successor agent arising
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under Section 9.9, together with their respective Affiliates, including the
Arranger (in the case of BofA), and the officers, directors, employees,
agents and attorneys-in-fact of such Persons and Affiliates.
"Aggregate Commitment" means the combined Commitments of the Banks in
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the amount of $100,000,000, as such amount may be reduced from time to time
pursuant to this Agreement.
"Agreement" means this Credit Agreement, together with the exhibits and
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Schedules hereto and the Disclosure Letter, in each case, as amended,
supplemented or modified from time to time.
"Annual Disposition Measurement Period" has the meaning specified in
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subsection 7.2(f)(i)(B).
"Applicable Margin" means
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For each day on which the The Applicable
aggregate principal of Margin, per annum,
outstanding Loans (after is:
taking into account any ____________________
Loans made or paid on such For Base For
day) is: Rate Euro-
Loans: dollar
Rate
Loans:
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Less than or equal to 50% 0.00% 1.00%
of the Aggregate
Commitment
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More than 50% of the 0.25% 1.25%
Aggregate Commitment
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The Applicable Margin shall be adjusted automatically as to all Loans
then outstanding as of the effective date of any change in the Applicable
Margin, as set forth therein.
"Arcada Holdings" means that certain corporation formed, or to be
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formed, pursuant to the Arcada Letter of Intent to act as the holding
company for the Company's software disk back-up, data management,
hierarchical storage management and related applications business.
"Arcada Letter of Intent" means that certain Letter of Intent, entered
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into as of December 13, 1993, between Archive Corporation, a wholly-owned
subsidiary of the Company, the Company and Quest Development Corporation.
"Arranger" means BA Securities, Inc., a wholly-owned subsidiary of
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BankAmerica Corporation. The Arranger is a registered broker-dealer and
permitted to underwrite and deal in Ineligible Securities.
"Asset Disposition Date" has the meaning specified in subsection
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7.2(f)(i)(A).
"Assignee" has the meaning specified in Section 103.
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"Assignment and Acceptance" has the meaning specified in subsection
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10.8(a).
"Attorney Costs" means and includes all reasonable fees and
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disbursements of any law firm or other external counsel, the reasonable
allocated cost of internal legal services and all reasonable disbursement
of internal counsel.
"Banks" means the financial institutions from time to time party to
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this Agreement.
"Base Rate" means, for any day, the higher of:
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(a) the rate of interest in effect for such day as publicly
announced from time to time by BofA in San Francisco, California, as its
"reference rate." (It is a rate set by BofA based upon various factors
including BofA's costs and desired return, general economic conditions
and other factors, and is used as a reference point for pricing some
loans, which may be priced at, above, or below such announced rate.);
and
(b) 0.50% per annum above the latest Federal Funds Rate.
Any change in the reference rate announced by BofA shall take effect at
the opening of business on the day specified in the public announcement of
such change.
"Base Rate Loan" means a Loan that bears interest based on the Base
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Rate.
"Board of Directors" means, at any time, the board of directors of the
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Company or any committee thereof which, in the instance, shall have the
lawful power to exercise the power and authority of such board of directors.
"BofA" means Bank of America National Trust and Savings Association, a
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national banking association.
"Borrowing" means a borrowing hereunder consisting of Loans made to the
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Company on the same day by the Banks pursuant to Article II.
"Borrowing Date" means any date on which a Borrowing occurs under
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Section 2.3.
"Business Day" means any day other than a Saturday, Sunday or other day
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on which commercial banks in Boston, New York City or San Francisco are
authorized or required by law to close and, if the applicable Business Day
relates to any Eurodollar Rate Loan, means such a day on which dealings are
carried on in the London interbank market.
"Capital Adequacy Regulation" means any guideline, request or directive
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of any central bank or other Governmental Authority, or any other law, rule
or regulation, whether or not having the force of law, in each case,
regarding capital adequacy of any bank or of any corporation controlling a
bank.
"Capitalized Lease Obligations" means any rental obligation of the
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Company or any of its Subsidiaries that, under GAAP, is required to be
capitalized on the books of the Company and its Subsidiaries, taken at the
amount thereof accounted for as indebtedness net of interest expense
determined on a consolidated basis, in accordance with GAAP.
"Cash Equivalents" means all Investments described in subsections
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7.4(a), (c), (f), (g), (h), (i), (j), (k) and (l), to the extent classified
as current assets in accordance with GAAP.
"Cash Flow Contribution" means, for any period, in respect of any
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Property of the Company or a Subsidiary of the Company, the amount of
Consolidated Operating Cash Flow fairly attributable to such Property during
such period, expressed as a percentage of such Consolidated Operating Cash
Flow.
"Change in Control" means the direct or indirect acquisition by any
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person (as such term is used in Section 13(d) and Section 14(d)(2) of the
Exchange Act), or related persons constituting a group (as such term is used
in Rule 13d-5 under the Exchange Act), of
(i) beneficial ownership of issued and outstanding shares of
voting stock of the Company, the result of which acquisition is that
such person or such group possesses in excess of 50% of the combined
voting power of all then issued and outstanding voting stock of the
Company, or
(ii) the power to elect, appoint, or cause the election or
appointment of at least a majority of the members of the Board of
Directors.
"Closing Date" means the date on which all conditions precedent set
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forth in Section 4.1 are satisfied or waived.
"Code" means the Internal Revenue Code of 1986, as amended.
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"Commitment", with respect to each Bank, has the meaning specified in
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subsection 2.1(a).
"Commitment Percentage" means, as to any Bank, the percentage
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equivalent of such Bank's Commitment divided by the Aggregate Commitment.
"Consolidated Assets" means, as of any date of determination, the
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aggregate amount of all assets of the Company and its Subsidiaries that
would, in accordance with
GAAP, be required to be shown as assets on a consolidated balance sheet of
the Company and its Subsidiaries as of such date.
"Consolidated Current Liabilities" means, as of any date of
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determination, all amounts which would, in accordance with GAAP, be included
under current liabilities on a consolidated balance sheet of the Company and
its Subsidiaries at such date.
"Consolidated Net Income" for any fiscal period means net earnings (or
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loss) after income taxes of the Company and its Subsidiaries determined on a
consolidated basis in accordance with GAAP, but excluding:
(a) any gain or loss arising from the sale of capital assets
(other than any gain or loss of less than $100,000 from any such sale);
(b) any gain or loss arising from any write-up of assets
subsequent to December 31, 1992 (other than as a consequence of a
physical review of inventory or other assets), any gain arising from the
acquisition of any securities of the Company or any Subsidiary, or any
other extraordinary item;
(c) earnings of any Person, substantially all the assets of which
have been acquired in any manner, realized by such other Person prior to
the date of such acquisition;
(d) net earnings of any Person (other than a Subsidiary) in which
the Company or any Subsidiary shall have an ownership interest unless
such net earnings shall have actually been received by the Company or
such Subsidiary in the form of cash distributions or cancellation of
Debt;
(e) any portion of the net earnings of any Subsidiary that for any
reason is unavailable, by law or pursuant to any contractual
restriction, for payment of dividends to the Company or any other
Subsidiary;
(f) the earnings of any Person to which assets of the Company
shall have been sold, transferred or disposed of, or into which the
Company shall have merged, prior to the date of such transaction; and
(g) any portion of the net earnings of the Company that cannot be
converted into United States dollars;
all determined in accordance with GAAP.
"Consolidated Operating Cash Flow" means, for any period, determined on
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a consolidated basis for the Company and its Subsidiaries,
(a) Consolidated Net Income for such period, plus
(b) the aggregate amount of depreciation and amortization accrued
for such period by the Company and its Subsidiaries (to the extent, but
only to the extent, each component of such aggregate amount was
reflected in the computation of Consolidated Net Income for such period)
determined on a consolidated basis.
"Consolidated Senior Debt" means, at any time, without duplication, the
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amount of Senior Debt outstanding at such time, determined on a consolidated
basis.
"Consolidated Subsidiary" means, at any time, any Subsidiary of the
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Company that in accordance with GAAP would be consolidated with the Company
for financial reporting purposes.
"Contingent Obligation" means, as applied to the Company and its
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Subsidiaries, any direct or indirect liability of any such Person with
respect to any Indebtedness, lease (other than operating lease obligations),
dividend, letter of credit or other obligation (the "primary obligations") of
another Person, other than the Company or any of its Consolidated
Subsidiaries (the "primary obligor"), including, without limitation, any
obligation of that Person, whether or not contingent, (a) to purchase,
repurchase or otherwise acquire such primary obligations or any Property
constituting direct or indirect security therefor, or (b) to advance or
provide funds (i) for the payment or discharge of any such primary
obligation, or (ii) to maintain working capital or equity capital of the
primary obligor or otherwise to maintain the net worth or solvency or any
balance sheet item, level of income or financial condition of the primary
obligor, or (c) to purchase Property, securities or services primarily for
the purpose of assuring the owner of any such primary obligation of the
ability of the primary obligor to make payment of such primary obligation, or
(d) otherwise to assure or hold harmless the holder of any such primary
obligation against loss in respect thereof or (e) the liability of a general
partner in connection with a partnership that is not a Subsidiary of such
Person; provided, however, that the term Contingent Obligation shall not
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include endorsements of instruments for deposit or collection in the ordinary
course of business. The amount of any Contingent Obligation shall be deemed
to be an amount equal to the stated or determinable amount of the primary
obligation supported by such Contingent Obligation or, if not stated or if
indeterminable, the maximum reasonably anticipated liability in respect
thereof.
"Contractual Obligations" means, as to any Person, any provision of any
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security issued by such Person or of any agreement, undertaking, contract,
indenture, mortgage, deed of trust or other instrument, document or agreement
to which such Person is a party or by which it or any of its Property is
bound.
"Controlled Group" means the Company and all Persons (whether or not
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incorporated) under common control with the Company or any of its
Subsidiaries pursuant to section 414(b) or (c) of the Code.
"Conversion/Continuation Date" means any date on which the Company
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elects to convert a Base Rate Loan to a Eurodollar Rate Loan or a Eurodollar
Rate Loan to a Base Rate Loan, or to continue a Eurodollar Rate Loan maturing
on such date as a Eurodollar Rate Loan with a new Interest Period, all as set
forth in a Notice of Conversion/Continuation.
"Debt" of any Person, at any time, means:
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(a) indebtedness for money borrowed of such Person;
(b) indebtedness that is secured by any Lien on Property owned by
such Person, whether or not the indebtedness secured thereby shall have
been assumed by such Person;
(c) Capitalized Lease Obligations of such Person;
(d) guarantees, endorsements (other than endorsements of
negotiable instruments for collection in the ordinary course of
business) and other contingent liabilities (whether direct or indirect)
of such Person in connection with the obligations, stock or dividends of
any other Person, provided that guarantees by such Person of contingent
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obligations of other Persons shall be excluded from this clause (d);
(e) obligations of such Person under any contract providing for
the making of loans, advances or capital contributions to any other
Person, or for the purchase of any Property from any other Person, in
each case primarily in order to enable such other Person to maintain
working capital, net worth or any other balance sheet condition or to
pay debts, dividends or expenses, to the extent that such other Person
is obligated to maintain such condition or make such payments and has
failed to do so;
(f) obligations of such Person under any contract for the purchase
of materials, supplies or other Property or services if such contract
(or any related document) requires that payment for such materials,
supplies or other Property or services shall be made regardless of
whether or not delivery of such materials, supplies or other Property or
services is ever made or tendered; and
(g) obligations under any other contract which, in legal effect,
is substantially equivalent to a guarantee, provided that guarantees by
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such Person of contingent obligations of other Persons shall be excluded
from this clause (g),
all as determined in accordance with GAAP, provided that such items shall
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only constitute Debt to the extent that, in accordance with GAAP, such items
would be (and only to the extent such items would be) included in determining
total liabilities as shown on the liability side of the balance sheet of such
Person (assuming that such Person was the primary obligor in respect of the
underlying obligation with respect to any guarantee or other contingent
obligation, as contemplated by the next succeeding sentence), provided,
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further, that notwithstanding the foregoing, "Debt" shall not include (i)
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accrued compensation, (ii) taxes payable and deferred taxes, (iii) trade
payables, including intercompany payables in the nature of trade payables,
(iv) any obligations payable, at the option of the obligor, in equity
securities of the obligor, or (v) any guarantee or contingent liability or
obligation with respect to any of the items set forth in the foregoing
clauses (i) to (iv), inclusive. For purposes of computing the amount of any
obligation specified in either of the foregoing clauses (d) or (g), it shall
be assumed that the indebtedness or other obligations which are the subject
of such guarantee, endorsement or other contingent liability are direct
obligations of the obligor on such guarantee, endorsement or contingent
liability (but not in an amount in excess of the maximum liability of such
obligor) and, therefore, are of the nature and type of, and bear interest at
the rate applicable to, such indebtedness or other obligations.
"Default" means any event which, with the giving of notice, the lapse of
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time, or both, would constitute an Event of Default other than an Event of
Default described in Section 8.1(b).
"Determination Date" means the last day of each fiscal quarter of the
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Company.
"Disclosure Letter" means that certain letter of even date herewith by
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the Company addressed to the Agent containing the Schedules referenced in
Article V hereof.
"documents" includes any and all instruments, documents, agreements,
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certificates and other writings, however evidenced.
"Dollars," "dollars" and "$" each mean lawful money of the United
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States.
"Domestic Lending Office" means, with respect to each Bank, the office
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of that Bank designated as such in the signature pages hereto or such other
office of the Bank as it may from time to time specify to the Company and the
Agent.
"Domestic Receivables" means all receivables of the Company and any
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Consolidated Subsidiary of the Company having its chief executive office
located in the United States, as determined in accordance with GAAP,
excluding any receivable representing an obligation of the Company or any
Subsidiary of the Company.
"Eligible Receivables" means all Domestic Receivables and Foreign
--------------------
Receivables, provided, however, that Foreign Receivables shall not exceed 50%
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of such aggregate amount.
"Eligible Transferee" means (i) a commercial bank organized under the
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laws of the United States, or any state thereof, and having a combined
capital and surplus of at least $100,000,000; or (ii) a commercial bank
organized under the laws of any other country which is a member of the
Organization for Economic Cooperation and Development (the "OECD"), or a
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political subdivision of any such country, and having a combined capital and
surplus of at least $100,000,000, provided that such bank is acting through a
branch or agency located in the United States.
"Environmental Claim" means all claims, however asserted, by any
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Governmental Authority or other Person alleging potential liability or
responsibility for violation of any Environmental Law or for release or
injury to the environment or threat to public health, personal injury
(including sickness, disease or death), property damage, natural resources
damage, or otherwise alleging liability or responsibility for damages
(punitive or otherwise), cleanup, removal, remedial or response costs,
restitution, civil or criminal penalties, injunctive relief, or other type of
relief, resulting from or based upon (a) the presence, placement, discharge,
emission or release (including intentional and unintentional, negligent and
non-negligent, sudden or non-sudden, accidental or non-accidental placement,
spills, leaks, discharges, emissions or releases) of any Hazardous Material
at, in or from Property, whether or not owned by the Company, or (b) any
other circumstances forming the basis of any violation, or alleged violation,
of any Environmental Law.
"Environmental Laws" means all federal, state or local laws, statutes,
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common law duties, rules, regulations, ordinances and codes, together with
all administrative orders, directed duties, requests, licenses,
authorizations and permits of, and agreements with, any Governmental
Authorities, in each case relating to environmental, health and safety;
including the Comprehensive Environmental Response, Compensation and
Liability Act of 1980 (42 USC (S)(S) 4601, et. seq.), the Clean Air Act (42
USC (S) 7401), the Federal Water Pollution Control Act of 1972 (33 USC (S)
1251), the Solid Waste Disposal Act (42 USC (S) 6901), the Federal Resource
Conservation and Recovery Act (42 USC (S)(S) 6901 et seq.), the Toxic
Substances Control Act (15 USC (S) 2601), the Emergency Planning and
Community Right-to-Know Act, the California Hazardous Waste Control Law
(Health and Safety Code (S)(S) 25100 et. seq.), the California Solid Waste
Management, Resource, Recovery and Recycling Act (Government Code (S)
66796.22), the California Water Code and the California Health and Safety
Code.
"Environmental Permits" means all licenses, permits, authorizations and
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registrations required under any Environmental Law.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
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amended, and any regulation promulgated thereunder.
"ERISA Affiliate" means any trade or business (whether or not
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incorporated) under common control with the Company or any Subsidiary of the
Company within the meaning of section 414(b) or 414(c) of the Code.
"ERISA Event" means (a) a Reportable Event with respect to a Qualified
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Plan or a Multiemployer Plan; (b) a withdrawal by any member of the
Controlled Group from a Qualified Plan subject to Section 4063 of ERISA
during a plan year in which it was a substantial employer (as defined in
section 4001(a)(2) of ERISA); (c) a complete or partial withdrawal (as such
terms are defined in section 4201(b) of ERISA) by any member of the
Controlled Group from a Multiemployer Plan; (d) the filing of a notice of
intent to terminate, the treatment of a plan amendment as a termination under
section 4041 or 4041A of ERISA or the commencement of proceedings by the PBGC
to terminate a Qualified Plan or Multiemployer Plan subject to Title IV of
ERISA; (e) a failure to make required contributions to a Qualified Plan or
Multiemployer Plan; (f) an event or condition which could reasonably be
expected to constitute grounds under section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any Qualified
Plan or Multiemployer Plan; (g) the imposition of any liability under Title
IV of ERISA, other than PBGC premiums due but not delinquent under section
4007 of ERISA, upon any member of the Controlled Group; (h) an application
for a funding waiver or an extension of any amortization period pursuant to
section 412 of the Code with respect to any Qualified Plan, Multiemployer
Plan or any other plan that would be a Qualified Plan or Multiemployer Plan
if the term "Controlled Group" were defined to include Persons under common
control with the Company or any of its
Subsidiaries pursuant to section 414(m) or (o) of the Code; or (i) any member
of the Controlled Group engages in or otherwise becomes liable for a non-
exempt prohibited transaction (as defined in section 406 of ERISA or section
4975 of the Code with respect to any Qualified Plan or Multiemployer Plan).
"Existing Facility" means the Credit Agreement dated as of January 3,
-----------------
1992, as heretofore amended, among the Company, the several financial
institutions party thereto and Bank of America National Trust and Savings
Association, as agent for such financial institutions.
"Eurodollar Lending Office" means with respect to each Bank, the office
-------------------------
of such Bank designated as such in the signature pages hereto or such other
office of such Bank as such Bank may from time to time specify to the Company
and the Agent.
"Eurodollar Rate" means, for any Interest Period, with respect to
---------------
Eurodollar Rate Loans comprising part of the same Borrowing, the rate of
interest per annum (rounded upward to the nearest 1/16th of 1%) determined by
the Agent as follows:
LIBOR
Eurodollar Rate = ------------------------------------
1.00 - Eurodollar Reserve Percentage
Where,
"Eurodollar Reserve Percentage" means for any day for any Interest
-----------------------------
Period the maximum reserve percentage (expressed as a decimal, rounded
upward to the nearest 1/100th of 1%) in effect on such day (whether or
not applicable to any Bank) under regulations issued from time to time
by the FRB for determining the maximum reserve requirement (including
any emergency, supplemental or other marginal reserve requirement) with
respect to Eurocurrency funding (currently referred to as "Eurocurrency
liabilities") having a term comparable to such Interest Period; and
"LIBOR" means the rate of interest per annum determined by the
-----
Agent to be the rate of interest per annum (rounded upward to the
nearest 1/16th of 1%) notified to the Agent by the Reference Bank as the
rate of interest at which dollar deposits in the approximate amount of
the amount of the Loan to be made or continued as, or converted into, a
Eurodollar Rate Loan by the Reference Bank and having a maturity
comparable to such Interest Period would be offered to major banks in
the London interbank market at their request at approximately 11:00 a.m.
(London time) two Business Days prior to the commencement of such
Interest Period.
The Eurodollar Rate shall be adjusted automatically as to all
Eurodollar Rate Loans then outstanding as of the effective date of any
change in the Eurodollar Reserve Percentage.
"Eurodollar Rate Loan" means a Loan that bears interest at a rate based
--------------------
on the Eurodollar Rate.
"Event of Default" means any of the events specified in Section 8.1.
----------------
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
------------
"Federal Funds Rate" means, for any day, the rate set forth in the
------------------
weekly statistical release designated as H.15(519), or any successor
publication, published by the FRB (including any such successor, "H.15(519)")
on the preceding Business Day opposite the caption "Federal Funds
(Effective)"; or, if such rate is not so published on any such preceding
Business Day, the rate for such day will be the arithmetic mean as determined
by the Agent of the rates for the last transaction in overnight Federal funds
arranged prior to 9:00 a.m. (New York City time) on that day by each of three
leading brokers of Federal funds transactions in New York City selected by
the Agent.
"Foreign Receivables" means all receivables of any Consolidated
-------------------
Subsidiary of the Company not having its chief executive office located in
the United States, as determined in accordance with GAAP, excluding any
receivable representing an obligation of the Company or any Subsidiary of
the Company.
"Four Quarter Period" has the meaning specified in subsection
-------------------
7.2(f)(ii)(A).
"FRB" means the Board of Governors of the Federal Reserve System or any
---
successor thereof.
"GAAP" means generally accepted accounting principles set forth from
----
time to time in the opinions and pronouncements of the Accounting Principles
Board and the American Institute of Certified Public Accountants and
statements and pronouncements of the Financial Accounting Standards Board (or
agencies with similar functions of comparable stature and authority within
the U.S. accounting profession), or in such other statements by such other
entity as may be in general use by significant segments of the U.S.
accounting profession, which are applicable to the circumstances as of the
date of determination.
"Governmental Authority" means any nation or government, any state or
----------------------
other political subdivision thereof, any central bank (or similar monetary or
regulatory authority) thereof,
any entity exercising executive, legislative, judicial, regulatory or
administrative functions of any of the foregoing, and any corporation or
other entity owned or controlled, through stock or capital ownership or
otherwise, by any of the foregoing.
"Hazardous Materials" means all those substances which are regulated by,
-------------------
or which may form the basis of liability under, any Environmental Law,
including all substances identified under any Environmental Law as a
pollutant, contaminant, waste, solid waste, hazardous waste, hazardous
constituent, special waste, hazardous substance, hazardous material, or toxic
substance, or petroleum or petroleum derived substance or waste.
"Indebtedness" of any Person means, without duplication, (a) all
------------
indebtedness for borrowed money; (b) all obligations issued, undertaken or
assumed as the deferred purchase price of Property or services (other than
ordinary course trade payables); (c) all reimbursement obligations with
respect to surety bonds, letters of credit, bankers' acceptances and similar
instruments (in each case, whether or not matured); (d) all obligations
evidenced by notes, bonds, debentures or similar instruments, including
obligations so evidenced incurred in connection with the acquisition of
Property, assets or businesses; (e) all indebtedness created or arising under
any conditional sale or other title retention agreement, or incurred as
financing, in either case with respect to Property acquired by the Person
(even though the rights and remedies of the seller or bank under such
agreement in the event of default are limited to repossession or sale of such
Property); (f) all Capitalized Lease Obligations; (g) all net obligations
with respect to Rate Contracts; (h) all indebtedness referred to in
paragraphs (a) through (g) above secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be secured
by) any Lien upon or in Property (including accounts and contracts rights)
owned by such Person, even though such Person has not assumed or become
liable for the payment of such Indebtedness (but only to the extent of the
lesser of (x) the indebtedness referred to in paragraphs (a) through (g)
above so secured or (y) the fair market value of the Property subject to such
Lien); and (i) all direct or indirect guaranties in respect of and
obligations (contingent or otherwise) to purchase or otherwise acquire, or
otherwise to assure a creditor against loss in respect of, indebtedness or
obligations of others of the kinds referred to in paragraphs (a) through (g)
above.
"Indemnified Liabilities" has the meaning specified in Section 10.5.
-----------------------
"Indemnified Person" has the meaning specified in Section 10.5.
------------------
"Ineligible Securities" means securities which may not be underwritten
---------------------
or dealt in by member banks of the Federal Reserve System under Section 16 of
the Banking Act of 1933 (12 U.S.C. (S) 24, Seventh), as amended.
"Insolvency Proceeding" means (a) any case, action or proceeding before
---------------------
any court or other Governmental Authority of competent jurisdiction relating
to bankruptcy, reorganization, insolvency, liquidation, receivership,
dissolution, winding-up or relief of debtors, or (b) any general assignment
for the benefit of creditors, composition, marshalling of assets for
creditors, or other, similar arrangement in respect of its creditors
generally or any substantial portion of its creditors; undertaken under U.S.
Federal, state or foreign law, including the Bankruptcy Code (12 U.S.C. (S)
101 et seq.).
-- ---
"Interest Payment Date" means, with respect to a Eurodollar Rate Loan,
---------------------
the last day of each Interest Period applicable to such Loan and, with
respect to a Base Rate Loan, the last day of each calendar quarter and each
date such Base Rate Loan is converted into a Eurodollar Rate Loan; provided,
--------
however, that if any Interest Period for a Eurodollar Rate Loan exceeds three
-------
months, interest shall also be paid on the date which falls three months
after the beginning of such Interest Period.
"Interest Period" means, with respect to any Eurodollar Rate Loan, the
---------------
period commencing on the Business Day the Loan is disbursed or on the
Conversion/Continuation Date on which the Loan is converted into or continued
as a Eurodollar Rate Loan and ending on the date one, two, three or six
months thereafter, as selected by the Company in its Notice of Borrowing or
Notice of Conversion/Continuation; provided that:
--------
(i) if any Interest Period would otherwise end on a day which is
not a Business Day, that Interest Period shall be extended to the
following Business Day unless the result of such extension would be to
carry such Interest Period into another calendar month, in which event
such Interest Period shall end on the immediately preceding Business
Day;
(ii) any Interest Period that begins on the last Business Day of a
calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Business Day of the calendar month at the
end of such Interest Period; and
(iii) no Interest Period shall be requested for any Loan that
extends beyond the Termination Date.
"Investment" has the meaning specified in Section 7.4.
----------
"IRS" means the Internal Revenue Service or any entity succeeding to any
---
of its principal functions under the Code.
"Italian Debt" means Indebtedness incurred by Conner Peripherals Europe
------------
S.p.A., in an aggregate principal amount (expressed in Italian Lire)
equivalent to approximately $16,800,000 of the date of this Agreement, and
not to exceed such principal amount except as a result of currency
fluctuations, plus accrued interest in respect thereof, arising under the
following agreements: (i) the agreement dated as of December 10, 1991,
entered into with Finaosta S.p.A. in the original principal amount of Lire
9,000,000,000, (ii) the agreement dated as of December 29, 1992, entered into
with Finaosta S.p.A., in the original principal amount of Lire 4,500,000,000,
(iii) agreement dated as of June 25, 1991, entered into with Finaosta S.p.A.,
in the original principal amount of Lire 10,000,000,000, (iv) agreement dated
as of October 31, 1989, entered into with I.M.I. Istituto Mobiliare Italiano
and Olivetti System & Network S.r.l., in the original principal amount of
Lire 10,350,000,000, and (v) agreement dated as of April 30, 1991, entered
into with I.M.I. Instituto Mobiliare Italiano and Olivetti System & Network
S.r.l., in the original principal amount of Lire 6,400,000,000.
"Lending Office" means, with respect to any Bank, the office or offices
--------------
of the Bank specified as its "Lending Office" or "Domestic Lending Office" or
"Eurodollar Lending Office", as the case may be, beneath its name on the
applicable signature page hereto, or such other office or offices of the Bank
as it may from time to time specify to the Company and the Agent.
"Lien" means any mortgage, deed of trust, pledge, hypothecation,
----
security interest, assignment intended for security (whether whole or
partial, absolute or contingent) or of accounts or chattel paper, charge or
deposit arrangement, encumbrance, lien (statutory or other) or other priority
or preferential arrangement of any kind or nature whatsoever in respect of
any Property owned or held by any Person (including, without limitation,
those created by, arising under or evidenced by any conditional sale or other
title retention agreement, the interest of a lessor under a Capitalized Lease
Obligation, any financing lease having substantially the same economic effect
as any of the foregoing, or the filing of any financing statement naming the
owner of the asset to which such lien relates as debtor, under the UCC or any
comparable law) and any contingent or other agreement to provide any of the
foregoing.
"Loan" means an extension of credit by a Bank to the Company pursuant to
----
Article II, and may be a Base Rate Loan or Eurodollar Rate Loan.
"Loan Agreements" means this Agreement, together with all amendments,
---------------
modifications and supplements thereto from time to time entered into by the
parties hereto in accordance with the terms hereof, and any and all consents,
waivers and other instruments and agreements executed by the parties hereto
in connection with any of the foregoing.
"Loan Documents" means the Loan Agreements, together with all
--------------
certificates, delivered from time to time to the Agent in connection
therewith, including without limitation the Disclosure Letter.
"Majority Banks" means at any time Banks holding at least sixty percent
--------------
(60%) of the then aggregate unpaid principal amount of the Loans, or, if no
such principal amount is then outstanding, Banks having at least sixty
percent (60%) of the Commitments.
"Margin Stock" means "margin stock" as such term is defined in
------------
Regulation G, T, U or X of the FRB.
"Material Adverse Compliance Effect" means a material adverse change in
----------------------------------
or a material adverse effect upon, any of (a) the operations, business,
properties, condition (financial or otherwise) or prospects of the Company or
the Company and its Subsidiaries taken as a whole; (b) the ability of the
Company to perform its obligations and to avoid any Event of Default under
any Loan Agreement (other than any such non-performance or any Event of
Default which has been waived in accordance with the terms hereof); or (c)
the legality, validity, binding effect or enforceability of any Loan
Agreement.
"Material Adverse Payment Effect" means a material adverse change in, or
-------------------------------
a material adverse effect upon, any of (a) the operations, business,
properties, condition (financial or otherwise) or prospects of the Company or
the Company and its Subsidiaries taken as a whole; (b) the ability of the
Company to perform its Obligations hereunder in accordance with their terms;
or (c) the legality, validity, binding effect or enforceability of any Loan
Agreement.
"Material Subsidiary" means, at any time, (a) any Consolidated
-------------------
Subsidiary which either (i) at such time owns assets having a net book value
equal to or greater than ten percent (10%) of Consolidated Assets, or (ii)
for the most recent fiscal quarter or the most recent fiscal year had income
from operations equal to or greater than five percent (5%) of the income from
operations for the Company and its Subsidiaries, determined on a consolidated
basis in accordance with GAAP, and (b) any Consolidated Subsidiary owning
more than 50% of the voting stock or other equity interest of any Subsidiary
described in clause (a) of this definition.
"Miscellaneous Payment Amounts" means the amount of any and all fees,
-----------------------------
expenses, costs, indemnity and reimbursement obligations and other
Obligations arising and outstanding from time to time hereunder, other than
(a) the principal amount of the Loans, (b) interest accrued thereon (or on
accrued interest), and (c) fees described in Section 2.10.
"Miscellaneous Payment Notice" means a written notice by the Agent or
----------------------------
any Bank entitled to receive any such payment amount, to the Company,
relating to any Miscellaneous Payment Amount and containing a reasonable
description of such Miscellaneous Payment Amount.
"Multiemployer Plan" means a "multiemployer plan" (within the meaning of
------------------
section 4001(a)(3) of ERISA) and to which any member of the Controlled Group
makes, is making, or is obligated to make contributions or has made, or been
obligated to make (at any time during the five (5) calendar years preceding
the date of this Agreement), contributions.
"Net Proceeds" means, with respect to a sale of equity securities, the
------------
gross proceeds thereof reduced by all reasonable out-of-pocket costs and
expenses paid or incurred by the Company directly in connection therewith,
including underwriter's commissions or discounts, registration and filing
fees, legal and accounting fees, and printing costs.
"1991 Indenture" means that certain Indenture dated as of March 1, 1991
--------------
by the Company to The First National Bank of Boston, as Trustee, as
supplemented through the date hereof.
"1992 Indenture" means that Indenture dated as of March 1, 1992, by and
--------------
between the Company and The First National Bank of Boston, as trustee,
relating to 6 1/2% convertible subordinated debentures due 2002, as
supplemented through the date hereof.
"Note Agreement" means that certain Note Agreement dated as of March 29,
--------------
1991 by and among the Company and the Purchasers listed on Annex 1 thereto,
as heretofore amended and as further amended from time to time in accordance
with the terms hereof.
"Note Purchase Agreement" means that certain Note Purchase Agreement
-----------------------
dated as of June 1, 1989 by and among the Company and the purchasers named in
Appendix 1 thereto relating to $15,000,000 in Series A and $15,000,000 in
Series B notes of the Company, as heretofore amended and as further amended
from time to time in accordance with the terms hereof.
"Notice of Borrowing" means a notice given by the Company to the Agent
-------------------
pursuant to Section 2.3, in substantially the form of Exhibit 2.3.
-----------
"Notice of Conversion/Continuation" means a notice given by the Company
---------------------------------
to the Agent pursuant to Section 2.4, in substantially the form of Exhibit
-------
2.4.
---
"Notice of Lien" means any "notice of lien" or similar document intended
--------------
to be filed or recorded with any court, registry, recorder's office, central
filing office or Governmental Authority for the purpose of evidencing,
creating, perfecting or preserving the priority of a Lien securing
obligations owing to a Governmental Authority.
"Obligations" means all Loans, and other Indebtedness, advances, debts
-----------
and payment obligations owing by the Company to any Bank, the Agent, or any
other Person required to be indemnified under any Loan Agreement, of any kind
or nature, present or future, arising under any Loan Agreement, whether
arising by reason of an extension of credit, loan, guaranty, indemnification
or in any other manner, whether direct or indirect, absolute or contingent,
due or to become due, now existing or hereafter arising.
"Other Taxes" has the meaning specified in subsection 3.1(b).
-----------
"Participant" has the meaning specified in subsection 10.8(d).
-----------
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
----
succeeding to any or all of its functions under ERISA.
"Permitted Banks" has the meaning specified in subsection 7.4(h).
---------------
"Permitted Investments" has the meaning specified in Section 7.4.
---------------------
"Permitted Liens" has the meaning specified in Section 7.1.
---------------
"Person" means an individual, partnership, corporation, business trust,
------
joint stock company, trust, unincorporated association, joint venture or
Governmental Authority.
"Plan" means an employee benefit plan (as defined in Section 3(3) of
----
ERISA) which the Company or any member of the Controlled Group sponsors or
maintains or to which the Company or member of the Controlled Group makes or
is obligated to make contributions, and includes any Multiemployer Plan or
Qualified Plan.
"Preferred Stock" means, at any time, with respect to any Person,
---------------
capital stock of such Person that is preferred as to the payment of
dividends, or as to the distribution of Property on any voluntary or
involuntary liquidation or
dissolution of such Person, over any other class of capital stock of such
Person (in each case, taken at the greater of its voluntary or involuntary
liquidation preference at the time of calculation thereof, but exclusive of
accrued dividends), provided, that the term "Preferred Stock" shall not
--------
include up to $6,500,000 of the shares of preferred stock of Arcada Holdings
issued, or to be issued, as contemplated by the Arcada Letter of Intent.
"Property" means any interest in any kind of property or asset, whether
--------
real, personal or mixed, and whether tangible or intangible.
"Purchase Money Mortgage" means a Lien held by any Person (whether or
-----------------------
not the seller of the assets covered by such Lien) on tangible Property
(other than assets acquired to replace, repair, upgrade or alter tangible
Property owned by the Company or any of its Subsidiaries on the date of this
Agreement), provided that such Lien:
--------
(a) secures all or a portion of the related purchase price or
construction costs of such Property;
(b) encumbers only tangible Property, accretions and accessions
thereto and (in the case of any Lien in respect of improvements to real
estate) any theretofore unimproved real Property on which such Property
is located (and the proceeds of the disposition thereof) acquired or
constructed with the proceeds of the indebtedness secured by such Lien;
and
(c) is created concurrently with or within one year of the
acquisition or substantial completion of construction of such tangible
Property.
"Qualified Plan" means a pension plan (as defined in section 3(2) of
--------------
ERISA) intended to be tax-qualified under section 401(a) of the Code and
which any member of the Controlled Group sponsors, maintains, or to which it
makes or is obligated to make contributions, or in the case of a multiple
employer plan (as described in section 4064(a) of ERISA) has made
contributions at any time during the immediately preceding period covering at
least five (5) plan years, but excluding any Multiemployer Plan.
"Rate Contracts" means interest rate and currency swap agreements, cap,
--------------
floor and collar agreements, interest rate insurance, currency spot and
forward contracts and other agreements or arrangements designed to provide
protection against fluctuations in interest or currency exchange rates.
"Reference Bank" means BofA, or any successor "Reference Bank"
--------------
designated by the Majority Banks.
"Reportable Event" means any of the events set forth in Section 4043(b)
----------------
of ERISA or the regulations thereunder other than a Reportable Event as to
which the provision of thirty (30) days' notice to the PBGC is waived under
applicable regulations, a withdrawal from a Plan described in Section 4063 of
ERISA, or a cessation of operations described in Section 4062(e) of ERISA.
"Requirement of Law" means, as to any Person, any law (statutory or
------------------
common), treaty, rule or regulation or determination of an arbitrator or of a
Governmental Authority, in each case applicable to or binding upon the Person
or any of its Property or to which the Person or any of its Property is
subject.
"Responsible Officer" means the Chief Executive Officer or the President
-------------------
of the Company or, with respect to financial matters, the Chief Financial
Officer or the Treasurer of the Company.
"Restricted Payment" has the meaning specified in subsection 7.8(a).
------------------
"Sale/Leaseback Transaction" means any transaction or series of related
--------------------------
transactions in which the Company or a Subsidiary of the Company sells or
transfers any of its Property to any Person (other than to the Company or to
a Subsidiary of the Company) and within one (1) year thereafter rents or
leases such transferred Property or substantially similar Property from any
Person.
"Sale/Leaseback Transaction Amount" means, on any date, after giving
---------------------------------
effect to all Sale/Leaseback Transactions occurring on such date, the greater
of:
(a) the present value, discounted at six and one-half percent
(6.5%) per annum, of all unpaid payment obligations of the Company and
its Subsidiaries in respect of all Sale/Leaseback Transactions in effect
on such date; or
(b) the depreciated purchase price of all Property, subject to
Sale/Leaseback Transactions at such time, on such date.
"Section 20 Subsidiary" means the subsidiary of the bank holding company
---------------------
of any Bank, which has been granted authority by the FRB to underwrite and
deal in Ineligible Securities.
"Senior Debt" means, at any time, (a) all Debt of the Company
-----------
outstanding at such time that is not Subordinated Debt, except for
Subordinated Debt that the Company has become obligated to prepay, redeem or
otherwise purchase or acquire (other than obligations to make mandatory
prepayments or mandatory redemptions scheduled at the time of issuance of
such Subordinated Debt), and (b) all Debt and Preferred Stock of any
Subsidiary of the Company.
"Solvent" means, (a) as to the Company at any time, that (i) the fair
-------
value of the Property of the Company is greater than the amount of the
Company's liabilities (including disputed, contingent and unliquidated
liabilities) as such value is established and liabilities evaluated for
purposes of section 101(31) of the United States Bankruptcy Code (12 U.S.C.
(S) 101 et seq.); (ii) the present fair saleable value of the Property of the
-- ---
Company is not less than the amount that will be required to pay the probable
liability of the Company on its debts as they become absolute and matured;
(iii) the Company is able to realize upon its Property and pay its debts and
other liabilities (including disputed, contingent and unliquidated
liabilities) as they mature in the normal course of business; (iv) the
Company does not intend to, and does not believe that it will, incur debts or
liabilities beyond the Company's ability to pay as such debts and liabilities
mature; and (v) the Company is not engaged in business or a transaction, and
is not about to engage in business or a transaction, for which the Company's
Property would constitute unreasonably small capital; and (b) as to the
Company and its Subsidiaries on a consolidated basis, that (i) the fair value
of the consolidated assets of such Persons is greater than the amount of such
Persons' consolidated liabilities (including, contingent and unliquidated
liabilities) as such value would be established and liabilities evaluated for
purposes of section 101(31) of the United States Bankruptcy Code (12 U.S.C.
(S) 101, et seq.); and (ii) the present fair saleable value of the
-------
consolidated assets of such Persons is not less than the amount that will be
required to pay the probable liability of such Persons on their consolidated
liabilities as they become absolute and matured.
"Subordinated Debt" means all Debt of the Company under the 1991
-----------------
Indenture, the 1992 Indenture, or which is subject to subordination
provisions in favor of the holders of the Obligations no less favorable to
such holders than those attached to the Note Agreement as Annex 4 or is
otherwise consented to in writing as "Subordinated Debt" by the Majority
Banks.
"Subsidiary" of a Person means any corporation, association,
----------
partnership, joint venture or other business entity of which more than fifty
percent (50%) of the voting stock or other equity interests is owned or
controlled directly or indirectly by the Person, or one or more of the
Subsidiaries of the Person, or a combination thereof. Unless the context
otherwise clearly requires, references herein to a "Subsidiary" refer to a
Subsidiary of the Company.
"Tangible Assets" means, at any time, as to the Company and its
---------------
Subsidiaries on a consolidated basis, all assets (including, without
duplication, the capitalized value of any leasehold interest under any
Capitalized Lease Obligation) of such Persons, except:
------
(a) the aggregate amount of deferred assets, other than prepaid
insurance and prepaid taxes, in excess of $10,000,000;
(b) patents, copyrights, trademarks, trade names, franchises,
goodwill and other similar intangible assets; and
(c) unamortized debt discount and expense (other than not more
than $6,500,000 of unamortized debt expense attributable to the issuance
of Indebtedness prior to the date hereof (which expense shall be
included in ("Tangible Assets")).
---------------
"Tangible Net Worth" means at any time, as to the Company and its
------------------
Subsidiaries on a consolidated basis:
(a) the net book value (after deducting related depreciation,
obsolescence, amortization, valuation and other proper reserves relating
to such assets) at which the Tangible Assets would be shown on a
consolidated balance sheet at such time prepared in accordance with GAAP
(subject to any modification required by the definition of "Tangible
Assets"), but excluding any amount on account of write-ups of assets
after December 31, 1992 (other than as a consequence of a physical
review of inventory or other assets), at such time, minus
-----
(b) the amount at which the liabilities of the Company and its
Subsidiaries would be shown on such balance sheet, and including as
liabilities all reserves for contingencies and other potential
liabilities (specifically including therein, without limitation,
actuarially determined unfunded vested pension liabilities and the
liabilities in respect of other post-retirement benefits) and all
minority interests in the Company's Subsidiaries at such time, all
determined in accordance with GAAP (subject to any modification required
by the preceding parenthetical expression in this clause (b)).
"Taxes" has the meaning specified in subsection 3.1(a).
-----
"Termination Date" means the earlier to occur of the second anniversary
----------------
of the Closing Date and December 31, 1995, subject to extension as provided
in subsection 2.1(b), or such earlier date on which the Commitments shall
terminate in accordance with the provisions of this Agreement.
"Three Year Disposition Measurement Period" has the meaning specified in
-----------------------------------------
subsection 7.2(f)(iii)(B).
"Total Liabilities" means at any time, as to the Company and its
-----------------
Subsidiaries on a consolidated basis, all liabilities of such Persons which
in accordance with GAAP would be shown on the liability side of a
consolidated balance sheet of the Company, as determined in accordance with
GAAP.
"Transferred Property" has the meaning specified in subsection
--------------------
7.2(f)(i)(B).
"Transfers" has the meaning specified in Section 7.2.
---------
"UCC" means the Uniform Commercial Code as in effect in the State of
---
California, or to the extent such laws would be deemed the applicable law
under California Uniform Commercial Code Section 9103, any other
jurisdiction.
"Unfunded Pension Liabilities" means the excess of the present value of
----------------------------
a Qualified Plan's or Multiemployer Plan's benefit liabilities under section
4001(a)(16) of ERISA over the current value of such Qualified Plan's or
Multiemployer Plan's assets.
"United States" and "U.S." each mean the United States of America.
------------- ----
"Wholly-Owned Subsidiary" means a Subsidiary of the Company (or of any
-----------------------
Subsidiary of the Company) of which 100% of the voting stock is owned
beneficially and of record, directly or indirectly, by the Company (or one or
more Wholly-Owned Subsidiaries of the Company or a combination thereof),
provided that directors qualifying shares and shares issued to comply with
local ownership legal requirements not exceeding in the aggregate 3% of the
voting stock of such Subsidiary may be owned by Persons other than the
Company or a Subsidiary of the Company.
1.2 Other Definitional Provisions.
-----------------------------
(a) Unless otherwise specified herein or therein, all terms defined in this
Agreement shall have the defined meanings when used in any certificate or other
document made or delivered pursuant hereto.
(b) All accounting terms not expressly defined herein shall be construed,
except where the context otherwise requires, and all financial computations
required under this Agreement shall be made, in accordance with GAAP,
consistently applied (subject to mandatory changes in GAAP).
(c) The words "hereof," "herein" and "hereunder" and words of similar import
when used in this Agreement shall refer to this Agreement as a whole and not to
any particular provision of this
Agreement, and section, schedule and exhibit references are to this Agreement
unless otherwise specified. The meaning of defined terms shall be equally
applicable to the singular and plural forms of the defined terms. The term
"including" is not limiting and means "including without limitation." The term
"pro rata" means, with respect to the Banks, ratably in accordance with the
respective Commitment Percentages.
(d) In the computation of periods of time from a specified date to a later
specified date, the word "from" means "from and including"; the words "to" and
"until" each mean "to but excluding," and the word "through" means "to and
including."
(e) References to agreements and other contractual instruments shall be
deemed to include all subsequent amendments and other modifications thereto, but
only to the extent such amendments and other modifications are not prohibited
by the terms of this Agreement.
(f) References to statutes or regulations are to be construed as including
all statutory and regulatory provisions consolidating, amending or replacing the
statute or regulation.
(g) The captions and headings of this Agreement are for convenience of
reference only and shall not affect the construction of this Agreement.
(h) This Agreement and the other Loan Documents are the result of
negotiations among and has been reviewed by counsel to the Agent, the Company
and the other parties, and are the products of all parties. Accordingly, they
shall not be construed against the Banks or the Agent merely because of the
Agent's or Banks' involvement in their preparation.
ARTICLE II
THE CREDITS
-----------
2.1 Amounts and Terms of Commitments.
--------------------------------
(a) Each Bank severally agrees, on the terms and conditions hereinafter set
forth, to make Loans to the Company from time to time on any Business Day during
the period from the Closing Date to the Termination Date, in an aggregate amount
not to exceed at any time outstanding the amount set forth opposite the Bank's
name in Schedule 2.1(a) under the heading "Commitment" (such amount as the same
---------------
may be reduced pursuant to Section 2.5 or as a result of one or more assignments
pursuant to Section 10.8, the Bank's "Commitment"); provided, however, that,
---------- -------- -------
after giving effect to any Borrowing, the aggregate principal amount of all
outstanding Loans shall not exceed the Aggregate Commitment. Within the limits
of each Bank's Commitment, and subject to the other terms and conditions hereof,
the Company may borrow under
this subsection 2.1(a), prepay pursuant to Section 2.6 and reborrow pursuant to
this subsection 2.l(a).
(b) Upon the written request of the Company, received by the Agent not less
than ninety (90) days prior to the then current Termination Date and upon the
written concurrence not less than thirty (30) days prior to such Termination
Date by all of the Banks with such request, the Termination Date may be extended
in the sole discretion of the Agent and the Banks for successive additional one-
year periods commencing on the then current Termination Date. In the event such
written concurrence from the Banks is not received by the Agent at least thirty
(30) days prior to the Termination Date, the Termination Date shall not be
extended. The Agent will promptly notify each Bank of the receipt by it of a
request under this subsection.
2.2 Loan Accounts. The Loans made by each Bank shall be evidenced by one or
-------------
more loan accounts or records maintained by such Bank in the ordinary course of
business. The loan accounts or records maintained by the Agent and each Bank
shall be conclusive (absent manifest error) of the amount of the Loans made by
the Banks to the Company and the interest and payments thereon. Any failure so
to record or any error in doing so shall not, however, limit or otherwise affect
the obligation of the Company hereunder to pay any amount owing with respect to
the Loans. The Agent shall cause to be maintained a register in which the Agent
shall record the Loans by each Bank and any transfers or assignments thereof.
With respect to such register, the Agent shall be entitled to rely on any
information provided to it by any Person reasonably believed by it to be
authorized by the Company or any Bank to deliver such information. The Agent
shall have no liability in connection with the maintenance of such register
except for acts of gross negligence or willful misconduct.
2.3 Procedure for Borrowing.
-----------------------
(a) Each Borrowing shall be made upon the written notice (or notice via
facsimile transmission, confirmed by a telephone call by the Company, provided
such notice is immediately confirmed by an original written notice sent by mail
or overnight courier) of the Company, delivered to the Agent, in the form of a
Notice of Borrowing (which notice must be received by the Agent prior to 9:00
A.M. (San Francisco time)) (i) three Business Days prior to the requested
Borrowing Date, in the case of Eurodollar Rate Loans; and (ii) one Business Day
prior to the requested Borrowing Date, in the case of Base Rate Loans,
specifying:
(A) the amount of the Borrowing, which shall be in an aggregate minimum
principal amount of $10,000,000 for Eurodollar Rate Loans or $5,000,000 for
Base Rate Loans or in either case any integral multiple of $1,000,000 in
excess of the applicable minimum principal amount;
(B) the requested Borrowing Date, which shall be a Business Day;
(C) whether the Borrowing is to be comprised of Eurodollar Rate Loans
or Base Rate Loans (or a combination thereof); and
(D) the duration of the Interest Period or Interest Periods applicable
to such Loans included in such notice. If the Notice of Borrowing fails to
specify the duration of the Interest Period for any Borrowing of Eurodollar
Rate Loans, such Interest Period shall be three (3) months.
(b) Upon receipt of the Notice of Borrowing, the Agent will promptly notify
each Bank of its receipt thereof and of the amount of such Bank's Commitment
Percentage of the Borrowing.
(c) Each Bank will make the amount of its Commitment Percentage of each
Borrowing available to the Agent for the account of the Company at the office
set forth on Schedule 2.3(c), or otherwise specified by the Agent in accordance
---------------
with Section 10.2 for payment by 11:00 A.M. (San Francisco time) on the
Borrowing Date requested by the Company in funds immediately available to the
Agent. Unless any applicable condition specified in Article IV has not been
satisfied, the proceeds of all such Loans will then be made available to the
Company by the Agent at such office by crediting the account of the Company on
the books of the Agent with the aggregate of the amounts made available to the
Agent by the Banks and in like funds as received by the Agent.
(d) Subsection 2.3(a) notwithstanding, if the Company shall not have given a
timely Notice of Borrowing to be made on the last day of any Interest Period for
outstanding Loans, then unless the Agent shall have received notice that the
Company elects not to make a Borrowing on such day (such notice to have been
received at least one Business Day prior to such day) the Agent shall be deemed
to have received a Notice of Borrowing from the Company requesting Base Rate
Loans to be made on such day in an amount equal to the amount of such
outstanding Loans (reduced to the extent necessary to reflect any reductions of
the Commitments on or prior to such day).
2.4 Conversion and Continuation Elections.
-------------------------------------
(a) The Company may upon irrevocable written notice to the Agent by delivery
of a Notice of Conversion/Continuation in accordance with subsection 2.4(b):
(i) elect to convert on any Business Day, any Base Rate Loans (or any
part thereof in an amount not less than $10,000,000 or an integral multiple
of $1,000,000 in excess thereof) into Eurodollar Rate Loans;
(ii) elect to convert on any Interest Payment Date, any Eurodollar Rate
Loans maturing on such Interest Payment Date (or any part thereof in an
amount not less than $5,000,000 or an integral multiple of $1,000,000 in
excess thereof) into Base Rate Loans; or
(iii) elect to renew, on any Interest Payment Date therefor, any
Eurodollar Rate Loans (or any part thereof in an amount not less than
$10,000,000 or an integral multiple of $1,000,000 in excess thereof);
provided, that if at any time the aggregate amount of Eurodollar Rate Loans
- --------
shall have been reduced, by payment, prepayment, or conversion of part thereof
to be less than $10,000,000, the Eurodollar Rate Loans shall automatically
convert into Base Rate Loans, and on and after such date the right of the
Company to continue such Loans as Eurodollar Rate Loans shall terminate and the
Company shall reimburse each Bank for any actual loss or actual expense
sustained or incurred as set forth in subsection 3.4 hereof.
(b) The Company shall deliver by telex, cable or facsimile, confirmed by a
telephone call by the Company and confirmed immediately by an original writing
sent by mail or overnight courier, a Notice of Conversion/Continuation to be
received by the Agent not later than 9:00 A.M. (San Francisco time) at least (i)
three Business Days in advance of the Conversion/Continuation Date, if the Loans
are to be converted into or continued as Eurodollar Rate Loans; and (ii) one
Business Day in advance of the Conversion/Continuation Date, if the Loans are to
be converted into Base Rate Loans, specifying:
(A) the proposed Conversion/Continuation Date;
(B) the aggregate amount of Loans to be converted or continued;
(C) the nature of the proposed conversion or continuation; and
(D) the duration of the requested Interest Period or Interest Periods
for Eurodollar Rate Loans. If the Notice of Conversion/Continuation shall
fail to specify the duration of the Interest Period, such Interest Period
shall be three (3) months.
(c) If upon the expiration of any Interest Period, the Company has failed to
select timely a new Interest Period to be applicable to the respective
Eurodollar Rate Loans, or if any Default or Event of Default then exists, the
Company shall be deemed to have elected to convert such Eurodollar Rate Loans
into Base Rate Loans effective as of the expiration date of such expiring
Interest Period.
(d) Upon receipt of a Notice of Conversion/Continuation, the Agent will
promptly notify each Bank of its receipt thereof, or, if no timely notice is
provided by the Company, the Agent will promptly notify each Bank of the details
of any automatic conversion. All conversions and continuations shall be made
ratably according to the respective outstanding principal amounts of the Loans
with respect to which the notice was given held by each Bank.
(e) Unless the Majority Banks otherwise agree, during the existence of a
Default or Event of Default pursuant to Section 8.1(a), (b) or (g), the Company
may not elect to have a Loan converted into or continued as a Eurodollar Rate
Loan, and during the existence of a Default or Event of Default other than
pursuant to Section 8.1(a), (b) or (g), the Company may not elect to have a Loan
converted into or continued as a Eurodollar Rate Loan with an Interest Period
longer than one month.
(f) Notwithstanding any other provision contained in this Agreement, after
giving effect to any conversion or continuation of any Loans, there shall not be
more than five (5) different Interest Periods in respect of Eurodollar Rate
Loans in effect.
2.5 Voluntary Termination or Reduction of Commitments. The Company may,
-------------------------------------------------
upon not less than three Business Days' prior notice to the Agent, terminate the
Aggregate Commitments or permanently reduce the Aggregate Commitment by an
aggregate minimum amount of $5,000,000, or any integral multiple of $1,000,000
in excess thereof, provided that no such reduction or termination shall be
--------
permitted if, after giving effect thereto and to any prepayments of the Loans
made on the effective date thereof, the then outstanding principal amount of the
Loans would exceed the amount of the Aggregate Commitment then in effect and,
provided, further, that once reduced in accordance with this Section 2.5, the
- -------- -------
Aggregate Commitments may not be increased. Any reduction of the Aggregate
Commitments shall be applied pro rata to each Bank's Commitment in accordance
with such Bank's Commitment Percentage. All accrued commitment fees to, but not
including the effective date of any reduction or termination of the Commitments
shall be paid on the effective date of such reduction or termination.
2.6 Optional Prepayments. Subject to Section 3.4, the Company may, at any
--------------------
time or from time to time, upon notice to the Agent as described in the
following sentence, ratably prepay Loans in whole or in part, in minimum amounts
of $5,000,000 for Base Rate Loans and $10,000,000 for Eurodollar Rate Loans or
in either case any multiple of $1,000,000 in excess of the applicable minimum
amount. Such notice of prepayment shall be provided to the Agent by no later
than 9:00 A.M. (San Francisco time) not less than three Business Days prior to
the proposed date of prepayment in respect of any Eurodollar Rate Loans, and by
no later than 9:00 A.M. (San Francisco time) not less than one Business Day
prior to the proposed date of prepayment in respect of any Base Rate Loans.
Such notice of prepayment shall specify
the date and amount of such prepayment and whether such prepayment is of Base
Rate Loans or Eurodollar Rate Loans, or any combination thereof. Such notice
shall not thereafter be revocable by the Company, and the Agent will promptly
notify each Bank of its receipt thereof. If such notice is given by the
Company, the Company shall make such prepayment and the payment amount specified
in such notice shall be due and payable on the date specified therein, together
with accrued interest to each such date on the amount prepaid and any amounts
required pursuant to Section 3.4.
2.7 Mandatory Prepayment. The principal amount of the outstanding Loans,
--------------------
together with all interest accrued thereon, and amounts required pursuant to
Section 3.4, shall be immediately due and payable, and the Commitments shall
terminate, upon the occurrence of a Change in Control. If the aggregate
outstanding amount of the Loans shall at any time be less than $5,000,000, such
outstanding principal amount, together with all interest accrued thereon shall
be immediately due and payable, together with amounts required pursuant to
Section 3.4.
2.8 Repayment. The Company agrees to repay to the Banks in full on the
---------
Termination Date the aggregate principal amount of the Loans outstanding on such
date.
2.9 Interest.
--------
(a) Subject to subsection 2.9(c), each Loan shall bear interest on the
outstanding principal amount thereof from the date when made until it becomes
due at a rate per annum equal to the Eurodollar Rate or the Base Rate, as the
case may be, plus the Applicable Margin.
----
(b) Interest on each Loan shall be paid in arrears on each Interest Payment
Date. Interest shall also be paid on the date of any prepayment of Loans
pursuant to Section 2.6 for the portion of the Loans so prepaid and upon payment
(including prepayment) in full thereof and, after the occurrence and during the
continuance of any Event of Default, interest shall be payable on demand.
(c) If any amount of principal of or interest on any Loan, or any other
amount payable under Section 2.10 hereof is not paid in full when due (whether
at stated maturity, by acceleration, demand or otherwise), the Company agrees to
pay interest on such unpaid principal, interest or fee from the date such amount
becomes due until the date such amount is paid in full, and after as well as
before any entry of judgment thereon, to the extent permitted by applicable law,
payable on demand, at a rate per annum equal to the applicable rate, which shall
be the Base Rate for either Base Rate or Eurodollar Rate Loans, plus two percent
(2%); provided, however, that in respect of payments of principal or interest
-------- -------
coming due in respect of any Eurodollar Rate Loans prior to the termination of
the then current interest period, the
applicable rate shall be the Eurodollar Rate plus two percent (2%) until the end
of such then current Interest Period.
(d) Interest shall accrue on unpaid Miscellaneous Payment Amounts at a rate
per annum equal to the Base Rate commencing on the day that is five Business
Days after the date a Miscellaneous Payment Notice is given by the Agent or the
applicable Bank to the Company; provided that from the 30th day after a
Miscellaneous Payment Notice is given, to the extent permitted by applicable
law, interest shall accrue on outstanding amounts at the rate per annum equal to
the Base Rate plus 2%. All such interest shall be paid upon demand.
2.10 Fees.
----
(a) The Company shall pay to the Agent an agency fee for the Agent's account
and an arrangement fee for the Arranger's account in the amounts and at the time
or times set forth in the commitment letter dated December 3, 1993 from the
Agent and the Arranger to, and accepted and agreed by, the Company, which
letter, to the extent it relates to the payment of fees, is incorporated herein
by reference.
(b) The Company shall pay to the Agent for the account of each Bank a
commitment fee of 0.5 percent per annum on the average daily unused portion of
such Bank's Commitment, computed on a quarterly basis in arrears on the last
Business Day of each calendar quarter based upon the daily utilization for that
quarter as calculated by the Agent. Such commitment fee shall accrue from the
Closing Date to the Termination Date and shall be due and payable quarterly in
arrears on the last Business Day of each quarter commencing on March 31, 1994
through the Termination Date, with the final payment to be made on the
Termination Date; provided that, in connection with any reduction or termination
--------
of Commitments under Section 2.5, the accrued commitment fee calculated for the
period ending on such date shall also be paid on the date of such reduction or
termination, with the following quarterly payment being calculated on the basis
of the period from such reduction or termination date to such quarterly payment
date. The commitment fees provided in this subsection shall accrue at all times
after the above-mentioned commencement date, including at any time during which
one or more conditions in Article IV are not met.
(c) On the Closing Date, the Company shall pay to the Agent for the account
of each Bank which has committed $30,000,000 or more to this credit, an upfront
fee equal to 0.25 percent of the aggregate amount of each such Bank's
Commitment.
2.11 Computation of Fees and Interest.
--------------------------------
(a) All computations of interest for Base Rate Loans when the Base Rate is
determined by BofA's "reference rate" shall be made on the basis of a year of
365 or 366 days, as the case may be, and actual days elapsed. All other
computations of fees and
interest under this Agreement shall be made on the basis of a 360 day year and
actual days elapsed (which results in more interest being paid than if computed
on the basis of a 365- or 366-day year). Interest and fees shall accrue during
each period during which interest or such fees are computed from the first day
thereof to the last day thereof.
(b) The Agent will, with reasonable promptness, notify the Company and the
Banks of each determination of a Eurodollar Rate, provided that any failure to
--------
do so shall not relieve the Company of any liability hereunder.
(c) Each determination of an interest rate by the Agent pursuant to any
provision of this Agreement shall be conclusive and binding on the Company and
the Banks in the absence of manifest error. The Agent will, at the request of
the Company or any Bank, deliver to the Company or the Bank, as the case may be,
a statement showing any quotation used by the Agent in determining any interest
rate.
2.12 Payments by the Company.
-----------------------
(a) All payments (including prepayments) to be made by the Company on
account of principal, interest, fees and Miscellaneous Payment Amounts shall be
made without set-off or counterclaim and shall be made to the Agent, for the
account of the Banks (except as otherwise provided in subsection 2.13(b) and
Sections 3.l, 3.3 and 3.4), at the Agent's office referenced on Schedule 2.3(c)
---------------
or otherwise notified by the Agent in accordance with Section 10.2, in dollars
and in immediately available funds no later than 9:00 A.M. (San Francisco time).
The Agent will promptly distribute to each Bank its pro rata share of such
principal, interest, fees or other amounts, in like funds as received, except to
the extent non-ratable payments are expressly provided for herein. Any payment
which is received by the Agent later than 9:00 A.M. (San Francisco time) shall
be deemed to have been received on the immediately succeeding Business Day.
(b) Whenever any payment hereunder shall be stated to be due on a day other
than a Business Day, such payment shall be made on the following Business Day,
and such extension of time shall in such case be included in the computation of
interest or fees, as the case may be; subject to the provisions set forth in the
definition of "Interest Period" herein.
(c) Unless the Agent receives notice from the Company prior to the date on
which any payment is due to the Banks hereunder that the Company will not make
such payment in full as and when due, the Agent may assume that the Company has
made such payment in full to the Agent on such date in immediately available
funds and the Agent may (but shall not be so required), in reliance upon such
assumption, distribute to each Bank on such due date an amount equal to the
amount then due such Bank. If and to the extent the Company has not made such
payment in full to the Agent, each Bank shall repay to the Agent on demand such
amount
distributed to such Bank or in the event of receipt by the Agent of partial
payment by the Company, such Bank's ratable portion of the amount not paid by
the Company, together with interest thereon for each day from the date such
amount is distributed to such Bank until the date such Bank repays such amount
to the Agent, at the Federal Funds Rate as in effect on such date. In the event
the Agent actually receives a payment of principal from the Company in
accordance with the terms of this Agreement by 9:00 A.M. (San Francisco time)
and does not pay the Banks their portion of such payment on the same day, the
Banks shall receive interest from the Agent at the Federal Funds Rate for each
day such payment is not received.
2.13 Payments by the Banks to the Agent.
----------------------------------
(a) Subject to the terms and conditions hereof, each Bank shall make
available to the Agent in immediately available funds for the account of the
Company the amount of its Commitment Percentage of any Borrowing.
(b) Unless the Agent receives notice from a Bank on or prior to the Closing
Date or, with respect to any Borrowing after the Closing Date, at least one
Business Day prior to the date of such Borrowing, that such Bank will not make
available as and when required hereunder to the Agent for the account of the
Company the amount of that Bank's Commitment Percentage of the Borrowing, the
Agent may assume that each Bank has made such amount available to the Agent in
immediately available funds on the Borrowing Date and the Agent may (but shall
not be so required), in reliance upon such assumption, make available to the
Company on such date a corresponding amount. If and to the extent any Bank
shall not have made its full amount available to the Agent in immediately
available funds and the Agent in such circumstances has made available to the
Company such amount, that Bank shall within two Business Days following such
Borrowing Date make such amount available to the Agent, together with interest
at the Federal Funds Rate for each day during such period. A certificate of the
Agent submitted to any Bank with respect to amounts owing under this subsection
2.13(b) shall be conclusive, absent manifest error. If such amount is so made
available, such payment to the Agent shall constitute such Bank's Loan on the
date of Borrowing for all purposes of this Agreement. If such amount is not
made available to the Agent within two Business Days following such Borrowing
Date, the Agent shall notify the Company of such failure to fund and, upon
demand by the Agent, the Company shall pay such amount to the Agent for the
Agent's account, together with interest thereon for each day elapsed since the
date of such Borrowing, at a rate per annum equal to the interest rate
applicable at the time to the Loans comprising such Borrowing.
(c) The failure of any Bank to make any Loan on any Borrowing Date shall not
relieve any other Bank of any obligation hereunder to make a Loan on such
Borrowing Date, but no Bank
shall be responsible for the failure of any other Bank to make the Loan to be
made by such other Bank on any Borrowing Date.
2.14 Sharing of Payments, etc. If, other than as provided in subsection
-------------------------
2.9(d) or 2.10(a) or Section 3.1, 3.3, 3.4 or 10.4, any Bank shall obtain on
account of the Loans made by it any payment (whether voluntary, involuntary,
through the exercise of any right of set-off, or otherwise) in excess of its
Commitment Percentage of payments on account of the Loans obtained by all the
Banks, such Bank shall forthwith (a) notify the Agent of such fact, and (b)
purchase from the other Banks such participations in the Loans made by them as
shall be necessary to cause such purchasing Bank to share the excess payment pro
rata with each of them; provided, however, that if all or any portion of such
-------- -------
excess payment is thereafter recovered from the purchasing Bank, such purchase
shall to that extent be rescinded and each other Bank shall repay to the
purchasing Bank the purchase price paid therefor together with an amount equal
to such paying Bank's Commitment Percentage (according to the proportion of (i)
the amount of such paying Bank's required repayment to (ii) the total amount so
recovered from the purchasing Bank) of any interest or other amount paid or
payable by the purchasing Bank in respect of the total amount so recovered. The
Company agrees that any Bank so purchasing a participation from another Bank
pursuant to this Section 2.14 may, to the fullest extent permitted by law,
exercise all its rights of payment (including the right of set-off, but subject
to Section 10.8) with respect to such participation as fully as if such Bank
were the direct creditor of the Company in the amount of such participation.
The Agent shall keep records (which shall be conclusive and binding in the
absence of manifest error), of participations purchased pursuant to this Section
2.14 and shall in each case notify the Banks following any such purchases or
repayments.
ARTICLE III
TAXES, YIELD PROTECTION AND ILLEGALITY
--------------------------------------
3.1 Taxes.
-----
(a) Subject to subsection 3.1(g), any and all payments by the Company to
each Bank or the Agent under this Agreement shall be made free and clear of, and
without deduction or withholding for, any and all present or future taxes,
levies, imposts, deductions, charges or withholdings, and all liabilities with
respect thereto, excluding, in the case of each Bank and the Agent, such taxes
(including income taxes or franchise taxes) as are imposed on or measured by
each Bank's net income by the jurisdiction under the laws of which such Bank or
the Agent, as the case may be, is organized or maintains a Lending Office or any
political subdivision thereof (all such non-excluded taxes, levies, imposts,
deductions, charges, withholdings and liabilities being hereinafter referred to
as "Taxes").
-----
(b) In addition, the Company shall pay any present or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies which arise from any payment made hereunder or from the execution,
delivery or registration of, or otherwise with respect to, this Agreement or any
other Loan Agreement (hereinafter referred to as "Other Taxes").
-----------
(c) Subject to subsection 3.1(g), the Company shall indemnify and hold
harmless each Bank and the Agent upon demand for the full amount of Taxes or
Other Taxes (including without limitation, any Taxes or Other Taxes imposed by
any jurisdiction on amounts payable under this Section 3.1) paid by the Bank or
the Agent and any liability (including penalties, interest, additions to tax
and expenses) arising therefrom or with respect thereto, whether or not such
Taxes or Other Taxes were correctly or legally asserted. Each of the Agent and
the Banks hereby severally agrees to notify the Company with reasonable
promptness if it obtains knowledge of such Taxes or Other Taxes.
(d) If the Company shall be required by law to deduct or withhold any Taxes
or Other Taxes from or in respect of any sum payable hereunder to any Bank or
the Agent, then, subject to subsection 3.1(g):
(i) the sum payable shall be increased as necessary so that after
making all required deductions (including deductions applicable to additional
sums payable under this Section 3.1) such Bank or the Agent, as the case may
be, receives an amount equal to the sum it would have received had no such
deductions been made;
(ii) the Company shall make such deductions; and
(iii) the Company shall pay the full amount deducted to the relevant
taxation authority or other authority in accordance with applicable law.
(e) Within thirty (30) days after the date of any payment by the Company of
Taxes or Other Taxes, the Company shall furnish to the Agent the original or a
certified copy of a receipt evidencing payment thereof, or other evidence of
payment satisfactory to the Agent.
(f) Each Bank which is a foreign person (i.e., a person other than a United
States person for United States Federal income tax purposes) agrees that:
(i) it shall, no later than the Closing Date (or, in the case of a Bank
which becomes a party hereto pursuant to Section 10.7 after the Closing Date,
the date upon which the Bank becomes a party hereto) deliver to the Company
through the Agent two accurate and complete signed originals of Internal
Revenue Service Form 4224 or any successor thereto ("Form 4224"), or two
accurate and complete signed originals of Internal Revenue Service
Form 1001 or any successor thereto ("Form 1001"), as appropriate, in each
case indicating that the Bank is on the date of delivery thereof entitled to
receive payments of principal, interest and fees under this Agreement free
from withholding of United States Federal income tax;
(ii) if at any time the Bank makes any changes necessitating a new
Form, it shall with reasonable promptness deliver to the Company through the
Agent in replacement for, or in addition to, the forms previously delivered
by it hereunder, two accurate and complete signed originals of Form 4224; or
two accurate and complete signed originals of Form 1001, as appropriate, in
each case indicating that the Bank is on the date of delivery thereof
entitled to receive payments of principal, interest and fees under this
Agreement free from withholding of United States Federal income tax;
(iii) it shall, before or promptly after the occurrence of any event
(including the passing of time but excluding any event mentioned in (ii)
above) requiring a change in the most recent Form 4224 or Form 1001
previously delivered by such Bank and if the delivery of the same be lawful,
deliver to the Company through the Agent two accurate and complete original
signed copies of Form 4224 or Form 1001 in replacement for the forms
previously delivered by the Bank; and
(iv) it shall, promptly upon the Company's reasonable request to that
effect, deliver to the Company such other forms or similar documentation as
may be required from time to time by any applicable law, treaty, rule or
regulation in order to establish such Bank's tax status for withholding
purposes.
(g) The Company will not be required to pay any additional amounts in
respect of United States Federal income tax pursuant to subsection 3.1(d) to any
Bank for the account of any Lending Office of such Bank:
(i) if the obligation to pay such additional amounts would not have
arisen but for a failure by such Bank to comply with its obligations under
subsection 3.1(f) in respect of such Lending Office;
(ii) if such Bank shall have delivered to the Company a Form 4224 in
respect of such Lending Office pursuant to subsection 3.1(f)(i), and such
Bank shall not at any time be entitled to exemption from deduction or
withholding of United States Federal income tax in respect of payments by the
Company hereunder for the account of such Lending Office for any reason other
than a change in United States law or regulations or in the official
interpretation of such law or regulations by any governmental authority
charged with the interpretation or
administration thereof (whether or not having the force of law) after the
date of delivery of such Form 4224; or
(iii) if the Bank shall have delivered to the Company a Form 1001 in
respect of such Lending Office pursuant to subsection 3.1(f)(ii), and such
Bank shall not at any time be entitled to exemption from deduction or
withholding of United States Federal income tax in respect of payments by the
Company hereunder for the account of such Lending Office for any reason other
than a change in United States law or regulations or any applicable tax
treaty or regulations or in the official interpretation of any such law,
treaty or regulations by any governmental authority charged with the
interpretation or administration thereof (whether or not having the force of
law) after the date of delivery of such Form 1001.
(h) If, at any time, the Company requests any Bank to deliver any forms or
other documentation pursuant to subsection 3.1(f)(iv), then the Company shall,
on demand of such Bank through the Agent, reimburse such Bank for any costs and
expenses (including Attorney Costs) reasonably incurred by such Bank in the
preparation or delivery of such forms or other documentation.
(i) If the Company is required to pay additional amounts to any Bank or the
Agent pursuant to subsection 3.1(d), then such Bank shall use its reasonable
best efforts (consistent with legal and regulatory restrictions) to change the
jurisdiction of its Lending Office so as to eliminate any such additional
payment by the Company which may thereafter accrue if such change in the
judgment of such Bank is not otherwise disadvantageous to such Bank.
(j) The agreements and obligations of the Company contained in this Section
3.1 shall survive the payment in full of all other Obligations.
(k) Each Bank and the Agent agree that (i) it will take all reasonable
actions by all usual means to maintain all exemptions, if any, available to it
from the United States withholding taxes (whether available by treaty, existing
administrative waiver or otherwise) and (ii) otherwise cooperate with the
Company to minimize amounts payable by the Company under this Section 3.1;
provided, however, that, the Agent and any Bank shall not be obligated by reason
- -----------------
of this subsection 3.1(j) to disclose any information regarding its tax affairs
or tax computations or to reorder its tax or other affairs or tax or other
planning, or to undertake any action that the Agent or such Bank deems to
involve incurring any risk of liability or cost to itself or which requires any
expenditure of effort that such Agent or Bank deems unreasonable under the
circumstances.
(l) Each Bank (or, if applicable, the Agent) which is organized under the
laws of the United States or any State thereof, shall provide the Company and
the Agent with two duplicates of statements conforming to the requirements of
Treasury Regulation 1.1441-5(b) or any successor thereto.
3.2 Illegality.
----------
(a) If any Bank determines that the introduction of any Requirement of Law,
or any change in any Requirement of Law, or in the interpretation or
administration of any Requirement of Law has made it unlawful, or that any
central bank or other Governmental Authority has asserted that it is unlawful,
for any Bank or its applicable Lending Office to make Eurodollar Rate Loans,
then, on notice thereof by the Bank to the Company through the Agent, any
obligation of that Bank to make Eurodollar Rate Loans shall be suspended until
the Bank notifies the Agent and the Company that the circumstances giving rise
to such determination no longer exist.
(b) If a Bank determines that it is unlawful to maintain any Eurodollar Rate
Loan, upon notice to such effect by such Bank to the Company, all Eurodollar
Rate Loans of the Bank then outstanding will immediately and automatically
convert to a Base Rate Loan and the Company shall pay to such Bank all amounts
required to be paid under Section 3.4 on the day that is three (3) Business Days
after the date of such notice.
(c) If the obligation of any Bank to make Eurodollar Rate Loans has been so
terminated or suspended, the Company may elect, by giving notice to the Bank
through the Agent that all Loans which would otherwise be made by the Bank as
Eurodollar Rate Loans shall be instead Base Rate Loans.
(d) Before giving any notice to the Agent pursuant to this Section 3.2, the
affected Bank shall designate a different Lending Office with respect to its
Eurodollar Rate Loans if such designation will avoid the need for giving such
notice or making such demand and will not, in the judgment of the Bank, be
illegal or otherwise disadvantageous to the Bank.
3.3 Increased Costs and Reduction of Return.
---------------------------------------
(a) If any Bank determines that, due to either (i) the introduction of or
any change in or in the interpretation of any law or regulation after the
Closing Date or (ii) the compliance by that Bank with any guideline or request
from any central bank or other Governmental Authority (whether or not having the
force of law) promulgated or becoming effective after the Closing Date, there
shall be any increase in the cost to such Bank of agreeing to make or making,
funding or maintaining any Eurodollar Rate Loans (other than an increase in
Taxes or Other Taxes), then the Company shall be liable for, and shall from time
to time, upon demand therefor by such Bank (with a copy of such demand to be
sent to the Agent), pay to such Bank, additional amounts as are sufficient to
compensate such Bank for such increased costs.
(b) If any Bank shall have determined that (i) the introduction of any
Capital Adequacy Regulation, (ii) any change in any Capital Adequacy Regulation,
(iii) any change in the interpretation or administration of any Capital Adequacy
Regulation by any central bank or other Governmental Authority charged with the
interpretation or administration thereof, or (iv) compliance by the Bank (or its
Lending Office) or any corporation controlling the Bank with any Capital
Adequacy Regulation, affects or would affect the amount of capital required or
expected to be maintained by the Bank or any corporation controlling the Bank
and (taking into consideration such Bank's or such corporation's policies with
respect to capital adequacy and such Bank's desired return on capital)
determines that the amount of such capital is increased as a consequence of its
Commitment, loans, credits or obligations under this Agreement, then, upon
demand of such Bank to the Company through the Agent, the Company shall pay to
the Bank, from time to time as specified by the Bank, additional amounts
sufficient to compensate the Bank for such increase.
3.4 Funding Losses. The Company shall reimburse each Bank and hold each
--------------
Bank harmless from any actual loss or actual expense which the Bank may sustain
or incur as a consequence of:
(a) the failure of the Company to make on a timely basis any payment of
principal of any Eurodollar Rate Loan (including payments made after any
acceleration thereof);
(b) the failure of the Company to borrow, continue or convert a Loan
after the Company has given (or is deemed to have given) a Notice of
Borrowing or a Notice of Conversion/Continuation;
(c) the failure of the Company to make any prepayment in accordance
with any notice delivered under Section 2.6;
(d) the prepayment (including pursuant to Section 2.7) or other payment
(including after any acceleration thereof) of a Eurodollar Rate Loan on a day
that is not the last day of the relevant Interest Period; or
(e) the conversion of a Eurodollar Rate Loan to a Base Rate Loan on a
day which is not the last day of the Interest Period with respect thereto,
provided, however, the Company shall not be required to compensate the Banks
-------- -------
for lost profits under this clause (e) of this Section 3.4;
including, in each case, any such loss or expense arising from the liquidation
or reemployment of funds obtained by it to maintain its Eurodollar Rate Loans
hereunder or from fees payable to terminate the deposits from which such funds
were obtained. For purposes of calculating amounts payable by the Company to
the Banks under this Section and under subsection 3.3(a), each Eurodollar Rate
Loan made by a Bank (and each related reserve, special deposit or similar
requirement) shall be conclusively deemed to have been funded at the LIBOR used
in determining the Eurodollar Rate for such Eurodollar Rate Loan by a matching
deposit or other borrowing in the interbank eurodollar market for a comparable
amount and for a comparable period, whether or not such Eurodollar Rate Loan is
in fact so funded.
This covenant shall survive the payment in full of all other Obligations.
3.5 Inability to Determine Rates. If the Majority Banks determine that for
----------------------------
any reason adequate and reasonable means do not exist for determining the
Eurodollar Rate for any requested Interest Period with respect to a proposed
Eurodollar Rate Loan or that the Eurodollar Rate applicable pursuant to
subsection 2.9(a) for any requested Interest Period with respect to a proposed
Eurodollar Rate Loan does not adequately and fairly reflect the cost to such
Banks of funding such Loan, the Agent will promptly so notify the Company and
each Bank. Thereafter, the obligation of the Banks to make or maintain
Eurodollar Rate Loans, as the case may be, hereunder shall be suspended until
the Agent revokes such notice in writing. Upon receipt of such notice, the
Company may revoke any Notice of Borrowing or Notice of Conversion/Continuation
then submitted by it. If the Company does not revoke such notice, the Banks
shall make, convert or continue the Loans, as proposed by the Company, in the
amount specified in the applicable notice submitted by the Company, but such
Loans shall be made, converted or continued as Base Rate Loans instead of
Eurodollar Rate Loans.
3.6 Certificates of Banks. Any Bank claiming reimbursement or compensation
---------------------
pursuant to this Article III shall deliver to the Company (with a copy to the
Agent) a certificate setting forth in reasonable detail the amount payable to
the Bank hereunder (including a description in reasonable detail of the way in
which such amount was determined) and such certificate shall be conclusive and
binding on the Company in the absence of manifest error; provided, however, that
the Company shall not be liable for any such amount attributable to any period
prior to the date one hundred eighty (180) days prior to the date of such
certificate.
ARTICLE IV
CONDITIONS PRECEDENT
--------------------
4.1 Conditions of Commitments. The Commitment of each Bank hereunder is
-------------------------
subject to the condition that the Agent shall have received on or before the
Closing Date all of the following, in form and substance satisfactory to the
Agent and its counsel and to the Banks and in sufficient copies for each Bank:
(a) Credit Agreement. This Agreement executed by the Company, the Agent
----------------
and each of the Banks;
(b) Resolutions; Incumbency.
-----------------------
(i) Copies of the resolutions of the board of directors of the Company
approving and authorizing the execution, delivery and performance by the
Company of this Agreement, the other Loan Documents to be delivered hereunder
and authorizing the borrowing of the Loans, certified as of the Closing Date
by the Secretary or an Assistant Secretary of the Company; and
(ii) A certificate of the Secretary or Assistant Secretary of the
Company certifying the names and true signatures of the officers of the
Company authorized to execute and deliver, as applicable, this Agreement, and
all other Loan Documents to be delivered hereunder;
(c) Articles of Incorporation; By-laws and Good Standing. Each of the
----------------------------------------------------
following documents:
(i) the articles of incorporation of the Company as in effect on the
Closing Date, certified by the Secretary of State of the State of
incorporation of the Company as of a recent date and by the Secretary or
Assistant Secretary of the Company as of the Closing Date and the bylaws of
the Company as in effect on the Closing Date, certified by the Secretary or
Assistant Secretary of the Company as of the Closing Date; and
(ii) a good standing certificate for the Company from the Secretary of
State of the State of Delaware and each state where the Company is qualified
to do business as a foreign corporation as of a recent date, and a bring-down
certificate by telex or facsimile, dated the Closing Date from the Secretary
of State of the State of Delaware;
(d) Legal Opinions. Opinions of Wilson, Sonsini, Goodrich & Rosati, special
--------------
counsel to the Company, and Marla Stark, Esquire, general counsel to the
Company, and addressed to the Agent and the Banks, collectively substantially in
the form of Exhibit 4.1(d)(i);
-----------------
(e) Payment of Fees. The Company shall have paid all costs, accrued and
---------------
unpaid fees and expenses (including, without limitation, Attorney Costs) to the
extent invoiced prior to or otherwise then due and payable on the Closing Date,
including any arising under subsection 2.10(a) and (c) and Sections 3.1, 10.4
and 10.10;
(f) Certificate. A certificate signed by a Responsible Officer, dated as of
-----------
the Closing Date, stating that:
(i) the representations and warranties contained in Article V are true
and correct on and as of such date, as though made on and as of such date;
(ii) no Default or Event of Default exists as of such date; and
(iii) no Material Adverse Compliance Effect has occurred since
September 30, 1993;
(g) Financial Statements. A certified copy of financial statements of the
--------------------
Company and its Subsidiaries referred to in Section 5.11;
(h) Certified Documents. Certified copies of the 1991 Indenture, 1992
-------------------
Indenture, Note Agreement and Note Purchase Agreement, each as supplemented
through the date hereof.
(i) Other Documents. Such other approvals, opinions or documents as any
---------------
Bank may reasonably request.
4.2 Conditions to all Borrowings. The obligation of each Bank to make any
----------------------------
Loan to be made by it hereunder (including its initial Loan) is subject to the
satisfaction of the following conditions precedent on the relevant Borrowing
Date:
(a) Notice of Borrowing. The Agent shall have received, with a
-------------------
counterpart for each Bank, a Notice of Borrowing;
(b) Continuation of Representations and Warranties. The
----------------------------------------------
representations and warranties made by the Company contained in Article V
shall be true and correct on and as of such Borrowing Date, with the same
effect as if made on and as of such date (except to the extent such
representations or warranties specifically relate to an earlier date, in
which case they shall be true and correct as of such date);
(c) No Existing Default. No Default or Event of Default shall exist or
-------------------
shall result from such Borrowing; and
(d) No Material Adverse Change. No Material Adverse Compliance Effect
--------------------------
shall have occurred since September 30, 1993.
Each Borrowing by the Company hereunder shall constitute a representation and
warranty by the Company hereunder as of each such Borrowing Date that the
conditions in this Section 4.2 have been satisfied.
The representations, warranties and conditions set forth in this Article IV
are solely for the benefit of Agent and the Banks, and the Agent with the
written consent of each of the Banks may waive any or all of such conditions in
whole or in part; provided that no such waiver of a condition shall constitute
a waiver by the Agent or Banks of any of their other respective rights or
remedies under this Agreement or otherwise at law or in equity if the Company
should be in default of any of its covenants, agreements, representations or
warranties under this Agreement.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
------------------------------
The Company represents and warrants to the Agent and each Bank that:
5.1 Corporate Existence and Power. The Company and each of its Material
-----------------------------
Subsidiaries:
(a) is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation;
(b) has the power and authority and all governmental licenses,
authorizations, consents and approvals (i) to own its assets and carry on its
business and other activities as currently conducted and (ii) to execute,
deliver and perform its obligations under the Loan Documents;
(c) is duly qualified as a foreign corporation and is licensed and in
good standing under the laws of each jurisdiction where its ownership, lease
or operation of Property or the conduct of its business requires such
qualification or license; and
(d) is in compliance with all Requirements of Law;
except, in each case referred to in subclause (b)(i), clause (c) or clause (d),
to the extent that the failure to do so could not reasonably be expected to have
a Material Adverse Compliance Effect.
5.2 Corporate Authorization; No Contravention. The execution, delivery and
-----------------------------------------
performance by the Company of this Agreement and any other Loan Document to
which it is a party, have been duly authorized by all necessary corporate action
and do not and will not:
(a) contravene the terms of the Company's certificate of incorporation,
bylaws or other organization document;
(b) conflict with or result in any breach or contravention of, or the
creation of any Lien under, any indenture, agreement, lease, instrument,
Contractual Obligation, injunction, order, decree or undertaking to which the
Company or any of its Subsidiaries is a party; or
(c) violate any Requirement of Law including the Foreign Assets Control
Regulations, the Transaction Control Regulations, the Cuban Assets Control
Regulations, the Foreign Fund Control Regulations, the Iranian Assets Control
Regulations, the Nicaraguan Trade Control Regulations, the South African
Transactions Regulations, the Libyan Sanctions Regulations, the Soviet Gold
Coin Regulations or the Panamanian Transactions Regulations of the United
States Treasury Department (31 C.F.R., Subtitle B, Chapter V, as amended) or
Executive Orders 12722 and 12724 (transactions with Iraq and Executive Orders
12723 and 12725 (transactions with Kuwait).
5.3 Governmental Authorization. No approval, consent, exemption,
--------------------------
authorization, or other action by, or notice to, or filing with, any
Governmental Authority is necessary or required in connection with the
execution, delivery, payment or repayment by the Company of the Obligations, or
enforcement against the Company, of this Agreement or any other Loan Document.
5.4 Binding Effect. This Agreement and each other Loan Agreement to which
--------------
the Company is a party constitute the legal, valid and binding obligations of
the Company, enforceable against the Company in accordance with their respective
terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, or similar laws affecting the enforcement of creditors' rights
generally or by equitable principles relating to enforceability.
5.5 Litigation. Except as set forth in Schedule 5.5 to the Disclosure
---------- ------------
Letter,
(a) there are no actions, suits, proceedings, claims or disputes
pending, or to the best knowledge of the Company, threatened or contemplated,
at law, in equity, in arbitration or before any Governmental Authority,
against the Company, or its Subsidiaries, or
any of their respective properties, which purport to affect or pertain to
this Agreement or any other Loan Document, or any of the transactions
contemplated hereby or thereby; and
(b) there are no actions, suits, proceedings, claims or disputes
pending, or to the best knowledge of the Company as of the Closing Date,
threatened or contemplated, at law, in equity, in arbitration or before any
Governmental Authority, against the Company, or its Subsidiaries, or any of
their respective properties, which, if determined adversely to the Company,
or its Subsidiaries, could reasonably be expected to have a Material Adverse
Compliance Effect; provided, however, that for purposes of making any such
-----------------
determination, at all times prior to the earlier of (i) the time that such
damages have been awarded at trial by a judge, jury or other determiner of
fact, and (ii) the time as of which accrual of such damage amounts would be
recognized for purposes of the Company's consolidated financial statements in
accordance with GAAP, the Company may disregard the effect of punitive
damages claimed by any opposing party, other than treble damages asserted in
connection with antitrust litigation.
No injunction, writ, temporary restraining order or any order of any nature has
been issued by any court or other Governmental Authority purporting to enjoin or
restrain the execution, delivery or performance of this Agreement or any other
Loan Document, or directing that the transactions provided for herein or therein
not be consummated as herein or therein provided.
5.6 No Default. No Default or Event of Default exists or would result from
----------
the incurring of obligations by the Company under this Agreement or any other
Loan Agreement. Neither the Company, nor any of its Subsidiaries, is in default
under or with respect to any Contractual Obligation in any respect which,
individually or together with all such defaults, could reasonably be expected to
have a Material Adverse Compliance Effect.
5.7 ERISA Compliance. No accumulated funding deficiency (as defined in
----------------
section 302 of ERISA and section 412 of the Code), whether or not waived, exists
with respect to any Qualified Plan or to any Plan that would be a Qualified Plan
if the term "Controlled Group" were defined to include Persons under common
control with the Company or any of its Subsidiaries pursuant to section 414(m)
or (o) of the Code. No liability to the PBGC (other than for required premium
payments) has been incurred or could reasonably be expected to be incurred by
the Company or any other ERISA Affiliate with respect to any Qualified Plan that
could reasonably be expected to have a Material Adverse Payment Effect. Neither
the Company nor any ERISA Affiliates have incurred or could reasonably expect to
incur any withdrawal liability under Title IV of ERISA with respect to any
Multiemployer Plan that could reasonably be expected to have a
Material Adverse Payment Effect. To the best knowledge of the Company, the
execution and delivery of this Agreement will not involve any transaction that
is subject to the prohibitions of section 406 of ERISA or in connection with
which a tax could be imposed pursuant to section 4975 of the Code.
5.8 Use of Proceeds; Margin Regulations. The proceeds of the Loans shall be
-----------------------------------
used solely for the purposes permitted by Section 6.11. No portion of the Loans
will be used, directly or indirectly, (a) to purchase or carry Margin Stock or
(b) to repay or otherwise refinance indebtedness of the Company or others
incurred to purchase or carry Margin Stock, (c) to extend credit for the purpose
of purchasing or carrying any Margin Stock, or (d) to make payments of principal
or interest on Ineligible Securities underwritten by any Section 20 Subsidiary
and issued by or for the benefit of the Company or any Affiliate of the Company.
No proceeds of any Loans will be used to acquire any security in any transaction
which is subject to Section 13 or 14 of the Exchange Act.
5.9 Title to Properties; Liens. The Company and each of its Subsidiaries
--------------------------
has good record and marketable title in fee simple to or valid leasehold
interests in all its real Property, except for such defects in title as could
not, individually or in the aggregate, be reasonably expected to have a Material
Adverse Payment Effect. As of the Closing Date, the property of the Company and
its Subsidiaries is subject to no Liens, other than Permitted Liens.
5.10 Taxes. The Company and each of its Subsidiaries have filed all
-----
Federal, state, foreign and other material tax returns and reports required to
be filed, and have paid all Federal and other material taxes, assessments, fees
and other governmental charges levied or imposed upon them or their properties
in accordance with such returns and reports except those which are being
contested in good faith by appropriate proceedings and for which adequate
reserves have been provided in accordance with GAAP and no Notice of Lien has
been filed or recorded. The Company has received no notice from any
Governmental Authority of any deficiency in respect of any such return or report
in an amount which, if assessed or required to be paid, would have a Material
Adverse Compliance Effect.
5.11 Financial Condition.
-------------------
(a) The Company's consolidated balance sheet dated September 30, 1993, and
related consolidated statements of income and cash flows for the quarter ended
on that date (i) were prepared in accordance with GAAP consistently applied
throughout the period covered thereby, except as otherwise expressly noted
therein; and (ii) accurately and fairly present in all material respects, in
accordance with GAAP, the consolidated financial condition of the Company and
its Consolidated Subsidiaries as of the date thereof and results of operations
for the period covered
thereby, subject only to normal year end adjustments and the absence of complete
footnotes.
(b) The audited consolidated balance sheet of the Company and its
Consolidated Subsidiaries dated December 31, 1992, and the related consolidated
statements of operations, shareholders equity and cash flows for the fiscal year
ending on such date (i) were prepared in accordance with GAAP consistently
applied throughout the period covered thereby, except as expressly noted
therein; and (ii) in accordance with GAAP, are complete and accurate and fairly
present in all material respects, the financial condition of the Company and its
Consolidated Subsidiaries as of the date thereof and the results of operations
for the period covered thereby.
(c) Since September 30, 1993 there has been no Material Adverse Compliance
Effect.
5.12 Environmental Matters.
---------------------
(a) The operations of the Company and each of its Subsidiaries comply in
all respects with all Environmental Laws, except where non-compliance could not
reasonably be expected to have a Material Adverse Compliance Effect.
(b) Each of the Company and its Subsidiaries has obtained all Environmental
Permits necessary for its respective operations, and all such Environmental
Permits are in good standing, and the Company and each of its Subsidiaries is in
compliance with all terms and conditions of such Environmental Permits, except
where failure to obtain such Environmental Permits, maintain such Environmental
Permits in good standing or be in compliance with such Environmental Permits
could not reasonably be expected to have a Material Adverse Compliance Effect.
(c) The Company and its Subsidiaries have received no notice that any of
their present Property or operations is subject to any outstanding written order
from or agreement with any Governmental Authority or other Person, nor subject
to any judicial or docketed administrative proceeding, respecting any
Environmental Law, Environmental Claim or Hazardous Material that could
reasonably be expected to, individually or in the aggregate, have a Material
Adverse Compliance Effect.
(d) There are no conditions or circumstances which may give rise to any
Environmental Claim arising from the operations of the Company or its
Subsidiaries, including Environmental Claims associated with any operations of
the Company or its Subsidiaries which, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Compliance Effect.
5.13 Regulatory Entities. None of the Company, any Person controlling the
-------------------
Company, or any Subsidiary of the Company, is (a) an "Investment Company" within
the meaning of the Investment Company Act of 1940; or (b) subject to regulation
under the
Public Utility Holding Company Act of 1935, the Federal Power Act, the
Interstate Commerce Act, any state public utilities code or any other Federal or
state statute or regulation limiting its ability to incur Indebtedness.
5.14 No Burdensome Restrictions. Neither the Company, nor any of its
--------------------------
Subsidiaries is a party to or bound by any Contractual Obligation or subject to
any charter or corporate restriction or any Requirement of Law which could
reasonably be expected to have a Material Adverse Compliance Effect.
5.15 Solvency. The Company is Solvent. The Company and its Consolidated
--------
Subsidiaries, on a consolidated basis, are Solvent.
5.16 Labor Relations. As of the Closing Date there are no strikes, lockouts
---------------
or other labor disputes against the Company or any of its Subsidiaries, or, to
the best of the Company's knowledge, threatened against or affecting the
Company or any of its Subsidiaries, and no significant unfair labor practice
complaint is pending against the Company or any of its Subsidiaries or, to the
best knowledge of the Company, threatened against any of them before any
Governmental Authority. After the Closing Date, except as could not be
reasonably expected to have a Material Adverse Compliance Effect individually or
in the aggregate, there are no strikes, lockouts or other labor disputes against
the Company or any of its Subsidiaries, or, to the best of the Company's
knowledge, threatened against or affecting the Company or any of its
Subsidiaries, and no significant unfair labor practice complaint is pending
against the Company or any of its Subsidiaries or, to the best knowledge of the
Company, threatened against any of them before any Governmental Authority.
5.17 Intellectual Property Matters. Except as set forth in Schedule 5.17 to
----------------------------- -------------
the Disclosure Letter, the Company or any of its Subsidiaries own or are
licensed or otherwise have the right to use (or could obtain ownership of
licenses or rights on terms not materially adverse to such Person and under
circumstances that could not reasonably be expected to have a Material Adverse
Compliance Effect) all of the patents, trademarks, service marks, trade names,
copyrights, other intellectual property rights and licenses to any of the
foregoing, that are reasonably necessary for the operation of their respective
businesses, without conflict with the rights of any other Person except where
such conflict could not be reasonably expected to have a Material Adverse
Compliance Effect. To the best of the Company's knowledge, except as set forth
on Schedule 5.17 to the Disclosure Letter, as of the Closing Date there is no
-------------
claim or litigation regarding any of the foregoing pending or threatened, and no
patent, invention, device, application or principle is pending or proposed,
which, in either case, could reasonably be expected to result in a Material
Adverse Compliance Effect.
5.18 Subsidiaries. As of the Closing Date, the Company has no Subsidiaries
------------
other than those listed on Schedule 5.18(a) to the Disclosure Letter and has no
----------------
equity investments or minority interests in any other corporation or entity in
excess of 5% thereof other than those listed on Schedule 5.18(b) to the Dis-
----------------
closure Letter. As of the Closing Date, the Material Subsidiaries are as
listed on Schedule 5.18(c) to the Disclosure Letter.
----------------
5.19 Broker's; Transaction Fees. Neither the Company nor any of its
--------------------------
Subsidiaries has any obligation to any Person in respect of any finder's,
broker's or investment banker's fee in connection with the transactions
contemplated hereby.
5.20 Insurance. The properties of the Company and its Subsidiaries are
---------
insured with financially sound and reputable insurance companies, in such
amounts, with such deductibles and covering such risks as is customarily carried
by companies engaged in similar businesses and owning similar properties in
localities where the Company or such Subsidiary operates.
5.21 Internal Control. The Company has established and maintains reasonable
----------------
internal controls and reporting systems designed to insure that Responsible
Officers will be promptly informed of all material financial, operational and
compliance matters relevant to compliance with the provisions of the Loan
Agreements.
5.22 Full Disclosure. The documents, certificates and written statements
---------------
(including the Loan Documents) furnished by the Company to the Agent or any Bank
pursuant to any provision of any Loan Agreement, or for use in connection with
the transactions contemplated by any Loan Agreement, taken together with all
such documents, certificates and written statements, do not contain any untrue
statement of a material fact or omit any material fact required to be stated
therein or necessary to make the statements made therein, in light of the
circumstances under which they are made, not misleading; provided, however, that
-------- -------
(a) it is recognized by the Agent and the Banks that projections and forecasts
provided by the Company, while reflecting the Company's good faith projections
or forecasts based upon methods and data the Company believes to be reasonable
and accurate, are not to be viewed as facts and that actual results during the
period or periods covered by any such projections and forecasts may differ from
the projected or forecasted results and (b) nothing contained in this Section
5.22 shall in any way impair the Agent's and the Banks' right to declare and
enforce an Event of Default under subsection 8.1(c) if any representation or
warranty by the Company in any Loan Document shall prove to be incorrect in any
material respect on or as of the date made or deemed made.
ARTICLE VI
AFFIRMATIVE COVENANTS
---------------------
So long as any Bank shall have any Commitment hereunder, or any Loan,
interest, fee or Miscellaneous Payment Amount owing shall remain unpaid, unless
the Majority Banks waive compliance in writing:
6.1 Financial Statements. The Company shall deliver to the Agent, with
--------------------
copies for each Bank:
(a) as soon as available, but not later than 95 days after the end of
each fiscal year of the Company, a copy of the audited consolidated balance
sheet of the Company as at the end of such year and the related consolidated
statements of operations, shareholders' equity and cash flows for such fiscal
year, setting forth in each case in comparative form the figures for the
previous year, and accompanied by the unqualified opinion of Price Waterhouse
or another nationally recognized independent public accounting firm which
report shall state that such consolidated financial statements present
fairly, in all material respects, the financial position for the periods
indicated in conformity with GAAP;
(b) as soon as available, but not later than 95 days after the end of
each fiscal year of the Company, an unaudited consolidating balance sheet of
the Company and each of its Subsidiaries as at the end of such fiscal year
and the related consolidating statement of operations, shareholders' equity
and cash flows for such fiscal year, all in reasonable detail, together with
a certificate by an appropriate Responsible Officer in the form of Exhibit
-------
6.1(b); and
------
(c) as soon as available, but not later than 50 days after the end of
each of the first three fiscal quarters of each year a copy of the unaudited
consolidated balance sheet of the Company as of the end of such quarter and
the related consolidated statements of income, and cash flows for the period
commencing on the first day and ending on the last day of such quarter, and
certified by an appropriate Responsible Officer as being, in all material
respects, complete and correct and fairly presenting, in accordance with
GAAP, the consolidated financial position and the results of operations of
the Company and the Company's Consolidated Subsidiaries, subject only to
normal year end adjustments and the absence of footnotes.
6.2 Certificates; Other Information. The Company shall furnish to the Agent
-------------------------------
with sufficient copies for each Bank:
(a) concurrently with the delivery of the financial statements
referred to in subsections 6.1(a) and (c) above, a compliance certificate of
a Responsible Officer in the form of Exhibit 6.2(a) hereto;
--------------
(b) promptly upon transmission thereof, copies of all such financial
statements, proxy statements, notices and reports as the Company sends to its
public stockholders generally, copies of all final registration statements on
Form S-1 or Form S-3 (without exhibits) or their successor forms relating to
offerings of debt or equity securities on behalf of the Company, and copies
of all Form 10-K's, Form 10-Q's, and Form 8-K's or their successor forms, and
all amendments to such forms, that the Company files with the Securities and
Exchange Commission (or any governmental body or agency succeeding to the
functions of the Securities and Exchange Commission);
(c) promptly upon receipt thereof by the Company, a copy of the final
management letter, if any, submitted by the Company's independent accountants
in connection with any annual audit made by them of the books of the Company
and its Subsidiaries; and
(d) promptly, such additional financial and other information as the
Agent, at the request of any Bank, may from time to time reasonably request,
including any changes in accounting practices or procedures, subject to the
second proviso of Section 6.9 hereof.
6.3 Notices. The Company shall notify the Agent and each Bank:
-------
(a) promptly of the occurrence of any Default or Event of Default or
of any event or circumstance that forseeably will result in a Default or
Event of Default;
(b) promptly after any Responsible Officer becomes aware thereof, of
any (i) breach or non-performance of, or any default under any Contractual
Obligation of the Company or any of its Material Subsidiaries which could
reasonably be expected to result in a Material Adverse Compliance Effect; or
(ii) dispute, litigation, investigation, proceeding or suspension which may
exist at any time between the Company or any of its Subsidiaries and any
Governmental Authority which, if adversely determined, could reasonably be
expected to have a Material Adverse Compliance Effect;
(c) promptly after any Responsible Officer becomes aware thereof, of
the commencement of, or any material and adverse pre-trial judicial or
administrative determination in, any litigation or proceeding affecting the
Company or any of its Subsidiaries (i) in which the amount of damages claimed
is $5,000,000 (or its equivalent in another currency or currencies) or more,
(ii) in which injunctive or similar relief is sought and which, if adversely
determined, could reasonably be expected to have a Material Adverse
Compliance Effect, or (iii) in which the relief sought is an injunction or
other stay of the performance of this Agreement or any Loan Document or the
operations of the Company or any of its Subsidiaries;
(d) promptly upon, but in no event later than ten days after, a
Responsible Officer becomes aware thereof of any of the following which if
adversely determined could have a Material Adverse Compliance Effect, of (i)
any and all enforcement, cleanup, removal or other governmental or regulatory
actions instituted, completed or threatened against the Company or any
Subsidiary of the Company or any of their properties pursuant to any
applicable Environmental Laws, (ii) all other Environmental Claims, and (iii)
any environmental or similar condition on any real Property adjoining or in
the vicinity of the Property of the Company or any Subsidiary of the Company
that could reasonably be anticipated to cause such Property or any part
thereof to be subject to any restrictions on the ownership, occupancy,
transferability or use of such Property under any Environmental Laws;
(e) promptly of any other litigation or proceeding affecting the
Company or any of its Subsidiaries which the Company would be required to
report to the Securities and Exchange Commission pursuant to the Exchange
Act, within four days after reporting the same to the Securities and Exchange
Commission;
(f) promptly of any ERISA Event affecting the Company or any member of
its Controlled Group (but in no event more than 20 days after such ERISA
Event) and (i) a copy of any notice with respect to such ERISA Event that may
be required to be filed with the PBGC (within 20 days following the required
filing date) and (ii) any notice delivered by the PBGC to the Company or any
member or its Controlled Group with respect to such ERISA Event (within 20
days after receipt of such notice);
(g) promptly after any Responsible Officer becomes aware thereof, of
any Material Adverse Compliance Effect subsequent to the date of the most
recent audited financial statements of the Company delivered to the Banks
pursuant to subsection 6.1(a);
(h) promptly of (including, where applicable, a description of) (i) the
placement of any Multiemployer Plan in reorganization status under Title IV
of ERISA; or (ii) any Multiemployer Plan becoming "insolvent" (as such term
is defined in Section 4245 of ERISA under Title IV of ERISA);
(i) promptly after any Responsible Officer becomes aware thereof, of
any labor controversy including any strike, work stoppage, boycott, shutdown
or other labor disruption against or involving the Company or any of its
Subsidiaries which has continued for more than 15 days;
(j) promptly after any Responsible Officer becomes aware thereof, of
the giving or receiving of any notices of prepayment, redemption, repurchase
or default under the Note Agreement, the 1991 Indenture, the 1992 Indenture,
the Note Purchase Agreement, or any agreement entered into by the Company or
its Subsidiaries after the date hereof pursuant to which the Company is
obligated in respect of debt for borrowed money aggregating in excess of
$15,000,000 (in the case of any one such agreement);
(k) promptly upon obtaining knowledge of any actual Change in Control
or the execution by the Company of an agreement providing for a Change in
Control; and
(l) promptly after any Responsible Officer becomes aware thereof, of
any transaction described in Section 7.3(b) hereof.
Each notice pursuant to this Section shall be accompanied by a written
certificate by a Responsible Officer of the Company setting forth details of the
occurrence referred to therein and stating what action the Company or the
affected Subsidiary proposes to take with respect thereto.
6.4 Preservation of Corporate Existence, Etc. Except as otherwise permitted
----------------------------------------
by Section 7.2 or 7.3 hereof, the Company shall and shall cause each of its
Material Subsidiaries to:
(a) preserve and maintain in full force and effect its corporate
existence and good standing under the laws of its State or jurisdiction of
incorporation;
(b) preserve and maintain in full force and effect all rights,
privileges, qualifications, permits, licenses and franchises necessary or
material to the normal conduct of its business, except where the failure to
do so could not individually or in the aggregate be reasonably expected to
have a Material Adverse Payment Effect;
(c) use its reasonable efforts, in the ordinary course and consistent
with past practice, to preserve its business and the goodwill of its
business; and
(d) preserve or renew all of its registered trademarks, trade names and
service marks, the non-preservation of which could reasonably be expected to
have a Material Adverse Payment Effect.
6.5 Maintenance of Property. Except as otherwise permitted by Section 7.2
-----------------------
or 7.3 hereof, the Company shall maintain, and shall cause each of its
Subsidiaries to maintain in good working order and condition, all its Property
which are material to the conduct of business by the Company or the Company and
its Subsidiaries taken as a whole.
6.6 Insurance. The Company shall maintain, and shall cause each of its
---------
Subsidiaries to maintain, with financially sound and reputable insurers,
insurance with respect to its properties and business against loss or damage
(including workers' compensation insurance, public liability and Property and
casualty insurance and business interruption insurance) of the kinds customarily
insured against by Persons engaged in the same or similar business, of such
types and in such amounts as are customarily carried under similar circumstances
(other than the Company's financial circumstances) by such other Persons. Upon
request of the Agent, the Company shall furnish the Agent, with copies for each
Bank, at reasonable intervals (but not more than once per calendar year) a
certificate of a Responsible Officer of the Company (and, if requested by the
Agent, any insurance broker of the Company) setting forth the nature and extent
of all insurance maintained by the Company and its Subsidiaries in accordance
with this Section 6.6 (and which, in the case of a certificate of a broker, were
placed through such broker).
6.7 Payment of Obligations. The Company shall, and shall cause each of its
----------------------
Subsidiaries to, (a) timely prepare and file all reports and returns in respect
of Federal, state, foreign and other income and franchise taxes and timely pay
all amounts in accordance therewith, together with all additional amounts
assessed by the applicable Governmental Authority in respect thereof, and (b)
pay before they become delinquent, all other material taxes, assessments and
governmental charges or levies imposed upon it or its Property; provided that
--------
items of the foregoing description need not be paid while being contested in
good faith and by appropriate proceedings as long as adequate reserves, to the
extent required by GAAP, have been established and maintained and exist with
respect thereto and, provided, further, that the contesting Person's right to
-----------------
use any material Property is not materially adversely affected thereby.
6.8 Compliance with Laws. The Company shall comply, and shall cause each of
--------------------
its Subsidiaries to comply, in all material respects with all Requirements of
Law of any Governmental Authority having jurisdiction over it or its business
(including
the Federal Fair Labor Standards Act), except such as may be contested in good
faith, as to which a bona fide dispute may exist, or where the failure to so
comply could not (a) impair or adversely affect the validity, binding effect or
enforceability of any Loan Agreement, including any remedy set forth therein;
(b) result, directly or indirectly, in any liability to the Agent or any Bank or
cause the Agent or any Bank to violate any Requirement of Law; or (c) reasonably
be expected to result in a material adverse effect upon the operations,
business, properties, condition (financial or otherwise) or prospects of the
Company or the Company and its Subsidiaries taken as a whole.
6.9 Inspection of Property and Books and Records. The Company shall
--------------------------------------------
maintain and shall cause each of its Subsidiaries to maintain sound accounting
policies and an adequate and effective system of accounts and internal
accounting control that will safeguard assets, properly record income, expenses
and liabilities, and assure the timely production of proper financial
statements in accordance with GAAP consistently applied in all material
respects. The Company shall permit, and shall cause each of its Subsidiaries to
permit, any employee of, or any financial, legal, environmental or other
professional consultant or advisor to, the Agent or any Bank, at the Agent's or
such Bank's expense, to visit and inspect any of their respective properties, to
examine all their respective corporate, financial and operating books and
records and make copies thereof or abstracts therefrom, and to discuss their
respective affairs, finances and accounts with their respective directors,
officers and independent public accountants, all at such reasonable times during
normal business hours and as often as may be reasonably desired, upon reasonable
advance notice to the Company; provided, however, that when an Event of Default
-------- -------
exists, the Agent or any Bank may visit, inspect, examine, make copies or
abstracts of and discuss, at the expense of the Company such properties at any
time during business hours and without advance notice; provided, further,
-------- -------
however, that the Company and its Subsidiaries will not be required to disclose,
- -------
permit the inspection, examination, copying or making extracts of, or discuss,
any portion of, any document, or any information, in respect of which and to the
extent that disclosure to the Agent or such Bank is then prohibited by law or
by agreement binding on the Company or any Subsidiary of the Company and entered
into between the Company or any such Subsidiary and any Person not an Affiliate
of the Company and that was not entered into by the Company or such Subsidiary
for the purpose of concealing information from the Agent, the Banks or other
creditors having contract provisions similar to this Section in particular, and
in respect of which (in the case of any such agreement) a Responsible Officer
has provided the Agent with a certificate setting forth a brief description of
the agreement (including, without limitation, the nature and purpose of the
agreement, the parties to the agreement, and the provision of the agreement that
prohibits such disclosure), provided, however, that if disclosure of the
-----------------
existence of any agreement is prohibited by the provisions thereof, such
certificate may state generally, with respect to
such agreement, that there are agreements pertaining to the matter as to which
information was requested which are binding on the Company or a Subsidiary and
which prohibit disclosure of the existence thereof. The Company and its
Subsidiaries shall use their reasonable efforts to obtain a waiver of any
contractual prohibition provided the Banks execute a confidentiality agreement;
provided, however, in no event shall the Company be required to disclose
- -----------------
personnel records. Nothing set forth in this Section 6.9 shall in any way
relieve the Company of its obligations to deliver documents pursuant to Section
6.1, 6.2(a) through (c) or 6.3 hereof.
6.10 Environmental Laws.
------------------
(a) The Company shall, and shall cause each of its Subsidiaries to, conduct
its operations and keep and maintain its Property in compliance with all
Environmental Laws, except where the failure to do so could not reasonably be
expected to, in the aggregate, have a Material Adverse Payment Effect.
(b) At any time as there exists an Event of Default, upon the written
request of the Majority Banks, the Company shall prepare and submit and cause
each of its Subsidiaries to prepare and submit, to the Agent, with copies for
each Bank, at the Company's sole cost and expense at reasonable intervals, an
audit report in form and detail satisfactory to the Majority Banks, providing an
update of the status of any environmental, health or safety compliance, hazard
or liability issue identified in any disclosure required or made pursuant to
subsection 6.3(d) or Section 5.12 and any other environmental, health or safety
compliance obligation, remedial obligation or liability.
6.11 Use of Proceeds. The Company shall use the proceeds of the Loans solely
---------------
to repay in full the Existing Facility and for working capital and other general
corporate purposes not in contravention of any Requirement of Law; provided,
--------
however, that the Company shall not directly or indirectly use the proceeds of
- -------
the Loans for any purchase or other acquisition of voting stock or equity of any
Person if (a) the purpose of such purchase or other acquisition is to effect a
material change in the business, corporate or capital structure of such Person,
or the Company intends to acquire in excess of 50% of the combined voting power
of all then issued and outstanding voting stock of such Person or otherwise to
acquire the power to elect, appoint, or cause the election or appointment of at
least a majority of the members of the board of directors of such Person, and
(b) such purchase or other acquisition has not been approved by the board of
directors (or other body exercising similar authority) of such Person.
6.12 Internal Controls. The Company will maintain reason-able internal
-----------------
controls and reporting systems designed to insure that a Responsible Officer
will be promptly informed of all material financial, operational and compliance
matters relevant to compliance with the provisions of the Loan Agreements.
6.13 Subordinated Debt Notices. Promptly after the initial Borrowing
-------------------------
hereunder, the Company shall send a written notice to the trustee under each of
the 1991 Indenture, the 1992 Indenture, and any and all other trustees or
creditors in respect of Subordinated Debt then outstanding, informing each such
Person that the Company has incurred "Senior Indebtedness" (or equivalent term,
as defined in such Indentures) pursuant to this Agreement. At any time as there
exists an Event of Default hereunder, the Company shall immediately upon the
receipt of a notice of default from the Agent, together with the request by the
Agent at the request of Banks holding in the aggregate the amount of "Senior
Indebtedness" (or equivalent term) as is necessary under the applicable
Subordinated Debt documentation to issue such notices, send by the most
expeditious means available written notices in the form specified by, and in
accordance with, Section 4.05 of the 1991 Indenture and the 1992 Indenture (or
other, equivalent, section under other applicable documentation) to such trustee
or other Person, and to all other Persons entitled to such notice pursuant to
the terms of such indenture, with a copy to the Agent. If the Company shall
fail to deliver any of the foregoing notices required by this Section 6.13, the
Company irrevocably authorizes the Agent to prepare, execute and deliver a
notice substantially in the form of Exhibit 6.13 (or in such other form as may
------------
be appropriate to such indenture).
ARTICLE VII
NEGATIVE COVENANTS
------------------
So long as any Bank shall have any Commitment hereunder, or any Loan,
interest, fee or Miscellaneous Payment Amount owing shall remain unpaid, unless
the Majority Banks waive compliance in writing:
7.1 Limitation on Liens. The Company shall not, nor shall it suffer or
-------------------
permit any of its Subsidiaries to, directly or indirectly, make, create, incur,
assume or suffer to exist any Lien (including any Lien granted pursuant to
paragraph 5C of the Note Agreement) upon or with respect to any part of its
Property, whether now owned or hereafter acquired, other than the following
("Permitted Liens"):
- -----------------
(a) any Lien (i) identified on Schedule 7.1, provided, that to the
------------ --------
extent such Lien shall attach to receivables of the Company or a Subsidiary
(other than as proceeds of other collateral), such Lien shall be subject to
subsection 7.1(q), (ii) arising in connection with the Agreement dated as of
September 1991 between the Company and Olivetti Finfactoring SpA, providing
for the factoring by Olivetti of receivables of the Company and its
Subsidiaries, provided, that the aggregate principal amount secured by any
--------
such Lien shall not at any time exceed the Italian Lire equivalent of
$5,000,000 plus accrued interest, and (iii) (A) arising under paragraph
5C of the Note Agreement (as in effect on the date hereof, without regard for
any future amendments thereof) securing the notes issued pursuant thereto and
(B) arising under paragraph 4C of the Note Purchase Agreement (as in effect
on the date hereof, without regard for any future amendments thereof)
securing the notes issued pursuant thereto;
(b) any Lien created under any Loan Document;
(c) Liens for taxes, fees, assessments or other governmental charges
which are not delinquent or remain payable without penalty, or to the extent
that non-payment thereof is permitted by Section 6.7, provided that no Notice
of Lien has been filed or recorded;
(d) Liens incurred or deposits made in the ordinary course of business,
(i) in respect of leases, statutory obligations or claims or
demands of materialmen, mechanics, carriers, warehousemen, landlords and
other like Persons that are not yet due or that are being actively
contested in good faith by appropriate proceedings, and in respect of
which adequate reserves are carried on the books of the Person liable
therefor to the extent required by GAAP,
(ii) in connection with workers' compensation, unemployment
insurance, social security and other like laws (other than ERISA),
(iii) to secure the performance of letters of credit used in place
of performance bonds, bids, leases, tenders, sales contracts, statutory
obligations, government contracts, surety and performance bonds and
other similar obligations not incurred in connection with the borrowing
of money, the obtaining of advances or the payment of the deferred
purchase price of Property,
(iv) incidental to the conduct of the Company's business or
ownership of its Property, provided that,
--------
(A) such obligations shall not have arisen in connection
with the borrowing of money, the obtaining of advances or credit,
the sale of accounts receivable or the payment of the deferred
purchase price of Property, and
(B) such Liens shall not in the aggregate materially
detract from the value of the Property encumbered thereby or
materially
interfere with the use of such Property in the ordinary conduct of
the owning Person's business.
(v) which constitute purchase money security interests with
respect to advances or the payment of deferred purchase price in
connection with the purchase of goods and services in the ordinary
course of business, provided that, at the time any such security
--------
interest is created, the Company or the Company's Subsidiary intends to
pay the amount secured thereby within 180 days after such creation,
provided, further, that any such security interest runs in favor of the
-------- -------
provider of such goods or services and is not part of a floor plan
financing arrangement or any other arrangement with any Person that is
primarily in the business of making loans or extending other financial
accommodations, or
(vi) which constitute Liens with respect to conditional sale or
other title retention agreements and any lease in the nature thereof,
provided that any such Lien with respect to conditional sales or other
--------
title retention agreements encumbers only Property and accretions
thereto (and proceeds arising from the disposition thereof) which are
subject to such conditional sale or other title retention agreement or
lease in the nature thereof and, provided, further, that the aggregate
-----------------
amount secured by all such conditional sale or other title retention
agreements and leases in the nature thereof shall not be more than
$5,000,000 (it being understood that additional amounts may be so
secured if permissible under any other provision of this Section 7.1);
(e) reservations, exceptions, encroachments, ease-ments, rights-of-way,
covenants, conditions, restrictions and other similar title exceptions or
encumbrances affecting real Property, provided such Liens do not interfere
--------
with the use of such Property in the ordinary conduct of the business of the
Company and its Subsidiaries, taken as a whole;
(f) Liens on Property of a Subsidiary of the Company to secure
obligations of such Subsidiary to the Company or another Subsidiary of the
Company;
(g) Liens with respect to Capitalized Lease Obligations and financing
leases (together with any related interest), provided that such Liens
--------
encumber only Property and accretions thereto (and proceeds arising from the
disposition thereof) acquired with the proceeds of the indebtedness secured
thereby;
(h) leases and subleases of, and licenses and sublicenses with respect
to, Property where the Company or a Subsidiary of the Company is the lessor
or licensor (or sublessor or sublicensor), provided that such leases,
--------
subleases, licenses and sublicenses do not in the aggregate materially
interfere with the business of the Company and its Subsidiaries taken as a
whole;
(i) (i) Liens to secure appeal bonds, supersedeas bonds and other
similar Liens arising in connection with court proceedings (including,
without limitation, surety bonds and letters of credit) or any other
instrument serving a similar purpose, provided that the aggregate amount
--------
so secured, together with the aggregate amount secured pursuant to
clause (ii) below, shall not at any time exceed $5,000,000 (it being
understood that additional amounts may be so secured if permissible
under any provision of this Section 7.1),
(ii) attachments, judgments and other similar Liens arising in
connection with court proceedings, provided that the execution or other
--------
enforcement of such Liens is effectively stayed and the claims secured
thereby are being actively contested in good faith and by appropriate
proceedings and, provided, further, that the aggregate amount so
-----------------
secured, together with the aggregate amount secured pursuant to clause
(i) above, shall not exceed $5,000,000 (it being understood that
additional amounts may be so secured if permissible under any other
provision of this Section 7.1);
(j) Liens on the Property of any corporation at the time such
corporation becomes a Subsidiary of the Company, or such corporation is
acquired by, consolidated with or merged into the Company or a Subsidiary of
the Company, and Liens on any Property at the time acquired by the Company or
a Subsidiary of the Company, provided, in each case, that such Lien was not
--------
incurred in contemplation of such transaction;
(k) any Lien permitted by this Section 7.1 securing Debt that is being
renewed, extended or refunded, provided that the principal amount of such
--------
Debt outstanding at the time of such renewal, extension or refunding is not
increased and such Lien is not extended to any other Property (other than
pursuant to its original terms);
(l) Purchase Money Mortgages, provided that each such Purchase Money
--------
Mortgage secures an amount not exceeding 100% of the lesser of the cost
(including liabilities assumed) or the fair market value at the time of
acquisition or construction of the Property to which
it relates (as determined in good faith by the Board of Directors);
(m) Liens consisting of an agreement to file or give a financing
statement set forth in operating leases (it being understood that, upon the
filing of any such financing statement, the Lien created thereby must be
permissible under another provision of this Section 7.1);
(n) Liens which constitute rights of set-off of a customary nature or
bankers' Liens with respect to amounts on deposit, whether arising by
operation of law or by contract, in connection with working capital
facilities, lines of credit, term loans, or other credit facilities and
similar arrangements entered into with banks in the ordinary course of
business;
(o) Liens on inventory, if any, arising in connection with any
arrangement pursuant to which the Company or a Subsidiary agrees to
repurchase inventory from a customer or a third party providing financing to
a customer, with respect to an aggregate amount of Debt of up to $30,000,000
at any time;
(p) Liens with respect to shares of capital stock of Arcada Holding
such as restrictions on transfer, rights of first refusal and similar
restrictions as contemplated by the Arcada Letter of Intent; and
(q) Liens not otherwise permitted by this Section 7.1 on Property of
the Company or any Subsidiary of the Company; provided that, as of each
--------
Determination Date, the amount of
(i) all Debt secured by Liens permitted only by this subsection
7.1(q), plus
----
(ii) all Debt of Subsidiaries of the Company (other than Debt owed
by a Subsidiary of the Company to the Company or another Subsidiary of
the Company) and all Preferred Stock of the Company's Subsidiaries
(other than such Preferred Stock owned by the Company or another
Subsidiary of the Company), plus
----
(iii) the Sale/Leaseback Transaction Amount,
(without duplication) does not exceed 20% of Tangible Net Worth, in each case
determined as of such Determination Date; and further provided that such
------- --------
Liens do not secure indebtedness for borrowed money loans or advances (which
should not be deemed to include receivables factoring).
7.2 Dispositions of Assets. The Company shall not, nor shall it permit any
----------------------
of its Subsidiaries to, directly or indirectly, sell, assign, lease, convey,
transfer or otherwise dispose of (whether in one or a series of transactions)
(collectively, "Transfers") any of its assets, business or Property (including
---------
accounts and notes receivable (with or without recourse) and equipment sale-
leaseback transactions) or enter into any agreement to do any of the foregoing
except:
(a) Transfers of inventory, or used, worn-out or surplus Property, all
in the ordinary course of business;
(b) Transfers of equipment to the extent that such equipment is
exchanged for credit against the purchase price of similar replacement
equipment or the proceeds of such sale are reasonably promptly applied to the
purchase price of such replacement equipment;
(c) Transfers in the ordinary course of business;
(d) Transfers to the Company or any of its Subsidiaries;
(e) Transfers which (i) constitute dispositions of cash or Cash
Equivalents not prohibited by this Agreement, (ii) constitute Investments
which are permitted under Section 7.4 hereof, or (iii) constitute the
liquidation of any Permitted Investment; and
(f) any other Transfers if all of the following conditions shall have
been satisfied:
(i) the sum (without duplication) of
(A) the net book value of such Property on the date of the
transfer (the "Asset Disposition Date"), expressed as a percentage of
----------------------
Consolidated Assets on the Determination Date most recently preceding
the Asset Disposition Date, plus
(B) the net book value of each other item of Property of the
Company and its Subsidiaries that was Transferred pursuant to this
subsection 7.2(f) (including, without limitation, a Transfer by merger
or consolidation) ("Transferred Property"), during the period ending on
--------------------
the Asset Disposition Date and commencing on the first day of the period
of 12 consecutive calendar months most recently ended as of the Asset
Disposition Date (the "Annual Disposition Measurement Period") (stock of
-------------------------------------
the Company's Subsidiaries being deemed to have a net book value equal
to the net book value of all assets of the issuer of stock in such Sub-
sidiary at such time, or the appropriate portion thereof if less than
all stock of such Subsidiary is the subject of such Transfer), expressed
in each case as a percentage of Consolidated Assets on the Determination
Date most recently preceding the date of each such Transfer, minus
(C) the aggregate net book value of all Property transferred
pursuant to this subsection 7.2(f) during the Annual Disposition
Measurement Period to the extent that the net proceeds arising therefrom
have been either reinvested in the business of the Company and the
Company's Subsidiaries or applied to, or irrevocably committed to make,
prepayments of Senior Debt within the period of 12 consecutive months
after the respective Transfers of such Property pursuant to this
subsection 7.2(f), such aggregate net book value (or the portion thereof
corresponding to the portion of such net proceeds so applied or to be so
applied) being expressed as a percentage of Consolidated Assets
determined on the Determination Date most recently preceding the date of
each such Transfer; provided, that any such net proceeds spent for
operating expenses or principal, premium or interest in respect of Debt
or held in deposit accounts or otherwise as short term investments shall
not be deemed to have been reinvested in the business of the Company and
the Company's Subsidiaries; provided, further, that such percentage
shall not, in any event, exceed 10%;
will not exceed 15%;
(ii) the sum (without duplication) of
(A) the Cash Flow Contribution of such Property during the period
of four consecutive fiscal quarters of the Company most recently ended
prior to the Asset Disposition Date (the "Four Quarter Period"), plus
-------------------
(B) the Cash Flow Contribution of each other item of Transferred
Property during the Annual Disposition Measurement Period, such Cash
Flow Contribution for any particular Property being measured for the
period of four consecutive fiscal quarters of the Company most recently
ended prior to the transfer of such Property, minus
(C) the Cash Flow Contribution of all Property transferred by the
Company and the Company's Subsidiaries during the Annual Disposition
Measurement Period to the extent that the net proceeds arising therefrom
have been either reinvested in the business of the Company and the
Company's Subsidiaries or applied to, or irrevocably committed to make
prepayments of Senior Debt within the period of 12 consecutive months
after the respective transfers of such Property pursuant to this
subsection 7.2(f), such Cash Flow Contribution (or the portion thereof
corresponding to the portion of such net proceeds so applied or to be so
applied) for any particular Property being measured for the period of
four consecutive fiscal quarters of the Company most recently ended
prior to the disposition of such Property, provided, that any such net
proceeds spent for operating expenses or principal, premium or interest
in respect of debt or held in deposit accounts or otherwise as short
term investments shall not be deemed to have been reinvested in the
business of the Company or the Company's Subsidiaries; provided,
further, that the Cash Flow Contribution of all such Property shall not,
in any event, exceed 10% of Consolidated Operating Cash Flow during the
Four Quarter Period,
will not exceed 15%;
(iii) the sum (without duplication) of
(A) the net book value of such Property on the Asset Disposition
Date, expressed as a percentage of Consolidated Assets on the
Determination Date most recently preceding the Asset Disposition Date,
plus
(B) the net book value of each other item of Property of the
Company and the Company's Subsidiaries that was transferred pursuant to
this subsection 7.2(f) (including, without limitation, a transfer by
merger or consolidation), during the period ending on the Asset
Disposition Date and commencing on the first day of the period of 36
consecutive calendar months most recently ended as of the Asset
Disposition Date (the "Three Year Disposition Measurement Period")
-----------------------------------------
(stock of a Subsidiary of the Company being deemed to have a net book
value equal to the net book value of all assets of the issuer of such
stock, or the appropriate portion thereof if less than all
stock of such Subsidiary is the subject of such Transfer), expressed in
each case as a percentage of Consolidated Assets on the Determination
Date most recently preceding the date of each such transfer,
will not exceed 40%;
(iv) the sum (without duplication) of
(A) the Cash Flow Contribution of such Property during the Four
Quarter Period, plus
(B) the Cash Flow Contribution of all other Property of the
Company and the Company's Subsidiaries that was transferred pursuant to
this subsection 7.2(f) (including, without limitation, a Transfer by
merger or consolidation) during such Three Year Disposition Measurement
Period, such Cash Flow Contribution for any particular Property being
measured for the period of four consecutive fiscal quarters of the
Company most recently ended prior to the disposition of such Property,
will not exceed 40%;
(v) with respect to any Transfer, or series of related Transfers,
of Property pursuant to this subsection 7.2(f) for consideration in an
amount which is at least equal to the sum of $25,000,000 plus 5% of the
amount, if any, by which Consolidated Assets, determined as of the most
recent Determination Date at the time of such transfer, exceeds
Consolidated Assets, determined as of December 31, 1992, in the opinion
of the Board of Directors, the sale is for fair market value and is in
the best interests of the Company and the Company's Subsidiaries; and
(vi) immediately prior to, and immediately after the consummation
of the transaction, and after giving effect thereto, no Default or
Event of Default exists or would exist under any provision of this
Agreement.
If the Company shall make any Transfer which would be prohibited by this
Section 7.2 but for the deduction provided for in subclause (C) of clause (i)
or (ii) of subsection (f), the Company shall be deemed to have covenanted that
the net proceeds from such Transfer shall be reinvested in the business of the
Company and the Company's Subsidiaries (subject to the limitations of the first
proviso to such subclause) or applied to, or irrevocably
committed to make prepayments of Senior Debt within the period of 12 consecutive
months after such Transfer.
7.3 Consolidations and Mergers.
--------------------------
(a) The Company shall not, and shall not suffer or permit any of its
Subsidiaries to, merge, consolidate with or into, nor shall the Company convey,
transfer, lease or otherwise dispose of (whether in one transaction or in a
series of transactions) all or substantially all of its assets (whether now
owned or hereafter acquired) to any Person except (i) any Subsidiary of the
Company (other than a Subsidiary created for such purpose) may merge,
consolidate or combine with or into, the Company (provided that the Company
shall be the continuing or surviving corporation) or with any one or more
Subsidiaries of the Company (provided that if any transaction shall be between a
--------
Subsidiary of the Company and a Wholly-Owned Subsidiary of the Company, the
Wholly-Owned Subsidiary shall be the continuing or surviving corporation) and
(ii) as expressly permitted in subsection 7.3(b).
(b) The Company shall not, and shall not permit its Subsidiaries to, do any
of the following, or enter into any agreement or make any offer to do any of
the following: (i) merge or consolidate with or into any Person other than the
Company or a Subsidiary of the Company, or (ii) purchase or otherwise acquire,
directly or indirectly, all or substantially all of the assets of any Person,
business or division other than of or from the Company or a Subsidiary of the
Company, or (iii) purchase or otherwise acquire, directly or indirectly, in
excess of 50% of the voting stock or equity of any Person other than a
Subsidiary of the Company; provided that the Company and its Subsidiaries may so
--------
merge (provided, in the case of the Company, that the Company is the surviving
corporation), and may enter into agreements, make offers and engage in the
transactions described in clauses (ii) and (iii) of this subsection if:
(A) the amount of all cash consideration payable by the Company or
any such Subsidiary (other than to the Company or a Wholly-Owned
Subsidiary of the Company), when added to the amount of all cash
consideration paid by the Company and all of its Subsidiaries for all
prior transactions undertaken after the Closing Date which would not be
permitted under this subsection 7.3(b) but for this proviso, is not
greater than the greater of $25,000,000 and fifteen percent (15%) of the
Company's Tangible Net Worth as of the end of the fiscal quarter
immediately preceding the closing of any such transaction,
(B) the amount of all consideration payable (including by
assumption of liabilities and the fair market value of Property other
than cash paid, including any consideration paid in the form of equity)
by the Company or any such Subsidiary (other than to the
Company or a Wholly-Owned Subsidiary of the Company), when added to the
amount of all consideration paid or assumed by the Company and all of
its Subsidiaries for all prior transactions undertaken after the Closing
Date which would not be permitted under this subsection 7.3(b) but for
this proviso, is not greater than $100,000,000,
(C) such other Person is in the same line of business as the
Company and its Subsidiaries or provides vertical integration for such
line of business, and
(D) at such time and immediately after giving effect thereto, no
Default or Event of Default would exist.
7.4 Loans and Investments. The Company will not and will not permit any of
---------------------
its Subsidiaries to purchase or make investments in, purchase stock or
securities of, or make loans or advances to, or make other investments in, or
guarantee the obligations of, any other Person (including investments in or
loans or advances to any corporation proposed to be acquired or created as a
Subsidiary) (all of the foregoing referred to as "Investments", and all of the
-----------
below-listed investments referred to as "Permitted Investments") except:
---------------------
(a) obligations of, or obligations guaranteed by (or insured by), the
United States government, its agencies, or any public instrumentality thereof
with maturities not to exceed (or an unconditional right to compel purchase
within) seven years from the date of acquisition;
(b) Investments in or to the Company or its Subsidiaries and
Investments in or to companies which simultaneously with such Investments
become Subsidiaries of the Company, and guarantees by the Company of the
obligations of its Subsidiaries and guarantees by Subsidiaries of the Company
of obligations of the Company or other Subsidiaries of the Company;
(c) commercial paper or loan participations maturing within seven years
of the date of acquisition issued by or granting participations in
obligations of a Person organized under the laws of the United States,
Canada, a country that is a member of the European Community, Singapore,
Taiwan, Malaysia or Japan, rated at the time of acquisition (or issued by or
granting participations in obligations of Persons organized under the laws of
such jurisdiction with other outstanding unsecured and unsupported debt
securities ranking pari passu with such commercial paper or loan
participations and rated at the time of acquisition) in the top rating
classification by Moody's Investors Service, Inc., Standard & Poor's
Corporation, Duff & Phelps Inc. or any
other rating agency nationally recognized in the United States, Japan or any
country which is a member of the European Community at the time of
acquisition thereof;
(d) Investments arising from transactions by the Company or its
Subsidiaries with customers or suppliers (including Investments received in
settlement of trade receivables which trade receivables are fully reserved
against on the books of the Company or such Subsidiary or are less than one
year overdue) in the ordinary course of business;
(e) Investments consisting of:
(i) travel advances, employee relocation loans, and other employee
loans and advances in the ordinary course of business,
(ii) loans to employees, officers or directors relating to the
purchase of equity securities of the Company or its Subsidiaries, or
(iii) other loans to officers and employees approved by the Board
of Directors in an aggregate amount not in excess of $10,000,000
outstanding at any time;
(f) operating deposit accounts maintained in the ordinary course of
business for operating fund purposes;
(g) securities issued by any state of the United States or any
political subdivision of any such state or any public instrumentality thereof
with maturities not to exceed (or an unconditional right to compel purchase
within) seven years of the date of acquisition, that are rated in one of the
highest two rating classifications by Moody's Investors Service, Inc.,
Standard & Poor's Corporation, Duff & Phelps Inc. or any other rating agency
nationally recognized in the United States;
(h) demand and time deposits with, Eurodollar deposits with,
certificates of deposit issued by, or obligations or securities fully backed
by letters of credit issued by
(i) any bank organized under the laws of the United States, any
state thereof, the District of Columbia or Canada having combined
capital and surplus aggregating at least $100,000,000, and outstanding
unsecured and unsupported debt rated "A" or better at the time of
acquisition thereof by Standard and Poor's Corporation, Moody's Investor
Service, Inc., Duff & Phelps Inc. or any other rating
agency nationally recognized in the United States, Japan or any country
which is a member of the European Community,
(ii) the banks listed in Schedule 7.4(h), or
---------------
(iii) any other bank organized under the laws of a country that is
a member of the European Community (or any political subdivision of any
such country), Japan, Singapore, Taiwan, Malaysia, the Cayman Islands,
the British West Indies or the Bahamas, having combined capital and
surplus of not less than $500,000,000 or the equivalent thereof in a
currency other than United States dollars.
(the banks described in the foregoing subclauses (i) to (iii), inclusive,
being referred to in this Agreement as "Permitted Banks");
---------------
(i) bankers' acceptances accepted by a Permitted Bank and eligible for
rediscount under the requirements of the Board of Governors of the Federal
Reserve System;
(j) repurchase agreements with any of:
(i) the Permitted Banks,
(ii) Alex. Brown & Sons Incorporated, Bear, Stearns & Co., Dean
Witter Reynolds Inc., The First Boston Corporation, Goldman Sachs & Co.,
J.P. Morgan Securities, Inc., Kidder, Peabody & Co., Incorporated,
Merrill Lynch, Pierce, Fenner & Smith Incorporated, Morgan Stanley & Co.
Incorporated, Paine Webber Incorporated, Salomon Brothers, Inc.,
Shearson Lehman Hutton, Inc., Smith Barney, Harris Upham & Co.,
Incorporated, or their successors, or
(iii) any other bank or securities dealer of a similar quality
approved by a Responsible Officer, or
(iv) any Affiliate of the foregoing,
such repurchase agreements to be (at the time entered into) fully
collateralized by securities of a type described in subsection (a), (c), (g)
or (h) above, in each case made in accordance with the Company's internal
investment policy in effect at such time;
(k) Investments in money market programs that would be classified on
the balance sheet of the investing Person as a current asset in accordance
with generally accepted accounting principles, which money market programs
have total invested assets in excess of $1,000,000,000;
(l) Investments in money market preferred stocks or other equivalent
Dutch-auction preferred stock of any corporation maturing within one year of
the date of acquisition thereof and with a credit rating at the time of
acquisition thereof of "AA+" or "aa1" or better (or a comparable rating) by
Moody's Investors Service, Inc., Standard & Poor's Corporation, Duff & Phelps
Inc. or any other rating agency nationally recognized in the United States,
Japan or any country which is a member of the European Community;
(m) notes receivable of, or prepaid royalties and other credit
extensions to, customers and suppliers in the ordinary course of business so
long as such notes, prepaid royalties or other credit extensions are due
within one year of the date of acquisition thereof or cover no more than a
reasonable estimate of one year's obligations to such customers or suppliers,
as the case may be;
(n) Rate Contracts entered into in the ordinary course of business so
long as, at the time any such transaction shall be entered into, the
counterparty in such transaction is one of the Banks or has outstanding debt
securities rated "A2" or better, or "A" or better (or a comparable rating),
by Moody's Investors Service, Inc., Standard & Poor's Corporation, Duff &
Phelps Inc. or any other rating agency nationally recognized in the United
States, Japan or any country which is a member of the European Community;
(o) guarantees by the Company and its Subsidiaries of the obligations
of Subsidiaries of the Company and of vendors and suppliers of such
Subsidiaries or the Company, in each case in respect of transactions of such
Subsidiaries entered into in the ordinary course of business of such
Subsidiaries and such vendors and suppliers and directly related to the
business conducted by such vendors and suppliers with such Subsidiaries or
the Company, as the case may be;
(p) Investments existing on the Closing Date listed on Schedule 7.4(p);
---------------
and other Investments existing on the Closing Date not in excess, in the
aggregate, of $20,000,000; and
(q) Investments not otherwise permitted by the other provisions of this
Section 7.4, if, on the date of the making of any such Investment, and after
giving effect to such Investment, the sum of (i) the difference between (A)
the aggregate cost of all Investments outstanding on such date made pursuant
to this subsection 7.4(q), minus (B) the net return of capital received by
the Company and its Subsidiaries on or prior to such date from all
Investments made pursuant to this subsection 7.4(q) during the period
commencing on the Closing Date and ending on such date, plus (ii) the
aggregate amount of Restricted Payments made pursuant to clause (iv) of
subsection 7.8(a) (and not otherwise permitted under subsection 7.8(a))
during the period commencing on the Closing Date and ending on such date,
does not exceed 15% of Tangible Net Worth on such date.
No Investments can be made pursuant to the provisions of subsection 7.4(q) of
this Agreement during any period when a Default or Event of Default has
occurred and is then continuing. Notwithstanding any provision in this
Section 7.4 to the contrary, none of the following shall constitute
"Investments" for purposes of this Section 7.4:
(i) Any distributions paid or made in respect of the stock of the
Company or any Subsidiary of the Company (whether in cash, Property or
stock of the Company or any such Subsidiary), or
(ii) Any payments (whether in cash, Property or stock of the
Company or any Subsidiary) to redeem, purchase or otherwise acquire any
stock of the Company or any Subsidiary of the Company;
provided, in each case, (A) that any such distribution or payment is
otherwise permitted under the terms of this Agreement or consented to in
writing by the Majority Banks, and (B) if any such distribution or payment is
changed from the form in which it was received, it must comply with the
provisions of this Section 7.4 or otherwise be consented to in writing by the
Majority Banks. For purposes of the preceding sentence, the term "stock"
shall include warrants, options and other rights to purchase stock.
For purposes of calculating compliance with this covenant, with respect to any
Investment denominated other than in Dollars, the equivalent in Dollars of any
such other Investment on the last day of each fiscal quarter of the Company
shall be deemed the amount of such Investment.
7.5 Limitation on Subsidiary Debt. The Company shall not, at any time,
-----------------------------
suffer or permit any Subsidiary to create, incur or assume any Debt, or to issue
any Preferred Stock unless, immediately after the creation, incurrence or
assumption of such Debt, or the issuance of such Preferred Stock, and after
giving effect thereto, the sum of (i) the Sale/Leaseback Transaction Amount,
plus (ii) the amount of all Debt secured by Liens permitted only by subsection
7.1(q), plus (iii) all Debt of Subsidiaries of the Company (other than Debt owed
by a Subsidiary to the Company or to another Subsidiary of the Company) and all
Preferred Stock of the Subsidiaries of the Company (other than Preferred Stock
of a Subsidiary owned by the Company or another Subsidiary of the Company)
(without duplication) does not exceed 20% of Tangible Net Worth, in each case
determined as of such time.
7.6 Transactions with Affiliates. The Company shall not and shall not
----------------------------
permit any of its Subsidiaries to enter into any transaction with any Affiliate
of the Company or of any such Subsidiary except (a) in the ordinary course of
business and pursuant to the reasonable requirements of the business of the
Company or such Subsidiary and upon fair and reasonable terms no less favorable
to the Company or such Subsidiary than would obtain in a comparable arm's-length
transaction with a Person not an Affiliate of the Company or such Subsidiary;
(b) if (i) such transaction relates to the compensation of an Affiliate who is
an officer, director or employee of the Company or any Subsidiary of the
Company, then (ii) such transaction is in the best interests of the Company and
its Subsidiaries, taken as a whole, (iii) such transaction has been approved by
the board of directors of the Company or the Subsidiary, as applicable, and (iv)
at the time of such transaction, the Company is required to file reports
pursuant to Section 13 of the Exchange Act; or (c) transactions between the
Company and a Subsidiary of the Company or between Subsidiaries of the Company.
This Section 7.6 shall not apply to the transactions contemplated by the Arcada
Letter of Intent. Purchases by the Company or any of its Subsidiaries of shares
of outstanding capital of the Company's Subsidiary formed under the laws of
China shall be deemed to comply with this Section 7.9 so long as the Company or
such Subsidiary pays fair value for such shares, as determined by the Board of
Directors of the Company.
7.7 Compliance with ERISA. The Company shall not directly or indirectly and
---------------------
shall not permit any ERISA Affiliate directly or indirectly to, (i) terminate
any Plan subject to Title IV of ERISA so as to result in any material (in the
opinion of the Majority Banks) liability to the Company or any ERISA Affiliate,
(ii) permit to exist any ERISA Event or any other event or condition, which
presents the risk of a material (in the opinion of the Majority Banks) liability
of the Company or any ERISA Affiliate, or (iii) make a complete or partial
withdrawal (within the meaning of ERISA Section 4201) from any Multiemployer
Plan so as to result in any material (in the opinion of the Majority Banks)
liability to the Company or any ERISA Affiliate, (iv) enter into any new Plan or
modify any existing Plan (except in
the ordinary course of business consistent with past practice) which could
create Unfunded Pension Liabilities with respect to such Plan in an amount which
exceeds $30,000,000, or (v) permit the Unfunded Pension Liabilities under any
Plan to exceed $30,000,000.
7.8 Restricted Payments.
-------------------
(a) The Company shall not declare or make any dividend payment or other
distribution of assets, properties, cash, rights, obligations or securities on
account of any shares of any class of its capital stock or purchase, redeem or
otherwise acquire for value (or permit any of its Subsidiaries to do so) any
shares of its capital stock or any warrants, rights or options to acquire such
shares, now or hereafter outstanding (collectively, Restricted Payments");
-------------------
except that (i) the Company may declare and make dividend payments or other
- -----------
distributions payable solely in its capital stock, provided that immediately
--------
after giving effect to any such proposed action, no Default or Event of Default
would exist; (ii) any Subsidiary of the Company may declare and make dividend
payments or other distributions of assets, properties, cash, rights, obligations
or securities on account of any shares of any class of its capital stock or
redeem or otherwise acquire for value any shares of its capital stock or any
warrants, rights or options to acquire such shares, to or from the Company or to
or from a Wholly-Owned Subsidiary of the Company; (iii) the Company or any of
its Subsidiaries may purchase shares of preferred stock of Arcada Holdings at a
cost not exceeding $6,000,000, plus accrued and unpaid dividends thereon,
provided that immediately after giving effect to any such proposed action, no
- --------
Default or Event of Default would exist; and (iv) the Company and its
Subsidiaries may make such other Restricted Payments (other than the declaration
or making by the Company of any dividend payment on account of any shares of any
class of its capital stock) if, on the date of making such Restricted Payment,
and after giving effect to such Restricted Payment, the sum of (A) the
difference between (I) the aggregate cost of all Investments outstanding on the
date of such Restricted Payment made pursuant to subsection 7.4(q), minus (II)
the net return of capital received by the Company and its Subsidiaries on or
prior to such date from all Investments made pursuant to subsection 7.4(q)
during the period commencing on the Closing Date and ending on such date, plus
(B) the aggregate amount of Restricted Payments made pursuant to this clause
(iv) of subsection 7.8(a) (and not otherwise permitted under this subsection
7.8(a)) during the period commencing on the Closing Date and ending on such
date, does not exceed 15% of Tangible Net Worth on such date, provided that
--------
immediately after giving effect to any such proposed action, no Default or Event
of Default would exist.
(b) The Company shall not, and shall not permit any of its Subsidiaries to,
make any payment of principal or redemption of Subordinated Debt, other than
mandatory prepayments or mandatory redemptions scheduled at the time of issuance
of such
Subordinated Debt, or otherwise purchase or acquire any Subordinated Debt,
directly or indirectly, or give any notice that irrevocably binds it to take any
such action; provided, however, that as long as no Default or Event of Default
-------- -------
shall exist immediately prior to, or immediately after, the consummation of any
such action, the Company may refinance Subordinated Debt by issuing additional
Subordinated Debt (the terms, conditions and provisions of which shall be
approved by the Majority Banks in writing in advance) in an amount equal to or
exceeding the amount required to redeem any Subordinated Debt.
(c) The Company shall not, and shall not permit any of its Subsidiaries to,
make any payment of principal or redemption of any notes issued under the Note
Agreement or the Note Purchase Agreement, other than mandatory prepayments or
mandatory redemptions scheduled at the time of issuance of such notes, or
otherwise purchase or acquire any of such notes, directly or indirectly, or give
any notice that irrevocably binds it to take any such action; provided, however,
that as long as no Default or Event of Default shall exist immediately prior to,
or immediately after, the consummation of any such action, the Company may
refinance the indebtedness outstanding under the Note Agreement or the Note
Purchase Agreement by issuing additional notes (the terms, conditions and
provisions of which shall be approved by the Majority Banks in writing in
advance) in an amount equal to or exceeding the amount required to redeem any
such notes.
7.9 Modified Quick Ratio. The Company shall not at any time suffer or
--------------------
permit its ratio (determined on a consolidated basis) of (a) cash plus the value
of all Cash Equivalents (valued in accordance with GAAP), plus the amount of
Eligible Receivables, net of any allowance for doubtful accounts, to (b) without
duplication, (i) Consolidated Current Liabilities, plus (ii) Consolidated Senior
Debt, plus (iii) Contingent Obligations of the Company and its Subsidiaries to
the extent such obligations in the aggregate from time to time exceed
$10,000,000, to be less than 1.20 to 1.00 during the period from the Closing
Date through March 31, 1994, or to be less than 1.25 to 1:00 at any time
thereafter.
7.10 Leverage Ratio. The Company shall not at any time suffer or permit the
--------------
ratio of (a) Total Liabilities, less the aggregate principal amount outstanding
under the 1991 Indenture and the 1992 Indenture as of the date of determination,
to (b) Tangible Net Worth, plus the aggregate principal amount outstanding under
the 1991 Indenture and the 1992 Indenture as of the date of determination, to be
greater than 1.10 to 1.00.
7.11 Minimum Tangible Net Worth. The Company shall not suffer or permit its
--------------------------
Tangible Net Worth as of the end of any fiscal quarter to be less than
$115,000,000 plus (i) 75% of Consolidated Net Income from October 1, 1993
through the end of each fiscal quarter thereafter, determined quarterly on a
consolidated basis and not reduced by any quarterly loss, plus (ii) 100% of the
Net Proceeds of any sale of capital stock of the
Company by or for the account of the Company, occurring on or after October 1,
1993, plus (iii) (without duplication) the amount by which the consolidated
Tangible Net Worth of the Company is increased, in accordance with GAAP, due to
conversions of Debt to equity occurring on or after October 1, 1993.
7.12 Losses in One Quarter. The Company, on a consolidated basis, shall not
---------------------
incur or suffer or permit to be incurred in any fiscal quarter, beginning after
September 30, 1993 (with the first computation being made as of December 31,
1993), an operating loss in excess of $40,000,000 or a net loss in excess of
$40,000,000, all as determined in accordance with GAAP.
7.13 Losses in Two Consecutive Quarters. The Company, on a consolidated
----------------------------------
basis, shall not incur or suffer or permit to be incurred in any two consecutive
fiscal quarters, beginning after September 30, 1993 (with the first computation
being made as of March 31, 1994), treated as one fiscal period, an operating
loss in excess of $25,000,000 or a net loss in excess of $25,000,000, all as
determined in accordance with GAAP.
7.14 Change in Business. The Company shall not, and shall not suffer or
------------------
permit any of its Subsidiaries to, engage in any material respect in any
business other than the development, manufacturing, distribution and sale of
computer peripherals and computer peripheral components.
7.15 Accounting Changes. The Company shall not, and shall not suffer or
------------------
permit any of its Subsidiaries to, make any significant change in accounting
treatment and reporting practices, except as required by GAAP, or change, suffer
or permit to be changed the fiscal year of the Company or any of its
Subsidiaries.
7.16 Indenture/Note Amendment. The Company shall not amend or agree to amend
------------------------
the Note Agreement or the Note Purchase Agreement, or the notes issued in
connection with a refinancing of the Note Agreement or the Note Purchase
Agreement pursuant to Section 7.8(c), to amend the repayment schedule with
respect thereto so as to cause any principal amount thereof to be payable
earlier than is provided on the date hereof. The Company shall not amend or
agree to amend the 1991 Indenture or the 1992 Indenture, or any other
documentation relating to Subordinated Debt, to amend the subordination
provisions thereof, to amend the repayment schedule with respect thereto so as
to cause any principal amount thereof to be payable earlier than is provided on
the date hereof, or to amend any other provision in any manner adverse to the
Banks.
7.17 Cessation of Business. The Company shall not voluntarily cease to
---------------------
conduct its business, except short-term cessations in the ordinary course of
business.
ARTICLE VIII
EVENTS OF DEFAULT
-----------------
8.1 Event of Default. Any of the following events shall constitute an
----------------
"Event of Default":
----------------
(a) Non-Payment. The Company fails to pay when due any amount of
-----------
principal of any Loan, or fails to pay within three Business Days of the date
when due, any interest on any Loan or any amount required by Section 2.10
hereof;
(b) Non-Payment of Other Amounts. The Company fails to pay within
----------------------------
thirty (30) days of the date any Miscellaneous Payment Notice is given, any
Miscellaneous Payment Amount;
(c) Representation or Warranty. Any representation or warranty by the
--------------------------
Company herein, or in any Loan Document, shall prove to have been incorrect
in any material respect on or as of the date made or deemed made; or
(d) Specific Defaults. The Company fails to perform or observe any
-----------------
term, covenant or agreement contained in Section 6.13 or Article VII hereof;
or
(e) Other Defaults. The Company fails to perform or observe any other
--------------
term or covenant contained in this Agreement or any Loan Agreement, and such
default shall continue unremedied for a period of 30 days after the earlier
of (i) the date upon which a Responsible Officer of the Company knew or
should have known of such failure or (ii) the date upon which written notice
thereof has been given to the Company by the Agent or any Bank; or
(f) Cross-Default. The Company or any of its Subsidiaries (i) fails to
-------------
make any payment in respect of any Debt or Indebtedness having an aggregate
principal amount (including amounts owing to all creditors under any combined
or syndicated credit arrangement) of more than $10,000,000 when due (whether
by scheduled maturity, required prepayment, acceleration, demand, or
otherwise) and such failure continues after the applicable grace or notice
period, if any, specified in the document relating thereto; or (ii) fails to
perform or observe any other condition or covenant or any other event shall
occur or condition exist under any agreement or instrument relating to any
such Debt or Indebtedness (in such aggregate principal amount), and such
failure continues after the applicable grace or notice period, if any,
specified in the document relating thereto if the effect of such event or
condition is to cause, or to permit the holder or holders of such Debt or
Indebtedness or
beneficiary or beneficiaries of such Debt or Indebtedness (or a trustee or
agent on behalf of such holder or holders or beneficiary or beneficiaries) to
cause such Debt or Indebtedness to be declared to be due and payable prior to
its stated maturity, or to be paid upon demand, or require the repurchase of
such Debt or Indebtedness, or if in respect of an obligation that is
contingent or unmatured, to compel the Company or such Subsidiary to deliver
cash collateral (including in the form of Cash Equivalents) in an amount
exceeding $10,000,000; provided, however, that no Event of Default shall
-----------------
exist under this subsection 8.1(f) solely as a result of (A) the voluntary
prepayment or redemptions of Debt or Indebtedness by the Company or any
Subsidiary of the Company in the absence of any event of default thereunder,
(B) reimbursement payments made in respect of any draws under letters of
credit issued for the account of the Company or any such Subsidiary or
payments made in satisfaction of guaranty obligations owing by the Company or
any such Subsidiary, or (C) the acceleration of the Italian Debt; or
(g) Cross-Acceleration. The Company fails to perform or observe any
------------------
payment obligation under any agreement or instrument of Indebtedness in favor
of any Bank and such failure continues for a period of five Business Days
after a written notice is delivered by such Bank (with a copy to the Agent)
under this subsection 8.1(g), and in connection therewith: (i) such Bank has
caused such agreement or instrument to be declared due and payable prior to
its stated maturity; or (ii) if such agreement or instrument is an obligation
specified in subclause (i) of the definition of "Indebtedness," such Bank
shall have issued a notice of default due to non-payment of such obligation;
or (iii) if such agreement or instrument is an obligation specified in
subclause (c) of the definition of "Indebtedness," such Bank shall have
issued a demand for cash collateralization in the case where such obligation
has been drawn or the Company shall not have reimbursed such Bank in
accordance with the terms of such obligation in the case where such
obligation has been drawn; or (iv) if such agreement or instrument is a Rate
Contract, following an event of default thereunder such Bank shall have
issued a demand for payment of net obligations and the Company has not
satisfied such demand on a timely basis; provided, however, that no Event of
-----------------
Default shall exist under this subsection 8.1(g) solely as a result of the
acceleration of the Italian Debt; or
(h) Bankruptcy or Insolvency. (i) The Company is or becomes not
------------------------
Solvent or generally fails to pay, or admits in writing its inability to pay,
its debts as they become due, subject to applicable grace periods, if any,
whether at stated maturity or otherwise; or (ii) the
Company or any of its Subsidiaries (A) commences any Insolvency Proceeding or
files any petition or answer in any Insolvency Proceeding; (B) acquiesces in
the appointment of a receiver, trustee, custodian or liquidator for itself or
a substantial portion of its Property, assets or business or effects a plan
or other arrangement with its creditors; (C) admits the material allegations
of a petition filed against it in any Insolvency Proceeding, or (D) takes any
action to effectuate any of the foregoing; or (iii) the Company and its
Subsidiaries on a consolidated basis are or become not Solvent; or
(i) Involuntary Proceedings. Any involuntary Insolvency Proceeding is
-----------------------
commenced or filed against the Company or any Subsidiary of the Company or
any writ, judgment, warrant of attachment, execution or similar process, is
issued or levied against a substantial part of the Company's or any of its
Subsidiaries' assets and any such proceedings or petition shall not be
dismissed, or such writ, judgment, warrant of attachment, execution or
similar process shall not be released, vacated or fully bonded within 60
consecutive days after commencement, filing or levy; or
(j) ERISA. (i) The Company or an ERISA Affiliate shall fail to pay
-----
when due, after the expiration of any applicable grace period, any
installment payment with respect to its withdrawal liability under a
Multiemployer Plan which could reasonably be expected to have a Material
Adverse Payment Effect; (ii) the Company or an ERISA Affiliate shall fail to
satisfy its contribution requirements under section 412(c)(11) of the Code,
whether or not it has sought a waiver under Section 412(d) of the Code; (iii)
in the case of an ERISA Event involving the withdrawal from a Plan of a
"substantial employer" (as defined in section 4001(a)(2) or section 4062(e)
of ERISA), the withdrawing employer's proportionate share of that Plan's
Unfunded Pension Liabilities is more than $40,000,000; (iv) in the case of an
ERISA Event involving the complete or partial withdrawal from a Multiemployer
Plan by the Company or an ERISA Affiliate, there is incurred a withdrawal
liability in an aggregate amount for the Company and all ERISA Affiliates of
the Company exceeding $60,000,000; (v) in the case of an ERISA Event
described in clause (d) or (f) of the definition of "ERISA Event," the
Unfunded Pension Liabilities of the relevant Plan or Plans exceed
$30,000,000; (vi) a Plan that is intended to be qualified under section
401(a) of the Code shall lose its qualification, and the loss could
reasonably be expected to impose on the Company or an ERISA Affiliate
liability (for additional taxes, to Plan participants, or otherwise) in the
aggregate amount of $20,000,000 or more; (vii) the commencement or increase
of contributions
to, the adoption of, or the amendment of a Plan (excluding any amendment
required to be made by ERISA, the Code or other applicable law) by, the
Company or an ERISA Affiliate shall result in a net increase in Unfunded
Pension Liabilities to the Company or an ERISA Affiliate in excess of
$20,000,000; or (viii) the occurrence of any combination of events listed in
clauses (iii) through (vii) that involves a net increase in aggregate
Unfunded Pension Liabilities and unfunded liabilities in excess of
$30,000,000; or
(k) Monetary Judgments. One or more final judgments, orders or decrees
------------------
shall be entered against the Company or any of its Subsidiaries involving in
the aggregate a liability of $50,000,000 or more (excluding amounts covered
by insurance provided by a Person not an Affiliate of the Company under a
policy to the extent to which such insurer has not contested coverage) and
the same shall remain unvacated, undischarged (other than by payment
thereof), and unstayed pending appeal, for a period of 45 consecutive days
after the entry thereof; or
(l) Non-Monetary Judgments. Any final non-monetary judgment, order or
----------------------
decree shall be rendered against the Company or any of its Subsidiaries which
does or is likely to have a Material Adverse Payment Effect, and there shall
be any period of 45 consecutive days during which a stay of enforcement of
such judgment or order, by reason of a pending appeal or otherwise, shall not
be in effect, unless such judgment, order or decree shall, within such 45-day
period, be vacated or discharged (other than by satisfaction thereof); or
(m) Invalidity of Subordination Provisions. The subordination
--------------------------------------
provisions of the 1991 Indenture, the 1992 Indenture, or any agreement or
instrument governing any other Subordinated Debt are for any reason revoked
or invalidated, or otherwise cease to be in full force and effect.
8.2 Remedies. If any Event of Default occurs, the Agent shall, at the
--------
request of, or may, with the consent of, the Majority Banks, (a) declare the
Commitments of each Bank to make Loans to be terminated, whereupon such
Commitments shall forthwith be terminated; (b) declare the unpaid principal
amount of all outstanding Loans, all interest accrued and unpaid thereon and all
other amounts payable hereunder to be immediately due and payable, without
presentment, demand, protest or other notice of any kind, all of which are
hereby expressly waived by the Company; and (c) exercise all rights and remedies
available to it under the Loan Agreements or applicable law; or any one or more
of the foregoing; provided, however, that upon the occurrence of any event
-------- -------
specified in clause (h) or (i) above (in the case of such clause (i) upon the
expiration of the 60-day period mentioned therein), the obligation of each Bank
to make Loans
shall automatically terminate and the unpaid principal amount of all outstanding
Loans and all interest and other amounts as aforesaid shall automatically become
due and payable without further act of the Agent or any Bank.
8.3 Rights Not Exclusive. The rights provided for in this Agreement and the
--------------------
other Loan Agreements are cumulative and are not exclusive of any other rights,
powers, privileges or remedies provided by law or in equity, or under any other
instrument, document or agreement.
8.4 Certain Financial Covenant Defaults. In the event that after the end of
-----------------------------------
any fiscal period of the Company, after taking into account any extraordinary
charge to earnings taken or to be taken as of the end of such fiscal period (a
"Charge"), and if solely by virtue of such Charge, there would exist an Event of
- -------
Default due to the breach of any of Sections 7.9, 7.10, 7.11, 7.12 or 7.13 as of
such fiscal period end date, such Event of Default shall be deemed to arise upon
the earlier of (a) the date the Company announces publicly it is taking or has
taken such Charge (including an announcement in the form of a statement in a
report filed with the SEC) and (b) the date the Company delivers to the Agent
its audited annual or unaudited quarterly financial statements in respect of
such fiscal period reflecting such Charge as taken.
ARTICLE IX
THE AGENT
---------
9.1 Appointment and Authorization. Each Bank hereby irrevocably appoints,
-----------------------------
designates and authorizes the Agent to take such action on its behalf under the
provisions of this Agreement and each other Loan Document and to exercise such
powers and perform such duties as are expressly delegated to it by the terms of
this Agreement or any other Loan Document, together with such powers as are
reasonably incidental thereto. Notwithstanding any provision to the contrary
contained elsewhere in this Agreement or in any other Loan Document, the Agent
shall not have any duties or responsibilities, except those expressly set forth
herein, or any fiduciary relationship with any Bank, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities shall be read
into this Agreement or any other Loan Document or otherwise exist against the
Agent.
9.2 Delegation of Duties. The Agent may execute any of its duties under
--------------------
this Agreement or any other Loan Document by or through agents, employees or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The Agent shall not be responsible for the
negligence or misconduct of any agent or attorney-in-fact that it selects with
reasonable care.
9.3 Liability of Agent. None of the Agent-Related Persons shall (a) be
------------------
liable for any action taken or omitted to be taken by any of them under or in
connection with this Agreement or any other Loan Document or the transactions
contemplated hereby (except for its own gross negligence or willful misconduct)
or (b) be responsible in any manner to any of the Banks for any recital,
statement, representation or warranty made by the Company or any Subsidiary of
the Company or any officer thereof contained in this Agreement or in any other
Loan Document, or in any certificate, report, statement or other document
referred to or provided for in, or received by the Agent under or in connection
with, this Agreement or any other Loan Document or the validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or any other Loan
Document, or for any failure of the Company or any other party to any Loan
Document to perform its obligations hereunder or thereunder. No Agent-Related
Person shall be under any obligation to any Bank to ascertain or to inquire as
to the observance or performance of any of the agreements contained in, or
conditions of, this Agreement or any other Loan Document, or to inspect the
properties, books or records of the Company or any of its Subsidiaries.
9.4 Reliance by Agent.
-----------------
(a) The Agent shall be entitled to rely, and shall be fully protected in
relying, upon any writing, resolution, notice, consent, certificate, affidavit,
letter, telegram, facsimile, telex or telephone message, statement or other
document or conversation believed by it to be genuine and correct and to have
been signed, sent or made by the proper Person or Persons and upon advice and
statements of legal counsel (including counsel to the Company), independent
accountants and other experts selected by the Agent. The Agent shall be fully
justified in failing or refusing to take any action under this Agreement or any
other Loan Document unless it shall first receive such advice or concurrence of
the Majority Banks, or to the extent expressly required herein, of all the Banks
as it deems appropriate and, if it so requests, it shall first be indemnified to
its reasonable satisfaction by the Banks against any and all liability and
expense which may be incurred by it by reason of taking or continuing to take
any such action. The Agent shall in all cases be fully protected in acting, or
in refraining from acting, under this Agreement or any other Loan Document in
accordance with a request or consent of the Majority Banks and such request and
any action taken or failure to act pursuant thereto shall be binding upon all of
the Banks.
(b) For purposes of determining compliance with the conditions specified in
Section 4.1, each Bank shall be deemed to have consented to, approved or
accepted or to be satisfied with each document or other matter required
thereunder to be consented to or approved by or acceptable or satisfactory to
the Bank unless an officer of the Agent responsible for the transactions
contemplated by the Loan Documents shall have received notice
from the Bank on or prior to the Closing Date specifying its objection thereto
and either such objection shall not have been withdrawn by notice to the Agent
to that effect or the Bank shall not have made available to the Agent the Bank's
ratable portion of such Borrowing. This subsection 9.4(b) is intended solely
for the benefit of the Agent, and the Company shall not have any right or remedy
as a result of this subsection.
9.5 Notice of Default. The Agent shall not be deemed to have knowledge or
-----------------
notice of the occurrence of any Default or Event of Default, except with respect
to defaults in the payment of principal, interest and fees payable to the Agent
for the account of the Banks, unless the Agent shall have received written
notice from a Bank or the Company referring to this Agreement, describing such
Default or Event of Default and stating that such notice is a "notice of
default". The Agent will notify the Banks of its receipt of any such notice.
The Agent shall take such action with respect to such Default or Event of
Default as may be requested by the Majority Banks in accordance with Article
VIII; provided, however, that unless and until the Agent has received any such
-------- -------
request, the Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default or Event of
Default as it shall deem advisable in the best interests of the Banks.
9.6 Credit Decision. Each Bank acknowledges that none of the Agent-Related
---------------
Persons has made any representation or warranty to it, and that no act by the
Agent hereinafter taken, including any review of the affairs of the Company and
its Subsidiaries, shall be deemed to constitute any representation or warranty
by any Agent-Related Person to any Bank. Each Bank represents to the Agent that
it has, independently and without reliance upon any Agent-Related Person and
based on such documents and information as it has deemed appropriate, made its
own appraisal of and investigation into the business, prospects, operations,
Property, financial and other condition and creditworthiness of the Company and
its Subsidiaries and made its own decision to enter into this Agreement and
extend credit to the Company hereunder. Each Bank also represents that it will,
independently and without reliance upon any Agent-Related Person and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit analysis, appraisals and decisions in taking or
not taking action under this Agreement and the other Loan Documents, and to make
such investigations as it deems necessary to inform itself as to the business,
prospects, operations, Property, financial and other condition and
creditworthiness of the Company. Except for notices, reports and other
documents expressly required to be furnished to the Banks by the Agent
hereunder, the Agent shall not have any duty or responsibility to provide any
Bank with any credit or other information concerning the business, prospects,
operations, Property, financial and other condition or creditworthiness of the
Company which may come into the possession of any of the Agent-Related Persons.
9.7 Indemnification. Whether or not the transactions contemplated hereby
---------------
are consummated, the Banks shall indemnify upon demand the Agent-Related Persons
(to the extent not reimbursed by or on behalf of the Company and without
limiting the obligation of the Company to do so), pro rata, from and against any
and all Indemnified Liabilities; provided, however, that no Bank shall be liable
-------- -------
for the payment to the Agent-Related Persons of any portion of such Indemnified
Liabilities resulting solely from such Person's gross negligence or willful
misconduct. Without limitation of the foregoing, each Bank shall reimburse the
Agent upon demand for its ratable share of any costs or out-of-pocket expenses
(including Attorney Costs) incurred by the Agent in connection with the
preparation, execution, delivery, administration, modification, amendment or
enforcement (whether through negotiations, legal proceedings or otherwise) of,
or legal advice in respect of rights or responsibilities under, this Agreement,
any other Loan Document, or any document contemplated by or referred to herein,
to the extent that the Agent is not reimbursed for such expenses by or on behalf
of the Company; provided, however, each Bank shall only be required to reimburse
-------- -------
the Agent for costs and out-of-pocket expenses with respect to accountants or
outside consultants to the extent such Bank approved the hiring of such
accountants or consultants. The undertaking in this Section shall survive the
payment of all the Loans hereunder and the resignation or replacement of the
Agent.
9.8 Agent in Individual Capacity. BofA and its Affiliates may make loans
----------------------------
to, issue letters of credit for the account of, accept deposits from, acquire
equity interests in and generally engage in any kind of banking, trust,
financial advisory, underwriting or other business with the Company and its
Subsidiaries and Affiliates as though BofA were not the Agent hereunder and
without notice to or consent of the Banks. The Banks acknowledge that, pursuant
to such activities, BofA or its Affiliates may receive information regarding the
Company or its Affiliates (including information that may be subject to
confidentiality obligations in favor of the Company or such Subsidiary) and
acknowledge that the Agent shall be under no obligation to provide such
information to them. With respect to its Loans, BofA shall have the same rights
and powers under this Agreement as any other Bank and may exercise the same as
though it were not the Agent, and the terms "Bank" and "Banks" include BofA in
its individual capacity.
9.9 Successor Agent. The Agent may, and at the request of the Majority
---------------
Banks shall, resign as Agent upon thirty (30) days' notice to the Banks. If the
Agent resigns under this Agreement, the Majority Banks shall appoint from among
the Banks a successor agent for the Banks which successor agent shall be
approved by the Company. If no successor agent is appointed prior to the
effective date of the resignation of the Agent, the Agent may appoint, after
consulting with the Banks and the Company, a successor agent from among the
Banks. Upon the acceptance of its appointment as successor agent hereunder,
such successor agent shall succeed to all the rights, powers and duties of the
retiring Agent and the term "Agent" shall mean such successor agent and the
retiring Agent's appointment, powers and duties as Agent shall be terminated.
After any retiring Agent's resignation hereunder as Agent, the provisions of
this Article IX and Sections 10.4 and 10.5 shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was Agent under this
Agreement. If no successor agent has accepted appointment as Agent by the date
which is 30 days following a retiring Agent's notice of resignation, the
retiring Agent's resignation shall nevertheless thereupon become effective and
the Banks shall perform all of the duties of the Agent hereunder until such
time, if any, as the Majority Banks appoint a successor agent as provided for
above.
ARTICLE X
MISCELLANEOUS
-------------
10.1 Amendments and Waivers. No amendment or waiver of any provision of
----------------------
this Agreement or any other Loan Document and no consent with respect to any
departure by the Company therefrom, shall be effective unless the same shall be
in writing and signed by the Majority Banks and the Company and acknowledged by
the Agent, and then such waiver shall be effective only in the specific instance
and for the specific purpose for which given; provided, however, that no such
-------- -------
waiver, amendment, or consent shall, unless in writing and signed by all the
Banks and the Company and acknowledged by the Agent, do any of the following:
(a) increase or extend the Commitment of any Bank (or reinstate any
Commitment terminated pursuant to subsection 8.2(a));
(b) postpone or delay any date fixed for any payment of principal,
interest, fees or other amounts due to the Banks (or any of them) under any
Loan Agreement;
(c) reduce the principal of, or the rate of interest specified herein
on, any Loan, or (subject to clause (ii) below) any fees or other amounts
payable hereunder or under any other Loan Document;
(d) change the percentage of the Commitments or of the aggregate unpaid
principal amount of the Loans or number of Banks which is required for the
Banks or any of them to take any action hereunder; or
(e) amend this Section 10.1, subsection 2.1(b) or Section 2.14, or any
provision herein providing for consent or other action by all Banks;
and, provided further, that (i) no amendment, waiver or consent shall, unless
-------- -------
in writing and signed by the Agent in addition to the Majority Banks, affect the
rights or duties of the Agent
under this Agreement or any other Loan Document, and (ii) the fees contained in
the commitment letter referred to in subsection 2.10(a) may be amended, or
rights or privileges thereunder waived, in a writing executed by the parties
thereto.
10.2 Notices.
-------
(a) All notices, requests and other communications shall be in writing
(including, unless the context expressly otherwise provides, by facsimile
transmission, provided that any matter transmitted by the Company by facsimile
(i) shall be immediately confirmed by a telephone call to the recipient at the
number specified on the applicable signature page hereof, and (ii) shall be
followed promptly by delivery of a hard copy original thereof) and mailed,
telecopied or delivered, to the address or facsimile number specified for
notices on the applicable signature page hereof; or, as directed to the Company
or the Agent, to such other address as shall be designated by such party in a
written notice to the other parties, and as directed to any other party, at such
other address as shall be designated by such party in a written notice to the
Company and the Agent.
(b) All such notices, requests and communications shall, when
transmitted by overnight delivery, or telecopied, be effective when delivered
for overnight (next-day) delivery, or transmitted in legible form by facsimile
machine, respectively, or if mailed, upon the third Business Day after the date
deposited into the U.S. mail, or if delivered, upon delivery; except that
notices pursuant to Article II or IX shall not be effective until actually
received by the Agent.
(c) Any agreement of the Agent and the Banks herein to receive certain
notices by telephone or facsimile is solely for the convenience and at the
request of the Company. The Agent and the Banks shall be entitled to rely on
the authority of any Person purporting to be a Person authorized by the Company
to give such notice and the Agent and the Banks shall not have any liability to
the Company or other Person on account of any action taken or not taken by the
Agent or the Banks in reliance upon such telephonic or facsimile notice. The
obligation of the Company to repay the Loans shall not be affected in any way or
to any extent by any failure by the Agent and the Banks to receive written
confirmation of any telephonic or facsimile notice or the receipt by the Agent
and the Banks of a confirmation which is at variance with the terms understood
by the Agent and the Banks to be contained in the telephonic or facsimile
notice.
10.3 No Waiver; Cumulative Remedies. No failure to exercise and no delay in
------------------------------
exercising, on the part of any Agent or any Bank, any right, remedy, power or
privilege hereunder, shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, remedy, power or privilege hereunder preclude any
other or further exercise thereof or the exercise of any other right, remedy,
power or privilege.
10.4 Costs and Expenses. The Company shall, whether or not the transactions
------------------
contemplated hereby shall be consummated:
(a) pay or reimburse the Agent on demand for all costs and expenses
incurred in connection with the development, preparation, negotiation,
syndication, delivery, administration and execution of, and any amendment,
supplement, waiver or modification to, this Agreement, any Loan Document and
any other documents prepared in connection herewith or therewith, and the
consummation of the transactions contemplated hereby and thereby, including
the Attorney Costs with respect thereto;
(b) pay or reimburse each Bank and the Agent on demand for all costs
and expenses incurred by them in connection with the enforcement or
preservation of any rights (including in connection with any "workout" or
restructuring regarding the Loans) under this Agreement, any Loan Document,
and any such other documents, including Attorney Costs to the Agent and to
each of the Banks; and
(c) pay or reimburse the Agent on demand for all appraisal, audit,
search and filing fees, incurred or sustained by the Agent in connection with
the matters referred to under paragraphs (a) and (b) above.
10.5 Indemnity. The Company shall pay, indemnify, and hold each Bank, the
---------
Agent and each of their respective officers, directors, employees, counsel,
agents and attorneys-in-fact (each, an "Indemnified Person") harmless from and
------------------
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, charges, expenses or disbursements (including
Attorney Costs) of any kind or nature whatsoever with respect to the execution,
delivery, enforcement, performance and administration of this Agreement and any
other Loan Documents or the transactions contemplated herein, and with respect
to any investigation, litigation or proceeding related to this Agreement or the
Loans or the use of the proceeds thereof (whether or not any Indemnified Person
is a party thereto) (all the foregoing, collectively, the "Indemnified
-----------
Liabilities"); provided, that the Company shall have no obligation hereunder to
- ----------- --------
any Indemnified Person with respect to Indemnified Liabilities arising from the
gross negligence or willful misconduct of such Indemnified Person. The
agreements in this section shall survive payment of all other Obligations.
10.6 Payments Set Aside. To the extent that the Company makes a payment to
------------------
the Agent or the Banks, or the Agent or the Banks exercise their right of set-
off, and such payment or the proceeds of such set-off or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set aside
or required (including pursuant to any settlement entered into by the Agent or
such Bank in its discretion) to be repaid to a
trustee, receiver or any other party, in connection with any Insolvency
Proceeding or otherwise, then (a) to the extent of such recovery the obligation
or part thereof originally intended to be satisfied shall be revived and
continued in full force and effect as if such payment had not been made or such
set-off had not occurred, and (b) each Bank severally agrees to pay to the Agent
upon demand its pro rata share of any amount so recovered from or repaid by the
Agent.
10.7 Successors and Assigns. The provisions of this Agreement shall be
----------------------
binding upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns, except that the Company may not assign or
transfer any of its rights or obligations under this Agreement (other than by
operation of law pursuant to any merger or consolidation permitted by Section
7.3) without the prior written consent of each Bank.
10.8 Assignments, Participations, etc.
---------------------------------
(a) Any Bank may, with the written consent of the Company and the Agent,
which consents shall not be unreasonably withheld, at any time assign and
delegate to one or more Eligible Transferees and, with notice to the Agent but
without the consent of the Company or the Agent, may assign to any of its
wholly-owned Affiliates (each an "Assignee") all or any ratable part of all of
--------
the Loans, the Commitments, and any other rights or obligations of such Bank
hereunder, in a minimum amount of $10,000,000, provided, however, that the
-------- -------
Company and the Agent may continue to deal solely and directly with such Bank in
connection with the interests so assigned to an Assignee until (i) written
notice of such assignment, together with payment instructions, addresses and
related information with respect to the Assignee, shall have been given to the
Company and the Agent by such Bank and the Assignee and (ii) such Bank and its
Assignee shall have delivered to the Company and the Agent an Assignment and
Acceptance in the form of Exhibit 10.8(a) ("Assignment and Acceptance"); and
--------------- -------------------------
(iii) the processing fees of $2,500 shall have been paid to the Agent.
(b) From and after the date that the Agent notifies the assignor Bank that
it has received (and provided its consent to, if applicable) the Assignment and
Acceptance and payment of the above-referenced processing fee, (i) the Assignee
thereunder shall be a party hereto and, to the extent that rights and
obligations hereunder have been assigned to it pursuant to such Assignment and
Acceptance, shall have the rights and obligations of a Bank under the Loan
Documents and (ii) the assignor Bank shall, to the extent that rights and
obligations hereunder have been assigned by it pursuant to such Assignment and
Acceptance, relinquish its rights and be released from its obligations under the
Loan Documents.
(c) Immediately upon each Assignee's making its payment under the Assignment
and Acceptance, this Agreement, shall be deemed to be amended to the extent, but
only to the extent, necessary to reflect the addition of the Assignee and the
resulting adjustment of the Commitments arising therefrom. The Commitment
allocated to each Assignee shall reduce such Commitments of the assigning Bank
pro tanto.
- --- -----
(d) Any Bank may at any time sell to one or more Eligible Transferees (a
"Participant") participating interests in any Loans, the Commitment of that Bank
- ------------
or any other interest of that Bank hereunder; provided, however, that (i) the
-------- -------
Bank's obligations under this Agreement shall remain unchanged, (ii) the Bank
shall remain solely responsible for the performance of such obligations, (iii)
the Company and the Agent shall continue to deal solely and directly with the
Bank in connection with the Bank's rights and obligations under this Agreement,
and (iv) no Bank shall transfer or grant any participating interest under which
the Participant shall have rights to approve any amendment to, or any consent or
waiver with respect to this Agreement except to the extent such amendment,
consent or waiver would require unanimous consent of the Banks as described in
the first proviso to Section 10.1. In the case of any such participation, the
----- -------
Participant shall not have any rights under this Agreement, or any of the other
Loan Documents, and all amounts payable by the Company hereunder shall be
determined as if such Bank had not sold such participation, except that if
amounts outstanding under this Agreement are due and unpaid, or shall have been
declared or shall have become due and payable upon the occurrence of an Event of
Default, each Participant shall be deemed to have the right of set-off in
respect of its participating interest in amounts owing under this Agreement to
the same extent as if the amount of its participating interest were owing
directly to it as a Bank under this Agreement.
(e) Each Bank agrees to take normal and reasonable precautions and exercise
due care to maintain the confidentiality of all non-public information provided
to it by the Company or any Subsidiary of the Company or by the Agent on such
Company's or Subsidiary's behalf in connection with this Agreement and neither
it nor any of its Affiliates shall use any such information for any purpose or
in any manner other than pursuant to the terms contemplated by this Agreement,
except to the extent such information (i) was or becomes generally available to
the public other than as a result of a disclosure by the Bank, or (ii) was or
becomes available on a non-confidential basis from a source other than the
Company, provided that such source is not bound by a confidentiality agreement
with the Company known to the Bank; provided further, however, that any Bank may
---------------- -------
disclose such information (A) at the request of any Bank regulatory authority or
in connection with an examination of such Bank by any such authority; (B)
pursuant to subpoena or other court process; (C) when required to do so in
accordance with the provisions of any applicable law; (D) at the express
direction of any other agency of any State of the United States of America or of
any
other jurisdiction in which such Bank conducts its business; and (E) to such
Bank's independent auditors and other professional advisors. Notwithstanding
the foregoing, the Company authorizes the Agent and each Bank to disclose to any
Participant or Assignee (each, a "Transferee") and any prospective Transferee
such financial and other information in such Bank's possession concerning the
Company or its Subsidiaries which has been delivered to the Banks pursuant to
this Agreement or which has been delivered to the Banks by the Company in
connection with the Banks' credit evaluation of the Company prior to entering
into this Agreement; provided that such Transferee agrees in writing to such
--------
Bank to keep such information confidential to the same extent required of the
Banks hereunder.
(f) Any Bank may hypothecate and pledge all or any part of the Obligations
owing to it, together with its interest in the Loan Documents, to the FRB or any
Federal Reserve Bank.
10.9 Set-off. In addition to any rights and remedies of the Banks provided
-------
by law, if an Event of Default exists or the Loans have been accelerated, each
Bank is authorized at any time and from time to time, without prior notice to
the Company, any such notice being waived by the Company to the fullest extent
permitted by law, to set-off and apply 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 Bank to or for the credit or the account of the Company
against any and all obligations of the Company now or hereafter existing under
this Agreement or any other Loan Document and any Loan held by such Bank
irrespective of whether or not the Agent or such Bank shall have made demand
under this Agreement or any Loan Document and although such obligations may be
contingent or unmatured. Each Bank agrees promptly to notify the Company and
the Agent after any such set-off and application made by such Bank; provided,
--------
however, that the failure to give such notice shall not affect the validity of
- -------
such set-off and application. The rights of each Bank under this Section 10.9
are in addition to the other rights and remedies (including without limitation,
other rights of set-off) which the Bank may have.
10.10 Termination of the Commitments under Existing Facility. Pursuant to
------------------------------------------------------
Section 2.5 of the Existing Facility, the Company hereby terminates the
Aggregate Commitments under, and as that term is defined in, the Existing
Agreement as of the date hereof, and the Banks hereby waive the three Business
Days' prior notice requirement in Section 2.5 for such notice. The Company
agrees to pay, on the date hereof, all accrued commitment fees under the
Existing Facility to, but not including, the date hereof.
10.11 Notification of Addresses, Lending Offices, Etc. Each Bank shall
-----------------------------------------------
notify the Agent and the Company in writing of any changes in the address to
which notices to the Bank should be directed, of addresses of its Eurodollar
Lending Office and its Domestic Lending Office, of payment instructions in
respect of
all payments to be made to it hereunder and of such other administrative
information as the Agent shall reasonably request.
10.12 Counterparts. This Agreement may be executed in any number of
------------
separate counterparts, each of which, when so executed, shall be deemed an
original, and all of said counterparts taken together shall be deemed to
constitute but one and the same instrument.
10.13 Severability. The illegality or unenforceability of any provision of
------------
this Agreement or any instrument or agreement required hereunder shall not in
any way affect or impair the legality or enforceability of the remaining
provisions of this Agreement or any instrument or agreement required hereunder.
10.14 No Third Parties Benefited. This Agreement is made and entered into
--------------------------
for the sole protection and legal benefit of the Company, the Banks, the Agent
and the Agent-Related Persons, and their permitted successors and assigns, and
no other Person shall be a direct or indirect legal beneficiary of, or have any
direct or indirect cause of action or claim in connection with, this Agreement
or any of the other Loan Documents.
10.15 Governing Law and Jurisdiction.
------------------------------
(a) THIS AGREEMENT AND THE LOAN DOCUMENTS SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF CALIFORNIA.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR THE
LOAN DOCUMENTS MAY BE BROUGHT IN THE COURTS OF THE STATE OF CALIFORNIA OR OF THE
UNITED STATES FOR THE NORTHERN DISTRICT OF CALIFORNIA, AND BY EXECUTION AND
DELIVERY OF THIS AGREEMENT, EACH OF THE COMPANY, THE AGENT AND THE BANKS
CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE
JURISDICTION OF THOSE COURTS. EACH OF THE COMPANY, THE AGENT AND THE BANKS
IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE
OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER
--------------------
HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT
OF THIS AGREEMENT OR ANY DOCUMENT RELATED HERETO. THE COMPANY, THE AGENT AND
THE BANKS EACH WAIVE PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER
PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY CALIFORNIA LAW.
10.16 Waiver of Jury Trial. THE COMPANY, THE BANKS AND THE AGENT WAIVE
--------------------
THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED
UPON OR ARISING OUT OF OR RELATED TO THIS AGREEMENT, THE OTHER LOAN DOCUMENTS OR
THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY IN ANY ACTION, PROCEEDING OR
OTHER LITIGATION OF ANY TYPE BOUGHT BY ANY OF THE PARTIES AGAINST ANY OTHER
PARTY OR ANY AGENT-RELATED PERSON, PARTICIPANT OR ASSIGNEE, WHETHER WITH RESPECT
TO CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE. THE COMPANY, THE BANKS AND THE
AGENT AGREE THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A COURT
TRIAL
WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING, THE PARTIES FURTHER AGREE THAT
THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS SECTION
AS TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN
PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT OR THE OTHER
LOAN DOCUMENTS OR ANY PROVISION HEREOF OR THEREOF. THIS WAIVER SHALL APPLY TO
ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS.
10.17 Entire Agreement. This Agreement, together with the other Loan
----------------
Documents, embodies the entire agreement and understanding among the Company,
the Banks and the Agent and supersedes all prior or contemporaneous agreements
and understandings of such persons, verbal or written, relating to the subject
matter hereof and thereof except, to the extent it related to the payment of
fees, for the commitment letter referenced in subsection 2.10(a).
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered in San Francisco, California by their proper and duly
authorized officers as of the day and year first above written.
CONNER PERIPHERALS, INC.
By: /s/ Conner Peripherals Inc.
---------------------------------
Title:
------------------------------
Address for notices:
3081 Zanker Road
San Jose, Ca 95134
Attn: P. Jackson Bell
Facsimile: (408) 456-3770
Telephone: (408) 456-3841
BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION, as Agent
By: /s/ Bank of America NT & SA
---------------------------------
Vice President
Address for notices:
Global Agency #5596
1455 Market Street, 12th Floor
San Francisco, CA 94103
Attn: Judith L. Kramer
Facsimile: (415) 622-4894
Telephone: (415) 953-2506
BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION, as a Bank
By: /s/ Bank of America NT & SA
---------------------------------
Vice President
Address for notices:
Credit Products-High Technology #3697
555 California Street
San Francisco, CA 94104
Attn: Michael A. Drevno
Facsimile: (415) 622-2514
Telephone: (415) 622-8088
Domestic and Eurodollar Lending Offices:
1850 Gateway Boulevard
Concord, CA 94520
THE FIRST NATIONAL BANK OF BOSTON
By: /s/ The First National Bank of Boston
--------------------------------------
Title:
-----------------------------------
Address for notices:
435 Tasso Street
Suite 250
Palo Alto, CA 94301
Attn: Alfred Artis & Lee Merkle
Facsimile: (415) 853-1425
Telephone: (415) 853-0947
Domestic Lending Office:
100 Federal Street
Boston, MA 02110
Eurodollar Lending Office:
100 Federal Street
Boston, MA 02110
BARCLAYS BANK PLC
/s/ Barclays Bank PLC
By: _____________________________
Title: __________________________
Address for notices:
388 Market Street
Suite 1700
San Francisco, CA 94111
Attn: Dean Chu
Facsimile: (415) 765-4760
Telephone: (415) 765-4703
Domestic Lending Office:
75 Wall Street
New York, NY 10265
Eurodollar Lending Office:
Nassau Bahamas Branch
c/o 75 Wall Street
New York, NY 10265
SCHEDULE 2.1(a)
Commitments
-----------
Commitment
Banks Commitment Percentage
----- ------------ -----------
Bank of America National Trust
and Savings Association $ 35,000,000 35%
The First National Bank of Boston $ 34,000,000 34%
Barclays Bank PLC $ 31,000,000 31%
Total $100,000,000 100%
============ ===
SCHEDULE 2.3(c)
Payment Offices
---------------
Bank of America National Trust
and Savings Association
ABA No. 121-000-358
Attn: Global Agency #5596
1850 Gateway Boulevard
Concord, CA 94250
For credit to: Account No. 1233-3-15329
Reference: Conner Peripherals, Inc.
The First National Bank of Boston
ABA No. 011-000-390
Commercial Loan Services
Mail Stop 7402-041
100 Rustcraft Road
Dedham, MA 02026
Reference: ADM 50 High Tech,
Conner Peripherals, Inc.
Barclays Bank PLC
ABA No. 026-002-574
75 Wall Street
New York, NY 10265
Account No. 050-019104
Benf: CLAD
Reference: Conner Peripherals, Inc.
EXHIBIT 2.3
Notice of Borrowing
-------------------
Date: ____________________
To: Bank of America National Trust and Savings Association as Agent for the
several financial institutions from time to time party to the Credit
Agreement dated as of December 23, 1993 (as extended, renewed, amended or
restated from time to time, the "Credit Agreement") among Conner
----------------
Peripherals, Inc., the several financial institutions from time to time
party thereto and Bank of America National Trust and Savings Association, as
Agent
Ladies and Gentlemen:
The undersigned, Conner Peripherals, Inc. (the "Company"), refers to the
-------
Credit Agreement, the terms defined therein being used herein as therein
defined, and hereby gives you notice irrevocably, pursuant to Section 2.3 of the
Credit Agreement, of the Borrowing specified herein:
1. The Business Day of the proposed Borrowing is ______
_____________________________, 19___.
2. The aggregate amount of the proposed Borrowing is
$_________________.
3. The Borrowing is to be comprised of $___________ of
[Eurodollar Rate] [Base Rate] Loans.
4. The duration of the Interest Period for the
Eurodollar Rate Loans included in the Borrowing shall be
[_______ days] [_______ months].
The undersigned hereby certifies that the following statements are true on
the date hereof, and will be true on the date of the proposed Borrowing, before
and after giving effect thereto and to the application of the proceeds
therefrom:
(a) the representations and warranties of the Company contained in
Article V of the Credit Agreement are true and correct as though made on and
as of the date hereof (except to the extent such representations and
warranties relate to an earlier date, in which case they are true and correct
as of such date);
(b) no Default or Event of Default has occurred and is continuing, or
would result from such proposed Borrowing; and
(c) no Material Adverse Compliance Effect has occurred since September
30, 1993.
IN WITNESS WHEREOF, the undersigned has executed this Certificate as of the
date first set forth above.
CONNER PERIPHERALS, INC.
By: _________________________
Title: ______________________
EXHIBIT 2.4
Notice of Conversion/Continuation
---------------------------------
Date: ____________________
To: Bank of America National Trust and Savings Association as Agent for the
several financial institutions from time to time party to the Credit
Agreement dated as of December 23, 1993 (as extended, renewed, amended or
restated from time to time, the "Credit Agreement") among Conner
----------------
Peripherals, Inc., the several financial institutions from time to time
party thereto and Bank of America National Trust and Savings Association, as
Agent
Ladies and Gentlemen:
The undersigned, Conner Peripherals, Inc. (the "Company"), refers to the
-------
Credit Agreement, the terms defined therein being used herein as therein
defined, and hereby gives you notice irrevocably, pursuant to Section 2.4 of the
Credit Agreement, of the [conversion] [continuation] of the Loans specified
herein, that:
1. The date of the [conversion] [continuation] is
______________________, 19__.
2. The aggregate amount of the Loans to be [converted]
[continued] is $______________.
3. The Loans are to be [converted into] [continued
as] [Eurodollar Rate] [Base Rate] Loans.
4. [If applicable:] The duration of the Interest Period
for the Loans included in the [conversion] [continuation]
shall be [______ months].
The undersigned hereby certifies that as of the date hereof, and as of the
date of the proposed [conversion][continuation], before and after giving effect
thereto and to the application of the proceeds therefrom, no Default or Event of
Default has occurred and is continuing, or would result from such proposed
[conversion] [continuation].
IN WITNESS WHEREOF, the undersigned has executed this Certificate as of the
date first set forth above.
CONNER PERIPHERALS, INC.
By: _________________________
Title: ______________________
EXHIBIT 4.1(d)(i)
Opinion of Company's Counsel
----------------------------
[Letterhead of Wilson, Sonsini, Goodrich & Rosati]
December 23, 1993
Bank of America National Trust and
Savings Association, as Agent
1455 Market Street, 12th Floor
San Francisco, California 94103
Attention: Global Agency #5596
and
The financial institutions listed
on Schedule 1 hereto (the "Banks")
-----
Re: Credit Agreement, dated as of December 23, 1993, among Conner
Peripherals, Inc., the Banks named therein and Bank of America
National Trust and Savings Association, as Agent for the Banks
--------------------------------------------------------------
Ladies and Gentlemen:
We have acted as counsel to Conner Peripherals, Inc., a California
corporation (the "Company"), in connection with the negotiation, execution and
-------
delivery of that certain Credit Agreement, dated as of December 23, 1993,
including the exhibits and Schedules thereto and the Disclosure Letter (the
"Credit Agreement"), among the Company, the Banks named therein and Bank of
- -----------------
America National Trust and Savings Association, as Agent for the Banks.
Capitalized terms used herein which are defined in the Credit Agreement shall
have the respective meanings set forth in the Credit Agreement, unless otherwise
defined herein. This opinion is rendered to you pursuant to Section 4.1(d)(i)
of the Credit Agreement.
In acting as such counsel, we have examined:
(a) the Credit Agreement;
(b) a letter agreement, dated as of the date hereof, by and between the
Company and the Agent with respect to
Bank of America National Trust and
Savings Association, as Agent
December 23, 1993
Page 2
certain fees payable in connection with the Credit Agreement (the "Fee
---
Letter");
------
(c) a Certificate of certain officers of the Company, dated as of the date
hereof, executed and delivered to you by the Company pursuant to Section
4.1(f) of the Credit Agreement;
(d) a Certificate of the Treasurer of the Company, dated as of the date
hereof, with respect to certain financial statements of the Company,
executed and delivered to you by the Company pursuant to Section 4.1 of
the Credit Agreement;
(e) a Certificate of the Assistant Secretary of the Company, dated as of the
date hereof, executed and delivered to you pursuant to Sections 4.1(b)
and 4.1(c) of the Credit Agreement, as to, among other things: (i) the
incumbency and signature of certain officers of the Company); (ii) the
Restated Articles of Incorporation of the Company; (iii) the bylaws of
the Company; and (iv) the adoption of certain resolutions by the
directors of the Company.
(f) a copy of the Restated Articles of Incorporation of the Company,
certified as of December __, 1993, by the Secretary of State of the
State of California;
(g) (i) a certificate of the Secretary of State of the State of California,
dated December __, 1993, with respect to the status of the Company as a
corporation incorporated under the laws of the State of California, and
a tax status certificate of the Franchise Tax Board of the State of
California, dated December __, 1993, with respect to the tax status of
the Company; (ii) a certificate of the Secretary of State of the State
of Colorado, dated December __, 1993, with respect to the standing of
the Company as a foreign corporation qualified to do business in the
State of Colorado; (iii) a certificate of the Secretary of State of the
State of Massachusetts, dated December __, 1993, with respect to the
standing of the Company as a foreign corporation qualified to do
business in the State of Massachusetts; (iv) a certificate of the
Secretary of State of the State of Minnesota, dated December __, 1993,
with respect to the standing of the Company as a foreign corporation
qualified to do business in the State of Minnesota; and (v) a
certificate of the Secretary of
Bank of America National Trust and
Savings Association, as Agent
December 23, 1993
Page 3
State of the State of Texas, dated December __, 1993, with respect to
the standing of the Company as a foreign corporation qualified to do
business in the State of Texas, and a certificate of the Controller of
the State of Texas with respect to the tax status of the Company, dated
December __, 1993; and
(h) the documents and agreements listed on Schedule 2 hereto (the "Reviewed
--------
Agreements") which the Company has certified to us constitute (i) all of
----------
the written indentures, debentures, loan agreements, lines of credit and
guarantees as to which the Company or one of its Subsidiaries is a
party, pursuant to which such party, as of December 23, 1993, is
borrowing or guaranteeing (pursuant to such agreement and not in the
aggregate) $5,000,000 or more, (ii) all of the documents listed as
exhibits to the Company's Annual Report on Form 10-K for the year ended
December 31, 1992, included therein pursuant to the requirements of
clauses (2), (4), (9) or (10) of Item 601(b) of Regulation S-K (other
than those which have expired, terminated or are otherwise no longer in
effect), and (iii) all of the documents required to be listed as
exhibits to the Company's Annual Report on Form 10-K for the year ended
December 31, 1992 (if such Annual Report were filed as of the date
hereof), required to be included therein pursuant to the requirements of
clauses (2), (4), (9) or (10) of Item 601(b) of Regulation S-K (other
than those which have expired, terminated or are otherwise no longer in
effect).
The Credit Agreement, together with the Fee Letter incorporated therein by
reference, is referred to herein as the Agreement. The Certificates referenced
in paragraphs (c), (d) and (e) above are referred to herein collectively as the
"Other Loan Documents".
--------------------
With respect to any documents submitted for our review we have assumed that
all signatures (other than those on behalf of the Company on the documents
referred to in paragraphs (a), (b), (c), (d) and (e) above) are genuine, all
documents submitted as originals are authentic, all documents submitted as
copies conform to the original documents and that all documents, books and
records made available to us by the Company are accurate and complete.
Bank of America National Trust and
Savings Association, as Agent
December 23, 1993
Page 4
We have also relied upon and obtained from public officials and officers and
representatives of the Company such other certificates and assurances as we
consider necessary for the purposes of rendering this opinion. With respect to
certain matters of fact we have relied upon, with your permission, the
Certificate of the Assistant Secretary of the Company referenced in paragraph
(e) above, an Officers' Certificate in the form attached to this opinion and the
certificates of public officials referenced in paragraph (g) above.
As used in this opinion, the expression "to our knowledge" or "known to us"
with reference to matters of fact means that during the course of our
representation of the Company in connection with the Agreement no information
has come to the attention of the attorneys of our firm involved in this
engagement which would give them actual knowledge of the existence or absence of
such facts; however, except to the extent expressly set forth herein, we have
made no independent investigation to determine the existence or absence of such
facts, and any limited inquiry undertaken by us during the preparation of this
opinion should not be regarded as such an investigation. No inference as to our
knowledge of the existence or absence of such facts should be drawn from the
fact of our representation of the Company. In rendering the opinion set forth
in paragraph 7 below, we have not made any independent investigation of court or
other governmental records to determine whether any actions have been filed.
On the basis of the foregoing and in reliance thereon, and based upon
examination of questions of law as we have deemed appropriate, and subject to
the assumptions, exceptions, qualifications and limitations set forth herein, we
advise you that in our opinion:
1. The Company is a corporation duly incorporated and validly existing in
good standing under the laws of the State of California. The Company is
duly qualified to do business and is in good standing in the States of
Colorado, Massachusetts, Minnesota and Texas.
2. The Company has the requisite corporate power and authority to enter
into and perform the Agreement, to execute and deliver the Other Loan
Documents, to own its properties and assets and to carry on its business
as presently conducted.
3. The Agreement, the borrowings proposed to be made under the Agreement
and the execution and delivery of the
Bank of America National Trust and
Savings Association, as Agent
December 23, 1993
Page 5
Other Loan Documents have been duly authorized by all necessary
corporate action on the part of the Company. The Agreement and the
Other Loan Documents have been duly executed and delivered by the
Company. The Agreement constitutes a legally valid and binding
obligation of the Company, enforceable against the Company in accordance
with its terms.
4. The execution and delivery of the Agreement, the execution and delivery
of the Other Loan Documents, the borrowings of Loans in accordance with
the Agreement, repayment of any such Loans by the Company and the
undertaking of the covenants set forth in the Agreement do not (a)
contravene the Company's Restated Articles of Incorporation or Bylaws,
(b) contravene any order, writ, judgment, decree, determination or award
of any court or arbitrator, known to us, to which the Company is a party
or subject, (c) conflict with or constitute a breach of the terms,
conditions or provisions of or constitute a default under any Reviewed
Agreement, (d) result in, or require the creation or imposition of any
lien, security interest or other encumbrance on any of the properties or
revenues of the Company or any of its Subsidiaries pursuant to any
Reviewed Agreement, or (e) contravene any provision of law, statute,
rule or regulation having applicability to the Company.
5. No governmental consents, approvals, authorizations, registrations,
declarations or filings are required to be made or obtained by the
Company (or on its behalf) for the due authorization, execution and
delivery by the Company of the Agreement and the Other Loan Documents,
the borrowing of Loans in accordance with the Agreement or the repayment
of any such Loans by the Company.
6. The Company is not an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
7. To our knowledge, no litigation, investigation or proceeding of or
before any court, arbitrator or other governmental authority is pending
or threatened against the Company or any Subsidiary of the Company or
any of the properties or revenues of the Company or any Subsidiary
thereof with respect to the Agreement or any of the borrowings proposed
to be made under the Agreement.
Bank of America National Trust and
Savings Association, as Agent
December 23, 1993
Page 6
8. The Loans under the Agreement constitute "Senior Indebtedness" as such
term is defined in the 1991 Indenture and the 1992 Indenture.
The foregoing opinions are subject to the following exceptions,
qualifications, limitations and assumptions:
A. We are admitted to practice law only in the State of California. Except
for the limited purpose of rendering the opinions set forth in clauses
(c) and (d) of paragraph 4 in accordance with the assumption set forth
in the next sentence, we express no opinion as to any matter relating to
laws of any jurisdiction other than the laws of the State of California
and the federal laws of the United States, as such are in effect on the
date hereof. For purposes of our review of the Reviewed Agreements,
except in the case of any such Reviewed Agreements, governed by the
federal laws of the United States, where such Reviewed Agreements
purport to be governed by laws other than those of the State of
California, we have, with your consent, assumed that the laws governing
such Reviewed Agreements (including the effect thereof and the
appropriate interpretation thereof) are no different from the laws of
the State of California.
B. We express no opinion as to (i) the effect of any bankruptcy,
insolvency, reorganization, arrangement, moratorium or other similar
laws relating to or affecting the rights of creditors generally
including, without limitation, the effect of statutory or other laws
regarding fraudulent transfers or conveyances or preferential transfers,
or (ii) the effect of general principles of equity, including without
limitation, concepts of materiality, reasonableness, good faith and fair
dealing, and the possible unavailability of specific performance,
injunctive relief or other equitable relief, whether considered in a
proceeding in equity or at law.
C. We express no opinion (i) regarding the enforceability of any provision
which may be deemed to be "unconscionable" within the meaning of Section
1670.5 of the California Civil Code, or (ii) as to the effect of the
exercise of judicial discretion, whether in a proceeding in equity or at
law.
Bank of America National Trust and
Savings Association, as Agent
December 23, 1993
Page 7
D. We express no opinion as to the legality, validity, binding nature or
enforceability of (i) provisions in the Agreement providing for the
payment or reimbursement of costs or expenses or indemnifying a party,
to the extent such provisions may be held unenforceable as contrary to
public policy, (ii) any provision of the Agreement insofar as it
provides for the payment or reimbursement of costs and expenses or
indemnification for claims, losses or liabilities in excess of a
reasonable amount determined by any court or other tribunal, (iii)
provisions regarding a Bank's or the Agent's ability to collect
attorneys' fees and costs in an action involving the Agreement, if the
Bank or Agent is not the prevailing party in such action (we call your
attention to the effect of Section 1717 of the California Civil Code,
which provides that, where a contract permits one party thereto to
recover attorneys' fees, the prevailing party in any action to enforce
any provision of the contract shall be entitled to recover its
reasonable attorneys' fees), (iv) provisions of any Agreement imposing
penalties or forfeitures, late payment charges or any increase in
interest rate, upon delinquency in payment or the occurrence of a
default to the extent they constitute a penalty or forfeiture or are
otherwise contrary to public policy, or (v) any provision of the
Agreement to the effect that a statement, certificate or determination
shall be deemed conclusive absent manifest error.
E. We express no opinion with respect to the legality, validity, binding
nature or enforceability of (i) any vague or broadly stated waivers
including, without limitation, the waivers of diligence, presentment,
demand, protest or notice, (ii) any waivers or consents (whether or not
characterized as a waiver or consent in the Agreement) relating to the
rights of the Company or duties owing to it existing as a matter of law,
including, without limitation, waivers of the benefits of statutory or
constitutional provisions, to the extent such waivers or consents are
found by California courts to be against public policy or which are
ineffective pursuant to California statutes and judicial decisions, or
(iii) any waivers of any statute of limitations to the extent such
waivers are in excess of four years beyond the statutory period.
Bank of America National Trust and
Savings Association, as Agent
December 23, 1993
Page 8
F. We express no opinion with respect to the legality, validity, binding
nature or enforceability of any provision of the Agreement to the effect
that rights or remedies are not exclusive, that every right or remedy is
cumulative and may be exercised in addition to any other right or
remedy, that the election of some particular remedy or remedies does not
preclude recourse to one or more other remedies or that failure to
exercise or delay in exercising rights or remedies will not operate as a
waiver of any such right or remedy.
G. We express no opinion as to any provision of the Agreement requiring
written amendments or waivers of such documents insofar as it suggests
that oral or other modifications, amendments or waivers could not be
effectively agreed upon by the parties or that the doctrine of
promissory estoppel might not apply.
H. We have assumed that there are no agreements or understandings between
or among the Company, a Bank, the Agent or third parties which would
expand, modify or otherwise affect the terms of the Agreement or the
respective rights or obligations of the parties thereunder and that the
Agreement correctly and completely set forth the intent of all parties
thereto.
I. We have assumed that all parties to the Agreement other than the Company
have filed all required franchise tax returns, if any, and paid all
required taxes, if any, under the California Revenue & Taxation Code.
J. We have assumed that the Agreement has been duly authorized, executed
and delivered by the Agent and each of the Banks and that the Agent and
each of the Banks have full power, authority and legal right to enter
into and perform the terms and conditions of the Agreement on their
parts to be performed and that the Agreement constitutes legal, valid
and binding obligations of the Agent and each of the Banks, enforceable
against them in accordance with its terms.
K. We express no opinion as to the applicability or effect of compliance or
non-compliance by the Agent or the Banks with any state, federal or
other laws applicable to the Agent or the Banks or to the transactions
contemplated by the Agreement because of the nature of
Bank of America National Trust and
Savings Association, as Agent
December 23, 1993
Page 9
their business, including their legal or regulatory status.
L. We have assumed that each Bank is either (i) a "Bank" as defined in and
operating under that certain act known as the "Bank Act" approved March
1, 1909, as amended, (ii) a bank created and operating under and
pursuant to the laws of the State of California or of the United States
or (iii) a foreign bank complying with the criteria set forth in Section
1716 of the California Financial Code, as amended, and that the Banks
are therefore exempt from the restrictions of Section 1 of Article XV of
the California Constitution and related statutes relating to rates of
interest upon the loan of money.
M. We express no opinion regarding compliance or non-compliance (or the
effect thereof) with anti-fraud provisions of federal or state
securities laws, if any of such provisions were to be applicable, or
with respect to the "Blue Sky" laws of any state other than the State of
California.
N. Our opinion in clause (e) of paragraph 4 above is based solely upon a
review of statutes, rules and regulations which, in our experience, are
normally applicable to transactions of the type contemplated by the
Agreement.
O. This opinion speaks only at and as of its date and is based solely on
the facts and circumstances existing on such date. We express no
opinion as to the effect on the Banks' or the Agent's rights under the
Agreement of any statute, rule, regulation or other law which is enacted
or becomes effective after, or of any court decision which changes the
law relevant to such rights which is rendered after, the date of this
opinion or the conduct of the parties following the closing of the
contemplated transaction. In addition, in rendering this opinion, we
assume no obligation to revise or supplement this opinion should the
present laws of the jurisdictions mentioned herein be changed by
legislative action, judicial decision or otherwise.
P. Our opinion set forth in paragraph 1 as to good standing in the State of
California and as due qualification and good standing in other states is
based solely on the certificates referenced in paragraph (g) above
(copies of which have been furnished to you), and, to the extent
Bank of America National Trust and
Savings Association, as Agent
December 23, 1993
Page 10
available, telephonic confirmation as of the date of this opinion of the
legal existence and good standing of the Company in the State of
California from the Office of the Secretary of State of the State of
California and the due qualification and good standing as a foreign
corporation qualified to do business from the Office of the Secretary of
State of the States of Colorado, Massachusetts, Minnesota and Texas.
This opinion is made with the knowledge and understanding that you (but no
other person) may rely thereon in entering into the Agreement and is solely for
your benefit. This opinion may not be quoted to or relied upon by any person
other than you, except that (i) this opinion may be disclosed to bank regulatory
and other governmental authorities having jurisdiction over you requesting (or
requiring) such disclosure and (ii) this opinion may be disclosed to and relied
upon by assignees of the Loans if such assignments are permitted under and made
in accordance with the Agreement; provided that in no event does this opinion
--------
extend to any issue or matter related to any such assignment or arising from or
out of any such assignment (as distinct from the subject transaction).
Very truly yours,
WILSON, SONSINI, GOODRICH &
ROSATI, Professional Corporation
SCHEDULE 1
----------
Bank of America National Trust
and Savings Association
1850 Gateway Boulevard
Concord, CA 94520
The First National Bank of Boston
100 Federal Street
Boston, MA 02110
Barclays Bank PLC
75 Wall Street
New York, NY 10265
SCHEDULE 2
----------
[To be provided by the Company's counsel]
EXHIBIT 6.1(b)
Consolidating Statement Certificate
-----------------------------------
Pursuant to that certain Credit Agreement dated as of December 23, 1993 (as
amended from time to time, the "Credit Agreement") among Conner Peripherals
----------------
Inc., a California corporation (the "Company"), the several financial
-------
institutions from time to time party thereto and Bank of America National Trust
and Savings Association, as Agent, the undersigned ______________, certifies
that he is the __________ of the Company, and that, as such, he is authorized to
execute and deliver this Certificate in the name and on behalf of the Company,
and that:
1. Attached hereto as Schedule 1 is a true, correct and complete copy of
----------
the unaudited consolidating balance sheets and related consolidating
statements of operations, shareholders' equity and cash flow for the
year ended _________, 199_ of the Company and each of its Subsidiaries.
2. Schedule 1 was used in connection with the preparation of the Company's
----------
audited consolidated balance sheet and related consolidated statements
of operations, shareholders' equity and cash flows for such year.
3. Schedule 1 was derived from the financial records of the Company.
----------
IN WITNESS WHEREOF, the undersigned has executed this Certificate in the name
and on behalf of the Company as of __________, 199_.
CONNER PERIPHERALS, INC.
By: _________________________
Title: ______________________
EXHIBIT 6.2(a)
Compliance Certificate
----------------------
Pursuant to that certain Credit Agreement dated as of December 23, 1993 (as
amended from time to time, the "Credit Agreement") among Conner Peripherals,
----------------
Inc., a California corporation (the "Company"), the several financial
-------
institutions from time to time party thereto and Bank of America National Trust
and Savings Associations, as Agent, the undersigned ________________, certifies
that he is the ________________ of the Company, and that, as such, he is
authorized to execute and deliver this Certificate in the name and on behalf of
the Company, and that:
1. Attached as Schedule 1 hereto are true and correct copies of the
----------
Company's audited financial statements for the year ended ____________________,
199__.
or
1. Attached as Schedule 1 hereto are true and correct copies of the
----------
Company's unaudited financial statements for the quarter ended _______________,
199__.
2. The attached financial statements accurately and fairly present in all
material respects, in accordance with GAAP, the consolidated financial position
and results of operations of the Company and the Company's Subsidiaries, subject
only to normal year-end adjustments [and the absence of footnotes].
3. The Company has reviewed the terms of the Credit Agreement and the
undersigned has made, or has caused to be made under his supervision, a review
of the transactions entered into by the Company and its Subsidiaries (as defined
in the Credit Agreement) during the accounting period covered by the attached
financial statements which could affect the Company's compliance with such
terms.
4. To the best of the undersigned's knowledge, the Company, during such
period, has observed, performed or satisfied all of the covenants and other
agreements contained in the Credit Agreement to be observed, performed or
satisfied by the Company.
5. The examinations described in paragraph 3 above did not disclose, and
the undersigned has obtained no knowledge of any Default or Event of Default
(both as defined in the Credit Agreement) and attached as Schedule 2 hereto are
----------
the calculations used to make such determination with respect to Sections 7.9
through 7.13 of the Credit Agreement as of the end of the accounting period
covered by the financial statements attached as Schedule 1 hereto.
----------
IN WITNESS WHEREOF, the undersigned has executed this certificate in the name
and on behalf of the Company as of ______________, 199_.
CONNER PERIPHERALS, INC.
By: ________________________
Title: _____________________
SCHEDULE 2
TO COMPLIANCE CERTIFICATE
-------------------------
($ in 000's)
Date: ______________, 199__
For the fiscal [quarter/year]
ended ______________, 199__
=========================================================================================================
Actual Required/Permitted
------ ------------------
- ---------------------------------------------------------------------------------------------------------
1. Section 7.9 Modified Quick
--------------------------
Ratio.
------
- ---------------------------------------------------------------------------------------------------------
The ratio/1/ of:
- ---------------------------------------------------------------------------------------------------------
A. the sum of:
(i) cash _______
(ii) Cash Equivalents/2/ _______
(iii) Eligible
Receivables (net
of allowance for
doubtful
accounts) _______
- -------------------------------------------------------------------------------
= (i) + (ii) + (iii) = _______
- -------------------------------------------------------------------------------
B. the sum/3/ of:
(i) Consolidated
Current
Liabilities _______
(ii) Consolidated
Senior Debt -------
(iii) Contingent Obli-
gations in excess
of $10,000,000
_______
= (i) + (ii) + (iii) =
Test Period Ratio not
A ----------- ---------
- less than:
---------
= B = ======= Closing Date -
March 31, 1994 1.20:1.00
April 1, 1994 -
and thereafter 1.25:1.00
- --------------------------------------------------------------------------------
2. Section 7.10 Leverage Ratio.
---------------------------
=========================================================================================================
------------------------
1 Determined on a consolidated basis.
2 Valued in accordance with GAAP.
3 Without duplication.
=========================================================================================================
Actual Required/Permitted
------ ------------------
- ---------------------------------------------------------------------------------------------------------
The ratio of:
A. the difference of:
(i) Total Liabilities _______
minus
-----
(ii) aggregate
principal amount
outstanding minus
the 1991
Indenture and the _______
1992 Indenture
- ---------------------------------------------------------------------------------------------------------
= (i) - (ii) = _______
- ---------------------------------------------------------------------------------------------------------
B. the sum of:
(i) Tangible Net
Worth _______
plus
----
(ii) aggregate
principal amount
outstanding under
the 1991
Indenture and the
1992 Indenture _______
= (i) + (ii) = _______
- ---------------------------------------------------------------------------------------------------------
= A
- =
B ------- Ratio not greater than 1.10 to 1.00
- ---------------------------------------------------------------------------------------------------------
3. Section 7.11 Minimum Tangible Net Worth.
- ---------------------------------------------------------------------------------------------------------
Tangible Net Worth = ========
- ---------------------------------------------------------------------------------------------------------
Not to be less than the sum
of:
- ---------------------------------------------------------------------------------------------------------
A. $115,000,000
plus
----
- ---------------------------------------------------------------------------------------------------------
B. 75% of Consolidated Net
Income, commencing with
the fiscal quarter
beginning 10/1/93 and
thereafter (not reduced
by any quarterly loss) --------
plus
----
=========================================================================================================
=========================================================================================================
Actual Required/Permitted
------ ------------------
- ---------------------------------------------------------------------------------------------------------
C. 100% of Net Proceeds
arising from the sale of
capital stock occurring
on or after 10/1/93 --------
plus
----
---------------------------------------------------------------------------------------------------------
D. any increase in
consolidated Tangible
Net Worth due to
conversions of debt to
equity occurring on or
after 10/1/93/4/
---------------------------------------------------------------------------------------------------------
= A + B + C + D = ========
---------------------------------------------------------------------------------------------------------
4. Section 7.12 Losses in One
--------------------------
Quarter
-------
---------------------------------------------------------------------------------------------------------
Aggregate operating loss for
the fiscal quarter just
ended Not to exceed $40,000,000
---------------------------------------------------------------------------------------------------------
Aggregate net loss for the
fiscal quarter just ended --------- Not to exceed $40,000,000
---------------------------------------------------------------------------------------------------------
5. Section 7.13 Losses in Two
--------------------------
Consecutive Quarters
--------------------
---------------------------------------------------------------------------------------------------------
Aggregate operating loss for
the fiscal quarter just
ended and the immediately
preceding fiscal quarter --------- Not to exceed $25,000,000
---------------------------------------------------------------------------------------------------------
Aggregate net loss for the
fiscal quarter just ended
and the immediately
preceding fiscal quarter --------- Not to exceed $25,000,000
=========================================================================================================
------------------------
/4/ Without duplication.
EXHIBIT 6.13
Notice to Trustee
-----------------
The First National Bank of Boston
Blue Hill Office Park
Mail Stop 45-02-15
150 Royall Street
Canton, MA 02021
Attention: Corporate Trust Division
Re: 1991 Conner Peripherals, Inc. Indenture
Ladies and Gentlemen:
Reference is made to that certain Indenture dated as of March 1, 1991 (as
amended from time to time, the "Indenture") between Conner Peripherals, Inc.
---------
(the "Company") and you, pursuant to irrevocable authorization granted to us by
-------
the Company, we hereby notify you that
[the Company has incurred Senior Indebtedness (as such term is defined in the
Indenture) pursuant to that certain Credit Agreement dated as of December 23,
1993 among the Company, Bank of America National Trust and Savings
Association, as Agent, and the several financial institutions from time to
time party thereto.]
or
[(i) the Company has defaulted pursuant to that certain Credit Agreement dated
as of December 23, 1993 (as amended from time to time, the Credit Agreement)
among the Company, Bank of America National Trust and Savings Association, as
Agent, and the several financial institutions from time to time party thereto;
(ii) the Credit Agreement constitutes Senior Indebtedness (as defined in the
Indenture); and (iii) the default has accelerated the maturity of such
Indebtedness.]
This notice is given pursuant to Section 4.05 of the Indenture.
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION, as Agent
By: __________________________
Title: _______________________
cc: Conner Peripherals, Inc.
2
EXHIBIT 10.8(a)
Assignment and Acceptance
-------------------------
ASSIGNMENT AND ACCEPTANCE dated ______________, 199__ between ________________
(the "Assignor") and ___________________ (the "Assignee").
-------- --------
PRELIMINARY STATEMENTS
A. Reference is made to the Credit Agreement dated as of December 23, 1993
(as amended from time to time, the "Credit Agreement"), among Conner
----------------
Peripherals, Inc. (the "Company"), the several financial institutions from time
-------
to time party thereto (the "Banks") and Bank of America National Trust and
-----
Savings Association as agent for the Banks (in such capacity, the "Agent").
-----
Capitalized terms not otherwise defined herein shall have the meanings ascribed
to such terms as set forth in the Credit Agreement.
B. The Assignor is a Bank under and as defined in the Credit Agreement and,
as such, presently has outstanding the following Commitment and Loans under the
Credit Agreement:
Commitment $__________
Base Rate Loans $__________
Eurodollar Rate Loans $__________
C. On the terms and conditions set forth below, the Assignor desires to sell
and assign to the Assignee, and the Assignee desires to purchase and assume from
the Assignor, a ______ %/5/ interest (the "Assigned Percentage") in and to all
-------------------
of the Assignor's rights and obligations as of the Effective Date (as defined
below).
D. After giving effect to such assignment, the respective Commitments and
outstanding Loans of the Assignor and Assignee under the Credit Agreement will
be:
Assignor
--------
Commitment $_________
Base Rate Loans $_________
Eurodollar Rate Loans $_________
- ----------------------
/5/ Specify percentage of Assignor's interest only in total facility in no more
------------------------
than 4 decimal points.
Assignee
--------
Commitment $_________
Base Rate Loans $_________
Eurodollar Rate Loans $_________
NOW, THEREFORE, the Assignor and the Assignee hereby agree as follows:
1. The Assignor hereby sells and assigns to the Assignee WITHOUT RECOURSE,
and the Assignee hereby purchases and assumes from the Assignor, the Assigned
Percentage of the Assignor's rights and obligations under the Credit Agreement
as of the Effective Date.
2. The Assignor (i) represents and warrants that as of the date hereof its
Commitments and outstanding Loans (without giving effect to assignments thereof
which have not yet become effective) are as follows:
Commitment $_________
Base Rate Loans $_________
Eurodollar Rate Loans $_________
(ii) represents and warrants that it is the legal and beneficial owner of the
interest being assigned by it hereunder and that such interest is free and clear
of any adverse claim; (iii) makes no representations or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with the Credit Agreement or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Credit
Agreement or any other Loan Document furnished pursuant thereto; and (iv) makes
no representations or warranty and assumes no responsibility with respect to the
financial condition of the Company or any of its Subsidiaries or the performance
or observance by the Company or any of its Subsidiaries of any of their
obligations under the Credit Agreement or any other Loan Document furnished
pursuant thereto.
3. The Assignee (i) represents and warrants that it is an Eligible
Transferee, (ii) confirms that it has received a copy of the Credit Agreement,
together with copies of such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter this
Assignment and Acceptance; (iii) agrees that it will, independently and without
reliance upon Agent, the Assignor or any other Bank and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own credit decisions in taking or not taking action under the Credit Agreement
and any other Loan
2
Documents; (iv) appoints and authorizes Agent to take such action as agent on
its behalf and to exercise such powers under the Credit Agreement and the other
Loan Documents as are delegated to Agent by the terms thereof, together with
such powers as are reasonably incidental thereto; and (v) agrees that it will
perform in accordance with their terms all of the obligations which by the terms
of the Credit Agreement and the other Loan Documents are required to be
performed by a Bank thereunder.
4. Following the execution of this Assignment and Acceptance by the Assignor
and the Assignee, it will be delivered to Agent for acceptance and recording by
Agent and acceptance by the Company. The effective date for this Assignment and
Acceptance shall be ____________ (the "Effective Date"), subject to acceptance
--------------
by the Agent and the Company; provided, however, this Assignment and Acceptance
shall not be effective until accepted by the Agent and the Company.
5. Subject to and upon such acceptance and recording as of the Effective
Date, (i) the Assignee shall be a party to the Credit Agreement and shall be
entitled to the rights and benefits of the Loan Documents and, to the extent of
the percentage assigned in this Assignment and Acceptance, have the rights and
obligations of a Bank thereunder and (ii) the Assignor shall, to the extent of
the percentage assigned in this Assignment and Acceptance, relinquish its rights
and be released from its obligations under the Credit Agreement and the other
Loan Documents.
6. Subject to and upon such acceptance and recording, from and after the
Effective Date, Agent shall make all payments under the Credit Agreement which
are payable to Agent for the account of the appropriate Bank to the appropriate
Banks severally in proportion to their respective percentages determined after
giving effect to this assignment, when payment is due. The Assignor and
Assignee shall make all appropriate adjustments in payments under the Credit
Agreement and the other Loan Documents for periods prior to the Effective Date
directly between themselves.
7. This Assignment and Acceptance shall be governed by, and construed in
accordance with, the laws of the State of California.
3
8. The following administrative details apply to the Assignee:
(A) Notice Address:
Assignee name: ________________
Address: _____________________
_____________________
_____________________
Attention: ____________________
Telephone: ( ) ______________
Facsimile: ( ) ______________
(B) Address for Payments:
Account No.: __________________
At: __________________
__________________
__________________
Reference: __________________
Attention: __________________
(C) Eurodollar Lending Office:
Assignee name: __________________
Address: ______________________
______________________
______________________
Attention: ____________________
Telephone: ( ) ______________
Facsimile: ( ) ______________
(C) Domestic Lending Office:
Assignee name: ________________
Address: ______________________
________________________________
Attention: ____________________
Telephone: ( ) ______________
Facsimile: ( ) ______________
9. This Assignment and Acceptance shall be governed by, and construed in
accordance with, the laws of the State of California.
4
IN WITNESS WHEREOF, the undersigned as executed this Certificate as of the
date first set forth above.
[NAME OF ASSIGNOR]
By: __________________________
Title: _______________________
[NAME OF ASSIGNEE]
By: _________________________
Title: ______________________
ACCEPTED this ___ day
of ___________, 199__
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as Agent
By: ____________________________
Title: Vice President
ACCEPTED this ___ day
of ___________, 199__
CONNER PERIPHERALS, INC.
By: ____________________________
Title: _________________________
5