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AMENDED AND RESTATED
REVOLVING CREDIT AGREEMENT
DATED AS OF MARCH 18, 1996
AMONG
ELECTRONIC ASSEMBLY CORPORATION
AND
FIRSTAR BANK MILWAUKEE, N.A.
HARRIS TRUST AND SAVINGS BANK
BANK ONE, MILWAUKEE, NA
LASALLE NATIONAL BANK
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TABLE OF CONTENTS
SECTION 1 DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 2 AMOUNTS AND TERMS OF REVOLVING CREDIT COMMITMENTS . . . . . . . . . . . . . . . . . 7
2.1 Revolving Credit Commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.2 Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.3 Interest Calculation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.4 Commitment Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
2.5 Procedure for Revolving Credit Loans . . . . . . . . . . . . . . . . . . . . . . . 14
2.6 Application of Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
2.7 Borrowing Base Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
2.8 Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
2.9 Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
2.10 Termination or Reduction of the Commitments . . . . . . . . . . . . . . . . . . . . 16
2.11 Agent's Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 3 REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . . . . . . . 16
3.1 Organization; Qualification and Subsidiaries . . . . . . . . . . . . . . . . . . . 16
3.2 Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
3.3 Authorization; Enforceability . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
3.4 Absence of Conflicting Obligations . . . . . . . . . . . . . . . . . . . . . . . . 17
3.5 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
3.6 Absence of Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
3.7 Accuracy of Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
3.8 Ownership of Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
3.9 Federal Reserve Regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
3.10 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
3.11 Security Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
3.12 Places of Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
3.13 Other Names . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
3.14 Investment Company Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
3.15 Dividends and Redemptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
3.16 Contingent Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
3.17 Absence of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
3.18 Environmental Conditions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 4 CONDITIONS PRECEDENT TO LOANS . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
4.1 Initial Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
4.2 Subsequent Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 5 AFFIRMATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
5.1 Corporate Existence, Properties, Etc . . . . . . . . . . . . . . . . . . . . . . . 21
5.2 Maintenance of Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
5.3 Financial Information; Notice of Default . . . . . . . . . . . . . . . . . . . . . 22
5.4 Inspection of Properties and Records . . . . . . . . . . . . . . . . . . . . . . . 22
5.5 Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
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SECTION 6 NEGATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
6.1 Sale of Assets, Consolidation, Merger, Etc . . . . . . . . . . . . . . . . . . . . 23
6.2 Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
6.3 Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
6.4 Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
6.5 Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
6.6 Fixed Asset Expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
6.7 Compliance with ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
6.8 Accounts Receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
6.9 Contingent Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
6.10 Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 7 DEFAULT; AMENDMENTS AND WAIVERS . . . . . . . . . . . . . . . . . . . . . . . . . . 25
7.1 Events of Default Defined . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
7.2 Remedies Upon Event of Default . . . . . . . . . . . . . . . . . . . . . . . . . . 27
7.3 Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 8 RIGHTS AND DUTIES OF THE AGENT . . . . . . . . . . . . . . . . . . . . . . . . . . 28
8.1 Appointment and Duties of the Agent . . . . . . . . . . . . . . . . . . . . . . . . 28
8.2 Discretion and Liability of the Agent . . . . . . . . . . . . . . . . . . . . . . . 29
8.3 Event of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
8.4 Consultation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
8.5 Communications to and from the Agent . . . . . . . . . . . . . . . . . . . . . . . 30
8.6 Limitations of Agency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
8.7 No Representation or Warranty . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
8.8 Bank Credit Decision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
8.9 Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
8.10 Resignation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
8.11 Noteholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 9 INCREASED COSTS; CAPITAL ADEQUACY . . . . . . . . . . . . . . . . . . . . . . . . . 32
9.1 Increased Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
9.2 Capital Adequacy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 10 MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
10.1 Expenses and Attorneys' Fees; Indemnification . . . . . . . . . . . . . . . . . . . 33
10.2 Assignability; Successors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
10.3 Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
10.4 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
10.5 Counterparts; Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
10.6 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
10.7 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
10.8 Participations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
10.9 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
10.10 JURY TRIAL WAIVER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
10.11 Interest Rate Hedges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
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LIST OF EXHIBITS
A. Revolving Credit Note
B. Loan Request
C. Borrowing Base Certificate
D. Security Agreement
E. Secretary's Certificate
F. Opinion of Counsel for the Company
G. Permitted Liens
H. Guaranty of Technology Group, Inc.
I. Guaranty of Plexus Corp.
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AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT
THIS AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT is made
and entered into as of March 18, 1996, by and among ELECTRONIC ASSEMBLY
CORPORATION, a Wisconsin corporation (the "Company"), FIRSTAR BANK MILWAUKEE,
N.A., a national banking association, HARRIS TRUST AND SAVINGS BANK, an
Illinois banking corporation, BANK ONE, MILWAUKEE, NA, a national banking
association, and LASALLE NATIONAL BANK, a national banking association (each a
"Bank" and collectively the "Banks"), and FIRSTAR BANK MILWAUKEE, N.A., a
national banking association, as agent for the Banks (the "Agent").
W I T N E S S E T H
WHEREAS, the Company, the Banks and the Agent are parties to a
Revolving Credit Agreement dated April 18, 1991, as amended through Amendment
No. 11 thereto dated as of July 28, 1995 (the "Original Credit Agreement")
providing for revolving credit loans to the Company in an aggregate principal
amount of up to $55,000,000; and
WHEREAS, the Company, the Banks and the Agent have agreed to
amend and restate the Original Credit Agreement in its entirety as set forth
herein;
NOW, THEREFORE, in consideration of the premises and the
mutual agreements contained herein, subject to all of the terms and conditions
set forth herein, the parties hereto agree to amend and restate the Original
Credit Agreement as follows:
SECTION 1 DEFINITIONS
As used in this Agreement, the following terms have the
following meanings:
1.1 "Affiliate" shall mean any Person which, directly or
indirectly, controls, is controlled by, or is under common control with, the
Company.
1.2 "Agreement" shall mean this Revolving Credit
Agreement, as amended, supplemented or modified from time to time.
1.3 "Borrowing Base" shall mean, as of any date, the sum
of (i) eighty percent (80%) of Qualified Accounts, and (ii) the lesser of (A)
fifty percent (50%) of Qualified Inventory and (B) $27,500,000, as certified in
the Borrowing Base Certificate then most recently delivered to the Agent
pursuant to Section 2.7 hereof.
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1.4 "Borrowing Date" shall have the meaning assigned
thereto in Section 2.5 hereof.
1.5 "Business Day" means any day other than Saturday or
Sunday on which banks in the States of Wisconsin and Illinois are open for the
transaction of substantially all of their banking functions, provided, however,
that for purposes of calculating the Basic LIBOR Rate, the LIBOR Interest
Period, and the election of LIBOR Pricing Options, the term Business Day shall
mean only those days on which dealings in U.S. dollar deposits are carried out
by U.S. financial institutions in the London interbank market.
1.6 "Capitalized Lease" shall mean any lease which is
capitalized on the books of the Lessee, or should be so capitalized under GAAP.
1.7 "Code" shall mean the Internal Revenue Code of 1986,
as amended from time to time.
1.8 "Commitment" shall mean the obligation of each Bank
to make Loans to the Company pursuant to Section 2.1. The amount of each
Bank's Commitment, and the "Percentage Interest" of each Bank in the loans to
be made under this Agreement, shall be as follows:
PERCENTAGE
BANK INTEREST COMMITMENT
---- ---------- ----------
FIRSTAR BANK MILWAUKEE, N.A. 36.37% $20,000,000
HARRIS TRUST AND SAVINGS BANK 30.91% $17,000,000
BANK ONE, MILWAUKEE, NA 16.36% $ 9,000,000
LASALLE NATIONAL BANK 16.36% $ 9,000,000
------ -----------
TOTAL 100% $55,000,000
1.9 "Commitment Period" shall mean the period from and
including the date hereof to and including the Termination Date.
1.10 "Controlled Group" shall mean a controlled group of
corporations as defined in Section 1563 of the Code, of which the Company is a
member.
1.11 "Default" shall mean an event which with the giving
of notice or the passage of time or both would constitute an Event of Default.
1.12 "ERISA" shall mean the Employee Retirement Income
Security Act of 1974, as amended from time to time.
1.13 "Employee Plan" shall mean any savings, profit
sharing, or retirement plan or any deferred compensation contract or other plan
subject to Title IV of ERISA maintained by the
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Company or any member of the Controlled Group, or any such plan to which the
Company or any member of the Controlled Group is required to contribute on
behalf of any of its employees.
1.14 "Environmental Audit" shall mean a review for the
purpose of determining whether the Company complies with Environmental Laws and
whether there exists any condition or circumstance which requires or will
require a cleanup, removal, or other remedial action under Environmental Laws
on the part of the Company including such procedures and analysis as any Bank
shall determine in its reasonable discretion.
1.15 "Environmental Laws" shall mean all federal, state
and local laws including statutes, regulations, ordinances, codes, rules and
other governmental restrictions and requirements relating to the discharge of
air pollutants, water pollutants or process waste water or otherwise relating
to the environment or hazardous substances including, but not limited to, the
Federal Solid Waste Disposal Act, the Federal Clean Air Act, the Federal Clean
Water Act, the Federal Resource Conservation and Recovery Act of 1976, the
Federal Comprehensive Environmental Responsibility Cleanup and Liability Act of
1980, regulations of the Environmental Protection Agency, regulations of the
Nuclear Regulatory Agency, and regulations of any state department of natural
resources or state environmental protection agency now or at any time hereafter
in effect.
1.16 "Event of Default" shall have the meaning assigned
thereto in Section 7.1 hereof.
1.17 "GAAP" shall mean those generally accepted accounting
principles and practices which are recognized as such by the American Institute
of Certified Public Accountants acting through its Accounting Principles Board
or by the Financial Accounting Standards Board or through other appropriate
boards or committees thereof and which are consistently applied for all
periods, and consistent with those applied in the preparation of the financial
statements referred to in Section 3.2, so as to properly reflect the financial
condition, and the results of operations and changes in financial position, of
the Company.
1.18 "Government Authority" shall mean any nation or
government, any state or other political subdivision thereof, and any entity
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government, and any corporation or other entity
owned or controlled through stock or capital ownership or otherwise, by any of
the foregoing.
1.19 "Guaranties" shall mean the guaranty agreements of
each of Technology Group, Inc. and Plexus Corp., in the forms of Exhibits H and
I hereto, respectively, as amended, supplemented or modified from time to time.
1.20 "Indebtedness" of any Person shall mean (i)
indebtedness for borrowed money or for the deferred purchase price
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of property or services in respect of which such Person is liable, contingently
or otherwise, as obligor or otherwise or any commitment by which such Person
assures a creditor against loss, including contingent reimbursement obligations
with respect to letters of credit; (ii) indebtedness guaranteed in any manner
by such Person, including guaranties in the form of an agreement to purchase,
provide funds for payment, supply funds to or otherwise invest in the debtor or
otherwise assure the creditor against loss; (iii) obligations under Capitalized
Leases in respect of which such Person is liable, contingently or otherwise, as
obligor, guarantor or otherwise, or in respect of which such Person assures a
creditor against loss; (iv) any unfunded obligation of such Person to a
"multiemployer plan" as such term is defined under ERISA; (v) all liabilities
secured by any Lien on any Property owned by such Person even though it has not
assumed or otherwise become liable for the payment thereof; and (vi) any other
liability or obligation of such Person payable more than one (1) year from the
date of the creation thereof, and which, in accordance with GAAP, is properly
shown as a liability of such Person on its balance sheet.
1.21 "Lien" shall mean any mortgage, pledge,
hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or
other), preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever including, without limitation, any
conditional sale or other title retention agreement, any financing lease having
substantially the same economic effect as any of the foregoing, and the filing
of any financing statement under the Uniform Commercial Code or comparable law
of any jurisdiction.
1.22 "Loans" shall have the meaning assigned thereto in
Section 2.1 of this Agreement.
1.23 "Maximum Amount of Credit" shall mean an amount equal
to the lesser of (i) $55,000,000 or (ii) the amount (being an integral multiple
of $100,000) to which such figure shall have been irrevocably reduced from time
to time by the Company pursuant to Section 2.10.
1.24 "Notes" shall have the meaning assigned thereto in
Section 2.2 of this Agreement and any note or notes issued in substitution for
any thereof.
1.25 "PBGC" shall mean the Pension Benefit Guaranty
Corporation established pursuant to Subtitle A of Title IV of ERISA.
1.26 "Percentage Interest" shall have the meaning assigned
thereto in Section 1.8 hereof.
1.27 "Permitted Liens" shall have the meaning assigned
thereto in Section 6.3 of this Agreement.
1.28 "Person" shall mean an individual, partnership,
corporation, business trust, joint stock company, trust,
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unincorporated association, joint venture, Government Authority or other entity
of whatever nature.
1.29 "Prime Rate" shall mean the rate announced by Firstar
Bank Milwaukee, N.A. from time to time in Milwaukee, Wisconsin as its prime
rate.
1.30 "Property" shall mean any interest in any kind of
property or asset, whether real, personal or mixed, or tangible or intangible.
1.31 "Qualified Account" shall mean an account owing to
the Company which meets the following requirements at the time it comes into
existence and continues to meet the same until it is collected in full: (i) it
is not past due and unpaid more than ninety days past its invoice date ; (ii)
it is owned by the Company free of any prior assignment, claim, lien, or
security interest whatsoever (except for the lien in favor of the Agent for the
benefit of the Banks created by the Security Agreement and liens described in
Section 10.11 of this Agreement); (iii) it is a valid and legally enforceable
obligation of an account debtor satisfactory to the Banks; (iv) it is not
subject to setoff, counterclaim, credit allowance, or adjustment by the account
debtor thereunder, or to any claim by such account debtor denying liability
thereunder in whole or in part, and such account debtor has not refused to
accept and has not returned or offered to return any of the goods which are
subject to such account (provided that the amount by which any such account
which otherwise meets all requirements for a Qualified Account exceeds the
amount of any such setoff or counterclaim may be included as a Qualified
Account); (v) it arose in the ordinary course of the Company's business from a
bona fide sale of goods or services to a customer located in the United States
or Canada (or to a customer located outside of the United States or Canada,
provided that accounts of such foreign customers may not exceed an aggregate of
$5,000,000), which goods or services have been delivered or shipped to the
account debtor; (vi) the Company has no notice of a bankruptcy, insolvency, or
similar proceeding of the account debtor thereunder, or of the inability of the
account debtor thereunder to pay its debts as they become due; (vii) it and the
transaction out of which it arose comply with all applicable laws and
regulations; (viii) it does not arise out of a contract or order which by its
terms forbids or makes void or unenforceable the assignment by the Company to
the Banks of the account arising with respect thereto; (ix) it is subject to a
valid and perfected first lien security interest in favor of the Agent for the
benefit of the Banks; and (x) it is certified by the Company on a monthly basis
(or at such more frequent intervals as the Agent shall reasonably request) as
to the amount thereof and other matters set forth above. An account which is
at any time a Qualified Account, but which subsequently fails to meet any of
the foregoing requirements, shall forthwith cease to be a Qualified Account.
1.32 "Qualified Inventory" shall mean inventory of the
Company, valued at the lower of market or cost (determined on a
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FIFO basis) which meets the following requirements and continues to meet the
same until it is sold or otherwise disposed of as permitted by this Agreement:
(i) it is owned by the Company free of any prior assignment, claim, lien, or
security interest whatsoever (except for the lien in favor of the Agent for the
benefit of the Banks created by the Security Agreement and liens described in
Section 10.11 of this Agreement); (ii) it is subject to a valid and perfected
first lien security interest in favor of the Banks; (iii) it is not obsolete,
is in good condition and is either currently usable or saleable; and (iv) its
existence, location, amount, and cost have been certified by the Company on a
monthly basis or at such more frequent intervals as the Agent shall reasonably
request, but Qualified Inventory shall not include (a) direct labor that has
been capitalized in work in process, (b) general stores merchandise, (c) test
fixtures, (d) shipping supplies, (e) tooling, (f) inventory owned by customers
of the Company or other third parties and held by the Company for processing
pursuant to a bailment or similar type of arrangement, or (g) inventory located
elsewhere than (1) one of the locations listed on Exhibit 3(i) to the Security
Agreement, or (2) any other location in the United States, provided that the
Agent shall have been furnished with all financing statements or other
documents necessary to create a valid and perfected first lien security
interest in such inventory in favor of the Banks, and at least five days have
elapsed from the date of delivery of such financing statements or other
documents to the Agent. Qualified Inventory shall also be reduced by the
aggregate amount of advance payments, as of the determination date for
Qualified Inventory, by or on account of customers of the Company. For the
purposes hereof, "advance payments" shall mean all payments, for goods to be
purchased from the Company, made by or on account of customers of the Company
prior to the time of shipment by the Company. Inventory of the Company which
is at any time Qualified Inventory, but which subsequently fails to meet any of
the foregoing requirements shall forthwith cease to be Qualified Inventory.
1.33 "Reportable Event" shall mean a reportable event as
that term is defined in Title IV of ERISA.
1.34 "Requirement of Law" shall mean as to any Person, the
Certificate or Articles of Incorporation and Bylaws or other organizational or
governing documents of such Person, and any law, treaty, rule or regulation, or
determination of an arbitrator or a court or other Government Authority, in
each case applicable to or binding upon such Person or any of its property or
to which such Person or any of its Property is subject.
1.35 "Requisite Consent" shall mean the written consent of
the Banks which together hold at least two-thirds (66 2/3%) of the Percentage
Interests in the loans outstanding under this Agreement.
1.36 "Security Agreement" shall mean the Security
Agreement between the Company and Technology Group, Inc. and the
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Agent, as the same may be amended, supplemented or modified from time to time.
1.37 "Subsidiary" shall mean as to any Person, a
corporation of which shares of stock having ordinary voting power (other than
stock having such power only by reason of the happening of a contingency that
has not occurred) to elect a majority of the board of directors or other
managers of such corporation are at the time owned, or the management of which
is otherwise controlled, directly, or indirectly through one or more
intermediaries, or both, by such Person.
1.38 "Termination Date" shall mean July 31, 1998 or such
earlier date on which the Commitment shall terminate as provided herein.
1.39 "UCC" shall mean the Uniform Commercial Code as the
same may from time to time be in effect in the State of Wisconsin.
1.40 "Unfunded Liabilities" shall mean, with regard to any
Employee Plan, the excess of the current value of the Employee Plan's benefits
guaranteed under ERISA over the current value of the Employee Plan's assets
allocable to such benefits.
Except as otherwise herein specifically provided, each
accounting term used herein shall have the meaning given to it under GAAP, and
all other terms contained in this Agreement (and which are not otherwise
specifically defined herein) shall have the meanings provided in the UCC to the
extent the same are used or defined therein unless the context otherwise
requires. 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 terms defined in other
sections of this Agreement shall have the meanings set forth therein.
SECTION 2 AMOUNTS AND TERMS OF REVOLVING CREDIT COMMITMENTS
2.1 Revolving Credit Commitments. Subject to the terms
and conditions hereof, and so long as no Default exists, each Bank agrees to
make revolving credit loans (the "Loans") to the Company during the Commitment
Period up to the amount of its Commitment; provided that the aggregate
principal amount of Loans at any one time outstanding shall not exceed the
lesser of (i) the Maximum Amount of Credit or (ii) the Borrowing Base. The
respective obligations of the Banks under this Agreement to make the Loans
contemplated hereby are several and are not joint or joint and several. The
failure of one of the Banks to make any Loan shall not relieve the other Banks
of their obligations to lend hereunder, and in no event shall such other Banks
or the Agent be liable in any way whatsoever for such failure to make any Loan
hereunder. No Bank shall be obligated in any event to lend in excess of its
Commitment. During the Commitment Period, the Company may borrow
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and repay the Loans in whole or in part, and reborrow, all in accordance with
the terms and conditions hereof.
2.2 Notes. The Loans made by each of the Banks pursuant
hereto shall be evidenced by a promissory note of the Company, in the form of
Exhibit A hereto with appropriate insertions (individually, a "Note" and
collectively, the "Notes"), payable to the order of that Bank in the amount of
that Bank's Commitment. Each Note shall (a) be dated the date hereof, (b) be
stated to mature on the Termination Date, (c) bear interest on the unpaid
principal amount thereof from time to time outstanding, and (d) be in the
principal amount of each Bank's Commitment, notwithstanding that the Company
shall be obligated to pay only the unpaid principal amount thereof from time to
time outstanding together with accrued interest thereon.
2.3 Interest Calculation.
(a) Interest. The principal amount of the
indebtedness from time to time evidenced by the Notes shall
accrue and bear interest at a rate per annum which shall at all times
equal the Applicable Rate. On the last day of each LIBOR Interest
Period or on any earlier termination of any LIBOR Pricing Option, the
Company will pay the accrued and unpaid interest on the indebtedness
evidenced by the Notes which was subject to the LIBOR Pricing Option
which expired or terminated on such date; provided, however, that if
any LIBOR Interest Period is longer than one month, the Company will
also pay on the last day of each month in such LIBOR Interest Period
the amount of accrued and unpaid interest on the portion of the
principal amount of the indebtedness evidenced by the Notes subject to
the LIBOR Pricing Option having such LIBOR Interest Period. On any
stated or accelerated maturity of the indebtedness evidenced by the
Notes all accrued and unpaid interest on such indebtedness shall be
forthwith due and payable, including without limitation any accrued and
unpaid interest on such indebtedness which is subject to a LIBOR
Pricing Option. In addition, the Company will, on demand, pay interest
on any overdue installments of principal and pay interest during the
continuance of any Event of Default both at a rate per annum which is
at all times equal to the sum of (a) the Applicable Rate (or, if more
than one Applicable Rate is then in effect, the weighted average of the
Applicable Rates then in effect) plus (b) 2% per annum.
(b) Applicable Rate. The term "Applicable Rate"
shall mean the sum of (i) for any portion of the Indebtedness
evidenced by the Notes which is at the time subject to an effective
LIBOR Pricing Option, the Libor Rate, and otherwise the Prime Rate,
plus (ii) in each case, the applicable spread set forth in the table
below (the "Applicable Spread") corresponding to the Consolidated Debt
to Worth Ratio (as defined in the Plexus Corp. Guaranty Agreement)
shown by the monthly financial statements of Plexus Corp. delivered
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pursuant to Section 7(h)(i) of the Plexus Corp. Guaranty Agreement:
Consolidated Debt LIBOR Prime
to Worth Ratio Rate Spread Rate Spread
------------------ ----------- -----------
greater than or equal to 2.00 to 1 2.0% 0.25%
less than 2.00 to 1 but greater than or equal 1.5% 0%
to 1.5 to 1
less than 1.5 to 1 but greater than or equal to 1.25% 0%
1.25 to 1
less than 1.25 to 1 1.0% 0%
The Applicable Spread shall be effective on the first day of each
month based upon the monthly financial statements delivered in the
immediately preceding month; provided that if no such financial
statements have been delivered in the preceding month, the Applicable
Spread shall be the highest applicable rate set forth in the table
above.
(c) The LIBOR Pricing Options. The following
provisions shall apply to the LIBOR Pricing Options:
(1) Certain Definitions. For purposes
of this Agreement:
(A) The term "Basic LIBOR Rate" as
applied to any LIBOR Interest Period shall mean the
per annum rate of interest determined by the Agent to
be the average (rounded up, if necessary, to the
nearest one-sixteenth of one percent) of the offered
rates for deposits in U.S. dollars for the applicable
LIBOR Interest Period which appear on the Reuters
Screen LIBO Page (or such other page on which the
appropriate information may be displayed), on the
electronic communications terminals in the Agent's
money center as of 11:00 a.m. (London time) two
Business Days prior to the first day of such LIBOR
Interest Period ("Calculation Date"), except as
provided below. If fewer than two offered rates
appear for the applicable LIBOR Interest Period or if
the appropriate screen is not accessible, the
applicable rate will be determined on the basis of
the rates at which deposits in U.S. dollars are
offered by four major banks in the London interbank
market, as selected by the Agent ("Reference Banks"),
at approximately 11 a.m., London time, on the
Calculation Date for the applicable LIBOR Interest
Period and in an amount equal to the principal amount
of the Loans subject to the
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applicable LIBOR Pricing Option. The Agent will
request the principal London office of each of the
Reference Banks to provide a quotation of its rate.
If at least two such quotations are provided, the
applicable rate will be the mean of the quotations.
If fewer than two quotations are provided as
requested, the applicable rate will be the mean of the
rates quoted by major banks in New York City, selected
by the Agent, at approximately 11 a.m., New York City
time, on the Calculation Date for loans in U.S.
dollars to leading European banks for the applicable
LIBOR Interest Period and in an amount equal to the
principal amount of the Loans subject to the
applicable LIBOR Pricing Option.
(B) The term "LIBOR Interest Period"
shall mean any period, selected as provided below in
this Section 2.3(c), of one, two, three, four, six,
or twelve months, each commencing on any Business
Day. Such LIBOR Interest Period shall end on the day
in the succeeding calendar month which corresponds
numerically to the beginning day of such LIBOR
Interest Period, provided, however, that if there is
no such numerically corresponding day in such
succeeding month, such LIBOR Interest Period shall
end on the last Business Day of such succeeding
month. If any LIBOR Interest Period so selected
would otherwise end on a date which is not a Business
Day, such LIBOR Interest Period shall instead end on
the immediately succeeding Business Day, provided,
however, that if said next succeeding Business Day
falls in a new month, such LIBOR Interest Period
shall end on the immediately preceding Business Day.
(C) The term "LIBOR Pricing Options"
shall mean the options granted pursuant to this
Section 2.3(c) to have the interest on all or any
portion of the principal amount of indebtedness
evidenced by the Notes computed with reference to a
LIBOR Rate.
(D) The term "LIBOR Rate" for any LIBOR
Interest Period shall mean a rate per annum equal to
the sum of (i) the quotient of (A) the Basic LIBOR
Rate applicable to that LIBOR Interest Period divided
by (B) one minus the LIBOR Reserve Requirement
(expressed as a decimal) applicable to that LIBOR
Interest Period, plus (ii) in the case of a LIBOR
Interest Period which is greater than six months,
one-quarter percent (1/4%). The LIBOR Rate shall be
rounded, if necessary, to the next higher 1/16 of 1%.
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(E) The term "LIBOR Reserve Requirement"
shall mean, with respect to each LIBOR Interest
Period, the stated maximum rate of all reserve
requirements (including all basic, supplemental,
marginal and other reserves and taking into account
any transitional adjustments or other scheduled
changes in reserve requirements during such LIBOR
Interest Period) that is specified on the first day
of such LIBOR Interest Period by the Board of
Governors of the Federal Reserve System for
determining the maximum reserve requirement with
respect to eurocurrency funding (currently referred
to as "Eurocurrency liabilities" in Regulation D of
such Board of Governors) applicable to the class of
banks of which the Banks are members.
(F) The term "Regulatory Change" means any
change enacted or issued after the date of this
Agreement of any (or the adoption after the date of
this Agreement of any new) federal or state law,
regulation, interpretation, direction, policy or
guideline, or any court decision, which affects (or,
in the case of a court decision would, if the
decision were applicable to any Bank, affect) the
treatment of any Loans of such Bank.
(2) Election of LIBOR Pricing Options.
Notwithstanding any of the provisions of Section 2.5 of the
Loan Agreement, and subject to all the terms and conditions
hereof, the Company may, by notice to the Agent received not
later than 10:30 a.m. (Milwaukee time) on the date three
Business Days prior to the commencement of the LIBOR Interest
Period selected in such notice, elect to have all or such
portion of the principal amount of indebtedness then evidenced
(or to be evidenced at the commencement of such LIBOR Interest
Period) by the Notes as the Company may specify in such notice
(in the minimum amount of $1,750,000) accrue and bear daily
interest during the LIBOR Interest Period so selected at a per
annum rate equal to the Applicable Rate computed on the basis
of the LIBOR Rate for such LIBOR Interest Period; provided,
however, that no such election shall become effective if,
prior to the commencement of such LIBOR Interest Period, the
Agent determines (which determination shall be binding and
conclusive on all parties) that (i) by reason of circumstances
affecting the London interbank market adequate and reasonable
means do not exist for ascertaining the applicable LIBOR Rate;
(ii) the LIBOR Rate does not accurately reflect the cost to
the Banks of making or maintaining a loan subject to such
LIBOR Pricing Option; or (iii) any Default or Event of Default
has occurred and is continuing. Each notice of election of a
LIBOR Pricing Option shall be irrevocable. The Agent shall
inform each Bank of each election of a LIBOR Pricing Option by
not later than 1:30
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p.m. Milwaukee time on the date notice of such election is received by
the Agent.
(d) Special Provisions.
(1) Increased Costs. If any Regulatory Change,
(A) shall subject any Bank to any tax,
duty or other charge with respect to any of its
Loans, or shall change the basis of taxation of
payments to any Bank of the principal of or interest
on its Loans, or any other amounts due under this
Agreement in respect of its Loans, or its obligation
to make Loans (except for changes in the rate of tax
on the overall net income of such Bank);
(B) shall impose, modify or make applicable
any reserve (including, without limitation, any
reserve imposed by the Board of Governors of the
Federal Reserve System, but excluding any reserve
included in the determination of interest rates on
Loans), special deposit or similar requirement
against assets of, deposits with or for the account
of, or credit extended by, any Bank; or
(C) shall impose on any Bank any other
condition affecting its Loans;
and the result of any of the foregoing is to increase the cost to (or in the
case of Regulation D or any other analogous law, rule or regulation, to impose
a cost on) such Bank of making or maintaining any Loans or to reduce the amount
of any sum received or receivable by such Bank under the Agreement and any
document or instrument related thereto, then after 15 days' notice from such
Bank (which notice shall be sent to the Agent and the Company and shall be
accompanied by a statement setting forth the basis of such notice), the Company
shall pay directly to such Bank, on demand, such additional amount or amounts
as will compensate such Bank for such increased cost or such reduction incurred
on or after the date of the giving of such notice to the Agent and the Company.
(2) Changes in Law Rendering Certain Loans
Unlawful. In the event that any Regulatory Change should make
it (or, in the good faith judgment of a Bank, should raise
substantial questions as to whether it is) unlawful for a Bank
to make, maintain or fund a Loan subject to a LIBOR Rate, then
(i) such Bank shall promptly notify each of the other parties
hereto, (ii) the obligation of all Banks to make such Loan
shall, upon the effectiveness of such event, be suspended for
the duration of such unlawfulness, and (iii) upon such notice,
any outstanding Loan subject to a LIBOR Rate shall
automatically be
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subject to the Applicable Rate set forth in Section 2.3(b)(2).
(3) Funding Losses. The Company hereby agrees
that upon demand by any Bank (which demand shall be sent to
the Agent and the Company and shall be accompanied by a
statement setting forth the basis for the calculations of the
amount being claimed) the Company will indemnify such Bank
against any net loss or expense which such Bank may sustain or
incur (including, without limitation, any net loss or expense
incurred by reason of the liquidation or reemployment of
deposits or other funds acquired by such Bank to fund or
maintain Loans subject to a LIBOR Rate), as reasonably
determined by such Bank, as a result of (i) any payment,
prepayment or conversion of any Loan subject to a LIBOR Rate
of such Bank on a date other than the last day of a LIBOR
Interest Period for such Loan whether or not required by any
other provision of this Agreement, or (ii) any failure of the
Company to borrow any loans on a date specified therefor in a
notice of borrowing pursuant to this Agreement.
(4) Discretion of Banks as to Manner of Funding.
Notwithstanding any provision of this Agreement to the
contrary, each Bank shall be entitled to fund and maintain its
funding of all or any part of its Loans in any manner it sees
fit.
(5) Capital Adequacy. If any Regulatory Change
affects the treatment of any Loan of a Bank as an asset or
other item included for the purpose of calculating the
appropriate amount of capital to be maintained by such Bank or
any corporation controlling such Bank and has the effect of
reducing the rate of return on such Bank's or such
corporation's capital as a consequence of the Loans or
Commitments of such Bank hereunder to a level below that which
such Bank or such corporation could have achieved but for such
Regulatory Change (taking into account such Bank's or such
corporation's policies with respect to capital adequacy) by an
amount deemed in good faith by such Bank to be material, then
after 15 days' notice from such Bank to the Company and the
Agent of such Regulatory Change, the Company shall pay to such
Bank, on demand, such additional amount or amounts as will
compensate such Bank or such corporation, as the case may be,
for such reduction incurred on or after the date of the giving
of such notice to the Agent and the Company. Such Bank shall
submit, to the Agent and the Company, a statement as to the
amount of such compensation, prepared in good faith and in
reasonable detail.
(6) Conclusiveness of Statements; Survival of
Provisions. Determinations and statements of any Bank
pursuant to sections 2.3(d)(1), (2), (3) and (5) shall be
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conclusive absent manifest error. The provisions of
section 2.3(d)(1), (3) and (5) shall survive the obligation of
the Banks to extend credit under this Agreement.
2.4 Commitment Fee. The Company will pay, with respect
to each Note, a commitment fee of one-quarter of one percent (1/4%), on a per
annum basis, as to the unused portion of the Commitment represented by such
Note during the period from the date of this Agreement to the date on which the
Commitment is terminated and the entire amount of principal of and interest due
on such Note is paid in full. The amount of such fee shall be calculated based
upon the number of actual days this Agreement is in effect and a year of 360
days. The fee shall be payable quarterly in arrears on the later of (i) the
twentieth day of the first month in each calendar quarter or (ii) five days
after the Company's receipt of the invoice therefor.
2.5 Procedure for Revolving Credit Loans. The Company
may obtain Loans by making a request therefor to the Agent, orally or in
writing by delivering to the Agent a Loan Request in the form of Exhibit B
hereto. Such request shall specify a Business Day during the Commitment Period
on which such Loans are to be made (the "Borrowing Date"), shall be received by
the Agent by 12:00 noon Milwaukee time on the Borrowing Date, and shall specify
the amount of the Loans requested; provided, however, that within three days
after any oral request for a Loan, the Agent shall receive from the Company a
Loan Request in the form of Exhibit B confirming the Company's request, and
each Bank's obligation to make further Loans hereunder shall be suspended until
such Loan Request has been received by the Agent. Each Loan shall be in the
minimum principal amount of One Hundred Thousand Dollars ($100,000) or a
multiple of $50,000 in excess thereof (except as otherwise provided in section
2.3(c)(2) with respect to Loans subject to Libor Pricing Options), and shall be
made pro rata from the Banks in accordance with their respective Percentage
Interests. The Agent shall inform each Bank of such request by not later than
1:30 p.m. Milwaukee time on the Borrowing Date. Not later than 3:30 p.m.
Milwaukee time on the Borrowing Date, each Bank shall make available to the
Agent at its principal office in Milwaukee, Wisconsin, in immediately available
funds, the amount of such Bank's Percentage Interest in such Loan. Upon
receipt by the Agent of such amount from a Bank, and fulfillment of the
conditions specified in Section 4.2 hereof, the Agent shall make such amount
available to the Company by promptly depositing such amount in the general
deposit account of the Company maintained with the Agent.
2.6 Application of Payments. All payments of principal
and interest hereunder and under the Notes and all payments of fees hereunder
shall be made to the Agent not later than 12:00 noon on the date of required
payment in immediately available funds for the ratable account of the Banks.
The Agent shall promptly (but not later than 3:00 p.m. on the date of payment)
distribute to the Banks, pro rata in accordance with their respective
Percentage Interests, the amount of principal and interest and fees received
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by the Agent. Any payment to the Agent for the account of a Bank hereunder
shall constitute a payment by the Company to such Bank of the amounts so paid
to the Agent, and any Notes or portions thereof so paid shall not be considered
outstanding for any purpose after the date of such payment to the Agent. All
payments or prepayments of principal and interest and fees shall be made pro
rata in accordance with the respective Percentage Interests of the Banks in all
Loans then outstanding. In the event any Bank shall receive from the Company or
any other source (other than the sale of a participation to another commercial
lender in the ordinary course of business) any payment of, on account of, or
for an obligation of the Company hereunder or under the Notes (whether pursuant
to the exercise of any right of set-off, banker's lien, realization upon any
security held for or appropriated to such obligation, counterclaim or
otherwise) other than as provided above, then such Bank shall immediately
purchase, without recourse and for cash, an interest in the obligations of the
same nature held by the other Banks so that each Bank shall thereafter have a
Percentage Interest in all obligations of the Company hereunder equal to the
Percentage Interest of such Bank set forth in Section 1.8 of this Agreement;
provided, if any payment so received shall be recovered in whole or in part
from such purchasing Bank, the purchase shall be rescinded and the purchase
price restored to the extent of such recovery, but without interest. The
Company specifically acknowledges and consents to the preceding sentence.
2.7 Borrowing Base Certificate. On or before the 15th
day of each calendar month, the Company shall deliver to each of the Banks a
Borrowing Base Certificate in the form attached hereto as Exhibit C as of the
last day of the preceding month.
2.8 Prepayments.
(a) Optional Prepayments. The Company may, at
its option, at any time and from time to time, prepay the Loans
hereunder, in whole or in part, without premium or penalty (but
subject to section 2.3(d)(3) in cases of Loans bearing interest at a
LIBOR Rate), together with accrued interest to the date of such
prepayment on the amount so prepaid. Partial prepayments shall be in
the principal amount of One Hundred Thousand Dollars ($100,000) or a
multiple of $50,000 in excess thereof.
(b) Mandatory Prepayment. At any time that the
aggregate principal amount of Loans outstanding hereunder exceeds the
Borrowing Base then in effect, the Company shall immediately prepay
the amount by which such Loans exceed the Borrowing Base, together
with interest accrued on the amount of the prepayment.
2.9 Security. Payment of all principal and interest
under the Notes, the costs of collection and all other obligations of the
Company to the Banks hereunder shall be secured by (i) a first lien on all of
the Company's accounts, inventory, documents relating to inventory, general
intangibles, contract rights,
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chattel paper, and instruments in accordance with, and to the extent limited
by, the Security Agreement in the form of Exhibit D hereto, and (ii) the
Guaranties. The Guaranty of Technology Group, Inc. shall be secured by a first
lien on its accounts, inventory, general intangibles and certain other
property.
2.10 Termination or Reduction of the Commitments. The
Company shall have the right, upon five (5) Business Days' prior written notice
to the Agent, to ratably reduce in part the Commitments; provided, however,
that each partial reduction of the Commitment of each Bank shall be in the
amount of $100,000 or an integral multiple thereof; and provided, further, that
no reduction shall reduce the Commitment of any Bank to an amount less than
such Bank's Percentage Interest in all Loans outstanding hereunder at the time.
The entire Commitments of all of the Banks may be terminated in whole at any
time upon five (5) Business Days' prior written notice to the Agent.
2.11 Agent's Fee. The Company shall pay fees to the Agent
for its services as Agent hereunder as provided in a fee letter agreement
between the Company and the Agent.
SECTION 3 REPRESENTATIONS AND WARRANTIES
In order to induce the Banks to make the Loans as herein
provided, the Company hereby represents and warrants to the Banks as follows:
3.1 Organization; Qualification and Subsidiaries. The
Company is validly organized and existing and in good standing under the laws
of the State of Wisconsin and has the corporate power and all necessary
licenses, permits and franchises to borrow hereunder and to grant the lien and
security interest provided for in the Security Agreement and to own its assets
and conduct its business as presently conducted. The Company is duly licensed
or qualified to do business in all jurisdictions where failure to qualify would
have a material adverse effect upon the Company, and the Company has no
material liabilities as a result of any failure to qualify to do business as a
foreign corporation in any jurisdiction. All of the issued and outstanding
capital stock of the Company has been validly issued and is fully paid and
non-assessable, except as provided in Section 180.0622(2)(b) Wis. Stats., and
is owned by Plexus Corp. free and clear of all pledges, liens, security
interests and other charges or encumbrances. The Company has no Subsidiaries.
3.2 Financial Statements. The audited consolidated
balance sheet of Plexus Corp. as of September 30, 1995, and the related audited
consolidated statements of income, shareholders' equity and cash flows for the
period ended on that date, are accurate and complete and were prepared in
accordance with GAAP, and present fairly the financial condition of Plexus
Corp. as of such date and the results of its operations for the period then
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ended. There has been no material adverse change in the business, properties
or condition, financial or otherwise, of the Company since the date of such
financial statements.
3.3 Authorization; Enforceability. The Loans
contemplated by this Agreement have been duly authorized by all necessary
corporate action. The making, execution, delivery and performance of this
Agreement, the Notes, and the Security Agreement by the Company have each been
duly authorized by all necessary corporate action. This Agreement and the
Security Agreement are, and the Notes, when executed, delivered and issued by
the Company will be, the valid and binding obligations of the Company,
enforceable against the Company in accordance with their respective terms,
except as limited by bankruptcy, insolvency or similar laws generally affecting
the enforcement of creditors rights.
3.4 Absence of Conflicting Obligations. The making,
execution and performance of this Agreement, the Notes, and the Security
Agreement and compliance with their respective terms do not violate or
constitute a default under any provision of law or the Articles of
Incorporation or Bylaws of the Company or any material agreement or instrument
to which the Company is a party or by which it is bound, or require the consent
or approval of, or filing or registration with, any Government Authority.
3.5 Taxes. The Company has filed all federal, state,
foreign and local tax returns which were required to be filed, except those
returns for which the due date has been validly extended. The Company has paid
or made provisions for the payment of all taxes owed, and no tax deficiencies
have been proposed or assessed against the Company. There are no pending or,
to the knowledge of the Company, threatened tax controversies or disputes as of
the date hereof. The Company's federal income tax returns for all tax years
through the year ended September 30, 1991 are no longer subject to audit, and
all taxes shown by such returns have been paid.
3.6 Absence of Litigation. The Company is not a party
to, nor so far as is known to the Company is there any threat of, any
litigation or administrative proceeding which in either case (i) relates to the
execution, delivery or performance of this Agreement, the Notes, the Security
Agreement or the Guaranties, (ii) would, if adversely determined, cause any
material adverse change in the assets and properties of, or any material
impairment of the right to carry on the business as now or proposed to be
conducted by, or cause any material adverse effect on the financial condition
of, the Company as a whole, or (iii) asserts or alleges that the Company is in
violation of, or has any liability under, Environmental Laws except as
disclosed on Schedule 3.6. To the best of the Company's knowledge after
diligent inquiry, there are no presently existing facts or circumstances likely
to give rise to any such litigation or administrative proceeding.
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3.7 Accuracy of Information. All information,
certificates or statements given by the Company in, or pursuant to, this
Agreement were accurate, true and complete in all material respects when given,
continue to be accurate, true and complete as of the date hereof, and do not
contain any untrue statement or omission of a material fact necessary to make
the statements therein not misleading. There is no fact known to the Company
which materially and adversely affects, or which in the future may (so far as
the Company can reasonably foresee) materially and adversely affect, the
business, properties, operations or condition, financial or otherwise, of the
Company which has not been set forth in this Agreement, the Security Agreement,
or other documents, certificates or statements furnished to the Banks or the
Agent by or on behalf of the Company in connection with the transactions
contemplated hereby.
3.8 Ownership of Property. The Company has good and
marketable title to all its assets and properties, and there are no mortgages,
deeds of trust, pledges, liens, security interests or other charges or
encumbrances of any nature on any of the assets or properties of the Company
except Permitted Liens. All buildings and equipment, whether leased to or
owned by the Company, are in good condition, repair (ordinary wear and tear
excepted) and working order and, to the best of the Company's belief, conform
to all applicable laws, ordinances and regulations.
3.9 Federal Reserve Regulations. The Company will not,
directly or indirectly, use any Loan to purchase or carry any "margin stock"
within the meaning of Regulation U of the Board of Governors of the Federal
Reserve System (12 C.F.R. 221, as amended), or otherwise take or permit any
action which would involve a violation of any regulation of the Board of
Governors of the Federal Reserve System.
3.10 ERISA. The Company and all Employee Plans are in
compliance in all material respects with the applicable provisions of ERISA and
the regulations and published interpretations thereunder and (i) no "prohibited
transaction" as defined in Section 406 of ERISA or Section 4975 of the Code has
occurred; (ii) there has not been any "reportable event" as defined in Section
4043 of ERISA, nor has the Company incurred any material liability to the PBGC
under Section 4062 of ERISA in connection with any Employee Plan; and (iii) no
"accumulated funding deficiency," as defined in Section 302(a)(2) of ERISA
(whether or not waived) has occurred. There are no Unfunded Liabilities of any
Employee Plans.
3.11 Security Agreement. Upon the execution of the
Security Agreement and the filing of the financing statements thereunder in the
manner prescribed by the UCC, the Banks shall have a legal, valid and perfected
first priority security interest in the property of the Company and TGI
described in the Security Agreement, valid against all creditors of the Company
and TGI, and against all purchasers from the Company or TGI (except to the
extent provided in the UCC), and the property subject to the
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Security Agreement shall be free and clear of all other Liens whatsoever,
except Permitted Liens.
3.12 Places of Business. The principal place of business
and chief executive office of the Company is located at 2121 Harrison Street,
Neenah, Wisconsin, and the books and records of the Company and all records of
account are located and hereafter shall continue to be located at such
principal place of business and chief executive office or at the address
specified in Section 10.7 hereof, or at 701 Keeneland, Richmond, Kentucky.
3.13 Other Names. The business conducted by the Company
has not been conducted under any corporate, trade or fictitious name other than
the name Electronic Assembly Corporation, and following the date hereof the
Company will not conduct its business under any trade or fictitious name unless
the Company shall have delivered prior written notice to the Agent of such name
change.
3.14 Investment Company Act. The Company is not an
"investment company" or a company "controlled by an investment company" within
the meaning of the Investment Company Act of 1940, as amended.
3.15 Dividends and Redemptions. The Company has not,
since September 30, 1995, paid or declared any dividend, or made any other
distribution on account of any shares of any class of its stock, or redeemed,
purchased or otherwise acquired, directly or indirectly, any shares of any
class of its stock, except as permitted hereby. The Company is not a party to
any agreement which may require it to redeem, purchase or otherwise acquire any
shares of any class of its stock.
3.16 Contingent Liabilities. The Company has no
guarantees or other contingent liabilities outstanding (including, without
limitation, liabilities by way of agreement, contingent or otherwise, to
purchase, to provide funds for payment, to supply funds to or otherwise invest
in the debtor or otherwise to assure the creditor against loss), except those
permitted by section 6.9 hereof.
3.17 Absence of Default. No event has occurred which
either of itself or with the lapse of time or the giving of notice or both,
would give any creditor of the Company the right to accelerate the maturity of
any Indebtedness of the Company. The Company is not in default under any other
lease, agreement or instrument, or any law, rule, regulation, order, writ,
injunction, decree, determination or award, non-compliance with which could
materially adversely affect its property, financial condition or business
operations.
3.18 Environmental Conditions. To the Company's knowledge
after reasonable investigation, there are no conditions existing currently or
likely to exist during the term of this loan which would subject the Company to
damages, penalties, injunctive relief or cleanup costs under any Environmental
Laws or which
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require or are likely to require cleanup, removal, remedial action or other
response pursuant to Environmental Laws by the Company, except as disclosed on
Schedule 3.6.
SECTION 4 CONDITIONS PRECEDENT TO LOANS
4.1 Initial Loans. In addition to the terms and
conditions otherwise contained herein, the obligation of each of the Banks to
make the initial Loans are conditioned on the Agent receiving, prior to or on
the date of such Loans, each of the following:
(a) the executed Notes, in the form of Exhibit A
hereto, dated the date of such Loans;
(b) the Security Agreement conforming to the
requirements hereof and executed by a duly authorized officer of the
Company;
(c) officially stamped acknowledgment copies of
financing statements or other evidence sufficient to the Agent that
financing statements and other appropriate documents have been filed
in each jurisdiction where such filing is necessary to perfect the
security interest of the Banks created by the Security Agreement, and
such lien searches and other evidence of lien priority covering the
security interest of the Banks created by the Security Agreement as
the Agent may require;
(d) a Loan Request and Borrowing Base Certificate
in the form of Exhibits B and C hereto;
(e) a certificate of the Secretary of the Company
in the form attached hereto as Exhibit E, dated the date of the Notes,
as to: (i) the incumbency and signature of the officers of the Company
signing this Agreement, the Notes, the Security Agreement, and any
other documents or materials to be delivered to the Banks or the Agent
pursuant to this Agreement; (ii) the adoption and continued effect of
resolutions of the Board of Directors of the Company attached thereto,
authorizing the execution, delivery and performance of this Agreement,
the Notes, and the Security Agreement; and (iii) the accuracy of a
copy of the Articles of Incorporation and Bylaws of the Company
attached thereto;
(f) the opinion of counsel for the Company in
form attached hereto as Exhibit F;
(g) the executed Guaranties in the forms attached
hereto as Exhibits H and I;
(h) such additional supporting documents and
materials as the Agent may reasonably request; and
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(i) evidence satisfactory to the Agent that the
Company maintains hazard and liability insurance coverage reasonably
satisfactory to the Agent, with appropriate endorsements naming the
Agent as an additional loss payee.
4.2 Subsequent Loans. In addition to the terms and
conditions otherwise contained herein, the obligation of each of the Banks to
make subsequent Loans is subject to the satisfaction, on the date of making
each such Loan, of the following conditions:
(a) all of the representations and warranties of
the Company contained in this Agreement shall be true and accurate on
and as of the date of such Loan as if made on such date, except that
the representations set forth in Section 3.2 hereof shall be made with
reference to the financial statements most recently delivered to the
Banks pursuant to Section 7(h) of the Plexus Guarantee Agreement, and
each request for a Loan shall constitute an affirmation by the Company
that such representations and warranties are then true and accurate;
(b) there shall not exist on such date a Default
or an Event of Default;
(c) the aggregate principal amount of all Loans
outstanding, together with the amount of the Loan requested shall not
exceed the lesser of (i) the Borrowing Base and (ii) the Maximum
Amount of Credit;
(d) the Agent shall have received executed Loan
Requests for all Loans previously requested by the Company and the
matters certified therein shall have been true and correct on the date
thereof and shall continue to be true and correct on the date of the
requested Loans; and
(e) upon the request of any Bank (but not more
often than once in any twelve-month period), the completion of an
Environmental Audit for the benefit of the Banks, conducted by the
Banks or an independent agent selected by the Banks.
SECTION 5 AFFIRMATIVE COVENANTS
The Company covenants and agrees that, from and after the date
of this Agreement and until the Commitments are terminated and the entire
amount of principal of and interest due on the Notes is paid in full, it shall:
5.1 Corporate Existence, Properties, Etc. (a) Maintain
its corporate existence; (b) comply in all material respects with all
applicable laws, including without limitation all Environmental Laws; (c)
conduct its business substantially as now conducted and proposed to be
conducted; (d) maintain insurance of such nature and in such amounts as is
customarily maintained by companies engaged
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in the same or similar business and furnish to the Agent, upon written request,
full information as to the insurance carried; and (e) pay before the same
become delinquent and before penalties accrue thereon, all taxes, assessments
and other government charges against it and its Property, and all other
liabilities except to the extent and so long as the same are being contested in
good faith by appropriate proceedings, with adequate reserves having been
provided.
5.2 Maintenance of Property. Keep all buildings and
equipment, whether leased to or owned by the Company, in good condition, repair
(ordinary wear and tear excepted), and working order.
5.3 Financial Information; Notice of Default. Furnish to
each of the Banks information respecting the business, assets and financial
condition of the Company as they may reasonably request and, without request,
furnish to each of the Banks promptly, and in any event within 10 days, after
Company has knowledge thereof a statement of the chief financial officer or
chief operating officer of the Company describing: (i) any event which, either
of itself or with the lapse of time or the giving of notice or both, would
constitute a default hereunder or under any other material agreement to which
the Company or any Subsidiary is a party, together with a statement of the
actions which the Company proposes to take with respect thereto; (ii) any
pending or threatened litigation or administrative proceeding of the type
described in section 3.6; and (iii) any fact or circumstance which is
materially adverse to the property, financial condition or business operations
of the Company or any Subsidiary.
5.4 Inspection of Properties and Records. Permit
representatives of any Bank to visit any of its properties and examine any of
its books and records at any reasonable time following reasonable notice and as
often as may be reasonably desired and facilitate such inspection and
examination, and, in the event any Bank is not satisfied with such inspections
and examinations, as reasonably determined by such Bank, to also permit
representatives of such Bank to so visit its properties and examine its books
and records upon reasonable notice and at a mutually agreed upon time.
5.5 Use of Proceeds. Use the entire proceeds of the
Loans to repay outstanding Indebtedness and for general corporate purposes.
SECTION 6 NEGATIVE COVENANTS
The Company covenants and agrees that, from and after the date
hereof and until the entire amount of principal of and interest due on the
Notes is paid in full and the Banks are no longer obligated to make Loans
hereunder, it shall not directly or indirectly:
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6.1 Sale of Assets, Consolidation, Merger, Etc. (a)
Sell, lease or otherwise dispose of all or a substantial part of its assets or
properties to any Person, whether in one or in a series of transactions; (b)
consolidate or merge with or into any other Person; (c) without the Requisite
Consent of the Banks, enter into any agreement, directly or indirectly, to sell
or transfer any property, real or personal, used in its business, and
thereafter lease such property or other property which it intends to use for
substantially the same purposes; or (d) liquidate or dissolve.
6.2 Indebtedness. Issue, create, incur, assume or
otherwise become liable with respect to (or agree to issue, create, incur,
assume or otherwise become liable with respect to), or permit to remain
outstanding, any Indebtedness except (i) Indebtedness to the Banks under this
Agreement, the Notes, and the Security Agreement; (ii) Indebtedness which has
been subordinated to the Banks in form and substance satisfactory to the Banks;
(iii) other Indebtedness outstanding and shown on the financial statements
referred to in section 3.2 hereof, including the refinancing of such
Indebtedness, provided that such Indebtedness shall not be increased; and (iv)
purchase money Indebtedness incurred for the acquisition of fixed assets and
other Indebtedness secured by fixed assets (subject in each case to the
restrictions of section 6.6 hereof), provided that (a) such Indebtedness is
secured solely by fixed assets of the Company, and (b) the amount of such
Indebtedness does not exceed the purchase price of such fixed assets.
6.3 Liens. Create or permit to be created or allow to
exist any Lien upon or interest in any property or assets now owned or
hereafter acquired by the Company except Permitted Liens. For purposes herein,
Permitted Liens shall mean: (i) liens for taxes, assessments, or governmental
charges, carriers', warehousemen's, repairmen's, mechanics', materialmen's and
other like liens, which are either not delinquent or are being contested in
good faith by appropriate proceedings which will prevent foreclosure of such
liens, and against which adequate reserves have been provided; (ii) easements,
restrictions, minor title irregularities and similar matters which have no
material adverse effect upon the ownership and use of the affected property;
(iii) liens or deposits in connection with worker's compensation, unemployment
insurance, social security or other insurance or to secure customs duties,
public or statutory obligations in lieu of surety, stay or appeal bonds, or to
secure performance of contracts or bids, other than contracts for the payment
of money borrowed, or deposits required by law as a condition to the
transaction of business or other liens or deposits of a like nature made in the
ordinary course of business; (iv) liens in favor of the Banks pursuant to the
Security Agreement; (v) liens described in Exhibit G; (vi) liens on fixed
assets of the Company securing Indebtedness permitted by Section 6.2(iv); and
(vii) the liens described in Section 10.11 of this Agreement.
6.4 Dividends. Declare any dividends on, or make any
payment on account of, or set apart assets for a sinking or other
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analogous fund for, the purchase, redemption, retirement or other acquisition
of, any shares of any class of stock of the Company, whether now or hereafter
outstanding, or make any other distribution in respect thereof, either directly
or indirectly, whether in cash or property or otherwise, except for dividends
to Plexus Corp. permitted by law, provided such dividends do not result in a
Default under this Agreement.
6.5 Investments. Make or commit to make advances, loans,
extensions of credit or capital contributions to, or purchase of any stock,
bonds, notes, debentures or other securities of, or make any other investment
in, any Person except:
(a) Investments in accounts, chattel paper, and
notes receivable, arising or acquired in the ordinary course of
business;
(b) Investments in bank certificates of deposit
(but only with FDIC-insured commercial banks having a combined capital
and surplus in excess of $23,000,000), open market commercial paper
maturing within one year having the highest rating of either Standard
& Poors Corporation or Moody's Investors Service, Inc., U.S. Treasury
Bills subject to repurchase agreements and short-term obligations
issued or guaranteed by the U.S. Government or any agency thereof;
(c) Investments in open-end diversified
investment companies of recognized financial standing investing solely
in short-term money market instruments consisting of securities issued
or guaranteed by the United States government, its agencies or
instrumentalities, time deposits and certificates of deposit issued by
domestic banks or London branches of domestic banks, bankers
acceptances, repurchase agreements, high grade commercial paper and
the like;
(d) Advances in the ordinary course of business
to suppliers, employees and officers of the Company consistent with
the Company's past practices; and
(e) Other Investments which, together with all
investments made by Plexus Corp. as permitted by Section 7(e)(iii) of
the Plexus Corp. Guaranty and all investments made by Technology
Group, Inc., may not exceed $50,000 in any one Person and $100,000 in
the aggregate in any fiscal year without the Requisite Consent of the
Banks.
6.6 Fixed Asset Expenditures. Expend sums for the
acquisition of fixed assets exceeding $7,500,000 in the aggregate in any fiscal
year.
6.7 Compliance with ERISA. (a) Terminate any Employee
Plan so as to result in any material liability to PBGC; (b) engage in any
"prohibited transaction" (as defined in Section 4975 of the Code) involving any
Employee Plan which would result in a material liability for an excise tax or
civil penalty in connection
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therewith; or (c) incur or suffer to exist any material "accumulated funding
deficiency" (as defined in Section 302 of ERISA), whether or not waived,
involving any condition, which presents a material risk of incurring a material
liability to PBGC by reason of termination of any such Employee Plan.
6.8 Accounts Receivable. Discount or sell with recourse,
or sell for less than the face amount thereof, any of its notes or accounts
receivable, whether now owned or hereafter acquired.
6.9 Contingent Liabilities. Guarantee or become a surety
or otherwise contingently liable (including, without limitation, liable by way
of agreement, contingent or otherwise, to purchase, to provide funds for
payment, to supply funds to or otherwise invest in the debtor or otherwise to
assure the creditor against loss) for any obligations of others, except (i) the
Guaranties, and (ii) pursuant to the deposit and collection of checks and
similar items in the ordinary course of business.
6.10 Affiliates. Suffer or permit any transaction with
any Affiliate, except on terms not less favorable to the Company than would be
usual and customary in similar transactions with non-affiliated persons.
SECTION 7 DEFAULT; AMENDMENTS AND WAIVERS
7.1 Events of Default Defined. The following events
shall be "Events of Default" as used herein:
(a) the Company shall fail to pay (i) any
installment of interest upon the Notes for more than five (5) days
after the date when due, or (ii) any principal amount of any Note when
due; or
(b) the Company shall fail to observe or perform
any of the covenants, agreements or conditions contained in Section
5.1, 5.5, or any provision of Section 6, of this Agreement;
(c) the Company shall fail to deliver any
Borrowing Base Certificate within five (5) days after the date when
due in accordance with Section 2.7 of this Agreement;
(d) the Company shall fail to observe or perform
any of the other covenants, agreements or conditions contained in this
Agreement and such default shall continue for thirty (30) days after
written notice thereof is given by the Agent to the Company;
(e) any representation or warranty made by the
Company herein or in any certificate, document or financial statement
delivered to the Banks or the Agent pursuant hereto
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shall prove to have been false in any material respect as of the time
when made or given;
(f) a final judgment shall be entered against the
Company which singularly or when added to another final judgment (or
judgments) against the Company exceeds the aggregate amount of Fifty
Thousand Dollars ($50,000), and such judgment (or judgments) shall
remain outstanding and unsatisfied, unbonded or unstayed after thirty
(30) days from the date of entry thereof;
(g) the Company shall (i) become insolvent or
take or fail to take any action which constitutes an admission of
inability to pay its debts as they mature, or (ii) make an assignment
for the benefit of creditors, file a petition in bankruptcy, petition
or apply to any tribunal for the appointment of a custodian, receiver
or any trustee for the Company or a substantial part of its respective
assets, or shall commence any proceeding under any bankruptcy,
reorganization, arrangement, readjustment of debt, dissolution or
liquidation law or statute of any jurisdiction, whether now or
hereafter in effect; or if there shall have been filed any such
petition or application, or any such proceeding shall have been
commenced against the Company, in which an order for relief is entered
or which remains undismissed for a period of thirty days or more; or
the Company by any act or omission shall indicate its consent to,
approval of or acquiescence in any such petition, application or
proceeding or order for relief or the appointment of a custodian,
receiver or any trustee for it or any substantial part of any of its
properties, or shall suffer any such custodianship, receivership or
trusteeship to continue undischarged for a period of thirty (30) days
or more;
(h) the Company adopts a plan of liquidation of
its assets;
(i) the Company shall fail to observe or perform
any of the other covenants, agreements or conditions contained in the
Security Agreement and such default shall continue for thirty (30)
days after written notice thereof is given by the Agent to the
Company;
(j) a default shall occur under any of the
Guaranties;
(k) The Company shall fail to pay as and when due
and payable (whether at maturity, by acceleration or otherwise) all or
any part of the principal of or interest on any Indebtedness of or
assumed by it having an outstanding principal balance of $100,000 or
more, or of the rentals due under any lease or sublease requiring
aggregate rental payments of $100,000 or more, and such default shall
not be cured within the period or periods of grace, if any, specified
in the instruments governing such obligations; or default
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shall occur under any evidence of, or any indenture, lease, sublease,
agreement or other instrument governing such obligations, and such
default shall continue for a period of time sufficient to permit the
acceleration of the maturity of any such indebtedness or other
obligation or the termination of such lease or sublease;
7.2 Remedies Upon Event of Default.
(a) Upon the occurrence of an Event of Default
specified in clauses (g) or (h) above, then, without presentment,
notice, demand or action of any kind by the Agent or any Bank, all of
which are hereby waived: (i) the Commitments and the obligation of
each of the Banks to make any Loans hereunder shall automatically and
immediately terminate; and (ii) the entire amount of unpaid principal
of and accrued and unpaid interest on the Notes shall become
automatically and immediately due and payable.
(b) Upon the occurrence of any Event of Default
specified in clause (a) above, the Agent may, and upon the request of
any Bank shall, without presentment, notice, demand or action of any
kind by the Agent or any Bank, all of which are hereby waived: (i)
immediately terminate the Commitments and each Bank's obligation to
make any Loans, and the same shall immediately be terminated; and (ii)
declare the entire amount of the unpaid principal of and accrued and
unpaid interest on the Notes immediately due and payable.
(c) Upon the occurrence of any other Event of
Default specified above, the Agent shall, upon the Requisite Consent
of the Banks, without presentment, notice, demand or action of any
kind by the Agent or any Bank, all of which are hereby waived: (i)
immediately terminate the Commitments and each Bank's obligation to
make any Loans, and the same shall immediately be terminated; and (ii)
declare the entire amount of the unpaid principal of and accrued and
unpaid interest on the Notes immediately due and payable.
(d) In addition to the foregoing remedies upon
the occurrence of an Event of Default, the Banks shall have all of the
rights and remedies provided by the Security Agreement and the
Guaranties, and no remedy herein conferred upon the Agent or the Banks
is intended to be exclusive of any other remedy and each and every
such remedy shall be cumulative and shall be in addition to every
other remedy given hereunder or now or hereafter existing at law or in
equity or by statute or otherwise. No failure or delay on the part of
the Agent or the Banks in exercising any right or remedy hereunder
shall operate as a waiver thereof nor shall any single or partial
exercise of any right hereunder preclude other or further exercise
thereof or the exercise of any other right or remedy.
7.3 Amendments. Subject to the provisions of this
Section 7.3, the Requisite Consent of the Banks (or the Agent with
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the Requisite Consent of the Banks) and the Company may enter into agreements
supplemental hereto for the purpose of adding or modifying any provisions to
this Agreement, the Notes, the Guaranties or the Security Agreement or changing
in any manner the rights of the Banks or the Company hereunder or thereunder or
waiving any Default hereunder; provided, however, that no such supplemental
agreement shall, without the consent of all of the Banks:
(a) Extend the maturity of any Note or reduce the
principal amount thereof, or reduce the rate or change the time of
payment of interest or fees thereon.
(b) Amend the definition of Requisite Consent.
(c) Extend the Termination Date, or increase the
amount of the Commitment of any Bank hereunder, or permit the Company
to assign its rights under this Agreement.
(d) Release any of the collateral under the
Security Agreement.
(e) Amend any provision of this Agreement
requiring a pro rata sharing among the Banks.
(f) Amend this Section 7.3.
(g) Amend the definition of Borrowing Base.
(h) Release any of the Guaranties.
No amendment of any provision of this Agreement relating to the Agent shall be
effective without the written consent of the Agent.
SECTION 8 RIGHTS AND DUTIES OF THE AGENT
8.1 Appointment and Duties of the Agent. The parties
hereto agree that the Agent shall act, subject to the terms and conditions of
this Section 8, as the agent for the Banks, and to the extent set forth herein
each of the Banks hereby irrevocably appoints, authorizes, empowers and directs
the Agent to take such action on its behalf and to exercise such powers
hereunder and under the Security Agreement and the Guaranties as are
specifically delegated to the Agent herein and therein in connection with the
administration of and the enforcement of any rights or remedies with respect to
this Agreement, the Notes, the Security Agreement, and the Guaranties, together
with such powers as are reasonably incidental thereto. The general
administration of the loans hereunder shall be with the Agent. The duties of
the Agent shall be entirely ministerial; the Agent shall not have any duty to
ascertain or to inquire as to the performance or observance of any of the
terms, covenants or conditions of this Agreement, the Notes or any related
document, or to enforce such performance, or to
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inspect the property (including the books and records) of the Company. It is
expressly understood and agreed that the obligations of the Agent hereunder and
under the Security Agreement and the Guaranties are only those expressly set
forth in such agreements. The Agent shall use reasonable diligence to examine
the face of each document received by it hereunder to determine whether such
document, on its face, appears to be what it purports to be. However, the Agent
shall not be under any duty to examine into or pass upon the validity or
genuineness of any documents received by it hereunder and the Agent shall be
entitled to assume that any of the same which appears regular on its face is
genuine and valid and what it purports to be.
8.2 Discretion and Liability of the Agent. Subject to
Sections 8.3 and 8.5 hereof, the Agent shall be entitled to use its discretion
with respect to exercising or refraining from exercising any rights which may
be vested in it by, or with respect to, taking or refraining from taking any
action or actions which it may be able to take under or in respect of this
Agreement, the Security Agreement, and the Guaranties. Neither the Agent nor
any of its directors, officers or employees shall be liable for any action
taken or omitted by them hereunder or in connection herewith, except for its or
their own gross negligence or willful misconduct. The Agent may execute any of
its duties under this Agreement by or through agents and attorneys-in-fact and
shall not be answerable for the default or misconduct of any such agent or
attorney-in-fact selected by it with reasonable care. The Agent shall incur no
liability under, or in respect of this Agreement, the Security Agreement, or
the Guaranties by acting upon a notice, certificate, warranty or other paper or
instrument believed by it to be genuine or authentic or to be signed by the
proper party or parties, or with respect to anything which it may do or refrain
from doing in the reasonable exercise of its judgment, or which may seem to it
to be necessary or desirable in the premises. The Agent may at any time request
instructions from the Banks with respect to any action or approval that, by the
terms of this Agreement, the Agent is permitted or required to take or to
grant, and if such instructions are requested, the Agent shall be absolutely
entitled to refrain from taking any action or to withhold any approval and
shall not be under any liability whatsoever to any Person for refraining from
any action or withholding any approval under this Agreement until it shall have
received such instructions by the Requisite Consent of the Banks; Provided,
however, that the Agent shall not in any event be required to comply with any
instructions given it by the Requisite Consent of the Banks if the Agent
determines that such compliance would expose it to personal liability or is
contrary to law or to the terms of this Agreement, but the Banks shall in all
events indemnify the Agent from any action taken by it in accordance with the
instructions of the Requisite Consent of the Banks. No Bank shall have any
right of action whatsoever against the Agent as a result of the Agent acting or
refraining from acting hereunder in accordance with instructions by the
Requisite Consent of the Banks.
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8.3 Event of Default. The Agent shall be entitled to
assume that no Default or Event of Default has occurred and is continuing,
unless the Agent has actual knowledge of such facts or has received notice from
a Bank in writing that such Bank considers that a Default or Event of Default
has occurred and is continuing, and which specifies the nature thereof. In the
event that the Agent shall acquire actual knowledge of any Default or Event of
Default the Agent shall promptly notify (either orally or in writing) the Banks
and the Company of such Default or Event of Default and if, but only if,
directed by the Requisite Consent of the Banks, shall take such action and
assert such rights as are contemplated under this Agreement, the Security
Agreement, and the Guaranties. The Agent shall be indemnified pro rata by the
Banks against any liability or expenses, including reasonable attorneys' fees,
incurred in connection with taking such action.
8.4 Consultation. The Agent in good faith may consult
with legal counsel, accountants and other experts selected by it and shall be
entitled to fully rely upon any opinion of such counsel, accountants or experts
in connection with any action taken or suffered by the Agent in accordance with
such opinion.
8.5 Communications to and from the Agent. Upon any
occasion requiring or permitting an approval, consent, waiver, election or
other action on the part of the Banks, unless action by the Agent alone is
expressly permitted hereunder, action shall be taken by the Agent for and on
behalf or for the benefit of all the Banks upon the direction of the Requisite
Consent of the Banks. The Company may rely on any communication from the Agent
hereunder and need not inquire into the propriety of or authorization for such
communication. Upon receipt by the Agent from the Company or any Bank of any
communication calling for an action on the part of the Banks, it will, in turn,
promptly inform the other Banks in writing of the nature of such communication.
8.6 Limitations of Agency. Notwithstanding anything in
this Agreement or any of the other related documents, express or implied, it is
agreed by the parties hereto that the Agent will act hereunder and under the
Security Agreement and the Guaranties as Agent solely for the Banks and only to
the extent specifically set forth herein, and will, under no circumstances, be
considered to be an agent or fiduciary of any nature whatsoever in respect to
any other Person. With respect to its Commitment and the Note issued to it,
Firstar Bank Milwaukee, N.A., in its individual capacity as a Bank, shall have,
and may exercise, the same rights and powers under this Agreement and the Note
payable to it as any other Bank has under this Agreement and the Notes, and the
terms "Bank" and "Banks", unless the context otherwise requires, shall include,
Firstar Bank Milwaukee, N.A. in its individual capacity as a Bank. The Agent
may generally engage in any kind of banking or trust business with the Company
as if it were not the Agent.
8.7 No Representation or Warranty. No Bank (including
the Agent) makes to any other Bank any representation or any warranty, express
or implied, or assumes any responsibility with
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respect to the Loans or the execution, construction, legality, validity,
genuineness, sufficiency, collectability, value or enforceability of this
Agreement, the Notes, the Security Agreement, the Guaranties or any instrument
or agreement executed by the Company or any other person in connection
therewith.
8.8 Bank Credit Decision. Each Bank acknowledges that it
has, independent of and without reliance upon the other Banks (or the Agent) or
any information provided by the other Banks (or the Agent) and based on the
financial statements of the Company and such other documents and information as
it has deemed appropriate, made its own credit analysis and decision to enter
into this Agreement. Each Bank also acknowledges that it will, independent of
and without reliance upon any other Bank (or the Agent) and based on such
documents and information as it shall deem appropriate at that time, continue
to make its own credit decisions in taking or not taking action under this
Agreement and any other documents related hereto including any commercial field
audits, it being understood and agreed that any commercial field audit
conducted by the Agent shall be for the sole benefit of Firstar Bank Milwaukee,
N.A. A copy of such field audits shall be provided by the Agent to the other
Banks, but the Agent shall not be responsible for any errors or omissions in
such audits except in the case of willful misconduct by the employees or agents
of the Agent in preparing such audits. Each Bank further agrees to inform the
other Banks of any information about the Company it believes to be materially
adverse to enable each Bank to continue to make its own credit decisions in
taking or not taking action under this Agreement and any other documents
related hereto.
8.9 Indemnity. To the extent the Agent is not
indemnified by the Company pursuant to any of the provisions hereof, the Banks
shall severally indemnify, on a pro rata basis, the Agent against loss, cost,
liability, damage or expense arising from, or in connection with, its duties as
Agent hereunder and not caused by its gross negligence or willful misconduct.
8.10 Resignation. The Agent may resign as such at any
time upon at least 30 days' prior notice to the Company and the Banks; provided
that such resignation shall not take effect until a successor agent has been
appointed. In the event of such resignation, the Banks shall, as promptly as
practicable, appoint a successor agent, and if they fail to do so within 30
days after such notice, the Agent may appoint a successor agent. If at any
time there is no Agent acting hereunder, the Company shall make all required
payments to, and otherwise deal directly with, the Banks and/or the holders of
the Notes, as the case may be.
8.11 Noteholders. The Agent may treat the payee of any
Note as the holder thereof until written notice of transfer shall have been
filed with the Agent, signed by such payee and in form satisfactory to the
Agent.
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SECTION 9 INCREASED COSTS; CAPITAL ADEQUACY
9.1 Increased Costs. If (i) the amendment of Regulation
D of the Board of Governors of the Federal Reserve System, or (ii) after the
date hereof, the adoption of any applicable law, rule or regulation, or any
change therein, or any change in the interpretation or administration thereof
by any governmental authority, central bank or comparable agency charged with
the interpretation or administration thereof, or compliance by any Bank with
any request or directive (whether or not having the force of law) of any such
authority, central bank or comparable agency issued after the date hereof,
(a) shall subject any Bank to any tax, duty or
other charge with respect to the Loans, the Notes or such Bank's
obligation to make or maintain any extension of credit hereunder, or
shall change the basis of taxation of payments to such Bank of the
principal of or interest on the Loans or any other amounts due under
this Agreement in respect of any extension of credit hereunder or such
Bank's obligation to make or maintain any extension of credit
hereunder (except for changes in the rate of tax on the overall net
income of such Bank imposed by the jurisdiction in which such Bank's
principal executive office is located); or
(b) shall impose, modify or deem applicable any
reserve (including, without limitation, any reserve imposed by the
Board of Governors of the Federal Reserve System), special deposit or
similar requirement against assets of, deposits with or for the
account of, or credit extended hereunder by, any Bank; or
(c) shall impose on any Bank any other condition
affecting any extension of credit hereunder, the Notes or such Bank's
obligation to make or maintain any extension of credit hereunder;
and the result of any of the foregoing is to increase the cost to (or to impose
a cost on) of making or maintain any extension of credit hereunder or to reduce
the amount of any sum received or receivable by such Bank under this Agreement
or under the Notes with respect thereto, then upon demand by such Bank (which
demand shall be accompanied by a statement setting forth the basis of such
demand), the Company shall pay directly to such Bank such additional amount or
amounts as will compensate such Bank for such increased cost or reduction.
9.2 Capital Adequacy. If either (i) the introduction of
or any change in or in the interpretation of any law or regulation, or (ii)
compliance by any Bank with any guideline or request from any central bank or
other governmental authority (whether or not having the force of law) affects
or would affect the amount of capital required or expected to be maintained by
such Bank or any corporation controlling such Bank and such Bank determines
that the amount of such capital is increased by or based upon the existence
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of such Bank's commitment to make or maintain extensions of credit hereunder
and other commitments of this type, then, upon demand by such Bank, the Company
shall immediately pay to such Bank, from time to time as specified by such
Bank, additional amounts sufficient to compensate such Bank in light of such
circumstances, to the extent that such Bank reasonably determines such increase
in capital to be allocable to the existence of such Bank's commitment to make
or maintain extensions of credit hereunder.
SECTION 10 MISCELLANEOUS
10.1 Expenses and Attorneys' Fees; Indemnification.
(a) The Company shall pay all reasonable fees and
expenses incurred by the Banks with respect to this Agreement, the
Notes, the Loans and the security interest granted to the Banks, and
any amendments thereof, supplements thereto, or any other collateral
documents connected therewith, including without limitation the
reasonable fees of counsel in connection with the preparation of this
Agreement, the Notes, the Security Agreement, and the Guaranties and
all amendments thereto (and any waivers or consents with respect to
the terms and provisions thereof) and the consummation of the
transactions contemplated herein, and protection or enforcement of the
Banks' rights under this Agreement, the Notes, the Security Agreement,
the Guaranties and any related agreements or instruments and all taxes
(other than income taxes) payable by any Bank in connection with the
transactions contemplated hereby.
(b) The Company agrees to indemnify the Banks
against any and all claims, damages, liabilities and expenses
(including, without limitation, reasonable attorneys' fees and
expenses) incurred by the Banks as a result of (i) any acquisition or
attempted acquisition of stock or assets of another person or entity
by the Company or any Subsidiary, (ii) the use of any of the proceeds
of any Loans made hereunder by the Company or any Subsidiary for the
making or furtherance of any such acquisition or attempted
acquisition, (iii) the construction or operation of any facility owned
or operated by the Company or any Subsidiary, or resulting from any
pollution or other environmental condition on the site of, or caused
by, any such facility, and (iv) the negotiation, preparation,
execution, delivery, administration, and enforcement of this
Agreement, the Notes, and any other document required hereunder.
10.2 Assignability; Successors. The Company's rights and
liabilities under this Agreement are not assignable in whole or in part without
the prior written consent of the Banks. The provisions of this Agreement shall
inure to the benefit of and be binding upon the successors and assigns of the
Banks or any holder of one or more of the Notes.
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10.3 Survival. All agreements, representations and
warranties made herein or in any document delivered pursuant hereto shall
survive the execution and delivery of this Agreement, the Notes, the Security
Agreement, the Guaranties, and the making of the Loans.
10.4 Governing Law. This Agreement, the Notes, the
Security Agreement, the Guaranties and any other agreements and documents
issued pursuant hereto shall be governed by the laws (other than the conflict
of laws rules) of the State of Wisconsin.
10.5 Counterparts; Headings. This Agreement may be
executed in several counterparts, each of which shall be deemed an original,
but such counterparts shall together constitute but one and the same agreement.
The section headings in this Agreement are inserted for convenience of
reference only and shall not constitute a part hereof.
10.6 Entire Agreement. This Agreement, the Exhibits
attached hereto, the Notes, the Security Agreement, and the Guaranties contain
the entire understanding of the parties with respect to the subject matter
hereof, and supersede all other understandings, oral or written, with respect
to the subject matter hereof, and no statement or writing subsequent to the
date hereof purporting to modify, alter or amend any portion hereof, including
the Company's obligation to pay the amount due hereunder (whether at maturity,
by reason of acceleration or otherwise), shall be effective unless consented to
in a writing, which makes specific reference to this Agreement, and which has
been signed by the party against which enforcement thereof is sought.
10.7 Notices. All communications or notices required or
permitted by this Agreement shall be in writing and shall be deemed to have
been given or made when delivered in hand, or when deposited in the mail.
Communications or notices shall be delivered personally or by certified or
registered mail, postage prepaid, and addressed as follows, unless and until
either of such parties notifies the other in accordance with this section of a
change of address:
if to the Company: Electronic Assembly Corporation
55 Jewelers Park Drive
Neenah, WI 54956
Attn: Thomas B. Sabol
Telephone: (414) 751-3306
Facsimile: (414) 751-3234
if to the Banks: Firstar Bank Milwaukee, N.A.
777 East Wisconsin Avenue
Milwaukee, WI 53202
Attn: Scott Roeper
Vice President
Telephone: (414) 765-6761
Facsimile: (414) 765-5062
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Harris Trust and Savings Bank
111 West Monroe Street
Chicago, IL 60603
Attn: George M. Dluhy
Vice President
Telephone: (312) 461-7788
Facsimile: (312) 461-2591
Bank One, Milwaukee, NA
111 East Wisconsin Avenue
Milwaukee, Wisconsin 53201
Attn: Anthony F. Maggiore
Vice President
Telephone: (414) 765-3111
Facsimile: (414) 765-2176
LaSalle National Bank
120 South LaSalle Street
Chicago, Illinois 60603
Attn: Kent A. Hammerstrom
First Vice President
Telephone: (312) 781-8036
Facsimile: (312) 606-8423
if to the Agent: Firstar Bank Milwaukee, N.A.
777 East Wisconsin Avenue
Milwaukee, Wisconsin 53202
Attn: Scott Roeper
Vice President
Telephone: (414) 765-6761
Facsimile: (414) 765-5062
10.8 Participations. Each of the Banks may at any time
sell or grant to one or more unit banks of the same holding company of such
Bank, participating interests in such Bank's Commitment and Loans or any other
interest of such Bank hereunder, but any such participant shall not constitute
a "Bank" hereunder. The Company authorizes each of the Banks to disclose to any
participant and to any prospective participant any and all financial
information in such Bank's possession concerning the Company which has been
delivered to such Bank by the Company or the Agent pursuant to this Agreement
or which has been delivered to such Bank by the Company or the Agent in
connection with such Bank's credit evaluation of the Company prior to entering
into this Agreement. Except as provided above, none of the Banks may assign or
sell any interest in, or grant any participating interest in, such Bank's
commitment or Percentage Interest in the Loans made hereunder, or any other
interest of such Bank hereunder, without the prior written consent of the
Company.
10.9 Severability. Any provision of this Agreement which
is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions
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hereof or affecting the validity or enforceability of such provision in any
other jurisdiction.
10.10 JURY TRIAL WAIVER. THE COMPANY, THE AGENT, AND THE
BANKS HEREBY IRREVOCABLY WAIVE ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE NOTES, THE
SECURITY AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
10.11 Interest Rate Hedges. The parties to this Agreement
acknowledge and agree that the Company may from time to time enter into
agreements with one or more of the Banks (or their affiliates) relating to
interest rate swaps, caps, floors, collars, options or similar interest rate
hedging arrangements ("Interest Rate Hedges"), and that the Company may secure
its obligations thereunder by granting a lien on the "Collateral" (as defined
in the Security Agreement), provided that any lien on such "Collateral"
securing the Company's obligations to one or more of the Banks (or their
affiliates) under such Interest Rate Hedges shall at all times be junior and
subordinate to the lien created by the Security Agreement securing the
Company's obligations under this Agreement and the Notes.
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IN WITNESS WHEREOF, the parties hereto have executed this
Agreement on the day and year first above written.
ELECTRONIC ASSEMBLY CORPORATION
By: _________________________________________
Title: ______________________________________
FIRSTAR BANK MILWAUKEE, N.A.,
for itself and as Agent
By: _________________________________________
Title: ______________________________________
HARRIS TRUST AND SAVINGS BANK
By: _________________________________________
Title: ______________________________________
BANK ONE, MILWAUKEE, NA
By: _________________________________________
Title: ______________________________________
LASALLE NATIONAL BANK
By: _________________________________________
Title: ______________________________________
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EXHIBIT A
REVOLVING CREDIT NOTE
$_____________ _____________, 199_
FOR VALUE RECEIVED, the undersigned, ELECTRONIC ASSEMBLY CORPORATION,
hereby promises to pay to the order of _______________ (the "Payee"), on July
31, 1998, at the office of Firstar Bank Milwaukee, N.A., as Agent for the payee
hereof, at 777 East Wisconsin Avenue, Milwaukee, Wisconsin in lawful money of
the United States of America and in immediately available funds, the principal
amount of _______________ Dollars ($__________) or, if less, the aggregate
unpaid principal amount of all loans made by the Payee to the undersigned under
the Amended and Restated Revolving Credit Agreement dated as of March __, 1996,
as amended from time to time (the "Credit Agreement"), by and among the
undersigned, Firstar Bank Milwaukee, N.A., for itself and as Agent, and certain
other banks named therein, together with interest on the principal amount
hereof from time to time unpaid. Interest (computed on the basis of the actual
number of days elapsed and a year of 360 days) shall accrue on such unpaid
principal amount from time to time at the rate or rates set forth in the Credit
Agreement, and shall be payable monthly on the first Business Day of each
month, or at such other times as may be provided in the Credit Agreement.
This Note is one of the Notes issued under the Credit Agreement and is
subject to permissive and mandatory prepayment, in each case upon the terms
provided in the Credit Agreement. This Note is payable and secured in
accordance with, is governed by and subject to, and is entitled to the benefits
of, the Credit Agreement. All capitalized terms used herein shall have the
meanings assigned to them in the Credit Agreement.
This Note is issued in replacement of and in substitution for, and not
in payment of, a promissory note previously issued by the undersigned to the
Payee pursuant to the terms of a Revolving Credit Agreement dated April 18,
1991, as previously amended (the "Original Credit Agreement"), which has been
amended and restated in its entirety by the Credit Agreement referred to above.
This Note shall not be construed as a novation of the indebtedness outstanding
under the Original Credit Agreement.
This Note shall be construed in accordance with the laws (other than
the conflict of laws rules) of the State of Wisconsin. The undersigned waives
presentment, protest and notice of dishonor, and agrees, in the event of
default hereunder, to pay all costs and expenses of collection, including
reasonable attorneys' fees.
ELECTRONIC ASSEMBLY CORPORATION
By: _________________________________
Title: ______________________________