1
EXHIBIT 10.1
CONFORMED COPY
$175,000,000
CREDIT AGREEMENT
dated as of March 13, 1996
among
EXIDE ELECTRONICS GROUP, INC.,
as Borrower
The GUARANTORS Party Hereto,
The LENDERS Listed Herein
The ISSUING LENDERS Party Hereto
MORGAN GUARANTY TRUST COMPANY OF NEW YORK,
as Administrative Agent
and
BANK OF AMERICA ILLINOIS,
as Documentation Agent
--------------------
NATIONSBANK, N.A.
and
ABN AMRO BANK, N.V.,
Co-Agents
2
FIRST UNION NATIONAL BANK OF NORTH CAROLINA,
Syndication Agent
J.P. MORGAN SECURITIES INC.,
Arranger
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3
TABLE OF CONTENTS
ARTICLE 1
DEFINITIONS
Page
1.1. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2. Accounting Terms and Determinations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
ARTICLE 2
THE CREDITS
2.1. Commitments to Lend . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
2.2. Method of Borrowing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
2.3. Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
2.4. Scheduled Termination of Commitments and Maturity of Loans . . . . . . . . . . . . . . . . . . . . . . 28
2.5. Interest Rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
2.6. Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
2.7. Optional Termination or Reduction of Commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
2.8. Mandatory Incremental Repayments, and Reduction of Commitments . . . . . . . . . . . . . . . . . . . . 32
2.9. Optional Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
2.10. Method of Electing Interest Rates. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
2.11. General Provisions as to Payments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
2.12. Funding Losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
2.13. Computation of Interest and Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
2.14. Regulation D Compensation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
2.15. Letters of Credit. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
ARTICLE 3
CONDITIONS
3.1. Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
3.2. Borrowings and Issuances of Letters of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
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ARTICLE 4
REPRESENTATIONS AND WARRANTIES
4.1. Corporate Existence and Power . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
4.2. Corporate and Governmental Authorization; No Contravention . . . . . . . . . . . . . . . . . . . . . . 46
4.3. Binding Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
4.4. Financial Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
4.5. Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
4.6. Compliance with ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
4.7. Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
4.8. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
4.9. Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
4.10. Regulatory Restrictions on Borrowing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
4.11. Full Disclosure. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
4.12. Representations of Guarantors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
4.13. Deltec Acquisition Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
ARTICLE 5
COVENANTS
5.1. Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
5.2. Payment of Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
5.3. Maintenance of Property; Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
5.4. Conduct of Business and Maintenance of Existence . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
5.5. Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
5.6. Inspection of Property, Books and Records; Annual Lender Meeting . . . . . . . . . . . . . . . . . . . 57
5.7. Mergers and Sales of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
5.8. Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
5.9. Negative Pledge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
5.10. Limitation on Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
5.11. Restricted Payments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
5.12. Investments and Other Acquisitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
5.13. Consolidated Capital Expenditures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
5.14. Sale-Leaseback Transactions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
5.15. Transactions with Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
5.16. Hedging Facilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
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Page
5.17. Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
5.18. Minimum Consolidated Net Worth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
5.19. Fixed Charge Coverage Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
5.20. Leverage Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
5.21. Minimum EBITDA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
5.22. Amendments of Related Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
5.23. Limitation on Restrictions Affecting Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . 69
5.24. Designated Senior Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
ARTICLE 6
DEFAULTS
6.1. Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
6.2. Notice of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
6.3. Cash Cover . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
ARTICLE 7
THE AGENT
7.1. Appointment and Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
7.2. Agents and Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
7.3. Action by Agents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
7.4. Consultation with Experts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
7.5. Liability of Agents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
7.6. Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
7.7. Credit Decision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
7.8. Successor Administrative Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
7.9. Agents' Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
7.10. Co-Agents, Documentation Agent and Syndication Agent. . . . . . . . . . . . . . . . . . . . . . . . . 75
ARTICLE 8
CHANGE IN CIRCUMSTANCES
8.1. Basis for Determining Interest Rate Inadequate or Unfair . . . . . . . . . . . . . . . . . . . . . . . 76
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Page
8.2. Illegality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
8.3. Increased Cost and Reduced Return . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
8.4. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
8.5. Base Rate Loans Substituted for Affected Euro-Dollar Loans . . . . . . . . . . . . . . . . . . . . . 81
8.6. Substitution of Lender . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
ARTICLE 9
GUARANTY
9.1. The Guaranty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
9.2. Guaranty Unconditional . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
9.3. Discharge Only Upon Payment In Full; Reinstatement In Certain Circumstances . . . . . . . . . . . . 83
9.4. Waiver by each Guarantor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
9.5. Subrogation and Contribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
9.6. Stay of Acceleration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
9.7. Limit of Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
ARTICLE 10
MISCELLANEOUS
10.1. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
10.2. No Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
10.3. Expenses; Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
10.4. Sharing of Set-Offs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
10.5. Amendments and Waivers; Release of Collateral. . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
10.6. Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
10.7. Collateral . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
10.8. Governing Law; Submission to Jurisdiction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
10.9. Counterparts; Integration; Effectiveness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
10.10. WAIVER OF JURY TRIAL. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
PRICING SCHEDULE
SCHEDULE 1 - Existing Letters of Credit
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Page
SCHEDULE 4.5 - Material Litigation
SCHEDULE 5.10 - Outstanding Indebtedness
EXHIBIT A - Note
EXHIBIT B - Security Agreement
EXHIBIT C - Pledge Agreement
EXHIBIT D - Opinion of Special North Carolina
Counsel for the Obligors
EXHIBIT E-1 - Opinion of Davis Polk & Wardwell,
Special New York Counsel to the Agents
EXHIBIT E-2 - Form of Opinion of Special Foreign
Counsel to the Agents
EXHIBIT F - Assignment and Assumption
Agreement
EXHIBIT G - Borrowing Base Certificate
EXHIBIT H - Guarantor Addendum
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CREDIT AGREEMENT
AGREEMENT dated as of March 13, 1996 among EXIDE ELECTRONICS
GROUP, INC., the GUARANTORS party hereto, the LENDERS listed on the signature
pages hereof, the ISSUING LENDERS parties hereto, MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, as Administrative Agent and BANK OF AMERICA ILLINOIS, as
Documentation Agent.
The parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
SECTION 1.1. Definitions. The following terms, as used
herein, have the following meanings:
"Acquisition" shall mean any acquisition (other than the
Deltec Acquisition), whether in a single transaction or series of related
transactions, by the Borrower or any one or more Subsidiaries, or any
combination thereof, of (i) all or a substantial part of the assets, or a going
business or division, of any Person, whether through purchase of assets or
securities, by merger or otherwise, (ii) control of at least a majority of
securities of an existing corporation or other Person ordinarily (and apart
from rights accruing under special circumstances) having the right to vote in
the election of directors or (iii) control of a greater than 50% ownership
interest in any existing partnership, joint venture or other Person.
"Additional Debt Incurrence" means the incurrence of any Debt
by the Borrower or any of its Subsidiaries after the date hereof of the type
referred to in clauses (i), (ii) or (vii) of the definition of "Debt" herein,
other than Debt (i) under the Loan Documents, or the Subordinated Notes, (ii)
which constitutes a permitted refinancing of Debt hereunder, (iii) which is
secured by a Lien permitted by
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Section 5.9(c) or (iv) expressly permitted by Sections 5.10(f) or (g).
"Administrative Agent" means Morgan Guaranty Trust Company of
New York in its capacity as administrative agent for the Lenders hereunder, and
its successors in such capacity.
"Administrative Questionnaire" means, with respect to each
Lender, an administrative questionnaire in the form prepared by the
Administrative Agent and submitted to the Administrative Agent (with a copy to
the Borrower) duly completed by such Lender.
"Affiliate" means, with respect to any Person, (i) any Person
that directly, or indirectly through one or more intermediaries, controls the
Borrower (a "Controlling Person") or (ii) any Person (other than the Borrower
or a Subsidiary) which is controlled by or is under common control with a
Controlling Person. As used herein, the term "control" means possession,
directly or indirectly, of the power to vote 10% or more of any class of voting
securities of a Person or to direct or cause the direction of the management or
policies of a Person, whether through the ownership of voting securities, by
contract or otherwise.
"Agents" means the Administrative Agent and the Documentation
Agent, and "Agent" means either one of the foregoing.
"Applicable Lending Office" means, with respect to any Lender,
(i) in the case of its Base Rate Loans, its Domestic Lending Office and (ii) in
the case of its Euro-Dollar Loans, its Euro-Dollar Lending Office.
"Asset Sale" means any sale, lease or other disposition
(including any such transaction effected by way of merger or consolidation) by
the Borrower or any of its Subsidiaries of any asset, including without
limitation any sale-leaseback transaction, whether or not involving a capital
lease, but excluding (i) dispositions of inventory, cash, cash equivalents and
other cash management investments
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and obsolete, unused or unnecessary equipment and undeveloped real estate, in
each case in the ordinary course of business, (ii) dispositions to the Borrower
or a Subsidiary of the Borrower and (iii) Permitted Receivables Dispositions.
"Assignee" has the meaning set forth in Section 10.6(c).
"Available Cash Flow" means, for any fiscal period, the sum of
(i) Consolidated Net Income for such period plus (ii) to the extent deducted in
determining Consolidated Net Income for such period, depreciation, amortization
and other similar noncash charges plus (iii) any increase (or minus any
decrease) during such period in deferred tax liabilities of the Borrower and
its Consolidated Subsidiaries, taken as a whole, minus (iv) any gain (or plus
any loss) from Asset Sales to the extent included (or deducted) in determining
Consolidated Net Income for such period.
"Available LC Amount" means at any time an amount equal to the
lesser of (i) $10,000,000, and (ii) the excess, if any, of the aggregate amount
of the Revolving Commitments (or if less, the Borrowing Base) over the
aggregate outstanding amount of Revolving Loans and Swing Loans at such time.
"Base Rate" means, for any day, a rate per annum equal to the
higher of (i) the Prime Rate for such day and (ii) the sum of 1/2 of 1% plus
the Federal Funds Rate for such day.
"Base Rate Loan" means (i) a Loan which bears interest by
reference to the Base Rate pursuant to the applicable Notice of Borrowing or
Notice of Interest Rate Election or the provisions of Article VIII or (ii) an
overdue amount which was a Base Rate Loan immediately before it became overdue.
"Base Rate Margin" means a rate per annum determined in
accordance with the Pricing Schedule.
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"Benefit Arrangement" means at any time an employee benefit
plan within the meaning of Section 3(3) of ERISA which is not a Plan or a
Multiemployer Plan and which is maintained or otherwise contributed to by any
member of the ERISA Group.
"Borrower" means Exide Electronics Group, Inc., a Delaware
corporation, and its successors.
"Borrower's 1995 Form 10-K" means the Borrower's annual report
on Form 10-K for the Fiscal Year ended September 30, 1995, as filed with the
Securities and Exchange Commission pursuant to the Securities Exchange Act of
1934.
"Borrowing" means a borrowing hereunder consisting of Loans
made to the Borrower at the same time by the Lenders pursuant to Article 2 (or
a Swing Loan made solely by the Swing Lender), all of which (except for Base
Rate Loans) have the same initial Interest Period. A Borrowing is a "Base Rate
Borrowing" if such Loans are Base Rate Loans, a "Euro-Dollar Borrowing" if such
Loans are Euro-Dollar Loans and a "Swing Borrowing" if such Loan is a Swing
Loan.
"Borrowing Base" means, at any date of determination, the sum
of (i) 70% of Eligible Accounts Receivable and (ii) 50% of Eligible
Inventories, in each case determined pursuant to the most recent Borrowing Base
Certificate prepared in accordance with Section 5.1(i).
"Borrowing Base Certificate" means a certificate, duly
executed by the chief financial officer, treasurer, assistant treasurer or
controller of the Borrower, appropriately completed and substantially in the
form of Exhibit G hereto.
"Closing Date" means the date on or after the Effective Date
on which the Administrative Agent shall have received the documents specified
in or pursuant to Section 3.1.
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"Collateral" means collateral subject to the Collateral
Documents.
"Collateral Documents" means, collectively, the Pledge
Agreement, the Security Agreement and any other agreement pursuant to which an
Obligor or any Subsidiary of an Obligor provides a Lien on its assets in favor
of the Administrative Agent for the benefit of the Lenders, and all
supplementary assignments, security agreements, pledge agreements,
acknowledgments or other documents delivered or to be delivered pursuant to the
terms hereof (including without limitation pursuant to Section 5.17) or of any
other Security Document.
"Commitment" means a Term Commitment or a Revolving
Commitment, and "Commitments" means any combination of the foregoing.
"Commitment Fee Rate" means a rate per annum determined in
accordance with the Pricing Schedule.
"Consolidated Capital Expenditures" means, for any period, the
additions to property, plant and equipment and other capital expenditures of
the Borrower and its Consolidated Subsidiaries for such period, as the same are
or would be set forth in a consolidated statement of cash flows of the Borrower
and its Consolidated Subsidiaries for such period.
"Consolidated Debt" means at any date the Debt of the Borrower
and its Consolidated Subsidiaries, determined on a consolidated basis as of
such date.
"Consolidated EBITDA" means, for any fiscal period,
Consolidated Net Income for such period plus, to the extent deducted in
determining Consolidated Net Income for such period, the aggregate amount of
(i) Consolidated Interest Expense, (ii) income tax expense, (iii) the aggregate
amount of depreciation, amortization and other similar non-cash charges and
(iv) minority interest expenses deducted in determining the Borrower's direct
or indirect share of net income of Consolidated Subsidiaries.
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13
"Consolidated Interest Expense" means, for any period, the
interest expense of the Borrower and its Consolidated Subsidiaries determined
on a consolidated basis for such period excluding, for the Fiscal Quarter ended
on or about March 31, 1996, $4,100,000 of interest expense incurred pursuant to
the Deltec Purchase Agreement.
"Consolidated Net Income" means, for any fiscal period, the
net income of the Borrower and its Consolidated Subsidiaries, determined on a
consolidated basis for such period, exclusive of the effect of any
extraordinary or other non-recurring gain (but not loss) and before the effect
of any dividends paid during such period on the Borrower's capital stock.
"Consolidated Net Working Investment" means at any date (i)
consolidated current assets of the Borrower and its Consolidated Subsidiaries
(exclusive of cash and cash equivalents) minus (ii) the sum (without
duplication) of (x) the consolidated current liabilities of the Borrower and
its Consolidated Subsidiaries and (y) the current liabilities of any Person
(other than the Borrower or any of its Consolidated Subsidiaries) which are
Guaranteed by the Borrower or a Consolidated Subsidiary, in each case exclusive
of Debt, all determined as of such date.
"Consolidated Net Worth" means at any date the sum of the
consolidated stockholders' equity of the Borrower and its Consolidated
Subsidiaries determined as of such date (other than any amount attributable to
stock which is required to be redeemed or is redeemable at the option of the
holder, if certain events or conditions occur or exist or otherwise).
"Consolidated Rental Expense" means, for any period, the
aggregate rental expense of the Borrower and its Consolidated Subsidiaries
determined on a consolidated basis for such period.
"Consolidated Subsidiary" means at any date any Subsidiary or
other entity the accounts of which would be consolidated with those of the
Borrower in its consolidated
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financial statements if such statements were prepared as of such date.
"Debt" of any Person means at any date, without duplication,
(i) all obligations of such Person for borrowed money, (ii) all obligations of
such Person evidenced by bonds, debentures, notes or other similar instruments,
(iii) all obligations of such Person to pay the deferred purchase price of
property or services, except trade accounts payable arising in the ordinary
course of business, (iv) all obligations of such Person as lessee which are
capitalized in accordance with generally accepted accounting principles, (v)
all non-contingent obligations (and, for purposes of Section 5.9 and the
definitions of Material Debt and Material Financial Obligations, all contingent
obligations) of such Person to reimburse any bank or other Person in respect of
amounts paid under a letter of credit or similar instrument, (vi) all Debt
secured by a Lien on any asset of such Person, whether or not such Debt is
otherwise an obligation of such Person, (vii) any Receivables Financing and
(viii) all Debt of others Guaranteed by such Person.
"Default" means any condition or event which constitutes an
Event of Default or which with the giving of notice or lapse of time or both
would, unless cured or waived, become an Event of Default.
"Deltec" means Deltec Power Systems, Inc., a Wisconsin
corporation, and its successors.
"Deltec Acquisition" means the acquisition by the Borrower of
Deltec and all other transactions contemplated by the Deltec Purchase Agreement
to be consummated on or before the Closing Date.
"Deltec Acquisition Documents" means the Deltec Purchase
Agreement and all agreements, documents and instruments executed and delivered
pursuant thereto or in connection with the foregoing, each as amended from time
to time in accordance with the terms hereof and thereof.
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"Deltec Purchase Agreement" means the Stock Purchase Agreement
dated as of November 16, 1995 among the Borrower, Deltec, Fiskars Holdings,
Inc. and Fiskars Holdings, Inc., including the exhibits and schedules thereto,
as amended by Amendment No. 1 thereto dated as of February 9, 1996 and as the
same may further be amended in accordance with the terms hereof and thereof.
"Deltec Seller Stock" means the 50 shares of Class A Preferred
Stock held by Fiskars Oy Ab, issued in connection with the closing of the
Deltec Acquisition and redeemable on January 8, 1997.
"Derivatives Obligations" of any Person means all obligations
of such Person in respect of any rate swap transaction, basis swap, forward
rate transaction, commodity swap, commodity option, equity or equity index
swap, equity or equity index option, bond option, interest rate option, foreign
exchange transaction, cap transaction, floor transaction, collar transaction,
currency swap transaction, cross-currency rate swap transaction, currency
option or any other similar transaction (including any option with respect to
any of the foregoing transactions) or any combination of the foregoing
transactions.
"Documentation Agent" means Bank of America Illinois in its
capacity as documentation agent for the Lenders hereunder, and its successors
in such capacity.
"Domestic Business Day" means any day except a Saturday,
Sunday or other day on which commercial banks in New York City are authorized
by law to close.
"Domestic Lending Office" means, as to each Lender, its office
located at its address set forth in its Administrative Questionnaire (or
identified in its Administrative Questionnaire as its Domestic Lending Office)
or such other office as such Lender may hereafter designate as its Domestic
Lending Office by notice to the Borrower and the Administrative Agent.
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16
"EEIC" means Exide Electronics International Corp., a Delaware
corporation.
"Effective Date" means the date this Agreement becomes
effective in accordance with Section 10.9.
"Eligible Accounts Receivable" means, at any date of
determination thereof, the aggregate amount of "Accounts Receivable" of the
Borrower and its Consolidated Subsidiaries, as such amount is shown on the
consolidated balance sheet of the Borrower and its Consolidated Subsidiaries on
such date on a basis consistent with that used in the preparation of the
financial statements referred to in Section 4.4(a) (other than any such amounts
that are subject to a Lien pursuant to a Permitted Receivables Financing), all
net of reserves and any "contra" accounts taken or maintained in respect
thereof, or such net amount that would be so shown on such balance sheet on
such date if it were so prepared on such date.
"Eligible Inventories" means, at any date of determination
thereof, the value (determined on a basis consistent with that used on the date
hereof) at such date of all inventory of the Borrower and its Consolidated
Subsidiaries, to the extent comprised of readily marketable materials of a type
manufactured, consumed or held for resale, as such amount is shown on the
consolidated balance sheet of the Borrower and its Consolidated Subsidiaries on
such date on a basis consistent with that used in the preparation of the
financial statements referred to in Section 4.4(a), other than any such amounts
that are subject to a Lien (other than Liens under the Loan Documents), all net
of reserves and any "contra" accounts taken or maintained in respect thereof,
or such net amount that would be so shown on such balance sheet on such date if
it were so prepared on such date.
"Environmental Laws" means any and all federal, state, local
and foreign statutes, laws, judicial decisions, regulations, ordinances, rules,
judgments, orders, decrees, plans, injunctions, permits, concessions, grants,
franchises, licenses, agreements and other governmental
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17
restrictions relating to the environment, the effect of the environment on
human health or to emissions, discharges or releases of pollutants,
contaminants, Hazardous Substances or wastes into the environment including,
without limitation, ambient air, surface water, ground water, or land, or
otherwise relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of pollutants,
contaminants, Hazardous Substances or wastes or the clean-up or other
remediation thereof.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended, or any successor statute.
"ERISA Group" means the Borrower, any Subsidiary and all
members of a controlled group of corporations and all trades or businesses
(whether or not incorporated) under common control which, together with the
Borrower or any Subsidiary, are treated as a single employer under Section 414
of the Internal Revenue Code.
"Euro-Dollar Business Day" means any Domestic Business Day on
which commercial banks are open for international business (including dealings
in dollar deposits) in London.
"Euro-Dollar Lending Office" means, as to each Lender, its
office, branch or affiliate located at its address set forth in its
Administrative Questionnaire (or identified in its Administrative Questionnaire
as its Euro-Dollar Lending Office) or such other office, branch or affiliate of
such Lender as it may hereafter designate as its Euro-Dollar Lending Office by
notice to the Borrower and the Administrative Agent.
"Euro-Dollar Loan" means (i) a Loan which bears interest at a
Euro-Dollar Rate pursuant to the applicable Notice of Borrowing or Notice of
Interest Rate Election or (ii) an overdue amount which was a Euro-Dollar Loan
immediately before it became overdue.
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"Euro-Dollar Margin" means a rate per annum determined in
accordance with the Pricing Schedule.
"Euro-Dollar Rate" means a rate of interest determined
pursuant to Section 2.5(b) on the basis of a London Interbank Offered Rate.
"Euro-Dollar Reserve Percentage" means for any day that
percentage (expressed as a decimal) which is in effect on such day, as
prescribed by the Board of Governors of the Federal Reserve System (or any
successor) for determining the maximum reserve requirement for a member bank of
the Federal Reserve System in New York City with deposits exceeding five
billion dollars in respect of "Eurocurrency liabilities" (or in respect of any
other category of liabilities which includes deposits by reference to which the
interest rate on Euro-Dollar Loans is determined or any category of extensions
of credit or other assets which includes loans by a non-United States office of
any Lender to United States residents).
"Event of Default" has the meaning set forth in Section 6.1.
"Excess Cash Flow" means, for any period the excess (if any)
of:
(A) the sum of (i) Available Cash Flow for such fiscal period,
and (ii) any decrease in Consolidated Net Working Investment between
the beginning and the end of such period;
over
(B) the sum of (i) Consolidated Capital Expenditures for such
period, (ii) any increase in Consolidated Net Working Investment
between the beginning and the end of such period, (iii) cash dividends
paid on capital stock during such period, (iv) mandatory reductions of
long-term Debt of the Borrower and its Consolidated Subsidiaries
during such period (adjusted to eliminate the effect of prepayments
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on account of Excess Cash Flow for a prior period) and (v) optional
prepayments of Term Loans during such period pursuant to Section 2.9.
"Existing Credit Agreement" means the Credit Agreement dated
as of September 30, 1994 among the Borrower, as guarantor, the "Borrowers"
referred to therein, First Union National Bank of North Carolina, as
co-arranger and administrative agent, BA Securities, Inc., as co-arranger, Bank
of America Illinois, as documentation agent and the lenders referred to
therein, as amended.
"Federal Funds Rate" means, for any day, the rate per annum
(rounded upward, if necessary, to the nearest 1/100th of 1%) equal to the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Domestic
Business Day next succeeding such day, provided that (i) if such day is not a
Domestic Business Day, the Federal Funds Rate for such day shall be such rate
on such transactions on the next preceding Domestic Business Day as so
published on the next succeeding Domestic Business Day, and (ii) if no such
rate is so published on such next succeeding Domestic Business Day, the Federal
Funds Rate for such day shall be the average rate quoted to the Administrative
Agent on such day on such transactions as determined by the Administrative
Agent.
"Fiscal Quarter" means a fiscal quarter in a Fiscal Year of
the Borrower. "First Fiscal Quarter 1996", "Second Fiscal Quarter 1996" and
"Third Fiscal Quarter 1996", e.g., mean, respectively, the fiscal quarters of
the Borrower ending most nearly on December 31, 1995, March 31, 1996 and June
30, 1996.
"Fiscal Year" means a fiscal year of the Borrower, and "Fiscal
Year" for any particular year means the fiscal year of the Borrower ended or
ending during the specified calendar year. "Fiscal Year 1996", e.g., means the
fiscal year of the Borrower ending approximately September 30, 1996.
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"Fixed Charge Coverage Ratio" means, at any date, the ratio of
(i) the sum of (A) Consolidated EBITDA plus (B) Consolidated Rental Expense
minus (C) Consolidated Capital Expenditures, in each case for the four
consecutive Fiscal Quarters of the Borrower and its Consolidated Subsidiaries
ending on such date (or, in the case of any Fiscal Quarter ending prior to
March 31, 1997, for the period commencing on April 1, 1996 and ending on the
last day of such Fiscal Quarter) to (ii) the sum of (x) Consolidated Interest
Expense for such period plus (y) Consolidated Rental Expense for such period
plus (z) the aggregate amount of dividends or distributions paid by the
Borrower on or with respect to its capital stock (or by any Subsidiary on or
with respect to capital stock owned by a Person other than the Borrower or
another Subsidiary) during such period, but excluding in any event the
redemption of the Deltec Seller Stock in accordance with the terms thereof.
"Group of Loans" or "Group" means at any time a group of Loans
consisting of (i) all Base Rate Loans at such time or (ii) all Euro-Dollar
Loans having the same Interest Period at such time; provided that, if Loans of
any particular Lender are converted to or made as Base Rate Loans pursuant to
Article 8, such Loans shall be included in the same Group or Groups of Loans
from time to time as they would have been in if they had not been so converted
or made.
"Guarantee" by any Person means any obligation, contingent or
otherwise, of such Person directly or indirectly guaranteeing any Debt or other
obligation of any other Person and, without limiting the generality of the
foregoing, any obligation, direct or indirect, contingent or otherwise, of such
Person (i) to purchase or pay (or advance or supply funds for the purchase or
payment of) such Debt or other obligation (whether arising by virtue of
partnership arrangements, by agreement to keep-well, to purchase assets, goods,
securities or services, to take-or-pay, or to maintain financial statement
conditions or otherwise) or (ii) entered into for the purpose of assuring in
any other manner the holder of such Debt or other obligation of the payment
thereof or to protect such holder against loss in
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21
respect thereof (in whole or in part), provided that the term Guarantee shall
not include endorsements for collection or deposit in the ordinary course of
business. The term "Guarantee" used as a verb has a corresponding meaning.
"Guarantor" means each Person listed on the signature pages
hereof as a "Guarantor", together with any Person who shall become a Guarantor
in accordance with Section 5.17(d), and their respective successors.
"Hazardous Substances" means any toxic, radioactive, caustic
or otherwise hazardous substance, including petroleum, its derivatives,
by-products and other hydrocarbons, or any substance having any constituent
elements displaying any of the foregoing characteristics.
"Immaterial Subsidiary" means a Subsidiary of the Borrower,
other than any Obligor, that at the relevant time of determination (i) does
not, together with any of its Subsidiaries, have assets (including capital
stock) with an aggregate fair market value exceeding $1,000,000 and (ii) is not
performing any activity significant to the business of the Borrower and its
Subsidiaries, taken as a whole, if the Borrower shall have notified the
Administrative Agent prior to the date hereof or any relevant event that such
Subsidiary is an "Immaterial Subsidiary". As of the Closing Date, Lortec Power
Systems, Inc., International Power Machines GmbH, International Power Machines
de Mexico, S.A. de C.V., International Power Machines Canada Ltd. and Exide
Electronics, B.V. are Immaterial Subsidiaries.
"Indemnitee" has the meaning set forth in Section 10.3(b).
"Interest Period" means, with respect to each Euro-Dollar
Loan, a period commencing on the date of Borrowing specified in the applicable
Notice of Borrowing or on the date specified in the applicable Notice of
Interest Rate Election and ending one, two, three or six months thereafter, as
the Borrower may elect in the applicable Notice; provided that:
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(a) any Interest Period which would otherwise end on a day
which is not a Euro-Dollar Business Day shall be extended to the next
succeeding Euro-Dollar Business Day unless such Euro-Dollar Business
Day falls in another calendar month, in which case such Interest
Period shall end on the next preceding Euro-Dollar Business Day;
(b) any Interest Period which begins on the last Euro-Dollar
Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such
Interest Period) shall, subject to clause (c) below, end on the last
Euro-Dollar Business Day of a calendar month; and
(c) if any Interest Period includes a date on which a payment
of principal of any Loan is required to be made under Section 2.4 or
Section 2.8 but does not end on such date, then (i) the principal
amount (if any) of each Euro-Dollar Loan required to be repaid on such
date shall have an Interest Period ending on such date and (ii) the
remainder (if any) of each such Euro-Dollar Loan shall have an
Interest Period determined as set forth above.
"Internal Revenue Code" means the Internal Revenue Code of
1986, as amended, or any successor statute.
"International Subsidiary" means any Subsidiary of the
Borrower organized under the laws of a jurisdiction, and conducting
substantially all of its operations outside of, the United States of America.
"Investment" means any investment in any Person, whether by
means of share purchase, capital contribution, loan, Guarantee, time deposit or
otherwise (but not including any demand deposit).
"Issuing Lender" means Morgan Guaranty Trust Company of New
York and First Union National Bank of North Carolina and any other Lender that
may agree to issue
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letters of credit hereunder, in each case as issuer of a letter of credit
hereunder.
"Lender" means each bank listed on the signature pages hereof,
each Assignee which becomes a Lender pursuant to Section 10.6(c), and their
respective successors, and shall include, as the context may require, the
Issuing Lender in such capacity.
"Letter of Credit" means a letter of credit to be issued
hereunder by an Issuing Lender.
"Letter of Credit Fee Rate" means a rate per annum determined
in accordance with the Pricing Schedule.
"Letter of Credit Liabilities" means, for any Lender and at
any time, the sum of (i) the amounts then owing to such Lender (including in
its capacity as an Issuing Lender) by the Borrower to reimburse it in respect
of amounts drawn under Letters of Credit and (ii) such Lender's Revolving
Percentage of the aggregate amount then available for drawing under all Letters
of Credit.
"Leverage Ratio" means, for any day, the ratio of (i)
Consolidated Debt on such day to (ii) Consolidated EBITDA for the four
consecutive Fiscal Quarters ending on or most recently prior to such day;
provided that in determining the Leverage Ratio as of any day prior to the end
of the Fiscal Quarter ending approximately on December 31, 1996, Consolidated
EBITDA for the Fiscal Quarters ending September 30, 1995 and December 31, 1995
shall be deemed to be $14,683,000 and $15,223,000, respectively.
"Lien" means, with respect to any asset, any mortgage, lien,
pledge, charge, security interest or encumbrance of any kind, or any other type
of preferential arrangement that has the practical effect of creating a
security interest, in respect of such asset. For the purposes of this
Agreement, the Borrower or any Subsidiary shall be deemed to own subject to a
Lien any asset which it has acquired or holds subject to the interest of a
vendor or
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lessor under any conditional sale agreement, capital lease or other title
retention agreement relating to such asset.
"Loan" means a Base Rate Loan, a Euro-Dollar Loan or a Swing
Loan, and "Loans" means Base Rate Loans, Swing Loans or Euro-Dollar Loans or
any combination of the foregoing.
"Loan Documents" means this Agreement, the Notes and the
Collateral Documents.
"London Interbank Offered Rate" has the meaning set forth in
Section 2.5(b).
"Major Casualty Proceeds" means (i) the aggregate insurance
proceeds received in connection with one or more related events by the Borrower
or any of its Subsidiaries under any insurance policy maintained by the
Borrower or any of its Subsidiaries covering losses with respect to tangible
real or personal property or improvements or losses from business interruption
or (ii) any award or other compensation with respect to any condemnation of
property (or any transfer or disposition of property in lieu of condemnation)
received by the Borrower or any of its Subsidiaries, if the amount of such
aggregate proceeds or award or other compensation exceeds $1,000,000.
"Material Debt" means Debt (other than the Notes) of the
Borrower and/or one or more of its Subsidiaries, arising in one or more related
or unrelated transactions, in an aggregate principal or face amount exceeding
$5,000,000.
"Material Financial Obligations" means a principal or face
amount of Debt and/or payment or collateralization obligations in respect of
Derivatives Obligations of the Borrower and/or one or more of its Subsidiaries,
arising in one or more related or unrelated transactions, exceeding in the
aggregate $5,000,000.
"Material Plan" means at any time a Plan or Plans having
aggregate Unfunded Liabilities in excess of $1,000,000.
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25
"Maturity Date" means March 13, 2001, or, if such day is not a
Euro-Dollar Business Day, the next succeeding Euro-Dollar Business Day unless
such Euro-Dollar Business Day falls in another calendar month, in which case
the Maturity Date shall be the next preceding Euro-Dollar Business Day.
"Moody's" means Moody's Investors Service, Inc.
"Multiemployer Plan" means at any time an employee pension
benefit plan within the meaning of Section 4001(a)(3) of ERISA to which any
member of the ERISA Group is then making or accruing an obligation to make
contributions or has within the preceding five plan years made contributions,
including for these purposes any Person which ceased to be a member of the
ERISA Group during such five year period.
"Net Cash Proceeds" means, with respect to any Reduction
Event, an amount equal to the cash proceeds received by the Borrower or any or
its Subsidiaries from or in respect of such Reduction Event (including any cash
proceeds received as income or other proceeds of any noncash proceeds of any
Asset Sale) or, in the case of any Permitted Receivables Financing, the
Receivables Investment Amount with respect thereto (including any increases in
the initial amount thereof from time to time, but not with respect to
reinvestments out of collections or proceeds by the purchasers or lenders
thereunder that do not result in an increase in the Receivables Investment
Amount with respect thereto), (i) less any expenses reasonably incurred by such
Person in respect of such Reduction Event and (ii) if such Reduction Event is
an Asset Sale, less (x) the amount of any Debt secured by a Lien on any asset
disposed of in such Asset Sale and discharged from the proceeds thereof and (y)
any taxes actually paid or to be payable by such Person (as estimated by a
senior financial or accounting officer of the Borrower, giving effect to the
overall tax position of the Borrower) in respect of such Asset Sale.
"Notes" means promissory notes of the Borrower, substantially
in the form of Exhibit A hereto, evidencing
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the obligation of the Borrower to repay the Loans, and "Note" means any one of
such promissory notes issued hereunder.
"Notice of Borrowing" has the meaning set forth in Section
2.2.
"Notice of Interest Rate Election" has the meaning set forth
in Section 2.10.
"Notice of Issuance" has the meaning set forth in Section
2.15(b).
"Obligor" means the Borrower and each Guarantor.
"Parent" means, with respect to any Lender, any Person
controlling such Lender.
"Participant" has the meaning set forth in Section 10.6(b).
"PBGC" means the Pension Benefit Guaranty Corporation or any
entity succeeding to any or all of its functions under ERISA.
"Permitted Receivables Disposition" means any transfer (by way
of sale, pledge or otherwise) by the Borrower or any Subsidiary to any other
Person of accounts receivable and other rights to payment (whether constituting
accounts, chattel paper, instruments, general intangibles or otherwise and
including the right to payment of interest or finance charges) and related
contract and other rights and property (including all general intangibles,
collections and other proceeds relating thereto, all security therefor (and the
property subject thereto), all guarantees and other agreements or arrangements
of whatsoever character from time to time supporting such right to payment, and
all other rights, title and interest in goods relating to a sale which gave
rise to such right of payment) in connection with a Permitted Receivables
Financing.
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"Permitted Receivables Financing" means any Receivables
Financing by the Borrower or any of its Subsidiaries which has been approved by
the Required Lenders (which Receivables Financing shall provide for recourse
against the transferor of such receivables only for limited indemnities and
breach of warranty concerning the eligibility of the receivables transferred,
and no such recourse for uncollectability of such receivables solely for the
failure of the related obligors to pay such receivables), which such approval
for any such transaction shall be considered in good faith. No Receivables
Financing or other transaction involving the sale, pledge or other disposition
by the Borrower or any of its Subsidiaries of any account receivable shall
constitute a "Permitted Receivables Financing" unless the Required Lenders
(determined, for this purpose, without the participation of any Lender acting
as a participant, sponsor or credit support provider in any such Permitted
Receivable Financing) have approved in writing (which such approval shall be
considered in good faith) the final form of all documentation relating to such
transaction (including, without limitation, the face amount of the accounts
receivable subject thereto and the economic terms) and shall have agreed to
such amendments to the Loan Documents, including, without limitation,
provisions for an "Event of Default" or similar event hereunder in the event of
a wind down or early amortization of such financing, and all amendments and
waivers relating to such documentation.
"Person" means an individual, a corporation, a limited
liability company, a partnership, an association, a trust or any other entity
or organization, including a government or political subdivision or an agency
or instrumentality thereof.
"Plan" means at any time an employee pension benefit plan
(other than a Multiemployer Plan) which is covered by Title IV of ERISA or
subject to the minimum funding standards under Section 412 of the Internal
Revenue Code and either (i) is maintained, or contributed to, by any member of
the ERISA Group for employees of any member of the ERISA Group or (ii) has at
any time within the preceding
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five years been maintained, or contributed to, by any Person which was at such
time a member of the ERISA Group for employees of any Person which was at such
time a member of the ERISA Group.
"Pledge Agreements" means each Pledge Agreement, the Share
Mortgage or similar document dated as of the date hereof between each Pledgor
and the Administrative Agent, each substantially in the form of Exhibit C, in
each case with such modifications and additions as shall be necessary to comply
with applicable law.
"Pledgors" means the Borrower, International Power Machines
Corporation, EEIC, Exide Electronics USA Holdings Corp., Exide Electronics
Corporation, Deltec Electronics Corp. and Deltec.
"Pricing Schedule" means the Schedule attached hereto
identified as such.
"Prime Rate" means the rate of interest publicly announced by
the Administrative Agent in New York City from time to time as its Prime Rate.
"Quarterly Date" means the last Euro-Dollar Business Day of
each March, June, September and December.
"Receivables Financing" means any receivables securitization
program or other type of accounts receivable financing transaction by the
Borrower or any of its Subsidiaries.
"Receivables Investment Amount" means at any time, with
respect to any Permitted Receivables Financing, the financing amount with
respect thereto at such time, equal to the amount advanced by the purchasers or
lenders with respect thereto for the purchase or financing of assets
transferred pursuant thereto, net of repayments or recoveries through
liquidation of such assets.
"Reduction Amount" means, (i) in respect of an Asset Sale,
100% of the Net Cash Proceeds thereof in excess
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of $1,000,000 in any Fiscal Year, (ii) in respect of an Additional Debt
Incurrence or receipt of Major Casualty Proceeds, 100% of the Net Cash Proceeds
thereof, (iii) in respect of Excess Cash Flow, 50% of the amount thereof, and
(iv) in respect of the issuance of equity securities not constituting Debt, 50%
of the Net Cash Proceeds thereof in excess of $200,000 in any Fiscal Year.
"Reduction Event" means (i) any Asset Sale, (ii) any
Additional Debt Incurrence, (iii) the issuance of any equity securities by the
Borrower or any of its Subsidiaries (other than equity securities issued to the
Borrower or any of its Subsidiaries) or (iv) receipt of Major Casualty
Proceeds. The description of any transaction as falling within the above
definition does not affect any limitation on such transaction imposed by
Article 5 of this Agreement.
"Reference Lenders" means the principal London offices of Bank
of America, NT & SA, First Union National Bank of North Carolina and Morgan
Guaranty Trust Company of New York, and "Reference Lender" means any one of
such Reference Lenders.
"Refunded Swing Loans" has the meaning set forth in Section
2.1(d).
"Refunding Date" has the meaning set forth in Section 2.1(e).
"Regulation U" means Regulation U of the Board of Governors of
the Federal Reserve System, as in effect from time to time.
"Required Lenders" means at any time Lenders having, in the
aggregate, at least 51% of the sum of (x) the Revolving Commitments at such
time or, if the Revolving Commitments shall have been terminated, the sum of
the aggregate outstanding principal amount of the Revolving Loans and Letter of
Credit Liabilities plus (y) the aggregate outstanding principal amount of the
Term Loans at such time or, if no Term Loans are then outstanding, the Term
Commitments at such time.
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"Restricted Investment" means any Investment by the Borrower
and its Subsidiaries in any Person, other than (i) Investments in Guarantors,
(ii) Temporary Cash Investments, (iii) Investments by Deltec, Borrower, EEIC
and Exide Electronic Corporation in FPS Power Systems Oy Ab with a book value
at any time in the aggregate not to exceed $5,000,000 collectively, (v)
Guarantees permitted under clause (i) of Section 5.10(h) and (v) Investments in
Subsidiaries other than Guarantors and in the Japanese Joint Venture, each of
which Investments under this clause (v) is in existence on the date hereof, and
in the respective amounts thereof on the date hereof, and renewals and
extensions by the obligor with respect to any of the foregoing, provided that
any such renewal or extension does not increase the amount of such Investment.
"Restricted Payment" means (i) any dividend or other
distribution on any shares of the Borrower's capital stock (except dividends
payable solely in shares of its capital stock) or (ii) any payment on account
of the purchase, redemption, retirement or acquisition of (a) any shares of the
Borrower's capital stock or (b) any option, warrant or other right to acquire
shares of the Borrower's capital stock and (iii) any payment of principal on,
or on account of, the purchase, redemption, retirement or other acquisition, in
each case prior to any scheduled maturity, scheduled repayment or scheduled
sinking fund payment of, the Subordinated Notes and any other Debt (except for
repayments in the ordinary course of business of Debt of International
Subsidiaries permitted under Section 5.10(g) hereof).
"Revolving Commitment" means, with respect to each Lender, the
amount set forth opposite the name of such Lender on the signature pages hereof
under the heading "Revolving Commitments", as such amount may be reduced from
time to time pursuant to Section 2.7 or 2.8.
"Revolving Credit Available Amount" means with respect to each
Lender, at any time, the lesser of (i) the amount of such Lender's Revolving
Commitment at such time
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and (ii) the Borrowing Base at such time multiplied by such Lender's Revolving
Percentage.
"Revolving Credit Period" means the period from and including
the Effective Date to but not including the Maturity Date.
"Revolving Loan" means a loan made by a Lender pursuant to
Section 2.1(b).
"Revolving Percentage" means, with respect to each Lender, the
percentage that such Lender's Revolving Commitment constitutes of the aggregate
amount of the Revolving Commitments.
"S&P" means Standard & Poor's Rating Group.
"Sale-Leaseback Transaction" means any arrangement with any
Person providing for the leasing by the Borrower or any Subsidiary of any
property that, or of any property similar to and used for substantially the
same purposes as any other property that, has been or is to be sold, assigned,
transferred or otherwise disposed of by the Borrower or any of its Subsidiaries
to such Person with the intention of entering into such a lease.
"Security Agreement" means the security agreement
substantially in the form of Exhibit B hereto between each Obligor party
thereto and the Administrative Agent entered into as of the Closing Date and
any security agreement entered into pursuant hereto after the Closing Date, in
each case as amended from time to time.
"Series G Preferred Stock" means the 1,000,000 shares of
Series G Convertible Preferred Stock held by Fiskars Oy Ab, issued in
connection with the closing of the Deltec Acquisition and convertible at any
time at the option of the holder, as in effect on the date hereof and as
amended from time to time in accordance with the terms hereof and thereof.
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"Subordinated Notes" means, at any time, the subordinated
notes, in an aggregate principal amount of not less than $75,000,000 and not
more than $150,000,000, issued pursuant to the Subordinated Note Agreement on
or prior to the Closing Date, having a scheduled maturity not earlier than, and
not requiring any payment of principal prior to, the date that is 10 years from
the Closing Date.
"Subordinated Note Agreement" means the Subordinated Note
Indenture dated as of March 13, 1996 between the Borrower, the guarantors
referred to therein, and the purchasers referred to therein, with regard to the
issuance of at least $75,000,000 in aggregate principal amount of subordinated
notes of the Borrower, substantially in the form delivered to the Lenders prior
to the date hereof, and as amended from time to time in accordance with the
terms thereof and hereof.
"Subsidiary" means, as to any Person, any corporation or other
entity of which securities or other ownership interests having ordinary voting
power to elect a majority of the board of directors or other persons performing
similar functions are at the time directly or indirectly owned by such Person;
unless otherwise specified, "Subsidiary" means a Subsidiary of the Borrower.
"Swing Lender" means Morgan Guaranty Trust Company of New
York, in its capacity as the Swing Lender under the swing loan facility
described in Section 2.1(c), and its successors in such capacity.
"Swing Loan" means a Loan made by the Swing Lender pursuant to
Section 2.1(c).
"Swing Loan Commitment" means $5,000,000 or, if less, the
aggregate amount of the Revolving Commitments.
"Swing Loan Refund Amount" has the meaning set forth in
Section 2.1(d).
"Syndication Date" means the earlier of (i) the 45th day after
the Closing Date and (ii) the date on which
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the Administrative Agent determines, in its sole discretion but after
consultation with the Co-Agents, and the other initial Lenders (and so notifies
the Borrower), that the primary syndication and resulting addition of
institutions as "Lenders" pursuant to Section 10.6 shall have been completed.
"Temporary Cash Investment" means any Investment in (i)
securities issued or unconditionally guaranteed by the United States of America
or any agency or instrumentality thereof, backed by the full faith and credit
of the United States of America and maturing within one year from the date of
acquisition, (ii) securities issued by any state of the United States of
America or any political subdivision or public instrumentality thereof,
maturing within one year from the date of acquisition and, at the time of
acquisition, having a rating of at least A- by S&P or the equivalent by
Moody's, (iii) commercial paper issued by any Person organized under the laws
of the United States of America, maturing no more than one year from the date
of acquisition and, at the time of acquisition, having a rating of at least A-1
or the equivalent thereof by S&P or at least P-1 or the equivalent thereof by
Moody's, (iv) time deposits and certificates of deposit that are insured by the
Federal Deposit Insurance Corporation (the "FDIC") or any successor
instrumentality of the government of the United States of America up to the
applicable limit on insurance granted by the FDIC or such other instrumentality
with respect to such instruments (it being understood that the amount invested
in such instrument may not exceed the limit on such insurance), maturing within
one year from the date of issuance and issued by a bank or trust company
organized under the laws of the United States of America or any state thereof
and having combined capital and surplus of at least $500,000,000, (v)
repurchase obligations with a term not exceeding seven (7) days with respect to
underlying securities of the types described in clause (i) above entered into
with any bank or trust company meeting the qualifications specified in clause
(iv) above and (vi) money market funds substantially all of whose assets are
comprised of securities of the types described in clauses (i) through (v)
above.
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"Term Commitment" means, with respect to each Lender, the
amount set forth opposite the name of such Lender on the signature pages hereof
under the heading "Term Commitments", as such amount may be reduced from time
to time pursuant to Section 2.7.
"Term Loan" means a loan made by a Lender pursuant to Section
2.1(a).
"Unfunded Liabilities" means, with respect to any Plan at any
time, the amount (if any) by which (i) the value of all benefit liabilities
under such Plan, determined on a plan termination basis using the assumptions
prescribed by the PBGC for purposes of Section 4044 of ERISA, exceeds (ii) the
fair market value of all Plan assets allocable to such liabilities under Title
IV of ERISA (excluding any accrued but unpaid contributions), all determined as
of the then most recent valuation date for such Plan, but only to the extent
that such excess represents a potential liability of a member of the ERISA
Group to the PBGC or any other Person under Title IV of ERISA.
"United States" means the United States of America, including
the States and the District of Columbia, but excluding its territories and
possessions.
SECTION 1.2. Accounting Terms and Determinations. Unless
otherwise specified herein, all accounting terms used herein shall be
interpreted, all accounting determinations hereunder shall be made, and all
financial statements required to be delivered hereunder shall be prepared in
accordance with generally accepted accounting principles as in effect from time
to time, applied on a basis consistent (except for changes concurred in by the
Borrower's independent public accountants) with the most recent audited
consolidated financial statements of the Borrower and its Consolidated
Subsidiaries delivered to the Lenders; provided that, if the Borrower notifies
the Administrative Agent that the Borrower wishes to amend any covenant in
Article 5 to eliminate the effect of any change in generally accepted
accounting principles on the operation of such covenant (or if the
Administrative Agent notifies the Borrower that the
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Required Lenders wish to amend Article 5 for such purpose), then the Borrower's
compliance with such covenant shall be determined on the basis of generally
accepted accounting principles in effect immediately before the relevant change
in generally accepted accounting principles became effective, until either such
notice is withdrawn or such covenant is amended in a manner satisfactory to the
Borrower and the Required Lenders.
ARTICLE 2
THE CREDITS
SECTION 2.1. Commitments to Lend.
(a) Term Loans. Each Lender severally agrees, on the terms
and conditions set forth in this Agreement, to make a single loan to the
Borrower on the Closing Date in an aggregate amount not to exceed such Lender's
Term Commitment. The Borrowing pursuant to this Section 2.1(a) shall be made
from the several Lenders ratably in proportion to their respective Term
Commitments. Loans made pursuant to this Section 2.1(a) are not revolving in
nature and amounts of such loans repaid or prepaid may not be reborrowed.
(b) Revolving Loans. Each Lender severally agrees, on the
terms and conditions set forth in this Agreement, to make loans to the Borrower
pursuant to this Section 2.1(b) from time to time during the Revolving Credit
Period in amounts such that the aggregate principal amount of Revolving Loans
by such Lender at any one time outstanding shall not exceed the amount by which
(i) such Lender's Revolving Credit Available Amount exceeds (ii) an amount
equal to such Lender's Revolving Percentage of the sum at such time of (x)
aggregate amount of all Letter of Credit Liabilities plus (y) the aggregate
outstanding principal amount of Swing Loans. Each Borrowing under this Section
shall be in an aggregate principal amount of $5,000,000 or any larger multiple
of $1,000,000 (except that any such Borrowing may be in the aggregate amount of
the
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unused Commitments) and shall be made from the several Lenders ratably in
proportion to their respective Revolving Commitments. Within the foregoing
limits, the Borrower may borrow under this Section, repay, or to the extent
permitted by Section 2.9, prepay Revolving Loans and reborrow at any time
during the Revolving Credit Period under this Section.
(c) Swing Loans. During the Revolving Credit Period, the
Swing Lender agrees, on the terms and conditions set forth in this Agreement,
to make loans to the Borrower pursuant to this Section 2.1(c) from time to time
in amounts such that (i) the aggregate principal amount of Swing Loans does not
at any time exceed the Swing Loan Commitment and (ii) the sum of the aggregate
outstanding principal amount of the Revolving Loans and Swing Loans plus the
aggregate amount of all Letter of Credit Liabilities at such time does not
exceed the aggregate Revolving Commitments or, if less, the Borrowing Base.
Each Borrowing under this Section 2.1(c) shall be in an aggregate principal
amount of $1,000,000 or any larger multiple thereof (except that any such
Borrowing may be in the aggregate available amount of Swing Loans determined in
accordance with the immediately preceding sentence). Within the foregoing
limits, the Borrower may borrow under this Section 2.1(c), repay or, to the
extent permitted by Section 2.9, prepay Swing Loans and reborrow at any time
prior to the Maturity Date under this Section 2.1(c).
(d) Conversion of Swing Loans to Revolving Loans. The Swing
Lender, at any time and from time to time in its sole and absolute discretion
may, on behalf of the Borrower (which hereby irrevocably directs the Swing
Lender to act on its behalf), on notice given by the Swing Lender no later than
11:00 A.M., New York City time, on the proposed date of Borrowing for the
Revolving Loans referred to below, request each Lender to make, and each Lender
hereby agrees to make, a Revolving Loan, in an amount (with respect to each
Lender, its "Swing Loan Refund Amount") equal to such Lender's Revolving
Percentage of the aggregate principal amount of the Swing Loans (the "Refunded
Swing Loans") outstanding on the date of such notice, to repay the Swing
Lender. Unless any of the events described in clause (g) or (h) of Section
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6.1 with respect to the Borrower shall have occurred and be continuing (in
which case the procedures of Section 2.1(e) shall apply), each Lender shall
make such Revolving Loan available to the Administrative Agent at its address
specified in or pursuant to Section 10.1 in immediately available funds, not
later than 12:00 Noon (New York City time), on the date of such notice. Each
such Revolving Loan shall initially be made as a Base Rate Loan. The
Administrative Agent shall pay the proceeds of such Revolving Loans to the
Swing Lender, which shall immediately apply such proceeds to repay Refunded
Swing Loans. Effective on the day such Revolving Loans are made, the portion
of the Swing Loans so paid shall no longer be outstanding as Swing Loans, shall
no longer be due as Swing Loans under the Note held by the Swing Lender, and
shall be due as Revolving Loans under the respective Notes issued to the
Lenders (including the Swing Lender) in accordance with their respective
Revolving Percentages (calculated as set forth above). The Borrower authorizes
the Swing Lender to charge the Borrower's accounts with the Administrative
Agent (up to the amount available in each such account) in order to immediately
pay the amount of such Refunded Swing Loans to the extent amounts received from
the Lenders are not sufficient to repay in full such Refunded Swing Loans.
(e) Purchase of Participations in Swing Loans. If prior
to the time Revolving Loans would have otherwise been made pursuant to Section
2.1(d), one of the events described in clause (g) or (h) of Section 6.1 with
respect to the Borrower shall have occurred and be continuing, each Lender
shall, on the date such Revolving Loans were to have been made pursuant to the
notice referred to in Section 2.1(d) (the "Refunding Date"), purchase an
undivided participating interest in the Swing Loans in an amount equal to such
Lender's Swing Loan Refund Amount. On the Refunding Date, each Lender shall
transfer to the Swing Lender, in immediately available funds, such Lender's
Swing Loan Refund Amount, and upon receipt thereof the Swing Lender shall
deliver to such Lender a Swing Loan participation certificate dated the date of
the Swing Lender's receipt of such funds and in the Swing Loan Refund Amount of
such Lender.
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(f) Payments on Participated Swing Loans. Whenever, at
any time after the Swing Lender has received from any Lender such Lender's
Swing Loan Refund Amount pursuant to Section 2.1(e), the Swing Lender receives
any payment on account of the Swing Loans in which the Lenders have purchased
participations pursuant to Section 2.1(e), the Swing Lender will promptly
distribute to each such Lender its ratable share (determined on the basis of
the Swing Loan Refund Amounts of all of the Lenders) of such payment
(appropriately adjusted, in the case of interest payments, to reflect the
period of time during which such Lender's participating interest was
outstanding and funded); provided, however, that in the event that such payment
received by the Swing Lender is required to be returned, such Lender will
return to the Swing Lender any portion thereof previously distributed to it by
the Swing Lender.
(g) Obligations to Refund or Purchase Participations in Swing
Loans Absolute. Each Lender's obligation to transfer the amount of a Revolving
Loan to the Swing Lender as provided in Section 2.1(d) or to purchase a
participating interest pursuant to Section 2.1(e) shall be absolute and
unconditional and shall not be affected by any circumstance, including, without
limitation, (i) any set-off, counterclaim, recoupment, defense or other right
which such Lender, the Borrower or any other Person may have against the Swing
Lender or any other Person, (ii) the occurrence or continuance of a Default or
an Event of Default or the termination or reduction of the Commitments, (iii)
any adverse change in the condition (financial or otherwise) of the Borrower or
any other Person, (iv) any breach of this Agreement by the Borrower, any other
Lender or any other Person or (v) any other circumstance, happening or event
whatsoever, whether or not similar to any of the foregoing.
SECTION 2.2. Method of Borrowing. (a) The Borrower shall
give the Administrative Agent notice (a "Notice of Borrowing") not later than
11:00 A.M. (New York City time) on (x) the date of each Base Rate Borrowing and
(y) the third Euro-Dollar Business Day before each Euro-Dollar Borrowing, and
not later than 12:00 Noon (New York
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City time) on the date of each Borrowing of a Swing Loan, specifying:
(i) the date of such Borrowing, which shall be a Domestic
Business Day in the case of a Base Rate Borrowing or Swing Borrowing,
or a Euro-Dollar Business Day in the case of a Euro-Dollar Borrowing;
(ii) the aggregate amount of such Borrowing;
(iii) whether the Loans comprising such Borrowing are to bear
interest initially at the Base Rate or a Euro-Dollar Rate,
provided that (i) no Loans shall be specified to bear
interest at the Euro-Dollar Rate prior to the Syndication Date and
(ii) all Swing Loans and, initially, Revolving Loans made
pursuant to Section 2.1(d) shall bear interest based on the Base Rate;
(iv) whether the Loans comprising such Borrowing are to be
Term Loans, Revolving Loans or Swing Loans, and
(v) in the case of a Euro-Dollar Borrowing, the duration of
the Interest Period applicable thereto, subject to the provisions of
the definition of Interest Period.
No more than three Swing Loans may be borrowed during any calendar week.
(b) Upon receipt of a Notice of Borrowing, the Administrative
Agent shall promptly notify each Lender of the contents thereof and of such
Lender's ratable share of such Borrowing and such Notice of Borrowing shall not
thereafter be revocable by the Borrower.
(c) Not later than 12:00 Noon (New York City time) on the
date of each Borrowing (or 1:00 P.M. (New York City time) on the date of each
Swing Borrowing), each Lender (or, in the case of a Swing Loan, the Swing
Lender) shall make available its share of such Borrowing, in Federal or
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other funds immediately available in New York City, to the Administrative Agent
at its address referred to in Section 10.1. Unless the Administrative Agent
determines that any applicable condition specified in Article 3 has not been
satisfied, the Administrative Agent will make the funds so received from the
Lenders available promptly on the date of such Borrowing to the Borrower at the
Administrative Agent's aforesaid address.
(d) Unless the Administrative Agent shall have received
notice from a Lender prior to the date of any Borrowing that such Lender will
not make available to the Administrative Agent such Lender's share of such
Borrowing, the Administrative Agent may assume that such Lender has made such
share available to the Administrative Agent on the date of such Borrowing in
accordance with subsection (c) of this Section and the Administrative Agent
may, in reliance upon such assumption, make available to the Borrower on such
date a corresponding amount. If and to the extent that such Lender shall not
have so made such share available to the Administrative Agent, such Lender and
the Borrower severally agree to repay to the Administrative Agent forthwith on
demand such corresponding amount together with interest thereon, for each day
from the date such amount is made available to the Borrower until the date such
amount is repaid to the Administrative Agent, at (i) in the case of the
Borrower, a rate per annum equal to the higher of the Federal Funds Rate and
the interest rate applicable thereto pursuant to Section 2.5 and (ii) in the
case of such Lender, the Federal Funds Rate. If such Lender shall repay to the
Administrative Agent such corresponding amount, such amount so repaid shall
constitute such Lender's Loan included in such Borrowing for purposes of this
Agreement.
SECTION 2.3. Notes. (a) The Loans of each Lender shall be
evidenced by a single Note payable to the order of such Lender for the account
of its Applicable Lending Office, in an amount equal to the aggregate unpaid
principal amount of such Lender's Loans.
(b) Each Lender may, by notice to the Borrower and the
Administrative Agent, request that its Loans of a
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particular type, or its Term Loans, on the one hand, and its Revolving Loans
and Swing Loans, on the other, be evidenced by a separate Note in an amount
equal to the aggregate unpaid principal amount of such Loans. Each such Note
shall be in substantially the form of Exhibit A hereto with appropriate
modifications to reflect the fact that it evidences solely Loans of the
relevant type. Each reference in this Agreement to the "Note" of such Lender
shall be deemed to refer to and include any or all of such Notes, as the
context may require.
(c) Upon receipt of each Lender's Note pursuant to Section
3.1(a), the Administrative Agent shall forward such Note to such Lender. Each
Lender shall record the date, amount and type of each Loan made by it and the
date and amount of each payment of principal made by the Borrower with respect
thereto, and may, if such Lender so elects in connection with any transfer or
enforcement of its Note, endorse on the schedule forming a part thereof
appropriate notations to evidence the foregoing information with respect to
each such Loan then outstanding; provided that the failure of any Lender to
make any such recordation or endorsement shall not affect the obligations of
the Borrower hereunder or under the Notes. Each Lender is hereby irrevocably
authorized by the Borrower so to endorse its Note and to attach to and make a
part of its Note a continuation of any such schedule as and when required.
SECTION 2.4. Scheduled Termination of Commitments and
Maturity of Loans. (a) The Term Commitments shall terminate at the close of
business on the Closing Date. The Revolving Commitments and the Swing
Commitment shall terminate on the Maturity Date, and any Loans then outstanding
(together with accrued interest thereon) shall be due and payable on such date.
(b) The Borrower shall be obligated to repay, and there shall
become due and payable on each Quarterly Date occurring in the months set forth
below an aggregate principal amount of the Term Loans equal to the amount set
forth below opposite such Quarterly Date; provided that in
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any event the outstanding Term Loans shall be repaid in full not later than the
Maturity Date:
Quarterly Date Amount Quarterly Date Amount
- -------------- ------ -------------- ------
June 1996 $1,250,000 December 1998 $2,083,333
September 1996 1,250,000 March 1999 2,083,333
December 1996 1,250,000 June 1999 3,333,334
March 1997 1,250,000 September 1999 3,333,334
June 1997 2,083,333 December 1999 3,333,334
September 1997 2,083,333 March 2000 3,333,334
December 1997 2,083,333 June 2000 3,750,000
March 1998 2,083,333 September 2000 3,750,000
June 1998 2,083,333 December 2000 3,750,000
September 1998 2,083,333 March 2001 3,750,000
(c) Each repayment pursuant to this Section 2.4 shall be made
together with accrued interest to the date of payment, and shall be applied
ratably to payment of the Term Loans of the several Lenders in proportion to
the aggregate outstanding principal amounts of their Term Loans. Within the
foregoing limits of this Section 2.4, each required payment or prepayment shall
be made with respect to such outstanding Group or Groups of Loans as the
Borrower may designate to the Administrative Agent not less than three
Euro-Dollar Business Days prior to the date required for such payment or
prepayment or, failing such designation by the Borrower, as the Administrative
Agent may specify by notice to the Borrower and the Lenders.
SECTION 2.5. Interest Rates. (a) Each Base Rate Loan shall
bear interest on the outstanding principal amount thereof, for each day from
the date such Loan is made until it becomes due, at a rate per annum equal to
the sum of (x) the Base Rate Margin plus (y) the Base Rate for such day. Such
interest shall be payable in arrears on the last Domestic Business Day of each
month while such Base Rate Loan is outstanding, beginning with the month in
which such Base Rate Loan is made and, with respect to the principal amount of
any Base Rate Loan converted to a Euro-Dollar Loan, on each date a Base Rate
Loan is so converted. Any
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overdue principal of or interest on any Base Rate Loan shall bear interest,
payable on demand, for each day until paid at a rate per annum equal to the sum
of 2% plus the rate otherwise applicable to Base Rate Loans for such day.
(b) Each Euro-Dollar Loan shall bear interest on the
outstanding principal amount thereof, for each day during each Interest Period
applicable thereto, at a rate per annum equal to the sum of (x) the Euro-Dollar
Margin for such day plus (y) the London Interbank Offered Rate applicable to
such Interest Period. Such interest shall be payable for each Interest Period
on the last day thereof and, if such Interest Period is longer than three
months, at intervals of three months after the first day thereof.
The "London Interbank Offered Rate" applicable to any Interest
Period means the average (rounded upward, if necessary, to the next higher 1/16
of 1%) of the respective rates per annum at which deposits in dollars are
offered to each of the Reference Lenders in the London interbank market at
approximately 11:00 A.M. (London time) two Euro-Dollar Business Days before the
first day of such Interest Period in an amount approximately equal to the
principal amount of the Euro-Dollar Loan of such Reference Lender to which such
Interest Period is to apply and for a period of time comparable to such
Interest Period.
(c) Any overdue principal of or interest on any Euro-Dollar
Loan shall bear interest, payable on demand, for each day until paid at a rate
per annum equal to the higher of (i) the sum of 2% plus the Euro-Dollar Margin
for such day plus the London Interbank Offered Rate applicable to such Loan at
the time it became overdue and (ii) the sum of 2% plus the Euro-Dollar Margin
for such day plus the average (rounded upward, if necessary, to the next higher
1/16 of 1%) of the respective rates per annum at which one day (or, if such
amount due remains unpaid more than three Euro-Dollar Business Days, then for
such other period of time not longer than three months as the Administrative
Agent may select) deposits in dollars in an amount approximately equal to such
overdue payment due to each of the Reference Lenders are offered to such
Reference Lender
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in the London interbank market for the applicable period determined as provided
above (or, if the circumstances described in clause (a) or (b) of Section 8.1
shall exist, at a rate per annum equal to the sum of 2% plus the rate
applicable to Base Rate Loans for such day).
(d) Each Swing Loan shall bear interest on the outstanding
principal amount thereof (and, in the case of any amount of overdue Swing Loan,
overdue interest thereon) at a rate for each day equal to the rate that would
be applicable to a Revolving Loan that is a Base Rate Loan on such day.
(e) The Administrative Agent shall determine each interest
rate applicable to the Loans hereunder. The Administrative Agent shall give
prompt notice to the Borrower and the participating Lenders of each rate of
interest so determined, and its determination thereof shall be conclusive in
the absence of manifest error.
(f) Each Reference Lender agrees to use its best efforts to
furnish quotations to the Administrative Agent as contemplated by this Section.
If any Reference Lender does not furnish a timely quotation, the Administrative
Agent shall determine the relevant interest rate on the basis of the quotation
or quotations furnished by the remaining Reference Lender or Lenders or, if
none of such quotations is available on a timely basis, the provisions of
Section 8.1 shall apply.
SECTION 2.6. Fees. (a) During the Revolving Credit Period,
the Borrower shall pay to the Administrative Agent for the account of each
Lender a commitment fee at the Commitment Fee Rate (determined daily in
accordance with the Pricing Schedule) on the daily amount by which such
Lender's Revolving Commitment exceeds the sum of (i) the aggregate outstanding
principal amount of the Revolving Loans and Swing Loans, if any, made by such
Lender and (ii) any Letter of Credit Liabilities of such Lender. Such
commitment fee shall accrue from and including the Effective Date to but
excluding the date of termination of the Revolving Commitments in their
entirety.
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(b) The Borrower shall pay to the Administrative Agent (i)
for the account of the Lenders ratably a letter of credit fee accruing daily on
the aggregate amount then available for drawing under all Letters of Credit at
the Letter of Credit Fee Rate (determined daily in accordance with the Pricing
Schedule) and (ii) for the account of each Issuing Lender a letter of credit
fronting fee accruing daily on the aggregate amount then available for drawing
under all Letters of Credit issued by such Issuing Lender at a rate per annum
equal to 0.25%.
(c) Accrued fees under this Section shall be payable
quarterly in arrears on each Quarterly Date and on the date of termination of
the Commitments in their entirety (and, if later, the date the amount of Letter
of Credit Liabilities shall be reduced to zero).
SECTION 2.7. Optional Termination or Reduction of
Commitments. During the Revolving Credit Period, the Borrower may, upon at
least three Domestic Business Days' notice to the Administrative Agent, (i)
terminate the Revolving Commitments at any time, if no Revolving Loans or Swing
Loans are outstanding at such time and no Letter of Credit Liabilities exist or
(ii) ratably reduce from time to time by an aggregate amount of $10,000,000 or
a larger multiple of $1,000,000, the aggregate amount of the Revolving
Commitments in excess of the sum of the aggregate outstanding principal amount
of the Revolving Loans and the Swing Loans, plus the aggregate amount of Letter
of Credit Liabilities.
SECTION 2.8. Mandatory Incremental Repayments, and Reduction
of Commitments. (a) Term Loans shall be repaid and Revolving Commitments
shall be reduced in the following amounts:
(i) in the event that the Borrower or any of its Subsidiaries
shall at any time, or from time to time, after the date hereof receive
any Net Cash Proceeds of any Reduction Event, an amount equal to the
Reduction Amount thereof; and
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(ii) an amount, for each Fiscal Year ending after the date
hereof, equal to the Reduction Amount of Excess Cash Flow for such
Fiscal Year.
provided that no repayment or reduction with respect to the receipt of any
Major Casualty Proceeds shall be required if (i) promptly after the loss giving
rise to such Major Casualty Proceeds, the Borrower delivers notice to the
Lenders setting forth in reasonable detail the Borrower's plans to restore,
repair or replace the property affected thereby, and the Required Lenders
consent to such use of such proceeds (such consent not to be unreasonably
withheld, but which shall be deemed to be withheld if not obtained within 30
days after the receipt of such proceeds) and (ii) to the extent that such
proceeds are actually so used within one year after such loss. Such reductions
and repayments shall be applied, first, to repay an aggregate principal amount
of the Term Loans until the Term Loans have been repaid in full and,
thereafter, to reduce the Revolving Commitments. Any repayment of Term Loans
required pursuant to this Section 2.8(a) shall be applied to reduce the amount
of subsequent scheduled repayments of Term Loans required pursuant to Section
2.4(b) ratably to all such subsequent scheduled repayments.
(b) The repayments and reductions required by clauses (a)(i)
and (a)(ii) of this Section shall be required or effective, in the case of
clause (a)(i), forthwith upon receipt by the Borrower or any of its
Subsidiaries, as the case may be, of such Net Cash Proceeds (or in the case of
Net Cash Proceeds of any Major Casualty Event as to which the Borrower has
requested the consent of the Required Lenders referred to in clause (a) above,
upon the failure of the Required Lenders to grant such consent or, if earlier,
30 days after the receipt thereof) and, in the case of clause (a)(ii), on the
90th day after the end of the related Fiscal Year; provided that if any such
repayment or reduction in the Commitments pursuant to either clause (a)(i) or
(a)(ii) of this section would otherwise require prepayment of Euro-Dollar Loans
or portions thereof prior to the last day of the then current Interest Period,
such amount may (unless the Required Lenders otherwise direct)
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instead be pledged with the Administrative Agent on terms satisfactory to the
Administrative Agent (and invested in such Temporary Cash Investments as the
Administrative Agent shall select, with interest or income thereon for the
account of the Borrower), and such prepayment may be deferred to the last day
of the Interest Period next ending after the date of such receipt.
(c) If at any time (including, without limitation on the date
of each reduction of Revolving Commitments or as a result of a change in the
Borrowing Base), the aggregate amount of Revolving Credit Available Amounts is
less than the sum of (i) the aggregate outstanding principal amount of
Revolving Loans and Swing Loans plus (ii) the aggregate amount of Letter of
Credit Liabilities, the Borrower shall be obligated to prepay or repay
Revolving Loans and Swing Loans, and collateralize outstanding Letters of
Credit, in such amounts as shall be necessary so that immediately after such
payment the sum of (i) the aggregate outstanding principal amount of Revolving
Loans and Swing Loans plus (ii) the aggregate amount of Letter of Credit
Liabilities does not exceed the aggregate amount of the Revolving Credit
Available Amounts (after giving effect to any reductions on such day).
(d) Each repayment or prepayment pursuant to this Section 2.8
shall be made together with accrued interest to the date of payment, and shall
be applied ratably to payment of the Loans of the several Lenders in proportion
to their Commitments (or, if the Commitments have been terminated, to the
aggregate outstanding principal amounts of their Loans). Within the foregoing
limits of this Section 2.8, each required payment or prepayment shall be made
with respect to such outstanding Group or Groups of Loans (or any Swing Loans)
as the Borrower may designate to the Administrative Agent not less than three
Euro-Dollar Business Days prior to the date required for such payment or
prepayment or, failing such designation by the Borrower, as the Administrative
Agent may specify by notice to the Borrower and the Lenders.
SECTION 2.9. Optional Prepayments. (a) Subject in the case
of any Euro-Dollar Borrowing to Section 2.12,
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the Borrower may, upon at least one Domestic Business Day's notice to the
Administrative Agent, prepay any Group of Base Rate Loans or Swing Loans or
upon at least three Euro-Dollar Business Days' notice to the Administrative
Agent, prepay any Group of Euro-Dollar Loans, in each case in whole at any
time, or from time to time in part in amounts aggregating $5,000,000 (or, in
the case of any Swing Loan, $1,000,000) or any larger multiple of $1,000,000,
by paying the principal amount to be prepaid together with accrued interest
thereon to the date of prepayment. Each such optional prepayment shall be
applied to prepay ratably the Loans of the several Lenders included in such
Group.
(b) Upon receipt of a notice of prepayment pursuant to this
Section, the Administrative Agent shall promptly notify each Lender of the
contents thereof and of such Lender's ratable share of such prepayment and such
notice shall not thereafter be revocable by the Borrower.
(c) Any prepayment of Term Loans pursuant to this Section
shall be applied to reduce the amount of subsequent scheduled repayments of
Term Loans required by Section 2.4 ratably to all the remaining such
repayments.
SECTION 2.10. Method of Electing Interest Rates. (a) The
Loans included in each Borrowing shall bear interest initially at the type of
rate specified by the Borrower in the applicable Notice of Borrowing.
Thereafter, the Borrower may from time to time elect to change or continue the
type of interest rate borne by each Group of Loans (subject in each case to the
provisions of Article 8, and except for any Swing Loan), as follows:
(i) if such Loans are Base Rate Loans, the Borrower may elect
to convert such Loans to Euro-Dollar Loans as of any Euro-Dollar
Business Day, provided that no Loans shall be specified to bear
interest at the Euro-Dollar Rate prior to the Syndication Date; and
(ii) if such Loans are Euro-Dollar Loans, the Borrower may
elect to convert such Loans to Base Rate Loans or elect to continue
such Loans as Euro-Dollar
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Loans for an additional Interest Period, subject to Section 2.12 in
the case of any such conversion or continuation effective on any day
other than the last day of the then current Interest Period applicable
to such Loans.
Each such election shall be made by delivering a notice (a "Notice of Interest
Rate Election") to the Administrative Agent not later than 10:00 A.M. (New York
City time) on the third Euro-Dollar Business Day before the conversion or
continuation selected in such notice is to be effective. A Notice of Interest
Rate Election may, if it so specifies, apply to only a portion of the aggregate
principal amount of the relevant Group of Loans; provided that (i) such portion
is allocated ratably among the Loans comprising such Group and (ii) the portion
to which such Notice applies, and the remaining portion to which it does not
apply, are each $5,000,000 or any larger multiple of $1,000,000.
(b) Each Notice of Interest Rate Election shall specify:
(i) the Group of Loans (or portion thereof) to which such
notice applies;
(ii) the date on which the conversion or continuation
selected in such notice is to be effective, which shall comply with
the applicable clause of subsection (a) above;
(iii) if the Loans comprising such Group are to be converted,
the new type of Loans and, if the Loans being converted are to be
Euro-Dollar Loans, the duration of the next succeeding Interest Period
applicable thereto; and
(iv) if such Loans are to be continued as Euro-Dollar Loans
for an additional Interest Period, the duration of such additional
Interest Period.
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Each Interest Period specified in a Notice of Interest Rate Election shall
comply with the provisions of the definition of Interest Period.
(c) Upon receipt of a Notice of Interest Rate Election from
the Borrower pursuant to subsection (a) above, the Administrative Agent shall
promptly notify each Lender of the contents thereof and such notice shall not
thereafter be revocable by the Borrower. If the Borrower fails to deliver a
timely Notice of Interest Rate Election to the Administrative Agent for any
Group of Euro-Dollar Loans, such Loans shall be converted into Base Rate Loans
on the last day of the then current Interest Period applicable thereto.
(d) An election by the Borrower to change or continue the
rate of interest applicable to any Group of Loans pursuant to this Section
shall not constitute a "Borrowing" subject to the provisions of Section 3.2.
SECTION 2.11. General Provisions as to Payments. (a) The
Borrower shall make each payment of principal of, and interest on, the Loans
and of Letter of Credit Liabilities and interest thereon and of fees hereunder
(other than fees payable directly to the Issuing Lenders), not later than 12:00
Noon (New York City time) on the date when due, in Federal or other funds
immediately available in New York City, to the Administrative Agent at its
address referred to in Section 10.1. The Administrative Agent will promptly
distribute to each Lender its ratable share of each such payment received by
the Administrative Agent for the account of the Lenders. Whenever any payment
of principal of, or interest on, the Base Rate Loans, or of Letter of Credit
Liabilities or interest thereon or of fees shall be due on a day which is not a
Domestic Business Day, the date for payment thereof shall be extended to the
next succeeding Domestic Business Day. Whenever any payment of principal of,
or interest on, the Euro-Dollar Loans shall be due on a day which is not a
Euro-Dollar Business Day, the date for payment thereof shall be extended to the
next succeeding Euro-Dollar Business Day unless such Euro-Dollar Business Day
falls in another calendar month, in which case the date
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for payment thereof shall be the next preceding Euro-Dollar Business Day. If
the date for any payment of principal is extended by operation of law or
otherwise, interest thereon shall be payable for such extended time.
(b) Unless the Administrative Agent shall have received
notice from the Borrower prior to the date on which any payment is due to the
Lenders hereunder that the Borrower will not make such payment in full, the
Administrative Agent may assume that the Borrower has made such payment in full
to the Administrative Agent on such date and the Administrative Agent may, in
reliance upon such assumption, cause to be distributed to each Lender on such
due date an amount equal to the amount then due such Lender. If and to the
extent that the Borrower shall not have so made such payment, each Lender shall
repay to the Administrative Agent forthwith on demand such amount distributed
to such Lender together with interest thereon, for each day from the date such
amount is distributed to such Lender until the date such Lender repays such
amount to the Administrative Agent, at the Federal Funds Rate.
SECTION 2.12. Funding Losses. If the Borrower makes any
payment of principal with respect to any Euro-Dollar Loan or any Euro-Dollar
Loan is converted to a Base Rate Loan (pursuant to Article 2, 6 or 8 or
otherwise) on any day other than the last day of an Interest Period applicable
thereto, or the last day of an applicable period fixed pursuant to Section
2.5(c), or if the Borrower fails to borrow, prepay, convert or continue any
Euro-Dollar Loans after notice has been given to any Lender in accordance with
Section 2.2(b), 2.9(c) or 2.10(a), the Borrower shall reimburse each Lender
within 15 days after demand for any resulting loss or expense incurred by it
(or by an existing or prospective Participant in the related Loan), including
(without limitation) any loss incurred in obtaining, liquidating or employing
deposits from third parties, but excluding loss of margin for the period after
any such payment or conversion or failure to borrow, prepay, convert or
continue, provided that such Lender shall have delivered to the Borrower a
certificate as to the amount of such loss
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or expense, which certificate shall be conclusive in the absence of manifest
error.
SECTION 2.13. Computation of Interest and Fees. Interest
based on the Prime Rate hereunder shall be computed on the basis of a year of
365 days (or 366 days in a leap year) and paid for the actual number of days
elapsed (including the first day but excluding the last day). All other
interest and fees shall be computed on the basis of a year of 360 days and paid
for the actual number of days elapsed (including the first day but excluding
the last day).
SECTION 2.14. Regulation D Compensation. For so long as any
Lender maintains reserves against "Eurocurrency liabilities" (or any other
category of liabilities which includes deposits by reference to which the
interest rate on Euro-Dollar Loans is determined or any category of extensions
of credit or other assets which includes loans by a non-United States office of
such Lender to United States residents), and as a result the cost to such
Lender (or its Euro-Dollar Lending Office) of making or maintaining its
Euro-Dollar Loans is increased, then such Lender may require the Borrower to
pay, contemporaneously with each payment of interest on the Euro-Dollar Loans,
additional interest on the related Euro-Dollar Loan of such Lender at a rate
per annum up to but not exceeding the excess of (i) (A) the applicable London
Interbank Offered Rate divided by (B) one minus the Euro-Dollar Reserve
Percentage over (ii) the applicable London Interbank Offered Rate. Any Lender
wishing to require payment of such additional interest (x) shall so notify the
Borrower and the Administrative Agent, in which case such additional interest
on the Euro-Dollar Loans of such Lender shall be payable to such Lender at the
place indicated in such notice with respect to each Interest Period commencing
at least three Euro-Dollar Business Days after the giving of such notice and
(y) shall furnish to the Borrower at least five Euro-Dollar Business Days prior
to each date on which interest is payable on the Euro-Dollar Loans an Officer's
certificate setting forth the amount to which such Lender is then entitled
under this Section (which shall be consistent with such Lender's good faith
estimate
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of the level at which the related reserves are maintained by it). Each such
certificate shall be accompanied by such information as the Borrower may
reasonably request as to the computation set forth therein.
SECTION 2.15. Letters of Credit. (a) On the Closing Date,
each letter of credit listed on Schedule 1 hereto shall be deemed to be issued
under this Section 2.15(a) and shall be deemed to be a Letter of Credit for all
purposes hereof. Subject to the terms and conditions hereof, each Issuing
Lender agrees to issue letters of credit hereunder from time to time before the
tenth day before the Maturity Date upon the request of the Borrower (the
"Letters of Credit"); provided that, immediately after each Letter of Credit is
issued, the aggregate amount of the Letter of Credit Liabilities shall not
exceed the Available LC Amount. Upon the date of issuance by an Issuing Lender
of a Letter of Credit, the Issuing Lender shall be deemed, without further
action by any party hereto, to have sold to each Lender, and each Lender shall
be deemed, without further action by any party hereto, to have purchased from
the Issuing Lender, a participation in such Letter of Credit and the related
Letter of Credit Liabilities in proportion to their respective Revolving
Percentages.
(b) The Borrower shall give the Issuing Lender notice at
least five days prior to the requested issuance of a Letter of Credit
specifying the date such Letter of Credit is to be issued, and describing the
terms of such Letter of Credit and the nature of the transactions to be
supported thereby (such notice, including any such notice given in connection
with the extension of a Letter of Credit, a "Notice of Issuance"). Upon
receipt of a Notice of Issuance, the Issuing Lender shall promptly notify the
Administrative Agent, and the Administrative Agent shall promptly notify each
Lender of the contents thereof and of the amount of such Lender's participation
in such Letter of Credit. The issuance by the Issuing Lender of each Letter of
Credit shall, in addition to the conditions precedent set forth in Article 3,
be subject to the conditions precedent that such Letter of Credit shall be in
such form and contain such terms as shall be satisfactory to the Issuing Lender
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and that the Borrower shall have executed and delivered such other instruments
and agreements relating to such Letter of Credit as the Issuing Lender shall
have reasonably requested. The Borrower shall also pay to the Issuing Lender
for its own account issuance, drawing, amendment and extension charges in the
amounts and at the times as agreed between the Borrower and the Issuing Lender.
The extension or renewal of any Letter of Credit shall be deemed to be an
issuance of such Letter of Credit, and if any Letter of Credit contains a
provision pursuant to which it is deemed to be extended unless notice of
termination is given by the Issuing Lender, the Issuing Lender shall timely
give such notice of termination unless it has theretofore timely received a
Notice of Issuance and the other conditions to issuance of a Letter of Credit
have also theretofore been met with respect to such extension. Except as set
forth on Schedule 1 hereto, no Letter of Credit shall have a term of more than
one year; provided that a Letter of Credit may contain a provision pursuant to
which it is deemed to be extended on an annual basis unless notice of
termination is given by the Issuing Lender; provided further that no Letter of
Credit shall have a term extending or be so extendible beyond the Maturity
Date.
(c) Upon receipt from the beneficiary of any Letter of Credit
of any notice of a drawing under such Letter of Credit, the Issuing Lender
shall notify the Administrative Agent and the Administrative Agent shall
promptly notify the Borrower and each other Lender as to the amount to be paid
as a result of such demand or drawing and the payment date. The Borrower shall
be irrevocably and unconditionally obligated forthwith to reimburse the Issuing
Lender for any amounts paid by the Issuing Lender upon any drawing under any
Letter of Credit, without presentment, demand, protest or other formalities of
any kind. All such amounts paid by the Issuing Lender and remaining unpaid by
the Borrower shall bear interest, payable on demand, for each day until paid at
a rate per annum equal to the sum of 2% plus the rate applicable to Base Rate
Loans for such day. In addition, each Lender will pay to the Administrative
Agent, for the account of the Issuing Lender, immediately upon the Issuing
Lender's demand at any time during the
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period commencing after such drawing until reimbursement therefor in full by
the Borrower, an amount equal to such Lender's ratable share of such drawing
(in proportion to its participation therein), together with interest on such
amount for each day from the date of the Issuing Lender's demand for such
payment (or, if such demand is made after 12:00 Noon (New York City time) on
such date, from the next succeeding Domestic Business Day) to the date of
payment by such Lender of such amount at a rate of interest per annum equal to
the rate applicable to Base Rate Loans for such period. The Issuing Lender
will pay to each Lender ratably all amounts received from the Borrower for
application in payment of its reimbursement obligations in respect of any
Letter of Credit, but only to the extent such Lender has made payment to the
Issuing Lender in respect of such Letter of Credit pursuant hereto.
(d) The obligations of the Borrower and each Lender under
subsection (c) above shall be absolute, unconditional and irrevocable, and
shall be performed strictly in accordance with the terms of this Agreement,
under all circumstances whatsoever, including without limitation the following
circumstances:
(i) any lack of validity or enforceability of this Agreement
or any Letter of Credit or any document related hereto or thereto;
(ii) any amendment or waiver of or any consent to departure
from all or any of the provisions of this Agreement or any Letter of
Credit or any document related hereto or thereto;
(iii) the use which may be made of the Letter of Credit by,
or any acts or omission of, a beneficiary of a Letter of Credit (or
any Person for whom the beneficiary may be acting);
(iv) the existence of any claim, set-off, defense or other
rights that the Borrower may have at any time against a beneficiary
of a Letter of Credit (or any Person for whom the beneficiary may be
acting), the
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Lenders (including the Issuing Lender) or any other Person, whether in
connection with this Agreement or the Letter of Credit or any document
related hereto or thereto or any unrelated transaction;
(v) any statement or any other document presented under a Letter
of Credit proving to be forged, fraudulent or invalid in any respect
or any statement therein being untrue or inaccurate in any respect
whatsoever;
(vi) payment under a Letter of Credit against presentation to the
Issuing Lender of a draft or certificate that does not comply with the
terms of the Letter of Credit, provided that the Issuing Lender's
determination that documents presented under the Letter of Credit
comply with the terms thereof shall not have constituted gross
negligence or willful misconduct of the Issuing Lender; or
(vii) any other act or omission to act or delay of any kind by any
Lender (including the Issuing Lender), the Administrative Agent or any
other Person or any other event or circumstance whatsoever that might,
but for the provisions of this subsection (vii), constitute a legal or
equitable discharge of the Borrower's or the Lender's obligations
hereunder.
(e) The Borrower hereby indemnifies and holds harmless each
Lender (including each Issuing Lender) and the Administrative Agent from and
against any and all claims, damages, losses, liabilities, costs or expenses
which such Lender or the Administrative Agent may incur (including, without
limitation, any claims, damages, losses, liabilities, costs or expenses which
the Issuing Lender may incur by reason of or in connection with the failure of
any other Lender to fulfill or comply with its obligations to such Issuing
Lender hereunder (but nothing herein contained shall affect any rights the
Borrower may have against such defaulting Lender)), and none of the Lenders
(including an Issuing Lender) nor the Administrative Agent nor any of their
officers or directors or employees or agents shall be
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liable or responsible, by reason of or in connection with the execution and
delivery or transfer of or payment or failure to pay under any Letter of
Credit, including without limitation any of the circumstances enumerated in
subsection (d) above, as well as (i) any error, omission, interruption or delay
in transmission or delivery of any messages, by mail, cable, telegraph, telex
or otherwise, (ii) any error in interpretation of technical terms, (iii) any
loss or delay in the transmission of any document required in order to make a
drawing under a Letter of Credit, (iv) any consequences arising from causes
beyond the control of the Issuing Lender, including without limitation any
government acts, or any other circumstances whatsoever in making or failing to
make payment under such Letter of Credit; provided that the Borrower shall not
be required to indemnify the Issuing Lender for any claims, damages, losses,
liabilities, costs or expenses, and the Borrower shall have a claim for direct
(but not consequential) damage suffered by it, to the extent caused by (x) the
willful misconduct or gross negligence of the Issuing Lender in determining
whether a request presented under any Letter of Credit complied with the terms
of such Letter of Credit or (y) the Issuing Lender's failure to pay under any
Letter of Credit after the presentation to it of a request strictly complying
with the terms and conditions of the Letter of Credit. Nothing in this
subsection (e) is intended to limit the obligations of the Borrower under any
other provision of this Agreement. To the extent the Borrower does not
indemnify an Issuing Lender as required by this subsection, the Lenders agree
to do so ratably in accordance with their Revolving Commitments.
ARTICLE 3
CONDITIONS
SECTION 3.1. Closing. The closing hereunder shall occur upon
the satisfaction of the following events (in the case of each document to be
received, each dated the Closing Date unless otherwise indicated):
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(a) receipt by the Administrative Agent of a duly executed
original Note for the account of each Lender dated on or before the
Closing Date complying with the provisions of Section 2.3;
(b) receipt by the Administrative Agent of an opinion of
Smith Helms Mulliss & Moore, L.L.P., counsel for the Obligors,
substantially in the form of Exhibit D hereto and covering such
additional matters relating to the transactions contemplated hereby as
the Required Lenders may reasonably request;
(c) receipt by the Administrative Agent of an opinion of (i)
Davis Polk & Wardwell, special New York counsel for the Administrative
Agent, substantially in the form of Exhibit E-1 hereto and (ii)
special counsel for the Agents in each of the United Kingdom, Hong
Kong, Finland, Germany, the U.S. Virgin Islands, France, Canada and
Mexico, in the forms attached as Exhibit E-2, and each covering such
additional matters relating to the transactions contemplated hereby as
the Agents may reasonably request;
(d) receipt by the Administrative Agent of duly executed
counterparts of each of the Collateral Documents, together with
evidence satisfactory to the Administrative Agent of the effectiveness
and perfection (to the extent required thereby) of the Liens
contemplated thereby, including the filing of UCC-1's and the delivery
of any promissory notes and stock certificates comprising the
Collateral;
(e) receipt by the Administrative Agent of evidence
satisfactory to it that the commitments under the Existing Credit
Agreement have terminated, all loans thereunder have been repaid in
full (all Lenders hereunder which are also banks under the Existing
Credit Agreement hereby agreeing that such repayment may be made,
whether or not at the end of interest periods under the Existing
Credit Agreement, but subject in any event to payment by the Borrower
of all funding losses, if any due with respect thereto under
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such Credit Agreement) and all accrued fees and other amounts payable
thereunder have been paid in full;
(f) satisfaction of the Required Lenders with the form and
substance of the Deltec Acquisition Documents (which the
Administrative Agent may conclude exists unless it shall have received
notice from the Required Lenders to the contrary), and receipt by the
Administrative Agent of (x) each opinion, report, and other document
required to be delivered pursuant to the Deltec Acquisition Documents
in connection with the Deltec Acquisition and (y) evidence
satisfactory to it of the satisfaction (without waiver) of all other
conditions to the closing of the Deltec Acquisition on the Closing
Date, and that all transactions contemplated by the Deltec Acquisition
Documents to be consummated on the closing date of the Deltec
Acquisition will take place prior to or simultaneously with the
transactions hereunder contemplated to take place on the Closing Date;
and satisfaction of the Required Lenders with (i) the terms and
conditions of the Deltec Acquisition Documents, (ii) the tax treatment
of the Deltec Acquisition and (iii) the corporate structure and the
capitalization of the Borrower and its Subsidiaries;
(g) satisfaction of the Required Lenders with the form and
substance (including without limitation interest rate) of the
Subordinated Note Agreement and Subordinated Notes (which the
Administrative Agent may conclude exists unless it shall have received
notice from the Required Lenders to the contrary), and receipt by the
Administrative Agent of evidence satisfactory to it that the Borrower
shall have issued, not later than the time of the Closing Date and
first Borrowing hereunder, the Subordinated Notes for an aggregate
gross proceeds to the Borrower of not less than $75,000,000 having a
scheduled maturity not earlier than, and not requiring any payment of
principal prior to, the date that is 10 years from the Closing Date;
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(h) receipt by the Borrower of the Net Cash Proceeds of the
Subordinated Notes;
(i) the Administrative Agent shall not have received notice
from the Lenders that, in their reasonable determination, any material
adverse change shall have occurred or be threatened in the financial
condition, results of operations, business, properties or prospects,
or any event or condition which is reasonably likely to result in such
a material adverse change, with respect to (x) the Borrower and its
Subsidiaries, taken as a whole, since the date of the most recent
audited balance sheet heretofore received by the Lenders or (y) Deltec
and its Subsidiaries, taken as a whole, since the date of the year-end
management report heretofore received by the Lenders;
(j) completion of, and satisfaction by the Lenders in their
sole good faith discretion with the scope and results of, their due
diligence review of financial, legal, tax and other matters concerning
the Borrower and its Subsidiaries and Deltec and its Subsidiaries,
which review may include but not be limited to review of financial
performance, consultation with customers of the Borrower and its
Subsidiaries and Deltec and its Subsidiaries, and review of material
contracts;
(k) receipt by the Lenders, not less than three days before
the Closing Date, of any information they may have theretofore
requested concerning the financial condition, results of operations,
liabilities (contingent and otherwise, including with respect to
environmental liabilities and employee and retiree benefits) and
prospects of, and the financial reporting and accounting systems and
the management information systems of, the Borrower and its
Subsidiaries (including after giving effect to the Deltec
Acquisition); and confirmation satisfactory to the Lenders, after
consultation with management of the Borrower, Arthur Anderson L.L.P,
as independent public accountants for the Borrower, and any
independent
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environmental consultant or independent accountant retained by the
Lenders, of all such information; and satisfaction of the Lenders in
their sole good faith discretion with all such information;
(l) receipt by the Administrative Agent, for its own account
and for the accounts of the Lenders, of all fees payable on or before
the Closing Date;
(m) receipt by the Administrative Agent of the documents
referred to in Section 5.3(c) required to be delivered on or before
the Closing Date; and
(n) receipt by the Administrative Agent of all documents the
Administrative Agent may reasonably request relating to the existence
of the Obligors, the corporate authority for and the validity of the
Loan Documents and the Deltec Acquisition, and any other matters
relevant hereto, all in form and substance satisfactory to the
Administrative Agent.
The Administrative Agent shall promptly notify the Borrower and the Lenders of
the Closing Date, and such notice shall be conclusive and binding on all
parties hereto.
SECTION 3.2. Borrowings and Issuances of Letters of Credit.
The obligation of any Lender to make a Loan on the occasion of any Borrowing
other than a Refunding Swing Loan, and of an Issuing Lender to issue (which
shall be deemed to include any renewal or extension of the term of) a Letter of
Credit on the occasion of a request therefor (including, without limitation,
any of the foregoing to occur on the Closing Date) is subject to the
satisfaction of the following conditions:
(a) the fact that the Closing Date shall have occurred on or
prior to March 31, 1996;
(b) receipt by the Administrative Agent of a Notice of
Borrowing as required by Section 2.2 or receipt by the Issuing Lender
of a Notice of Issuance as required by Section 2.15(b);
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(c) receipt by the Administrative Agent of the most recent
Borrowing Base Certificate required to be delivered pursuant to
Section 5.1(i) hereof;
(d) the fact that, immediately after such Borrowing or
issuance of a Letter of Credit, the sum of the aggregate outstanding
principal amount of the Revolving Loans and Swing Loans and the
aggregate amount of Letter of Credit Liabilities will not exceed the
aggregate Revolving Credit Available Amounts;
(e) the fact that, immediately before and after such
Borrowing or issuance of a Letter of Credit, no Default shall have
occurred and be continuing; and
(f) the fact that the representations and warranties of the
Obligors contained in this Agreement shall be true on and as of the
date of such Borrowing or issuance of a Letter of Credit.
Each Borrowing and issuance of a Letter of Credit hereunder shall be deemed to
be a representation and warranty by the Borrower on the date of such Borrowing
as to the facts specified in clauses (d), (e) and (f) of this Section.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants, and each Guarantor
represents and warrants, with respect to itself only, as to the matters set
forth in Section 4.12, (including, in the case of any such representation and
warranty made or deemed made before the consummation of the Deltec Acquisition,
at the time such representation and warranty is made or deemed made and
immediately after giving effect to the consummation of the Deltec Acquisition),
that:
SECTION 4.1. Corporate Existence and Power. The Borrower is
a corporation duly incorporated, validly existing and in good standing under
the laws of the
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jurisdiction of its incorporation, and has all corporate powers and all
material governmental licenses, authorizations, consents and approvals required
to carry on its business as now conducted.
SECTION 4.2. Corporate and Governmental Authorization; No
Contravention. The execution, delivery and performance by the Borrower of the
Loan Documents to which it is a party are within the corporate powers of the
Borrower, have been duly authorized by all necessary corporate action, require
no action by or in respect of, or filing with, any governmental body, agency or
official and do not contravene, or constitute a default under, any provision of
applicable law or regulation or of the certificate of incorporation or by-laws
of the Borrower or of any agreement, judgment, injunction, order, decree or
other instrument binding upon the Borrower or any of its Subsidiaries or result
in the creation or imposition of any Lien (other than Liens under the Loan
Documents) on any asset of the Borrower or any of its Subsidiaries.
SECTION 4.3. Binding Effect. The Loan Documents (other than
the Notes) to which the Borrower is a party constitute valid and binding
agreements of the Borrower and each Note, when executed and delivered in
accordance with this Agreement, will constitute a valid and binding obligation
of the Borrower, in each case enforceable in accordance with its terms except
(i) as may be limited by bankruptcy, insolvency or similar laws affecting
creditors ' rights generally and (ii) as rights of acceleration and the
availability of equitable remedies may be limited by equitable principles of
general applicability.
SECTION 4.4. Financial Information. (a) The (i)
consolidated balance sheet of the Borrower and its Consolidated Subsidiaries as
of September 30, 1995 and the related consolidated statements of income and
cash flows for the Fiscal Year then ended, reported on by Arthur Andersen & Co.
and set forth in the Borrower's 1995 Form 10-K, a copy of which has been
delivered to each of the Lenders, and (ii) consolidating balance sheet of the
Borrower and its Consolidated Subsidiaries as of September 30, 1995 and the
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related consolidating statements of income for the Fiscal Year then ended, each
fairly present, in conformity with generally accepted accounting principles,
the consolidated or consolidating (as applicable) financial position of the
Borrower and its Consolidated Subsidiaries as of such date and their
consolidated or consolidated (as applicable) results of operations and
consolidated cash flows for such Fiscal Year.
(b) Since September 30, 1995, there has been no material
adverse change in the business, financial position, results of operations or
prospects of the Borrower and its Consolidated Subsidiaries, considered as a
whole (both before and after giving effect to the Deltec Acquisition, and
including Deltec and its Subsidiaries after the Deltec Acquisition).
(c) The consolidated balance sheet of Deltec and its
consolidated Subsidiaries as of September 30, 1995 and the related consolidated
statements of income and cash flows for the nine months then ended, copies of
which have been delivered to each of the Lenders, fairly present, in conformity
with generally accepted accounting principles, the consolidated financial
position of Deltec and its consolidated Subsidiaries as of such date and their
consolidated results of operations and cash flows for such period.
(d) From September 30, 1995 to the Closing Date, there has
been no material adverse change in the business, financial position, results of
operations or prospects of Deltec and its Subsidiaries, considered as a whole.
(e) The pro forma balance sheet of the Borrower and its
Consolidated Subsidiaries as of December 31, 1995 with respect to the Borrower
and its Consolidated Subsidiaries, copies of which have been delivered to each
of the Lenders, fairly presents, in conformity with generally accepted
accounting principles applied on a basis consistent with the financial
statements referred to in Section 4.4(a), the consolidated financial position
of the Borrower and its Consolidated Subsidiaries as of such date, adjusted to
give
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effect (as if such events had occurred on such date) to (A) the Deltec
Acquisition and other transactions contemplated by the Deltec Acquisition
Documents, (B) the making of the Loans and the issuance of the Letters of
Credit to be made or issued on the Closing Date, (C) the issuance of the
Subordinated Notes on or before the Closing Date, (D) the application of the
proceeds from the foregoing as contemplated by the Deltec Acquisition
Documents, this Agreement and the Subordinated Note Agreement and (E) the
payment of all legal, accounting and other fees related thereto to the extent
known at the time of the preparation of such balance sheet. As of the date of
such balance sheet and the date hereof, the Borrower and its Consolidated
Subsidiaries (on a pro forma basis as aforesaid) had and (except as incurred
since the date of such balance sheet in the ordinary course of business) have
no material liabilities, contingent or o properly reflected on such balance
sheet.
SECTION 4.5. Litigation. Except as set forth on Schedule
4.5, there is no action, suit or proceeding pending against, or to the
knowledge of the Borrower threatened against or affecting, the Borrower or any
of its Subsidiaries before any court or arbitrator or any governmental body,
agency or official in which there is a reasonable possibility of an adverse
decision which could materially adversely affect the business, consolidated
financial position or consolidated results of operations of the Borrower and
its Consolidated Subsidiaries, considered as a whole, or which in any manner
draws into question the validity or enforceability of the Loan Documents or
challenges the Deltec Acquisition.
SECTION 4.6. Compliance with ERISA. Each member of the ERISA
Group has fulfilled its obligations under the minimum funding standards of
ERISA and the Internal Revenue Code with respect to each Plan and is in
compliance in all material respects with the presently applicable provisions of
ERISA and the Internal Revenue Code with respect to each Plan. No member of
the ERISA Group has (i) sought a waiver
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of the minimum funding standard under Section 412 of the Internal Revenue Code
in respect of any Plan, (ii) failed to make any contribution or payment to any
Plan or Multiemployer Plan or in respect of any Benefit Arrangement, or made
any amendment to any Plan or Benefit Arrangement, which has resulted or could
result in the imposition of a Lien or the posting of a bond or other security
under ERISA or the Internal Revenue Code or (iii) incurred any liability under
Title IV of ERISA other than a liability to the PBGC for premiums under Section
4007 of ERISA.
SECTION 4.7. Environmental Matters. In the ordinary course
of its business, the Borrower conducts an ongoing review of the effect of
Environmental Laws on the business, operations and properties of the Borrower
and its Subsidiaries, in the course of which it identifies and evaluates
associated liabilities and costs (including, without limitation, any capital or
operating expenditures required for clean-up or closure of properties presently
or previously owned, any capital or operating expenditures required to achieve
or maintain compliance with environmental protection standards imposed by law
or as a condition of any license, permit or contract, any related constraints
on operating activities, including any periodic or permanent shutdown of any
facility or reduction in the level of or change in the nature of operations
conducted thereat, any costs or liabilities in connection with off-site
disposal of wastes or Hazardous Substances, and any actual or potential
liabilities to third parties, including employees, and any related costs and
expenses). On the basis of this review, the Borrower has reasonably concluded
that such associated liabilities and costs, including the costs of compliance
with Environmental Laws, are unlikely to have a material adverse effect on the
business, financial condition, results of operations or prospects of the
Borrower and its Consolidated Subsidiaries, considered as a whole.
SECTION 4.8. Taxes. The Borrower and its Subsidiaries have
filed all United States Federal income tax returns and all other material tax
returns which are required to be filed by them and have paid all taxes due
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pursuant to such returns or pursuant to any assessment received by the Borrower
or any Subsidiary. The charges, accruals and reserves on the books of the
Borrower and its Subsidiaries in respect of taxes or other governmental charges
are, in the opinion of the Borrower, adequate.
SECTION 4.9. Subsidiaries. Each of the Borrower's corporate
Subsidiaries is a corporation duly incorporated, validly existing and in good
standing under the laws of its jurisdiction of incorporation, and has all
corporate powers and all material governmental licenses, authorizations,
consents and approvals required to carry on its business as now conducted,
except for any of the foregoing the failure of which to have could not in the
aggregate have a material adverse effect on the business, financial position,
results of operations or prospects of the Borrower and its Consolidated
Subsidiaries, considered as a whole, or the rights and remedies of the Lenders
under the Loan Documents. On the Closing Date and after giving effect to the
Deltec Acquisition, (i) each of the Subsidiaries of the Borrower, other than
International Subsidiaries, is a Guarantor and (ii) the Borrower and its
Subsidiaries (other than International Subsidiaries) have pledged, pursuant to
the Pledge Agreements, all of the capital stock of the Borrower's Subsidiaries
other than (x) the Deltec Seller Stock, (y) up to 35% of the capital stock of
each International Subsidiary owned by the Borrower or a Subsidiary other than
an International Subsidiary and (z) capital stock of each International
Subsidiary owned by an International Subsidiary.
SECTION 4.10. Regulatory Restrictions on Borrowing. The
Borrower is not an "investment company" within the meaning of the Investment
Company Act of 1940, as amended, a "holding company" within the meaning of the
Public Utility Holding Company Act of 1935, as amended, or otherwise subject to
any regulatory scheme which restricts its ability to incur debt.
SECTION 4.11. Full Disclosure. All information heretofore
furnished by the Borrower to any Agent or any Lender for purposes of or in
connection with this Agreement
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or any transaction contemplated hereby is, and all such information hereafter
furnished by the Borrower to the Agent or any Lender will be, true and accurate
in all material respects on the date as of which such information is stated or
certified. The Borrower has disclosed to the Lenders in writing any and all
facts which materially and adversely affect or may affect (to the extent the
Borrower can now reasonably foresee), the business, operations or financial
condition of the Borrower and its Consolidated Subsidiaries, taken as a whole,
or the ability of the Obligors to perform their obligations under the Loan
Documents.
SECTION 4.12. Representations of Guarantors. Each Guarantor
is a corporation duly incorporated, validly existing and in good standing under
the laws of the jurisdiction of its incorporation, and has all corporate powers
and all material governmental licenses, authorizations, consents and approvals
required to carry on its business as now conducted. The execution, delivery
and performance by each Guarantor of the Loan Documents to which it is a party
are within such Guarantor's corporate powers, have been duly authorized by all
necessary corporate action, require no action by or in respect of, or filing
with, any governmental body, agency or official and do not contravene, or
constitute a default under, any provision of applicable law or regulation or of
the certificate of incorporation or by-laws of such Guarantor or of any
agreement, judgment, injunction, order, decree or other instrument binding upon
such Guarantor or result in the creation or imposition of any Lien on any asset
of such Guarantor. The Loan Documents to which each Guarantor is a party
constitute valid and binding agreements of such Guarantor, in each case
enforceable against such Guarantor in accordance with their respective terms
except (i) as may be limited by bankruptcy, insolvency or similar laws
affecting creditors' rights generally and (ii) as rights of acceleration and
the availability of equitable remedies may be limited by equitable principles
of general applicability. Each of the representations and warranties of the
Obligors contained in the Collateral Documents is true and correct.
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SECTION 4.13. Deltec Acquisition Documents. The
representations and warranties contained in the Deltec Acquisition Documents of
the Borrower and, to the best knowledge of the Borrower, each other party
thereto are, and shall be, true in all material respects on the date hereof and
the Closing Date.
ARTICLE 5
COVENANTS
The Borrower agrees that, so long as any Lender has any
Commitment hereunder or any amount payable under any Note or any Letter of
Credit Liability remains unpaid:
SECTION 5.1. Information. The Borrower will deliver to each
of the Lenders:
(a) as soon as available and in any event within 90 days
after the end of each Fiscal Year, a consolidated and consolidating
balance sheet of the Borrower and its Consolidated Subsidiaries as of
the end of such Fiscal Year and the related consolidated and
consolidating statements of income and consolidated statement of cash
flows for such Fiscal Year, setting forth in the case of such
consolidated financial statements in comparative form the figures for
the previous Fiscal Year, all certified by the chief financial officer
or chief accounting officer of the Borrower as to fairness of
presentation, generally accepted accounting principles and consistency
and, in the case of such consolidated financial statements, reported
on in a manner acceptable to the Securities and Exchange Commission by
Arthur Andersen & Co. or other independent public accountants of
nationally recognized standing;
(b) as soon as available and in any event within 45 days
after the end of each of the first three quarters of each Fiscal Year
of the Borrower, an unaudited consolidated and consolidating balance
sheet
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of the Borrower and its Consolidated Subsidiaries as of the end of
such quarter and the related consolidated and consolidating statements
of income and consolidated cash flows for such quarter and for the
portion of the Borrower's Fiscal Year ended at the end of such
quarter, setting forth in the case of such consolidated statements of
income and cash flows, in comparative form the figures for the
corresponding quarter and the corresponding portion of the Borrower's
previous Fiscal Year, all certified (subject to normal year-end
adjustments) as to fairness of presentation, generally accepted
accounting principles and consistency by the chief financial officer
or the chief accounting officer of the Borrower;
(c) as soon as available and in any event within 30 days
after the end of each month of the Borrower (or, in the case of the
months ending March 31, 1996, April 30, 1996 and May 31, 1996, 45 days
after the end of each such month), an unaudited summary consolidated
balance sheet of the Borrower and its Consolidated Subsidiaries as of
the end of such month and the related summary consolidated statements
of income and cash flows for such month and for the portion of the
Borrower's Fiscal Year ended at the end of such month, setting forth
in comparative form the figures for the corresponding month and the
corresponding portion of the Borrower's previous Fiscal Year, all
certified (subject to normal quarterly and year-end adjustments) as to
fairness of presentation, generally accepted accounting principles (as
applicable) and consistency by the chief financial officer or the
chief accounting officer of the Borrower;
(d) simultaneously with the delivery of each set of financial
statements referred to in clauses (a) and (b) above, a certificate of
the chief financial officer or the chief accounting officer of the
Borrower (i) setting forth in reasonable detail the calculations
required to establish whether the Borrower was in compliance with the
requirements of Sections 5.7, 5.9 through 5.14, inclusive, and 5.18
through 5.21,
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inclusive, on the date of such financial statements, (ii) if such
certificate is delivered with financial statements referred to in
clause (a), setting forth in reasonable detail the computation of
Excess Cash Flow for the Fiscal Year to which such financial
statements relate, certified as having been prepared from such
financial statements in accordance with this Agreement, (iii) stating
whether any Subsidiary has been created or acquired, and whether any
Immaterial Subsidiary has ceased to be an Immaterial Subsidiary, since
the delivery of the last such certificate (or in the case of the first
such certificate, since the date hereof) and describing in reasonable
detail any such Subsidiary and (iv) stating whether any Default exists
on the date of such certificate and, if any Default then exists,
setting forth the details thereof and the action which the Borrower is
taking or proposes to take with respect thereto;
(e) simultaneously with the delivery of each set of financial
statements referred to in clause (a) above, a statement of the firm of
independent public accountants which reported on such statements (i)
whether anything has come to their attention to cause them to believe
that any Default existed on the date of such statements and (ii)
confirming the calculations set forth in the officer's certificate
delivered simultaneously therewith pursuant to clause (d) above;
(f) within five days after any officer of the Borrower
obtains knowledge of any Default, if such Default is then continuing,
a certificate of the chief financial officer or the chief accounting
officer of the Borrower setting forth the details thereof and the
action which the Borrower is taking or proposes to take with respect
thereto;
(g) promptly upon the mailing thereof to the shareholders of
the Borrower generally, copies of all financial statements, reports
and proxy statements so mailed;
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(h) promptly upon the filing thereof, copies of all
registration statements (other than the exhibits thereto and any
registration statements on Form S-8 or its equivalent) and reports on
Forms 10-K, 10-Q and 8-K (or their equivalents) which the Borrower
shall have filed with the Securities and Exchange Commission, and
copies of (i) all financial statements, reports, notices and proxy
statements that any Obligor shall send or make available generally to
its stockholders, (ii) all registration statements and prospectuses
that any Obligor shall render to or file with the Securities and
Exchange Commission, the National Association of Securities Dealers or
any national securities exchange, (iii) all material reports and other
statement (other than routine reports prepared in the ordinary course
of business that would not result in any adverse action) that any
Obligor may render to or file with any other governmental authority,
including, without limitation, the Environmental Protection Agency and
state and federal environmental and health authorities and agencies
and (iv) all press releases and other statements that any Obligor
shall make available generally to the public concerning developments
in the business of the Borrower or any of its Subsidiaries, other than
press releases or statements issued in the ordinary course of
business;
(i) at each of the following dates, determined as of the
following dates specified: a Borrowing Base Certificate (x) as
soon as available (and in any event within fifteen days) after the
last day of each calendar month of the Borrower, determined as of the
last business day of such calendar month, (y) as soon as available
(and in any event within five days) after each of the fifteenth day
and the last day of each calendar month of the Borrower, determined as
of such fifteenth day and last day, and (z) within five days after
receipt of a request therefor (which may be given from time to time)
from the Required Lenders, determined as of the date of such request;
provided that in the case of clauses (y) and (z) above, the
determination of the Borrowing Base shall be an
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estimate by the Borrower, subject to normal month-end adjustments and
determined in good faith using reasonable methods consistent with the
accounting methods used in the financial statements most recently
delivered pursuant to Section 4.4(a) or 5.1(a);
(j) if and when any member of the ERISA Group (i) gives or is
required to give notice to the PBGC of any "reportable event" (as
defined in Section 4043 of ERISA) with respect to any Plan which might
constitute grounds for a termination of such Plan under Title IV of
ERISA, or knows that the plan administrator of any Plan has given or
is required to give notice of any such reportable event, a copy of the
notice of such reportable event given or required to be given to the
PBGC; (ii) receives notice of complete or partial withdrawal liability
under Title IV of ERISA or notice that any Multiemployer Plan is in
reorganization, is insolvent or has been terminated, a copy of such
notice; (iii) receives notice from the PBGC under Title IV of ERISA of
an intent to terminate, impose liability (other than for premiums
under Section 4007 of ERISA) in respect of, or appoint a trustee to
administer any Plan, a copy of such notice; (iv) applies for a waiver
of the minimum funding standard under Section 412 of the Internal
Revenue Code, a copy of such application; (v) gives notice of intent
to terminate any Plan under Section 4041(c) of ERISA, a copy of such
notice and other information filed with the PBGC; (vi) gives notice of
withdrawal from any Plan pursuant to Section 4063 of ERISA, a copy of
such notice; or (vii) fails to make any payment or contribution to any
Plan or Multiemployer Plan or in respect of any Benefit Arrangement or
makes any amendment to any Plan or Benefit Arrangement which has
resulted or could result in the imposition of a Lien or the posting of
a bond or other security, a certificate of the chief financial officer
or the chief accounting officer of the Borrower setting forth details
as to such occurrence and action, if any, which the Borrower or
applicable member of the ERISA Group is required or proposes to take;
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(k) as soon as practicable and in any event within 60 days
after the close of each Fiscal Year, an annual budget prepared on a
quarterly basis for the Borrower and its Subsidiaries and projections
for the Borrower for the Fiscal Year then beginning, all prepared (in
the case of projections) on a basis consistent with the financial
statements described in subsection (a) and (b) above, accompanied by a
statement of the chief financial officer or chief accounting officer
of the Borrower to the effect that, to the best of his knowledge, the
budget and projections are a reasonable estimates thereof for the
periods covered thereby; and
(l) from time to time such additional information regarding
the financial position or business of the Borrower and its
Subsidiaries or any Guarantor as the Agent, at the request of any
Lender, may reasonably request.
SECTION 5.2. Payment of Obligations. The Borrower will pay
and discharge, and will cause each Subsidiary to pay and discharge, at or
before maturity, all their respective material obligations and liabilities
(including, without limitation, tax liabilities and claims of materialmen,
warehousemen and the like which if unpaid might by law give rise to a Lien),
except where the same may be contested in good faith by appropriate
proceedings, and will maintain, and will cause each Subsidiary to maintain, in
accordance with generally accepted accounting principles, appropriate reserves
for the accrual of any of the same.
SECTION 5.3. Maintenance of Property; Insurance. (a) The
Borrower will keep, and will cause each Subsidiary to keep, all property useful
and necessary in its business in good working order and condition, ordinary
wear and tear excepted.
(b) The Borrower will maintain, and will cause each
Subsidiary to maintain, (i) physical damage insurance on all real and personal
property on an all risks basis (including the perils of flood and quake),
covering the
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repair and replacement cost of all such property and consequential loss
coverage for business interruption and extra expense, (ii) public liability
insurance (including products/completed operations liability coverage) in an
amount not less than $22,000,000 and (iii) such other insurance coverage in
such amounts and with respect to such risks as the Required Lenders may
reasonably request. All such insurance shall be provided by insurers having an
A.M. Best policyholders rating of not less than B+ or such other insurers as
the Required Lenders may approve in writing.
(c) The Borrower will deliver to the Lenders (i) on the date
of the first Borrowing hereunder, a certificate from the Borrower's insurance
broker dated such date showing the amount of coverage as of such date, and
certifying that such policies will include effective waivers (whether under the
terms of any such policy or otherwise) by the insurer of all claims for
insurance premiums against all loss payees and additional insureds and all
rights of subrogation against all loss payees and additional insureds, and that
if all or any part of such policy is cancelled, terminated or expires, the
insurer will forthwith give notice thereof to each additional insured and loss
payee and that no cancellation, reduction in amount or material change in
coverage thereof shall be effective until at least 10 days after receipt by
each additional insured and loss payee of written notice thereof, (ii) upon
request of any Lender through the Administrative Agent from time to time, full
information as to the insurance carried, (iii) within five days of receipt of
notice from any insurer a copy of any notice of cancellation or material change
in coverage from that existing on the date of this Agreement and (iv)
forthwith, notice of any cancellation or nonrenewal of coverage by the
Borrower. Not later than the Closing Date, the Borrower shall cause the
Administrative Agent to be named as an additional insured and loss payee on
each insurance policy required to be maintained pursuant to this Section 5.3.
SECTION 5.4. Conduct of Business and Maintenance of
Existence. The Borrower will preserve, renew and keep in full force and
effect, and will cause each Subsidiary to
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preserve, renew and keep in full force and effect their respective corporate
existence and their respective rights, privileges and franchises necessary or
desirable in the normal conduct of business; provided that nothing in this
Section 5.4 shall prohibit (i) the merger of a Subsidiary into the Borrower,
the merger of a Guarantor with another Person if the Person surviving such
merger is a Guarantor or the merger or consolidation of any Subsidiary that is
not a Guarantor with or into another Person if the corporation surviving such
consolidation or merger is a Subsidiary and if, in each case, after giving
effect thereto, no Default shall have occurred and be continuing or (ii) the
failure to maintain any of the foregoing rights, privileges or franchises that
could not in the aggregate have a material adverse affect on the business,
financial position, results of operations or prospects of the Borrower and its
Consolidated Subsidiaries, taken as a whole, or on the rights of the Lenders
under the Loan Documents, or (iii) the termination of the corporate existence
of any Subsidiary other than a Guarantor if the Borrower in good faith
determines that such termination is in the best interest of the Borrower and is
not materially disadvantageous to the Lenders.
SECTION 5.5. Compliance with Laws. The Borrower will comply,
and cause each Subsidiary to comply, in all material respects with all
applicable laws, ordinances, rules, regulations, and requirements of
governmental authorities (including, without limitation, Environmental Laws and
ERISA and the rules and regulations thereunder) except where the necessity of
compliance therewith is contested in good faith by appropriate proceedings.
SECTION 5.6. Inspection of Property, Books and Records;
Annual Lender Meeting. (a) The Borrower will keep, and will cause each
Subsidiary to keep, proper books of record and account in which full, true and
correct entries shall be made of all dealings and transactions in relation to
its business and activities; and will permit, and will cause each Subsidiary to
permit, representatives of any Lender at such Lender's expense to visit and
inspect any of their respective properties, to examine and make
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abstracts from any of their respective books and records and to discuss their
respective affairs, finances and accounts with their respective officers,
employees and independent public accountants, all at such reasonable times and
as often as may reasonably be desired.
(b) Unless otherwise instructed by the Administrative Agent
in its discretion, within 120 days after the end of each Fiscal Year, the
Borrower will conduct a meeting of the Lenders to discuss such fiscal year's
results and the financial condition of the Borrower at which shall be present
the chief executive officer and the chief financial officer of the Borrower and
such other officers of the Borrower as the Borrower's chief executive officer
shall designate. Such meetings shall be held at a time and place convenient to
the Lenders and the Borrower, and shall be in person unless the Administrative
Agent in its discretion notifies the Borrower that any such meeting shall be by
telephone conference.
SECTION 5.7. Mergers and Sales of Assets. (a) The Borrower
will not, and will not permit any Subsidiary to, consolidate or merge with or
into any other Person, provided that (i) the Borrower or any Guarantor may each
merge with another Person if it is the corporation surviving such merger and
immediately after giving effect to such merger, no Default shall have occurred
and be continuing, and (ii) any Subsidiary other than a Guarantor may merge
with any other Person if the corporation surviving the merger is the Borrower
or a Subsidiary of the Borrower and immediately after giving effect to such
merger, no Default shall have occurred and be continuing.
(b) The Borrower will not, and will not permit any of its
Subsidiaries to, make any Asset Sale, other than (i) Asset Sales the fair
market value of which, when combined with all other such Asset Sales previously
made during each Fiscal Year, does not exceed $1,000,000, and (ii) any Asset
Sale in which (x) the consideration therefor is not less than the fair market
value of the related asset (as determined in good faith by the chief financial
officer of the Borrower), (y) the consideration received therefor
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consists solely of cash payable at the closing thereof and (z) after giving
effect to such Asset Sale, the aggregate fair market value of the assets
disposed of in all Asset Sales in such Fiscal Year does not exceed $2,500,000.
(c) Without limitation of the foregoing, the Borrower will
not, and will not permit its Subsidiaries to, sell, lease or otherwise
transfer, directly or indirectly, all or substantially all of the assets of the
Borrower and its Subsidiaries, taken as a whole, to any other Person.
SECTION 5.8. Use of Proceeds. The proceeds of the Term Loans
will be used by the Borrower to finance a portion of the purchase price of the
Deltec Acquisition and to refinance a portion of the approximately $80,000,000
aggregate principal amount of existing Debt under the Existing Credit
Agreement. The proceeds of the Revolving Loans will be used by the Borrower to
refinance the balance of the aggregate principal amount of existing Debt under
the Existing Credit Agreement, and to provide working capital and for general
corporate purposes. The Letters of Credit issued under this Agreement will be
issued in the ordinary course for general corporate purposes, but not to
support Debt for borrowed money. None of the proceeds of any of the foregoing
will be used, directly or indirectly, for the purpose, whether immediate,
incidental or ultimate, of buying or carrying any "margin stock" within the
meaning of Regulation U.
SECTION 5.9. Negative Pledge. Neither the Borrower nor any
Subsidiary will create, assume or suffer to exist any Lien on any asset now
owned or hereafter acquired by it, except:
(a) Liens existing on the date of this Agreement securing
Debt outstanding on the date of this Agreement in an aggregate
principal or face amount not exceeding $5,000,000;
(b) any Lien existing on any asset of any Person at the time
such Person becomes a Subsidiary and not created in contemplation of
such event;
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(c) any Lien on any fixed asset securing Debt incurred or
assumed for the purpose of financing all or any part of the cost of
acquiring such fixed asset (including through capital leases), in an
aggregate principal amount of such Debt at any time outstanding not
greater than $5,000,000, provided that such Lien attaches to such
fixed asset concurrently with or within 90 days after the acquisition
thereof;
(d) any Lien on any asset of any Person existing at the time
such Person is merged or consolidated with or into the Borrower or a
Subsidiary and not created in contemplation of such event;
(e) any Lien existing on any asset prior to the acquisition
thereof by the Borrower or a Subsidiary and not created in
contemplation of such acquisition;
(f) any Lien arising out of the refinancing, extension,
renewal or refunding of any Debt secured by any Lien permitted by any
of the foregoing clauses of this Section, provided that such Debt is
not increased and is not secured by any additional assets;
(g) Liens arising in the ordinary course of its business
which (i) do not secure Debt or Derivatives Obligations, (ii) do not
secure any obligation in an amount exceeding $5,000,000 and (iii) do
not in the aggregate materially detract from the value of its assets
or materially impair the use thereof in the operation of its business;
(h) Liens created in connection with Permitted
Receivables Financings, including, without limitation, Liens on
proceeds in any form and bank accounts in which any such proceeds are
deposited; provided that, except for the assets transferred pursuant
to Permitted Receivables Dispositions made in connection with such
Permitted Receivables Financings, no such Lien may extend to any
assets of the Borrower or any Subsidiary;
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(i) Liens on cash and cash equivalents securing Derivatives
Obligations, provided that the aggregate amount of cash and cash
equivalents subject to such Liens may at no time exceed $5,000,000;
(j) Liens created by the Loan Documents;
(k) Liens securing Debt of International Subsidiaries
incurred in compliance with Section 5.10(g); and
(l) any Lien on any inventory securing obligations (whether
contingent or matured) under trade or documentary letters of credit
incurred or assumed for the purpose of financing all or any part of
the cost of acquiring such inventory, which such obligations do not
exceed in the aggregate at any time $2,000,000.
Notwithstanding the foregoing, no Obligor will create, assume or suffer to
exist any Lien on any Collateral other than Liens described in clause (b), (c),
(d), (e) or (g) above, or Liens described in clause (f) above relating to a
Lien described in clause (b), (c), (d), (e) or (g) above, which do not in the
aggregate materially detract from the value of the Collateral.
SECTION 5.10. Limitation on Debt. The Borrower will not, and
will not permit any of its Subsidiaries to, incur or at any time be liable with
respect to any Debt except:
(a) Debt under the Loan Documents;
(b) the Subordinated Notes and Guarantees thereof provided by
Guarantors, each such Guarantee thereof subordinated to the
obligations of the respective Guarantor under the Loan Documents on
substantially the same basis as the obligations of the Borrower under
the Subordinated Notes are subordinated to the obligations of the
Borrower under the Loan Documents;
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(c) Debt of the Borrower and the Guarantors (other than
Debt referred to in clauses (a) and (b) above) outstanding on the date
hereof not in excess of $8,300,000 in aggregate principal amount and
identified on Schedule 5.10, including the Guarantees referred to on
such Schedule, and any refinancing by the obligor with respect thereto
of such Debt (and, without limitation, renewals or extensions of such
Guarantees), provided that any such refinancing does not increase the
principal amount or shorten the maturity of any payment of principal
of such Debt;
(d) Debt secured by Liens permitted by Section 5.9(c) or
5.9(l), in an aggregate principal or obligation amount at any time
outstanding not exceeding the amount permitted pursuant to such
Section 5.9(c) or 5.9(l), as the case may be;
(e) Debt of the Guarantors owing to the Borrower or another
Guarantor;
(f) Debt of the Borrower and the Guarantors not otherwise
permitted by this Section incurred after the Closing Date in an
aggregate principal amount at any time outstanding not to exceed
$5,000,000;
(g) Debt of International Subsidiaries incurred for working
capital purposes in an aggregate principal amount at any time
outstanding not to exceed $25,000,000;
(h) Guarantees by (i) the Borrower of Debt referred to in
clause (g) above and (ii) Deltec of Debt of FPS Power Systems Oy Ab at
any time outstanding otherwise permitted by this Section 5.10 in an
aggregate principal amount not to exceed $8,000,000; and
(i) Debt pursuant to a Permitted Receivables Financing.
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SECTION 5.11. Restricted Payments. Neither the Borrower nor
any Subsidiary will declare or make any Restricted Payment other than:
(a) any Restricted Payments required to be made by the
Borrower pursuant to the terms of employee benefit plans and stock
options, in each case as in effect on the Closing Date and as modified
thereafter, provided that the aggregate amount of Restricted Payments
permitted by this clause (a) shall not exceed $1,000,000 in any Fiscal
Year or $3,000,000 in the aggregate for all periods after the Closing
Date;
(b) any regularly scheduled dividends payable on the Series G
Preferred Stock in accordance with the terms thereof; provided that
both before and after giving effect thereto no Default shall have
occurred and be continuing;
(c) Restricted Payments of the type referred to in clause (i)
or (ii) of the definition of Restricted Payments (other than those
referred to in clauses (a) and (b) above), to the extent that (x) both
before and after giving effect thereto no Default shall have occurred
and be continuing and (y) the aggregate amount of all such Restricted
Payments declared or made in any Fiscal Year does not exceed the sum
of (A) $500,000 plus (B) the amount of Net Cash Proceeds received by
the Borrower from the issuance of stock options and other equity in
such Fiscal Year in an amount not to exceed $500,000 in Fiscal Year
1996, $750,000 in each of Fiscal Years 1997 and 1998 and $1,000,000 in
each of Fiscal Years 1999 and 2000 (but in no event, in any Fiscal
Year, greater than the amount of such Net Cash Proceeds
minus any payments thereof required under Section 2.8); and
(d) Restricted Payments of the type referred to in clause
(iii) of the definition of Restricted Payments, solely to the extent
that Subordinated Notes are tendered as payment of the exercise price
of warrants issued pursuant to the Subordinated Note
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Agreement and no consideration other than shares of common stock of
the Borrower are issued or paid therefor.
SECTION 5.12. Investments and Other Acquisitions. Neither
the Borrower nor any Subsidiary will (a) hold, make or acquire any Restricted
Investment in any Person or (b) consummate or agree to consummate any
Acquisition, unless:
(i) immediately after any such Restricted Investment is made
or acquired or any such Acquisition is consummated or agreed to, the
sum of (A) the aggregate amount expended by the Borrower and its
Subsidiaries with respect to Acquisitions (including the value of
capital stock of the Borrower used to make Acquisitions) after the
date hereof plus (B) the aggregate net book value of all Restricted
Investments does not in the aggregate exceed the sum of (x) an amount
equal to 50% of the aggregate amount of Excess Cash Flow for each
Fiscal Year ending after the date hereof (any such incremental amount
pursuant to this clause (x) to be added on the date of receipt of the
financial statements referred to in Section 5.1 for such Fiscal Year),
but in no event more than $5,000,000 in any Fiscal Year and (y) an
additional amount equal to $3,000,000 in any Fiscal Year or
$10,000,000 for all periods after the Closing Date;
(ii) both before and immediately after giving effect to such
Acquisition or Restricted Investment, no Default shall have occurred
and be continuing; and
(iii) in the case of any Acquisition, the Borrower would be in
compliance with Sections 5.19, 5.20 and 5.21 after the Fixed Charge
Coverage Ratio, Leverage Ratio and Consolidated EBITDA are each
adjusted with respect to such Acquisition on the date of consummation
or proposed consummation thereof (the "Transaction Date") as follows:
in calculating Consolidated EBITDA, Consolidated Interest Expense,
Consolidated Rental Expense and Consolidated Capital Expenditures, (1)
the incurrence of any Debt incurred in connection with such
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Acquisition and the application of the proceeds therefrom shall be
assumed to have occurred on the first day of the period of four
consecutive Fiscal Quarters (or other period) for which such amounts
are required to be determined in accordance with the definitions of
Fixed Charge Coverage Ratio and Leverage Ratio (the "Reference
Period"), (2) pro forma effect shall be given to the Acquisition
(including adjustments to operating results permitted to be made in
accordance with generally accepted accounting principles) which occur
during the Reference Period or subsequent to the Reference Period and
prior to the Transaction Date as if such Acquisition had occurred on
the first day of the Reference Period, (3) the incurrence of any Debt
during the Reference Period or subsequent to the Reference Period and
prior to the Transaction Date and the application of the proceeds
therefrom shall be assumed to have occurred on the first day of such
Reference Period and (4) Consolidated Interest Expense attributable to
any Debt (whether existing or being incurred) computed on a pro forma
basis and bearing a floating interest rate shall be computed as if the
rate in effect on the date of computation had been the applicable rate
for the entire period unless such Person or any of its Subsidiaries is
a party to a interest party swap or cap or similar agreement (which
shall remain in effect for the twelve month period after the
Transaction Date) which has the effect of fixing the interest rate on
the date of computation, in which case such rate (whether higher or
lower) shall be used.
SECTION 5.13. Consolidated Capital Expenditures.
Consolidated Capital Expenditures will not, for any of the fiscal periods set
forth below, exceed the amount indicated opposite such period:
Fiscal Period Amount
------------- -----------
Fiscal Year 1996 $16,000,000
Fiscal Year 1997 16,000,000
Fiscal Year 1998 17,500,000
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Fiscal Year 1999 18,000,000
Fiscal Year 2000 18,500,000
First Fiscal Quarter 2001 5,000,000
SECTION 5.14. Sale-Leaseback Transactions. Neither the
Borrower nor any of its Subsidiaries will engage in any Sale-Leaseback
Transactions unless the Borrower or such Subsidiary would be entitled, pursuant
to the other provisions of Article 5, to incur Debt with a principal amount
equal to or exceeding the Value of such Sale- Leaseback Transaction secured by
a Lien on the property to be leased (after giving similar effect to all other
Sale-Leaseback Transactions in effect at such time). For purposes of this
Section, "Value" means, with respect to a Sale-Leaseback Transaction, at any
time, the amount equal to the greater of (i) the net proceeds of the sale or
transfer of the property leased pursuant to such Sale-Leaseback Transaction and
(ii) the fair value in the opinion of the Board of Directors of the Borrower of
such property at the time of entering into such Sale-Leaseback Transaction, in
either case divided first by the number of full years of the term of the lease
and then multiplied by the number of full years of such term remaining at the
time of determination, without regard to any renewal or extension options
contained in the lease.
SECTION 5.15. Transactions with Affiliates. The Borrower
will not, and will not permit any Subsidiary to, directly or indirectly, pay
any funds to or for the account of, make any investment (whether by acquisition
of stock or indebtedness, by loan, advance, transfer of property, guarantee or
other agreement to pay, purchase or service, directly or indirectly, any Debt,
or otherwise) in, lease, sell, transfer or otherwise dispose of any assets,
tangible or intangible, to, or participate in, or effect, any transaction with,
any Affiliate except on an arms-length basis on terms at least as favorable to
the Borrower or such Subsidiary Affiliate than could have been obtained from a
third party who was not an Affiliate; provided that the foregoing provisions of
this Section shall not prohibit any such Person from declaring or paying any
lawful dividend or
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other payment ratably in respect of all of its capital stock of the relevant
class so long as, after giving effect thereto, no Default shall have occurred
and be continuing.
SECTION 5.16. Hedging Facilities. Not later than 30 days
after the Closing Date the Borrower will have entered into and thereafter
maintain in full force and effect interest rate agreements in such amounts and
on such terms as shall result in effectively limiting to a rate acceptable to
the Administrative Agent the interest cost to the Borrower of the London
Interbank Offered Rate on the Loans in an aggregate principal amount not less
than $65,000,000 for a period of two years beginning on such date, all on terms
and conditions satisfactory to the Required Lenders. The Borrower will not,
and will not permit any of its Subsidiaries to, incur any Derivatives
Obligations except for purposes of hedging and not for speculative purposes.
SECTION 5.17. Further Assurances. (a) The Borrower will,
and will cause each of the other Obligors to, at the Borrower's sole cost and
expense, do, execute, acknowledge and deliver all such further acts, deeds,
conveyances, mortgages, assignments, notices of assignment and transfers as the
Administrative Agent shall from time to time request, which may be necessary in
the reasonable judgment of the Administrative Agent from time to time to
assure, perfect, convey, assign and transfer to the Administrative Agent the
property and rights conveyed or assigned pursuant to the Collateral Documents,
or which may facilitate the performance of the terms of the Collateral
Documents, or the filing, registering or recording of the Collateral Documents.
(b) All costs and expenses in connection with the grant of
any security interests under the Collateral Documents, including without
limitation reasonable legal fees and other reasonable costs and expenses in
connection with the granting, perfecting and maintenance of any security
interests under the Collateral Documents or the preparation, execution,
delivery, recordation or filing of documents and any other acts as the
Administrative Agent may
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reasonably request in connection with the grant of such security interests
shall be paid by the Borrower promptly upon demand.
(c) The Borrower will not, and will not permit any of its
Subsidiaries to, enter into or become subject to any agreement which would
impair their ability to comply, or which would purport to prohibit them from
complying, with the provisions of this Section.
(d) Substantially simultaneously with acquiring or forming
any Subsidiary or Subsidiaries, Borrower will cause such Subsidiary or
Subsidiaries (but excluding any Subsidiary which is an International
Subsidiary) to become a party hereto as a "Guarantor" and/or a party to the
Security Agreement by executing and delivering to the Administrative Agent an
agreement substantially in the form of Exhibit H hereto appropriately completed
with respect to such new Guarantor (a "Guarantor Addendum") and to cause each
such Subsidiary (other than any International Subsidiary) to become a party to
one or more pledge agreements in substance consistent with the Pledge
Agreements to secure its obligations hereunder. Within 30 days after acquiring
or forming such Subsidiary or Subsidiaries (other than any International
Subsidiary), the Borrower will cause such Subsidiary or Subsidiaries to (i)
execute and deliver such other supplements and documents creating security
interests as the Administrative Agent may specify, (ii) do all other things
which may be necessary or which the Administrative Agent may reasonably request
in order to confer upon and confirm to the Lenders the benefits of such
security required to be granted and (iii) deliver such legal opinions,
certificates, evidences of corporate action or other documents as the
Administrative Agent may reasonably request, all in form and substance
satisfactory to the Administrative Agent, relating to the satisfaction of the
Borrower's obligations under this Section.
SECTION 5.18. Minimum Consolidated Net Worth. Consolidated
Net Worth will at no time be less than the sum of (i) $82,000,000 and (ii) an
amount equal to 75% of Consolidated Net Income for each Fiscal Quarter of the
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Borrower ending after December 31, 1995 (provided that for the Fiscal Quarter
ended most nearly on March 31, 1996, Consolidated Net Income of the Borrower
shall be adjusted to give effect to the Deltec Acquisition based on pro forma
financial statements of Deltec prepared in a manner consistent with Section
4.4(e)) and on or prior to the date of determination, in each case, for which
Consolidated Net Income is positive (but with no deduction on account of
negative Consolidated Net Income for any Fiscal Quarter of the Borrower) plus
(iii) 90% of the aggregate net proceeds, including the fair market value of
property other than cash (as determined in good faith by the Board of Directors
of the Borrower), received by the Borrower from the issuance and sale after the
date hereof of any capital stock of the Borrower (other than the proceeds of
any issuance and sale of any capital stock (x) to a Subsidiary of the Borrower
or (y) which is required to be redeemed, or is redeemable at the option of the
holder, at any time) or in connection with the conversion or exchange of any
Debt of the Borrower into capital stock of the Borrower after December 31,
1995.
SECTION 5.19. Fixed Charge Coverage Ratio. As of the last
day of each Fiscal Quarter of the Borrower set forth below, the Fixed Charge
Ratio will not be less than the ratio set forth below opposite such Fiscal
Quarter:
Fiscal Quarter Ratio
-------------- ------
Third Fiscal Quarter 1996 1.20:1
Fourth Fiscal Quarter 1996 1.50:1
First Fiscal Quarter 1997 1.30:1
Second Fiscal Quarter 1997 1.35:1
Third Fiscal Quarter 1997 1.60:1
Fourth Fiscal Quarter 1997 1.85:1
First Fiscal Quarter 1998 2.00:1
Second Fiscal Quarter 1998 2.10:1
Third Fiscal Quarter 1998 2.25:1
Fourth Fiscal Quarter 1998 2.45:1
First Fiscal Quarter 1999 2.55:1
Second Fiscal Quarter 1999 2.70:1
Third Fiscal Quarter 1999 2.90:1
Fourth Fiscal Quarter 1999
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and thereafter 3.00:1
SECTION 5.20. Leverage Ratio. As of the last day of each
Fiscal Quarter of the Borrower set forth below and at all times thereafter
until the last day of the next such Fiscal Quarter, the Leverage Ratio shall
not exceed the ratio set forth below opposite such Fiscal Quarter:
Fiscal Quarter Ratio
-------------- ------
Third Fiscal Quarter 1996 4.30:1
Fourth Fiscal Quarter 1996 3.90:1
First Fiscal Quarter 1997 3.80:1
Second Fiscal Quarter 1997 3.60:1
Third Fiscal Quarter 1997 3.25:1
Fourth Fiscal Quarter 1997 2.75:1
First Fiscal Quarter 1998 2.70:1
Second Fiscal Quarter 1998 2.50:1
Third Fiscal Quarter 1998 2.25:1
Fourth Fiscal Quarter 1998
and thereafter 2.00:1
SECTION 5.21. Minimum EBITDA. At no time during any period
specified below shall Consolidated EBITDA for the four consecutive Fiscal
Quarters then most recently ended (or, in the case of any Fiscal Quarter ending
prior to March 31, 1997, for the period commencing on April 1, 1996 and ending
on the last day of such Fiscal Quarter), be less than the corresponding amount
set forth below:
Period Amount
------ ------------
Third Fiscal Quarter 1996 $ 14,800,000
Fourth Fiscal Quarter 1996 35,000,000
First Fiscal Quarter 1997 43,000,000
Second Fiscal Quarter 1997 60,000,000
Third Fiscal Quarter 1997 66,000,000
Fourth Fiscal Quarter 1997 76,000,000
First Fiscal Quarter 1998 78,000,000
Second Fiscal Quarter 1998 82,000,000
Third Fiscal Quarter 1998 88,000,000
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Fourth Fiscal Quarter 1998 98,000,000
First Fiscal Quarter 1999 100,000,000
Second Fiscal Quarter 1999 103,000,000
Third Fiscal Quarter 1999 108,000,000
Fourth Fiscal Quarter 1999 118,000,000
First Fiscal Quarter 2000 120,000,000
Second Fiscal Quarter 2000 122,000,000
Third Fiscal Quarter 2000 125,000,000
Fourth Fiscal Quarter 2000 128,000,000
First Fiscal Quarter 2001
and thereafter 130,000,000
SECTION 5.22. Amendments of Related Documents. The Borrower
shall not and shall not permit its Subsidiaries to, without the prior written
consent of the Required Lenders, modify or amend, or waive any provision or
condition contained in, any of the Deltec Acquisition Documents, the
Subordinated Note Agreement, the Subordinated Notes or the Series G Preferred
Stock from the forms of each of the foregoing heretofore delivered to the
Lenders and the Agents in any manner that could reasonably be expected to be
adverse to the Lenders.
SECTION 5.23. Limitation on Restrictions Affecting
Subsidiaries. Neither the Borrower nor any of its Subsidiaries will enter
into, or suffer to exist, any agreement with any Person, other than the Loan
Documents and the Subordinated Note Indenture and guarantees with respect
thereto, which prohibits or limits the ability of any Subsidiary to (a) pay
dividends or make other distributions or pay any Debt owed to the Borrower or
any other Subsidiary, (b) make loans or advances to the Borrower or any other
Subsidiary or (c) transfer any of its properties or assets to the Borrower or
any other Subsidiary, provided that the foregoing shall not prohibit (i) such
restrictions as exist today and set forth in the agreements identified on
Schedule 5.23 and (ii) customary net worth and financial leverage tests in
agreements governing Debt in effect on the date of this Agreement of
International Subsidiaries incurred and outstanding in compliance with this
Agreement.
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SECTION 5.24. Designated Senior Debt. Without the consent of
the Required Lenders, the Borrower shall not designate any Debt, other than
Debt under the Loan Documents, as "Designated Senior Debt", as such term is
defined in the Subordinated Note Indenture as in effect on the date hereof, or
any comparable designation that confers upon the holders of such Debt (or any
Person acting on their behalf) the right to initiate blockage periods under the
Subordinated Note Indenture.
ARTICLE 6
DEFAULTS
SECTION 6.1. Events of Default. If one or more of the
following events ("Events of Default") shall have occurred and be continuing:
(a) the Borrower shall fail to pay (i) when due any principal
of any Loan or any reimbursement obligation under any Letter of Credit
or (ii) within two Domestic Business Days after the same shall become
due, any interest on any Loan or any fees or any other amount payable
hereunder;
(b) the Borrower shall fail to observe or perform any
covenant contained in Article 5, other than those contained in
Sections 5.1 through 5.6;
(c) any Obligor shall fail to observe or perform any covenant
or agreement contained in the Loan Documents (other than those covered
by clause (a) or (b) above) for 30 days after notice thereof has been
given to the Borrower by the Administrative Agent at the request of
any Lender;
(d) any representation, warranty, certification or statement
made by any Obligor in any Loan Document or in any certificate,
financial statement or other document delivered pursuant to any Loan
Document shall
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prove to have been incorrect in any material respect when made (or
deemed made);
(e) the Borrower or any Subsidiary shall fail to make any
payment in respect of any Material Financial Obligations when due or
within any applicable grace period;
(f) any event or condition shall occur which results in the
acceleration of the maturity of any Material Debt or enables (or, with
the giving of notice or lapse of time or both, would enable) the
holder of such Debt or any Person acting on such holder's behalf to
accelerate the maturity thereof;
(g) the Borrower or any Subsidiary (other than an Immaterial
Subsidiary) shall commence a voluntary case or other proceeding
seeking liquidation, reorganization or other relief with respect to
itself or its debts under any bankruptcy, insolvency or other similar
law now or hereafter in effect or seeking the appointment of a
trustee, receiver, liquidator, custodian or other similar official of
it or any substantial part of its property, or shall consent to any
such relief or to the appointment of or taking possession by any such
official in an involuntary case or other proceeding commenced against
it, or shall make a general assignment for the benefit of creditors,
or shall fail generally to pay its debts as they become due, or shall
take any corporate action to authorize any of the foregoing;
(h) an involuntary case or other proceeding shall be
commenced against the Borrower or any Subsidiary (other than an
Immaterial Subsidiary) seeking liquidation, reorganization or other
relief with respect to it or its debts under any bankruptcy,
insolvency or other similar law now or hereafter in effect or seeking
the appointment of a trustee, receiver, liquidator, custodian or other
similar official of it or any substantial part of its property, and
such involuntary case or other proceeding shall
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remain undismissed and unstayed for a period of 60 days; or an order
for relief shall be entered against the Borrower or any Subsidiary
under the federal bankruptcy laws as now or hereafter in effect;
(i) any member of the ERISA Group shall fail to pay when due
an amount or amounts aggregating in excess of $1,000,000 which it
shall have become liable to pay under Title IV of ERISA; or notice of
intent to terminate a Material Plan shall be filed under Title IV of
ERISA by any member of the ERISA Group, any plan administrator or any
combination of the foregoing; or the PBGC shall institute proceedings
under Title IV of ERISA to terminate, to impose liability (other than
for premiums under Section 4007 of ERISA) in respect of, or to cause a
trustee to be appointed to administer any Material Plan; or a
condition shall exist by reason of which the PBGC would be entitled to
obtain a decree adjudicating that any Material Plan must be
terminated; or there shall occur a complete or partial withdrawal
from, or a default, within the meaning of Section 4219(c)(5) of ERISA,
with respect to, one or more Multiemployer Plans which could cause one
or more members of the ERISA Group to incur a current payment
obligation in excess of $1,000,000;
(j) judgments or orders for the payment of money in excess of
$3,000,000 shall be rendered against the Borrower or any Subsidiary
and such judgments or orders shall continue unsatisfied and unstayed
for a period of 10 days;
(k) the Guarantee of any Guarantor under Article 9 shall for
any reason be revoked or invalidated, or otherwise cease to be in full
force and effect, or any Guarantor, or any Person on behalf of any
Guarantor, shall deny or disaffirm its obligations under such
Guarantee, or any Lien created by any of the Collateral Documents
shall at any time fail to constitute a valid and (to the extent
required by the Collateral Documents) perfected Lien on any
substantial part of the Collateral purported to be subject thereto,
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securing the obligations purported to be secured thereby, with the
priority required by the Loan Documents, or any Obligor shall assert
any of the foregoing in writing;
(l) any person or group of persons (within the meaning of
Section 13 or 14 of the Securities Exchange Act of 1934, as amended)
shall have acquired beneficial ownership (within the meaning of Rule
13d-3 promulgated by the Securities and Exchange Commission under said
Act) of 33-1/3% or more of the outstanding shares of common stock of
the Borrower; or, during any period of 12 consecutive calendar months,
individuals who were directors of the Borrower on the first day of
such period shall cease to constitute a majority of the board of
directors of the Borrower; or there shall occur any "Change of
Control", as such term is defined in the Subordinated Note Indenture
as in effect on the date hereof, or any similar event that permits the
holders of the Subordinated Notes (or any Person acting on their
behalf) the right to accelerate the maturity of the Subordinated Notes
or demand any payment or redemption thereof or with respect thereto;
then, and in every such event, the Administrative Agent shall (i) if requested
by Lenders having more than 50% in aggregate amount of the Commitments, by
notice to the Borrower terminate the Commitments and they shall thereupon
terminate, and (ii) if requested by Lenders holding more than 50% of the sum of
the aggregate principal amount of the Loans and the Letter of Credit
Liabilities, by notice to the Borrower declare the Loans and the Letter of
Credit Liabilities (together with accrued interest thereon) to be, and the
Loans and the Letter of Credit Liabilities shall thereupon become, immediately
due and payable without presentment, demand, protest or other notice of any
kind, all of which are hereby waived by the Borrower; provided that in the case
of any of the Events of Default specified in clause 6.1(g) or 6.1(h) above with
respect to the Borrower, without any notice to the Borrower or any other act by
the Administrative Agent or the Lenders, the Commitments shall thereupon
terminate and the Loans and the
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Letter of Credit Liabilities (together with accrued interest thereon) shall
become immediately due and payable without presentment, demand, protest or
other notice of any kind, all of which are hereby waived by the Borrower.
SECTION 6.2. Notice of Default. The Administrative Agent
shall give notice to the Borrower under Section 6.1(c) promptly upon being
requested to do so by any Lender and shall thereupon notify all the Lenders
thereof. Upon receipt by the Administrative Agent of any notice of
acceleration under the Subordinated Note Agreement, the Administrative Agent
shall promptly notify the Lenders thereof.
SECTION 6.3. Cash Cover. The Borrower agrees, in addition to
the provisions of Section 6.1 hereof, that upon the occurrence and during the
continuance of any Event of Default, it shall, if requested by the
Administrative Agent upon the instruction of the Lenders having more than 50%
in aggregate amount of the Revolving Commitments (or, if the Revolving
Commitments shall have been terminated, holding more than 50% of the aggregate
Letter of Credit Liabilities), pay to the Administrative Agent an amount in
immediately available funds (which funds shall be held as collateral pursuant
to arrangements satisfactory to the Administrative Agent) equal to the
aggregate amount available for drawing under all Letters of Credit then
outstanding at such time, provided that, upon the occurrence of any Event of
Default specified in Section 6.1(g) or 6.1(h) with respect to the Borrower,
the Borrower shall pay such amount forthwith without any notice or demand or
any other act by any Agent or the Lenders.
ARTICLE 7
THE AGENT
SECTION 7.1. Appointment and Authorization. Each Lender
irrevocably appoints and authorizes the Administrative Agent and the
Documentation Agent to enter into and act as its agent in connection with the
Collateral
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Documents and to take such action as agent on its behalf and to exercise such
powers under the Loan Documents as are delegated to the Agents by the terms
hereof or thereof, together with all such powers as are reasonably incidental
thereto. Each Lender hereby agrees to be bound by the provisions of the
Collateral Documents and, without limitation of the foregoing or of any other
provision hereof, agrees to the provisions set forth in Section 10 of the Share
Mortgage dated as of the date hereof entered into between EEIC and the
Administrative Agent whereby EEIC pledges 66% of the stock of MPL Powerware
Systems, Ltd., as though such provisions were set forth fully herein.
SECTION 7.2. Agents and Affiliates. Each of the Agents shall
have the same rights and powers under the Loan Documents as any other Lender
and may exercise or refrain from exercising the same as though it were not the
Agent, and each Agent and its affiliates may accept deposits from, lend money
to, and generally engage in any kind of business with the Borrower or any
Subsidiary or affiliate of the Borrower as if it were not an Agent.
SECTION 7.3. Action by Agents. The obligations of the Agents
hereunder are only those expressly set forth herein. Without limiting the
generality of the foregoing, the Administrative Agent shall not be required to
take any action with respect to any Default, except as expressly provided in
Article 6.
SECTION 7.4. Consultation with Experts. Each of the Agents
may consult with legal counsel (who may be counsel for any Obligor),
independent public accountants and other experts selected by it and shall not
be liable for any action taken or omitted to be taken by it in good faith in
accordance with the advice of such counsel, accountants or experts.
SECTION 7.5. Liability of Agents. Neither of the Agents nor
any of their affiliates nor any of their respective directors, officers, agents
or employees shall be liable for any action taken or not taken by it in
connection herewith (i) with the consent or at the request of the
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Required Lenders or (ii) in the absence of its own gross negligence or willful
misconduct. Neither Agent nor any of their affiliates nor any of their
respective directors, officers, agents or employees shall be responsible for or
have any duty to ascertain, inquire into or verify (i) any statement, warranty
or representation made in connection with the Loan Documents or any borrowing
hereunder; (ii) the performance or observance of any of the covenants or
agreements of any Obligor; (iii) the satisfaction of any condition specified in
Article 3, except receipt of items required to be delivered to the
Documentation Agent or the Administrative Agent; or (iv) the validity,
effectiveness or genuineness of the Loan Documents or any other instrument or
writing furnished in connection herewith. No Agent shall incur any liability
by acting in reliance upon any notice, consent, certificate, statement, or
other writing (which may be a bank wire, telex, facsimile transmission or
similar writing) believed by it to be genuine or to be signed by the proper
party or parties.
SECTION 7.6. Indemnification. Each Lender shall, ratably in
accordance with its Commitment, indemnify each Agent, its affiliates and their
respective directors, officers, agents and employees (to the extent not
reimbursed by the Borrower) against any cost, expense (including counsel fees
and disbursements), claim, demand, action, loss or liability (except such as
result from such indemnities' gross negligence or willful misconduct) that such
indemnities may suffer or incur in connection with the Loan Documents or any
action taken or omitted by such indemnities thereunder.
SECTION 7.7. Credit Decision. Each Lender acknowledges that
it has, independently and without reliance upon any Agent or any other Lender,
and based on such documents and information as it has deemed appropriate, made
its own credit analysis and decision to enter into this Agreement. Each Lender
also acknowledges that it will, independently and without reliance upon any
Agent or any other Lender, and based on such documents and information as it
shall deem appropriate at the time, continue to make its
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own credit decisions in taking or not taking any action under the Loan
Documents.
SECTION 7.8. Successor Administrative Agent. The
Administrative Agent may resign at any time by giving notice thereof to the
Lenders and the Borrower. Upon any such resignation, the Required Lenders
shall have the right to appoint a successor Administrative Agent. If no
successor Administrative Agent shall have been so appointed by the Required
Lenders, and shall have accepted such appointment, within 30 days after the
retiring Administrative Agent gives notice of resignation, then the retiring
Administrative Agent may, on behalf of the Lenders, appoint a successor
Administrative Agent, which shall be a commercial bank organized or licensed
under the laws of the United States of America or of any State thereof and
having a combined capital and surplus of at least $50,000,000. Upon the
acceptance of its appointment as Administrative Agent hereunder by a successor
Administrative Agent, such successor Administrative Agent shall thereupon
succeed to and become vested with all the rights and duties of the retiring
Administrative Agent, and the retiring Administrative Agent shall be discharged
from its duties and obligations hereunder. After any retiring Administrative
Agent's resignation hereunder as Administrative Agent, the provisions of this
Article shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was Administrative Agent.
SECTION 7.9. Agents' Fee. The Borrower shall pay to each
Agent for its own account fees in the amounts and at the times previously
agreed upon between the Borrower and such Agent.
SECTION 7.10. Co-Agents, Documentation Agent and Syndication
Agent. The Co-Agents referred to on the signature pages hereof, the
Documentation Agent, and the Syndication Agent referred to on the cover page
hereof, in their respective capacities as such, shall have no duties or
obligations of any kind under the Loan Documents.
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ARTICLE 8
CHANGE IN CIRCUMSTANCES
SECTION 8.1. Basis for Determining Interest Rate Inadequate
or Unfair. If on or prior to the first day of any Interest Period for any
Euro-Dollar Loan:
(a) the Administrative Agent is advised by the Reference
Lenders that deposits in dollars (in the applicable amounts) are not
being offered to the Reference Lenders in the London interbank market
for such Interest Period, or
(b) Lenders having 50% or more of the aggregate principal
amount of the affected Loans advise the Administrative Agent that the
London Interbank Offered Rate as determined by the Administrative
Agent will not adequately and fairly reflect the cost to such Lenders
of funding their Euro-Dollar Loans for such Interest Period,
the Administrative Agent shall forthwith give notice thereof to the Borrower
and the Lenders, whereupon until the Administrative Agent notifies the Borrower
that the circumstances giving rise to such suspension no longer exist, (i) the
obligations of the Lenders to make Euro-Dollar Loans shall be suspended and
(ii) each outstanding Euro-Dollar Loan shall be converted into a Base Rate Loan
on the last day of the then current Interest Period applicable thereto. Unless
the Borrower notifies the Administrative Agent at least two Domestic Business
Days before the date of any Euro-Dollar Borrowing for which a Notice of
Borrowing has previously been given that it elects not to borrow on such date,
such Borrowing shall instead be made as a Base Rate Borrowing.
SECTION 8.2. Illegality. If, on or after the date of this
Agreement, the adoption of any applicable law, rule or regulation, or any
change in any applicable law, rule or regulation, or any change in the
interpretation or administration thereof by any governmental authority,
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central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Lender (or its Euro-Dollar Lending
Office) with any request or directive (whether or not having the force of law)
of any such authority, central bank or comparable agency shall make it unlawful
or impossible for any Lender (or its Euro-Dollar Lending Office) to make,
maintain or fund its Euro-Dollar Loans and such Lender shall so notify the
Administrative Agent, the Administrative Agent shall forthwith give notice
thereof to the other Lenders and the Borrower, whereupon until such Lender
notifies the Borrower and the Administrative Agent that the circumstances
giving rise to such suspension no longer exist, the obligation of such Lender
to make Euro-Dollar Loans, or to continue or convert outstanding Loans as or
into Euro-Dollar Loans, shall be suspended. Before giving any notice to the
Administrative Agent pursuant to this Section, such Lender shall designate a
different Euro-Dollar Lending Office if such designation will avoid the need
for giving such notice and will not, in the judgment of such Lender, be
otherwise disadvantageous to such Lender. If such notice is given, each
Euro-Dollar Loan of such Lender then outstanding shall be converted to a Base
Rate Loan either (a) on the last day of the then current Interest Period
applicable to such Euro-Dollar Loan if such Lender may lawfully continue to
maintain and fund such Loan to such day or (b) immediately if such Lender shall
determine that it may not lawfully continue to maintain and fund such Loan to
such day.
SECTION 8.3. Increased Cost and Reduced Return. (a) If on
or after the date hereof, the adoption of any applicable law, rule or
regulation, or any change in any applicable law, rule or regulation, 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 Lender (or its Applicable Lending
Office) with any request or directive (whether or not having the force of law)
of any such authority, central bank or comparable agency shall impose, modify
or deem applicable any reserve (including, without limitation, any such
requirement imposed by the Board of Governors of the Federal Reserve System,
but
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excluding any such requirement with respect to which such Lender is entitled to
compensation during the relevant interest period under Section 2.14), special
deposit, insurance assessment or similar requirement against assets of,
deposits with or for the account of, or credit extended by, any Lender (or its
Applicable Lending Office) or shall impose on any Lender (or its Applicable
Lending Office) or the London interbank market any other condition affecting
its Euro-Dollar Loans or its obligations hereunder in respect of Letters of
Credit, its Note or its obligation to make Euro- Dollar Loans or issue or
participate in any Letter of Credit, and the result of any of the foregoing is
to increase the cost to such Lender (or its Applicable Lending Office) of
making or maintaining any Euro-Dollar Loan or of issuing or participating in
any Letter of Credit, or to reduce the amount of any sum received or receivable
by such Lender (or its Applicable Lending Office) under this Agreement or under
its Note with respect thereto, by an amount deemed by such Lender to be
material, then, within 15 days after demand by such Lender (with a copy to the
Administrative Agent), the Borrower shall pay to such Lender such additional
amount or amounts as will compensate such Lender for such increased cost or
reduction.
(b) If any Lender shall have determined that, after the date
hereof, the adoption of any applicable law, rule or regulation regarding
capital adequacy, or any change in any such law, rule or regulation, 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 any request or directive regarding capital adequacy
(whether or not having the force of law) of any such authority, central bank or
comparable agency, has or would have the effect of reducing the rate of return
on capital of such Lender (or its Parent) as a consequence of such Lender's
obligations hereunder to a level below that which such Lender (or its Parent)
could have achieved but for such adoption, change, request or directive (taking
into consideration its policies with respect to capital adequacy) by an amount
deemed by such Lender to be material, then from time to time, within 15 days
after demand by such Lender (with a copy to the
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Administrative Agent), the Borrower shall pay to such Lender such additional
amount or amounts as will compensate such Lender (or its Parent) for such
reduction.
(c) Each Lender will promptly notify the Borrower and the
Administrative Agent of any event of which it has knowledge, occurring after
the date hereof, which will entitle such Lender to compensation pursuant to
this Section and will designate a different Lending Office if such designation
will avoid the need for, or reduce the amount of, such compensation and will
not, in the judgment of such Lender, be otherwise disadvantageous to such
Lender. A certificate of any Lender claiming compensation under this Section
and setting forth in reasonable detail its calculation of the additional amount
or amounts to be paid to it hereunder shall be conclusive in the absence of
manifest error. In determining such amount, such Lender may use any reasonable
averaging and attribution methods. Notwithstanding the foregoing subsections
(a) and (b) of this Section 8.3, the Borrower shall only be obligated to
compensate any Lender for any amount arising or accruing during (i) any time or
period commencing not more than (x) in the case of subsection (a), six months
and (y) in the case of subsection (b), three months, prior to the date on which
such Lender notifies the Administrative Agent and the Borrower that it proposes
to demand such compensation and identifies to the Administrative Agent and the
Borrower the statute, regulation or other basis upon which the claimed
compensation is or will be based and (ii) any time or period during which,
because of the retroactive application of such statute, regulation or other
basis, such Lender did not know that such amount would arise or accrue.
SECTION 8.4. Taxes. (a) For the purposes of this Section
8.4, the following terms have the following meanings:
"Taxes" means any and all present or future taxes, duties,
levies, imposts, deductions, charges or withholdings with respect to any
payment by the Borrower or any Guarantor, as the case may be, pursuant to this
Agreement or under any Note, and all liabilities with respect thereto,
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excluding (i) in the case of each Lender and each Agent, taxes imposed on its
income, and franchise or similar taxes imposed on it, by a jurisdiction under
the laws of which such Lender or such Agent (as the case may be) is organized
or in which its principal executive office is located or, in the case of each
Lender, in which its Applicable Lending Office is located and (ii) in the case
of each Lender, any United States withholding tax imposed on such payments but
only to the extent that such Lender is subject to United States withholding tax
at the time such Lender first becomes a party to this Agreement.
"Other Taxes" means any present or future stamp or documentary
taxes and any other excise or property taxes, or similar charges or levies,
which arise from any payment made pursuant to this Agreement or under any Note
or from the execution or delivery of, or otherwise with respect to, any Loan
Document.
(b) Any and all payments by the Borrower or any Guarantor to
or for the account of any Lender or any Agent hereunder or under any Note shall
be made without deduction for any Taxes or Other Taxes; provided that, if the
Borrower or any Guarantor shall be required by law to deduct any Taxes or Other
Taxes from any such payments, (i) the sum payable shall be increased as
necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this Section) such Lender or the
Agent (as the case may be) receives an amount equal to the sum it would have
received had no such deductions been made, (ii) the Borrower or any Guarantor,
as the case may be, shall make such deductions, (iii) the Borrower or such
Guarantor, as the case may be, shall pay the full amount deducted to the
relevant taxation authority or other authority in accordance with applicable
law and (iv) the Borrower shall furnish to the Documentation Agent, at its
address referred to in Section 10.1, the original or a certified copy of a
receipt evidencing payment thereof.
(c) The Borrower agrees to indemnify each Lender and each
Agent for the full amount of Taxes or Other Taxes (including, without
limitation, any Taxes or Other Taxes
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imposed or asserted by any jurisdiction on amounts payable under this Section)
paid by such Lender or such Agent (as the case may be) and any liability
(including penalties, interest and expenses) arising therefrom or with respect
thereto. This indemnification shall be paid within 15 days after such Lender
or such Agent (as the case may be) makes demand therefor.
(d) Each Lender organized under the laws of a jurisdiction
outside the United States, on or prior to the date of its execution and
delivery of this Agreement in the case of each Lender listed on the signature
pages hereof and on or prior to the date on which it becomes a Lender in the
case of each other Lender, and from time to time thereafter if requested in
writing by the Borrower (but only so long as such Lender remains lawfully able
to do so), shall provide the Borrower and the Administrative Agent with
Internal Revenue Service form 1001 or 4224, as appropriate, or any successor
form prescribed by the Internal Revenue Service, certifying that such Lender is
entitled to benefits under an income tax treaty to which the United States is a
party which exempts the Lender from United States withholding tax or reduces
the rate of withholding tax on payments of interest for the account of such
Lender or certifying that the income receivable pursuant to this Agreement is
effectively connected with the conduct of a trade or business in the United
States.
(e) For any period with respect to which a Lender has failed
to provide the Borrower or the Administrative Agent with the appropriate form
pursuant to Section 8.4(d) (unless such failure is due to a change in treaty,
law or regulation occurring subsequent to the date on which such form
originally was required to be provided), such Lender shall not be entitled to
indemnification under Section 8.4(b) or (c) with respect to Taxes imposed by
the United States; provided that if a Lender, which is otherwise exempt from or
subject to a reduced rate of withholding tax, becomes subject to Taxes because
of its failure to deliver a form required hereunder, the Borrower shall take
such steps as such Lender shall reasonably request to assist such Lender to
recover such Taxes.
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(f) If the Borrower or any Guarantor is required to pay
additional amounts to or for the account of any Lender pursuant to this
Section, then such Lender will change the jurisdiction of its Applicable
Lending Office if, in the judgment of such Lender, such change (i) will
eliminate or reduce any such additional payment which may thereafter accrue and
(ii) is not otherwise disadvantageous to such Lender.
SECTION 8.5. Base Rate Loans Substituted for Affected
Euro-Dollar Loans. If (i) the obligation of any Lender to make Euro-Dollar
Loans, or to convert or continue outstanding Loans into or as Euro-Dollar
Loans, has been suspended pursuant to Section 8.2 or (ii) any Lender has
demanded compensation under Section 8.3 or 8.4 with respect to its Euro-Dollar
Loans and the Borrower shall, by at least five Euro-Dollar Business Days' prior
notice to such Lender through the Administrative Agent, have elected that the
provisions of this Section shall apply to such Lender, then, unless and until
such Lender notifies the Borrower that the circumstances giving rise to such
suspension or demand for compensation no longer exist:
(a) all Loans which would otherwise be made by such Lender as
(or continued as or converted into) Euro-Dollar Loans shall instead be
Base Rate Loans (on which interest and principal shall be payable
contemporaneously with the related Euro-Dollar Loans of the other
Lenders); and
(b) after each of its Euro-Dollar Loans has been repaid (or
converted to a Base Rate Loan), all payments of principal which would
otherwise be applied to repay such Euro-Dollar Loans shall be applied
to repay its Base Rate Loans instead.
If such Lender notifies the Borrower that the circumstances giving rise to such
notice no longer apply, the principal amount of each such Base Rate Loan shall
be converted into a Euro-Dollar Loan on the first day of the next succeeding
Interest Period applicable to the related Euro-Dollar Loans of the other
Lenders.
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SECTION 8.6. Substitution of Lender. If (i) the obligation
of any Lender to make Euro-Dollar Loans has been suspended pursuant to Section
8.2 or (ii) any Lender has demanded compensation under Section 8.3 or 8.4, the
Borrower shall have the right, with the assistance of the Administrative Agent,
to seek one or more mutually satisfactory substitute financial institutions
(which may be one or more of the Lenders) to purchase the Note and assume the
Commitments of such Lender.
ARTICLE 9
GUARANTY
SECTION 9.1. The Guaranty. Each Guarantor hereby
unconditionally guarantees, jointly and severally with each other Guarantor,
the full and punctual payment (whether at stated maturity, upon acceleration or
otherwise) of the principal of and interest on each Note and the full amount of
all Letter of Credit Liabilities under this Agreement, and the full and
punctual payment of all other amounts payable by the Borrower or any other
Obligor under the Loan Documents, and all Hedging Obligations (as defined in
the Security Agreement of even date herewith). Upon failure by the Borrower or
any other Obligor to pay punctually any such amount, each Guarantor shall
forthwith on demand pay the amount not so paid at the place and in the manner
specified in this Agreement or the other Loan Documents.
SECTION 9.2. Guaranty Unconditional. The obligations of each
Guarantor hereunder shall be unconditional and absolute and, without limiting
the generality of the foregoing, shall not be released, discharged or otherwise
affected by:
(i) any extension, renewal, settlement, compromise, waiver or
release in respect of any obligation of the Borrower or any other
Obligor under the Loan Documents, by operation of law or otherwise;
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(ii) any modification or amendment of or supplement to the
Loan Documents;
(iii) any release, impairment, non-perfection or invalidity
of any direct or indirect security for any obligation of the Borrower
or any other Obligor under the Loan Documents;
(iv) any change in the corporate existence, structure or
ownership of the Borrower or any other Obligor, or any insolvency,
bankruptcy, reorganization or other similar proceeding affecting the
Borrower, any other Obligor or their respective assets or any
resulting release or discharge of any obligation of the Borrower or
any other Obligor contained in the Loan Documents;
(v) the existence of any claim, set-off or other rights which
such Guarantor may have at any time against the Borrower, any other
Obligor, any Agent, any Lender or any other Person, whether in
connection herewith or any unrelated transactions, provided that
nothing herein shall prevent the assertion of any such claim by
separate suit or compulsory counterclaim;
(vi) any invalidity or unenforceability relating to or
against the Borrower or any other Obligor for any reason of the Loan
Documents, or any provision of applicable law or regulation purporting
to prohibit the payment by the Borrower or any other Obligor of the
principal of or interest on any Note or any other amount payable by
the Borrower or any other Obligor under the Loan Documents; or
(vii) any other act or omission to act or delay of any kind
by the Borrower, any other Obligor, any Agent, any Lender or any other
Person or any other circumstance whatsoever which might, but for the
provisions of this paragraph, constitute a legal or equitable
discharge of the Guarantor's obligations hereunder.
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SECTION 9.3. Discharge Only Upon Payment In Full;
Reinstatement In Certain Circumstances. Each Guarantor's obligations hereunder
shall remain in full force and effect until the Commitments shall have
terminated and the principal of and interest on the Notes and all other amounts
payable by the Obligors under the Loan Documents shall have been paid in full.
If at any time any payment of the principal of or interest on any Note or any
other amount payable by the Obligors under the Loan Documents is rescinded or
must be otherwise restored or returned upon the insolvency, bankruptcy or
reorganization of any Obligor or otherwise, each Guarantor's obligations
hereunder with respect to such payment shall be reinstated at such time as
though such payment had been due but not made at such time.
SECTION 9.4. Waiver by each Guarantor. Each Guarantor
irrevocably waives acceptance hereof, presentment, demand, protest and any
notice not provided for herein, as well as any requirement that at any time any
action be taken by any Person against the Borrower or any other Guarantor or
any other Person.
SECTION 9.5. Subrogation and Contribution. Each Guarantor
irrevocably waives any and all rights to which it may be entitled, by operation
of law or otherwise, upon making any payment hereunder (i) to be subrogated to
the rights of the payee against the Borrower with respect to such payment or
against any direct or indirect security therefor, or otherwise to be
reimbursed, indemnified or exonerated by or for the account of the Borrower in
respect thereof or (ii) to receive any payment, in the nature of contribution
or for any other reason, from any other Guarantor with respect to such payment.
SECTION 9.6. Stay of Acceleration. If acceleration of the
time for payment of any amount payable by any Obligor under the Loan Documents
is stayed upon insolvency, bankruptcy or reorganization of the Borrower, all
such amounts otherwise subject to acceleration under the terms of this
Agreement shall nonetheless be payable by each Guarantor hereunder forthwith on
demand by the Agent made at
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the request of the requisite proportion of the Lenders specified in Article 6
of the Agreement.
SECTION 9.7. Limit of Liability. The obligations of each
Guarantor shall be limited to an aggregate amount equal to the largest amount
that would not render its obligations hereunder subject to avoidance under
Section 548 of the United States Bankruptcy Code or any comparable provisions
of any applicable state law.
ARTICLE 10
MISCELLANEOUS
SECTION 10.1. Notices. All notices, requests and other
communications to any party hereunder shall be in writing (including bank wire,
telex, facsimile transmission or similar writing) and shall be given to such
party: (a) in the case of the Borrower or the Administrative Agent, at its
address, facsimile number or telex number set forth on the signature pages
hereof, (b) in the case of any Guarantor, in care of the Borrower, (c) in the
case of any Lender, at its address, facsimile number or telex number set forth
in its Administrative Questionnaire or (d) in the case of any party, such other
address, facsimile number or telex number as such party may hereafter specify
for the purpose by notice to the Administrative Agent and the Borrower. Each
such notice, request or other communication shall be effective (i) if given by
telex, when such telex is transmitted to the telex number specified in this
Section and the appropriate answerback is received, (ii) if given by facsimile
transmission, when transmitted to the facsimile number specified in this
Section and confirmation of receipt is received, (iii) if given by mail, 72
hours after such communication is deposited in the mails with first class
postage prepaid, addressed as aforesaid or (iv) if given by any other means,
when delivered at the address specified in this Section; provided that notices
to the Administrative Agent or any Issuing Lender under Article 2 or Article 8
shall not be effective until received.
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SECTION 10.2. No Waivers. No failure or delay by any Agent
or any Lender in exercising any right, power or privilege hereunder or under
any Note shall operate as a waiver thereof nor shall any single or partial
exercise thereof preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. The rights and remedies herein
provided shall be cumulative and not exclusive of any rights or remedies
provided by law.
SECTION 10.3. Expenses; Indemnification. (a) The Borrower
shall pay (i) all out-of-pocket expenses of the Agents (including the
Syndication Agent referred to on the cover page hereof), including fees and
disbursements of special counsel for the Administrative Agent, in connection
with the preparation and administration of the Loan Documents, any waiver or
consent thereunder or any amendment thereof or any Default or alleged Default
thereunder and (ii) if an Event of Default occurs, all out-of-pocket expenses
incurred by the Agents and each Lender, including (without duplication) the
fees and disbursements of outside counsel and the allocated cost of inside
counsel, in connection with such Event of Default and collection, bankruptcy,
insolvency and other enforcement proceedings resulting therefrom.
(b) The Borrower agrees to indemnify the Agents and each
Lender, their respective affiliates and the respective directors, officers,
agents and employees of the foregoing (each an "Indemnitee") and hold each
Indemnitee harmless from and against any and all liabilities, losses, damages,
costs and expenses of any kind, including, without limitation, the reasonable
fees and disbursements of counsel, which may be incurred by such Indemnitee in
connection with any investigative, administrative or judicial proceeding
(whether or not such Indemnitee shall be designated a party thereto) brought or
threatened relating to or arising out of the Loan Documents or any actual or
proposed use of proceeds of Loans hereunder; provided that no Indemnitee shall
have the right to be indemnified hereunder for such Indemnitee's own gross
negligence or willful misconduct.
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SECTION 10.4. Sharing of Set-Offs. Each Lender agrees that
if it shall, by exercising any right of set-off or counterclaim or otherwise,
receive payment of a proportion of the aggregate amount of principal and
interest due with respect to any Note held by it and any Letter of Credit
Liabilities which is greater than the proportion received by any other Lender
in respect of the aggregate amount of principal and interest due with respect
to any Note and Letter of Credit Liabilities held by such other Lender, the
Lender receiving such proportionately greater payment shall purchase such
participations in the Notes and Letter of Credit Liabilities held by the other
Lenders, and such other adjustments shall be made, as may be required so that
all such payments of principal and interest with respect to the Notes and
Letter of Credit Liabilities held by the Lenders shall be shared by the Lenders
pro rata; provided that nothing in this Section shall impair the right of any
Lender to exercise any right of set-off or counterclaim it may have and to
apply the amount subject to such exercise to the payment of indebtedness of any
Obligor other than its indebtedness hereunder. Each Obligor agrees, to the
fullest extent it may effectively do so under applicable law, that any holder
of a participation in a Note or Letter of Credit Liabilities, whether or not
acquired pursuant to the foregoing arrangements, may exercise rights of set-off
or counterclaim and other rights with respect to such participation as fully as
if such holder of a participation were a direct creditor of such Obligor in the
amount of such participation.
SECTION 10.5. Amendments and Waivers; Release of Collateral.
(a) Any provision of this Agreement or the Notes may be amended or waived if,
but only if, such amendment or waiver is in writing and is signed by the
Borrower and the Required Lenders (and, if the rights or duties of the
Documentation Agent, the Administrative Agent or an Issuing Lender are affected
thereby, by such affected Agent or Issuing Lender, as relevant); provided that
no such amendment or waiver shall:
(i) unless signed by all the Lenders with a Term Commitment,
increase or decrease the Term Commitments
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(except for a ratable decrease in all the Term Commitments), subject
any such Lender to any additional obligation, or postpone the date
fixed for the scheduled termination of any Term Commitment;
(ii) unless signed by all Lenders holding Term Loans, reduce
the principal of or rate of interest on any Term Loans, postpone the
date fixed for any scheduled payment of principal of or interest on
any Term Loans, or decrease the aggregate amount by which Term Loans
are required to be repaid on any date scheduled pursuant to Section
2.4(b) or postpone any date for such repayment;
(iii) unless signed by all Lenders with a Revolving
Commitment, increase or decrease any Revolving Commitment (except for
a ratable decrease in all the Revolving Commitments), subject any such
Lender to any additional obligation, postpone the date fixed for any
scheduled reduction or termination of any Revolving Commitment, reduce
the principal of or rate of interest on any Revolving Loan or the
amount to be reimbursed in respect of any Letter of Credit or any
interest thereon, extend any Letter of Credit expiry date beyond the
Maturity Date, or postpone the date fixed for scheduled payment of
principal of, and dates fixed for payment of interest on, any
Revolving Loan;
(iv) unless signed by all the Lenders, postpone the date fixed for
any payment of any fees hereunder or release any Guarantor from its
obligations hereunder;
(v) unless signed by the Swing Lender and each other Lender
affected thereby, increase the Swing Loan Commitment, postpone the
date fixed for the termination of the Swing Loan Commitment or
otherwise affect any of its rights or obligations hereunder; and
(vi) unless signed by all the Lenders, change the percentage
of the Commitments or of the aggregate unpaid principal amount of the
Notes and the Letter of Credit Liabilities, or the number of Lenders,
which
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113
shall be required for the Lenders or any of them to take any action
under this Section or any other provision of this Agreement.
Any provision of the Collateral Documents may be amended or waived if, but only
if, such amendment or waiver is in writing and is signed by the relevant
Obligor or Obligors and the Administrative Agent with the consent of the
Required Lenders; provided that no such amendment or waiver shall, unless
signed by all the Lenders, effect or permit a release of all or substantially
all of the Collateral.
(b) Notwithstanding anything to the contrary in the
Collateral Documents, Collateral shall be released from the Lien of the
Collateral Documents from time to time as necessary to effect any sale or
pledge of assets permitted by the Loan Documents. The Administrative Agent
shall, at the sole expense of the Borrower, execute and deliver all release
documents reasonably requested to evidence any release pursuant to this
subsection (b).
SECTION 10.6. Successors and Assigns. (a) The provisions of
this Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns, except that the Borrower
may not assign or otherwise transfer any of its rights under this Agreement
without the prior written consent of all Lenders.
(b) Any Lender may at any time grant to one or more banks or
other institutions (each a "Participant") participating interests in its
Commitment or any or all of its Loans and Letter of Credit Liabilities. In the
event of any such grant by a Lender of a participating interest to a
Participant, whether or not upon notice to the Borrower and the Agents, such
Lender shall remain responsible for the performance of its obligations
hereunder, and the Borrower, the Issuing Lenders and the Agents shall continue
to deal solely and directly with such Lender in connection with such Lender's
rights and obligations under this Agreement. Any agreement pursuant to which
any Lender may grant such a participating interest shall provide that such
Lender shall retain the sole right and responsibility to enforce the
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114
obligations of the Borrower hereunder including, without limitation, the right
to approve any amendment, modification or waiver of any provision of this
Agreement; provided that such participation agreement may provide that such
Lender will not agree to any modification, amendment or waiver of this
Agreement described in clause (i), (ii), (iii) or (iv) of, or in the proviso in
the last sentence of, Section 10.5(a) without the consent of the Participant.
The Borrower agrees that each Participant shall, to the extent provided in its
participation agreement, be entitled to the benefits of Section 2.14 or Article
8 with respect to its participating interest. An assignment or other transfer
which is not permitted by subsection (c) or (d) below shall be given effect for
purposes of this Agreement only to the extent of a participating interest
granted in accordance with this subsection (b).
(c) Any Lender may at any time assign to one or more banks or
other institutions (each an "Assignee") all, or a pro rata part of all, of its
rights and obligations under this Agreement with respect to either:
(i) its outstanding Term Loans, or
(ii) its Revolving Commitment and outstanding Revolving Loans
and Letter of Credit Liabilities,
and such Assignee shall assume such rights and obligations, pursuant to an
Assignment and Assumption Agreement in substantially the form of Exhibit F
hereto executed by such Assignee and such transferor Lender, with (and subject
to) the subscribed consent of the Borrower and the Administrative Agent and, if
such assignment includes amounts pursuant to clause (ii) above, the Issuing
Lenders and Swing Lender, none of which consents shall be unreasonably withheld;
provided that:
(A) if an Assignee is an affiliate of such transferor Lender
or was a Lender immediately prior to such assignment, no such consent
of the Borrower shall be required; and
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(B) if such transferor Lender (i) assigns a pro rata part
(but not all) of its Term Loans or (ii) assigns a pro rata part (but
not all) of its Revolving Commitment and outstanding Revolving Loans,
then (x) the aggregate outstanding principal amount of Term Loans (if
any) assigned to an Assignee shall be at least $5,000,000 and (y) the
portion of the transferor Lender's Revolving Commitment and
outstanding Revolving Loans (if any) assigned to an Assignee shall be
at least $5,000,000 (or if such Assignee was a Lender immediately
prior to such Assignment, the above amounts determined with reference
to the respective Term Loans, Revolving Commitment and Revolving
Loans, as applicable, of such Assignee after giving effect to such
assignment), and, after giving effect to such partial assignment, the
aggregate outstanding amount of Term Loans retained by the assigning
Lender shall be at least $5,000,000 and the portion of the Revolving
Commitment and outstanding Revolving Loans retained by the assigning
Lender shall be at least $5,000,000.
Upon execution and delivery of such instrument and payment by such Assignee to
such transferor Lender of an amount equal to the purchase price agreed between
such transferor Lender and such Assignee, such Assignee shall be a Lender party
to this Agreement and shall have all the rights and obligations of a Lender
with a Commitment as set forth in such instrument of assumption, and the
transferor Lender shall be released from its obligations hereunder to a
corresponding extent, and no further consent or action by any party shall be
required. Upon the consummation of any assignment pursuant to this subsection
(c), the transferor Lender, the Administrative Agent and the Borrower shall
make appropriate arrangements so that, if required, a new Note is issued to the
Assignee. In connection with any such assignment, the transferor Lender shall
pay to the Administrative Agent an administrative fee for processing such
assignment in the amount of $3,500. If the Assignee is not incorporated under
the laws of the United States of America or a state thereof, it shall deliver
to the Borrower and the Administrative Agent certification as to exemption
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116
from deduction or withholding of any United States federal income taxes in
accordance with Section 8.4.
(d) Any Lender may at any time assign all or any portion of
its rights under this Agreement and its Note to a Federal Reserve Bank. No
such assignment shall release the transferor Lender from its obligations
hereunder.
(e) No Assignee, Participant or other transferee of any
Lender's rights shall be entitled to receive any greater payment under Section
8.3 or 8.4 than such Lender would have been entitled to receive with respect to
the rights transferred, unless such transfer is made with the Borrower's prior
written consent or by reason of the provisions of Section 8.2, 8.3 or 8.4
requiring such Lender to designate a different Applicable Lending Office under
certain circumstances or at a time when the circumstances giving rise to such
greater payment did not exist.
SECTION 10.7. Collateral. Each of the Lenders represents to
the Agents and each of the other Lenders that it in good faith is not relying
upon any "margin stock" (as defined in Regulation U) as collateral in the
extension or maintenance of the credit provided for in this Agreement.
SECTION 10.8. Governing Law; Submission to Jurisdiction.
This Agreement and each Note shall be governed by and construed in accordance
with the laws of the State of New York. Each Obligor hereby submits to the
nonexclusive jurisdiction of the United States District Court for the Southern
District of New York and of any New York State court sitting in New York City
for purposes of all legal proceedings arising out of or relating to this
Agreement or the transactions contemplated hereby. Each Obligor irrevocably
waives, to the fullest extent permitted by law, any objection which it may now
or hereafter have to the laying of the venue of any such proceeding brought in
such a court and any claim that any such proceeding brought in such a court has
been brought in an inconvenient forum.
SECTION 10.9. Counterparts; Integration; Effectiveness. This
Agreement may be signed in any number
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of counterparts, each of which shall be an original, with the same effect as if
the signatures thereto and hereto were upon the same instrument. This
Agreement constitutes the entire agreement and understanding among the parties
hereto and supersedes any and all prior agreements and understandings, oral or
written, relating to the subject matter hereof. This Agreement shall become
effective upon receipt by the Administrative Agent of counterparts hereof
signed by each of the parties hereto (or, in the case of any party as to which
an executed counterpart shall not have been received, receipt by the
Administrative Agent in form satisfactory to it of telegraphic, telex,
facsimile or other written confirmation from such party of execution of a
counterpart hereof by such party).
SECTION 10.10. WAIVER OF JURY TRIAL. EACH OF THE BORROWER,
THE AGENTS AND THE LENDERS HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL
BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR
THE TRANSACTIONS CONTEMPLATED HEREBY.
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118
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective authorized officers as of the
day and year first above written.
EXIDE ELECTRONICS GROUP, INC.
By /s/ Marty R. Kittrell
----------------------------------
Name: Marty R. Kittrell
Title: Vice President
Address: 8609 Six Forks Road
Raleigh, NC 27615
Telex:
Facsimile: 919/870-3100
GUARANTORS
----------
EXIDE ELECTRONICS CORPORATION
By /s/ Marty R. Kittrell
----------------------------------
Name: Marty R. Kittrell
Title: Vice President
Address: 8609 Six Forks Road
Raleigh, NC 27615
Telex:
Facsimile: 919/870-3100
EXIDE ELECTRONICS INTERNATIONAL CORP.
By /s/ Marty R. Kittrell
----------------------------------
Name: Marty R. Kittrell
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119
Title: Vice President
Address: 8609 Six Forks Road
Raleigh, NC 27615
Telex:
Facsimile: 919/870-3100
INTERNATIONAL POWER MACHINES
CORPORATION
By /s/ Marty R. Kittrell
-----------------------------------
Name: Marty R. Kittrell
Title: Vice President - Finance
Address: 8609 Six Forks Road
Raleigh, NC 27615
Telex:
Facsimile: 919/870-3100
112
120
DELTEC POWER SYSTEMS, INC.
By /s/ Marty R. Kittrell
----------------------------------
Name: Marty R. Kittrell
Title: Senior Vice President
Address: 8609 Six Forks Road
Raleigh, NC 27615
Telex:
Facsimile: 919/870-3100
LECTRO PRODUCTS, INC.
By /s/ Marty R. Kittrell
----------------------------------
Name: Marty R. Kittrell
Title: Vice President
Address: 8609 Six Forks Road
Raleigh, NC 27615
Telex:
Facsimile: 919/870-3100
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121
DATATRAX ACQUISITION CORPORATION
By /s/ Marty R. Kittrell
----------------------------------
Name: Marty R. Kittrell
Title: Vice President
Address: 8609 Six Forks Road
Raleigh, NC 27615
Telex:
Facsimile: 919/870-3100
EXIDE ELECTRONICS USA HOLDINGS CORP.
By /s/ Marty R. Kittrell
----------------------------------
Name: Marty R. Kittrell
Title: Vice President
Address: 8609 Six Forks Road
Raleigh, NC 27615
Telex:
Facsimile: 919/870-3100
DELTEC ELECTRONICS CORP.
By /s/ Marty R. Kittrell
----------------------------------
Name: Marty R. Kittrell
Title: Senior Vice President
Address: 8609 Six Forks Road
Raleigh, NC 27615
Telex:
Facsimile: 919/870-3100
114
122
LORTEC POWER SYSTEMS, INC.
By /s/ Marty R. Kittrell
----------------------------------
Name: Marty R. Kittrell
Title: Senior Vice President
Address: 8609 Six Forks Road
Raleigh, NC 27615
Telex:
Facsimile: 919/870-3100
115
123
TERM REVOLVING
COMMITMENTS COMMITMENTS LENDERS
- ----------- ----------- -------
$13,333,333 $33,333,334 MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
By /s/ Douglas A. Cruikshank
-----------------------------
Name: Douglas A. Cruikshank
Title: Vice President
$12,222,222 $30,555,556 FIRST UNION NATIONAL BANK
OF NORTH CAROLINA
By /s/ T.M. Molitor
-----------------------------
Name: T.M. Molitor
Title: Vice President
$11,111,111 $27,777,778 BANK OF AMERICA ILLINOIS
By /s/ Michael J. McKenney
-----------------------------
Name: Michael J. McKenney
Title: Vice President
$ 6,666,667 $16,666,666 NATIONSBANK, N.A.
By /s/ Richard G. Parkhurst
-----------------------------
Name: Richard G. Parkhurst
Title: Vice President
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124
$ 6,666,667 $16,666,666 ABN AMRO BANK, N.V.
By /s/ Larry Kelley
-------------------------------
Name: Larry Kelley
Title: Group Vice President
By /s/ Steven Hipsman
-------------------------------
Name: Steven Hipsman
Title: Vice President
TOTAL TERM TOTAL REVOLVING
COMMITMENTS COMMITMENTS
- ----------- ---------------
$50,000,000 $125,000,000
============================
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, as
Administrative Agent
By /s/ Douglas A. Cruikshank
-------------------------------
Name: Douglas A. Cruikshank
Title: Vice President
Address: 60 Wall Street
New York, NY 10260
Telex: TRT 177615
Answerback 177615 MGT UT
Facsimile: 212/648-5536
BANK OF AMERICA ILLINOIS,
as Documentation Agent
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125
By /s/ Michael J. McKenney
---------------------------------
Name: Michael J. McKenney
Title: Vice President
Address: 231 South LaSalle Street
Chicago, Illinois 60697
Telex: 25-34-12 CONTL-BK-CGO
Facsimile: 312/974-9626
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126
PRICING SCHEDULE
Each of "Euro-Dollar Margin", "Base Rate Margin", "Letter of
Credit Fee Rate" and "Commitment Fee Rate" means, for any date, the rates set
forth below in the row opposite such term and in the column corresponding to
the "Pricing Level" that applies at such date:
- -----------------------------------------------------------------------------------------------------------------
Level I Level II Level III Level IV Level V Level VI
- -----------------------------------------------------------------------------------------------------------------
Euro-Dollar
Margin 0.75% 1.00% 1.50% 2.00% 2.25% 2.50%
- -----------------------------------------------------------------------------------------------------------------
Letter of Credit Fee
Rate 0.75% 1.00% 1.50% 2.00% 2.25% 2.50%
- -----------------------------------------------------------------------------------------------------------------
Base Rate
Margin 0% 0% 0.50% 1.00% 1.25% 1.50%
- -----------------------------------------------------------------------------------------------------------------
Commitment Fee
Rate 0.25% 0.375% 0.375% 0.375% 0.50% 0.50%
- -----------------------------------------------------------------------------------------------------------------
For purposes of this Schedule, the following terms have the
following meanings:
"Applicable Leverage Ratio" means, for any day, the Leverage Ratio
as at the last day of the Fiscal Quarter of the Borrower most recently ended
prior to such date for which the Borrower has delivered financial statements
pursuant to Section 5.1(a) or 5.1(b), as the case may be; provided that if the
Borrower shall fail to timely deliver the financial statements required to be
delivered by it pursuant to Section 5.1(a) or 5.1(b), as the case may be, the
Applicable Leverage Ratio for each date from and including the date on which
such statements are required to be delivered to but excluding the date on which
such statements are delivered shall be deemed to be greater than 4.0.
"Level I Pricing" applies at any date if the Applicable Leverage
Ratio for such date is less than 2.0.
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127
"Level II Pricing" applies at any date if the Applicable Leverage
Ratio for such date is greater than or equal to 2.0 and less than 2.5.
"Level III Pricing" applies at any date if the Applicable Leverage
Ratio for such date is greater than or equal to 2.5 and less than 3.0.
"Level IV Pricing" applies at any date if the Applicable Leverage
Ratio for such date is greater or equal to 3.0 and less than 3.5.
"Level V Pricing" applies at any date if the Applicable Leverage
Ratio for such date is greater than or equal to 3.5 and less than 4.0.
"Level VI Pricing" applies at any date if the Applicable Leverage
Ratio for such date is greater than or equal to 4.0.
"Pricing Level" refers to the determination of which of Level I,
Level II, Level III, Level IV, Level V or Level VI Pricing applies at any date.
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128
SCHEDULE 1:
EXISTING LETTERS OF CREDIT
====================================================================================
ISSUING LENDER ORIGINAL MATURITY AMOUNT
ISSUE DATE DATE
- ------------------------------------------------------------------------------------
First Union National Bank 5/25/95 6/1/96 $230,999
of North Carolina
("FUNB")
- ------------------------------------------------------------------------------------
FUNB 5/25/95 6/1/96 $ 69,001
- ------------------------------------------------------------------------------------
FUNB 5/24/93 9/1/97 $ 49,652
- ------------------------------------------------------------------------------------
FUNB 7/8/92 6/26/96 $ 32,400
====================================================================================
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129
SCHEDULE 4.5:
LITIGATION
On August 21, 1995, a case entitled National Broadcasting Company, Inc. and
CNBC, Inc. vs. International Power Machine/LorTec Systems, Inc. et al, as filed
in the Supreme Court of New York, New York County. The plaintiffs allege that
International Power Machines Corporation ("IPM") negligently manufactured and
installed an uninterruptible power supply product that caused them property and
compensatory damages when the equipment malfunctioned during the installation
of the product by third-party contractors. The plaintiffs included seven
causes of action, each of which seeks damages in the amount of $1.1 million.
Three of those causes of action also seek $3.0 million in punitive damages.
Claims of this nature are generally covered by the Borrower's insurance and its
insurer has accepted general defense of the matter. The insurer has notified
the Borrower that while claims based on IPM's negligent manufacture or design
are covered by the insurance policy, damages, if any, caused by IPM's
intentional or careless decision to install a known defective and dangerous
product would be subject to certain exclusions under the policy. While
discovery is at an early stage, the Borrower believes at this time, based on
the advise of its defense counsel, that no evidence has yet been presented that
supports any allegation of intentional or careless conduct. IPM also believes
that is has meritorious defenses and counter-claims against the third-party
co-defendants who IPM alleges defectively installed the product. The Borrower
believes that the final outcome of this matter will not have a material adverse
effect on the business or the financial position of the Borrower and its
subsidiaries taken as a whole.
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SCHEDULE 5.10:
EXISTING DEBT OF THE BORROWER AND THE GUARANTORS
1. Revolving Credit Facility for up to FF 25,000,000 made to Exide Electronics
S.A. by ABN-AMRO Bank N.V., guaranteed by Exide Electronics Corporation.
2. Working Capital Loan for DEM 2,000,000, made to Exide Electronics
International G.m.b.H. by NBD Bank, guaranteed by Exide Electronics
Corporation.
3. Revolving Credit Facility for up to BP 3,350,000, made to MPL Powerware
Systems Limited by NationsBank, N.A., guaranteed by Exide Electronics Group,
Inc., Exide Electronics Corporation and Exide Electronics International Corp.
4. Revolving Credit Facility made to Exide Electronics Canada Inc. by Bank of
Montreal for $2,500,000, guaranteed by Exide Electronics Group, Inc.
5. Promissory Note from Exide Electronics Group, Inc., to MasTec, Inc. in the
original principal amount of $450,000.
6. Equipment Loan from Associates Commercial Corporation to Lectro Products,
Inc. in the original principal amount of $393,448.86.
7. Tekes government loan to FPS Power Systems Oy Ab granted as support for
research and development projects in the original principal amount of 5,500,000
Finnish Marks.
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131
EXHIBITS
124
132
EXHIBIT A
NOTE
New York, New York
___________ __, 199_
For value received, EXIDE ELECTRONICS GROUP, INC., a Delaware
corporation (the "Borrower"), promises to pay to the order of
______________________ (the "Lender"), for the account of its Applicable
Lending Office, the unpaid principal amount of each Loan made by the Lender to
the Borrower pursuant to the Credit Agreement referred to below on the maturity
date and from time to time on earlier repayment dates referred to in the Credit
Agreement. The Borrower promises to pay interest on the unpaid principal
amount of each such Loan on the dates and at the rate or rates provided for in
the Credit Agreement. All such payments of principal and interest shall be
made in lawful money of the United States in Federal or other immediately
available funds at the office of Morgan Guaranty Trust Company of New York, 60
Wall Street, New York, New York.
All Loans made by the Lender, the respective types and maturities
thereof and all repayments of the principal thereof shall be recorded by the
Lender and, if the Lender so elects in connection with any transfer or
enforcement hereof, appropriate notations to evidence the foregoing information
with respect to each such Loan then outstanding may be endorsed by the Lender
on the schedule attached hereto, or on a continuation of such schedule attached
to and made a part hereof; provided that the failure of the Lender to make any
such recordation or endorsement shall not affect the obligations of the
Borrower hereunder or under the Credit Agreement.
133
This note is one of the Notes referred to in the Credit Agreement
dated as of March 13, 1996 among the Borrower, the Guarantors party thereto,
the lenders listed on the signature pages thereof, the issuing lenders party
thereto, Morgan Guaranty Trust Company of New York, as Administrative Agent and
Bank of America Illinois, as Documentation Agent (as the same may be amended
from time to time, the "Credit Agreement"). Terms defined in the Credit
Agreement are used herein with the same meanings. Reference is made to the
Credit Agreement for provisions for the prepayment hereof and the acceleration
of the maturity hereof.
The payment in full of the principal and interest on this note has,
pursuant to the provisions of the Credit Agreement, been unconditionally
guaranteed by the Guarantors referred to therein.
EXIDE ELECTRONICS GROUP,
INC.
By
----------------------
Name:
Title:
2
134
LOANS AND PAYMENTS OF PRINCIPAL
- --------------------------------------------------------------------------
Amount Type Amount of
of of Principal Maturity Notation
Date Loan Loan Repaid Date Made By
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
3
135
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
4
136
EXHIBIT B
SECURITY AGREEMENT
137
EXECUTION COPY
SECURITY AGREEMENT
SECURITY AGREEMENT dated as of March 13, 1996 between EXIDE
ELECTRONICS GROUP, INC., a Delaware corporation (together with its successors,
"Borrower"), each of the "Guarantors" listed on the signature pages hereof and
each Person that shall, at any time after the date hereof, become a "Guarantor"
and a party hereto pursuant to Section 5.17 of the Credit Agreement referred to
below (together with their respective successors, the "Guarantors", and
together with the Borrower, the "Obligors"), and MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, as Administrative Agent for the Lenders referred to below.
W I T N E S S E T H :
WHEREAS, (i) the Borrower, the other Obligors, certain lenders
(including any such Lender in its capacity as Issuing Lender, as defined
therein, the "Lenders"), Bank of America Illinois, as documentation agent for
such Lenders and Morgan Guaranty Trust Company of New York, as administrative
agent for such Lenders (the "Agents"), are parties to a Credit Agreement of
even date herewith (as the same may be amended from time to time, the "Credit
Agreement"); and
WHEREAS, in order to induce the Lenders, and the Agents to
enter into the Credit Agreement, each Obligor has agreed to grant a continuing
security interest in and to the Collateral (as hereafter defined) to secure its
obligations under the Loan Documents referred to in the Credit Agreement;
NOW, THEREFORE, in consideration of the premises and other
good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
SECTION 1. Definitions
Terms defined in the Credit Agreement and not otherwise
defined herein have, as used herein, the respective meanings provided for
therein. The following
138
additional terms, as used herein, have the following respective meanings:
"Accounts" means all "accounts" (as defined in the UCC) now
owned or hereafter acquired by any Obligor, and shall also mean and include all
accounts receivable, contract rights, book debts, notes, drafts and other
obligations or indebtedness owing to any Obligor arising from the sale, lease
or exchange of goods or other property by it and/or the performance of services
by it (including any such obligation which might be characterized as an
account, contract right or general intangible under the Uniform Commercial Code
in effect in any jurisdiction) and all rights of any Obligor in, to and under
all purchase orders for goods, services or other property, and all rights of
any Obligor to any goods, services or other property represented by any of the
foregoing (including returned or repossessed goods and unpaid sellers' rights
of rescission, replevin, reclamation and rights to stoppage in transit) and all
monies due to or to become due to any Obligor under all contracts for the sale,
lease or exchange of goods or other property and/or the performance of services
by it (whether or not yet earned by performance on the part of such Obligor),
in each case whether now in existence or hereafter arising or acquired
including, without limitation, the right to receive the proceeds of said
purchase orders and contracts and all collateral security and guarantees of any
kind given by any Person with respect to any of the foregoing.
"Collateral" has the meaning set forth in Section 3.
"Collateral Accounts" has the meaning set forth in Section
5(A).
"Collateral Account Period" has the meaning set forth in
Section 5(A).
"Documents" means all "documents" (as defined in the UCC) or
other receipts covering, evidencing or representing goods, now owned or
hereafter acquired by any Obligor, only to the extent such documents relate to
Accounts, Inventory and General Intangibles.
"General Intangibles" means all "general intangibles" (as
defined in the UCC) now owned or hereafter acquired by any Obligor, including
(i) all obligations or indebtedness owing to such Obligor (other than Accounts)
from whatever source arising, (ii) all rights or claims in respect of refunds
for taxes paid and (iii) all rights in
2
139
respect of any pension plan or similar arrangement maintained for employees of
any member of the ERISA Group; provided, however, that General Intangibles
shall not include any patents or copyrights.
"Hedging Obligations" means all obligations of the Borrower to
any Lender or any Affiliate of a Lender under (i) any interest rate swap
agreement, interest rate cap agreement or interest rate collar agreement, (ii)
any foreign exchange contract or currency swap agreement or (iii) any similar
agreement or arrangement of a type designed to protect the Borrower against
fluctuations in interest rates or currency exchange rates.
"Instruments" means all "instruments", "chattel paper" or
"letters of credit" (each as defined in the UCC), including those evidencing,
representing, arising from or existing in respect of, relating to, securing or
otherwise supporting the payment of, any of the Accounts, including (but not
limited to) promissory notes, drafts, bills of exchange and trade acceptances,
now owned or hereafter acquired by any Obligor.
"Inventory" means all "inventory" (as defined in the UCC), now
owned or hereafter acquired by any Obligor, wherever located, and shall also
mean and include all raw materials and other materials and supplies,
work-in-process and finished goods and any products made or processed therefrom
and all substances, if any, commingled therewith or added thereto.
"Liquid Investments" has the meaning set forth in Section
5(D).
"Perfection Certificate" means, with respect to any Obligor, a
certificate substantially in the form of Exhibit A, completed and supplemented
with the schedules and attachments contemplated thereby to the satisfaction of
the Administrative Agent, and duly executed by the chief executive officer and
the chief legal officer of such Obligor.
"Permitted Liens" means the Security Interests and the Liens
on the Collateral permitted to be created, to be assumed or to exist pursuant
to Section 5.9 of the Credit Agreement.
"Proceeds" means all proceeds of, and all other profits,
products, rents or receipts, in whatever form, arising from the collection,
sale, lease, exchange, assignment, licensing or other disposition of, or other
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realization upon, collateral, including all claims of any Obligor against third
parties for loss of, damage to or destruction of, or for proceeds payable
under, or unearned premiums with respect to, policies of insurance in respect
of, any collateral, and any condemnation or requisition payments with respect
to any collateral, in each case whether now existing or hereafter arising.
"Secured Obligations" means the obligations secured under this
Agreement which include: (a) with respect to the Borrower, (i) all principal
of and interest (including any interest which accrues after the commencement of
any case, proceeding or other action relating to the bankruptcy, insolvency or
reorganization of the Borrower whether or not allowed or allowable as a claim
in any such proceeding) on any loan under, or any note issued pursuant to, the
Credit Agreement, (ii) all other amounts payable by the Borrower hereunder or
under any other Loan Document, (iii) all other obligations of the Borrower
hereunder and the other Loan Documents, (iv) any Hedging Obligations and (v)
any amendments, restatements, renewals, extensions or modifications of any of
the foregoing; and (b) with respect to each other Obligor, (i) all obligations
of such Obligor under the Credit Agreement (including without limitation,
Article 9 thereof) and under any other Loan Document and (ii) any amendments,
restatements, renewals, extensions or modifications of any of the foregoing.
"Secured Parties" means the Agents, the Lenders (including
without limitation with respect to any Hedging Obligations owed to such
Lenders), and any Affiliate of any Lender to which Hedging Obligations are
owed.
"Security Interests" means the security interests in the
Collateral granted hereunder securing the Secured Obligations.
"UCC" means the Uniform Commercial Code as in effect on the
date hereof in the State of New York; provided that if by reason of mandatory
provisions of law, the perfection or the effect of perfection or non-perfection
of the Security Interest in any Collateral is governed by the Uniform
Commercial Code as in effect in a jurisdiction other than New York, "UCC" means
the Uniform Commercial Code as in effect in such other jurisdiction for
purposes of the provisions hereof relating to such perfection or effect of
perfection or non-perfection.
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SECTION 2. Representations and Warranties
Each Obligor represents and warrants as follows:
(A) Such Obligor has good and marketable title to all of its
Collateral, free and clear of any Liens other than the Permitted Liens. Such
Obligor has taken all actions necessary under the UCC to perfect its interest
in any Accounts purchased or otherwise acquired by it, as against its assignors
and creditors of its assignors.
(B) Such Obligor has not performed any acts which might
prevent the Administrative Agent from enforcing any of the terms of this
Agreement or which would limit the Administrative Agent in any such
enforcement. Other than financing statements or other similar or equivalent
documents or instruments with respect to the Security Interests and Permitted
Liens, no financing statement, mortgage, security agreement or similar or
equivalent document or instrument covering all or any part of its Collateral is
on file or of record in any jurisdiction in which such filing or recording
would be effective to perfect a Lien on such Collateral. No Collateral is in
the possession of any Person (other than an Obligor) asserting any claim
thereto or security interest therein, except that the Administrative Agent or
its designee may have possession of Collateral as contemplated hereby.
(C) The information set forth in the Perfection Certificate
delivered to the Administrative Agent prior to the Closing Date is correct and
complete after giving effect to the consummation of the Acquisition. Not later
than 30 days following the Closing Date, such Obligor shall furnish to the
Administrative Agent file search reports from each UCC filing office set forth
in Schedule 7 to the Perfection Certificate confirming the filing information
set forth in such Schedule.
(D) The Security Interests constitute valid security
interests under the UCC securing the Secured Obligations. When UCC financing
statements in the form specified in Exhibit A shall have been filed in the
offices specified in the Perfection Certificate, the Security Interests shall
constitute perfected security interests in the Collateral (except Inventory in
transit) to the extent that a security interest therein may be perfected by
filing pursuant to the UCC, prior to all other Liens and rights of others
therein except for the Permitted Liens existing on and as of the Closing Date.
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(E) The Inventory is insured in accordance with the
requirements of the Credit Agreement.
(F) All Inventory has or will have been produced in
compliance with the applicable requirements of the Fair Labor Standards Act, as
amended.
SECTION 3. The Security Interests
(A) In order to secure the full and punctual payment and
performance of the Secured Obligations in accordance with the terms thereof,
each Obligor hereby grants to the Administrative Agent for the ratable benefit
of the Secured Parties a continuing security interest in and to all of the
following property of such Obligor, whether now owned or existing or hereafter
acquired or arising and regardless of where located (all being collectively
referred to as the "Collateral"):
(1) Accounts;
(2) Inventory;
(3) General Intangibles;
(4) Documents;
(5) Instruments;
(6) The Collateral Account of such Obligor, all cash deposited
therein from time to time, the Liquid Investments made pursuant to
Section 5(D) and other monies and property of any kind of such Obligor
in the possession or under the control of the Administrative Agent;
(7) All books and records (including customer lists, credit
files, computer programs, printouts and other computer materials and
records) of such Obligor pertaining to any of the Collateral; and
(8) All Proceeds of all or any of the Collateral described in
Clauses 1 through 7 hereof.
(B) The Security Interests are granted as security only and
shall not subject any Secured Party to, or transfer or in any way affect or
modify, any obligation or liability of any Obligor with respect to any of the
Collateral or any transaction in connection therewith.
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SECTION 4. Further Assurances; Covenants
(A) None of the Obligors will change its name, identity or
structure in any manner unless it shall have given the Administrative Agent
prior notice thereof and delivered an opinion of counsel with respect thereto
in accordance with Section 4(L). None of the Obligors will change the location
of (i) its chief executive office or chief place of business or (ii) the
locations where it keeps or holds any Collateral or any records relating
thereto from the applicable location described in the Perfection Certificate
unless it shall have given the Administrative Agent prior notice thereof and
delivered an opinion of counsel with respect thereto in accordance with Section
4(L). None of the Obligors shall in any event change the location of any
Collateral if such change would cause the Security Interests in such Collateral
to lapse or cease to be perfected.
(B) Each Obligor will, from time to time, at its expense,
execute, deliver, file and record any statement, assignment, instrument,
document, agreement or other paper and take any other action (including any
filings of financing or continuation statements under the UCC) that from time
to time may be necessary or desirable, or that the Administrative Agent may
request, in order to create, preserve, perfect, confirm or validate the
Security Interests or to enable the Secured Parties to obtain the full benefits
of this Agreement, or to enable the Administrative Agent to exercise and
enforce any of its rights, powers and remedies hereunder with respect to any of
the Collateral. To the extent permitted by applicable law, each Obligor hereby
authorizes the Administrative Agent, and appoints the Administrative Agent as
its true and lawful attorney (with full power of substitution, in the name of
such Obligor, the Secured Parties or otherwise, for the sole use and benefit of
the Secured Parties), to execute and file financing statements or continuation
statements without such Obligor's signature appearing thereon. Each Obligor
agrees that a carbon, photographic, photostatic or other reproduction of this
Agreement or of a financing statement is sufficient as a financing statement.
Each Obligor shall pay the costs of, or incidental to, any recording or filing
of any financing or continuation statements concerning the Collateral.
(C) If any Collateral is at any time in the possession or
control of any warehouseman, bailee or any agents or processors of any Obligor,
such Obligor shall notify such warehouseman, bailee, agent or processor of the
Security Interests created hereby and to hold all such
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Collateral for the Administrative Agent's account subject to the Administrative
Agent's instructions.
(D) Each Obligor shall keep full and accurate books and
records relating to the Collateral, and stamp or otherwise mark such books and
records in such manner as the Required Lenders may reasonably require in order
to reflect the Security Interests.
(E) Each Obligor will immediately deliver and pledge each
Instrument to the Administrative Agent, appropriately endorsed to the
Administrative Agent, provided that so long as no Event of Default shall have
occurred and be continuing, such Obligor may retain for collection in the
ordinary course any Instruments (other than checks and drafts constituting
payments in respect of Accounts, as to which the provisions of Section 5(B)
shall apply) received by it in the ordinary course of business and the
Administrative Agent shall, promptly upon request of such Obligor, make
appropriate arrangements for making any other Instrument pledged by such
Obligor available to it for purposes of presentation, collection or renewal
(any such arrangement to be effected, to the extent deemed appropriate to the
Administrative Agent, against trust receipt or like document).
(F) Each Obligor shall use its best efforts to cause to be
collected from its account debtors, as and when due, any and all amounts owing
under or on account of each Account (including Accounts which are delinquent,
such Accounts to be collected in accordance with lawful collection procedures)
and shall apply forthwith upon receipt thereof all such amounts as are so
collected to the outstanding balance of such Account. Subject to the rights of
the Secured Parties hereunder upon the occurrence and during the continuance of
an Event of Default, each Obligor may allow in the ordinary course of business
as adjustments to amounts owing under its Accounts (i) an extension or renewal
of the time or times of payment, or settlement for less than the total unpaid
balance, which such Obligor finds appropriate in accordance with sound business
judgment and (ii) a refund or credit due as a result of returned or damaged
merchandise or as a discount for prompt payment or as an allowance for
cooperative advertising or other promotion, all in accordance with such
Obligor's ordinary course of business consistent with its historical collection
practices. The costs and expenses (including attorney's fees) of collection,
whether incurred by such Obligor or the Administrative Agent, shall be borne by
such Obligor.
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(G) Upon the occurrence and during the continuance of any
Event of Default, upon request of the Required Lenders through the
Administrative Agent, each Obligor will promptly notify (and such Obligor
hereby authorizes the Administrative Agent so to notify) each account debtor in
respect of any Account or Instrument that such Collateral has been assigned to
the Administrative Agent hereunder, and that any payments due or to become due
in respect of such Collateral are to be made directly to the Administrative
Agent or its designee.
(H) Except as permitted under the Credit Agreement, no
Obligor will sell, lease, exchange, assign or otherwise dispose of, or grant
any option with respect to, any Collateral.
(I) Each Obligor will, promptly upon request, provide to the
Administrative Agent all information and evidence it may reasonably request
concerning the Collateral to enable the Administrative Agent to enforce the
provisions of this Agreement.
(J) Not more than six months nor less than 30 days prior to
each date on which any Obligor proposes to take any action contemplated by
Section 4(A), such Obligor shall give notice to the Administrative Agent of
such proposed action, and, at such Obligor's cost and expense, cause to be
delivered to the Secured Parties with such notice, an opinion of counsel,
satisfactory to the Administrative Agent and substantially in the form of
Exhibit B to the effect that all financing statements and amendments or
supplements thereto, continuation statements and other documents required to be
recorded or filed in order to perfect and protect the Security Interests for a
period (and after giving effect to the proposed action that is the subject of
such notice), specified in such opinion, continuing until a date not earlier
than eighteen months from the date of such opinion, against all creditors of
and purchasers from such Obligor have been filed in each filing office
necessary for such purpose and that all filing fees and taxes, if any, payable
in connection with such filings have been paid in full.
(K) From time to time upon request by the Administrative
Agent, each Obligor shall, at its cost and expense, cause to be delivered to
the Secured Parties an opinion of counsel satisfactory to the Administrative
Agent as to such matters relating to the transactions contemplated hereby as
the Required Lenders may reasonably request.
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SECTION 5. Collateral Account
(A) Upon an Event of Default and upon notice of the
Administrative Agent, given at the direction of the Required Lenders, and at
all times thereafter until such notice may be revoked at the direction of the
Required Lenders (any such period, a "Collateral Account Period"), the Obligors
will establish with the Administrative Agent a cash collateral account (the
"Collateral Account") in the name and under the control of the Administrative
Agent into which there shall be deposited from time to time the cash proceeds
of the Collateral required to be delivered to the Administrative Agent pursuant
to subsection (B) of this Section 5 or any other provision of this Agreement.
Any income received by the Administrative Agent with respect to the balance
from time to time standing to the credit of the Collateral Account, including
any interest or capital gains on Liquid Investments, shall remain, or be
deposited, in the Collateral Account. All right, title and interest in and to
the cash amounts on deposit from time to time in the Collateral Account
together with any Liquid Investments from time to time made pursuant to
subsection (D) of this Section shall vest in the Administrative Agent, shall
constitute part of the Collateral hereunder and shall not constitute payment of
the Secured Obligations until applied thereto as hereinafter provided.
(B) At the time the Collateral Account is established and
during any Collateral Account Period, the Borrower or such other Obligor as
appropriate shall instruct all account debtors and other Persons obligated in
respect of all Accounts to make all payments in respect of the Accounts either
(i) directly to the Administrative Agent (by instructing that such payments be
remitted to a post office box which shall be in the name and under the control
of the Administrative Agent) or (ii) to one or more other banks in any state
(other than Louisiana) in the United States (by instructing that such payments
be remitted to a post office box which shall be in the name and under the
control of such bank) under a Lockbox Letter substantially in the form of
Exhibit C hereto duly executed by the Borrower and such bank or under other
arrangements, in form and substance satisfactory to the Administrative Agent,
pursuant to which the Borrower shall have irrevocably instructed such other
bank (and such other bank shall have agreed) to remit all proceeds of such
payments directly to the Administrative Agent for deposit into the Collateral
Account or as the Administrative Agent may otherwise instruct such bank. All
such payments made to the Administrative Agent shall be deposited in the
Collateral Account. In addition to the foregoing, the Borrower agrees that if,
during any
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Collateral Account Period, the proceeds of any Collateral hereunder (including
the payments made in respect of Accounts) shall be received by it, the Borrower
shall as promptly as possible deposit such proceeds into the Collateral
Account. Until so deposited, all such proceeds received during any Collateral
Account Period shall be held in trust by the Borrower for and as the property
of the Administrative Agent and the Lenders and shall not be commingled with
any other funds or property of the Borrower.
(C) Upon the occurrence and continuation of an Event of
Default, the Administrative Agent shall, if so instructed by the Required
Lenders, apply or cause to be applied (subject to collection) any or all of the
balance from time to time standing to the credit of the Collateral Account in
the manner specified in Section 9.
(D) Amounts on deposit in the Collateral Accounts shall be
invested and re-invested from time to time in such Liquid Investments as
Borrower shall determine, which Liquid Investments shall be held in the name
and be under the control of the Administrative Agent; provided that, if an
Event of Default has occurred and is continuing, the Administrative Agent
shall, if instructed by the Required Lenders, cause such Liquid Investments to
be liquidated and apply or cause to be applied the proceeds thereof to the
payment of the Secured Obligations in the manner specified in Section 9. For
this purpose, "Liquid Investments" means Temporary Cash Investments; provided
that (i) each Liquid Investment shall mature within 30 days after it is
acquired by the Administrative Agent and (ii) in order to provide the
Administrative Agent, for the benefit of the Secured Parties, with a perfected
security interest therein, each Liquid Investment shall be either:
(i) evidenced by negotiable certificates or instruments, or
if non-negotiable then issued in the name of the Administrative Agent,
which (together with any appropriate instruments of transfer) are
delivered to, and held by, the Administrative Agent or an agent
thereof (which shall not be any Obligor or any of its Affiliates) in
the State of New York; or
(ii) in book-entry form and issued by the United States and
subject to pledge under applicable state law and Treasury regulations
and as to which (in the opinion of counsel to the Administrative
Agent) appropriate measures shall have been taken for perfection of
the Security Interests.
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SECTION 6. General Authority
Each Obligor hereby irrevocably appoints the Administrative
Agent its true and lawful attorney, with full power of substitution, in the
name of such Obligor, the Secured Parties or otherwise, for the sole use and
benefit of the Secured Parties, but at such Obligor's expense, to the extent
permitted by law to exercise, at any time and from time to time while an Event
of Default has occurred and is continuing, all or any of the following powers
with respect to all or any of the Collateral:
(i) to demand, sue for, collect, receive and give acquittance
for any and all monies due or to become due thereon or by virtue
thereof,
(ii) to settle, compromise, compound, prosecute or defend any
action or proceeding with respect thereto,
(iii) to sell, transfer, assign or otherwise deal in or with
the same or the proceeds or avails thereof, as fully and effectually
as if the Administrative Agent were the absolute owner thereof, and
(iv) to extend the time of payment of any or all thereof and
to make any allowance and other adjustments with reference thereto;
provided that the Administrative Agent shall give the relevant Obligor not less
than ten days' prior notice of the time and place of any sale or other intended
disposition of any of the Collateral, except any Collateral which is perishable
or threatens to decline speedily in value or is of a type customarily sold on a
recognized market. Each Obligor agrees that such notice constitutes
"reasonable notification" within the meaning of Section 9-504(3) of the UCC.
SECTION 7. Remedies upon Event of Default
(A) If any Event of Default has occurred and is continuing,
the Administrative Agent may exercise on behalf of the Secured Parties all
rights of a secured party under the UCC (whether or not in effect in the
jurisdiction where such rights are exercised) and, in addition, the
Administrative Agent may, without being required to give any notice, except as
herein provided or as may be required by mandatory provisions of law, (i)
withdraw all cash and Liquid Investments in the Collateral Accounts and apply
such cash and Liquid Investments and other cash, if any, then
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held by it as Collateral as specified in Section 9 and (ii) if there shall be
no such cash or Liquid Investments or if such cash and Liquid Investments shall
be insufficient to pay all the Secured Obligations in full, sell the Collateral
or any part thereof at public or private sale, for cash, upon credit or for
future delivery, and at such price or prices as the Administrative Agent may
deem satisfactory. The Administrative Agent or any other Secured Party may be
the purchaser of any or all of the Collateral so sold at any public sale (or,
if the Collateral is of a type customarily sold in a recognized market or is of
a type which is the subject of widely distributed standard price quotations, at
any private sale). Each Obligor will execute and deliver such documents and
take such other action as the Administrative Agent deems necessary or advisable
in order that any such sale may be made in compliance with law. Upon any such
sale the Administrative Agent shall have the right to deliver, assign and
transfer to the purchaser thereof the Collateral so sold. Each purchaser at
any such sale shall hold the Collateral so sold to it absolutely and free from
any claim or right of whatsoever kind, including any equity or right of
redemption of any Obligor which may be waived, and each Obligor, to the extent
permitted by law, hereby specifically waives all rights of redemption, stay or
appraisal which it has or may have under any law now existing or hereafter
adopted. The notice (if any) of such sale required by Section 6 shall (1) in
case of a public sale, state the time and place fixed for such sale, and (2) in
the case of a private sale, state the day after which such sale may be
consummated. Any such public sale shall be held at such time or times within
ordinary business hours and at such place or places as the Administrative Agent
may fix in the notice of such sale. At any such sale the Collateral may be
sold in one lot as an entirety or in separate parcels, as the Administrative
Agent may determine. The Administrative Agent shall not be obligated to make
any such sale pursuant to any such notice. The Administrative Agent may,
without notice or publication, adjourn any public or private sale or cause the
same to be adjourned from time to time by announcement at the time and place
fixed for the sale, and such sale may be made at any time or place to which the
same may be so adjourned. In case of any sale of all or any part of the
Collateral on credit or for future delivery, the Collateral so sold may be
retained by the Administrative Agent until the selling price is paid by the
purchaser thereof, but the Administrative Agent shall not incur any liability
in case of the failure of such purchaser to take up and pay for the Collateral
so sold and, in case of any such failure, such Collateral may again be sold
upon like notice. The Administrative Agent, instead of exercising the power of
sale herein conferred upon it, may
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proceed by a suit or suits at law or in equity to foreclose the Security
Interests and sell the Collateral, or any portion thereof, under a judgment or
decree of a court or courts of competent jurisdiction.
(B) For the purpose of enforcing any and all rights and
remedies under this Agreement the Administrative Agent may (i) require any
Obligor to, and each Obligor agrees that it will, at its expense and upon the
request of the Administrative Agent, forthwith assemble all or any part of the
Collateral as directed by the Administrative Agent and make it available at a
place designated by the Administrative Agent which is, in its opinion,
reasonably convenient to the Administrative Agent and such Obligor, whether at
the premises of such Obligor or otherwise, (ii) to the extent permitted by
applicable law, enter, with or without process of law and without breach of the
peace, any premise where any of the Collateral is or may be located, and
without charge or liability to it seize and remove such Collateral from such
premises, (iii) have access to and use such Obligor's books and records
relating to the Collateral and (iv) prior to the disposition of the Collateral,
store or transfer it without charge in or by means of any storage or
transportation facility owned or leased by such Obligor, process, repair or
recondition it or otherwise prepare it for disposition in any manner and to the
extent the Administrative Agent deems appropriate and, in connection with such
preparation and disposition, use without charge any trademark, trade name,
copyright, patent or technical process used by such Obligor. The
Administrative Agent may also render any or all of the Collateral unusable at
such Obligor's premises and may dispose of Collateral on such premises without
liability for rent or costs.
SECTION 8. Limitation on Duty of Administrative Agent
in Respect of Collateral
Beyond the exercise of reasonable care in the custody thereof,
the Administrative Agent shall have no duty as to any Collateral in its
possession or control or in the possession or control of any agent or bailee or
any income thereon or as to the preservation of rights against prior parties or
any other rights pertaining thereto. The Administrative Agent shall be deemed
to have exercised reasonable care in the custody of the Collateral in its
possession if the Collateral is accorded treatment substantially equal to that
which it accords its own property, and shall not be liable or responsible for
any loss or damage to any of the Collateral, or for any diminution in the value
thereof, by reason of the act or
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omission of any warehouseman, carrier, forwarding agency, consignee or other
agent or bailee selected by the Administrative Agent in good faith.
SECTION 9. Application of Proceeds
Upon the occurrence and during the continuance of an Event of
Default, the proceeds of any sale of, or other realization upon, all or any
part of the Collateral and any cash held in the Collateral Accounts of any
Obligor shall be applied by the Administrative Agent in the following order of
priorities:
first, to payment of the expenses of such sale or other
realization, including reasonable compensation to agents and counsel
for the Administrative Agent, and all expenses, liabilities and
advances incurred or made by the Administrative Agent in connection
therewith, and any other unreimbursed expenses for which the
Administrative Agent or any other Secured Party is to be reimbursed
pursuant to Section 10.3 of the Credit Agreement or Section 12 hereof
and unpaid fees owing to the Administrative Agent under the Credit
Agreement;
second, to the ratable payment of unpaid principal of the
Secured Obligations and of reimbursement obligations constituting
Secured Obligations;
third, to the ratable payment of all other Secured
Obligations, until all Secured Obligations shall have been paid in
full; and
finally, to payment to such Obligor or its successors or
assigns, or as a court of competent jurisdiction may direct, of any
surplus then remaining from such proceeds.
The Administrative Agent may make distributions hereunder in cash or in kind
or, on a ratable basis, in any combination thereof. In determining allocations
under this section, the amount of any Hedging Obligations shall be equal to the
amount of the unrealized net loss position owed to such Secured Party.
SECTION 10. Hedging Obligations
As a condition to accepting the benefits of this Agreement,
each Lender and each Affiliate thereof that is owed Hedging Obligations agrees
with each of the other
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Lenders, each Affiliate of a Lender that is owed Hedging Obligations and the
Administrative Agent that it will from time to time (i) provide such
information to the Administrative Agent to make any determination of the amount
of Secured Obligations held by such Lender or Affiliate thereof or otherwise as
requested by the Administrative Agent for any other purpose of the Loan
Documents and (ii) otherwise cooperate in taking action or enforcing rights
with respect to such Hedging Obligations and rights hereunder as may be
reasonably requested by the Administrative Agent at the direction of the
Required Lenders.
SECTION 11. Concerning the Administrative Agent
The provisions of Article 7 of the Credit Agreement shall
inure to the benefit of the Administrative Agent in respect of this Agreement
and shall be binding upon the parties to the Credit Agreement and to the
Subsidiary Guarantors in such respect, and are expressly incorporated herein as
though set forth in full. In furtherance and not in derogation of the rights,
privileges and immunities of the Administrative Agent therein set forth:
(A) The Administrative Agent is authorized to take all such
action as is provided to be taken by it as Administrative Agent hereunder and
all other action reasonably incidental thereto. As to any matters not
expressly provided for herein (including the timing and methods of realization
upon the Collateral) the Administrative Agent shall act or refrain from acting
in accordance with written instructions from the Required Lenders or, in the
absence of such instructions, in accordance with its discretion.
(B) The Administrative Agent shall not be responsible for the
existence, genuineness or value of any of the Collateral or for the validity,
perfection, priority or enforceability of the Security Interests in any of the
Collateral, whether impaired by operation of law or by reason of any action or
omission to act on its part hereunder. The Administrative Agent shall have no
duty to ascertain or inquire as to the performance or observance of any of the
terms of this Agreement by any Obligor
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SECTION 12. Appointment of Administrative Co-Agents
At any time or times, in order to comply with any legal
requirement in any jurisdiction, the Administrative Agent may appoint another
bank or trust company or one or more other persons, either to act as co-agent
or co-agents, jointly with the Administrative Agent, or to act as separate
agent or agents on behalf of the Secured Parties with such power and authority
as may be necessary for the effectual operation of the provisions hereof and
may be specified in the instrument of appointment (which may, in the discretion
of the Administrative Agent, include provisions for the protection of such
co-agent or separate agent similar to the provisions of Section 11).
SECTION 13. Expenses
In the event that any Obligor fails to comply with the
provisions of this Agreement or any other Loan Document, such that the value of
any Collateral or the validity, perfection, rank or value of any Security
Interest is thereby diminished or potentially diminished or put at risk, the
Administrative Agent if requested by the Required Lenders may, but shall not be
required to, effect such compliance on behalf of such Obligor, and such Obligor
shall reimburse the Administrative Agent for the costs thereof on demand. All
insurance expenses and all expenses of protecting, storing, warehousing,
appraising, insuring, handling, maintaining, and shipping the Collateral, any
and all excise, property, sales, and use taxes imposed by any state, federal,
or local authority on any of the Collateral, or in respect of periodic
appraisals and inspections of the Collateral to the extent the same may be
requested by the Required Lenders from time to time, or in respect of the sale
or other disposition thereof shall be borne and paid by such Obligor; and if
such Obligor fails to promptly pay any portion thereof when due, the
Administrative Agent or any other Secured Party may, at its option, but shall
not be required to, pay the same and charge such Obligor's account therefor,
and the Obligor agrees to reimburse the Administrative Agent or such other
Secured Party therefor on demand. All sums so paid or incurred by the
Administrative Agent or any other Secured Party for any of the foregoing and
any and all other sums for which such Obligor may become liable hereunder and
all costs and expenses (including attorneys' fees, legal expenses and court
costs (including the reasonable allocation of the compensation, costs and
expenses of in-house counsel, based upon time spent)) reasonably incurred by
the Administrative Agent or any other Secured Party in enforcing or protecting
the Security
17
154
Interests or any of their rights or remedies under this Agreement, shall,
together with interest thereon until paid at the rate applicable to Base Rate
Loans on such day plus 2%, be additional Secured Obligations hereunder.
SECTION 14. Termination of Security
Interests; Release of Collateral
Upon the repayment in full of all Secured Obligations and the
termination of the Commitments under the Credit Agreement and provided that no
Letters of Credit or Hedging Obligations are outstanding, the Security
Interests shall terminate and all rights of each Obligor to the Collateral
shall revert to such Obligor. At any time and from time to time prior to such
termination of the Security Interests, the Administrative Agent may release any
or all of the Collateral, but only with the requisite consents specified
therefore in Section 10.5 of the Credit Agreement. Upon any such termination
of the Security Interests or release of Collateral, the Administrative Agent
will, at the expense of the Obligors, execute and deliver to the relevant
Obligor such documents as such Obligor shall reasonably request to evidence the
termination of the Security Interests or the release of such Collateral, as the
case may be.
SECTION 15. Notices
All notices, communications and distributions hereunder shall
be given in accordance with Section 10.1 of the Credit Agreement.
SECTION 16. Waivers, Non-Exclusive Remedies
No failure on the part of the Administrative Agent to
exercise, and no delay in exercising and no course of dealing with respect to,
any right under this Agreement shall operate as a waiver thereof; nor shall any
single or partial exercise by the Administrative Agent or any Secured Party of
any right under the Credit Agreement, any of the other Loan Documents or this
Agreement preclude any other or further exercise thereof or the exercise of any
other right. The rights in this Agreement, the Credit Agreement and the other
Loan Documents are cumulative and are not exclusive of any other remedies
provided by law.
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SECTION 17. Successors and Assigns
This Agreement is for the benefit of the Administrative Agent
and the Secured Parties and their successors and assigns, and in the event of
an assignment of all or any of the Secured Obligations, the rights hereunder,
to the extent applicable to the indebtedness so assigned, shall be transferred
with such indebtedness. This Agreement shall be binding on each Obligor and
its successors and assigns.
SECTION 18. Changes in Writing
Neither this Agreement nor any provision hereof may be
changed, waived, discharged or terminated orally, but only in writing signed by
the Obligors and the Administrative Agent with the consent of the Required
Lenders.
SECTION 19. NEW YORK LAW
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE LAWS OF THE STATE OF NEW YORK (WITHOUT REFERENCE TO PRINCIPLES
OR CONFLICTS OF LAW), EXCEPT AS OTHERWISE REQUIRED BY MANDATORY PROVISIONS OF
LAW AND EXCEPT TO THE EXTENT THAT REMEDIES PROVIDED BY THE LAWS OF ANY
JURISDICTION OTHER THAN NEW YORK ARE GOVERNED BY THE LAWS OF SUCH JURISDICTION.
SECTION 20. Severability
If any provision hereof is invalid or unenforceable in any
jurisdiction, then, to the fullest extent permitted by law, (i) the other
provisions hereof shall remain in full force and effect in such jurisdiction
and shall be liberally construed in favor of the Administrative Agent and the
other Secured Parties in order to carry out the intentions of the parties
hereto as nearly as may be possible; and (ii) the invalidity or
unenforceability of any provision hereof in any jurisdiction shall not affect
the validity or enforceability of such provision in any other jurisdiction.
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156
SECTION 21. Counterparts
This Agreement may be signed in any number of counterparts,
each of which shall be an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument.
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157
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective authorized officers as of the
day and year first above written.
EXIDE ELECTRONICS GROUP,
INC.
By
---------------------------
Title:
GUARANTORS
----------
EXIDE ELECTRONICS
INTERNATIONAL CORP.
By
---------------------------
Title:
DELTEC POWER SYSTEMS, INC.
By
---------------------------
Title:
EXIDE ELECTRONICS CORPORATION
By
--------------------------
Title:
LECTRO PRODUCTS, INC.
By
---------------------------
Title:
DATATRAX ACQUISITION
CORPORATION
By
--------------------------
Title:
21
158
EXIDE ELECTRONICS USA HOLDINGS
CORP.
By
-----------------------------
Title:
DELTEC ELECTRONICS CORP.
By
-------------------------------
Title:
INTERNATIONAL POWER MACHINES CORPORATION
By
-------------------------------
Title:
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, as
Administrative Agent
By
-------------------------------
Title:
22
159
EXHIBIT A
PERFECTION CERTIFICATE*
The undersigned, [Chief executive officer] and [Chief legal
officer], of [OBLIGOR], a _________ ________ (the "Obligor") hereby certify,
with reference to the Security Agreement dated as of March 13, 1996 between the
Obligors, and Morgan Guaranty Trust Company of New York, as Administrative
Agent (terms defined therein being used herein as therein defined), to the
Agents and each Lender as follows:
1. Names. (a) The exact organizational name of the Obligor,
after giving effect to the consummation of the Acquisition, as it appears in
its certificate of formation is as follows:
(b) Set forth below is each other name the Obligor has had
since its organization, together with the date of the relevant change:
(c) The Obligor has not changed its identity or
organizational structure in any way within the past five years except for the
Acquisition.
(d) The following is a list of all other names (including
trade names or similar appellations) used by the Obligor or any of its
divisions or other business units at any time during the past five years:
__________________________________
* To be completed by each Obligor.
160
2. Current Locations. (a) The chief executive office of the
Obligor is located at the following address:
Mailing Address County State
--------------- ------ -----
(b) The following are all the locations where the Obligor
maintains any books or records relating to any Accounts:
Mailing
Address County State
------- ------ -----
(c) The following are all the places of business of the
Obligor not identified above:
Mailing
Name Address County State
---- ------- ------ -----
(d) The following are all the locations where the Obligor
maintains any Inventory not identified above:
Mailing
Name Address County State
---- ------- ------ -----
(e) The following are the names and addresses of all Persons
other than the Obligor which have possession of any of the Obligor's Inventory:
Mailing
Name Address County State
---- ------- ------ -----
3. Prior Locations. (a) Set forth below is the information
required by subparagraphs (a), (b) and (c) of paragraph 2 with respect to each
location or place of
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161
business maintained by the Obligor at any time during the past five years:
(b) Set forth below is the information required by
subparagraphs (d) and (e) of paragraph 2 with respect to each location or
bailee where or with whom Inventory has been lodged at any time during the past
four months:
4. Unusual Transactions. All Accounts have been originated
by the Obligor and all Inventory has been acquired by the Obligor in the
ordinary course of its business.
5. File Search Reports. Attached hereto as Schedule 5(A) is
a true copy of a file search report from the Uniform Commercial Code filing
officer in each jurisdiction identified in paragraph 2 or 3 above with respect
to each name set forth in paragraph 1 above. Attached hereto as Schedule 5(B)
is a true copy of each financing statement or other filing identified in such
file search reports.
6. UCC Filings. A duly signed financing statement on Form
UCC-1 in substantially the form of Schedule 6(A) hereto has been duly filed in
the Uniform Commercial Code filing office in each jurisdiction identified in
paragraph 2 hereof. Attached hereto as Schedule 6(B) is a true copy of each
such filing duly acknowledged by the filing officer.
7. Schedule of Filings. Attached hereto as Schedule 7 is a
schedule setting forth filing information with respect to the filings described
in paragraph 6 above.
8. Filing Fees. All filing fees and taxes payable in
connection with the filings described in paragraph 6 above have been paid.
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162
IN WITNESS WHEREOF, we have hereunto set our hands this ____
day of March, 1995.
----------------------------
Title:
----------------------------
Title:
4
163
SCHEDULE 6(A)
Description of Collateral
All accounts, chattel paper, contract rights, general
intangibles, inventory, and documents, now owned or hereafter acquired,
wherever located, and all proceeds thereof.
164
SCHEDULE 7
SCHEDULE OF FILINGS
Debtor Filing Officer File Number Date of Filing*
- -----------
* Indicate lapse date, if other than fifth anniversary.
165
EXHIBIT B
OPINION OF
COUNSEL TO THE OBLIGORS
* * * *
1. The Security Agreement creates valid security interests,
for the benefit of the Secured Parties, in each Obligor's right, title and
interest in its Collateral to the extent the UCC is applicable thereto (the
"Security Interest").
2. UCC financing statements and amendments thereto
(collectively, the "Financing Statements") have been filed in the filing
offices listed in Schedule 7 to the Perfection Certificate (the "Filing
Jurisdictions"), which are all of the offices in which filings are required to
perfect the Security Interest, to the extent the Security Interest may be
perfected by filing under the UCC, and no further filing or recording of any
document or instrument or other action will be required so to perfect the
Security Interest, except that (i) continuation statements with respect to each
Financing Statement must be filed within the respective time periods set forth
on Schedule 7 to the Perfection Certificate; (ii) additional filings may be
necessary if any Obligor changes its name, identity or structure or the
jurisdiction in which its places of business, its chief executive office or the
Collateral are located; and (iii) we express no opinion on the perfection of,
or need for further filing or recording to perfect, the Security Interest in
goods now or hereafter located in any jurisdiction other than the Filing
Jurisdictions.
3. There are
(i) no UCC financing statements which name any Obligor as
debtor or seller and cover any of the Collateral, other than the
Financing Statements, [and the financing statements with respect to
Permitted Liens annexed as Schedule 5(A) to the Perfection
Certificate], listed in the available records in the UCC filing
offices set forth in paragraphs 2 and 3 of the Perfection Certificate,
which include all of the offices prescribed under the UCC as the
offices in which filings should have been made to perfect security
interests in the Collateral; and
(ii) no notices of the filing of any federal tax lien (filed
pursuant to Section 6323 of the Internal Revenue Code) or any lien of
the Pension Benefit Guaranty Corporation (filed pursuant to Section
4068 of ERISA) covering any of the Collateral listed
166
in the available records in the [UCC filing office in state of each
Obligor's chief executive office], which is the only office having
files which must be searched in order to fully determine the existence
of notices of the filing of federal tax liens (filed pursuant to
Section 6323 of the Internal Revenue Code) and liens of the Pension
Benefit Guaranty Corporation (filed pursuant to Section 4068 of ERISA)
on the Collateral.
4. The Security Interest validly secures the payment of all
future Loans made by the Lenders to the Borrowers, whether or not at the time
such Loans are made an Event of Default or other event not within the control
of the Lenders has relieved or may relieve the Lenders from their obligations
to make such Loans, and is perfected to the extent set forth in paragraph 2
above with respect to such future Loans. Insofar as the priority thereof is
governed by the UCC, the Security Interest has the same priority with respect
to such future Loans as it does with respect to Loans made on the date hereof.
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167
EXHIBIT C
[FORM OF LOCKBOX LETTER]
______ __, 19__
[Name and Address of Lockbox Bank]
Re: [Name of Borrower]
Gentlemen:
We hereby notify you that effective ___________, 19__, we have
transferred exclusive ownership and control of our lock-box account[s] No[s].
_________________ (the "Lockbox Account[s]") maintained with you under the
terms of the [Lockbox Agreement] attached hereto as Exhibit A (the "Lockbox
Account[s]") to Morgan Guaranty Trust Company of New York, as Administrative
Agent (the "Agent").
We hereby irrevocably instruct you to make all payments to be
made by you out of or in connection with the Lockbox Account[s] (i) to the
Agent for credit to account no. ___________ maintained by it at its office at
23 Wall Street, New York, New York 10015 or (ii) as you may otherwise be
instructed by the Agent.
We also hereby notify you that the Agent shall be irrevocably
entitled to exercise any and all rights in respect of or in connection with the
Lockbox Account[s], including, without limitation, the right to specify when
payments are to be made out of or in connection with the Lockbox Account[s].
All funds deposited into the Lockbox Account[s] will not be
subject to deductions, set-off, banker's lien or any other right in favor of
any other person than the Agent, except that you may set-off against the
Lockbox Account[s] the face amount of any check deposited in and credited to
such Lockbox Account[s] which is subsequently returned for any reason. Your
compensation for providing the services contemplated herein shall be as
mutually agreed between you and us from time to time and we will continue to
pay such compensation.
168
Please confirm your acknowledgment of and agreement to the
foregoing instructions by signing in the space provided below.
Very truly yours,
[BORROWER]
By
---------------------------
Title:
Acknowledged and agreed
to as of this ____ day of
______, 19__.
[LOCKBOX BANK]
By
---------------------------
Title:
2
169
EXHIBIT C
PLEDGE AGREEMENT
170
EXECUTION COPY
PLEDGE AGREEMENT
AGREEMENT dated as of March 13, 1996 among EXIDE ELECTRONICS GROUP,
INC. ("Borrower"), EXIDE ELECTRONICS CORPORATION, EXIDE ELECTRONICS USA
HOLDINGS CORP., INTERNATIONAL POWER MACHINES CORPORATION, and DELTEC POWER
SYSTEMS, INC. (each together with its successors, a "Pledgor" and collectively
the "Pledgors") and MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as
Administrative Agent.
W I T N E S S E T H :
WHEREAS, Borrower, the Pledgors and the other Obligors referred to
therein, certain lenders (including any such Lender in its capacity as Issuing
Lender, as defined therein, the "Lenders"), Bank of America Illinois as
Documentation Agent for such Lenders and Morgan Guaranty Trust Company of New
York, as Administrative Agent for such Lenders (the "Agents") are parties to a
Credit Agreement of even date herewith (as the same may be amended from time to
time, the "Credit Agreement"); and
WHEREAS, in order to induce said Lenders and the Agents, to enter
into the Credit Agreement, each Pledgor has agreed to grant a continuing
security interest in and to the Collateral (as hereafter defined) to secure its
respective obligations under the Credit Agreement;
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
SECTION 1. Definitions
Terms defined in the Credit Agreement and not otherwise defined
herein have, as used herein, the respective meanings provided for therein. The
following
171
additional terms, as used herein, have the following respective meanings:
"Collateral" has the meaning assigned to such term in Section 3(A).
"Issuers" means the companies identified on Schedule 1 as the issuers
of the Pledged Stock.
"Pledged Instruments" means (i) the Subsidiary Notes and (ii) any
instrument required to be pledged to the Administrative Agent pursuant to
Section 3(B).
"Pledged Securities" means the Pledged Instruments and the Pledged
Stock.
"Pledged Stock" means (i) the Subsidiary Shares and (ii) any other
capital stock required to be pledged to the Administrative Agent pursuant to
Section 3(B); provided, however, that Pledged Stock shall not include the
Deltec Seller Stock.
"Secured Obligations" means the obligations secured under this
Agreement which include: (a) with respect to the Borrower, (i) all principal
of and interest (including any interest which accrues after the commencement of
any case, proceeding or other action relating to the bankruptcy, insolvency or
reorganization of the Borrower whether or not allowed or allowable as a claim
in any such proceeding) on any loan under, or any note issued pursuant to, the
Credit Agreement, (ii) all other amounts payable by the Borrower hereunder or
under any other Loan Document, (iii) all other obligations of the Borrower
hereunder and the other Loan Documents, (iv) any Hedging Obligations (as
defined in the Security Agreement between Borrower, the Guarantors referred to
therein, and the Administrative Agent dated of even date herewith) and (v) any
amendments, restatements, renewals, extensions or modifications of any of the
foregoing; and (b) with respect to each other Pledgor, (i) all obligations of
such Pledgor under the Credit Agreement (including without limitation, Article
9 thereof) and under any other Loan Document and (ii) any amendments,
restatements, renewals, extensions or modifications of any of the foregoing.
"Secured Parties" means the Agents, the Lenders (including without
limitation with respect to any Hedging Obligations (as defined in the Security
Agreement between Borrower, the Guarantors referred to therein, and the
Administrative Agent, dated of even date herewith) owed to
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172
such Lenders), and any Affiliate of any Lender to which Hedging Obligations are
owed.
"Security Interests" means the security interests in the Collateral
granted hereunder securing the Secured Obligations.
"Subsidiary Notes" means any debt of an Issuer owing to a Pledgor.
"Subsidiary Shares" means as to any Pledgor, the collective reference
to the shares of capital stock of each Issuer listed opposite such Pledgor's
name on Schedule I attached hereto, together with all shares, stocks, stock
certificates, options or rights of any nature whatsoever that currently exist
or which may be issued or granted in respect thereof (or in substitution for
the same) by any Issuer while this Agreement is in effect.
Unless otherwise defined herein, or unless the context otherwise
requires, all terms used herein which are defined in the New York Uniform
Commercial Code as in effect on the date hereof shall have the meanings therein
stated.
SECTION 2. Representations and Warranties
Each Pledgor represents and warrants as follows:
(A) Title to Pledged Securities. Each Pledgor owns all of the
Pledged Securities listed on Schedule I across from its name, free and clear of
any Liens other than the Security Interests. The Pledged Stock includes all of
the issued and outstanding capital stock of each issuer. All of the Pledged
Stock has been duly authorized and validly issued, and is fully paid and
non-assessable, and is subject to no options to purchase or similar rights of
any Person. Each Pledgor is not and will not become a party to or otherwise
bound by any agreement, other than this Agreement, which restricts in any
manner the rights of any present or future holder of any of the Pledged
Securities with respect thereto.
(B) Validity, Perfection and Priority of Security Interests. Upon
the delivery of the Pledged Instruments and certificates representing the
Pledged Stock to the Administrative Agent in accordance with Section 4 hereof,
the Administrative Agent will have valid and perfected security interests in
the Collateral subject to no prior Lien. No registration, recordation or
filing with any governmental body, agency or official is required in
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173
connection with the execution or delivery of this Agreement or necessary for
the validity or enforceability hereof or for the perfection or enforcement of
the Security Interests. None of the Pledgors nor any of their respective
Subsidiaries has performed or will perform any acts which might prevent the
Administrative Agent from enforcing any of the terms and conditions of this
Agreement or which would limit the Administrative Agent in any such
enforcement.
(C) UCC Filing Locations. The chief executive office of each
Pledgor is located at its address set forth on the signature pages of the
Credit Agreement. Under the Uniform Commercial Code as in effect in the State
in which such office is located, no local filing is required to perfect a
security interest in collateral consisting of general intangibles.
SECTION 3. The Security Interests
In order to secure the full and punctual payment of the Secured
Obligations in accordance with the terms thereof, and to secure the performance
of all the respective obligations of each Pledgor hereunder:
(A) Each Pledgor hereby assigns, charges and pledges to and with the
Administrative Agent for the benefit of the Secured Parties and grants to the
Administrative Agent for the benefit of the Secured Parties security interests
in the Pledged Securities, and all of its rights and privileges with respect to
the Pledged Securities, and all income and profits thereon, and all interest,
dividends and other payments and distributions with respect thereto, and all
proceeds of the foregoing (the "Collateral"). Contemporaneously with the
execution and delivery hereof, Pledgor is delivering the Subsidiary Notes and
certificates representing the Subsidiary Shares in pledge hereunder.
(B) In the event that any Issuer at any time issues any additional
or substitute shares of capital stock of any class or any substitute note or
owes any other debt to a Pledgor, such Pledgor will immediately pledge and
deposit with the Administrative Agent certificates representing all of such
shares and such note or any instrument evidencing such other Debt as additional
security for such Pledgor's Secured Obligations. All such shares and
instruments constitute Pledged Securities and are subject to all provisions of
this Agreement.
(C) The Security Interests are granted as security only and shall
not subject any Secured Party to, or
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174
transfer or in any way affect or modify, any obligation or liability of the
Pledgor or any of its Subsidiaries with respect to any of the Collateral or any
transaction in connection therewith.
SECTION 4. Delivery of Pledged Securities
All Pledged Instruments shall be delivered to the Administrative
Agent by the Pledgors pursuant hereto indorsed to the order of the
Administrative Agent, and accompanied by any required transfer tax stamps, all
in form and substance satisfactory to the Administrative Agent. All
certificates representing Pledged Stock delivered to the Administrative Agent
by such Pledgor pursuant hereto shall be in suitable form for transfer by
delivery, or shall be accompanied by duly executed instruments of transfer or
assignment in blank, with signatures appropriately guaranteed, and accompanied
by any required transfer tax stamps, all in form and substance satisfactory to
the Administrative Agent.
SECTION 5. Further Assurances
(A) Each Pledgor agrees that it will, at its expense and in such
manner and form as the Administrative Agent may require, execute, deliver, file
and record any financing statement, specific assignment or other paper and take
any other action that may be necessary or desirable, or that the Administrative
Agent may request, in order to create, preserve, perfect or validate any
Security Interest or to enable the Administrative Agent to exercise and enforce
its rights hereunder with respect to any of the Collateral. To the extent
permitted by applicable law, each Pledgor hereby authorizes the Administrative
Agent to execute and file, in the name of such Pledgor or otherwise, Uniform
Commercial Code financing statements (which may be carbon, photographic,
photostatic or other reproductions of this Agreement or of a financing
statement relating to this Agreement) which the Administrative Agent in its
sole discretion may deem necessary or appropriate to further perfect the
Security Interests.
(B) Each Pledgor agrees that it will not change (i) its name,
identity or corporate structure in any manner or (ii) the location of its chief
executive office unless it shall have given the Administrative Agent not less
than 30 days' prior notice thereof.
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175
SECTION 6. Record Ownership of Pledged Stock.
The Administrative Agent may at any time or from time to time, in its
sole discretion, cause any or all of the Pledged Stock to be transferred of
record into the name of the Administrative Agent or its nominee. Each Pledgor
will promptly give to the Administrative Agent copies of any notices or other
communications received by it with respect to Pledged Stock registered in the
name of such Pledgor and the Administrative Agent will promptly give to Pledgor
copies of any notices and communications received by the Administrative Agent
with respect to Pledged Stock registered in the name of the Administrative
Agent or its nominee.
SECTION 7. Right to Receive Distributions on Collateral.
Unless an Event of Default shall have occurred and be
continuing, each Pledgor shall have the right to receive all dividends,
interest and other payments and distributions made upon or with respect to its
respective Collateral.
If an Event of Default shall have occurred and be continuing,
the Administrative Agent shall have the right to receive and to retain as
Collateral hereunder all dividends, interest and other payments and
distributions made upon or with respect to the Collateral and each Pledgor
shall take all such action as the Administrative Agent may deem necessary or
appropriate to give effect to such right. All such dividends, interest and
other payments and distributions which are received by each Pledgor shall be
received in trust for the benefit of the Secured Parties and, if the
Administrative Agent so directs, shall be segregated from other funds of the
Pledgors, and their Subsidiaries and shall, forthwith upon demand by the
Administrative Agent, be paid over to the Administrative Agent as Collateral in
the same form as received (with any necessary endorsement). After all Events
of Default have been cured, the Administrative Agent's right to retain
dividends, interest and other payments and distributions under this Section 7
shall cease and the Administrative Agent shall pay over to each Pledgor any
such Collateral retained by it during the continuance of an Event of Default.
SECTION 8. Right to Vote Pledged Stock.
Unless an Event of Default shall have occurred and be continuing,
each Pledgor shall have the right, from time
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176
to time, to vote and to give consents, ratifications and waivers with respect
to its Pledged Stock, and the Administrative Agent shall, upon receiving a
written request from such Pledgor accompanied by a certificate signed by its
principal financial officer stating that no Event of Default has occurred and
is continuing, deliver to such Pledgor or as specified in such request such
proxies, powers of attorney, consents, ratifications and waivers in respect of
any of the Pledged Stock which is registered in the name of the Administrative
Agent or its nominee as shall be specified in such request and be in form and
substance satisfactory to the Administrative Agent.
If an Event of Default shall have occurred and be continuing, the
Administrative Agent shall have the right to the extent permitted by law and
each Pledgor shall take all such action as may be necessary or appropriate to
give effect to such right, to vote and to give consents, ratifications and
waivers, and take any other action with respect to any or all of the Pledged
Stock with the same force and effect as if the Administrative Agent were the
absolute and sole owner thereof.
SECTION 9. General Authority
Each Pledgor hereby irrevocably appoints the Administrative Agent its
true and lawful attorney, with full power of substitution, in the name of such
Pledgor, the Administrative Agent, the Secured Parties or otherwise, for the
sole use and benefit of the Secured Parties, but at the expense of such
Pledgor, to the extent permitted by law to exercise, at any time and from time
to time while an Event of Default has occurred and is continuing, all or any of
the following powers with respect to all or any of the Collateral:
(i) to demand, sue for, collect, receive and give acquittance
for any and all monies due or to become due upon or by virtue thereof,
(ii) to settle, compromise, compound, prosecute or defend any
action or proceeding with respect thereto,
(iii) to sell, transfer, assign or otherwise deal in or with the
same or the proceeds or avails thereof, as fully and effectually as if
the Administrative Agent were the absolute owner thereof, and
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177
(iv) to extend the time of payment of any or all thereof and to
make any allowance and other adjustments with reference thereto;
provided that the Administrative Agent shall give each Pledgor not less than
ten days' prior notice of the time and place of any sale or other intended
disposition of any of the Collateral except any Collateral which threatens to
decline speedily in value or is of a type customarily sold on a recognized
market. The Administrative Agent and each Pledgor agree that such notice
constitutes "reasonable notification" within the meaning of Section 9-504(3) of
the Uniform Commercial Code.
SECTION 10. Remedies upon Event of Default
If any Event of Default shall have occurred and be continuing, the
Administrative Agent may exercise on behalf of the Secured Parties all the
rights of a secured party under the Uniform Commercial Code (whether or not in
effect in the jurisdiction where such rights are exercised) and, in addition,
the Administrative Agent may, without being required to give any notice, except
as herein provided or as may be required by mandatory provisions of law, (i)
apply the cash, if any, then held by it as Collateral as specified in Section
13 and (ii) if there shall be no such cash or if such cash shall be
insufficient to pay all the Secured Obligations in full, sell the Collateral or
any part thereof at public or private sale or at any broker's board or on any
securities exchange, for cash, upon credit or for future delivery, and at such
price or prices as the Administrative Agent may deem satisfactory. Any Secured
Party may be the purchaser of any or all of the Collateral so sold at any
public sale (or, if the Collateral is of a type customarily sold in a
recognized market or is of a type which is the subject of widely distributed
standard price quotations, at any private sale). The Administrative Agent is
authorized, in connection with any such sale, if it deems it advisable so to
do, (i) to restrict the prospective bidders on or purchasers of any of the
Pledged Securities to a limited number of sophisticated investors who will
represent and agree that they are purchasing for their own account for
investment and not with a view to the distribution or sale of any of such
Pledged Securities, (ii) to cause to be placed on certificates for any or all
of the Pledged Securities or on any other securities pledged hereunder a legend
to the effect that such security has not been registered under the Securities
Act of 1933 and may not be disposed of in violation of the provision of said
Act, and (iii) to impose such other limitations or conditions in
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178
connection with any such sale as the Administrative Agent deems necessary or
advisable in order to comply with said Act or any other law. Each Pledgor will
execute and deliver such documents and take such other action as the
Administrative Agent deems necessary or advisable in order that any such sale
may be made in compliance with law. Upon any such sale the Administrative
Agent shall have the right to deliver, assign and transfer to the purchaser
thereof the Collateral so sold. Each purchaser at any such sale shall hold the
Collateral so sold absolutely and free from any claim or right of whatsoever
kind, including any equity or right of redemption of Pledgor which may be
waived, and Pledgor, to the extent permitted by law, hereby specifically waives
all rights of redemption, stay or appraisal which it has or may have under any
law now existing or hereafter adopted. The notice (if any) of such sale
required by Section 9 shall (1) in the case of a public sale, state the time
and place fixed for such sale, (2) in the case of a sale at a broker's board or
on a securities exchange, state the board or exchange at which such sale is to
be made and the day on which the Collateral, or the portion thereof so being
sold, will first be offered for sale at such board or exchange, and (3) in the
case of a private sale, state the day after which such sale may be consummated.
Any such public sale shall be held at such time or times within ordinary
business hours and at such place or places as the Administrative Agent may fix
in the notice of such sale. At any such sale the Collateral may be sold in one
lot as an entirety or in separate parcels, as the Administrative Agent may
determine. The Administrative Agent shall not be obligated to make any such
sale pursuant to any such notice. The Administrative Agent may, without notice
or publication, adjourn any public or private sale or cause the same to be
adjourned from time to time by announcement at the time and place fixed for the
sale, and such sale may be made at any time or place to which the same may be
so adjourned. In the case of any sale of all or any part of the Collateral on
credit or for future delivery, the Collateral so sold may be retained by the
Administrative Agent until the selling price is paid by the purchaser thereof,
but the Agent shall not incur any liability in the case of the failure of such
purchaser to take up and pay for the Collateral so sold and, in the case of any
such failure, such Collateral may again be sold upon like notice. The
Administrative Agent, instead of exercising the power of sale herein conferred
upon it, may proceed by a suit or suits at law or in equity to foreclose the
Security Interests and sell the Collateral, or any portion thereof, under a
judgment or decree of a court or courts of competent jurisdiction.
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SECTION 11. Expenses
Each Pledgor agrees that it will forthwith upon demand pay to the
Administrative Agent:
(i) the amount of any taxes which the Administrative Agent may
have been required to pay by reason of the Security Interests or to
free any of the Collateral from any Lien thereon, and
(ii) the amount of any and all out-of-pocket expenses, including
the fees and disbursements of counsel and of any other experts, which
the Administrative Agent may incur in connection with (w) the
administration or enforcement of this Agreement, including such
expenses as are incurred to preserve the value of the Collateral and
the validity, perfection, rank and value of any Security Interest, (x)
the collection, sale or other disposition of any of the Collateral,
(y) the exercise by the Administrative Agent of any of the rights
conferred upon it hereunder or (z) any Default or Event of Default.
Any such amount not paid on demand shall bear interest at the rate applicable
to Base Rate Loans on such day plus 2% and shall be an additional Secured
Obligation hereunder.
SECTION 12. Limitation on Duty of Administrative Agent in Respect of
Collateral.
Beyond the exercise of reasonable care in the custody thereof, the
Administrative Agent shall have no duty as to any Collateral in its possession
or control or in the possession or control of any agent or bailee or any income
thereon or as to the preservation of rights against prior parties or any other
rights pertaining thereto. The Administrative Agent shall be deemed to have
exercised reasonable care in the custody and preservation of the Collateral in
its possession if the Collateral is accorded treatment substantially equal to
that which it accords its own property, and shall not be liable or responsible
for any loss or damage to any of the Collateral, or for any diminution in the
value thereof, by reason of the act or omission of any agent or bailee selected
by the Administrative Agent in good faith.
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SECTION 13. Application of Proceeds
Upon the occurrence and during the continuance of an Event of
Default, the proceeds of any sale of, or other realization upon, all or any
part of the Collateral and any cash held shall be applied by the Administrative
Agent in the following order of priorities:
first, to payment of the expenses of such sale or other
realization, including reasonable compensation to agents and counsel
for the Administrative Agent, and all expenses, liabilities and
advances incurred or made by the Administrative Agent in connection
therewith, and any other unreimbursed expenses for which the
Administrative Agent or any other Secured Party is to be reimbursed
pursuant to Section 10.3 of the Credit Agreement or Section 11 hereof
and unpaid fees owing to the Administrative Agent under the Credit
Agreement;
second, to the ratable payment of unpaid principal of the Secured
Obligations;
third, to the ratable payment of accrued but unpaid interest on
the Secured Obligations in accordance with the provisions of the
Credit Agreement;
fourth, to the ratable payment of all other Secured Obligations,
until all Secured Obligations shall have been paid in full; and
finally, to payment to the respective Pledgor or its successors
or assigns, or as a court of competent jurisdiction may direct, of any
surplus then remaining from such proceeds.
The Administrative Agent may make distributions hereunder in cash or in kind
or, on a ratable basis, in any combination thereof.
SECTION 14. Concerning the Administrative Agent
The provisions of Article VII of the Credit Agreement shall inure to
the benefit of the Administrative Agent in respect of this Agreement and shall
be binding upon the parties to the Credit Agreement in such respect. In
furtherance and not in derogation of the rights, privileges and immunities of
the Administrative Agent therein set forth:
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181
(A) The Administrative Agent is authorized to take all such action
as is provided to be taken by it as Administrative Agent hereunder and all
other action reasonably incidental thereto. As to any matters not expressly
provided for herein (including, without limitation, the timing and methods of
realization upon the Collateral) the Administrative Agent shall act or refrain
from acting in accordance with written instructions from the Required Lenders
or, in the absence of such instructions, in accordance with its discretion.
(B) The Administrative Agent shall not be responsible for the
existence, genuineness or value of any of the Collateral or for the validity,
perfection, priority or enforceability of the Security Interests in any of the
Collateral, whether impaired by operation of law or by reason of any action or
omission to act on its part hereunder. The Administrative Agent shall have no
duty to ascertain or inquire as to the performance or observance of any of the
terms of this Agreement by the Pledgors.
SECTION 15. Appointment of Co-Administrative Agents
At any time or times, in order to comply with any legal requirement
in any jurisdiction, the Administrative Agent may appoint another bank or trust
company or one or more other persons, either to act as co-agent or co-agents,
jointly with the Administrative Agent, or to act as separate agent or agents on
behalf of the Secured Parties with such power and authority as may be necessary
for the effectual operation of the provisions hereof and may be specified in
the instrument of appointment (which may, in the discretion of the
Administrative Agent, include provisions for the protection of such co-agent or
separate agent similar to the provisions of Section 14).
SECTION 16. Termination of Security Interests;
Release of Collateral
Upon the repayment in full of all Secured Obligations and the
termination of the Commitments under the Credit Agreement and provided that no
Letters of Credit or Hedging Obligations are outstanding, the Security
Interests shall terminate and all rights of each Pledgor to its respective
Collateral shall revert to such Pledgor. At any time and from time to time
prior to such termination of the Security Interests, the Administrative Agent
may release any of the Collateral upon the terms and at the times set forth in
Section 10.5 of the Credit Agreement. Upon any such
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termination of the Security Interests or release of Collateral, the
Administrative Agent will, at the expense of the respective Pledgor, execute
and deliver to such Pledgor such documents as such Pledgor shall reasonably
request to evidence the termination of the Security Interests or the release of
such Collateral, as the case may be.
SECTION 17. Notices
All notices hereunder shall be given in accordance with Section 10.1
of the Credit Agreement.
SECTION 18. Waivers, Non-Exclusive Remedies
No failure on the part of the Administrative Agent to exercise, and
no delay in exercising and no course of dealing with respect to, any right
under this Agreement shall operate as a waiver thereof; nor shall any single or
partial exercise by the Administrative Agent of any right under the Credit
Agreement or this Agreement preclude any other or further exercise thereof or
the exercise of any other right. The rights in this Agreement and the Credit
Agreement are cumulative and are not exclusive of any other remedies provided
by law.
SECTION 19. Successors and Assigns
This Agreement is for the benefit of the Administrative Agent and the
Secured Parties and their successors and assigns, and in the event of an
assignment of all or any of the Secured Obligations, the rights hereunder, to
the extent applicable to the indebtedness so assigned, may be transferred with
such indebtedness. This Agreement shall be binding on Pledgor and its
successors and assigns.
SECTION 20. Changes in Writing
Neither this Agreement nor any provision hereof may be changed,
waived, discharged or terminated orally, but only in writing signed by each
Pledgor and the Administrative Agent with the consent of the Required Lenders.
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SECTION 21. New York Law
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY
THE LAWS OF THE STATE OF NEW YORK, EXCEPT AS OTHERWISE REQUIRED BY MANDATORY
PROVISIONS OF LAW AND EXCEPT TO THE EXTENT THAT REMEDIES PROVIDED BY THE LAWS
OF ANY JURISDICTION OTHER THAN NEW YORK ARE GOVERNED BY THE LAWS OF SUCH
JURISDICTION.
SECTION 22. Severability
If any provision hereof is invalid or unenforceable in any
jurisdiction, then, to the fullest extent permitted by law, (i) the other
provisions hereof shall remain in full force and effect in such jurisdiction
and shall be liberally construed in favor of the Administrative Agent and the
Secured Parties in order to carry out the intentions of the parties hereto as
nearly as may be possible; and (ii) the invalidity or unenforceability of any
provision hereof in any jurisdiction shall not affect the validity or
enforceability of such provision in any other jurisdiction.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized officers as of the day and year
first above written.
EXIDE ELECTRONICS GROUP, INC.
By _______________________
Title:
EXIDE ELECTRONICS CORPORATION
By _______________________
Title:
EXIDE ELECTRONICS USA HOLDINGS CORP.
By _______________________
Title:
INTERNATIONAL POWER MACHINES
CORPORATION
By _______________________
Title:
DELTEC POWER SYSTEMS, INC.
By _______________________
Title:
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MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, as
Administrative Agent
By ______________________
Title:
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Schedule 1
Stock %/# of
% Cert. Shares
Pledgor Owned Issuer Class No. Pledged
------- ----- ------ ----- ---- -------
Exide Electronics 100% Exide Electronics USA Common 1 100%
Corporation Holdings Corp.
Exide Electronics 100% Exide Electronics Common 2 100%
Group, Inc. International Corp.
Exide Electronics 100% Exide Electronics Common 4 100%
Group, Inc. Corporation
Exide Electronics 100% International Power Common 1A 100%
Group, Inc. Machines Corporation
Exide Electronics 100% Lectro Products, Inc. Common 5 100%
Group, Inc.
Exide Electronics 100% Deltec Power Systems, Common 1 100%
Group, Inc. Inc.
Exide Electronics USA 100% Datatrax Acquisition Common 1 100%
Holdings Corp. Corporation
International Power 100% Lortec Power Systems, Class A Common 13 10,000
Machines Corporation Inc.
International Power 100% Lortec Power Systems, Class B Common 14 10
Machines Corporation Inc.
Deltec Power Systems, 100% Deltec Electronics Common 4 100%
Inc. Corp.
27009/163/SA/pledge.domestic
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EXHIBIT D
OPINION OF
COUNSEL FOR THE OBLIGORS
March __, 1996
To the Lenders and the Administrative Agent
Referred to Below
c/o Morgan Guaranty Trust Company of New York
as Administrative Agent
60 Wall Street
New York, New York 10260
Gentlemen and Ladies:
We have acted as counsel for Exide Electronics Group, Inc., a
Delaware corporation ("Borrower") and Exide Electronics Corporation, a Delaware
corporation, Exide Electronics International Corp., a Delaware corporation,
International Power Machines Corporation, a Delaware corporation, and [other
Guarantors], (collectively, the "Guarantors" and together with Borrower, the
"Obligors"), in connection with (i) the Credit Agreement dated as of March 13,
1996 (the "Credit Agreement") among Borrower, the Guarantors, the lenders
listed on the signature pages thereof (including any such Lender in its
capacity as Issuing Lender, as defined therein, the "Lenders"), Bank of America
Illinois as Documentation Agent for the Lenders and Morgan Guaranty Trust
Company of New York as Administrative Agent for the Lenders (the "Agents"),
(ii) the Notes, (iii) the Security Agreement, and (iv) the Pledge Agreements
(the documents referred to in clauses (i) through (iv) are referred to herein
collectively as the "Loan Documents").
188
Terms defined in the Credit Agreement and not otherwise defined herein are used
herein as therein defined.
We have examined originals or copies, certified or otherwise
identified to our satisfaction, of such documents, corporate records,
certificates of public officials and other instruments and have conducted such
other investigations of fact and law as we have deemed necessary or advisable
for purposes of this opinion.
Upon the basis of the foregoing, we are of the opinion that:
1. [Each of the] Obligors is a corporation duly incorporated,
validly existing and in good standing under the laws of the State of Delaware,
and has all corporate powers and all material governmental licenses,
authorizations, consents and approvals required to carry on its business as now
conducted.
2. The execution, delivery and performance by each Obligor of
the Loan Documents to which it is a party are within the corporate powers of
such Obligor, have been duly authorized by all necessary corporate action,
require no action by or in respect of, or filing with, any governmental body,
agency or official and do not contravene, or constitute a default under, any
provision of applicable law or regulation or of the certificate of
incorporation or by-laws of such Obligor or of any agreement, judgment,
injunction, order, decree or other instrument binding upon such Obligor or any
of its Subsidiaries or result in the creation or imposition of any Lien (other
than Liens under the Loan Documents) on any asset of such Obligor or any of its
Subsidiaries.
3. The Loan Documents (other than the Notes) to which the
Borrower is a party constitute valid and binding agreements of the Borrower and
each Note, when executed and delivered in accordance with this Agreement, will
constitute a valid and binding obligation of the Borrower, in each case
enforceable in accordance with its terms except (i) as may be limited by
bankruptcy, insolvency or similar laws
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189
affecting creditors' rights generally and (ii) as rights of acceleration and
the availability of equitable remedies may be limited by equitable principles
of general applicability, and except that certain of the remedial provisions in
the Collateral Documents may be limited by applicable law, although such
limitations do not in our opinion make the remedies provided for therein
inadequate for the practical realization of the benefits of the security
intended to be afforded thereby. The Loan Documents to which each Guarantor is
a party constitute valid and binding agreements of such Guarantor, in each case
enforceable against the Borrower in accordance with their respective terms
except (i) as may be limited by bankruptcy, insolvency or similar laws
affecting creditors' rights generally and (ii) as rights of acceleration and
the availability of equitable remedies may be limited by equitable principles
of general applicability, and except that certain of the remedial provisions in
the Collateral Documents may be limited by applicable law, although such
limitations do not in our opinion make the remedies provided for therein
inadequate for the practical realization of the benefits of the security
intended to be afforded thereby.
4. [Except as set forth on Schedule 4.5,] there is no action,
suit or proceeding pending against, or to the knowledge of the Borrower
threatened against or affecting, the Borrower or any of its Subsidiaries before
any court or arbitrator or any governmental body, agency or official in which
there is a reasonable possibility of an adverse decision which could materially
adversely affect the business, consolidated financial position or consolidated
results of operations of the Borrower and its Consolidated Subsidiaries,
considered as a whole, or which in any manner draws into question the validity
or enforceability of the Loan Documents.
5. The Security Agreement creates a valid security interest
(the "Article 9 Security Interest"), for the benefit of the secured parties
named therein, in all of each Obligor's right, title and interest in all
Collateral (as defined in the Security Agreement) (after giving effect to the
consummation of the Deltec Acquisition, in the case of
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190
__________), in each case, to the extent Article 9 of the Uniform Commercial
Code (the "UCC") is applicable thereto and, to the extent provided in Section
9-306 of the UCC, all proceeds thereof.
6. UCC financing statements and amendments thereto
(collectively, the "Financing Statements") have been filed in the filing
offices listed in Schedule 7 to the Perfection Certificate (the "Filing
Jurisdictions"), which are all of the offices in which filings are required to
perfect the Article 9 Security Interest to the extent the Article 9 Security
Interest may be perfected by filing under the UCC, and no further filing or
recording of any document or instrument or other action will be required so to
perfect the Article 9 Security Interest, except that (i) continuation
statements with respect to each Financing Statement must be filed within the
respective time periods set forth on Schedule 7 to the Perfection Certificate;
(ii) additional filings may be necessary if the Company changes its name,
identity or corporate structure or the jurisdiction in which its places of
business, its chief executive office or the Collateral are located; and (iii)
we express no opinion on the perfection of, or need for further filing or
recording to perfect, the Article 9 Security Interest in goods now or hereafter
located in any jurisdiction other than the Filing Jurisdictions.
7. Each Pledge Agreement creates a valid security
interest (the "Pledge Security Interest") for the benefit of the secured
parties named therein, in all right, title and interest of the Pledgor in all
property referred to therein. The delivery to the Administrative Agent in the
State of New York of the certificates and related stock powers executed in
blank representing the Pledged Stock (as defined in each of the Pledge
Agreements) is effective to create in favor of the Agent for the benefit of the
Secured Parties named therein a perfected and first priority security interest
in the Pledged Stock under the Uniform Commercial Code as in effect in the
State of New York. No registration, recordation or filing with any
governmental body, agency or official is required in connection with the
execution or delivery of the Pledge Agreements or necessary for the
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191
validity or enforceability thereof or for the perfection of the Pledge Security
Interest.
8. There are
(i) no UCC financing statements which name any of the
Obligors as debtor or seller and cover any of the Collateral, other
than the Financing Statements, [and the financing statements with
respect to Permitted Liens annexed as Schedule 5(A) to the Perfection
Certificate,] listed in the available records in the UCC filing
offices set forth in paragraphs 2 and 3 of each of the Perfection
Certificates, which include all of the offices prescribed under the
UCC as the offices in which filings should have been made to perfect
security interests in the Collateral; and
(ii) no notices of the filing of any federal tax lien (filed
pursuant to Section 6323 of the Internal Revenue Code) or any lien of
the Pension Benefit Guaranty Corporation (filed pursuant to Section
4068 of ERISA) covering any of the Collateral listed in the available
records in the office of [ ] of [specify States] which
are the only offices having files which must be searched in order to
fully determine the existence of notices of the filing of federal tax
liens (filed pursuant to Section 6323 of the Internal Revenue Code)
and liens of the Pension Benefit Guaranty Corporation (filed pursuant
to Section 4068 of ERISA) on the Collateral.
9. The Liens and security interests created by the Article 9
Security Interest and the Pledge Security Interest validly secure the payment of
all future Loans made by the Lenders to the Borrower and Guarantees by the
Obligors with respect thereto, whether or not at the time such Loans are made an
Event of Default or other event not within the control of the Lenders has
relieved or may relieve the Lenders from their obligations to make such Loans,
and are perfected to the extent set forth in paragraph 9 above, with respect to
such future Loans. Insofar as the priority thereof is governed by the UCC, the
Article 9 Security
5
192
Interest has the same priority with respect to such future Loans as
they do with respect to Loans made on the date hereof, except that (i)
the Article 9 Security Interest in the Collateral acquired after the
filing of a federal tax lien pursuant to Section 6323 of the Internal
Revenue Code or a lien of the Pension Benefit Guaranty Corporation
pursuant to Section 4068 of ERISA have priority over such liens only
with respect to the Collateral acquired before the 46th day following
such filing and (ii) the Article 9 Security Interest has priority over
such liens to the extent they secure Loans made after the date of
filing of such liens only if such future Loans are made before the
earlier of the 46th day after such liens are filed or the time that
the Lenders have actual notice or knowledge that such liens were
filed. The priority of the Pledge Security Interest will be the same
with respect to Loans made or deemed made after the date hereof, as
with respect to any Loans made on the date hereof, except to the
extent that any priority may be affected by any Lien, security
interest or other encumbrance imposed by law in favor of any
government or governmental authority or agency.
10. None of the Agents or the Lenders is required to pay any
tax or be qualified to do business or file any designation for service
of process or file any reports in the State of [North Carolina] or
comply with any statutory or regulatory rule or requirement applicable
only to financial institutions chartered or qualified to do business
in the State of [North Carolina] solely by reason of its execution and
delivery or acceptance of the Loan Documents or by reason of its
participation in any of the transactions under or contemplated by the
Loan Documents, including, without limitation, the making of any Loan,
and the purchase and holding of any Note contemplated thereby, and the
making and receipt of any payments pursuant thereto, and the validity
and enforceability of the Loan Documents will not be affected by any
failure to so qualify or file.
11. No taxes or other charges, including, without limitation,
intangible, documentary, stamp, mortgage, transfer or recording taxes
or similar charges, are payable to the State of [North Carolina] or to
any jurisdiction
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193
therein on account of the execution, delivery or ownership of the Loan
Documents, the creation of the indebtedness (including, without
limitation, the Loans and the indebtedness evidenced by the Notes)
evidenced or secured thereby, the creation of the Liens and security
interests thereunder, or the filing, recording or registration of the
Financing Statements, except for nominal filing or recording fees.
12. The choice of New York law to govern the Loan Documents
in which such choice is stipulated is a valid and effective choice of
law under the laws of the State of [North Carolina] and adherence to
existing judicial precedents would require a court sitting in the
State of [North Carolina] to abide by such choice of law.
13. The Administrative Agent will have the power, without
naming all the Secured Parties, to exercise remedies under the Pledge
Agreements and the Security Agreement for the realization of the
Collateral (as the case may be) in its own name as Administrative
Agent.
[To the extent that any of the foregoing opinions concerns a
matter of New York law, we have assumed that the laws of the State of
New York are identical to the laws of the State of North Carolina in
all relevant respects.]
Very truly yours,
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194
SCHEDULE I
(TO OPINION OF COUNSEL FOR THE COMPANY)
FINANCING STATEMENTS
195
EXHIBIT E-1
OPINION OF
DAVIS POLK & WARDWELL, SPECIAL COUNSEL
FOR THE AGENTS
________________, 199_
To the Lenders and the Agents
Referred to Below
c/o Morgan Guaranty Trust Company
of New York, as Administrative Agent
60 Wall Street
New York, New York 10260
Dear Sirs:
We have participated in the preparation of the Credit
Agreement (the "Credit Agreement") dated as of March 13, 1996 among the Exide
Electronics Group, Inc. (the "Borrower"), the Guarantors party thereto, the
lenders listed on the signature pages thereof (the "Lenders"), the issuing
lenders party thereto, Morgan Guaranty Trust Company of New York, as
Administrative Agent and Bank of America Illinois, as Documentation Agent (the
"Agents"), and have acted as special counsel for the Agents for the purpose of
rendering this opinion pursuant to Section 3.1(c) of the Credit Agreement.
Terms defined in the Credit Agreement are used herein as therein defined.
We have examined originals or copies, certified or otherwise
identified to our satisfaction, of such documents, corporate records,
certificates of public officials and other instruments and have conducted such
other investigations of fact and law as we have deemed necessary or advisable
for purposes of this opinion.
196
Upon the basis of the foregoing, we are of the opinion that:
1. The execution, delivery and performance by the Borrower of
the Credit Agreement and of the Notes are within the Borrower's corporate
powers and have been duly authorized by all necessary corporate action.
2. The Credit Agreement constitutes a valid and binding
agreement of the Borrower and each Note constitutes a valid and binding
obligation of the Borrower, in each case enforceable in accordance with its
terms except as the same may be limited by bankruptcy, insolvency or similar
laws affecting creditors' rights generally and by general principles of equity.
We are members of the Bar of the State of New York and the
foregoing opinion is limited to the laws of the State of New York, the federal
laws of the United States of America and the General Corporation Law of the
State of Delaware. In giving the foregoing opinion, we express no opinion as
to the effect (if any) of any law of any jurisdiction (except the State of New
York) in which any Lender is located which limits the rate of interest that
such Lender may charge or collect.
This opinion is rendered solely to you in connection with the
above matter. This opinion may not be relied upon by you for any other purpose
or relied upon by any other person without our prior written consent.
Very truly yours,
2
197
EXHIBIT E-2
OPINION OF SPECIAL COUNSEL
FOR THE AGENT
________________, 199_
To the Lenders and the Agents
Referred to Below
c/o Morgan Guaranty Trust Company
of New York, as Administrative Agent
60 Wall Street
New York, New York 10260
Dear Sirs:
[To come -- being negotiated separately with each foreign
counsel.]
198
EXHIBIT F
ASSIGNMENT AND ASSUMPTION AGREEMENT
AGREEMENT dated as of _________, 19__ among <NAME OF ASSIGNOR>
(the "Assignor"), <NAME OF ASSIGNEE> (the "Assignee"), EXIDE ELECTRONICS GROUP,
INC. (the "Borrower") and MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as
Administrative Agent (the "Agent").
WHEREAS, this Assignment and Assumption Agreement (the
"Agreement") relates to the Credit Agreement dated as of March 13, 1996 (the
"Credit Agreement") among the Borrower, the Guarantors party thereto, the
Lenders party thereto, as Lenders, the issuing lenders party thereto, Morgan
Guaranty Trust Company of New York, as Administrative Agent and Bank of America
Illinois, as Documentation Agent;
WHEREAS, Term Loans made to the Borrower by the Assignor under
the Credit Agreement in the aggregate principal amount of $__________ are
outstanding at the date hereof;
WHEREAS, as provided under the Credit Agreement, the Assignor
has a Revolving Commitment in the amount of $_______________, under which the
Assignor has outstanding Revolving Loans in the aggregate amount of
$___________ at the date hereof;
[WHEREAS, the Assignor proposes to assign to the Assignee all
of the rights of the Assignor under the Credit Agreement in respect of a
pro-rata portion of each of its Term Loans in an amount equal to $__________
(the "Term Assigned Amount"), and the Assignee proposes to accept such
assignment of such rights and assume the corresponding obligations from the
Assignor;]
[WHEREAS, the Assignor proposes to assign to the Assignee all
of the rights of the Assignor under the Credit
199
Agreement in respect of a portion of its Revolving Commitment in an amount
equal to $__________ (the "Revolving Commitment Assigned Amount"), together
with a corresponding portion of each of its Revolving Loans, and the Assignee
proposes to accept such assignment of such rights and assume the corresponding
obligations from the Assignor;]
NOW, THEREFORE, in consideration of the foregoing and the
mutual agreements contained herein, the parties hereto agree as follows:
SECTION 1. Definitions. All capitalized terms not otherwise
defined herein shall have the respective meanings set forth in the Credit
Agreement.
SECTION 2. Assignment. [The Assignor hereby assigns and
sells to the Assignee all of the rights of the Assignor under the Credit
Agreement with respect to its Term Loans to the extent of the Term Assigned
Amount, and the Assignee hereby accepts such assignment from the Assignor and
assumes all of the obligations of the Assignor under the Credit Agreement to
the extent of the Term Assigned Amount, including the purchase from the
Assignor of a pro-rata portion of the principal amount of each of the Term
Loans of the Assignor outstanding at the date hereof.] [The Assignor hereby
assigns and sells to the Assignee all of the rights of the Assignor under the
Credit Agreement with respect to its Revolving Commitment to the extent of the
Revolving Commitment Assigned Amount, and the Assignee hereby accepts such
assignment from the Assignor and assumes all of the obligations of the Assignor
under the Credit Agreement to the extent of the Revolving Commitment Assigned
Amount, including the purchase from the Assignor of a pro-rata portion of the
principal amount of each Revolving Loan of the Assignor outstanding at the date
hereof.] Upon the execution and delivery hereof by the Assignor, the Assignee,
the Borrower, the Administrative Agent [, each Issuing Lender and the Swing
Lender] and the payment of the amounts specified in Section 3 required to be
paid on the date hereof [(i) the Assignee shall, as of the date hereof, succeed
to the rights and be obligated to perform the obligations of a Lender under the
Credit Agreement with
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200
outstanding Term Loans in an aggregate amount equal to the Term Assigned
Amount, [(ii) the Assignee shall, as of the date hereof, succeed to the rights
and be obligated to perform the obligations of a Lender under the Credit
Agreement with a Revolving Commitment in an amount equal to the Revolving
Commitment Assigned Amount, and (iii) the Revolving Commitment of the Assignor
shall, as of the date hereof, be reduced by a like amount and the Assignor
released from its obligations under the Credit Agreement to the extent such
obligations have been assumed by the Assignee]. The assignment provided for
herein shall be without recourse to the Assignor.
SECTION 3. Payments. As consideration for the assignment and
sale contemplated in Section 2 hereof, the Assignee shall pay to the Assignor
on the date hereof in Federal funds the amount heretofore agreed between them.1
It is understood that commitment and/or facility fees accrued to the date
hereof are for the account of the Assignor and such fees accruing from and
including the date hereof are for the account of the Assignee. Each of the
Assignor and the Assignee hereby agrees that if it receives any amount under
the Credit Agreement which is for the account of the other party hereto, it
shall receive the same for the account of such other party to the extent of
such other party's interest therein and shall promptly pay the same to such
other party.
SECTION 4. Consent of the Borrower, the Administrative Agent
and the Issuing Lenders. This Agreement is conditioned upon the consent of the
Borrower, the Administrative Agent and each Issuing Lender pursuant to Section
10.6(c) of the Credit Agreement. The execution of this Agreement by the
Borrower, the Administrative Agent and each Issuing Lender is evidence of this
consent. Pursuant
- ---------------------
(1) Amount should combine principal together with accrued
interest and breakage compensation, if any, to be paid by the Assignee, net
of any portion of any upfront fee to be paid by the Assignor to the Assignee.
It may be preferable in an appropriate case to specify these amounts
generically or by formula rather than as a fixed sum.
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to Section 10.6(c), the Borrower agrees to execute and deliver a Note payable
to the order of the Assignee to evidence the assignment and assumption provided
for herein and the Assignor agrees to provide to the Borrower the Note so
assigned marked cancelled.
SECTION 5. Non-Reliance on Assignor. The Assignor makes no
representation or warranty in connection with, and shall have no responsibility
with respect to, the solvency, financial condition, or statements of any
Obligor, or the validity and enforceability of the obligations of any Obligor
in respect of the Credit Agreement or any Note. The Assignee acknowledges that
it has, independently and without reliance on the Assignor, and based on such
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement and will continue to be
responsible for making its own independent appraisal of the business, affairs
and financial condition of the Obligors.
SECTION 6. Governing Law. This Agreement shall be governed
by and construed in accordance with the laws of the State of New York.
SECTION 7. Counterparts. This Agreement may be signed in any
number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
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202
IN WITNESS WHEREOF, the parties have caused this Agreement to
be executed and delivered by their duly authorized officers as of the date
first above written.
<NAME OF ASSIGNOR>
By
--------------------------
Name:
Title:
<NAME OF ASSIGNEE>
By
---------------------------
Name:
Title:
EXIDE ELECTRONICS GROUP, INC.
By
---------------------------
Name:
Title:
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK,
as Administrative Agent
By
---------------------------
Name:
Title:
[ISSUING LENDER(S)]
as Issuing Lender
5
203
By
--------------------------
Name:
Title:
6
204
EXHIBIT G
FORM OF BORROWING BASE CERTIFICATE
I, ________________, the ____________ of EXIDE ELECTRONICS GROUP,
INC. (the "Borrower"), DO HEREBY CERTIFY, pursuant to the Credit Agreement
dated as of March 13, 1996 (as amended from time to time, the "Credit
Agreement") among the Borrower, the Guarantors party thereto, the Lenders
referred to therein, Morgan Guaranty Trust Company of New York, as
Administrative Agent and Bank of Illinois America, as Documentation Agent, that
attached hereto as Exhibit A is a true and accurate calculation of the
Borrowing Base of Borrower as of __________, 19__, determined in accordance
with the requirements of the Credit Agreement.
Capitalized terms used herein and not otherwise defined herein have
the meanings assigned to them in the Credit Agreement.
IN WITNESS WHEREOF, I have signed this certificate as of this ___ day
of ____________, 19__.
--------------------------
Name:
Title:
(i)
205
Exhibit A
to
BORROWING BASE CERTIFICATE
(all numbers in thousands)
As at ____________, 19__
********************************************************************************
ACCOUNTS RECEIVABLE
Gross Accounts Receivable of the Borrower
and its Consolidated Subsidiaries __________
Less:
(a) Receivables for which have
been established a contra
account, but only to the
extent of such account ________
(b) Receivables subject to a Lien
pursuant to a Permitted
Receivables Financing ________
(c) Receivables against which a
reserve has been taken ________
Total Eligible Receivables $_________
206
ELIGIBLE RECEIVABLES $________ X 70% =
========
(2)
207
INVENTORY
Value (determined
on a basis consistent
with that used in the
preparation of the financial
statements referred to in
Section 4.4(a) of the Credit
Agreement) of all
Inventory owned by the
Borrower and its Consolidated
Subsidiaries _________
Less:
(a) Inventory that is subject
to a Lien (other than
Liens created pursuant to
the Loan Documents) _________
(b) Inventory against which
a reserve has been taken _________
(c) Inventory for which has
been established a contra
account, but only to the
extent of such account _________
Total Ineligible Inventory $________
ELIGIBLE INVENTORY $________ X 50% = _________
BORROWING BASE TOTAL $________
(3)
208
EXHIBIT H
GUARANTOR ADDENDUM
(ADDENDUM TO LOAN DOCUMENTS)
ADDENDUM dated as of ____________, ____ to CREDIT AGREEMENT
dated as of March 13, 1996 (as amended and supplemented from time to time, the
"Credit Agreement") entered into among Exide Electronics Group, Inc. (the
"Borrower"), the Guarantors party thereto, the lenders listed on the signatory
pages thereof, Bank of America Illinois as Documentation Agent and MORGAN
GUARANTY TRUST COMPANY OF NEW YORK as Administrative Agent for the Lenders
referred to therein (together with its successors in such capacity, the
"Agent"). Capitalized terms used but not defined herein are used as defined in
the Credit Agreement.
[Name of new Guarantor] (the "New Guarantor"), has become a
Subsidiary of the Borrower, and the New Guarantor and the Company wish to
comply with the terms of the Credit Agreement referred to therein. The New
Guarantor accordingly agrees as follows:
1. The New Guarantor hereby agrees that it is (and hereby
becomes) a "Guarantor" party to the Credit Agreement and an "Obligor" party to
the Security Agreement, in each case for all purposes as though a Guarantor or
Obligor (as the case may be) originally signatory thereto.
2. Without limitation of the foregoing:
(a) In order to secure the full and punctual payment and
performance of the Secured Obligations in accordance with the terms thereof,
the New Guarantor hereby grants to the Agent for the ratable benefit of the
Secured Parties (as defined in the Security Agreement) a continuing security
interest in and to all of the Collateral (as defined in the Security Agreement)
of the New Guarantor.
(4)
209
(b) The New Guarantor hereby unconditionally guarantees the
full and punctual payment (whether at stated maturity, upon acceleration or
otherwise) of the principal of and interest on each Note and the full amount of
all Letter of Credit Liabilities under the Credit Agreement, and the full and
punctual payment of all other amounts payable by the Borrower or any other
Obligor under the Loan Documents, [including without limitation all interest
accruing before and after the commencement of any bankruptcy, insolvency or
similar proceedings, whether or not allowed or allowable as a claim in such
proceedings]. Upon failure by the Borrower or any other Obligor to pay
punctually any such amount, each Guarantor agrees jointly and severally that it
shall forthwith on demand pay the amount not so paid at the place and in the
manner specified in the Credit Agreement or the other Loan Documents.
(c) The New Guarantor represents that:
(i) The New Guarantor has been duly organized, is validly
existing as a corporation, limited liability company or other business
entity and is in good standing under the laws of its jurisdiction of
organization, with full corporate or other entity powers to carry on
its business as presently conducted.
(ii) The execution, delivery and performance by the New Guarantor
of this Addendum and each other Loan Document to which the New
Guarantor is a party are within the New Guarantor's corporate or other
entity powers, have been duly authorized by all necessary corporate or
other entity action, require no action by or in respect of, or filing
with, any governmental body, agency or official and do not contravene,
or constitute a default under, any provision of applicable law or
regulation or of the certificate of organization or by-laws of the New
Guarantor or of any agreement, judgment, injunction, order, decree or
other instrument binding upon the New Guarantor or result in the
creation or imposition of any Lien on any asset of the New Guarantor
or any of its Subsidiaries.
(5)
210
(iii) This Addendum and each other Loan Document to which the New
Guarantor is a party constitutes a valid and binding agreement of the
New Guarantor, enforceable in accordance with its terms except as (i)
the enforceability hereof may be limited by bankruptcy, insolvency or
similar laws affecting creditors' rights generally and (ii) rights of
acceleration and the availability of equitable remedies may be limited
by equitable principles of general applicability.
(6)
211
IN WITNESS WHEREOF, the New Guarantor has caused this Addendum
to be duly executed by its duly authorized officer as of the day and year first
above written.
[NAME OF NEW GUARANTOR]
By
----------------------------
Title:
Accepted and Acknowledged as of
the date first written above:
MORGAN GUARANTY TRUST COMPANY OF NEW YORK,
as Administrative Agent
By
---------------------------
Title
(7)