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CREDIT AGREEMENT
among
MICROCHIP TECHNOLOGY INCORPORATED
THE BANKS NAMED HEREIN
BANK ONE, ARIZONA, NA
as Administrative Agent
and
THE FIRST NATIONAL BANK OF CHICAGO
as Documentation Agent
Dated as of October 28, 1997
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TABLE OF CONTENTS
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Page
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ARTICLE I DEFINITIONS.......................................................2
SECTION 1.1 Defined Terms................................................2
SECTION 1.2 Terms Generally.............................................12
ARTICLE II THE REVOLVING CREDIT FACILITY....................................13
SECTION 2.1 The Commitment..............................................13
SECTION 2.2 Borrowings Under the Revolving Credit Facility..............13
SECTION 2.3 Notice of Borrowings........................................13
SECTION 2.4 Revolving Credit Loans......................................14
SECTION 2.5 Refinancings................................................15
SECTION 2.6 Fees........................................................15
SECTION 2.7 Notes; Repayment of Revolving Credit Loans..................15
SECTION 2.8 Interest on Revolving Credit Loans..........................16
SECTION 2.9 Default Interest............................................16
SECTION 2.10 Termination and Reduction of Commitments...................16
SECTION 2.11 Conversion and Continuation of Borrowings..................17
SECTION 2.12 Prepayment.................................................18
SECTION 2.13 Reserve Requirements; Change in Circumstances..............18
SECTION 2.14 Change in Legality.........................................20
SECTION 2.15 Redeployment Loss..........................................21
SECTION 2.16 Pro Rata Treatment.........................................22
SECTION 2.17 Sharing of Setoffs.........................................22
SECTION 2.18 Payments...................................................23
SECTION 2.19 Taxes......................................................23
SECTION 2.20 Termination or Assignment of Commitments Under Certain
Circumstances.......................................26
ARTICLE III REPRESENTATIONS AND WARRANTIES...................................27
SECTION 3.1 Organization; Corporate Powers; Etc.........................27
SECTION 3.2 Authorization; Etc..........................................27
SECTION 3.3 Enforceability..............................................27
SECTION 3.4 Financial Condition and Information.........................27
SECTION 3.5 No Material Adverse Change..................................28
SECTION 3.6 Litigation..................................................28
SECTION 3.7 Federal Reserve Regulations.................................28
SECTION 3.8 Investment Company Act......................................28
SECTION 3.9 Public Utility Holding Company Act..........................28
SECTION 3.10 Tax Returns................................................29
SECTION 3.11 ERISA......................................................29
SECTION 3.12 Title to Properties: Possession............................29
SECTION 3.13 Use of Proceeds............................................29
SECTION 3.14 Environmental and Safety Matters...........................29
SECTION 3.15 Subsidiaries...............................................29
ARTICLE IV CONDITIONS TO CREDIT EVENTS......................................30
SECTION 4.1 Credit Events...............................................30
SECTION 4.2 First Credit Event..........................................30
ARTICLE V AFFIRMATIVE COVENANTS............................................32
SECTION 5.1 Corporate Existence.........................................32
SECTION 5.2 Insurance...................................................32
SECTION 5.3 Taxes.......................................................32
SECTION 5.4 Financial Statements; Reports, etc..........................32
SECTION 5.5 Litigation and Other Notices................................33
SECTION 5.6 Maintaining Records: Access to Premises and Records.........34
SECTION 5.7 Use of Proceeds.............................................34
SECTION 5.8 Operations and Properties...................................34
SECTION 5.9 Compliance with Law.........................................34
SECTION 5.10 ERISA Compliance...........................................34
ARTICLE VI NEGATIVE COVENANTS...............................................36
SECTION 6.1 Liens.......................................................36
SECTION 6.2 Sale and Lease-Back Transactions............................37
SECTION 6.3 Subsidiary Indebtedness.....................................37
SECTION 6.4 Mergers, Consolidations, Sales of Assets....................37
SECTION 6.5 Acquisitions................................................38
SECTION 6.6 Business of Borrower........................................38
SECTION 6.7 ERISA Liabilities...........................................38
SECTION 6.8 Subordinated Indebtedness...................................38
SECTION 6.9 Debt/EBITDA Ratio...........................................38
SECTION 6.10 Consolidated Effective Tangible Net Worth..................39
SECTION 6.11 Debt/Worth Ratio...........................................39
SECTION 6.12 Continued Profitability....................................39
ARTICLE VII EVENTS OF DEFAULT................................................40
SECTION 7.1 Events of Default...........................................40
SECTION 7.2 Remedies....................................................42
SECTION 7.3 Occurrence and Declaration of an Event of Default...........43
ARTICLE VIII THE ADMINISTRATIVE AGENT; INTERBANK AGREEMENT....................44
SECTION 8.1 Appointment.................................................44
SECTION 8.2 Liability...................................................44
SECTION 8.3 Action by Administrative Agent..............................45
SECTION 8.4 Resignation.................................................46
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SECTION 8.5 Agent as Bank...............................................46
SECTION 8.6 Ownership and Possession of Loan Documents..................47
SECTION 8.7 Indemnification.............................................47
SECTION 8.8 Independent Credit Analysis.................................47
SECTION 8.9 Process for Obtaining Approval of the Banks.................48
SECTION 8.10 Communications to the Banks................................48
SECTION 8.11 Relationship with the Borrower.............................49
SECTION 8.12 Payments to or by the Banks................................49
SECTION 8.13 Application of Payments....................................50
SECTION 8.14 Defaulting Banks...........................................50
SECTION 8.15 Purchase of Defaulting Bank's Interest After Default.......51
SECTION 8.16 Purchase Price and Payment for Defaulting Bank's Interest..52
ARTICLE IX MISCELLANEOUS....................................................53
SECTION 9.1 Notices.....................................................53
SECTION 9.2 Survival of Agreement.......................................53
SECTION 9.3 Binding Effect..............................................53
SECTION 9.4 Successors and Assigns......................................54
SECTION 9.5 Expenses; Indemnity.........................................56
SECTION 9.6 Right of Setoff.............................................57
SECTION 9.7 Applicable Law..............................................58
SECTION 9.8 Waivers; Amendment..........................................58
SECTION 9.9 Interest Rate Limitation....................................58
SECTION 9.10 Entire Agreement...........................................59
SECTION 9.11 Severability...............................................59
SECTION 9.12 Counterparts and Signature Pages...........................59
SECTION 9.13 Headings...................................................59
SECTION 9.14 Arbitration................................................59
SECTION 9.15 Jurisdiction; Consent to Service of Process................61
SECTION 9.16 Waiver of Jury Trial.......................................61
SECTION 9.17 Confidentiality............................................62
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LIST OF EXHIBITS AND SCHEDULES
Exhibit "A" - Form of Assignment and Acceptance
Exhibit "B" - Form of Borrowing Notice
Exhibit "C" - Form of Note
Exhibit "D" - Administrative Details Reply Form
Exhibit "E" - Matters to be Covered by the Legal Opinion of Borrower's Counsel
Exhibit "F" - Form of Quarterly Compliance and Margin Certificate
Schedule 2.1 - Commitments of Banks
Schedule 3.5 - Material Adverse Change Since June 30, 1997
Schedule 3.15 - Borrower's Subsidiaries
Schedule 6.1 - Permitted Liens
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CREDIT AGREEMENT
BY THIS CREDIT AGREEMENT (together with any amendments or
modifications, the "Agreement"), entered into as of October 28, 1997 by and
among MICROCHIP TECHNOLOGY INCORPORATED, a Delaware corporation (the
"Borrower"), the banks listed in Schedule 2.1 (the "Banks"), BANK ONE, ARIZONA,
NA, a national banking association, as administrative agent for the Banks (in
such capacity, the "Administrative Agent") and THE FIRST NATIONAL BANK OF
CHICAGO, a national banking association, as Documentation Agent in consideration
of the mutual promises herein contained and for other valuable consideration,
the parties hereto do agree as follows:
RECITALS
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A. The Borrower has requested that the Banks provide lending
commitments in an aggregate principal amount of $90,000,000.00 at any time
outstanding on a revolving credit basis on and after the date hereof and at any
time and from time to time prior to the Expiration Date.
B. The Banks have agreed to provide financial accommodations to the
Borrower pursuant to this Agreement in an amount not to exceed the Maximum
Commitment, which amount is $90,000,000.00
C. The proceeds of such borrowing are to provide funds for general
corporate purposes, including without limitation, working capital.
D. The Banks are willing to extend such credit (the "Revolving Credit
Facility") to the Borrower on the terms and subject to the conditions herein set
forth.
E. Effective as of the delivery of this Agreement, the Credit Agreement
dated October 31, 1996 by and among the Borrower, the banks listed therein,
Wells Fargo Bank, N.A. as administrative agent for said banks and NBD Bank as
Co-Agent (the "Prior Agreement") will be terminated by Borrower.
Accordingly, the Borrower, the Banks and the Administrative Agent agree
as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 Defined Terms. Although terms may be defined elsewhere in
this Agreement, as used in this Agreement, the following terms shall have the
meanings specified below:
"Administrative Agent" shall have the meaning assigned to such term in
the Preamble, and any successor thereto.
"Administrative Details Reply Form" shall mean an Administrative
Details Reply Form substantially in the form of Exhibit "D".
"Affiliate" shall mean, when used with respect to a specified person,
another person that directly, or indirectly through one or more intermediaries,
Controls or is Controlled by or is under common Control with the person
specified.
"Agency Fee" shall have the meaning assigned to such term in Section
2.6(b).
"Agreement" shall mean this Credit Agreement.
"Applicable Interest Rate" with respect to a given Borrowing shall mean
the interest rate in effect for that Borrowing as determined pursuant to Section
2.8 herein.
"Applicable Margin" shall mean on any date, with respect to the Loans,
the lowest applicable spread or factor set forth below based upon Borrower's
achievement of all of the conditions for that spread category.
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LIBOR Base Rate
Borrowing Borrowing Facility
Spread Spread Fee Factor
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CATEGORY 1: Conditions
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Debt/EBITDA Ratio less than
0.50 32.5 basis points 0 basis points 17.5 basis points
CATEGORY 2: Conditions
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Debt/EBITDA Ratio less than
0.65 55.0 basis points 0 basis points 20.0 basis points
CATEGORY 3: Conditions
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Debt/EBITDA Ratio equal to or
less than 0.80 77.5 basis points 0 basis points 22.5 basis points
For purposes of the foregoing, the Applicable Margin shall be determined for,
and as to future LIBOR Borrowings and as to existing and future Base Rate
Borrowings shall be effective as of the first day of, each Margin Period of
Borrower by reference to the above-specified financial ratio (the "Loan Pricing
Qualifiers") calculated as of the end of the immediately preceding fiscal
quarter, where "Margin Period" shall mean a quarterly period beginning two (2)
Business Days after the sixtieth (60th) day after the end of a fiscal quarter of
Borrower.
"Assignment and Acceptance" shall mean an assignment and acceptance
entered into by a Bank and an assignee, accepted by the Administrative Agent, in
the form of Exhibit "A".
"Bank" and "Banks" shall have the meaning assigned to such terms in the
Preamble.
"Baseline Financial Statements" shall mean the consolidated financial
statements of Borrower and the Subsidiaries (including all footnotes thereto)
for the period ending June 30, 1997, that were submitted to the Banks in
connection with Borrower's application for the Loans and are more fully
described in Section 3.4 hereof.
"Base Rate" shall mean the Prime Rate in effect from time to time.
"Base Rate Borrowing" shall mean a Borrowing bearing interest at a rate
determined by reference to the Base Rate.
"Board" shall mean the Board of Governors of the Federal Reserve System
of the United States.
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"Borrower" shall have the meaning assigned to such term in the
Preamble.
"Borrowing" shall mean an outstanding principal amount of one of the
Revolving Credit Loans as to which a single Interest Period is in effect and
with respect to which a single Applicable Interest Rate applies.
"Borrowing Maturity Date" shall mean (a) with respect to a Base Rate
Borrowing, the first day of each calendar month in arrears, and (b) with respect
to any LIBOR Borrowing, the last day of the Interest Period applicable thereto,
and (c) each of (i) the date of any refinancing or conversion of a Borrowing
with or to a Borrowing of a different Type, (ii) the date of prepayment of a
Borrowing and (iii) the Expiration Date.
"Borrowing Notice" shall mean a notice given pursuant to Section 2.3,
as therein described.
"Business Day" shall mean any day (other than a day which is a
Saturday, Sunday or legal holiday in the State of Arizona) on which commercial
banks are open for business in Phoenix, Arizona, San Francisco, California and
Chicago, Illinois; provided, however, that, when used in connection with a LIBOR
Borrowing, the term "Business Day" shall exclude any day on which banks are not
open for dealings in dollar deposits in the London interbank market.
"Capital Lease" shall mean any lease of any property (whether real,
personal or mixed) required by GAAP to be accounted for as a "capital lease" on
the balance sheet of the lessee.
"Capital Lease Obligations" of any Person shall mean the obligations of
such Person to pay rent or other amounts under any lease of (or other
arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as Capital Leases on a balance sheet of such person under GAAP
and, for the purposes of this Agreement, the amount of such obligations at any
time shall be the capitalized amount thereof at such time determined in
accordance with GAAP.
"Cash Flow" shall mean the sum of the following for the relevant
period: (i) Consolidated Net Income, (ii) tax expense, (iii) interest expense,
(iv) depreciation expense, and (v) amortization of intangibles expense, all
determined over a rolling period of four consecutive fiscal quarters ending on
(or, if the date of determination is other than the end of a fixed quarter,
immediately preceding) the date of determination.
A "Change in Control" shall be deemed to have occurred if, after the
date hereof, (a) any person or group (within the meaning of Rule 13d-3, as in
effect on the date hereof, promulgated by the SEC under the 1934 Act), shall
acquire, directly or indirectly, beneficially or of record, shares representing
more than 50% of the aggregate ordinary voting power represented by the issued
and outstanding capital stock of the Borrower; (b) a majority of the seats
(other than vacant seats) on the board of directors become occupied by persons
not members of said board on the date hereof that were neither (i) nominated by
the board of directors of the Borrower, nor (ii)
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appointed by directors so nominated; or (c) any person or group shall otherwise
directly or indirectly Control the Borrower.
"Closing Date" shall mean October 28, 1997.
"Code" shall mean the Internal Revenue Code of 1986, as the same may be
amended from time to time.
"Commitment" shall mean, with respect to each Bank, the commitment of
such Bank as to the Revolving Credit Facility hereunder as set forth in Schedule
2.1, as such Bank's Commitment may be permanently terminated or reduced from
time to time pursuant to Section 2.10 or Section 2.20. Each Bank's Commitment
shall not be less than $10,000,000.00 except to the extent such Bank's
Commitment shall have been permanently terminated or reduced pursuant to Section
2.10 or Section 2.20. Each Bank's Commitment shall fully, automatically and
permanently terminate on the Expiration Date.
"Consolidated Debt" shall mean the total Debt of the Borrower and its
Subsidiaries, less the outstanding principal amount of its Convertible
Subordinated Indebtedness, all computed on a consolidated basis in accordance
with GAAP.
"Consolidated Effective Tangible Net Worth" shall mean Consolidated
Tangible Net Worth plus the outstanding principal amount of Subordinated
Indebtedness.
"Consolidated Net Income" shall mean, for any period, the aggregate net
income (or net deficit) of the Borrower and its Subsidiaries for such period,
computed on a consolidated basis in accordance with GAAP.
"Consolidated Tangible Net Worth" shall mean, with respect to the
Borrower and its Subsidiaries, Stockholders Equity reduced by the book value of
all Intangible Assets, all to be determined on a consolidated basis in
accordance with GAAP consistent with those applied in the preparation of the
Baseline Financial Statements.
"Control" shall mean the power to direct or cause the direction of the
management or policies of a person, whether through rights of ownership under
voting securities, under contract or otherwise, and "Controlling" and
"Controlled" shall have meanings correlative thereto.
"Convertible Subordinated Indebtedness" shall mean Subordinated
Indebtedness that is convertible into equity of the Borrower, which amount for
purposes of the calculation of the ratio under Section 6.11 shall not exceed at
any time $100,000,000.00.
"Credit Event" shall have the meaning assigned to such term in Article
IV.
"Current Bank" shall have the meaning assigned to such term in Section
8.15.
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"Debt" shall mean, as at the date as of which any determination is
being or is to be made thereof and in respect of any Person, without duplication
and excluding intercorporate debt and other intercorporate obligations solely
among such Person and its Subsidiaries, all liabilities of such Person,
including (without limitation) the following to the extent such would be
presented as liabilities in the balance sheet of such Person prepared under GAAP
on a basis consistent with the Baseline Financial Statements: (i) indebtedness
of such Person for borrowed money, (ii) obligations of such Person evidenced by
bonds, debentures, notes or other similar instruments, (iii) obligations of such
Person to pay the deferred purchase price of property or services under
conditional sale or other similar agreements which provide for the deferral of
the payment of the purchase price for a period in excess of one year following
the date of such Person's receipt and acceptance of the complete delivery of
such property and/or services, (iv) Capital Lease Obligations of such person and
(v) Guarantees by such Person and any of its Subsidiaries of Debt of third
parties.
"Default Rate" shall mean a rate per annum (computed as provided in
Section 2.8(b)) equal to the Base Rate plus three percent (3%) and changing in
conformity with each change in the Base Rate.
"Defaulting Bank" shall have the meaning assigned to such term in
Section 8.14(a).
"Designated Officer" shall mean any of the Chairman of the Board,
President, any Vice President, the Chief Financial Officer, the General Counsel,
the Secretary, the Controller, the Treasurer and any Assistant Treasurer of the
Borrower.
"Documentation Agent" shall mean The First National Bank of Chicago, a
national banking association. The Documentation Agent shall have no rights,
duties or responsibilities under the Loan Documents beyond those of a Bank.
"Dollars" or "$" shall mean lawful money of the United States of
America.
"Equipment" shall mean tangible personalty that is not "inventory,"
"farm equipment" or "fixtures," as the immediately preceding terms in quotations
are defined in Article Nine of the Uniform Commercial Code as in effect in and
for the State of Arizona.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as the same may be amended from time to time.
"ERISA Affiliate" shall mean any trade or business (whether or not
incorporated) that is a member of a group of which the Borrower is a member and
which is treated as a single employer under Section 414 of the Code.
"ERISA Liabilities" shall mean at any time the minimum liability with
respect to Plans that would be required to be reflected at such time as a
liability on the consolidated balance sheet of the Borrower under GAAP.
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"Eurodollar Lending Office," with respect to any Bank (or transferee)
or the Administrative Agent, shall mean such office or branch as such Bank (or
transferee) or the Administrative Agent has designated to the Borrower herein in
Schedule "2.1" as the office or branch of such Bank (or transferee) or the
Administrative Agent which shall constitute the Lending Office thereof for LIBOR
Borrowings.
"Event of Default" shall have the meaning assigned to such term in
Section 7.1.
"Expiration Date" shall mean the earliest of the following: (a) the
date the Banks exercise their option to declare the Loans fully due and payable
after the occurrence of an Event of Default and the continuation thereof, or (b)
October 28, 2000.
"Facility Fee" shall have the meaning assigned to such term in Section
2.6(a).
"Facility Fee Percentage" shall mean a rate per annum equal to the
Applicable Margin for the Facility Fee except that in the event that interest is
payable pursuant to Section 2.9 at the Default Rate, "Facility Fee Percentage"
shall mean a rate per annum equal to 50.0 basis points.
"Federal Funds Rate" shall mean, for any day, the weighted average of
the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published on the next
succeeding Business Day by the Federal Reserve Bank of San Francisco, or, if
such rate is not so published for any day which is a Business Day, the average
of the quotations for the day of such transactions received by the
Administrative Agent from three Federal funds brokers of recognized standing
selected by it.
"Fee Letter" shall mean that letter agreement between the Borrower and
the Administrative Agent with respect to the payment of the Agency Fee.
"Fees" shall mean the Facility Fee, the Agency Fee and all other fees
and charges, if any, (other than interest) payable hereunder or otherwise
payable in connection with the Revolving Credit Facility.
"Financial Officer" of any corporation shall mean the chief financial
officer, principal accounting officer, treasurer or controller of such
corporation.
"GAAP" shall mean generally accepted accounting principles in the
United States.
"Governmental Authority" shall mean any federal, state, tribal, local
or foreign court or governmental agency, authority, instrumentality or
regulatory body.
"Guarantee" of or by any Person shall mean any obligation, contingent
or otherwise, of such Person guaranteeing or having the economic effect of
guaranteeing any Indebtedness of any other Person (the "Primary Obligor") in any
manner, whether directly or indirectly, and including without limitation any
obligation of such Person, direct or indirect, (a) to purchase or pay (or
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advance or supply funds for the purchase or payment of) such Indebtedness or to
purchase (or to advance or supply funds for the purchase of) any security for
the payment of such Indebtedness, (b) to purchase property, securities or
services for the purpose of assuring the owner of such Indebtedness of the
payment of such Indebtedness or (c) to maintain working capital, equity capital
or other financial statement condition or liquidity of the Primary Obligor so as
to enable the Primary Obligor to pay such Indebtedness; provided, however, that
the term Guarantee shall not include endorsements for collection or deposit, in
either case in the ordinary course of business.
"Indebtedness" of a Person shall mean each of the following (without
duplication) that, individually, is in excess of $100,000.00 in outstanding
amount (in Dollars or the equivalent at market exchange rates) on the date such
obligation is incurred: (a) obligations of that Person to any other Person for
payment of borrowed money, (b) Capital Lease Obligations, (c) notes and drafts
drawn or accepted by that Person payable to any other Person, whether or not
representing obligations for borrowed money (but without duplication of
indebtedness for borrowed money), (d) any obligation for the purchase price of
property the payment of which is deferred for more than one year or evidenced by
a note or equivalent instrument, (e) Guarantees of Indebtedness of third
parties, and (f) a recourse or non-recourse payment obligation of any other
Person that is secured by a Lien on any property of the first Person, whether or
not assumed by the first person, up to the fair market value (from time to time)
of such property (absent manifest evidence to the contrary, the fair market
value of such property shall be the amount determined under GAAP for financial
reporting purposes).
"Information" shall have the meaning assigned to such term in Section
9.17.
"Intangible Assets" of any Person shall mean those assets of such
person that are (i) deferred assets, other than prepaid insurance and prepaid
taxes; (ii) patents, copyrights, trademarks, tradenames, franchises, goodwill,
experimental expenses, and other similar assets which would be classified as
intangible assets on a balance sheet of such Person, prepared in accordance with
GAAP; and (iii) unamortized debt discount and expense.
"Interest Period" shall mean (a) as to any LIBOR Borrowing, the period
commencing on the date of such Borrowing and ending the day preceding the
numerically corresponding day (or, if there is no numerically corresponding day,
on the last day) in the calendar month that is 1, 2, 3 or 6 months thereafter,
as the Borrower may elect, or, if earlier, on the Expiration Date, and (b) as to
any Base Rate Borrowing, the period commencing on the date of such Borrowing and
ending the day preceding the Expiration Date, the day preceding the date such
Borrowing is converted to a Borrowing of a different Type in accordance with
Section 2.11 or the date of repayment or prepayment of such Borrowing in
accordance with Section 2.5 or 2.12; provided, however, that if any Interest
Period would end on a day other than a Business Day, such Interest Period shall
be extended to the next succeeding Business Day unless, in the case of LIBOR
Borrowings only, such next succeeding Business Day would fall in the next
calendar month, in which case such Interest Period shall end on the next
preceding Business Day. Interest shall accrue from and include the first day of
an Interest Period and include the last day of such Interest Period.
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"Lending Office," with respect to any Bank or any transferee of the
Loans or the Administrative Agent, shall mean such office or branch as such Bank
or such transferee or the Administrative Agent has designated to the Borrower
herein as the office or branch of that Bank or such transferee or the
Administrative Agent from which Loans are to be made.
"LIBO Rate" shall mean, with respect to any LIBOR Borrowing for any
Interest Period, an interest rate per annum (rounded upwards, if necessary, at
the third decimal place) determined by dividing (i) Base LIBOR by (ii) 100% less
the LIBOR Reserve Percentage; where "Base LIBOR" shall mean the offered rate for
United States dollar deposits greater than $1 million as of 11:00 a.m., City of
London time, England, two (2) Business Days prior to the first day of the
respective Interest Period as quoted in the schedule of "British Bankers LIBOR
Rates" as reported by Bloomberg Financial Markets, Inc. or as reported by such
other sources selected by the Administrative Agent, for a period of time equal
to the Interest Period.
"LIBOR Borrowing" shall mean a Borrowing bearing interest at a rate
determined by reference to the LIBO Rate.
"LIBOR Reserve Percentage" shall mean the reserve percentage prescribed
by the Board (or any successor) for "Eurocurrency Liabilities" (as defined in
Regulation D, as amended), adjusted by Administrative Agent for expected changes
in such reserve percentage during the applicable Interest Period.
"Lien" shall mean any mortgage, pledge, security interest or similar
lien.
"Loans" shall mean the Revolving Credit Loans made available by the
Banks to Borrower under the Revolving Credit Facility.
"Loan Documents" shall mean this Agreement, the Notes, the Fee Letter
and all other documents, instruments and agreements of every kind and
description at any time undertaken by any Person for the benefit of the Banks in
connection with the Loans.
"Loan Pricing Qualifiers" shall have the meaning assigned to such term
in the definition of "Applicable Margin."
"Margin Stock" shall have the meaning given such term under Regulation
U.
"Material Division" shall mean any division of the Borrower or a
Subsidiary which represents more than 30% of the consolidated assets of the
Borrower.
"Material Subsidiary" shall mean any Subsidiary which represents more
than 30% of the consolidated assets of the Borrower.
"Maximum Commitment" shall mean $90,000,000.00.
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"Minimum Additional Amount" shall mean $100,000.00
"Minimum Amount" shall mean $3,000,000.00.
"Multiemployer Plan" shall mean a multiemployer plan as defined in
Section 4001(a)(3) of ERISA to which the Borrower or any ERISA Affiliate (other
than one considered an ERISA Affiliate only pursuant to subsection (m) or (o) of
Section 414 of the Code) is making or accruing an obligation to make
contributions, or has within any of the preceding five plan years made or
accrued an obligation to make contributions.
"1934 Act" shall mean the United States Securities Exchange Act of
1934, as amended.
"Note" and "Notes" shall mean, severally and collectively, revolving
credit notes of the Borrower executed and delivered as provided in Section 2.7,
as such notes might be amended, modified, extended and restated from time to
time.
"Operating Plan" shall have the meaning assigned to such term in
Section 5.4(e).
"PBGC" shall mean the Pension Benefit Guaranty Corporation referred to
and defined in ERISA.
"Permitted Lien" shall mean a Lien permitted under Section 6.1.
"Person" shall mean any natural person (whether or not acting in a
representative capacity), corporation, limited liability company, business
trust, joint venture, association, sole proprietorship, partnership or
government, or any agency or political subdivision thereof.
"Plan" shall mean any pension plan (other than a Multiemployer Plan)
that is (1) a qualified plan under Section 401(a) of the Code, (ii) subject to
the provisions of Title IV of ERISA or Section 412 of the Code and (iii)
maintained for employees of the Borrower or any ERISA Affiliate.
"Potential Default" shall mean any event or condition which upon
notice, lapse of time or both would constitute an Event of Default.
"Prime Rate" shall mean at any time a rate of interest equal to the
"Prime Rate" as most recently published in The Wall Street Journal or, if no
longer so published, in other comparable sources.
"Prior Agreement" shall have the meaning assigned to such term in the
Recitals.
"Quarterly Certificate" shall mean that Quarterly Compliance and Margin
Certificate substantially in the form of Exhibit F.
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"Redeployment Loss" shall have the meaning assigned to such term in
Section 2.15.
"Register" shall have the meaning assigned to such term in Section
9.4(d).
"Regulation D" shall mean Regulation D of the Board as from time to
time in effect and all official rulings and interpretations thereunder or
thereof.
"Regulation G" shall mean Regulation G of the Board as from time to
time in effect and all official rulings and interpretations thereunder or
thereof.
"Regulation T" shall mean Regulation T of the Board as from time to
time in effect and all official rulings and interpretations thereunder or
thereof.
"Regulation U" shall mean Regulation U of the Board as from time to
time in effect and all official rulings and interpretations thereunder or
thereof.
"Regulation X" shall mean Regulation X of the Board as from time to
time in effect and all official rulings and interpretations thereunder or
thereof.
"Reportable Event" shall mean any reportable event as defined in
Section 4043(b) of ERISA or the regulations issued thereunder with respect to a
Plan (other than a Plan maintained by an ERISA Affiliate which is considered an
ERISA Affiliate only pursuant to subsection (m) or (o) of Section 414 of the
Code).
"Required Banks" shall mean, at any time, Banks having Commitments
representing at least 66 and 2/3% of the Total Commitment.
"Revolving Credit Facility" shall have the meaning assigned to such
term in Recital D.
"Revolving Credit Loans" shall mean the revolving line of credit loans
made available by the Banks to the Borrower pursuant to Article II. Each
Revolving Credit Loan shall be composed of one or more LIBOR Borrowings and/or
Base Rate Borrowings.
"Sale and Lease-Back Transaction" shall have the meaning assigned to
such term in Section 6.2.
"SEC" shall mean the United States Securities and Exchange Commission.
"Significant Subsidiary" shall have the meaning assigned to such term
in SEC Regulation S-X, 17 C.F.R. ss.210.1-02.
"Stockholders Equity" shall mean the excess of total assets over total
liabilities, all to be determined on a consolidated basis in accordance with
GAAP.
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"Subordinated Indebtedness" shall mean all indebtedness of the Borrower
subordinated to payment of the principal of, premium, if any, and interest on
the obligations of the Borrower under the Loan Documents, pursuant to agreements
acceptable to the Required Banks.
"Subsidiary" of a Person shall mean any corporation, association or
other business entity of which more than 50% of the total voting power of shares
of stock entitled to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly, by that
Person, by one or more of the other Subsidiaries of that Person, or by any
combination thereof.
"Termination" shall mean the payment in full of the principal amount of
all Loans, all accrued interest thereon and all fees with respect thereto,
coupled with termination of the Revolving Credit Facility and all other
obligations (if any) of all of the Banks to advance funds or extend credit to or
for the benefit of Borrower pursuant to this Agreement.
"Termination Date" shall mean the date of the occurrence of the last
event to occur required for Termination to occur.
"Total Commitment" shall mean at any time the aggregate amount of the
Banks' Commitments, as in effect from time to time, which amount shall not
exceed the Maximum Commitment.
"Type," when used in respect of any Borrowing, shall refer to the rate
by reference to which interest on such Borrowing is determined. For purposes
hereof, "rate" shall mean the LIBO Rate or the Base Rate.
SECTION 1.2 Terms Generally. The definitions in Section 1.1 shall apply
equally to both the singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. All references herein to Articles, Sections, Exhibits
and Schedules shall be deemed references to Articles and Sections of this
Agreement, and Exhibits and Schedules to this Agreement, unless the context
shall otherwise require. Except as otherwise expressly provided herein, all
terms of an accounting or financial nature shall be construed in accordance with
GAAP as in effect in the United States of America from time to time; provided,
however, that, for purposes of determining compliance with any covenant set
forth in Article VI, such terms shall be construed in accordance with GAAP as in
effect on the date of this Agreement applied on a basis consistent with the
application used in preparing the Baseline Financial Statements.
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ARTICLE II
THE REVOLVING CREDIT FACILITY
SECTION 2.1 The Commitment.
Subject to the terms and conditions herein set forth, each
Bank agrees, severally and not jointly, to make Revolving Credit Loans to the
Borrower, at any time and from time to time on and after the date hereof and
until the Expiration Date, in an aggregate principal amount at any time
outstanding not to exceed such Bank's Commitment, subject, however, to the
conditions that (a) at no time shall the outstanding aggregate principal amount
of all Revolving Credit Loans made by all Banks exceed the Maximum Commitment,
and (b) at all times the outstanding aggregate principal amount of all Revolving
Credit Loans made by each Bank shall equal the product of (y) the percentage
which its Commitment represents of the Maximum Commitment times (z) the
outstanding aggregate principal amount of all Revolving Credit Loans made by all
Banks. Commitments may be terminated or reduced from time to time pursuant to
Sections 2.10 and 2.20. Within the foregoing limits, the Borrower may borrow,
pay or prepay and reborrow hereunder, on and after the date hereof and prior to
the Expiration Date, subject to the terms, conditions and limitations set forth
herein.
SECTION 2.2 Borrowings Under the Revolving Credit Facility.
Each advance under the Revolving Credit Facility shall be a
single LIBOR Borrowing or a single Base Rate Borrowing, as the Borrower may
request. Borrowings of more than one Type may be outstanding at the same time;
provided, however, that (i) the Borrower shall not be entitled to request any
Borrowing which, if made, would result in an aggregate of more than ten separate
Borrowings being outstanding collectively under the Revolving Credit Facility at
any one time and (ii) each Borrowing shall be in a principal amount which is an
integral multiple of the Minimum Additional Amount and not less than the Minimum
Amount. For purposes of the foregoing, Borrowings having different Interest
Periods, regardless of whether they commence on the same date, shall be
considered separate Borrowings.
SECTION 2.3 Notice of Borrowings.
In order to request a Borrowing, the Borrower shall give to
the Administrative Agent written or telecopy notice (or telephone notice
promptly confirmed in writing or by telecopy) in the form of Exhibit "B" (a
"Borrowing Notice"), (a) in the case of a LIBOR Borrowing, not later than 9:00
a.m., Arizona time, three Business Days before a proposed Borrowing and (b) in
the case of a Base Rate Borrowing, not later than 9:00 a.m., Arizona time, on
the day of a proposed Borrowing. Each Borrowing Notice shall be irrevocable and
shall in each case specify (i) whether the Borrowing then being requested is to
be a LIBOR Borrowing or a Base Rate Borrowing; (ii) the date of such Borrowing
(which shall be a Business Day) and the amount thereof; (iii) if such Borrowing
is to be a LIBOR Borrowing, the Interest Period with respect thereto; and (iv)
if such Borrowing is to refinance all or any part of any outstanding
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Borrowing, the identity and amount of such Borrowing that the Borrower requests
to be refinanced. If no election as to the Type of Borrowing is specified in any
Borrowing Notice, then the requested Borrowing shall be a Base Rate Borrowing.
If no Interest Period with respect to any LIBOR Borrowing is specified in any
Borrowing Notice, then the Borrower shall be deemed to have selected an Interest
Period of one month's duration. Subject to Section 2.11, if the Borrower shall
not have given notice in accordance with this Section of its election to
refinance a LIBOR Borrowing prior to the end of the Interest Period in effect
for such Borrowing, then the Borrower (unless such Borrowing is repaid at the
end of such Interest Period) shall be deemed to have given notice of an election
to refinance such Borrowing with a Base Rate Borrowing.
SECTION 2.4 Revolving Credit Loans.
(a) Each Revolving Credit Loan shall be made as part of a
Borrowing made by the Banks ratably in accordance with their Commitments;
provided, however, that the failure of any Bank to make any Revolving Credit
Loan shall not in itself relieve any other Bank of its obligation to lend
hereunder (it being understood, however, that no Bank shall be responsible for
the failure of any other Bank to make any Revolving Credit Loan required to be
made by such other Bank).
(b) Each Bank shall make any LIBOR Borrowing by causing either
at its option any domestic branch or the Eurodollar Lending Office of such Bank
to make such Revolving Credit Loan; provided that any exercise of such option
shall not affect the obligation of the Borrower to repay such Revolving Credit
Loan in accordance with the terms of this Agreement and the applicable Note.
(c) Subject to Section 2.3, each Bank shall make each
Revolving Credit Loan to be made by it hereunder on the proposed date thereof by
wire transfer of immediately available funds to the Administrative Agent in
Phoenix, Arizona, not later than 11:30 a.m., Arizona time, and the
Administrative Agent shall by 12:00 noon, Arizona time, credit the amounts so
received to the general deposit account of the Borrower with the Administrative
Agent (or such other account as the Borrower may designate) or, if a Borrowing
shall not occur on such date because any condition precedent herein specified
shall not have been met, return the amounts so received to the respective Banks.
Revolving Credit Loans shall be made by the Banks pro rata in accordance with
Section 2.16. Unless the Administrative Agent shall have received notice from a
Bank prior to any Borrowing that such Bank will not make available to the
Administrative Agent such Bank's portion of such Borrowing, the Administrative
Agent may assume that such Bank has made such portion available to the
Administrative Agent on the date of such Borrowing in accordance with this
paragraph (c) 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 Bank shall not have made such portion available
to the Administrative Agent, such Bank 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, the interest rate
applicable at the time to
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the Revolving Credit Loans comprising such Borrowing and (ii) in the case of
such Bank, the Federal Funds Rate. If such Bank shall repay to the
Administrative Agent such corresponding amount, such amount shall constitute
such Bank's Revolving Credit Loan as part of such Borrowing for purposes of this
Agreement.
SECTION 2.5 Refinancings. Subject to Section 2.11, the Borrower may
refinance all or any part of any Borrowing with a Borrowing of the same or a
different Type made pursuant to Section 2.3, and at any time may combine all
Base Rate Borrowings into a single Borrowing, in each case subject to the
conditions and limitations set forth herein and elsewhere in this Agreement. Any
Borrowing or part thereof so refinanced or combined shall be deemed to have been
repaid in accordance with Section 2.7 with the proceeds of a new Borrowing
hereunder, and the proceeds of the new Borrowing (except to the extent, if any,
they exceed the principal amount of the Borrowing(s) being refinanced) shall not
be disbursed to the Borrower pursuant to Section 2.4(c).
SECTION 2.6 Fees.
(a) The Borrower agrees to pay to each Bank, through the
Administrative Agent, (i) quarterly in arrears for each calendar quarter ending
each March 31, June 30, September 30 and December 31, on a date not later than
five (5) Business Days after such calendar quarter has ended, commencing
December 31, 1997 and (ii) on the date on which the respective Commitment of
such Bank shall be terminated as provided herein, for the period from the end of
the preceding calendar quarter to the date of such termination, a facility fee
(each a "Facility Fee") at a rate per annum equal to the Facility Fee Percentage
on the average daily amount of the Commitment of such Bank during the preceding
calendar quarter (or shorter period (1) commencing with the date hereof or (2)
ending with the Expiration Date or any other date on which the respective
Commitment of such Bank shall be terminated). The Facility Fee shall be computed
on the basis of the actual number of days elapsed in a year of 360 days. The
Facility Fee due to each Bank shall commence to accrue on the date hereof and
shall cease to accrue on the earlier of the Expiration Date and the termination
of the Commitment of such Bank as provided herein.
(b) The Borrower agrees to pay the Administrative Agent, for
its own account, any fee provided for in the Fee Letter (the "Agency Fee") at
the times provided therein.
(c) All Fees shall be paid to each Bank on the dates due, in
Dollars in immediately available funds to the Administrative Agent for
distribution, if and as appropriate, among the Banks. Once paid, none of the
Fees shall be refundable under any circumstances.
SECTION 2.7 Notes; Repayment of Revolving Credit Loans. The Revolving
Credit Loans made by each Bank shall be evidenced by a single Note, duly
completed and executed on behalf of the Borrower, dated the date of said Bank's
Commitment, in substantially the form of Exhibit C hereto, payable to the order
of such Bank in a principal amount equal to said Bank's Commitment. The
outstanding principal balance of each Borrowing under the Revolving Credit
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Facility, as evidenced by the applicable Note, shall be payable on the Borrowing
Maturity Date applicable to such Borrowing (if any). Each Note shall bear
interest from the date thereof on the outstanding principal balance thereof as
set forth in Section 2.8. Each Bank may (and is hereby authorized by the
Borrower, at said Bank's discretion, to) endorse on a schedule attached to the
Note held by such Bank (or on a continuation of such schedule attached to each
such Note and made a part thereof), or otherwise to record in such Bank's
internal records, an appropriate notation evidencing the date and amount of each
Revolving Credit Loan of such Bank, each payment or prepayment of principal of
any such Revolving Credit Loan and the other information provided for on such
schedule; provided, however, that the failure of any Bank to make such a
notation or any error therein shall not in any manner affect the obligation of
the Borrower to repay each Revolving Credit Loan in accordance with the terms of
the relevant Note.
SECTION 2.8 Interest on Revolving Credit Loans.
(a) Subject to the provisions of Sections 2.9 and 2.11, each
LIBOR Borrowing shall bear interest (computed on the basis of the actual number
of days elapsed over a year of 360 days) at a rate per annum equal to, the LIBO
Rate for the Interest Period in effect for such LIBOR Borrowing plus the
Applicable Margin. Interest on each LIBOR Borrowing shall be payable on each
applicable Borrowing Maturity Date and, in the case of a LIBOR Borrowing with an
Interest Period of more than three (3) months' duration, on the last day of each
three month period. The LIBO Rate for each Interest Period shall be determined
by the Administrative Agent in accordance with the provisions of this Agreement,
and such determination shall be conclusive absent manifest error. The
Administrative Agent shall promptly advise the Borrower and each Bank of such
LIBO Rate.
(b) Subject to the provisions of Sections 2.9 and 2.11, each
Base Rate Borrowing shall bear interest (computed on the basis of the actual
number of days elapsed over a year of 360 days, as the case may be) at a rate
per annum equal to the Base Rate plus the Applicable Margin. Interest on each
Base Rate Borrowing shall be payable on each applicable Borrowing Maturity Date.
The Base Rate shall be determined by the Administrative Agent in accordance with
the provisions of this Agreement, and such determination shall be conclusive
absent manifest error. The Administrative Agent shall promptly advise the
Borrower and each Bank of such Base Rate.
SECTION 2.9 Default Interest. If the Borrower shall default in the
payment of the principal of or interest on any Revolving Credit Loan or any
other amount becoming due hereunder, whether by scheduled maturity, notice of
prepayment, acceleration or otherwise, the Borrower shall on demand from time to
time pay interest, to the extent permitted by law, on such defaulted amount up
to (but not including the date of actual payment (after as well as before
judgment) at the Default Rate.
SECTION 2.10 Termination and Reduction of Commitments. Upon at least
three (3) Business Days' prior irrevocable written or telecopy notice to the
Administrative Agent, Borrower may at any time in whole permanently terminate,
or from time to time in part permanently reduce,
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each such Commitment; provided, however, that each partial reduction of the
Maximum Commitment shall be in an integral multiple of the Minimum Additional
Amount and in a minimum principal amount of $5,000,000.00; and provided further,
that the Borrower shall not be permitted to terminate or reduce the Maximum
Commitment if, as a result respectively, the aggregate principal amount of the
Revolving Credit Loans outstanding hereunder would exceed such reduced amount of
the Maximum Commitment.
SECTION 2.11 Conversion and Continuation of Borrowings. The Borrower
shall have the right at any time upon prior irrevocable notice to the
Administrative Agent (i) not later than 9:00 a.m., Arizona time, on the day of
conversion, to convert any LIBOR Borrowing into a Base Rate Borrowing, (ii) not
later than 9:00 a.m., Arizona time, three (3) Business Days prior to conversion
or continuation, to convert any Base Rate Borrowing into a LIBOR Borrowing or to
continue any LIBOR Borrowing as a LIBOR Borrowing for an additional Interest
Period, and (iii) not later than 9:00 a.m., Arizona time, three (3) Business
Days prior to conversion, to convert the Interest Period with respect to any
LIBOR Borrowing to another permissible Interest Period, subject in each case to
the following:
(a) if less than all the outstanding principal amount of any
Borrowing shall be converted or continued, the aggregate principal amount of
such Borrowing converted or continued shall be an integral multiple of the
Minimum Additional Amount and not less than the Minimum Amount;
(b) each conversion shall be effected by applying the proceeds
of the new Borrowing resulting from such conversion to the Borrowing (or portion
thereof) being converted; accrued interest on a Borrowing (or portion thereof)
being converted shall be paid by the Borrower at the time of conversion;
(c) any LIBOR Borrowing may be converted only at the end of
the Interest Period applicable thereto;
(d) any portion of a Borrowing maturing or required to be
repaid in less than one month may not be converted into or continued as a LIBOR
Borrowing;
(e) any portion of a LIBOR Borrowing which cannot be continued
as a LIBOR Borrowing by reason of clauses (c) and (d) above shall be
automatically converted at the end of the Interest Period in effect for such
Borrowing into a Base Rate Borrowing; and
(f) each conversion or continuation shall be made pro rata
among the Banks in accordance with the respective principal amounts of the
converted or continued Borrowings.
Each notice pursuant to this Section shall be irrevocable and
shall refer to this Agreement and specify (i) the identity and amount of the
Borrowing that the Borrower requests be converted or continued, (ii) whether
such Borrowing is to be converted to or continued as a LIBOR Borrowing or a Base
Rate Borrowing, (iii) if such notice requests a conversion, the date
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of such conversion (which shall be a Business Day) and (iv) if such Borrowing is
to be converted to or continued as a LIBOR Borrowing, the Interest Period with
respect thereto. If no Interest Period is specified in any such notice with
respect to any conversion to or continuation as a LIBOR Borrowing, the Borrower
shall be deemed to have selected an Interest Period of one month's duration. The
Administrative Agent shall advise the other Banks of any notice given pursuant
to this Section and of each Bank's portion of any converted or continued
Borrowing. If the Borrower shall not have given notice in accordance with this
Section to continue any LIBOR Borrowing into a subsequent Interest Period (and
shall not otherwise have given notice in accordance with this Section to convert
such Borrowing), such Borrowing shall, at the end of the Interest Period
applicable thereto (unless repaid pursuant to the terms hereof), automatically
be continued as a Base Rate Borrowing.
SECTION 2.12 Prepayment.
(a) The Borrower shall have the right at any time and from
time to time to prepay any Borrowing, in whole or in part, upon written or
telecopy notice (or telephone notice promptly confirmed by written or telecopy
notice) to the Administrative Agent, such notice to be three (3) Business Days
with respect to a LIBOR Borrowing and one Business Day with respect to a Base
Rate Borrowing; provided, however, that each partial prepayment shall be in an
amount which is an integral multiple of the Minimum Additional Amount and not
less than the Minimum Amount.
(b) On the date of any termination or reduction of a
Commitment pursuant to Section 2.10, the Borrower shall pay or prepay an amount
of the respective Revolving Credit Loan such that the sum of the aggregate
principal amount of such Loan outstanding will not exceed the respective
Commitment after giving effect to such termination or reduction.
(c) Each notice of prepayment shall specify the prepayment
date and the principal amount of each Borrowing (or portion thereof) to be
prepaid, shall be irrevocable and shall commit the Borrower to prepay such
Borrowing (or portion thereof) by the amount stated therein on the date stated
therein. All prepayments under this Section shall be subject to Section 2.15 but
otherwise without premium or penalty. All prepayments under this Section shall
be accompanied by a payment of accrued interest on the amount being prepaid to
the date of payment.
SECTION 2.13 Reserve Requirements; Change in Circumstances.
(a) If any Bank shall have determined that the adoption after
the date hereof of any law, rule, regulation or guideline regarding capital
adequacy, or any change after the date hereof in any of the foregoing or in the
interpretation or administration of any of the foregoing by any Governmental
Authority, central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Bank (or any Lending Office of such
Bank) or any Bank's holding company with any request or directive promulgated
after the date hereof regarding capital adequacy (whether or not having the
force of law) of any such
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Governmental Authority, central bank or comparable agency, has or would have the
effect of reducing the rate of return on such Bank's or on the capital of such
Bank's holding company, if any, as a consequence of this Agreement or the
Revolving Credit Loans made by such Bank to a level below that which such Bank
or such Bank's holding company could have achieved but for such adoption, change
or compliance (taking into consideration such Bank's policies and the policies
of such Bank's holding company with respect to capital adequacy) by an amount
deemed by such Bank in good faith to be material, then from time to time the
Borrower shall pay to such Bank such additional amount or amounts as will
compensate such Bank or such Bank's holding company for any such reduction
suffered.
(b) Notwithstanding any other provision herein, if after the
date of this Agreement any change in applicable law or regulation (either by way
of changes in existing laws or regulations or the introductions of new laws or
regulations) or in the interpretation or administration thereof by any
Governmental Authority charged with the interpretation or administration thereof
(whether or not having the force of law) shall change the basis of taxation of
payments to any Bank of the principal of or interest on any LIBOR Borrowing made
by such Bank, Fees or other amounts payable hereunder (other than changes in
respect of taxes imposed on the net income of such Bank), or shall impose,
modify or deem applicable any reserve, special deposit or similar requirement
against assets of, deposits with or for the account of or credit extended by
such Bank, including without limitation any reserve requirement that may be
applicable to "eurocurrency liabilities" under and as defined in Regulation D,
or shall impose on such Bank or the London interbank market any other condition
affecting this Agreement or any LIBOR Borrowing made by such Bank, and the
result of any of the foregoing shall be to increase the cost to such Bank of
making or maintaining any LIBOR Borrowing or to reduce the amount of any sum
received or receivable by such Bank hereunder or under the Notes (in respect of
LIBOR Borrowing only), whether of principal, interest or otherwise, by an amount
deemed by such Bank in good faith to be material, then, the Borrower will pay to
such Bank such additional amount or amounts as will compensate such Bank for
such additional costs incurred or reduction suffered.
(c) A certificate of a Bank, setting forth such amount or
amounts as shall be necessary to compensate such Bank or its holding company as
specified in paragraph (a) or (b) above, as the case may be, and setting forth
in reasonable detail the manner in which such amount or amounts have been
determined, shall be delivered to the Borrower and shall be conclusive absent
manifest error. The Borrower shall pay each Bank the amount shown as due on any
such certificate delivered by it within ten (10) days after its receipt of the
same.
(d) Failure on the part of any Bank to demand compensation for
any increased costs or reduction in amounts received or receivable with respect
to any period shall not constitute a waiver of said Bank's right to demand
compensation with respect to such period or any other period. The protection of
this Section shall be available to any Bank regardless of any possible
contention of the invalidity or inapplicability of the law, rule, regulation,
guideline or other change or condition which shall have occurred or been
imposed, provided that if such Bank is compensated for such increased costs or
reduction by any Governmental Authority or third party
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in the event such invalidity or inapplicability is finally determined, then such
Bank shall return to Borrower the respective compensation paid by Borrower, up
to the lesser of such amount as is received by such Bank or such amount as was
paid by Borrower.
(e) Without prejudice to the survival of any other agreement
contained herein, the agreements and obligations contained in this Section shall
survive Termination, provided that Borrower shall have no further obligation to
the Banks under this Section unless a certificate setting forth the amount of
such obligation shall have been delivered by the Banks pursuant to paragraph (c)
above within ninety (90) calendar days after the Termination Date.
(f) Each Bank or the Administrative Agent on behalf of the
Banks shall give notification to the Borrower of any event or prospective event
which will give rise to the operation of paragraphs (a) or (b) of this Section,
such notification to be sent within thirty (30) days of the date of the public
promulgation of the effective date of any such law, rule, regulation, guidelines
or change therein.
SECTION 2.14 Change in Legality.
(a) Notwithstanding any other provision herein, if any change
in any law or regulation or in the interpretation thereof by any Governmental
Authority charged with the administration or interpretation thereof shall make
it unlawful for any Bank to make or maintain any LIBOR Borrowing or to give
effect to its obligations as contemplated hereby with respect to any LIBOR
Borrowing, then by written notice to the Borrower setting forth in reasonable
detail the relevant circumstances and the effect thereof, such Bank may:
(i) declare that LIBOR Borrowings will not thereafter
be made by such Bank hereunder, whereupon any request by the Borrower
for a LIBOR Borrowing shall be deemed a request for a Base Rate
Borrowing unless such declaration shall be subsequently withdrawn; and
(ii) require that all outstanding LIBOR Borrowings
made by it be converted to Base Rate Borrowings, in which event all
such LIBOR Borrowings shall be automatically converted to Base Rate
Borrowings as of the effective date of such notice as provided in
paragraph (b) below.
In the event any Bank shall exercise its rights under (i) or (ii) above, all
payments and prepayments of principal which would otherwise have been applied to
repay the LIBOR Borrowings that would have been made by such Bank or the
converted LIBOR Borrowings of such Bank shall instead be applied to repay the
Base Rate Borrowings made by such Bank in lieu of, or resulting from the
conversion of, such LIBOR Borrowings.
(b) For purposes of this Section, a notice to the Borrower by
any Bank shall be effective as to each LIBOR Borrowing, if lawful, on the last
day of the Interest Period
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currently applicable to such LIBOR Borrowing; in all other cases such notice
shall be effective on the date of receipt by the Borrower.
(c) Each Bank shall use its best efforts to give prompt
notification to the Borrower of any event or prospective event which will give
rise to the operation of paragraph (a) of this Section.
SECTION 2.15 Redeployment Loss. The Borrower shall pay to each Bank on
demand against any Redeployment Loss (defined below) arising as a consequence of
any payment, prepayment or conversion of a LIBOR Borrowing required by any other
provision of this Agreement or otherwise made or deemed made on a date other
than the last day of the Interest Period applicable thereto. "Redeployment Loss"
shall mean, in each circumstance, the amount, if any, equal to the product of
(i) the Average Lost Daily Interest Income and (ii) the number of days from the
date of prepayment or conversion to the Borrowing Maturity Date, discounted to
present value at the Discount Rate over the number of days in (ii) above.
As used in the preceding paragraph:
"Average Lost Daily Interest Income" means the amount
determined by dividing (i) the product of the Prepaid Principal and the
Lost Rate, by (ii) 360, where:
"Prepaid Principal" means the amount equal to the
amount of principal actually being prepaid; and
"Lost Rate" means the rate per annum equal to the
percentage, if any, by which (i) the yield to maturity of
United States Treasury debt obligations having a maturity date
nearest to the Borrowing Maturity Date ("Treasury
Obligations") determined on the first day of the Interest
Period exceeds (ii) the yield to maturity of Treasury
Obligations determined on the date of prepayment.
"Discount Rate" means the rate per annum equal to the yield to
maturity of Treasury Obligations determined on the date of prepayment.
The maturity date and yield to maturity of Treasury Obligations shall be
determined by the Administrative Agent, in its absolute and sole discretion, on
the basis of quotations published in The Wall Street Journal or other comparable
sources.
A certificate of any Bank setting forth in reasonable detail any amount or
amounts which Bank is entitled to receive pursuant to this Section and setting
forth in reasonable detail the calculation of such amounts shall be delivered to
the Borrower and shall be conclusive absent manifest error. Without prejudice to
the survival of any other agreement contained herein, the agreements and
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obligations contained in this Section shall survive Termination provided that
Borrower shall have no further obligation to any Bank under this Section unless
a certificate setting forth the amount of such obligation shall have been
delivered by such Bank pursuant to the preceding sentence within ninety (90)
calendar days after the Termination Date.
SECTION 2.16 Pro Rata Treatment. Except as required under Section 2.14
or permitted by Section 2.20, each Borrowing, each payment or prepayment of
principal of any Borrowing, each payment of interest on the Revolving Credit
Loans, each payment of the Facility and Facility Fees, each reduction of the
Commitments and each refinancing of any Borrowing with a Borrowing of any Type,
shall be allocated pro rata among the Banks in accordance with their respective
Commitments (or, if such Commitments shall have expired or been terminated, in
accordance with the respective principal amounts of their outstanding Revolving
Credit Loans). Each Bank agrees that in computing such Bank's portion of any
Borrowing to be made hereunder, the Administrative Agent may, in its discretion,
round each Bank's percentage of such Borrowing to the next higher or lower whole
dollar amount.
SECTION 2.17 Sharing of Setoffs. Each Bank agrees that if it shall,
through the exercise of a right of banker's lien, setoff or counterclaim against
the Borrower, or pursuant to a secured claim under Section 506 of Title 11 of
the United States Code or other security or interest arising from, or in lieu
of, such secured claim, received by such Bank under any applicable bankruptcy,
insolvency or other similar law or otherwise, or by any other means, obtain
payment (voluntary or involuntary) in respect of any Revolving Credit Loan or
Revolving Credit Loans as a result of which the unpaid principal portion of the
Revolving Credit Loans of such Bank shall be proportionately less than the
unpaid principal portion of the Revolving Credit Loans of any other Bank, it
shall be deemed simultaneously to have purchased from such other Bank at face
value, and shall promptly pay to such other Bank the purchase price for, a
participation in the Revolving Credit Loans of such other Bank, so that the
aggregate unpaid principal amount of the Revolving Credit Loans and
participations in the Revolving Credit Loans held by each Bank shall be in the
same proportion to the aggregate unpaid principal amount of all Revolving Credit
Loans then outstanding as the principal amount of its Revolving Credit Loans
prior to such exercise of banker's lien, setoff or counterclaim or other event
was to the principal amount of all Revolving Credit Loans outstanding prior to
such exercise of banker's lien, setoff or counterclaim or other event; provided,
however, that, if any such purchase or purchases or adjustments shall be made
pursuant to this Section and the payment giving rise thereto shall thereafter be
recovered, such purchase or purchases or adjustments shall be rescinded to the
extent of such recovery and the purchase price or prices or adjustment restored
without interest. The Borrower expressly consents to the foregoing arrangements
and agrees that any Bank holding a participation in a Revolving Credit Loan
deemed to have been so purchased may exercise any and all rights of banker's
lien, setoff or counterclaim with respect to any and all moneys owing by the
Borrower to such Bank by reason thereof as fully as if such Bank had made a
Revolving Credit Loan directly to the Borrower in the amount of such
participation.
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SECTION 2.18 Payments.
(a) The Borrower shall make each payment (including without
limitation principal of or interest on any Borrowing or any Fees or other
amounts) hereunder and under any other Loan Document no later than 12:00 noon,
Arizona time, on the date when due in Dollars to the Administrative Agent at its
offices at Post Office Box 71, Phoenix, Arizona 85001, Attention: Commercial
Banking AZ1-1178, in immediately available funds or at such other location as
the Administrative Agent may notify the Borrower in writing. Borrower agrees
that the Administrative Agent may electronically debit an account designated by
Borrower in a separate written agreement with the Administrative Agent, for each
such payment so long as the Administrative Agent shall have transmitted by
facsimile to the Borrower at 602/786-7393 (or at such other number as may be
designated by Borrower to the Administrative Agent in writing) (i) at least five
Business Days before its due date a notice of the amount to be debited, and (ii)
on the due day a notice of the amount actually debited. Any payment received by
the Administrative Agent after 12:00 noon, Arizona time, other than a payment
made by electronic debit, shall be deemed to have been received by the
Administrative Agent on the next Business Day.
(b) Whenever any payment (including without limitation
principal of or interest on any Borrowing or any Fees or other amounts)
hereunder or under any other Loan Document shall become due, or otherwise would
occur, on a day that is not a Business Day, such payment may be made on the next
succeeding Business Day, and such extension of time shall in such case be
included in the computation of interest or Fees, if applicable.
SECTION 2.19 Taxes.
(a) All payments by the Borrower under this Agreement shall be
made without setoff or counterclaim and in such amounts as may be necessary in
order that all such payments after deduction or withholding for or on account of
any present or future taxes, levies, imposts, duties, withholdings or other
charges of whatsoever nature and all liabilities with respect thereto, other
than any taxes on or measured by the gross or net income of a Bank pursuant to
(i) the income and/or franchise tax laws of the jurisdictions in which such Bank
is incorporated or organized or in which the principal office of such Bank or
the branch that is a party to this Agreement of that Bank is located, and (ii)
the income and/or franchise tax laws of the jurisdictions in which the Lending
Office or the Eurodollar Lending Office of that Bank are then located (all such
nonexcluded taxes, levies, imposts, duties, withholdings and liabilities being
hereinafter referred to as "Taxes"), shall not be less than the amounts
otherwise specified to be paid by the Borrower to or for the account of the
Administrative Agent or Bank (or any transferee or assignee (each, a
"Transferee")) under this Agreement. Upon request of the Borrower in writing,
each Bank shall designate a different Lending Office or Eurodollar Lending
Office, as the case may be, if such designation will avoid the imposition of
Taxes and if such designation will not, in the sole judgment of such Bank, be
otherwise disadvantageous to such Bank. With respect to each deduction or
withholding for or on account of any Taxes of the Administrative Agent or any
Bank (or Transferee), Borrower shall promptly (and in any event not later than
45
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days thereafter) furnish to such Administrative Agent or Bank (or Transferee) a
receipt evidencing payment thereof.
(b) In addition, the Borrower agrees to pay any present or
future stamp or documentary taxes or any other excise or property taxes, charges
or similar levies which arise from any payment made hereunder or from the
execution, delivery or registration of, or otherwise with respect to, this
Agreement or any other Loan Document (hereinafter referred to as "Stamp Taxes").
Each Bank that is organized outside the United States represents and warrants
that as of the Closing Date, it is not aware of any Stamp Tax imposed by the
jurisdiction in which it is incorporated that applies to this Agreement or any
payment made to such Bank hereunder.
(c) The Borrower will indemnify each Bank (or Transferee) and
the Administrative Agent for the full amount of Taxes and Stamp Taxes (including
without limitation any Taxes or Stamp Taxes imposed by any jurisdiction on
amounts payable under this Section) paid by such Bank (or Transferee) or the
Administrative Agent, as the case may be, and any liability (including without
limitation penalties, interest and expenses) arising therefrom or with respect
thereto, whether or not such Taxes or Stamp Taxes were correctly or legally
asserted by the relevant taxing authority or other Governmental Authority. Such
indemnification shall be made within 30 days after the date any Bank (or
Transferee) or the Administrative Agent, as the case may be, makes written
demand therefor. If a Bank, as the result of any Tax with respect to which the
Borrower is required to make a payment pursuant to this Section shall realize a
tax credit or refund in its country or other jurisdiction of incorporation or
organization or in the jurisdiction in which its principal office or Lending
Office or Eurodollar Lending Office is then located, which tax credit or refund
would not have been realized but for the Borrower's payment of such Tax, such
Bank shall pay to the Borrower an amount equal to such tax credit or refund (to
the extent of amounts that have been paid by the Borrower under this Section
with respect to such credit or refund) net of all out-of-pocket expenses of such
Bank; provided that the Borrower, upon the request of the Bank, agrees to return
such credit or refund (plus penalties, interest or other charges) to such Bank
in the event such Bank is required to repay such credit or refund to the
relevant taxing authority. Any amount required to be calculated pursuant to this
Section shall be calculated in good faith by the Bank (or Transferee) or the
Administrative Agent, and such calculation shall be conclusive and binding upon
the parties hereto. In the event the Borrower is required to make any payment
pursuant to this Section to a Bank, such Bank shall promptly and in a timely
manner take all such actions as may be reasonably available to it to pursue any
possible tax credit or refund of such payment.
(d) Without prejudice to the survival of any other agreement
contained herein, the agreements and obligations contained in this Section shall
survive Termination, provided that Borrower shall have no further obligation to
the Banks under this Section unless a certificate setting forth the amount of
such obligation shall have been delivered by the Banks to the Borrower within
ninety (90) calendar days after the Termination Date.
(e) Each Bank (or Transferee) that is organized outside the
United States (i) on or before the date it becomes a party to this Agreement and
(ii) with respect to each Lending
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Office or Eurodollar Lending Office located outside the United States of such
Bank (or Transferee), on or before the date such office or branch becomes a
Lending Office or Eurodollar Lending Office, shall deliver to the Borrower and
the Administrative Agent such certificates, documents or other evidence, as
required by the Code or Treasury Regulations issued pursuant thereto, including
Internal Revenue Service Form 1001 or Form 4224, properly completed and duly
executed by such Bank (or Transferee) establishing that payments received
hereunder are (i) not subject to withholding under the Code because such payment
is effectively connected with the conduct by such Bank (or Transferee) of a
trade or business in the United States or (ii) totally exempt from United States
Federal withholding tax under a provision of an applicable tax treaty. In
addition, each such Bank (or Transferee) shall, if legally able to do so,
thereafter deliver such certificates, documents or other evidence from time to
time establishing that payments received hereunder are not subject to such
withholding upon receipt of a written request therefor from the Borrower or the
Administrative Agent. Unless the Borrower and the Administrative Agent have
received forms or other documents satisfactory to them indicating that payments
hereunder or under the Notes are not subject to United States Federal
withholding tax, the Borrower or the Administrative Agent shall withhold such
taxes from such payments at the applicable statutory rate.
(f) The Borrower shall not be required to pay any additional
amounts to any Bank (or Transferee) or the Administrative Agent in respect to
United States Federal withholding tax pursuant to paragraph (a) above if the
obligation to pay such additional amounts would not have arisen but for a
failure by such Bank (or Transferee) or the Administrative Agent to deliver the
certificates, documents or other evidence specified in the preceding paragraph
(e) unless such failure is attributable to (i) a change in applicable law,
regulation or official interpretation thereof or (ii) an amendment or
modification to or a revocation of any applicable tax treaty or a change in
official position regarding the application or interpretation thereof, in each
case on or after the date such Bank (or Transferee) or the Administrative Agent
becomes a party to this Agreement (or, if applicable, on or after the date a
Lending Office or Eurodollar Lending Office of such Bank (or Transferee) or
Administrative Agent became a Lending Office or Eurodollar Lending Office
hereunder).
(g) Nothing contained in this Section shall require any Bank
(or Transferee) or the Administrative Agent to make available any of its tax
returns (or any other information relating to its taxes) which it deems to be
confidential.
(h) Each Bank or the Administrative Agent on behalf of the
Banks shall give notification to the Borrower of any event or prospective event
which will give rise to the operation of paragraphs (a), (b) or (c) of this
Section, such notification to be sent within thirty (30) days of the date of the
public promulgation of the effective date of any such Taxes or Stamp Taxes.
-25-
SECTION 2.20 Termination or Assignment of Commitments Under Certain
Circumstances.
(a) If any Bank (or Transferee) or the Administrative Agent
claims any additional amounts payable pursuant to Section 2.13 or Section 2.19
or exercises its rights under Section 2.14, it shall (consistent with legal and
regulatory restrictions) (i) promptly notify the Borrower (through the
Administrative Agent) of the circumstances giving rise to such additional
amounts or the exercise of such rights and (ii) file any certificate or document
requested by the Borrower or change the jurisdiction of its applicable Lending
Office or take any other action if the making of such a filing or change or the
taking of such action would avoid the need for or reduce the amount of any such
additional amounts which may thereafter accrue or avoid the circumstances giving
rise to such exercise and would not, in the sole determination of such Bank (or
Transferee), be otherwise disadvantageous to such Bank (or Transferee).
(b) In the event that any Bank shall have delivered a notice
or certificate pursuant to Section 2.13 or 2.14, or the Borrower shall be
required to make additional payments to any Bank under Section 2.19, the
Borrower shall have the right, at its option and own expense, upon notice to
such Bank and the Administrative Agent, (i) in the case of Sections 2.13, 2.14
or 2.19 only, to terminate the Commitment of such Bank or (ii) in all cases
described in this paragraph, to require such Bank to transfer and assign without
recourse (in accordance with and subject to the restrictions contained in
Section 9.4) all its interests, rights and obligations under this Agreement to
another financial institution reasonably acceptable to the Administrative Agent
which shall assume such obligations; provided that (i) no such termination or
assignment shall conflict with any law, rule or regulation or order of any
Governmental Authority and (ii) the Borrower or the assignee, as the case may
be, shall pay to the affected Bank in immediately available funds on the date of
such termination or assignment the principal of and interest accrued to the date
of payment on the Revolving Credit Loans made by it hereunder and all other
amounts accrued for its account or owed to it hereunder, including without
limitation amounts payable and owed to it pursuant to Sections 2.13, 2.14 and
2.19.
(c) Each Bank represents and warrants to the Borrower that as
of the date hereof it is not aware of any claims available to it under Section
2.13, 2.14 or 2.19 or any circumstances which it has determined will enable it
to make any such claims.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES
The Borrower hereby represents and warrants to the Administrative Agent
and the Banks as follows:
SECTION 3.1 Organization; Corporate Powers; Etc. (a) The Borrower is a
corporation duly organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation; (b) the Borrower has the corporate
power and authority to own its property and assets and to carry on its business
as now conducted and is qualified to do business in every jurisdiction where
such qualification is required except where the failure to so qualify would not
result in a material adverse effect on the business, assets, operations or
condition (financial or otherwise) of the Borrower; and (c) the Borrower has the
corporate power to execute, deliver and perform this Agreement and the other
Loan Documents and to borrow hereunder.
SECTION 3.2 Authorization; Etc. The execution, delivery and performance
by the Borrower of this Agreement, the Borrowings hereunder, and the issuance,
execution and delivery of the Notes: (a) have been duly authorized by all
requisite corporate action; (b) will not violate (i) any provision of law, any
order of any court, or any rule, regulation or order of any other agency of
government, (ii) the Certificate of Incorporation or By-laws of the Borrower or
(iii) any provision of any material indenture, agreement or other instrument to
which the Borrower is a party, or by which the Borrower or any of its properties
or assets are or may be bound; (c) will not be in conflict with, result in a
breach of or constitute (alone, with notice, with lapse of time, or with any
combination of these factors) a default under any indenture, agreement or other
instrument referred to in (b)(iii) above; and (d) will not result in the
creation or imposition of any Lien upon any property or assets of the Borrower
that is not a Permitted Lien. Except for filings which may be required under the
1934 Act, no registration with or consent or approval of, or other action by,
any Governmental Authority is required in connection with the execution,
delivery and performance of this Agreement, the execution and delivery of the
Notes or the Borrowings hereunder.
SECTION 3.3 Enforceability. This Agreement constitutes, and each other
Loan Document when duly executed and delivered by the Borrower will constitute,
the legal, valid and binding obligation of the Borrower, enforceable in
accordance with its terms, subject, as to the enforcement of remedies, to
applicable bankruptcy, reorganization, insolvency, moratorium and other laws of
general applicability relating to or affecting creditors' rights from time to
time in effect and to general principles of equity (regardless of whether such
enforcement is considered in a proceeding at law or in equity).
SECTION 3.4 Financial Condition and Information. The Borrower has
heretofore furnished to the Banks copies of (i) the consolidated balance sheets
of the Borrower as of March 31, 1997 and as of June 30, 1997, and the related
consolidated statements of income, shareholder's equity and Cash Flows of the
Borrower for the year ended March 31, 1997 and for
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the fiscal period ended June 30, 1997, including without limitation as to the
March 31, 1997 balance sheets and statements the related notes, audited by and
including the opinion the independent public accountants of the Borrower, and
(ii) the Annual Report on Form 10-K for the fiscal year ended March 31, 1997 of
the Borrower. Such financial statements fairly state the consolidated financial
condition of the Borrower as of the respective dates thereof and the
consolidated results of the operations and changes in financial position of the
Borrower for the periods covered thereby. All such financial statements,
including related schedules and notes thereto, have been prepared in accordance
with GAAP.
SECTION 3.5 No Material Adverse Change. Since March 31, 1997, there has
been no material adverse change in the business, operations, assets or condition
(financial or otherwise) of the Borrower and its Significant Subsidiaries, taken
as a whole (except as disclosed in the financial statements referred to in
Section 3.4 or as otherwise disclosed on Schedule 3.5 attached hereto).
SECTION 3.6 Litigation. Except as set forth in the Borrower's SEC
filing on Form 10-K for the year ended March 31, 1997, there are no actions,
suits or proceedings at law or in equity or by or before any governmental
instrumentality or other agency now pending or, to the knowledge of the
Borrower, threatened against or affecting the Borrower or any property or rights
of the Borrower which would be reasonably likely in the aggregate to (i)
materially impair the ability of the Borrower to perform its obligations under
this Agreement or the Notes or materially impair the ability of the Borrower to
carry on business substantially as now being conducted or (ii) result in any
material adverse change in the business, assets, operations, or condition
(financial or otherwise) of the Borrower.
SECTION 3.7 Federal Reserve Regulations.
(a) The Borrower is not engaged principally, or as one of its
important activities, in the business of extending credit for the purpose of
purchasing or carrying Margin Stock.
(b) No part of the proceeds of any Loan will be used, whether
directly or indirectly, and whether immediately, incidentally or ultimately, (i)
to purchase or carry Margin Stock or to extend credit to others for the purpose
of purchasing or carrying Margin Stock or to refund indebtedness originally
incurred for such purpose, or (ii) for any purpose which entails a violation of,
or which is inconsistent with, the provisions of the Regulations of the Board,
including Regulation G, U or X.
SECTION 3.8 Investment Company Act. The Borrower is not an "investment
company" or a company "controlled" by an "investment company" within the meaning
of the Investment Company Act of 1940, as amended.
SECTION 3.9 Public Utility Holding Company Act. The Borrower is not a
"holding company," or a "subsidiary company" of a "holding company," or an
"affiliate" of a "holding
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company" or of a "subsidiary company" of a "holding company," within the meaning
of the Public Utility Holding Company Act of 1935, as amended.
SECTION 3.10 Tax Returns. As of the filing date of the Borrower's Form
10-K, Form 10-Q or Form 8-K most recently filed with the SEC, the Borrower has
duly filed or caused to be filed all federal, state and local tax returns which
are required to have been filed and has paid or caused to be paid all material
taxes required to be paid by it, except taxes the validity of which is being
contested in good faith by appropriate proceedings and with respect to which the
Borrower has set aside on its books such reserves as are required by GAAP.
SECTION 3.11 ERISA. As of the filing date of the Borrower's Form 10-K,
Form 10-Q or Form 8-K most recently filed with the SEC, the Borrower had no
material undisclosed ERISA Liabilities under any Plans, and currently has no
Plans in effect.
SECTION 3.12 Title to Properties: Possession. The Borrower has good and
indefeasible title to, or valid leasehold interests in, all its material
properties and assets, subject only to encumbrances, adverse claims and defects
in title which do not involve any risk of loss that is material to the Borrower
and the Subsidiaries taken as a whole. All such assets and properties are free
and clear of all Liens other than those permitted by Section 6.1. The Borrower
has all licenses and rights necessary to enable it to use all material
technology used by it in its operations.
SECTION 3.13 Use of Proceeds. The Borrower will use the proceeds of any
borrowing hereunder solely for the purposes set forth in the Recitals to this
Agreement.
SECTION 3.14 Environmental and Safety Matters. As of the filing date of
the Borrower's Form 10-K, Form 10-Q or Form 8-K most recently filed with the
SEC, the Borrower and the Subsidiaries had no material undisclosed environmental
liabilities.
SECTION 3.15 Subsidiaries. All Significant Subsidiaries are correctly
identified on Schedule "3.15" hereto.
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ARTICLE IV
CONDITIONS TO CREDIT EVENTS
The obligations of the Banks to make each and every Loan, and to make
each and every advance of the proceeds thereof (each of the foregoing events
being called a "Credit Event") are subject to the prior or contemporaneous
satisfaction of the following conditions:
SECTION 4.1 Credit Events. On the date of each Credit Event, including
the date of each refinancing of a Borrowing as contemplated by Section 2.5:
(a) The Administrative Agent shall have received in respect of
such advance or refinancing a Borrowing Notice as required by Section
2.3.
(b) The representations and warranties set forth in Article
III hereof shall have been true and correct in all material respects
both (i) on the date hereof and (ii) as of such date, except to the
extent such representations and warranties expressly relate and are
limited to a different date.
(c) At the time of and immediately after such advance or
refinancing no Event of Default or Potential Default shall have
occurred and be continuing.
Each advance or refinancing hereunder shall be deemed to constitute a
representation and warranty by the Borrower on the date of such Credit Event as
to the satisfaction of the conditions specified in paragraphs (b) and (c) of
this Section 4.1.
SECTION 4.2 First Credit Event. On the Closing Date:
(a) Each Bank shall have received a duly executed copy of this
Agreement.
(b) The Administrative Agent shall have received the Fee
Letter and payment of all expenses owed to the Banks pursuant to Section 9.5(a)
and of all Fees that are then due and payable.
(c) Each Bank shall have received duly executed Notes
complying with the provisions of Section 2.7.
(d) The Administrative Agent and each Bank shall have received
a favorable written opinion of Borrower's legal counsel, dated as of the Closing
Date and addressed to the Administrative Agent and the Banks, to the effect set
forth in Exhibit "E" hereto, and the Borrower hereby instructs such counsel to
deliver such opinion to the Administrative Agent and each Bank.
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(e) All legal matters incident to this Agreement and the first
Credit Event hereunder shall be reasonably satisfactory to the Banks and to the
legal counsel for the Administrative Agent.
(f) The Administrative Agent and each Bank shall have received
(i) a copy of the Certificate or Articles of Incorporation, including all
amendments thereto, of Borrower, certified as of a recent date by the Secretary
of State of the state of Borrower's organization, and a certificate from such
Secretary of State as of a recent date, as to the good standing of the Borrower;
(ii) a certificate of the Secretary or Assistant Secretary of the Borrower dated
the Closing Date and certifying (A) that attached thereto is a true and complete
copy of the By-Laws of the Borrower as in effect on the Closing Date and at all
times since a date prior to the date of the resolutions described in the next
clause of this sentence, (B) that attached thereto is a true and complete copy
of resolutions duly adopted by the Board of Directors of the Borrower
authorizing the execution, delivery and performance of the Loan Documents and
the Credit Events hereunder, and that such resolutions have not been modified,
rescinded or amended and are in full force and effect, (C) that the Certificate
or Articles of Incorporation of the Borrower have not been amended since the
date of the last amendment thereto shown on the certificate of good standing
furnished pursuant to clause (i) above, and (D) as to the incumbency and
specimen signature of each officer executing any Loan Document or any other
document delivered in connection herewith on behalf of the Borrower; and (iii) a
certificate of another officer as to the incumbency and specimen signature of
the Secretary or Assistant Secretary executing the certificate pursuant to (ii)
above.
(g) The Administrative Agent shall have received (i) a
certificate, dated the Closing Date and signed on behalf of the Borrower by a
Financial Officer of the Borrower, confirming compliance with the conditions
precedent set forth in paragraphs (b) and (c) of Section 4.1, and (ii) a
Quarterly Certificate as of the end of the prior fiscal quarter dated the
Closing Date and signed on behalf of the Borrower by a Financial Officer of the
Borrower.
(h) The Administrative Agent shall have received all amounts
due and payable hereunder or under the other Loan Documents on or prior to the
Closing Date.
(i) The Administrative Agent shall have received evidence
satisfactory to it that the Prior Agreement has been or will be terminated and
all loans and other amounts outstanding thereunder have been or will be paid in
full, on or prior to the Closing Date.
(j) Since March 31, 1997, there has been no material adverse
change in the business, operations, assets or conditions (financial or
otherwise) of the Borrower and its Significant Subsidiaries, taken as a whole
(except as disclosed in the financial statements referred to in Section 3.4 or
as otherwise disclosed on Schedule 3.5 attached hereto).
(k) The Administrative Agent and each Bank shall have received
consolidated financial projections for the next three (3) years as to the
Borrower and its Significant Subsidiaries.
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ARTICLE V
AFFIRMATIVE COVENANTS
The Borrower covenants and agrees that, at all times prior to
Termination, unless the Required Banks shall otherwise consent in writing, it
will:
SECTION 5.1 Corporate Existence. Do or cause to be done all things
necessary to preserve, renew and keep in full force and effect its corporate
existence, material rights, licenses, permits and franchises material to the
conduct of its business; comply in all material respects with all applicable
laws, rules, regulations, and orders (except that force majeure events will
excuse noncompliance so long as noncompliance would not materially impair the
creditworthiness of the Borrower) whether now in effect or hereafter enacted
where the failure to so comply would be reasonably likely to have a material
adverse effect on the business, assets, operations or condition (financial or
otherwise) of the Borrower; and, at all times maintain and preserve all material
property required for the conduct of its business as presently or hereafter
conducted.
SECTION 5.2 Insurance. Maintain adequate insurance by financially sound
and reputable insurers of all properties of a character usually insured by
companies engaged in the same or a similar business operating on a similar
economic scale in the same vicinity against loss or damage resulting from fire
or other risks insured against by extended coverage and of the kind customarily
insured against by such companies, and maintain in full force and effect public
liability insurance against claims for personal injury, death or property damage
occurring upon, in, about or in connection with the use of any properties
occupied or controlled by it in such amounts as shall be customary among
companies engaged in the same or similar businesses and similarly situated and
maintain such other insurance as may be required by law; provided, however, that
nothing in this Section 5.2 shall preclude the Borrower from being self-insured
to the extent customary with companies in the same or similar business.
SECTION 5.3 Taxes. Pay and discharge promptly any taxes, assessments
and governmental charges or levies imposed upon it or upon its income or profits
or in respect of its material property (real or personal), before the same shall
become delinquent; provided, however, that neither the Borrower nor any of the
Subsidiaries shall be required to pay and discharge or to cause to be paid and
discharged any such obligation, tax, assessment, charge, levy or claim so long
as the validity or amount thereof shall be contested in good faith by
appropriate proceedings and the Borrower or such Subsidiary, as appropriate,
shall set aside on its books such reserves as are required by GAAP with respect
thereto.
SECTION 5.4 Financial Statements; Reports, etc. In the case of the
Borrower, furnish to the Administrative Agent (as Information subject to the
applicable requirements of Section 9.17 herein, if any):
(a) within 120 days after the end of each fiscal year, (i) a
consolidated balance sheet, (ii) a consolidated statement of income and (iii) a
consolidated statement of cash flow, each
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showing the financial condition of the Borrower and its Subsidiaries as of the
close of such fiscal year and the results of operations during such fiscal year,
all the foregoing financial statements to be prepared in accordance with GAAP,
audited by an accounting firm of nationally recognized standing with an
unqualified opinion from such firm;
(b) within 60 days after the end of each fiscal quarter of
each fiscal year of the Borrower or, if earlier, when filed by the Borrower with
the SEC, Borrower's Form 10-Q for such fiscal quarter;
(c) within 60 days after the end of each fiscal quarter of
each fiscal year of the Borrower, the Quarterly Certificate certifying that to
the best of its, his or her knowledge no Event of Default or Potential Default
has occurred, or, if such an Event of Default or Potential Default has occurred,
specifying the nature and extent thereof and accompanied by a statement of a
Financial Officer of the Borrower specifying any corrective action taken or
proposed to be taken with respect thereto;
(d) concurrently with each delivery of the statements referred
to in (a) and (b) above, a certificate of the firm or person certifying such
statements (which certificate, when furnished by the independent accountants
referred to in paragraph (a) above, may be limited to accounting matters and
disclaim responsibility for legal interpretations), setting forth in reasonable
detail in the form of Exhibit F the calculation of financial measures and ratios
required to demonstrate compliance with the covenants, conditions and agreements
contained in Article VI hereof and the calculation of the Loan Pricing
Qualifiers, all determined as of the end of the period covered by said
statements;
(e) not later than the last Business Day of the first fiscal
quarter of each fiscal year of Borrower, a financial forecast of consolidated
gross operating revenue and Consolidated Net Income of Borrower and its
Subsidiaries for each fiscal quarter of the said fiscal year as at the end of
each such fiscal quarter (collectively, the "Operating Plan"), in a form and
containing such additional information as the Administrative Agent may
reasonably require;
(f) within 10 days of their being filed, in addition to those
delivered by Borrower to Bank pursuant to (b) above, copies of all reports
(other than preliminary proxy statements) filed by the Borrower with the SEC (or
any Governmental Authority succeeding to any or all of the functions of the SEC)
under the requirements of the 1934 Act, or any successor statute; and
(g) promptly, from time to time, such other information
regarding the operations, business affairs and financial condition of the
Borrower as the Administrative Agent may reasonably request.
SECTION 5.5 Litigation and Other Notices. Give the Administrative Agent
prompt written or telecopy notice of the following:
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(a) any Event of Default or Potential Default and the steps,
if any, proposed to be taken by the Borrower with respect thereto;
(b) the filing or commencement of any action, suit or formal
proceeding at law or in equity or by or before any court or hearing officer of
any Governmental Authority, or any other event or condition, which has resulted
in, or which is reasonably likely to result in, a material adverse change in the
business, operations or condition (financial or otherwise) of the Borrower and
the Subsidiaries taken as a whole and which has not been reported in the
Borrower's most recent SEC filings on Form 10-K, 10-Q or 8-K.
SECTION 5.6 Maintaining Records: Access to Premises and Records.
Maintain all financial records in accordance with GAAP, and upon reasonable
notice permit representatives of the Administrative Agent and each Bank to have
access to such financial records and the premises of the Borrower at reasonable
times and to make such excerpts from such records as such representatives may
deem necessary, provided that each person obtaining information shall hold all
confidential information obtained in accordance with the restrictions set forth
in Section 9.17.
SECTION 5.7 Use of Proceeds. Use the proceeds of the Loans solely for
the purposes set forth in Recitals hereto.
SECTION 5.8 Operations and Properties. Keep in good working order and
condition, ordinary wear and tear excepted, all of its assets and properties
which are necessary to the conduct of its business.
SECTION 5.9 Compliance with Law. Comply with all applicable laws,
rules, regulations, and all final, nonappealable orders of any Governmental
Authority applicable to it or any of its property, business operations or
transactions, a breach of which could have a material adverse effect on its
ability to repay the Loans.
SECTION 5.10 ERISA Compliance. In the event that Borrower should, at
any time in the future while this Agreement is in effect, implement a Plan, (a)
at all times comply with the minimum funding standards set forth in Section 302
of ERISA and Section 412 of the Code or shall have duly obtained a formal waiver
of such compliance from the proper authority; (b) at the Administrative Agent's
request, within thirty (30) days after the filing thereof, furnish to
Administrative Agent copies of each annual report/return (Form 5500 Series), as
well as all schedules and attachments required to be filed with the Department
of Labor and/or the Internal Revenue Service pursuant to ERISA, in connection
with any such Plan for each year of the Plan; (c) notify the Administrative
Agent within a reasonable time of any fact, including, but not limited to, any
Reportable Event arising in connection with any such Plan, which would
constitute grounds for termination thereof by the PBGC or for the appointment by
the appropriate United States District Court of a trustee to administer such
Plan, together with a statement, if requested by the Administrative Agent, as to
the reason therefor and the action, if any, proposed to be taken with respect
thereto; and (d) furnish to the Administrative Agent within a reasonable time,
upon
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the Administrative Agent's request, such additional information concerning any
such Plan as may be reasonably requested.
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ARTICLE VI
NEGATIVE COVENANTS
The Borrower covenants and agrees that, at all times prior to
Termination, it will not, and will not permit any Subsidiary to:
SECTION 6.1 Liens. Incur, create, assume or permit to exist any Liens
on any of Borrower's property or assets, or the property or assets of any
Subsidiary, whether such property or assets are now owned or hereafter acquired
by Borrower or by a Subsidiary, or on any income or rights in respect of any
thereof, to secure any Indebtedness; provided that the foregoing shall not apply
to Liens on the property or assets of Borrower or any Subsidiary:
(i) existing on the date hereof and described in Schedule
"6.1" or, with respect to the property or assets of any business
association or sole proprietorship merged with, consolidated with or
acquired by the Borrower or any of the Subsidiaries existing in such
property or assets prior to such merger, consolidation or acquisition
(excluding, however, such Liens as are incurred in contemplation of
such transaction), provided that such Liens shall secure only those
obligations that they secure on the date hereof or on the date of (and
immediately prior to) such merger, consolidation or acquisition,
respectively;
(ii) in favor of the United States, any state or any political
subdivision or agency thereof which arise from Indebtedness of a sort
not described in any of clauses (a) through (e) of the definition of
such term;
(iii) that are deposits to secure the performance of bids,
trade contracts (other than for Indebtedness), leases, statutory
obligations, surety and appeal bonds, performance bonds and other
obligations of a like nature incurred in the ordinary course of
business;
(iv) that are Liens on property, plant, improvements thereto
or equipment acquired after the Closing Date; provided that (i) such
Liens are incurred, and the Indebtedness secured thereby is created,
before or contemporaneously with such acquisition, (ii) the
Indebtedness secured thereby does not exceed the cost of such real
property or plant, improvements or equipment, and (iii) such security
interests do not apply to any other property or assets of the Borrower
or any Subsidiary;
(v) which secure Indebtedness in an amount incurred during the
term of this Agreement not greater than $50,000,000.00 minus the
aggregate purchase price of any Sale and Lease-Back Transactions
entered into by the Borrower and the Subsidiaries during such term;
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(vi) which (A) are incurred in the ordinary course of business
or in the development of its real property, (B) do not exceed
individually $1,000,000.00, and (C) do not exceed at any time in the
aggregate $10,000,000.00; and
(vii) that are any extension, renewal, or replacement (or
successive extensions, renewals, or replacements) in whole or in part,
of any Lien referred to in (i) through (v) hereof; provided, however,
that (1) the Lien shall be limited to all or part of the property
subject to the Lien extended, renewed, or replaced and (2) the
principal amount of Indebtedness secured thereby shall not be increased
by such extension, renewal or replacement.
SECTION 6.2 Sale and Lease-Back Transactions. Enter into any
arrangement, directly or indirectly, with any Person whereby Borrower or any
Subsidiary shall sell or transfer any property, real or personal, whether now
owned or hereafter acquired, and thereafter rent or lease such property or other
property that it intends to use for substantially the same purpose or purposes
as the property being sold or transferred (a "Sale and Lease-Back Transaction"),
provided that the Borrower or any Subsidiary may enter into any Sale and
Lease-Back Transaction in the ordinary course of business if the aggregate
purchase price of all property subject to Sale and Lease-Back Transactions
during the term of this Agreement does not exceed $50 Million minus the
aggregate amount of any Indebtedness referred to in clause (v) of Section 6.1
which shall be incurred by the Borrower and the Subsidiaries after the date of
this Agreement.
SECTION 6.3 Subsidiary Indebtedness. Permit any Indebtedness of any
Subsidiary to be outstanding, other than (i) intercorporate debt and other
intercorporate obligations exclusively among the Borrower and its Subsidiaries,
(ii) Indebtedness secured by Liens in the property or assets of any person
(including the Borrower or any Subsidiary) that, if existing in property or
assets of the Borrower or any Subsidiary, would be Liens described in one or
more of subsections 6.1(i) through (vi), inclusive, but only to the extent such
Indebtedness is not greater than the fair market value of the properties or
assets subject to such Liens at the time such Liens were created, (iii)
Indebtedness deemed to exist by reason of Sale and Lease-Back Transactions that,
if involving properties or assets of the Borrower or any Subsidiary, would be
permitted under Section 6.2, and (iv) other Indebtedness (including such
portions of Indebtedness permitted in part by the foregoing subsections (i),
(ii) or (iii) of this Section 6.3 as are in excess of the amount so permitted)
in an aggregate amount not to exceed $25 Million at any time.
SECTION 6.4 Mergers, Consolidations, Sales of Assets. Merge into or
consolidate with any other Person, or permit any other Person to merge into or
consolidate with it, or sell, transfer, lease or otherwise dispose of (in one
transaction or in a series of transactions) all or substantially all of its
assets or the assets of any Material Division, whether now owned or hereafter
acquired, or any capital stock of any Subsidiary (including any sale or
transfer, by merger or otherwise, of one of the Subsidiaries or Material
Divisions); except that (a) the Borrower and any Subsidiary may sell inventory
in the ordinary course of business and (b) if at the time thereof and
immediately after giving effect thereto no Event of Default or Potential
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Default shall have occurred and be continuing (i) any wholly owned Subsidiary
may merge into the Borrower in a transaction in which the Borrower is the
surviving corporation, (ii) any wholly owned Subsidiary may merge into or
consolidate with any other wholly owned Subsidiary in a transaction in which the
surviving entity is a wholly owned Subsidiary and no person other than the
Borrower or a wholly owned Subsidiary receives any consideration, (iii) any
other corporation may be merged with a Subsidiary of the Borrower, provided that
the surviving corporation shall be a Subsidiary of the Borrower and no Event of
Default or Potential Default has occurred or would occur as a result of such
merger or acquisition and (iv) any other corporation may be merged into the
Borrower if the Borrower shall be the surviving corporation and no Event of
Default or Potential Default has occurred or would occur as a result of such
merger or acquisition; but provided that in any merger of the Borrower pursuant
to (iv) above, the surviving entity must be at least as creditworthy as the
Borrower was immediately prior to such merger or acquisition and must expressly
fully assume in writing all obligations of the Borrower pursuant to this
Agreement.
SECTION 6.5 Acquisitions. Make either acquisitions of any other Person
or investments in any other Person without the written consent of the Required
Banks, which consent shall not be unreasonably withheld or delayed, that exceed
$100,000,000.00 or that make use of more than $50,000,000.00 of the proceeds of
the Loans.
SECTION 6.6 Business of Borrower. Substantially change the nature of
the business conducted by the Borrower and its Subsidiaries.
SECTION 6.7 ERISA Liabilities. Create or suffer to exist ERISA
Liabilities in an aggregate amount in excess of $1,000,000.00 for all Plans, if
any, maintained by Borrower.
SECTION 6.8 Subordinated Indebtedness.
(a) Amend or modify the terms of any Subordinated Indebtedness
if as a result such terms would become less favorable to the Banks.
(b) Amend or modify the covenants or default provisions of any
Subordinated Indebtedness if as a result such covenants or provisions would be
more restrictive of the Borrower.
(c) Cause or permit any Subordinated Indebtedness to become
due prior to the Expiration Date.
(d) Directly or indirectly prepay, redeem, purchase, defease,
retire or otherwise acquire for value any Subordinated Indebtedness.
SECTION 6.9 Debt/EBITDA Ratio. At any time, permit the ratio of (i) the
sum of its Consolidated Debt plus its Convertible Subordinated Indebtedness,
less its accruals and accounts payables, to (ii) its Cash Flow to be greater
than 0.8 to 1.0.
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SECTION 6.10 Consolidated Effective Tangible Net Worth. Permit its
Consolidated Effective Tangible Net Worth at any time to be less than the sum of
(the "Minimum Net Worth Requirement") (i) $337,000,000.00, (ii) the aggregate of
fifty percent (50%) of the Consolidated Net Income for each fiscal quarterly
period, commencing with that fiscal quarterly period ending September 30, 1997,
(iii) ninety percent (90%) of the aggregate net increase in Stockholders Equity
after September 30, 1997 arising from the issuance and sale of additional
capital stock, and (iv) one-hundred percent (100%) of the aggregate net increase
in Stockholders Equity after September 30, 1997 arising from the conversion of
any Convertible Subordinated Indebtedness into its capital stock less the costs
of such conversion. The Minimum Net Worth Requirement shall not be reduced by
any Consolidated Net Income for a fiscal quarterly period that is less than zero
(i.e. a net deficit or loss). If the Borrower shall not have delivered timely
financial statements under Section 5.4 which permit Bank to determine whether a
Potential Default or Event of Default under this Section exists, the Bank shall
be entitled to take any and all actions available to it upon the occurrence of
such an Event of Default, which shall be deemed to have occurred upon the last
day of the period covered by such financial statements.
SECTION 6.11 Debt/Worth Ratio. At any time, permit the ratio of
Consolidated Debt to Consolidated Effective Tangible Net Worth to be greater
than 1.0 to 1.0.
SECTION 6.12 Continued Profitability. For any fiscal year or any two
consecutive fiscal quarterly periods, incur Consolidated Net Income of less than
zero (i.e., a net deficit or loss).
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ARTICLE VII
EVENTS OF DEFAULT
SECTION 7.1 Events of Default. In case of the happening of any of the
following events (herein called "Events of Default"):
(a) default shall be made in the payment of any principal of
any Loan, when and as the same shall become due and payable, whether at
the due date thereof or by acceleration thereof or otherwise and such
default shall continue for a period of five (5) Business Days after
such default;
(b) default shall be made in the payment of any interest on
any Loan or any Fee, indemnification amount or any other amount due
from the Borrower under the Loan Documents (other than an amount
referred to in (a) above), when and as the same shall become due and
payable, and such default shall continue for a period of five (5)
Business Days after the earlier of (i) the day on which a Designated
Officer knows or should have known of such default in the exercise of
prudent business practices customary to the industry and (ii) receipt
by the Borrower of written or telecopy notice from the Administrative
Agent of such default;
(c) any representation or warranty made or deemed made by the
Borrower in connection with the Loan Documents or in any report,
certificate or other instrument furnished by the Borrower pursuant to
the Loan Documents or with the Borrowings hereunder shall prove to have
been false or misleading in any material respect when made or delivered
or when deemed made in accordance with the terms hereof; provided that
if any such breach of representation or warranty has been subsequently
remedied (such that if made or given as of the date of remedy it is no
longer false or misleading in any material respect) and such breach has
caused no material adverse effect on the rights or interests of any
Bank under this Agreement, such breach shall no longer constitute a
Potential Default or Event of Default hereunder.
(d) default shall be made in the due observance or performance
of any covenant or agreement to be observed or performed on the part of
the Borrower contained in Section 5.1 or in Article VI, and with
respect only to Section 5.1 (other than the covenant in such Section to
preserve its corporate existence) and Section 6.1, such default shall
continue for a period of thirty (30) calendar days after the earlier of
(i) the day on which a Designated Officer knows or should have known of
such default in the exercise of prudent business practices customary to
the industry and (ii) receipt by the Borrower of written or telecopy
notice from the Administrative Agent of such default;
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(e) default shall be made in the due observance or performance
of any covenant, condition or agreement to be observed or performed on
the part of the Borrower pursuant to the terms hereof (other than a
default described in one or more of the other provisions of this
Section 7.1) and such default shall remain unremedied for more than
thirty (30) calendar days after the earlier of (i) the day on which a
Designated Officer of Borrower knows or should have known of such
default in the exercise of prudent business practices customary to the
industry or (ii) written notice of such default shall have been given
to a Designated Officer by the Administrative Agent;
(f) the Borrower or any of its Subsidiaries shall fail to make
when due any payment (of whatever amount) on Indebtedness aggregating
in excess of $1,000,000.00 (whether due by scheduled maturity, required
prepayment, acceleration, demand or otherwise), and such failure shall
continue after the applicable grace period, if any, specified in the
agreement or instrument relating to such Indebtedness, or any failure
by the Borrower to perform any covenant or agreement on its part to be
performed under any agreement or instrument evidencing or security
relating to any Indebtedness in excess of $1,000,000.00 shall result in
the acceleration of the maturity of a portion of such Indebtedness in
excess of $100,000.00;
(g) the Borrower or any Material Subsidiary shall (i)
voluntarily commence any proceeding or file any petition seeking relief
under Title 11 of the United States Code or any other Federal, state or
foreign bankruptcy, insolvency or similar law, (ii) consent to the
institution of, or fail to controvert in a timely and appropriate
manner, any such proceeding or the filing of any such petition, (iii)
apply for or consent to the appointment of a receiver, trustee,
custodian, sequestrator or similar official for such corporation or for
a substantial part of its property, (iv) file an answer admitting the
material allegations of a petition filed against it in any such
proceeding, (v) make a general assignment for the benefit of creditors,
(vi) become unable, admit in writing its inability or fail generally to
pay its debts as they become due, or (vii) take corporate action for
the purpose of effecting any of the foregoing;
(h) an involuntary proceeding shall be commenced or an
involuntary petition shall be filed in a court of competent
jurisdiction seeking (i) relief in respect of the Borrower or any of
its Material Subsidiaries or of a substantial part of the property of
any of them under Title 11 of the United States Code or any other
Federal, state or foreign bankruptcy, insolvency or similar law, (ii)
the appointment of a receiver, trustee, custodian, sequestrator or
similar official for the Borrower or any of its Material Subsidiaries
or for a substantial part of the property of any of them, or (iii) the
winding-up or liquidation of the Borrower or any of its Material
Subsidiaries; and such proceeding or petition shall continue
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undismissed for 60 days or an order or decree approving or ordering any
of the foregoing shall be entered;
(i) either of (A) the occurrence of any one or more Reportable
Events or (B) a failure to make a "required payment" under the
provisions of Section 412(n)(1) of the Code shall have occurred with
respect to any Plan or Plans and the occurrence of either (A) or (B)
above shall have resulted in any of (1) liability of the Borrower to
the PBGC or to one or more Plans in an aggregate amount exceeding
$1,000,000.00, (2) the termination of the respective Plan or Plans by
the PBGC, (3) the appointment by the appropriate United States District
Court of a trustee to administer such Plan or Plans or (4) for the
imposition of a Lien in favor of such Plan or Plans;
(j) any material provision of the Loan Documents ceases to be
valid and binding on or enforceable against the Borrower;
(k) the entry of any non-appealable judgment in excess of
seven and one-half percent (7.5%) of Borrower's Consolidated Tangible
Net Worth against the Borrower or any Material Subsidiary that is not
adequately covered by insurance; or
(l) there shall have occurred a Change in Control.
SECTION 7.2 Remedies. Upon the occurrence of any Event of Default, and
at any time thereafter during the continuance of such event, the Administrative
Agent, shall, at the sole option of the Required Banks and if so directed by the
Required Banks, by written or telecopy notice to the Borrower, take any of the
following actions, plus any other actions provided for under this Agreement, the
Loan Documents or applicable law, at the same or different times:
(A) terminate forthwith any or all Commitments of the
Banks, and
(B) declare any or all of the Loans to be forthwith
due and payable, whereupon the principal of such Loans,
together with accrued interest thereon and any unpaid accrued
Fees and all other liabilities of the Borrower accrued
hereunder and under the Notes, shall become forthwith due and
payable together with interest thereon as provided in Section
2.9, without presentment, demand, protest or any other notice
of any kind, all of which are hereby expressly waived by the
Borrower, anything contained herein or in any Note to the
contrary notwithstanding;
provided, however, that in the case of an Event of Default specified in
paragraph (g) or (h) above involving the Borrower, without notice to the
Borrower or any other act by the Administrative
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Agent or the Banks, the Commitments shall automatically terminate and all Loans
together with all such interest, Fees and other amounts, shall become
immediately due and payable, all without presentment, demand, protest or any
other notice of any kind, all of which are hereby expressly waived by the
Borrower, anything contained herein or in any Note to the contrary
notwithstanding.
SECTION 7.3 Occurrence and Declaration of an Event of Default. If the
Administrative Agent obtains actual knowledge of the occurrence of an Event of
Default, the Administrative Agent shall, within three (3) Business Days of
obtaining such knowledge, give written notice of such occurrence to each of the
Banks. In addition, if any Bank obtains actual knowledge of the occurrence of an
Event of Default, that Bank shall, within three (3) Business Days of obtaining
such knowledge, give written notice of such occurrence to the Administrative
Agent and the Administrative Agent shall give written notice of such occurrence
to each of the Banks.
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ARTICLE VIII
THE ADMINISTRATIVE AGENT; INTERBANK AGREEMENT
SECTION 8.1 Appointment. In order to expedite the transactions
contemplated by this Agreement, Bank One, Arizona, NA, a national banking
association, is hereby appointed to act as Administrative Agent on behalf of the
Banks. In addition, The First National Bank of Chicago, a national banking
association, is hereby appointed as Documentation Agent; as Documentation Agent,
The First National Bank of Chicago shall have no rights, duties or
responsibilities under the Loan Documents beyond those of a Bank. Each of the
Banks, and each subsequent holder of any Note by its acceptance thereof, hereby
irrevocably authorizes the Administrative Agent to take such actions on its
behalf and to exercise such powers as are specifically delegated to the
Administrative Agent by the terms and provisions hereof and of the other Loan
Documents, together with such actions and powers as are reasonably incidental
thereto. The Administrative Agent is hereby expressly authorized by the Banks,
without hereby limiting any implied authority, (a) to receive on behalf of the
Banks all payments of principal of and interest on the Loans and all other
amounts due to the Banks hereunder, and promptly to distribute to each Bank its
proper share of each payment so received in accordance with this Agreement; (b)
to give notice on behalf of each of the Banks to the Borrower of any Default or
Event of Default specified in this Agreement of which the Administrative Agent
has actual knowledge acquired in connection with its agency hereunder; and (c)
to distribute to each Bank copies of all notices, financial statements and other
materials delivered by the Borrower pursuant to this Agreement as received by
the Administrative Agent.
SECTION 8.2 Liability. Neither the Administrative Agent nor any of its
directors, officers, employees or agents shall be liable as such for any action
taken or omitted by any of them except for its or his own gross negligence or
wilful misconduct, or be responsible for any statement, warranty or
representation herein or the contents of any document delivered in connection
herewith, or be required to ascertain or to make any inquiry concerning the
performance or observance by the Borrower of any of the terms, conditions,
covenants or agreements contained in any Loan Document. The Administrative Agent
shall not be responsible to the Banks or the holders of the Notes for the due
execution, genuineness, validity, enforceability or effectiveness of this
Agreement, the Notes or any other Loan Documents or other instruments or
agreements. The Administrative Agent may deem and treat the payee of any Note as
the owner thereof for all purposes hereof until it shall have received from the
payee of such Note notice, given as provided herein, of the transfer thereof.
The Administrative Agent shall in all cases be fully protected in acting, or
refraining from acting, in accordance with written instructions signed by either
the Required Banks (if the consent of only the Required Banks is required by the
provisions of this Agreement with respect to an issue) or all the Banks (if the
consent of all the Banks is required by the provisions of this Agreement with
respect to an issue), as applicable, and, except as otherwise specifically
provided herein, such instructions and any action or inaction pursuant thereto
shall be binding on all the Banks and each subsequent holder of any Note. The
Administrative Agent shall, in the absence of knowledge to the contrary, be
entitled to rely on any instrument or document believed by it in good faith to
be genuine and
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correct and to have been signed or sent by the proper Person or Persons. Neither
the Administrative Agent nor any of its directors, officers, employees or agents
shall have any responsibility to the Borrower on account of the failure of or
delay in performance or breach by any Bank of any of its obligations hereunder
or to any Bank on account of the failure of or delay in performance or breach by
any other Bank or the Borrower of any of their respective obligations hereunder
or under any other Loan Document or in connection herewith or therewith. The
Administrative Agent may execute any and all duties hereunder by or through
agents or employees and shall be entitled to rely upon the advice of legal
counsel selected by it with respect to all matters arising hereunder and shall
not be liable for any action taken or suffered in good faith by it in accordance
with the advice of such counsel.
SECTION 8.3 Action by Administrative Agent.
(a) The Banks hereby acknowledge that the Administrative Agent
shall be under no duty to take any discretionary action permitted to be taken by
it pursuant to the provisions of this Agreement unless it shall be requested in
writing to do so by the Required Banks.
(b) Unless in each case consented to in writing by all the
Banks, the Administrative Agent shall not (i) agree to the modification or
waiver of any of the terms of any of the Loan Documents, or (ii) consent to any
act or omission by the Borrower, or (iii) exercise any rights which the
Administrative Agent may have with respect to the Loans, the Notes, or any of
the other Loan Documents, if any such agreement, modification, waiver, consent
or exercise would:
(i) change or modify the interest rate and repayment
provisions set forth in the Loan Documents;
(ii) increase the Maximum Commitment;
(iii) extend the Expiration Date of the Loans;
(iv) postpone any date for payment or forgive the
payment of principal of, or interest on, the Loans or the payment of
any other sum due under the Loan Documents;
(v) waive any Event of Default;
(vi) allow any assignment by Borrower of any right or
interest in the Loan Documents;
(vii) change or modify the Fees, other than the
Agency Fee, or the payment of such Fees; or
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(viii) amend or modify the provisions of Sections
2.13, 2.14, 2.16, 2.19, 9.5, 9.6, 9.8(b) or this Section 8.3(b), the
definition of "Required Banks," or Sections 6.8 through Section 6.12.
(c) Upon receipt of a Borrowing Notice from the Borrower, the
Administrative Agent shall provide to each Bank a telecopy notice of such
Borrowing (or telephone notice promptly confirmed by telecopy) (i) in the case
of a LIBOR Borrowing, not later than 9:30 a.m., Arizona time, three Business
Days before a proposed LIBOR Borrowing, and (b) in the case of a Base Rate
Borrowing, not later than 9:30 a.m., Arizona time, on the Business Day of a
proposed Base Rate Borrowing.
(d) The Administrative Agent agrees to distribute to each Bank
by 4:00 p.m., Arizona time, its pro rata share of each payment or prepayment of
principal of any Loan, each payment of interest on the Loans, and each payment
of the Facility Fee and Facility Fee that is received from the Borrower prior to
12:00 noon, Arizona time. Any such payments received after 12:00 noon, Arizona
time, on any Business Day shall be made available to the Banks on or before 4:00
p.m., Arizona time, on the immediately following Business Day.
(e) The Administrative Agent agrees to distribute promptly to
each Bank a copy of all Information received from the Borrower and all
amendments and modifications of the Loan Documents.
(f) The Administrative Agent agrees to distribute or cause to
be distributed no later than thirty (30) days after the Closing Date to each
Bank a copy of the Loan Documents.
SECTION 8.4 Resignation. The Administrative Agent may not, without the
consent of the Borrower, resign at any time. Upon receiving such consent, and
subject to giving 30 days' prior written notice to the Banks, the Administrative
Agent may resign as Administrative Agent hereunder. Upon any such resignation,
the Required Banks, with the consent of the Borrower (which consent shall not be
unreasonably withheld), shall have the right to appoint from the Banks a
successor. If no successor shall have been so appointed by the Required Banks
and shall have accepted such appointment within 30 days after the Administrative
Agent gives notice of its resignation, then the Administrative Agent may, on
behalf of the Banks, appoint a successor Administrative Agent which shall be a
bank with an office in Phoenix, Arizona, having a combined capital and surplus
of at least $50,000,000.00 or an Affiliate of any such bank. Upon the acceptance
of any appointment as Administrative Agent hereunder by a successor bank, such
successor shall succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Administrative Agent and such retiring
Administrative Agent shall be discharged from its duties and obligations
hereunder. After the Administrative Agent's resignation hereunder, the
provisions of this Article and Section 9.5 shall continue in effect for its
benefit in respect of any actions taken or omitted to be taken by it while it
was acting as an Administrative Agent.
SECTION 8.5 Agent as Bank. With respect to the Loans made by it
hereunder and the Notes issued to it, the Administrative Agent in its individual
capacity and not as an Administrative
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Agent shall have the same rights and powers as any other Bank and may exercise
the same as though it were not the Administrative Agent, and the Administrative
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 other
Affiliate thereof as if it were not the Administrative Agent.
SECTION 8.6 Ownership and Possession of Loan Documents. Each Bank shall
own an undivided interest in the Borrowings and the Loan Documents equal to its
pro rata Commitment from time to time. The Administrative Agent shall hold the
Loan Documents in its possession, as agent, at its office at 201 North Central
Avenue, Phoenix, Arizona 85004, or at such other location as the Administrative
Agent shall designate in writing to the Banks, for the pro rata benefit of
itself as one of the Banks and each of the other Banks; provided, however, that
the Administrative Agent shall deliver to each Bank an original promissory note
executed by the Borrower and evidencing such Bank's Commitment. The
Administrative Agent shall keep and maintain complete and accurate files and
records of all matters pertaining to the Borrowings. Upon reasonable prior
notice to the Administrative Agent by a Bank, the files and records shall be
made available to such Bank and its respective representatives and agents for
inspection and copying during normal business hours.
SECTION 8.7 Indemnification. Each Bank agrees (i) to reimburse the
Administrative Agent, on demand, in the amount of its pro rata share (based on
its Commitment hereunder) of any expenses incurred for the benefit of the Banks
by the Administrative Agent, including counsel fees and compensation of agents
and employees paid for services rendered on behalf of the Banks, which shall not
have been reimbursed by the Borrower and (ii) to indemnify and hold harmless the
Administrative Agent and any of its directors, officers, employees or agents, on
demand, in the amount of such pro rata share, from and against any and all
liabilities, taxes, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature whatsoever which
may be imposed on, incurred by or asserted against it in its capacity as the
Administrative Agent or any of them in any way relating to or arising out of
this Agreement or any other Loan Document or any action taken or omitted by it
or any of them under this Agreement or any other Loan Document, to the extent
the same shall not have been reimbursed by the Borrower; provided that no Person
shall be liable to the Administrative Agent for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting from the gross negligence or wilful
misconduct of the Administrative Agent or any of its directors, officers,
employees or agents.
SECTION 8.8 Independent Credit Analysis. Each Bank acknowledges that it
has, independently and without reliance upon the Administrative Agent or any
other Bank 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 Bank also acknowledges that it will, independently and without
reliance upon the Administrative Agent or any other Bank and based on such
documents and information as it shall from time to time deem appropriate,
continue to make its own decisions in taking or not taking action under or based
upon this Agreement or any other Loan Document, any related agreement or any
document furnished hereunder or thereunder.
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SECTION 8.9 Process for Obtaining Approval of the Banks.
(a) With respect to obtaining the consent, approval, or
determination of all of the Banks or of the Required Banks, the Administrative
Agent or any Bank may request that the Banks make a determination pursuant to
this Agreement. In the case of a request by any such Bank, the request shall be
made through the Administrative Agent and the Administrative Agent shall request
a determination of the Banks in accordance with this Section 8.9. All
communications from the Administrative Agent to the Banks requesting the Banks'
determination, consent, approval, disapproval and/or joinder shall:
(i) Be given in the form of a written notice to each
of the Banks;
(ii) Be accompanied by a description of the matter or
thing as to which such determination, approval, consent, disapproval or
joinder is requested, and shall advise each of the Banks where such
matter or thing may be inspected, or shall otherwise adequately
describe the matter or issue to be resolved;
(iii) Include, to the extent not previously provided
to the Banks, all written materials (to the extent necessary to make an
informed decision) and a description of all oral information (to the
extent necessary to make an informed decision) provided to the
Administrative Agent in respect of the matter or issue to be resolved;
and
(iv) Include such other information and
recommendations as the Administrative Agent may reasonably deem
appropriate.
(b) Subject to Paragraph (c) of this Section 8.9, the Banks
shall reply within seven (7) Business Days after such written notice is given by
the Administrative Agent; provided, however, that if the Administrative Agent
notifies the Banks that, pursuant to the Loan Documents, the matter with respect
to which such consent, approval, disapproval or joinder is sought requires that
the Administrative Agent respond within a certain time period and/or provides
that if a response is not given within a certain time period such approval or
consent shall be deemed given, the Banks shall reply by the earlier of (i) three
(3) Business Days before such time period expires (as designated by the
Administrative Agent) or (ii) five (5) Business Days after such written notice
is given by the Administrative Agent.
(c) With respect to each Bank, unless a Bank shall give
written notice to the Administrative Agent that such Bank does consent to or
approve any matter as to which such Bank's consent or approval is sought within
the applicable time frame, such Bank shall be deemed to have disapproved of and
not consented to such recommendation or determination.
SECTION 8.10 Communications to the Banks. All communications from the
Borrower to the Banks relating to the Loan Documents and the Borrowings shall be
sent by or through the Administrative Agent.
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SECTION 8.11 Relationship with the Borrower. Consistent with the agency
established hereunder, the Banks acknowledge and agree that the Administrative
Agent, in accordance with its respective rights and duties under the Loan
Documents, shall have the sole and exclusive authority to bind the
Administrative Agent and the Banks with respect to matters relating to the Loan
Documents. To the extent that any matter has been approved by all of the Banks
or by the Required Banks in accordance with the provisions of this Agreement,
the Administrative Agent is authorized to execute such documents and instruments
as the Administrative Agent may deem prudent to evidence and confirm such
approval.
SECTION 8.12 Payments to or by the Banks.
(a) The Banks shall be entitled to interest on the amount of
Borrowings held by each Bank for the period of time such Borrowings are
outstanding at the rates set forth in this Agreement, to the extent that such
payments are actually received from the Borrower. If permitted pursuant to
Section 2.9 of this Agreement, the Administrative Agent shall charge and collect
interest at the Default Rate unless the Required Banks otherwise agree.
(b) Other Fees to the extent applicable shall be paid to the
Banks in accordance with Section 2.6.
(c) Amounts paid by the Borrower pursuant to any provision of
the Loan Documents providing for payment, compensation, or reimbursement to one
or more, but not necessarily all, of the Banks, shall be paid to the Bank or
Banks incurring such expenses or otherwise entitled to compensation under any of
those provisions, with each Bank entitled to receive any payment, reimbursement,
or compensation pursuant to any of such Sections or other provisions being
obligated to provide to the Administrative Agent and the Borrower a certificate
setting forth in reasonable detail the basis for the amount of any request for
compensation, payment or reimbursement under any of those Sections or other
provisions.
(d) Regular monthly payments of interest and any other
payments to the Administrative Agent on behalf of the Banks (other than payments
to be applied to the outstanding principal amount of Borrowings, which payments
will be applied as provided in Section 8.13), received by the Administrative
Agent shall be made available to the Banks entitled thereto in accordance with
Section 8.3(d).
(e) If and to the extent any Bank shall not have made any
payment required pursuant to Section 2.4, such Bank agrees to pay the
Administrative Agent, forthwith on demand, such amount, together with interest
thereon at the Federal Funds Rate, for each day from such date until the date
such amount is paid to the Administrative Agent as provided in Section 2.4(c).
The failure of any Bank to make available to the Administrative Agent any amount
required pursuant to Section 2.4 shall not relieve any other Bank of its
obligation hereunder to make available as aforesaid such payment, as specified
above, nor shall any Bank be relieved of its obligations to make such payments
for any other reason.
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(f) Funds shall be transferred to the Banks in accordance with
the funds transfer instructions given to the Administrative Agent and by the
Administrative Agent to the Banks from time to time on or before the times
specified in Section 8.3(d).
(g) If and to the extent the Administrative Agent shall not
have made any payment required pursuant to Section 8.3(d) to a Bank, the
Administrative Agent agrees to pay such Bank forthwith on demand, such amount,
together with interest thereon at the Federal Funds Rate, for each day from such
date until the date such amount is paid pursuant to Section 8.3(d).
SECTION 8.13 Application of Payments. All monies collected or received
by the Administrative Agent on account of the Loans or in respect of security
for the Loans, directly or indirectly, shall be applied in the following order
of priority, except to the extent otherwise required by Article II of this
Agreement, in which case the provisions of Article II shall control:
(a) To the payment of all costs and expenses due to the
Administrative Agent and/or the Banks pursuant to the Loan Documents, including
costs incurred in collection of such monies, including, without limitation, the
payment to the Banks of the amounts described in Section 8.12(d);
(b) To outstanding interest on the Loans, which amount shall
be allocated between the Banks in accordance with the actual principal amount of
Loans held by each Bank throughout the period in question as determined by the
Administrative Agent on a daily basis; provided, however, that if amounts
received by the Administrative Agent are not sufficient to pay in full all such
outstanding interest on the Loans, such amount shall be allocated among the
Banks pro rata in accordance with the amount of Loans held by each Bank during
the period in question; and
(c) To the payment of principal on the Loans in accordance
with the principal amount of Loans held by each Bank.
SECTION 8.14 Defaulting Banks.
(a) If for any reason any of the Banks shall fail or refuse to
abide by its obligations under the Loan Documents (each a "Defaulting Bank"),
then, in addition to the rights and remedies that may be available to the
Administrative Agent and the other Banks at law and in equity, but subject to
the notice and cure periods hereinafter set forth, such Defaulting Bank's right
to participate in the administration of the Loans and the Loan Documents,
including without limitation, any rights to consent to or direct any action or
inaction of the Administrative Agent, all of the Banks, or to be taken into
account in the calculation of the Required Banks (other than the right to vote
with respect to a decision as to its Loans to extend the Expiration Date
thereof, or to amend the interest rate and repayment provisions thereof or to
modify such Bank's Commitment), shall be suspended during the pendency of such
failure or refusal. A Bank shall be deemed to be a Defaulting Bank if (i) such
Bank shall have failed to pay to the Administrative Agent any amount due
pursuant to this Agreement within five (5) Business Days after written
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notice by the Administrative Agent to such Bank stating such payment is due from
such Bank to the Administrative Agent; (ii) such Bank shall have failed to
perform any of its other obligations under this Agreement or the Loan Documents
in any material respect. and such failure shall not have been cured within 30
days after written notice by the Administrative Agent to such Bank of such
failure, or if such failure cannot reasonably be cured within such 30 day
period, within such longer period of time as may be necessary to complete such
cure, so long as such Bank commences such cure within such 30-day period and
thereafter diligently pursues such cure to completion within not more than 120
days after such written notice; or (iii) such Bank shall institute or be subject
to any bankruptcy, insolvency, receivership, conservatorship, reorganization,
liquidation or similar proceedings under state or federal law; provided,
however, in the case of a failure described in clause (i) or clause (ii) of this
sentence, if within the 5-Business Day period described in clause (i) or the 30
day period described in clause (ii), as applicable, the Bank in question in good
faith disputes such default asserting that such default has not occurred (and
provided that such Bank has satisfied its funding obligations pursuant to the
provisions of Section 2.4), such Bank shall not be deemed to be a Defaulting
Bank until such Bank is found to be in default pursuant to a final judicial or
arbitration determination and such Bank does not thereafter take the action
necessary to cure the default within 10 Business Days following the date of the
final determination.
(b) With respect to each Defaulting Bank, any Current Bank
shall, in addition to any other rights or remedies available at law or equity,
be entitled, in the case of the failure of a Defaulting Bank to pay its pro rata
share (the "Defaulting Bank's Share") in a Loan made pursuant to Section 2.4, to
pay to the Administrative Agent the Defaulting Bank's Share (pro rata if made by
more than one Current Bank, based on the pro rata shares of the Current Banks
making the payment). If one or more of the Current Banks pays the Defaulting
Banks' Share, in addition to any other rights and remedies available to the
Banks, each Current Bank making such payment may elect to do either of the
following with respect to the payment made by such Current Bank:
(i) Notify the Administrative Agent to adjust the pro
rata shares of the Defaulting Bank and the Current Bank making payment
of the Defaulting Bank's Share, allocating the Defaulting Bank's Share
to the Current Bank as of the date the Loan was made; or
(ii) Receive all amounts which the Defaulting Bank
would otherwise be entitled to receive pursuant to this Agreement with
respect to the Defaulting Bank's Share (including interest accruing
under the Loan Documents on the Loan, to the extent of the Defaulting
Bank's Share of such Loan), pro rata according to the portion of the
Defaulting Bank's Share paid by such Current Bank, until such Current
Bank has been repaid the full amount of the Defaulting Bank's Share,
together with accrued interest paid by the Borrower under the Agreement
with respect thereto.
SECTION 8.15 Purchase of Defaulting Bank's Interest After Default. If a
Bank becomes a Defaulting Bank under Section 8.14, each Bank which is not a
Defaulting Bank (a "Current
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Bank") shall have the right, but not the obligation, in its sole discretion to
acquire (or if more than one Current Bank exercises such right, each such
Current Bank shall have the right to acquire, pro rata according to its pro rata
shares, or in such other proportions as they may mutually agree), the interest
in the Commitment and the Loans of a Defaulting Bank. Upon any such purchase,
the Defaulting Bank's interest in the Commitment and the Loans and its rights
hereunder as a Bank (but not its liability in respect thereof or under the Loan
Documents or this Agreement for events occurring prior to such purchase) shall
terminate at the date of purchase, and the Defaulting Bank shall promptly
execute all documents reasonably requested to surrender and transfer such
interest including an Assignment and Acceptance agreement and the canceled Note
shall be returned to the Borrower. Current Banks exercising purchase rights
under this Agreement must, as a precondition to the exercise of such rights,
concurrently exercise their corresponding purchase rights under this Agreement.
SECTION 8.16 Purchase Price and Payment for Defaulting Bank's Interest.
The purchase price for the interest in the Commitment and the Loans of a
Defaulting Bank shall be equal to the total outstanding Loans owed by the
Borrower to the Defaulting Bank as of the date of such purchase, including
without limitation any outstanding interest related thereto up to the date of
such purchase, together with any accrued but unpaid Fees payable to the
Defaulting Bank through such date. Payment of the purchase price for the
Defaulting Bank's interest in the Commitment and the Loans so acquired shall be
made on the date of such purchase.
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ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Notices. Notices and other communications provided for
herein shall be in writing and shall be delivered by hand or overnight courier
service, mailed or sent by telecopy, graphic scanning or other telegraphic
communications equipment of the sending party, as follows:
(a) if to the Borrower, to it at 2355 West Chandler Boulevard,
Chandler, Arizona 85224, Attention: Treasurer (Telecopy No.
602/917-4112);
(b) if to the Administrative Agent, to it at Post Office Box
71, Phoenix, Arizona 8501, Attention: Commercial Banking AZ1-1178
(Telecopy No. 602/221- 1761).
(c) if to a Bank, to it at its address (or telecopy number)
set forth in Schedule 2.1 or in the Assignment and Acceptance pursuant
to which such Bank shall have become a party hereto.
All notices and other communications given to any party hereto in accordance
with the provisions of this Agreement shall be deemed to have been given on the
date of receipt if delivered by hand or overnight courier service or sent by
telecopy or other telegraphic communications equipment of the sender, or on the
date five Business Days after dispatch by certified or registered mail if
mailed, in each case delivered, sent or mailed (properly addressed) to such
party as provided in this Section or in accordance with the latest unrevoked
direction from such party given in accordance with this Section.
SECTION 9.2 Survival of Agreement. All covenants, agreements,
representations and warranties made by the Borrower herein and in the
certificates or other instruments prepared or delivered in connection with or
pursuant to this Agreement or any other Loan Document shall be considered to
have been relied upon by the Banks and shall survive the making by the Banks of
the Loans, and the execution and delivery to the Banks of the Notes evidencing
such Loans, regardless of any investigation made by the Banks or on their
behalf, and shall continue in full force and effect until Termination has
occurred.
SECTION 9.3 Binding Effect. This Agreement shall become effective when
it shall have been executed by the Borrower and the Administrative Agent and
when the Administrative Agent shall have received copies hereof which, when
taken together, bear the signatures of each Bank, and thereafter shall be
binding upon and inure to the benefit of the Borrower, the Administrative Agent
and each Bank and their respective successors and assigns, except that the
Borrower shall not have the right to assign its rights hereunder or any interest
herein without the prior consent of all the Banks and the Administrative Agent.
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SECTION 9.4 Successors and Assigns.
(a) Whenever in this Agreement any of the parties hereto is
referred to, such reference shall be deemed to include the successors and
assigns of such party; and all covenants, promises and agreements by or on
behalf of the Borrower, the Administrative Agent or the Banks that are contained
in this Agreement shall bind and inure to the benefit of their respective
successors and assigns.
(b) Each Bank at its own expense may assign to one or more
assignees all or a portion of its interests, rights and obligations under this
Agreement (including all or a portion of its Commitment, and the Loans at the
time owing to it and the Notes held by it); provided, however, that (i) except
in the case of an assignment to a Bank or an Affiliate of any Bank, the Borrower
and the Administrative Agent must give their prior written consent to such
assignment (which consent shall not be unreasonably withheld), (ii) each such
assignment shall be of a constant, and not a varying, percentage of all the
assigning Bank's rights and obligations under this Agreement, (iii) except in
the case of an assignment to a Bank or an Affiliate of any Bank, the amount of
the Commitment of the assigning Bank subject to each such assignment (determined
as of the date the Assignment and Acceptance with respect to such assignment is
delivered to the Administrative Agent) shall not be less than $10,000,000.00 or
such lesser amount if such amount is the entire Commitment of the assigning
Bank, (iv) the parties to each such assignment shall execute and deliver to the
Administrative Agent an Assignment and Acceptance, together with the Note or
Notes subject to such assignment and, except in the case of an assignment to a
Bank or an Affiliate of any Bank, a processing and recordation fee of $2,500
(which fee shall not in any way be the responsibility of the Borrower), (v) the
assignee, if it shall not be a Bank, shall deliver to the Administrative Agent
an Administrative Details Reply Form and (vi) any increased costs by reason of
any such assignment will not be borne by the Borrower. Upon acceptance and
recording pursuant to paragraph (e) of this Section 9.4, from and after the
effective date specified in each Assignment and Acceptance, which effective date
shall be at least five Business Days after the execution thereof, (A) the
assignee thereunder shall be a party hereto and, to the extent of the interest
assigned by such Assignment and Acceptance, have all the rights and obligations
of a Bank under this Agreement and (B) the assigning Bank thereunder shall, to
the extent of the interest assigned by such Assignment and Acceptance, be
released from its obligations under this Agreement (and, in the case of an
Assignment and Acceptance covering all or the remaining portion of an assigning
Bank's rights and obligations under this Agreement, such Bank shall cease to be
a party hereto (but shall continue to be entitled to the benefits of Sections
2.13, 2.15, 2.19 and 9.5, as well as to any Fees accrued for its account
hereunder and not yet paid)).
(c) By executing and delivering an Assignment and Acceptance,
the assigning Bank thereunder and the assignee thereunder shall be deemed to
confirm to and agree with each other and the other parties hereto as follows:
(i) such assigning Bank warrants that it is the legal and beneficial owner of
the interest being assigned thereby free and clear of any adverse claim and that
its Commitment and the outstanding balances of its Loans, without giving effect
to assignments thereof which have not become effective, are as set forth in such
Assignment and Acceptance, (ii) except as set forth in (i) above, such assigning
Bank makes no representation or
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warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this Agreement, or
the execution, legality, validity, enforceability, genuineness, sufficiency or
value of this Agreement, any other Loan Document or any other instrument or
document furnished pursuant hereto or the financial condition of the Borrower or
any Subsidiary or the performance or observance by the Borrower or any
Subsidiary of any of its obligations under this Agreement, any other Loan
Document or any other instrument or document furnished pursuant hereto; (iii)
such assignee represents and warrants that it is legally authorized to enter
into such Assignment and Acceptance; (iv) such assignee confirms that it has
received a copy of this Agreement, together with copies of the most recent
financial statements delivered pursuant to Section 5.4 and such other documents
and information as it has deemed appropriate to make its own credit analysis and
decision to enter into such Assignment and Acceptance; (v) such assignee will
independently and without reliance upon the Administrative Agent, such assigning
Bank or any other Bank and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under this Agreement; (vi) such assignee appoints
and authorizes the Administrative Agent to take such action as agent on its
behalf and to exercise such powers under this Agreement as are delegated to the
Administrative Agent by the terms hereof, together with such powers as are
reasonably incidental thereto; and (vii) such assignee agrees that it will
perform in accordance with their terms all the obligations which by the terms of
this Agreement are required to be performed by it as a Bank.
(d) The Administrative Agent shall maintain at one of its
offices in Phoenix, Arizona, a copy of each Assignment and Acceptance delivered
to it and a register for the recordation of the names and addresses of the
Banks, and the Commitment of, and principal amount of the Loans owing to, each
Bank pursuant to the terms hereof from time to time (the "Register"). The
entries in the Register shall be conclusive in the absence of manifest error and
the Borrower, the Administrative Agent and the Banks may treat each Person whose
name is recorded in the Register pursuant to the terms hereof as a Bank
hereunder for all purposes of this Agreement. The Register shall be available
for inspection by the Borrower and any Bank, at any reasonable time and from
time to time upon reasonable prior notice.
(e) Upon its receipt of a duly completed Assignment and
Acceptance executed by an assigning Bank and an assignee together with the Note
or Notes subject to such assignment, an Administrative Details Reply Form
completed in respect of the assignee (unless the assignee shall already be a
Bank hereunder), the processing and recordation fee referred to in paragraph (b)
above and, if required, the written consent of the Borrower and the
Administrative Agent to such assignment, the Administrative Agent shall (i)
accept such Assignment and Acceptance, (ii) record the information contained
therein in the Register and (iii) give prompt notice thereof to the Borrower and
the Banks. Within five Business Days after receipt of notice, the Borrower, at
its own expense, shall execute and deliver to the Administrative Agent, in
exchange for the surrendered Note or Notes, a new Note or Notes to the order of
such assigning Bank in a principal amount equal to the applicable Commitment
retained by it. Such new Note or Notes shall be in an aggregate principal amount
equal to the aggregate principal amount of such surrendered Note or Notes; such
new Notes shall be dated the date of the surrendered Notes which they replace
and
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shall otherwise be in substantially the form of Exhibit C. Canceled Notes shall
be returned to the Borrower.
(f) Each Bank may without the consent of the Borrower or the
Administrative Agent sell participations to one or more banks or other entities
in all or a portion of its rights and obligations under this Agreement
(including all or a portion of its Commitment and the Loans owing to it and the
Notes held by it); provided, however, that (i) such Bank's obligations under
this Agreement shall remain unchanged, (ii) such Bank shall remain solely
responsible to the other parties hereto for the performance of such obligations,
(iii) the participating banks or other entities shall be entitled to the benefit
of the cost protection provisions contained in Sections 2.13, 2.15 and 2.19 to
the same extent as if they were Banks (however no participating bank or entity
shall be entitled to claim a greater amount than could have been claimed by the
Bank from whom the participation was acquired) and (iv) the Borrower, the
Administrative Agent and the other Banks shall continue to deal solely and
directly with such Bank in connection with such Bank's rights and obligations
under this Agreement, and such Bank shall retain the sole right to enforce the
obligations of the Borrower relating to the Loans and to approve any amendment,
modification or waiver of any provision of this Agreement. No entity acquiring a
participation pursuant to this paragraph (f) shall by virtue of such
participation have any direct voting rights under this Agreement.
(g) Any Bank or participant may, in connection with any
assignment or participation or proposed assignment or participation pursuant to
this Section 9.4, disclose to the assignee or participant or proposed assignee
or participant any information relating to the Borrower furnished to such Bank
by or on behalf of the Borrower; provided that, prior to any such disclosure of
such information, each such assignee or participant or proposed assignee or
participant shall execute an agreement whereby such assignee or participant
shall agree to preserve the confidentiality of such information on terms no less
restrictive than those applicable to Banks pursuant to Section 9.17.
(h) Any Bank may at any time assign all or any portion of its
rights under this Agreement and the Notes issued to it to a Federal Reserve
Bank; provided that no such assignment shall release a Bank from any of its
obligations hereunder.
(i) The Borrower shall not assign or delegate any of its
rights or duties hereunder without the prior written consent of the Banks.
SECTION 9.5 Expenses; Indemnity.
(a) The Borrower agrees to pay all out-of-pocket expenses
reasonably incurred by the Administrative Agent and any Bank in connection with
the preparation of this Agreement and the other Loan Documents or in connection
with any amendments, modifications or waivers of the provisions hereof or
thereof (whether or not the transactions hereby contemplated shall be
consummated) or reasonably incurred by the Administrative Agent and any Bank in
connection with the enforcement or protection of their rights in connection with
this Agreement and the other
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Loan Documents or in connection with the Loans made or the Notes issued
hereunder, including without limitation the reasonable fees, charges and
disbursements of the counsel for the Administrative Agent and any Bank, and, in
connection with any such enforcement or protection, the reasonable fees, charges
and disbursements of counsel for the Administrative Agent and any Bank. The
Borrower further agrees that it shall indemnify the Administrative Agent and any
Bank from and hold them harmless against any documentary taxes, assessments or
charges made by any Governmental Authority by reason of the execution and
delivery of this Agreement or any of the other Loan Documents.
(b) The Borrower agrees to indemnify the Administrative Agent,
each Bank and each of their respective affiliates, directors, officers,
employees and agents (each such person being called an "Indemnitee") against,
and to hold each Indemnitee harmless from, any and all losses, claims, damages,
liabilities and related expenses, including without limitation reasonable
counsel fees, charges and disbursements, incurred by or asserted against any
Indemnitee arising out of, in any way connected with, or as a result of (i) the
execution or delivery of this Agreement or any other Loan Document or any
agreement or instrument contemplated thereby, the performance by the parties
thereto of their respective obligations thereunder or the consummation of the
transactions contemplated thereby, (ii) the use of the proceeds of the Loans
pursuant to the request of the Borrower or (iii) any claim, litigation,
investigation or proceeding relating to any of the foregoing, whether or not any
Indemnitee is a party thereto; provided that such indemnity shall not, as to any
Indemnitee, be available to the extent that such losses, claims, damages,
liabilities or related expenses are determined by a court of competent
jurisdiction by final and nonappealable judgment to have resulted from the gross
negligence or wilful misconduct of such Indemnitee.
(c) The provisions of this Section shall remain operative and
in full force and effect regardless of the expiration of the term of this
Agreement, the consummation of the transactions contemplated hereby, the
repayment of any of the Loans, the invalidity or unenforceability of any term or
provision of this Agreement or any other Loan Document, or any investigation
made by or on behalf of the Administrative Agent and any Bank. All amounts due
under this Section shall be payable on written demand therefor.
SECTION 9.6 Right of Setoff. Subject to the provisions of Section 2.17,
if an Event of Default shall have occurred and be continuing and any Bank shall
have requested the Administrative Agent to declare the Loans immediately due and
payable pursuant to Article VII, each Bank is hereby authorized at any time and
from time to time, to the fullest extent permitted by law, to set off and apply
any and all deposits (general or special, time or demand, provisional or final)
at any time held and other indebtedness at any time owing by such Bank to or for
the credit or the account of the Borrower against any of and all the obligations
of the Borrower now or hereafter existing under this Agreement and any other
Loan Documents held by such Bank, irrespective of whether or not such Bank shall
have made any demand under this Agreement or such other Loan Document and
although such obligations may be unmatured; provided that such right of setoff
shall not apply to amounts which may be held in (i) trust accounts or (ii) asset
management accounts, including without limitation brokerage accounts, cash
management
-57-
accounts or other money management or investment accounts of a non-depository
nature with any Bank. The rights of each Bank under this Section are in addition
to other rights and remedies (including other rights of setoff) which such Bank
may have.
SECTION 9.7 Applicable Law. THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE
STATE OF ARIZONA APPLICABLE TO CONTRACTS MADE AND TO BE ENFORCED ENTIRELY WITHIN
THAT STATE.
SECTION 9.8 Waivers; Amendment.
(a) No failure or delay of a party hereto in exercising any
power or right hereunder shall operate as a waiver thereof, nor shall any single
or partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude any other or
further exercise thereof or the exercise of any other right or power. The rights
and remedies of the parties hereunder and under the other Loan Documents are
cumulative and are not exclusive of any rights or remedies which they would
otherwise have. No waiver of any provision of this Agreement or any other Loan
Document or consent to any departure by a party therefrom shall in any event be
effective unless the same shall be permitted by Paragraph (b) of this Section
and then such waiver or consent shall be effective only in the specific instance
and for the purpose for which given. No notice or demand on a party in any case
shall entitle that party to any other or further notice or demand in similar or
other circumstances.
(b) Neither this Agreement nor any provision hereof may be
waived, amended or modified except pursuant to an agreement or agreements in
writing entered into by the Borrower and the Required Banks; provided, however,
that any such agreement shall have been consented to by all the Banks to the
extent required pursuant to the provisions of Section 8.3(b); provided further
that no such agreement shall amend, modify or otherwise affect the rights or
duties of the Administrative Agent hereunder without the prior written consent
of the Administrative Agent. Each Bank and each holder of a Note shall be bound
by any waiver, amendment or modification authorized by this Section regardless
of whether its Note shall have been marked to make reference thereto, and any
consent by any Bank or holder of a Note pursuant to this Section shall bind any
Person subsequently acquiring a Note from it, whether or not such Note shall
have been so marked.
SECTION 9.9 Interest Rate Limitation. Notwithstanding anything herein
or in the Notes to the contrary, if at any time the applicable interest rate,
together with all fees and charges which are treated as interest under
applicable law (collectively, the "Charges"), as provided for herein or in any
other document executed in connection herewith, or otherwise contracted for,
charged, received, taken or reserved by any Bank, shall exceed the maximum
lawful rate (the "Maximum Rate") which may be contracted for, charged, taken,
received or reserved by such Bank in accordance with applicable law, the rate of
interest payable under the Notes held by such Bank, together with all Charges
payable to such Bank, shall be limited to the Maximum Rate. Borrower hereby
agrees to the payment of interest with respect to the Loans and Borrowings under
the
-58-
Loans at the respective applicable rates determined pursuant to this Agreement,
in each case as increased by any rate of interest resulting from any charges in
the nature of interest paid or payable in connection with the Loans, the Notes
and/or this Agreement.
SECTION 9.10 Entire Agreement. This Agreement and the other Loan
Documents constitute the entire contract between the parties relating to the
subject matter hereof. Any previous agreement among any of the parties with
respect to the subject matter hereof, including without limitation the Prior
Agreement, is superseded by this Agreement and the other Loan Documents. Nothing
in this Agreement or in the other Loan Documents, expressed or implied, is
intended to confer upon any party other than the parties hereto and thereto any
rights, remedies, obligations or liabilities under or by reason of this
Agreement or the other Loan Documents.
SECTION 9.11 Severability. In the event any one or more of the
provisions contained in this Agreement or in any other Loan Document should be
held invalid, illegal or unenforceable in any respect, the validity, legality
and enforceability of the remaining provisions contained herein and therein
shall not in any way be affected or impaired thereby. The parties shall endeavor
in good-faith negotiations to replace the invalid, illegal or unenforceable
provisions with valid provisions the economic effect of which comes as close as
possible to that of the invalid, illegal or unenforceable provisions.
SECTION 9.12 Counterparts and Signature Pages. This Agreement may be
executed in two or more counterparts, each of which shall constitute an original
but all of which when taken together shall constitute but one contract. Delivery
of an executed counterpart of a signature page to this Agreement by facsimile
transmission shall be effective as delivery of a manually executed counterpart
of this Agreement. All parties hereto authorize the Administrative Agent to
gather and attach manually executed counterpart signature pages to counterpart
copies of this Agreement in order to constitute one or more counterparts bearing
evidence of manual execution by all parties.
SECTION 9.13 Headings. Article and Section headings and the Table of
Contents used herein are for convenience of reference only, are not part of this
Agreement and are not to affect the construction of, or to be taken into
consideration in interpreting, this Agreement.
SECTION 9.14 Arbitration.
(a) Arbitration. Upon the demand of any party, any Dispute
shall be resolved by binding arbitration in accordance with the terms of this
Agreement. A "Dispute" shall mean any action, dispute, claim or controversy of
any kind, whether in contract or tort, statutory or common law, legal or
equitable, now existing or hereafter arising under or in connection with, or in
any way pertaining to, any of the Loan Documents, or any past, present or future
extensions of credit and other activities, transactions or obligations of any
kind related directly or indirectly to any of the Loan Documents, including
without limitation, any of the foregoing arising in connection with the exercise
of any self-help, ancillary or other remedies pursuant to any of the Loan
Documents. Any party may by summary proceedings bring an action in court to
compel
-59-
arbitration of a Dispute. Any party who fails or refuses to submit to
arbitration following a lawful demand by any other party shall bear all costs
and expenses incurred by such other party in successfully compelling arbitration
of any Dispute.
(b) Governing Rules. Arbitration proceedings shall be
administered by the American Arbitration Association ("AAA") or such other
administrator as the parties shall mutually agree upon in accordance with the
AAA Commercial Arbitration Rules. All Disputes submitted to arbitration shall be
resolved in accordance with the Federal Arbitration Act (Title 9 of the United
States Code), notwithstanding any conflicting choice of law provision in any of
the Loan Documents. The arbitration shall be conducted at a location in Arizona
selected by the AAA or other administrator. If there is any inconsistency
between the terms hereof and any such rules, the terms and procedures set forth
herein shall control. All statutes of limitation applicable to any Dispute shall
apply to any arbitration proceeding. All discovery activities shall be expressly
limited to matters directly relevant to the Dispute being arbitrated. Judgment
upon any award rendered in an arbitration may be entered in any court having
jurisdiction; provided however, that nothing contained herein shall be deemed to
be a waiver by any party that is a bank of the protections afforded to it under
12 U.S.C. ss.91 or any similar applicable state law.
(c) No Waiver; Provisional Remedies, Self-Help and
Foreclosure. No provision hereof shall limit the right of any party to exercise
self-help remedies such as setoff, foreclosure against or sale of any real or
personal property collateral or security, or to obtain provisional or ancillary
remedies, including without limitation injunctive relief, sequestration,
attachment, garnishment or the appointment of a receiver, from a court of
competent jurisdiction before, after or during the pendency of any arbitration
or other proceeding. The exercise of any such remedy shall not waive the right
of any party to compel arbitration hereunder.
(d) Arbitrator Qualifications and Powers; Awards. Arbitrators
must be active members of the Arizona State Bar or retired judges of the state
or federal judiciary of Arizona with expertise in the substantive law applicable
to the subject matter of the Dispute. Arbitrators are empowered to resolve
Disputes by summary rulings in response to motions filed prior to the final
arbitration hearing. Arbitrators (i) shall resolve all Disputes in accordance
with the substantive law of the state of Arizona, (ii) may grant any remedy or
relief that a court of the state of Arizona could order or grant within the
scope hereof and such ancillary relief as is necessary to make effective any
award, and (iii) shall have the power to award recovery of all reasonable costs
and fees, to impose sanctions and to take such other actions as they deem
necessary to the same extent a judge could pursuant to the Federal Rules of
Civil Procedure, the Arizona Rules of Civil Procedure or other applicable law.
Any Dispute in which the amount in controversy is $5,000,000.00 or less shall be
decided by a single arbitrator who shall not render an award of greater than
$5,000,000.00 (including damages, costs, fees and expenses). By submission to a
single arbitrator, each party expressly waives any right or claim to recover
more than $5,000,000.00. Any Dispute in which the amount in controversy exceeds
$5,000,000.00 shall be decided by majority vote of a panel of three arbitrators;
provided however, that all three arbitrators must actively participate in all
hearings and deliberations.
-60-
(e) Miscellaneous. To the maximum extent practicable, the AAA,
the arbitrators and the parties shall take all action required to conclude any
arbitration proceeding within 180 days of the filing of the Dispute with the
AAA. No arbitrator or other party to an arbitration proceeding may disclose the
existence, content or results thereof, except for disclosures of information by
a party required in the ordinary course of its business, by applicable law or
regulation, or to the extent necessary to exercise any judicial review rights
set forth herein. If more than one agreement for arbitration by or between the
parties potentially applies to a Dispute, the arbitration provision most
directly related to the Loan Documents or the subject matter of the Dispute
shall control. This arbitration provision shall survive termination, amendment
or expiration of any of the Loan Documents or any relationship between the
parties.
SECTION 9.15 Jurisdiction; Consent to Service of Process.
(a) Each of the parties hereto hereby irrevocably and
unconditionally submits, for itself and its property, to the nonexclusive
jurisdiction of Arizona State court or Federal court of the United States of
America sitting in Phoenix, Arizona, and any appellate court from any thereof,
in any action or proceeding arising out of or relating to this Agreement or the
other Loan Documents, or for recognition or enforcement of any judgment, and
each of the parties hereto hereby irrevocably and unconditionally agrees that
all claims in respect of any such action or proceeding may be heard and
determined in such Arizona State or, to the extent permitted by law, in such
Federal court. Each of the parties hereto agrees that a final judgment in any
such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Nothing in this Agreement shall affect any right that any Bank may otherwise
have to bring any action or proceeding relating to this Agreement or the other
Loan Documents against the Borrower or its properties in the courts of any
jurisdiction.
(b) Each of the parties hereto hereby irrevocably and
unconditionally waives, to the fullest extent it may legally and effectively do
so, any objection which it may now or hereafter have to the laying of venue of
any suit, action or proceeding arising out of or relating to this Agreement or
the other Loan Documents in any Arizona State or Federal court sitting in
Phoenix, Arizona. Each of the parties hereto hereby irrevocably waives, to the
fullest extent permitted by law, the defense of an inconvenient forum to the
maintenance of such action or proceeding in any such court.
(c) Each party to this Agreement irrevocably consents to
service of process in the manner provided for notices in Section 9.1. Nothing in
this Agreement will affect the right of any party to this Agreement to serve
process in any other manner permitted by law.
SECTION 9.16 Waiver of Jury Trial. Each party hereto hereby waives, to
the fullest extent permitted by applicable law, any right it may have to a trial
by jury in respect of any litigation directly or indirectly arising out of,
under or in connection with this Agreement or any of the other Loan Documents.
Each party hereto (a) certifies that no representative, agent or attorney of any
other party has represented, expressly or otherwise, that such other party would
-61-
not, in the event of litigation, seek to enforce the foregoing waiver and (b)
acknowledges that it and the other parties hereto have been induced to enter
into this Agreement and the other Loan Documents, as applicable, by (among other
things) the mutual waivers and certifications in this Section.
SECTION 9.17 Confidentiality. Each Bank agrees to keep confidential
(and to cause its officers, directors, employees, agents and representatives to
keep confidential) the Information (as defined below), except that any Bank
shall be permitted to disclose Information (i) to such of its and its
Affiliates' officers, directors, employees, agents and representatives
(including outside counsel) as need to know such Information; (ii) to the extent
required by applicable laws and regulations or by any subpoena or similar legal
process, or requested by any bank regulatory authority (provided that such Bank
shall, except for Information requested by any such bank regulatory authority,
promptly notify Borrower (to the extent practicable and lawful, notice shall be
given to the Borrower before such disclosure is made so as to permit Borrower to
seek a protective order) of the circumstances and content of each such
disclosure and shall request confidential treatment of any Information so
disclosed); (iii) to the extent such Information (A) becomes publicly available
other than as a result of a breach of this Agreement, (B) becomes available to
such Bank on a nonconfidential basis without a breach of confidence from a
source other than the Borrower or its Affiliates or (C) was available to such
Bank on a nonconfidential basis prior to its disclosure to such Bank by the
Borrower or its Affiliates; (iv) to the extent the Borrower shall have consented
to such disclosure in writing; or (v) to prospective successors or assigns so
long as each such person shall have agreed in writing to abide by the provisions
of this Section 9.17. As used in this Section 9.17, as to any Bank,
"Information" shall mean any financial statements, reports, materials,
documents, certificates and other information that the Borrower or any of its
Affiliates may have furnished or may hereafter furnish to such Bank in
-62-
connection with this Agreement or any other materials prepared by any such
person from any of the foregoing.
IN WITNESS WHEREOF, the Borrower, the Administrative Agent and the
Banks have caused this Agreement to be duly executed by their respective
authorized officers as of the day and year first above written.
MICROCHIP TECHNOLOGY INCORPORATED,
a Delaware corporation
By: /s/ Gordon W. Parnell
------------------------------------------
Name: Gordon W. Parnell
----------------------------------------
Its: Vice President, Controller and Treasurer
-----------------------------------------
"Borrower"
BANK ONE, ARIZONA, NA
By: /s/ Steve Reinhart
------------------------------------------
Name: Steve Reinhart
----------------------------------------
Its: Vice President
-----------------------------------------
"Administrative Agent"
BANK ONE, ARIZONA, NA
By: /s/ Steve Reinhart
------------------------------------------
Name: Steve Reinhart
----------------------------------------
Its: VP
-----------------------------------------
"Bank"
-63-
THE FIRST NATIONAL BANK OF CHICAGO, a
national banking association
By: /s/ Mark A. Isley
-------------------------------------
Name: Mark A. Isley
-----------------------------------
Its: First Vice President
------------------------------------
"Documentation Agent" and "Bank"
WELLS FARGO BANK, N.A.
By: /s/ Jenny L. Apker
-------------------------------------
Name: Jenny L. Apker
-----------------------------------
Its: Vice President
------------------------------------
"Bank"
NORWEST BANK ARIZONA, N.A.
By: /s/ Mae G. DelaBarre
-------------------------------------
Name: Mae G. DelaBarre
-----------------------------------
Its: Assistant Vice President
------------------------------------
"Bank"
THE INDUSTRIAL BANK OF JAPAN, LIMITED,
San Francisco Agency
By: /s/ T Takahide Ajkiyama
-------------------------------------
Name: T Takahide Akiyama
-----------------------------------
Its: General Manager
------------------------------------
"Bank"
-64-
EXHIBIT "A"
ASSIGNMENT AND ACCEPTANCE
-------------------------
______________, 19___
Reference is made to the Credit Agreement dated as of October 28,
1997 (the "Credit Agreement"), among MICROCHIP TECHNOLOGY INCORPORATED, a
Delaware corporation (the "Borrower"), the lenders named therein (the "Banks")
and BANK ONE, ARIZONA, NA, a national banking association, as Administrative
Agent for the Banks (in such capacity, the "Administrative Agent") and THE FIRST
NATIONAL BANK OF CHICAGO, a national banking association, as Documentation
Agent. Terms defined in the Credit Agreement and not otherwise defined herein
shall have the meanings assigned to such terms in the Credit Agreement.
1. The Assignor hereby sells and assigns, without recourse, to the
Assignee, and the Assignee hereby purchases and assumes, without recourse, from
the Assignor, effective as of the Effective Date set forth on the reverse
hereof, the interests set forth on the reverse hereof (the "Assigned Interest")
in the Assignor's rights and obligations under the Credit Agreement, including,
without limitation, the interests set forth on the reverse hereof in the
Commitment of the Assignor on the Effective Date and the Loans owing to the
Assignor which are outstanding on the Effective Date, together with unpaid
interest accrued on the assigned Loans to the Effective Date and the amount, if
any, set forth on the reverse hereof of the Fees accrued to the Effective Date
for the account of the Assignor. Each of the Assignor and the Assignee hereby
makes and agrees to be bound by all the representations, warranties and
agreements set forth in Section 9.4(c) of the Credit Agreement, a copy of which
has been received by each such party. From and after the Effective Date (i) the
Assignee shall be a party to and be bound by the provisions of the Credit
Agreement and, to the extent of the interests assigned by this Assignment and
Acceptance, have the rights and obligations of a Bank thereunder and under the
Loan Documents and (ii) the Assignor shall, to the extent of the interests
assigned by this Assignment and Acceptance, relinquish its rights and be
released from its obligations under the Credit Agreement.
2. This Assignment and Acceptance is being delivered to the
Administrative Agent together with (i) the Notes evidencing the Loans included
in the Assigned Interest, (ii) the appropriate forms specified in Section
2.19(e) of the Credit Agreement, duly completed and executed by such Assignee,
(iii) if the Assignee is not already a Bank under the Credit Agreement, an
Administrative Details Reply Form in the form of Exhibit "D" to the Credit
Agreement and (iv) a processing fee of $2,500.00.
3. This Assignment and Acceptance shall be governed by and construed
in accordance with the laws of the State of Arizona.
Date of Assignment:
Legal Name of Assignor:
Legal Name of Assignee:
Assignee's Address for Notice:
Effective Date of Assignment
(may not be fewer than 5 Business
Days after the Date of Assignment):
Percentage Assigned of
Commitment (set forth, to at
least 8 decimals, as a
percentage of the Commitment
and the aggregate Commitments
of all Banks thereunder)
Principal Amount Assigned
Commitment
Assigned: $________________ ______________%
Loans:
Fees Assigned
(if any):
The terms set forth above and
on the reverse side hereof are
hereby agreed to: Accepted
__________________, as Assignor ________________________________________
By__________________________ By________________________________
Its____________________ Its__________________________
__________________, as Assignor ________________________________________
By__________________________ By________________________________
Its____________________ Its__________________________
-2-
EXHIBIT "B"
BORROWING NOTICE
----------------
Bank One, Arizona, NA
Post Office Box 71
Phoenix, AZ 85001
Attention: Commercial Banking AZ1-1178 Date:______________
(Telecopy No. 602/221-1761) Time:______________
Dear Sir or Madam:
The undersigned, Microchip Technology Incorporated, a Delaware
corporation ("Borrower"), refers to the Credit Agreement dated as of October 28,
1997 (as it may hereafter be amended, modified, extended or restated from time
to time, the "Credit Agreement"), among Borrower, the Banks named therein, and
Bank One, Arizona, NA, as Administrative Agent for the Banks and The First
National Bank of Chicago, a national banking association, as Documentation
Agent. Capitalized terms used herein and not otherwise defined herein shall have
the meanings assigned to such terms in the Credit Agreement. The Borrower hereby
gives notice that it requests a Borrowing pursuant to Section 2.3 of the Credit
Agreement and sets forth below the terms of such requested Borrowing:
A. Type of Borrowing1 ____________________
B. Advance date of Borrowing ____________________
C. Principal Amount of Borrowing2 ____________________
- -------------------
1 LIBOR Borrowing or Base Rate Borrowing
2 Each Borrowing shall be a principal amount which is an integral
multiple of $100,000.00 and not less than $3,000,000.00.
From: Through:
----- --------
D. LIBOR Borrowing Interest
Period3 _______________ ______________
Borrowing Maturity Date _______________ ______________
E. Refinancing Election (Identity
of Borrowing to be refinanced)4
Date ____________________
Type ____________________
Amount ____________________
Borrowing Maturity Date ____________________
Upon acceptance of the Borrowing to be made by the Banks in response to
this request, Borrower shall be deemed to have represented and warranted to the
Banks that, as of the date of such Credit Event, the conditions specified in
Section 4.1 of the Credit Agreement are satisfied.
Sincerely,
MICROCHIP TECHNOLOGY INCORPORATED,
a Delaware corporation
By________________________________________
Its V.P. Controller and Treasurer
An Officer of Borrower duly
authorized to request
Borrowings under the Credit
Agreement
- --------------------
3 Which shall be subject to the definition of "Interest Period" and end
not later than the Expiration Date.
4 Identity shall include the date and amount of Borrowing, the Type and,
with respect to LIBOR Borrowings, the Borrowing Maturity Date. -2-
EXHIBIT "C"
NOTE
$------------- --------------, ------
Phoenix, Arizona
FOR VALUE RECEIVED, MICROCHIP TECHNOLOGY INCORPORATED, a Delaware
corporation (hereinafter called "Maker"), hereby promises to pay to the order of
_____________________________________ (the "Bank"), at the office of Bank One,
Arizona, NA, a national banking association (the "Administrative Agent"), at
Post Office Box 71, Phoenix, Arizona 85001, Attention: Commercial Banking
AZ1-1178 or at such other location as the Administrative Agent may notify the
Maker in writing in Dollars, in immediately available funds, the principal sum
of ____________________________________ AND NO/100 DOLLARS ($_________________)
or the aggregate unpaid principal amount of all Revolving Credit Loans (as such
terms and each other capitalized term used herein are defined in the Credit
Agreement hereinafter referred to) made by the Bank pursuant to the Credit
Agreement, whichever is less, and to pay interest in like funds from the date
hereof on the unpaid balance thereof at the rates of interest per annum and at
the times specified in the Credit Agreement.
Principal hereof shall be payable in the amounts and at the times set
forth in the Credit Agreement.
This Note is one of the revolving credit notes referred to in Section
2.7 of the Credit Agreement dated as of October 28, 1997 by and among Maker, the
Banks named therein, the Administrative Agent and The First National Bank of
Chicago, a national banking association, as Documentation Agent (as the same may
be amended, modified or restated from time to time, the "Credit Agreement"). All
of the terms, conditions and covenants of the Credit Agreement are expressly
made a part of this Note by reference in the same manner and with the same
effect as if set forth herein at length and Bank or any transferee of this Note
(sequentially, the "Holder") is entitled to the benefits of and remedies
provided in the Credit Agreement and any other agreements by and between Maker
and Bank. Reference is made to the Credit Agreement for provisions regarding the
maturity, payment, prepayment and acceleration of the indebtedness evidenced
hereby.
After maturity and as otherwise provided in the Credit Agreement, all
unpaid amounts of this Note shall bear interest at the Default Rate. Maker
agrees to pay all collection expenses, including reasonable attorneys' fees and
court costs, incurred in the collection or enforcement of all or any part of
this Note in which the Holder is the prevailing party. In the event of any court
proceedings, court costs and attorneys' fees shall be set by the court and not
by jury and shall be included in any judgment obtained by the Holder. Maker
agrees to an effective rate of interest that is the rate stated above plus any
additional rate of interest resulting from any other charges
in the nature of interest paid or to be paid by or on behalf of Maker, or any
benefit received or to be received by holder hereof, in connection with this
Note.
Failure of the Holder to exercise any option hereunder shall not
constitute a waiver of the right to exercise same in the event of any subsequent
default, or in the event of continuance of any existing default after demand for
strict performance hereof.
This Note is entitled to the benefit of the Credit Agreement and the
other Loan Documents.
This Note shall be binding upon Maker and its successors and assigns
and shall inure to the benefit of the payee hereof, and any subsequent
transferees of this Note, and their successors and assigns.
This Note shall be governed by and construed according to the laws of
the State of Arizona.
IN WITNESS WHEREOF, Maker has caused this Note to be executed by its
duly authorized corporate agent as of the day and year first above written.
MICROCHIP TECHNOLOGY INCORPORATED,
a Delaware corporation
By______________________________________
Its_____________________________________
"MAKER"
-2-
EXHIBIT "D"
ADMINISTRATIVE DETAILS REPLY FORM
---------------------------------
Re: $90,000,000 Revolving Credit Facility for Microchip Technology Incorporated
1. Name of Entity For Signature Page: ________________________________________
2. Name of Entity as it Should
Appear in Any Publicity: ________________________________________
(if different than above)
3. Name of Person to Receive Draft
Credit Agreement at Bank: ________________________________________
4. Name of Person to Sign
Credit Agreement: ________________________________________
5. Contacts: Credit Contact Operations Contact Legal Counsel
-------------- ------------------ -------------
Name: _______________________ _______________________ ________________________
Title: _______________________ _______________________ ________________________
Address: _______________________ _______________________ ________________________
_______________________ _______________________ ________________________
_______________________ _______________________ ________________________
Telephone: _______________________ _______________________ ________________________
Facsimile #: _______________________ _______________________ ________________________
Telex # _______________________ _______________________ ________________________
Answerback: _______________________ _______________________ ________________________
Payment Instructions:
Method of Payment: Fedwire _________________ Chips___________________
Pay to: ____________________________________________________
Name of Bank: ____________________________________________________
City, State, Zip: ____________________________________________________
ABA Number: _______________________ Reference:_______________________
Account Number: _______________________ Account Name:____________________
Attention: _________________________________________________________
-2-
EXHIBIT "E"
MATTERS TO BE COVERED BY THE LEGAL OPINION OF
BORROWER'S COUNSEL
1. The Borrower is a corporation duly incorporated, validly existing
and in good standing under the laws of the State of Delaware, and has all
corporate power and all material governmental licenses, authorizations, consents
and approvals required to carry on its business as now conducted.
2. Each Subsidiary identified in Schedule "3.15" of the Credit
Agreement is a corporation duly incorporated, validly existing, and in good
standing under the laws of the jurisdiction of its incorporation, and has all
corporate power and all material governmental licenses, authorizations, consents
and approvals to carry on its business as now conducted.
3. The execution, delivery and performance by the Borrower of the Loan
Documents are within Borrower's corporate power, have been duly authorized by
all necessary corporate action, and require no action by or in respect of, or
filing with, any Governmental Authority and neither the execution and delivery
thereof nor the consummation of the transactions contemplated thereby nor
compliance by the Borrower with any, nor the Borrower's performance of all, of
the terms and provisions of the Loan Documents will contravene any law
applicable to it or conflict with, result in any breach of, or constitute any
default under, its certificate of incorporation or by-laws (both as amended to
date) or conflict with, result in any breach of, or constitute default under, or
result in the creation of a Lien under, or require the consent of any trustee or
creditor pursuant to, any indenture, mortgage, chattel mortgage, deed of trust,
conditional sales contract, lease, bank loan or credit agreement to which the
Borrower is a party or by which it or its assets are bound, known to us.
4. Each Loan Document has been duly authorized and delivered by the
Borrower, and is the legal, valid and binding obligation of the Borrower,
enforceable against it in accordance with its terms, except as enforcement
thereof may be limited by applicable bankruptcy, insolvency or other laws or
equitable principles of general application relating to the enforcement of
creditors' rights.
5. To the best knowledge of such counsel after due inquiry, there are
no actions, suits or proceedings pending or threatened in any court or before
any regulatory commission, board or other administrative or other governmental
entity against or affecting the Borrower which could reasonably be expected to
have a material adverse effect on its ability to enter into or perform its
obligations under any of the Loan Documents or on the condition (financial or
otherwise), operations, business or prospects of the Borrower, except those
described in the Borrower's report on Form 10-K for its most recently completed
fiscal year ended March 31, 1997, delivered to the Bank.
6. No consent, approval, waiver, license or authorization or other
action by or filing with any governmental authority is required in connection
with the execution and delivery by the Borrower of the Loan Documents except for
those which have already been obtained and are in full force and effect.
7. The Borrower is not an "investment company" nor a company
"controlled" by an "investment company," within the meaning of the Investment
Company Action of 1940, as amended.
-2-
EXHIBIT "F"
QUARTERLY COMPLIANCE AND MARGIN CERTIFICATE
FOR FISCAL QUARTER ENDING
________________, 19__
("Reporting Quarter")
Bank One, Arizona, NA
Post Office Box 71
Phoenix, Arizona 85001
Attn: Commercial Banking AZ1-1178 Date: 1
-------------------------
Dear Ladies and Gentlemen:
This Quarterly Compliance and Margin Certificate refers to the Credit
Agreement dated as of October 28, 1997 (as it may hereafter be amended,
modified, extended or restated from time to time, the "Credit Agreement"), among
Microchip Technology Incorporated, a Delaware corporation ("Borrower"), the
Banks named therein, Bank One, Arizona, NA, a national banking association, as
Administrative Agent for the Banks and The First National Bank of Chicago, a
national banking association, as Documentation Agent. Capitalized terms used and
not otherwise defined herein shall have the meanings assigned to such terms in
the Credit Agreement.
Pursuant to Section 5.4 of the Credit Agreement, the undersigned, a
Financial Officer of Borrower, hereby certifies that:
1. Enclosed are the required financial statements for the [quarter]
[fiscal year] ending for Borrower as required under Section 5.4 of the Credit
Agreement.
2. To the best of the undersigned's knowledge, no "Event of Default" or
Potential Default has occurred [or if so, specifying the nature and extent
thereof and any corrective actions taken or to be taken].
3. As of the last day of the Reporting Quarter, the computations below
were true and correct:
- ----------------
1 To be submitted within 60 days after the end of each fiscal quarter of
each fiscal year of Borrower.
I. Section 6.9 - Debt/EBITDA Ratio (in thousands)
Numerator: Debt (which includes Convertible $_______
Subordinated Indebtedness)
less accruals $_______
less accounts payable $_______
equals $ A
--------
divided by
Denominator: Cash Flow (rolling 4 quarters) B
--------
equals A/B
========
maximum 0.8x
========
II. Section 6.10 - Consolidated Effective Tangible Net Worth (in thousands)
Company Net Worth (Stockholders Equity) ________
less: Intangible Assets (________)
plus: Subordinated Indebtedness ________
equals $ A
--------
Covenant Requirement:
Beginning Consolidated Effective
Tangible Net Worth $337,000
plus: 50% of positive quarterly net
income beginning with the third quarter
of fiscal 1998 Consolidated Net Income $_______
plus: 90% of the aggregate increase in
Stockholders Equity after September 30, 1997
arising from the issuance and sale of
additional capital stock $_______
-2-
plus: 100% of the aggregate increase in
Stockholders Equity arising from the
conversion of Convertible Subordinated
Indebtedness $_______
less: the costs of such conversion ($_______)
equals $ B
--------
A is required to be greater than or equal to B A > B
========
III. Section 6.11 - Debt/Worth Ratio (in thousands)
Numerator: Debt $_______
less Convertible Subordinated Indebtedness
(not to exceed $100,000) $_______
equals Consolidated Debt $_______
divided by
Denominator: Consolidated Effective
Tangible Net Worth $ B
--------
equals A/B
========
maximum 1.0x
========
-3-
IV. Applicable Margin for LIBOR Borrowings and Facility Fee:
1 2 3
------- ------- -------
equal to or
A. 6.9 Debt/EBITDA Ratio: less than less than less than
0.50 0.65 0.80
If A, then the Applicable
Margin is (basis points)
* LIBOR Borrowing 32.5 55.0 77.5
* Facility Fee 17.5 20.0 22.5
Actual Applicable Margin is Category __________.
MICROCHIP TECHNOLOGY INCORPORATED
By:__________________________________
Name:________________________________
Its:_________________________________
-4-
SCHEDULE 2.1
COMMITMENTS OF BANKS
as to the Revolving Credit Facility
as of October 28, 1997
Euro Dollar
Bank % $ Lending Office
---------------- ------- ----------- --------------
1. Bank One, Arizona, NA 27.777778 25,000,000.00 _________________
2. The First National Bank 22.222222 20,000,000.00 _________________
of Chicago
3. Wells Fargo Bank, N.A. 22.222222 20,000,000.00 _________________
4. The Industrial Bank of Japan,
Limited, San Francisco
Agency 16.666667 15,000,000.00 _________________
5. Norwest Bank Arizona, 11.111111 10,000,000.00 _________________
N.A.
Maximum Commitment 100% $90,000,000.00 _________________
Addresses
- ---------
1. P.O. Box 71
Phoenix, Arizona 85001
Attention: Commercial Banking,
Dept. AZ1-1178
2. 777 South Figueroa Street, 4th Floor
Los Angeles, California 90017-5800
3. 100 West Washington
Phoenix, Arizona 85003
Attention: Jenny Apker #4101-251
4. 555 California Street, S. 3110
San Francisco, California 94104
5. 3300 North Central Avenue MS9004
Phoenix, Arizona 85012-2501
Attention: Mae DelaBarre
-2-
SCHEDULE 3.15
BORROWER'S SUBSIDIARIES
MICROCHIP TECHNOLOGY TAIWAN
9-1 West 1st Street
Kaohsiung Export Processing Zone
Kaohsiung, Taiwan
R.O.C.
ARIZONA MICROCHIP TECHNOLOGY LTD.
Unit 3, The Courtyard
Meadowbank
Furlong Road
Bourne End
Buckinghamshire
SL8 5AJ England
MICROCHIP TECHNOLOGY (THAILAND) COMPANY LIMITED
14 Moo 1, T. Wangtakien
A. Muangchacherngsao,
Chacherngsao 24000,
Thailand
Physical and Registered Address
SCHEDULE 3.5
MATERIAL ADVERSE CHANGE SINCE JUNE 30, 1997
None
SCHEDULE 6.1
PERMITTED LIENS
1. Loan and Security Agreement dated as of February 4, 1994 by and between
Microchip Techonology Incorporated and Financings, Inc.
2. Master Lease Agreement by and between Microchip Techonology
Incorporated and General Electric Corporation dated as of August 17,
1993.
3. Master Lease Agreement by and between Microchip Technology Incorporated
and Wells Fargo Bank, N.A. dated as of October 20, 1993.