1
EXHIBIT 10.29
EXECUTION COPY
================================================================================
$180,000,000
CREDIT AGREEMENT
AMONG
THE DII GROUP, INC.
AND
THE SUBSIDIARY BORROWERS
FROM TIME TO TIME PARTIES HERETO,
THE SEVERAL LENDERS
FROM TIME TO TIME PARTIES HERETO,
THE CHASE MANHATTAN BANK,
AS ADMINISTRATIVE AGENT,
AND
CHASE SECURITIES INC.
AS ARRANGER
DATED AS OF OCTOBER 30, 1998
================================================================================
2
TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS................................................................................1
1.1 Defined Terms............................................................................1
1.2 Other Definitional Provisions...........................................................24
SECTION 2. AMOUNT AND TERMS OF U.S. DOLLAR COMMITMENTS...............................................24
2.1 Term Commitments........................................................................24
2.2 Procedure for Term Loan Borrowing.......................................................25
2.3 Repayment of Term Loans; Evidence of Debt...............................................25
2.4 Revolving Commitments...................................................................26
2.5 Procedure for Dollar Revolving Loan Borrowing...........................................27
2.6 Commitment Fees, etc. ..................................................................27
2.7 Termination or Reduction of Revolving Commitments.......................................27
2.8 Repayment of Dollar Revolving Loans; Evidence of Debt...................................28
SECTION 3. AMOUNT AND TERMS OF MULTICURRENCY COMMITMENTS.............................................28
3.1 Multicurrency Commitments...............................................................28
3.2 Procedure for Multicurrency Borrowings..................................................29
3.3 Repayment of Multicurrency Loans; Evidence of Debt......................................29
SECTION 4. LETTERS OF CREDIT.........................................................................30
4.1 L/C Commitment..........................................................................30
4.2 Procedure for Issuance of Letter of Credit..............................................30
4.3 Fees and Other Charges..................................................................31
4.4 L/C Participations......................................................................31
4.5 Reimbursement Obligation of the Company.................................................32
4.6 Obligations Absolute....................................................................32
4.7 Letter of Credit Payments...............................................................33
4.8 Applications............................................................................33
SECTION 5. GENERAL PROVISIONS APPLICABLE TO THE LOANS................................................33
5.1 Interest Rates and Payment Dates........................................................33
5.2 Computation of Interest and Fees........................................................34
5.3 Inability to Determine Interest Rate....................................................35
5.4 Optional Prepayments....................................................................35
5.5 Mandatory Prepayments and Commitment Reductions.........................................36
5.6 Conversion and Continuation Options.....................................................37
5.7 Limitations on Tranches.................................................................38
5.8 Pro Rata Treatment and Payments.........................................................38
5.9 Requirements of Law.....................................................................40
5.10 Taxes..................................................................................41
5.11 Indemnity..............................................................................43
-i-
3
5.12 Change of Lending Office...............................................................43
5.13 Subsidiary Borrowers...................................................................43
5.14 Replacement of Lenders.................................................................44
5.15 Lending Installations..................................................................44
SECTION 6. REPRESENTATIONS AND WARRANTIES............................................................44
6.1 Financial Condition.....................................................................44
6.2 No Change...............................................................................45
6.3 Corporate Existence; Compliance with Law................................................45
6.4 Corporate Power; Authorization; Enforceable Obligations.................................46
6.5 No Legal Bar............................................................................46
6.6 Litigation..............................................................................46
6.7 No Default..............................................................................46
6.8 Ownership of Property; Liens............................................................47
6.9 Intellectual Property...................................................................47
6.10 Taxes..................................................................................47
6.11 Federal Regulations....................................................................47
6.12 Labor Matters..........................................................................47
6.13 ERISA..................................................................................48
6.14 Investment Company Act; Other Regulations..............................................48
6.15 Subsidiaries...........................................................................48
6.16 Use of Proceeds........................................................................48
6.17 Environmental Matters..................................................................49
6.18 Accuracy of Information, etc...........................................................50
6.19 Security Documents.....................................................................50
6.20 Solvency...............................................................................50
6.21 Year 2000 Matters......................................................................51
6.22 Certain Documents......................................................................51
6.23 Immaterial Subsidiaries................................................................51
SECTION 7. CONDITIONS PRECEDENT......................................................................52
7.1 Conditions to Initial Extension of Credit...............................................52
7.2 Conditions to Each Extension of Credit..................................................55
7.3 Each Subsidiary Borrower Credit Event...................................................55
SECTION 8. AFFIRMATIVE COVENANTS.....................................................................56
8.1 Financial Statements....................................................................56
8.2 Certificates; Other Information.........................................................56
8.3 Payment of Obligations..................................................................58
8.4 Maintenance of Existence; Compliance. ..................................................58
8.5 Maintenance of Property; Insurance......................................................58
8.6 Inspection of Property; Books and Records; Discussions..................................58
8.7 Notices.................................................................................58
8.8 Environmental Laws......................................................................59
8.9 Additional Collateral, etc..............................................................59
-ii-
4
SECTION 9. NEGATIVE COVENANTS........................................................................61
9.1 Financial Condition Covenants...........................................................61
9.2 Indebtedness............................................................................62
9.3 Liens...................................................................................63
9.4 Fundamental Changes.....................................................................64
9.5 Disposition of Property.................................................................65
9.6 Restricted Payments.....................................................................65
9.7 Capital Expenditures....................................................................66
9.8 Investments.............................................................................66
9.9 Optional Payments and Modifications of Certain Debt Instruments. .......................67
9.10 Transactions with Affiliates...........................................................68
9.11 Sales and Leasebacks...................................................................68
9.12 Changes in Fiscal Periods..............................................................68
9.13 Negative Pledge Clauses................................................................68
9.14 Clauses Restricting Subsidiary Distributions...........................................69
9.15 Lines of Business......................................................................69
9.16 Amendments to Acquisition Documents....................................................69
SECTION 10. EVENTS OF DEFAULT........................................................................69
SECTION 11. THE ADMINISTRATIVE AGENT.................................................................73
11.1 Appointment............................................................................73
11.2 Delegation of Duties...................................................................73
11.3 Exculpatory Provisions.................................................................73
11.4 Reliance by Administrative Agent.......................................................73
11.5 Notice of Default......................................................................74
11.6 Non-Reliance on Administrative Agent and Other Lenders.................................74
11.7 Indemnification........................................................................75
11.8 Administrative Agent in Its Individual Capacity........................................75
11.9 Successor Administrative Agent.........................................................75
11.10 Authorization to Release Guarantees and Liens.........................................76
SECTION 12. GUARANTEE................................................................................76
12.1 Guarantee..............................................................................76
12.2 No Subrogation, Contribution, Reimbursement or Indemnity...............................77
12.3 Amendments, etc. with respect to the Subsidiary Borrower Obligations...................77
12.4 Guarantee Absolute and Unconditional...................................................78
12.5 Reinstatement..........................................................................78
12.6 Payments...............................................................................79
SECTION 13. MISCELLANEOUS............................................................................79
13.1 Amendments and Waivers.................................................................79
13.2 Notices................................................................................80
13.3 No Waiver; Cumulative Remedies.........................................................81
13.4 Survival of Representations and Warranties.............................................81
-iii-
5
13.5 Payment of Expenses and Taxes..........................................................81
13.6 Successors and Assigns; Participations and Assignments.................................82
13.7 Adjustments; Set-off...................................................................84
13.8 Counterparts...........................................................................85
13.9 Severability...........................................................................85
13.10 Integration...........................................................................85
13.11 GOVERNING LAW.........................................................................85
13.12 Submission To Jurisdiction; Waivers...................................................86
13.13 Acknowledgments.......................................................................86
13.14 Conversion of C.......................................................................87
13.15 Confidentiality.......................................................................87
13.16 European Economic and Monetary Union..................................................87
13.17 Accounting Changes....................................................................91
13.18 Collateral Agent as Several Creditor. ................................................91
13.19 WAIVERS OF JURY TRIAL.................................................................91
-iv-
6
ANNEX:
A Pricing Grid
SCHEDULES:
1.1A Commitments
1.1B Qualified Foreign Subsidiaries
1.1C Immaterial Subsidiaries
6.4 Consents, Authorizations, Filings and Notices
6.15 Subsidiaries
6.19 UCC Filing Jurisdictions
7.1(g) Environmental Audit Properties
9.2(d) Existing Indebtedness
9.3(f) Existing Liens
9.5(f) Specified Dispositions
9.8(k) Investments
EXHIBITS:
A Form of Guarantee and Collateral Agreement
B Form of Borrowing Subsidiary Agreement
C Form of Borrowing Subsidiary Termination
D Form of Compliance Certificate
E Form of Closing Certificate
F Form of Assignment and Acceptance
G-1 Form of Legal Opinion of Curtis, Mallet-Prevost, Colt & Mosle
G-2 Form of Legal Opinion of Counsel to Subsidiary Borrowers
H Form of Exemption Certificate
I Form of Solvency Certificate
J Form of Term Note
K Form of Revolving Note
L Form of Intercreditor Agreement
-v-
7
CREDIT AGREEMENT, dated as of October 30, 1998, among THE DII
GROUP, INC., a Delaware corporation (the "Company"), the SUBSIDIARY BORROWERS
(as hereinafter defined), the several banks and other financial institutions or
entities from time to time parties to this Agreement (the "Lenders") and THE
CHASE MANHATTAN BANK, as administrative agent.
W I T N E S S E T H:
WHEREAS, pursuant to the Acquisition Agreement (such
capitalized term and other capitalized terms used without definition in these
recitals being used with the meanings given such terms in Section 1.1) the
Company, through one or more Wholly-Owned Subsidiaries, will acquire from
Hewlett-Packard GmbH certain assets used in the manufacturing of certain printed
circuit boards, including the premises used for such manufacturing at its
facility located in Boblingen, Germany; and
WHEREAS, to finance, in part, the cost of the Acquisition
(including specified assumed liabilities), the payment of fees and expenses
relating thereto and the refinancing of certain existing indebtedness of the
Company, and to provide financing for working capital and general corporate
purposes of the Company and its Subsidiaries, the Company has requested the
Lenders to make available the credit facilities described herein; and
WHEREAS, the Lenders are willing to make such credit
facilities available upon and subject to the terms and conditions hereinafter
set forth;
NOW, THEREFORE, in consideration of the premises and the
mutual agreements hereinafter set forth, the parties hereto hereby agree as
follows:
SECTION 1. DEFINITIONS
1.1 Defined Terms. As used in this Agreement, the terms listed
in this Section 1.1 shall have the respective meanings set forth in this Section
1.1.
"ABR": for any day, a rate per annum (rounded upwards, if
necessary, to the next 1/16 of 1%) equal to the greatest of (a) the Prime Rate
in effect on such day, (b) the Base CD Rate in effect on such day plus 1% and
(c) the Federal Funds Effective Rate in effect on such day plus 1/2 of 1%. For
purposes hereof: "Prime Rate" shall mean the rate of interest per annum publicly
announced from time to time by the Reference Lender as its prime rate in effect
at its principal office in New York City (the Prime Rate not being intended to
be the lowest rate of interest charged by the Reference Lender in connection
with extensions of credit to debtors); "Base CD Rate" shall mean the sum of (a)
the product of (i) the Three-Month Secondary CD Rate and (ii) a fraction, the
numerator of which is one and the denominator of which is one minus the C/D
Reserve Percentage and (b) the C/D Assessment Rate; and "Three-Month Secondary
CD Rate" shall mean, for any day, the secondary market rate for three-month
certificates of deposit reported as being in effect on such day (or, if such day
shall not be a Business Day, the next preceding Business Day) by the Board
through the public information telephone line of the Federal Reserve Bank of New
York (which rate will, under the current
8
2
practices of the Board, be published in Federal Reserve Statistical Release
H.15(519) during the week following such day), or, if such rate shall not be so
reported on such day or such next preceding Business Day, the average of the
secondary market quotations for three-month certificates of deposit of major
money center banks in New York City received at approximately 10:00 A.M., New
York City time, on such day (or, if such day shall not be a Business Day, on the
next preceding Business Day) by the Reference Lender from three New York City
negotiable certificate of deposit dealers of recognized standing selected by it.
Any change in the ABR due to a change in the Prime Rate, the Three-Month
Secondary CD Rate or the Federal Funds Effective Rate shall be effective as of
the opening of business on the effective day of such change in the Prime Rate,
the Three-Month Secondary CD Rate or the Federal Funds Effective Rate,
respectively.
"ABR Loans": Loans the rate of interest applicable to which is
based upon the ABR.
"Acquisition": as defined in Section 7.1.
"Acquisition Agreement": the Master Asset Purchase Agreement,
dated as of October 30, 1998, among the Company, MTKG and the Seller.
"Acquisition Documentation": collectively, the Acquisition
Agreement and all schedules, exhibits and annexes thereto and all side letters
and agreements affecting the terms thereof or entered into in connection
therewith (including, without limitation, the Division Purchase Agreement), in
each case as amended, supplemented or otherwise modified from time to time in
accordance with Section 9.16.
"Adjustment Date": as defined in the Pricing Grid.
"Administrative Agent": The Chase Manhattan Bank, together
with its affiliates, as the arranger of the Commitments and as the
administrative agent for the Lenders under this Agreement and the other Loan
Documents, together with any of its successors.
"Affiliate": as to any Person, any other Person that, directly
or indirectly, is in control of, is controlled by, or is under common control
with, such Person. For purposes of this definition, "control" of a Person means
the power, directly or indirectly, either to (a) vote 10% or more of the
securities having ordinary voting power for the election of directors (or
persons performing similar functions) of such Person or (b) direct or cause the
direction of the management and policies of such Person, whether by contract or
otherwise.
"Aggregate Available Revolving Commitments": as at any date of
determination with respect to all Revolving Lenders, an amount in U.S. Dollars
equal to the Available Revolving Commitments of all Revolving Lenders on such
date.
"Aggregate Committed Outstandings": as at any date of
determination with respect to any Revolving Lender, an amount in U.S. Dollars
equal to the sum of (a) the
9
3
Aggregate Revolving Outstandings of such Revolving Lender on such date and (b)
the U.S. Dollar Equivalent of the Aggregate Multicurrency Outstandings of such
Revolving Lender on such date.
"Aggregate Exposure": with respect to any Lender at any time,
an amount equal to (a) until the Closing Date, the aggregate amount of such
Lender's Commitments at such time and (b) thereafter, the sum of (i) the
aggregate then unpaid principal amount of such Lender's Term Loans and (ii) the
amount of such Lender's Revolving Commitment then in effect or, if the Revolving
Commitments have been terminated, the amount of such Lender's Aggregate
Committed Outstandings then outstanding.
"Aggregate Exposure Percentage": with respect to any Lender at
any time, the ratio (expressed as a percentage) of such Lender's Aggregate
Exposure at such time to the Aggregate Exposure of all Lenders at such time.
"Aggregate Multicurrency Outstandings": as at any date of
determination with respect to any Revolving Lender, an amount in the applicable
Available Foreign Currencies equal to the aggregate unpaid principal amount of
such Revolving Lender's Multicurrency Loans.
"Aggregate Revolving Outstandings": as at any date of
determination with respect to any Revolving Lender, an amount equal to the sum
of (a) the aggregate unpaid principal amount of such Lender's Dollar Revolving
Loans on such date and (b) such Lender's Revolving Percentage of the aggregate
unpaid principal amount of all L/C Obligations on such date.
"Agreement": this Credit Agreement, as amended, supplemented
or otherwise modified from time to time.
"Applicable Margin": for each Type of Loan at any time, the
rate per annum determined pursuant to the Pricing Grid.
"Application": an application, in such form as the Issuing
Lender may specify from time to time, requesting the Issuing Lender to open a
Letter of Credit.
"Arranger": Chase Securities Inc., as arranger of the
Commitments.
"Asset Sale": any Disposition of property (other than Capital
Stock of the Company) or series of related Dispositions of property (excluding
any such Disposition permitted by clause (a), (b), (c), (d) or (f) of Section
9.5 or Section 9.11) that yields gross proceeds to the Company or any of its
Subsidiaries (valued at the initial principal amount thereof in the case of
non-cash proceeds consisting of notes or other debt securities and valued at
fair market value in the case of other non-cash proceeds) in excess of
$2,000,000 in any fiscal year; provided, that asset Dispositions permitted by
clause (f) of Section 9.5 shall not be excluded from the definition of "Asset
Sale" to the extent that the gross proceeds therefrom exceed $125,000,000, in
the case of the Disposition described in Item 1 set forth on Schedule 9.5(f),
and $30,000,000, in the case of the Disposition described in Item 2 set forth on
Schedule 9.5(f).
10
4
"Assignee": as defined in Section 13.6(c).
"Assignment and Acceptance": an Assignment and Acceptance,
substantially in the form of Exhibit F.
"Assignor": as defined in Section 13.6(c).
"Available Foreign Currencies": Deutsche Marks, Pounds
Sterling, euro (when available) and any other available and freely-convertible
eurocurrency selected by the Company and approved by the Administrative Agent
and each of the Revolving Lenders.
"Available Revolving Commitment": as to any Revolving Lender
at any time, an amount equal to the excess, if any, of (a) such Lender's
Revolving Commitment then in effect over (b) such Lender's Aggregate Committed
Outstandings on such date.
"Benefitted Lender": as defined in Section 13.7(a).
"Board": the Board of Governors of the Federal Reserve System
of the United States (or any successor).
"Borrowers": the collective reference to the Company and the
Subsidiary Borrowers.
"Borrowing Date": any Business Day specified by a Borrower as
a date on which such Borrower requests the relevant Lenders to make Loans
hereunder.
"Borrowing Subsidiary Agreement": a Borrowing Subsidiary
Agreement, substantially in the form of Exhibit B.
"Borrowing Subsidiary Termination": a Borrowing Subsidiary
Termination, substantially in the form of Exhibit C.
"Business": as defined in Section 6.17(b).
"Business Day": (a) when such term is used in respect of a day
on which a Loan denominated in an Available Foreign Currency is to be made, a
payment is to be made in respect of such Loan, an interest rate or Exchange Rate
is to be set in respect of such Available Foreign Currency or any other dealing
in such Available Foreign Currency is to be carried out pursuant to this
Agreement, such term shall mean a London Banking Day which is also a day on
which banks are open for general banking business in the city which is the
principal financial center of the country of issuance of such Available Foreign
Currency, (b) when such term is used in respect of a day on which a Eurodollar
Loan is to be made, an interest rate is to be set in respect thereof or any
payment is to be made in respect thereof, such term shall mean a London Banking
Day, and (c) when such term is used in any context in this Agreement (including
as described in the foregoing clauses (a) and (b)), such term shall mean a day
which, in addition to complying
11
5
with any applicable requirements set forth in the foregoing clauses (a) and (b),
is a day other than a Saturday, Sunday or other day on which commercial banks in
New York City are authorized or required by law to close.
"Capital Expenditures": for any period, with respect to any
Person, the aggregate of all expenditures by such Person and its Subsidiaries
for the acquisition or leasing (pursuant to a capital lease) of fixed or capital
assets or additions to equipment (including replacements, capitalized repairs
and improvements during such period) that should be capitalized under GAAP on a
consolidated balance sheet of such Person and its Subsidiaries, provided that
the acquisition of Capital Stock shall in no case constitute a Capital
Expenditure.
"Capital Lease Obligations": as to any Person, 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.
"Capital Stock": any and all shares, interests, participations
or other equivalents (however designated) of capital stock of a corporation, any
and all equivalent ownership interests in a Person (other than a corporation)
and any and all warrants, rights or options to purchase any of the foregoing.
"Cash Equivalents": (a) marketable direct obligations issued
by, or unconditionally guaranteed by, the United States Government or issued by
any agency thereof and backed by the full faith and credit of the United States,
in each case maturing within one year from the date of acquisition; (b)
certificates of deposit, time deposits, eurodollar time deposits or overnight
bank deposits having maturities of six months or less from the date of
acquisition issued by any Lender or by any commercial bank organized under the
laws of the United States or any state thereof or Hong Kong or any foreign
country which is a member of the OECD having combined capital and surplus of not
less than $200,000,000 (or the foreign currency equivalent thereof); (c)
commercial paper of an issuer rated at least A-1 by Standard & Poor's Ratings
Services ("S&P") or P-1 by Moody's Investors Service, Inc. ("Moody's"), or
carrying an equivalent rating by a nationally recognized rating agency, if both
of the two named rating agencies cease publishing ratings of commercial paper
issuers generally, and maturing within six months from the date of acquisition;
(d) repurchase obligations of any Lender or of any commercial bank satisfying
the requirements of clause (b) of this definition, having a term of not more
than 30 days, with respect to securities issued or fully guaranteed or insured
by the United States government; (e) securities with maturities of one year or
less from the date of acquisition issued or fully guaranteed by any state,
commonwealth or territory of the United States, by any political subdivision or
taxing authority of any such state, commonwealth or territory or by any foreign
government, the securities of which state, commonwealth, territory, political
subdivision, taxing authority or foreign government (as the case may be) are
rated at least A by S&P or A by Moody's; (f) securities with maturities of six
months or less from the date of acquisition backed by standby letters of credit
issued by any Lender or any commercial bank satisfying the
12
6
requirements of clause (b) of this definition; or (g) shares of money market
mutual or similar funds which invest exclusively in assets satisfying the
requirements of clauses (a) through (f) of this definition.
"C/D Assessment Rate": for any day as applied to any ABR Loan,
the annual assessment rate in effect on such day that is payable by a member of
the Bank Insurance Fund maintained by the Federal Deposit Insurance Corporation
(the "FDIC") classified as well-capitalized and within supervisory subgroup "B"
(or a comparable successor assessment risk classification) within the meaning of
12 C.F.R. ss. 327.4 (or any successor provision) to the FDIC (or any successor)
for the FDIC's (or such successor's) insuring time deposits at offices of such
institution in the United States.
"C/D Reserve Percentage": for any day as applied to any ABR
Loan, that percentage (expressed as a decimal) which is in effect on such day,
as prescribed by the Board, for determining the maximum reserve requirement for
a Depositary Institution (as defined in Regulation D of the Board as in effect
from time to time) in respect of new non-personal time deposits in Dollars
having a maturity of 30 days or more.
"Change of Control": (a) any "person" or "group" within the
meaning of Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934,
as amended, shall become the "beneficial owner" (as defined in Rule 13d-3 under
the Securities Exchange Act of 1934, as amended) of more than 35% of the then
outstanding voting stock of the Company other than in a transaction having the
approval of the board of directors of the Company at least a majority of which
members are Continuing Directors or (b) Continuing Directors shall cease to
constitute at least a majority of the directors constituting the board of
directors of the Company.
"Closing Date": the date on which the conditions precedent set
forth in Section 7.1 shall have been satisfied, which date is October 30, 1998.
"Code": the Internal Revenue Code of 1986, as amended from
time to time.
"Collateral": all property of the Loan Parties, now owned or
hereafter acquired, upon which a Lien is purported to be created by any Security
Document.
"Collateral Agent": The Chase Manhattan Bank, together with
its affiliates, as collateral agent pursuant to the terms of the Intercreditor
Agreement.
"Commitment": as to any Lender, the sum of the Term Commitment
and the Revolving Commitment of such Lender.
"Commitment Fee Rate": at any time, the rate per annum
determined pursuant to the Pricing Grid.
"Commonly Controlled Entity": an entity, whether or not
incorporated, that is under common control with the Company within the meaning
of Section 4001 of ERISA or is
13
7
part of a group that includes the Company and that is treated as a single
employer under Section 414 of the Code.
"Company": as defined in the preamble hereto.
"Company Guaranty: the guarantee contained in Section 12.
"Compliance Certificate": a certificate duly executed by a
Responsible Officer substantially in the form of Exhibit D.
"Confidential Information Memorandum": the Confidential
Information Memorandum dated October 1998 and furnished to the Lenders.
"Consolidated EBITDA": for any period, Consolidated Net Income
for such period plus, without duplication and to the extent included as a charge
in the statement of such Consolidated Net Income for such period, the sum of (a)
income tax expense and asset taxes, (b) interest expense, amortization or
writeoff of debt discount and debt issuance costs and commissions, discounts and
other fees and charges associated with Indebtedness (including the Loans), (c)
depreciation and amortization expense, (d) amortization of intangibles
(including, but not limited to, goodwill) and organization costs, (e) any
extraordinary, unusual or non-recurring non-cash expenses or losses (including,
whether or not otherwise includable as a separate item in the statement of such
Consolidated Net Income for such period, non-cash losses on sales of assets
outside of the ordinary course of business or realized upon the sale of Capital
Stock of any Person), (f) aggregate non-recurring charges taken in fiscal 1998
with respect to Orbit Semiconductor, Inc. (amounting to approximately
$84,000,000) and (g) any other non-cash charges, and minus, to the extent
included in the statement of such Consolidated Net Income for such period, the
sum of (a) interest income, (b) any extraordinary, unusual or non-recurring
income or gains (including, whether or not otherwise includable as a separate
item in the statement of such Consolidated Net Income for such period, gains on
the sales of assets outside of the ordinary course of business or realized upon
the sale of Capital Stock of any Person) and (c) any other non-cash income, all
as determined on a consolidated basis.
"Consolidated Interest Coverage Ratio": for any period, the
ratio of (a) Consolidated EBITDA for such period to (b) Consolidated Interest
Expense for such period.
"Consolidated Interest Expense": for any period, total cash
interest expense (including that attributable to Capital Lease Obligations) of
the Company and its Subsidiaries for such period with respect to all outstanding
Indebtedness of the Company and its Subsidiaries (including all commissions,
discounts and other fees and charges owed with respect to letters of credit and
bankers' acceptance financing and net costs under Derivative Agreements in
respect of interest rates to the extent such net costs are allocable to such
period in accordance with GAAP).
"Consolidated Leverage Ratio": as at any day, the ratio of (a)
Consolidated Total Funded Debt on such day to (b) Consolidated EBITDA for the
four consecutive fiscal quarters of the Company most recently ended.
14
8
"Consolidated Net Income": for any period, the consolidated
net income (or loss) of the Company and its Subsidiaries, determined on a
consolidated basis in accordance with GAAP; provided that there shall be
excluded (a) the income (or deficit) of any Person accrued prior to the date it
becomes a Subsidiary of the Company or is merged into or consolidated with the
Company or any of its Subsidiaries, (b) the income (or deficit) of any Person
(other than a Subsidiary of the Company) in which the Company or any of its
Subsidiaries has an ownership interest, except to the extent that any such
income is actually received by the Company or such Subsidiary in the form of
dividends or similar distributions and (c) the undistributed earnings of any
Subsidiary of the Company to the extent that the declaration or payment of
dividends or similar distributions by such Subsidiary is not at the time
permitted by the terms of any Contractual Obligation (other than under any Loan
Document) or Requirement of Law applicable to such Subsidiary.
"Consolidated Net Worth": at any date, all amounts that would,
in conformity with GAAP, be included on a consolidated balance sheet of the
Company and its Subsidiaries under stockholders' equity at such date (excluding
any foreign currency adjustments); provided, for purposes of determining
compliance with Section 9.1(c), no effect shall be given to non-recurring
charges taken in the fourth quarter of fiscal year 1998 with respect to Orbit
Semiconductor, Inc. in an aggregate amount not to exceed $18,000,000.
"Consolidated Senior Funded Debt": at any date, the aggregate
principal amount of all Senior Indebtedness of the Company and its Subsidiaries
at such date which is Funded Debt, determined on a consolidated basis in
accordance with GAAP.
"Consolidated Total Funded Debt": at any date, the aggregate
principal amount of Funded Debt of the Company and its Subsidiaries at such
date, determined on a consolidated basis in accordance with GAAP.
"Continuing Directors": the directors of the Company on the
Closing Date, and each other director, if, in each case, such other director's
election or appointment by the other directors or nomination for election by the
stockholders to the board of directors of the Company, as the case may be, is
recommended or approved by at least 66-2/3% of the then Continuing Directors.
"Contractual Obligation": as to any Person, any provision of
any security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.
"Convertible Subordinated Notes": the 6% Convertible
Subordinated Notes of the Company due October 15, 2002.
"Default": any of the events specified in Section 10, whether
or not any requirement for the giving of notice, the lapse of time, or both, has
been satisfied.
15
9
"Derivative Agreements": of any Person at any date, swaps,
caps or collar agreements or similar arrangements to which such Person and any
financial institution, commodities or stock exchange or clearinghouse (a
"Derivatives Counterparty") are parties under which such parties agree to
exchange payments based upon interest rates, exchange rates or market prices or
values or changes therein in respect of debt obligations or equities, currencies
or commodities or indexes in respect of any of the foregoing without delivery of
the same (including, whether or not otherwise included in the foregoing, options
granted or written by such Person in favor of a Derivatives Counterparty
intended to be settled in cash.)
"Disposition": with respect to any property, any sale, lease,
sale and leaseback, assignment, conveyance, transfer or other disposition
thereof. The terms "Dispose" and "Disposed of" shall have correlative meanings.
"Division Purchase Agreement": the Division Purchase
Agreement, dated as of October 30, 1998, between Hewlett-Packard Company and
Multilayer Technology.
"Dollar Revolving Loans": as defined in Section 2.4(a).
"Dollars", "U.S. Dollars" and "$": dollars in lawful currency
of the United States.
"Domestic Subsidiary": any Subsidiary of the Company organized
under the laws of any jurisdiction within the United States.
"Dutch Pledge Agreements": the Deed of Pledge of Registered
Shares in a Limited Partnership executed by Dovatron Nevada, Inc. and Dovatron
Mexico, Inc. pursuant to which the pledgors thereunder grant a security interest
in an aggregate of 65% of the outstanding limited partnership interest in DII
International Holdings C.V., and the Deed of Pledge of Registered Shares in a
Private Limited Liability Company executed by Dovatron Nevada, Inc., pursuant to
which the pledgor thereunder grants a security interest in 65% of the share
capital of Nador Invest B.V., in each case in form and substance satisfactory to
the Administrative Agent.
"Environmental Laws": any and all foreign, Federal, state,
local or municipal laws, rules, orders, regulations, statutes, ordinances,
codes, decrees, requirements of any Governmental Authority or other Requirements
of Law (including common law) regulating, relating to or imposing liability or
standards of conduct concerning protection of human health or the environment,
as now or may at any time hereafter be in effect.
"ERISA": the Employee Retirement Income Security Act of 1974,
as amended from time to time.
"Eurocurrency Base Rate": (a) with respect to each Interest
Period pertaining to a Multicurrency Loan denominated in any currency other than
Pounds Sterling (in the event that Pounds Sterling is an Available Foreign
Currency), the rate per annum determined by the Administrative Agent to be the
offered rate for deposits in such currency with a term comparable to such
Interest Period that appears on the applicable Telerate Page at approximately
11:00 A.M., London time, two Business Days prior to the beginning of such
Interest Period; provided,
16
10
however, that if at any time for any reason such offered rate for any such
currency does not appear on a Telerate Page, "Eurocurrency Base Rate" shall
mean, with respect to each day during each Interest Period pertaining to a
Multicurrency Loan denominated in such currency, the rate per annum equal to the
average (rounded upward to the nearest 1/16th of 1%) of the respective rates
notified to the Administrative Agent by each of the Multicurrency Reference
Lenders as the rate at which such Multicurrency Reference Lender is offered
deposits in such currency at or about 11:00 A.M., London time, two Business Days
prior to the beginning of such Interest Period in the London interbank market
for delivery on the first day of such Interest Period for the number of days
comprised therein; and (b) in the event that Pounds Sterling is an Available
Foreign Currency, with respect to each day during each Interest Period
pertaining to a Multicurrency Loan denominated in Pounds Sterling, the rate per
annum equal to the average (rounded upward to the nearest 1/16th of 1%) of the
respective rates notified to the Administrative Agent by each of the
Multicurrency Reference Lenders as the rate at which such Multicurrency
Reference Lender is offered deposits in Pounds Sterling at or about 11:00 A.M.,
London time, two Business Days prior to the beginning of such Interest Period in
the Paris interbank market for delivery on the first day of such Interest Period
for the number of days comprised therein.
"Eurocurrency Rate": with respect to each day during each
Interest Period pertaining to a Multicurrency Loan, a rate per annum determined
for such day in accordance with the following formula (rounded upward to the
nearest 1/100th of 1%):
Eurocurrency Base Rate
----------------------------------------
1.00 - Eurocurrency Reserve Requirements
"Eurocurrency Reserve Requirements": for any day as applied to
a Eurodollar Loan or a Multicurrency Loan, the aggregate (without duplication)
of the maximum rates (expressed as a decimal fraction) of reserve requirements
in effect on such day (including basic, supplemental, marginal and emergency
reserves under any regulations of the Board or other Governmental Authority
having jurisdiction with respect thereto) dealing with reserve requirements
prescribed for eurocurrency funding (currently referred to as "Eurocurrency
Liabilities" in Regulation D of the Board) maintained by a member bank of the
Federal Reserve System.
"Eurodollar Base Rate": with respect to each day during each
Interest Period pertaining to a Eurodollar Loan, the rate per annum determined
on the basis of the rate for deposits in Dollars for a period equal to such
Interest Period commencing on the first day of such Interest Period appearing on
Page 3750 of the Dow Jones Markets screen as of 11:00 A.M., London time, two
Business Days prior to the beginning of such Interest Period. In the event that
such rate does not appear on Page 3750 of the Dow Jones Markets screen (or
otherwise on such screen), the "Eurodollar Base Rate" shall be determined by
reference to such other comparable publicly available service for displaying
eurodollar rates as may be selected by the Administrative Agent or, in the
absence of such availability, by reference to the rate at which the
Administrative Agent is offered Dollar deposits at or about 11:00 A.M., New York
City time, two Business Days prior to the beginning of such Interest Period in
the interbank eurodollar
17
11
market where its eurodollar and foreign currency and exchange operations are
then being conducted for delivery on the first day of such Interest Period for
the number of days comprised therein.
"Eurodollar Loans": Loans the rate of interest applicable to
which is based upon the Eurodollar Rate.
"Eurodollar Rate": with respect to each day during each
Interest Period pertaining to a Eurodollar Loan, a rate per annum determined for
such day in accordance with the following formula (rounded upward to the nearest
1/100th of 1%):
Eurodollar Base Rate
----------------------------------------
1.00 - Eurocurrency Reserve Requirements
"Event of Default": any of the events specified in Section 10,
provided that any requirement for the giving of notice, the lapse of time, or
both, has been satisfied.
"Exchange Rate": with respect to any currency other than
Dollars, the rate shall be determined by reference to such publicly available
service for displaying exchange rates as may be agreed upon by the
Administrative Agent and the Company or, in the absence of such agreement, such
"Exchange Rate" shall instead be the Administrative Agent's spot rate of
exchange in the interbank market where its foreign currency exchange operations
in respect of such non-Dollar currency are then being conducted, at or about
11:00 A.M., local time, on such date for the purchase of Dollars with such
non-Dollar currency, for delivery two Business Days later; provided, that if at
the time of any such determination, no such spot rate can reasonably be quoted,
the Administrative Agent may use any reasonable method as it deems applicable to
determine such rate, and such determination shall be conclusive absent manifest
error.
"Excluded Foreign Subsidiary": any Foreign Subsidiary in
respect of which either (a) the pledge of all of the Capital Stock of such
Subsidiary as Collateral or (b) the guaranteeing by such Subsidiary of the
Obligations, would, in the good faith judgment of the Company, result in adverse
tax, legal or regulatory consequences to the Company.
"Existing Credit Agreement": the Loan Agreement, dated as of
May 5, 1993, among the Company, certain of its Subsidiaries and Norwest Bank
Colorado, N.A., The Chase Manhattan Bank, Harris Trust and Savings Bank and NBD
Bank.
"Facility": each of (a) the Term Commitments and the Term
Loans made thereunder (the "Term Facility") and (b) the Revolving Commitments
(including the commitment to make Multicurrency Loans) and the extensions of
credit made thereunder (the "Revolving Facility").
"Federal Funds Effective Rate": 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
18
12
Bank of New York, or, if such rate is not so published for any day that is a
Business Day, the average of the quotations for the day of such transactions
received by the Reference Lender from three federal funds brokers of recognized
standing selected by it.
"Foreign Subsidiary": any Subsidiary of the Company that is
not a Domestic Subsidiary.
"Funded Debt": as to any Person, all Indebtedness of such
Person of the types described in clauses (a) through (e) of the definition of
Indebtedness in this Section 1.1, and all Guarantee Obligations of such Person
in respect of such Indebtedness.
"Funding Office": the office of the Administrative Agent
specified in Section 13.2 or such other office as may be specified from time to
time by the Administrative Agent as its funding office by written notice to the
Company and the Lenders.
"GAAP": generally accepted accounting principles in the United
States as in effect from time to time, except that for purposes of Section 9.1,
GAAP shall be determined on the basis of such principles in effect on the date
hereof and consistent with those used in the preparation of the most recent
audited financial statements delivered pursuant to Section 6.1(b).
"Governmental Authority": any nation or government, any state
or other political subdivision thereof, any agency, authority, instrumentality,
regulatory body, court, central bank or other entity exercising executive,
legislative, judicial, taxing, regulatory or administrative functions of or
pertaining to government, any securities exchange and any self-regulatory
organization (including the National Association of Insurance Commissioners).
"Greatsino Acquisition": the acquisition by the Company of all
the outstanding capital stock of Greatsino Electric Technology, which is a
printed circuit board fabricator and contract electronics manufacturer with
operations in the People's Republic of China.
"Greatsino Documentation": collectively, the Stock Purchase
Agreement dated as of August 22, 1998, by and among the Company, Universal
Appliances Ltd. and Valenta Holdings Ltd., pursuant to which the Company
purchased all of the outstanding stock of Greatsino Electronic Technology, and
all schedules, exhibits and annexes thereto and all side letters and agreements
affecting the terms thereof or entered into in connection therewith (in each
case as in effect on the date hereof).
"Guarantee and Collateral Agreement": the Guarantee and
Collateral Agreement to be executed and delivered by the Company and each
Subsidiary Guarantor, substantially in the form of Exhibit A, as the same may be
amended, supplemented or otherwise modified from time to time.
"Guarantee Obligation": as to any Person (the "guaranteeing
person"), any obligation of (a) the guaranteeing person or (b) another Person
(including any bank under any letter of credit) to induce the creation of which
the guaranteeing person has issued a
19
13
reimbursement, counterindemnity or similar obligation, in either case
guaranteeing or in effect guaranteeing any Indebtedness, leases, dividends or
other obligations (the "primary obligations") of any other third Person (the
"primary obligor") in any manner, whether directly or indirectly, including any
obligation of the guaranteeing person, whether or not contingent, (i) to
purchase any such primary obligation or any property constituting direct or
indirect security therefor (other than pursuant to a contractual right to
indemnity (other than in respect of Indebtedness) in connection with
acquisitions or Dispositions in accordance with past practice), (ii) to advance
or supply funds (1) for the purchase or payment of any such primary obligation
or (2) to maintain working capital or equity capital of the primary obligor or
otherwise to maintain the net worth or solvency of the primary obligor, (iii) to
purchase property, securities or services primarily for the purpose of assuring
the owner of any such primary obligation of the ability of the primary obligor
to make payment of such primary obligation or (iv) otherwise to assure or hold
harmless the owner of any such primary obligation against loss in respect
thereof; provided, however, that the term Guarantee Obligation shall not include
endorsements of instruments for deposit or collection in the ordinary course of
business. The amount of any Guarantee Obligation of any guaranteeing person
shall be deemed to be the lower of (a) an amount equal to the stated or
determinable amount of the primary obligation in respect of which such Guarantee
Obligation is made and (b) the maximum amount for which such guaranteeing person
may be liable pursuant to the terms of the instrument embodying such Guarantee
Obligation, unless such primary obligation and the maximum amount for which such
guaranteeing person may be liable are not stated or determinable, in which case
the amount of such Guarantee Obligation shall be such guaranteeing person's
maximum reasonably anticipated liability in respect thereof as determined by the
Company in good faith.
"Immaterial Subsidiary": any Subsidiary set forth on Schedule
1.1C or any new Subsidiary created or acquired after the Closing Date and
designated by the Company by notice to the Administrative Agent as an Immaterial
Subsidiary; provided, that at any time, (i) the aggregate book value of the
assets of each Immaterial Subsidiary shall not exceed 5% of the aggregate book
value of all assets of the Company and its Subsidiaries taken as a whole and
(ii) the revenues of each Immaterial Subsidiary as of the fiscal year most
recently ended do not exceed 5% of the revenues of the Company and its
Subsidiaries taken as a whole in such fiscal year, (iii) the aggregate book
value of the assets of all such Immaterial Subsidiaries, taken together shall
not exceed 10% of the aggregate book value of the assets of the Company and its
Subsidiaries taken as a whole and (iv) the aggregate revenues of all Immaterial
Subsidiaries in such fiscal year shall not exceed 10% of the aggregate revenues
of the Company and its Subsidiaries taken as a whole in such fiscal year;
provided that the foregoing clauses (iii) and (iv) shall apply only to
Immaterial Subsidiaries created or acquired after the Closing Date. The Company
shall redesignate any Immaterial Subsidiary as a Material Subsidiary by written
notice to the Administrative Agent delivered not later than the date of delivery
of the Company's audited financial statements for any fiscal year which would
demonstrate that one or more Immaterial Subsidiaries must be redesignated as
Material Subsidiaries in order to comply with the requirements set forth in the
preceding sentence.
"Indebtedness": of any Person at any date, without
duplication, (a) all indebtedness of such Person for borrowed money, (b) all
obligations of such Person for the
20
14
deferred purchase price of property or services (other than current trade
payables incurred in the ordinary course of such Person's business), (c) all
obligations of such Person evidenced by notes, bonds, debentures or other
similar instruments, (d) all indebtedness created or arising under any
conditional sale or other title retention agreement with respect to property
acquired by such Person (even though the rights and remedies of the seller or
lender under such agreement in the event of default are limited to repossession
or sale of such property), (e) all Capital Lease Obligations of such Person, (f)
all obligations of such Person, contingent or otherwise, as an account party
under acceptance, letter of credit or similar facilities, (g) the liquidation
value of all redeemable preferred Capital Stock of such Person, (h) all
Guarantee Obligations of such Person in respect of obligations of the kind
referred to in clauses (a) through (g) above; (i) all obligations of the kind
referred to in clauses (a) through (h) above secured by (or for which the holder
of such obligation has an existing right, contingent or otherwise, to be secured
by) any Lien on property (including accounts and contract rights) owned by such
Person, whether or not such Person has assumed or become liable for the payment
of such obligation; and (j) for the purposes of Sections 9.2 and 10(e) only, all
obligations of such Person in respect of Derivative Agreements.
"Insolvency": with respect to any Multiemployer Plan, the
condition that such Plan is insolvent within the meaning of Section 4245 of
ERISA.
"Insolvent": pertaining to a condition of Insolvency.
"Intellectual Property": the collective reference to all
rights, priorities and privileges relating to intellectual property, whether
arising under United States, multinational or foreign laws or otherwise,
including copyrights, copyright licenses, patents, patent licenses, trademarks,
trademark licenses, technology, know-how and processes, and all rights to sue at
law or in equity for any infringement or other impairment thereof, including the
right to receive all proceeds and damages therefrom.
"Intercreditor Agreement": the Collateral Agency and
Intercreditor Agreement to be entered into by The Chase Manhattan Bank, as
collateral agent, each of the Lenders and each Lender under the MTKG Credit
Agreement, substantially in the form of Exhibit H, as the same may be amended,
supplemented or otherwise modified from time to time.
"Interest Payment Date": (a) as to any ABR Loan, the last day
of each March, June, September and December to occur while such Loan is
outstanding and the final maturity date of such Loan, (b) as to any Eurodollar
Loan or Multicurrency Loan having an Interest Period of three months or less,
the last day of such Interest Period, (c) as to any Eurodollar Loan or
Multicurrency Loan having an Interest Period longer than three months, each day
that is three months, or a whole multiple thereof, after the first day of such
Interest Period and the last day of such Interest Period and (d) as to any Loan
(other than any Revolving Loan that is an ABR Loan), the date of any repayment
or prepayment made in respect thereof.
"Interest Period": with respect to any Eurodollar Loan or
Multicurrency Loan:
21
15
(a) initially, the period commencing on the borrowing or
conversion date, as the case may be, with respect to such Eurodollar
Loan or Multicurrency Loan and ending one, two, three or six months
thereafter, as selected by the relevant Borrower in its notice of
borrowing or notice of conversion, as the case may be, given with
respect thereto; and
(b) thereafter, each period commencing on the last day of the
next preceding Interest Period applicable to such Eurodollar Loan or
Multicurrency Loan and ending one, two, three or six months thereafter,
as selected by the relevant Borrower by irrevocable notice to the
Administrative Agent not less than three Business Days prior to the
last day of the then current Interest Period with respect thereto;
provided that, all of the foregoing provisions relating to Interest
Periods are subject to the following:
(i) if any Interest Period pertaining to a
Eurodollar Loan or Multicurrency Loan would otherwise end on a
day that is not a Business Day, such Interest Period shall be
extended to the next succeeding Business Day unless the result
of such extension would be to carry such Interest Period into
another calendar month in which event such Interest Period
shall end on the immediately preceding Business Day;
(ii) any Interest Period applicable to a
Eurodollar Loan or Multicurrency Loan that would otherwise
extend beyond the Scheduled Revolving Termination Date shall
end on the Scheduled Revolving Termination Date;
(iii) any Interest Period pertaining to a
Eurodollar Loan or Multicurrency Loan that begins on the last
Business Day of a calendar month (or on a day for which there
is no numerically corresponding day in the calendar month at
the end of such Interest Period) shall end on the last
Business Day of a calendar month; and
(iv) each Borrower shall select Interest Periods
so as not to require a payment or prepayment of any Eurodollar
Loan or Multicurrency Loan during an Interest Period for such
Eurodollar Loan or Multicurrency Loan.
"Investments": as defined in Section 9.8.
"Issuing Lender": The Chase Manhattan Bank, in its capacity as
issuer of any Letter of Credit.
"Judgement Currency": as defined in Section 13.14.
"L/C Commitment": $25,000,000.
22
16
"L/C Fee Payment Date": the last day of each March, June,
September and December and the last day of the Revolving Commitment Period.
"L/C Obligations": at any time, an amount equal to the sum of
(a) the aggregate then undrawn and unexpired amount of the then outstanding
Letters of Credit and (b) the aggregate amount of drawings under Letters of
Credit that have not then been reimbursed pursuant to Section 4.5.
"L/C Participants": the collective reference to all the
Revolving Lenders other than the Issuing Lender.
"Lending Installation": with respect to a Lender or the
Administrative Agent, the office, branch, subsidiary or Affiliate of such Lender
or the Administrative Agent listed on the signature pages hereof or otherwise
selected by such Lender or the Administrative Agent pursuant to Section 5.15.
"Lenders": as defined in the preamble hereto.
"Letters of Credit": as defined in Section 4.1(a).
"Lien": any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other), charge or other
security interest or any preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever (including any
conditional sale or other title retention agreement and any capital lease having
substantially the same economic effect as any of the foregoing).
"Loan": any loan made by any Lender pursuant to this
Agreement.
"Loan Documents": this Agreement, the Security Documents, each
Borrowing Subsidiary Agreement, each Borrowing Subsidiary Termination, the
Intercreditor Agreement and the Notes.
"Loan Parties": the Company, each Subsidiary Borrower and each
other Subsidiary of the Company that is a party to a Loan Document.
"London Banking Day": any day on which banks in London are
open for general banking business, including dealings in foreign currency and
exchange.
"Majority Facility Lenders": with respect to any Facility, the
holders of more than 50% of the aggregate unpaid principal amount of the Term
Loans or the Aggregate Committed Outstandings, as the case may be, outstanding
under such Facility (or, in the case of the Revolving Facility, prior to any
termination of the Revolving Commitments, the holders of more than 50% of the
Total Revolving Commitments).
"Majority Revolving Facility Lenders": the Majority Facility
Lenders in respect of the Revolving Facility.
23
17
"Material Adverse Effect": a material adverse effect on (a)
the Acquisition, (b) the business, property, operations, condition (financial or
otherwise) or prospects of the Company and its Subsidiaries taken as a whole or
(c) the validity or enforceability of this Agreement or any of the other Loan
Documents or the rights or remedies of the Administrative Agent or the Lenders
hereunder or thereunder.
"Materials of Environmental Concern": any gasoline or
petroleum (including crude oil or any fraction thereof) or petroleum products or
any hazardous or toxic substances, materials or wastes, defined or regulated as
such in or under any Environmental Law, including asbestos, polychlorinated
biphenyls and urea-formaldehyde insulation.
"Material Subsidiary": any Subsidiary other than an Immaterial
Subsidiary.
"MTKG": Multilayer Technology and Co. KG, a German limited
partnership and indirect subsidiary of the Company.
"MTKG Credit Agreement": the $90,000,000 term loan credit
agreement to be entered into among MTKG, The Chase Manhattan Bank, as
administrative agent, and the several lenders from time to time parties thereto,
as the same may be amended, supplemented or otherwise modified from time to
time.
"Multicurrency Loans": as defined in Section 3.1.
"Multicurrency Reference Lender": The Chase Manhattan Bank.
"Multiemployer Plan": a Plan that is a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.
"Net Cash Proceeds": (a) in connection with any Asset Sale or
any Recovery Event, the proceeds thereof in the form of cash and Cash
Equivalents (including any such proceeds received by way of deferred payment of
principal pursuant to a note or installment receivable or purchase price
adjustment receivable or otherwise, but only as and when received) of such Asset
Sale or Recovery Event, net of attorneys' fees, accountants' fees, investment
banking fees, amounts required to be applied to the repayment of Indebtedness
secured by a Lien expressly permitted hereunder on any asset that is the subject
of such Asset Sale or Recovery Event (other than any Lien pursuant to a Security
Document) and other customary fees and expenses actually incurred in connection
therewith and net of taxes paid or reasonably estimated to be payable as a
result thereof (after taking into account any available tax credits or
deductions and any tax sharing arrangements) and (b) in connection with any
issuance or sale of equity securities or debt securities or instruments or the
incurrence of loans, the cash proceeds received from such issuance or
incurrence, net of attorneys' fees, investment banking fees, accountants' fees,
underwriting discounts and commissions and other customary fees and expenses
actually incurred in connection therewith.
24
18
"Non-Excluded Taxes": as defined in 5.10(a).
"Non-Guarantor Subsidiary": any Subsidiary that is not a
Wholly Owned Subsidiary Guarantor.
"Non-U.S. Lender": as defined in Section 5.10(d).
"Notes": the collective reference to any promissory note
evidencing Loans.
"Obligations": the unpaid principal of and interest on
(including interest accruing after the maturity of the Loans and Reimbursement
Obligations and interest accruing after the filing of any petition in
bankruptcy, or the commencement of any insolvency, reorganization or like
proceeding, relating to the Company or any Subsidiary Borrower, whether or not a
claim for post-filing or post-petition interest is allowed in such proceeding)
the Loans and all other obligations and liabilities of each Borrower to the
Administrative Agent or to any Lender (or, in the case of Derivative Agreements,
any affiliate of any Lender), whether direct or indirect, absolute or
contingent, due or to become due, or now existing or hereafter incurred, which
may arise under, out of, or in connection with, this Agreement, any other Loan
Document, the Letters of Credit, any Derivative Agreement entered into with any
Lender or any affiliate of any Lender or any other document made, delivered or
given in connection herewith or therewith, whether on account of principal,
interest, reimbursement obligations, fees, indemnities, costs, expenses
(including all fees, charges and disbursements of counsel to the Administrative
Agent or to any Lender that are required to be paid by any Borrower pursuant
hereto) or otherwise.
"Other Taxes": any and all present or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies arising from any payment made hereunder or from the execution, delivery
or enforcement of, or otherwise with respect to, this Agreement or any other
Loan Document.
"Participant": as defined in Section 13.6(b).
"PBGC": the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title -IV of ERISA (or any successor).
"Person": an individual, partnership, corporation, limited
liability company, business trust, joint stock company, trust, unincorporated
association, joint venture, Governmental Authority or other entity of whatever
nature.
"Plan": at a particular time, any employee benefit plan that
is covered by ERISA and in respect of which the Company or a Commonly Controlled
Entity is (or, if such plan were terminated at such time, would under Section
4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5) of
ERISA.
"Pricing Grid": the pricing grid attached hereto as Annex A.
25
19
"Pro Forma Balance Sheet": as defined in Section 6.1(a).
"Projections": as defined in Section 8.2(c).
"Properties": as defined in Section 6.17(a).
"Qualified Foreign Subsidiary": (a) any Foreign Subsidiary
listed on Schedule 1.1B and (b) any other Foreign Subsidiary the designation of
which as a Subsidiary Borrower is accompanied by any amendments, supplements or
other modifications to the Security Documents deemed necessary or appropriate by
the Administrative Agent in connection with such designation.
"Recovery Event": any settlement of or payment in respect of
any property or casualty insurance claim or any condemnation proceeding relating
to any asset of the Company or any of its Subsidiaries.
"Reference Lender": The Chase Manhattan Bank.
"Register": as defined in Section 13.6(d).
"Regulation U": Regulation U of the Board as in effect from
time to time.
"Reimbursement Obligation": the obligation of the Company to
reimburse the Issuing Lender pursuant to Section 4.5 for amounts drawn under
Letters of Credit.
"Reinvestment Deferred Amount": with respect to any
Reinvestment Event, the aggregate Net Cash Proceeds received by the Company or
any of its Subsidiaries in connection therewith that are not applied to prepay
the Term Loans pursuant to Section 5.5(c) as a result of the delivery of a
Reinvestment Notice.
"Reinvestment Event": any Asset Sale or Recovery Event in
respect of which the Company has delivered a Reinvestment Notice or entered into
a written agreement to use all or a specified portion of the Net Cash Proceeds
of such Asset Sale or Recovery Event to acquire assets similar to those giving
rise to the relevant Asset Sale or Recovery Event, as the case may be.
"Reinvestment Notice": a written notice executed by a
Responsible Officer stating that no Event of Default has occurred and is
continuing and that the Company (directly or indirectly through a Subsidiary)
intends and expects to use all or a specified portion of the Net Cash Proceeds
of an Asset Sale or Recovery Event to acquire assets similar to those giving
rise to the relevant Asset Sale or Recovery Event, as the case may be.
"Reinvestment Prepayment Amount": with respect to any
Reinvestment Event, the Reinvestment Deferred Amount relating thereto less any
amount expended prior to the relevant Reinvestment Prepayment Date to acquire
assets similar to those giving rise to the relevant Reinvestment Event, as the
case may be.
26
20
"Reinvestment Prepayment Date": with respect to any
Reinvestment Event, the earlier of (a) the date occurring 12 months after such
Reinvestment Event and (b) the date on which the Company shall have determined
not to acquire assets similar to those giving rise to the relevant Recovery
Event with all or any portion of the relevant Reinvestment Deferred Amount.
"Reorganization": with respect to any Multiemployer Plan, the
condition that such plan is in reorganization within the meaning of Section 4241
of ERISA.
"Reportable Event": any of the events set forth in Section
4043(b) of ERISA, other than those events as to which the thirty day notice
period is waived under subsections .27, .28, .29, .30, .31, .32, .34 or .35 of
PBGC Reg. ss. 4043.
"Required Lenders": at any time, the holders of more than 50%
of (a) until the Closing Date, the Commitments then in effect and (b)
thereafter, the sum of (i) the aggregate unpaid principal amount of the Term
Loans then outstanding and (ii) the Total Revolving Commitments then in effect
or, if the Revolving Commitments have been terminated, the Aggregate Committed
Outstandings then outstanding.
"Required Prepayment Lenders": the Majority Facility Lenders
in respect of each Facility.
"Requirement of Law": as to any Person, the Certificate of
Incorporation and By-Laws or other organizational or governing documents of such
Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person or
any of its property is subject.
"Responsible Officer": the chief executive officer, president,
chief financial officer or the executive vice president of finance of the
Company, but in any event, with respect to financial matters, the chief
financial officer or the executive vice president of finance of the Company.
"Restricted Payments": as defined in Section 9.6.
"Revolving Commitment": as to any Lender, the obligation of
such Lender, if any, to make Revolving Loans and participate in Letters of
Credit in an aggregate principal and/or face amount (in U.S. Dollars or the
Dollar Equivalent thereof) not to exceed the amount set forth under the heading
"Revolving Commitment" opposite such Lender's name on Schedule 1.1A or in the
Assignment and Acceptance pursuant to which such Lender became a party hereto,
as the same may be changed from time to time pursuant to the terms hereof. The
original amount of the Total Revolving Commitments is $110,000,000.
27
21
"Revolving Commitment Period": the period from and including
the Closing Date to the Scheduled Revolving Termination Date, or such earlier
date on which the Revolving Loans shall terminate as provided herein.
"Revolving Lender": each Lender that has a Revolving
Commitment or that holds Revolving Loans.
"Revolving Loans": the collective reference to Dollar
Revolving Loans and Multicurrency Loans.
"Revolving Percentage": as to any Revolving Lender at any
time, the percentage which such Lender's Revolving Commitment then constitutes
of the Total Revolving Commitments (or, at any time after the Revolving
Commitments shall have expired or terminated, the percentage which the sum of
(i) aggregate principal amount of such Lender's Dollar Revolving Loans then
outstanding and (ii) the Dollar Equivalent of such Lender's Multicurrency Loans
then outstanding, constitutes of the aggregate principal amount of the Dollar
Revolving Loans and the Dollar Equivalent of the Multicurrency Loans then
outstanding).
"Revolving Termination Date": the earlier of (a) the Scheduled
Revolving Termination Date and (b) the date on which the Revolving Commitments
are terminated pursuant to the terms hereof.
"Scheduled Revolving Termination Date": November 1, 2003.
"SEC": the Securities and Exchange Commission, any successor
thereto and any analogous Governmental Authority.
"Security Documents": the collective reference to the
Guarantee and Collateral Agreement, the Dutch Pledge Agreements and all other
security documents hereafter delivered to the Administrative Agent granting a
Lien on any property of any Person to secure the obligations and liabilities of
any Loan Party under any Loan Document.
"Seller": Hewlett-Packard GmbH, a German company.
"Senior Indebtedness": at any date, all Indebtedness of the
Company and its Subsidiaries at such date other than Subordinated Indebtedness.
"Single Employer Plan": any Plan that is covered by Title IV
of ERISA, but that is not a Multiemployer Plan.
"Solvent": when used with respect to any Person, means that,
as of any date of determination, (a) the amount of the "present fair saleable
value" of the assets of such Person will, as of such date, exceed the amount of
all "liabilities of such Person, contingent or otherwise", as of such date, as
such quoted terms are determined in accordance with applicable
28
22
federal and state laws governing determinations of the insolvency of debtors,
(b) the present fair saleable value of the assets of such Person will, as of
such date, be greater than the amount that will be required to pay the liability
of such Person on its debts as such debts become absolute and matured, (c) such
Person will not have, as of such date, an unreasonably small amount of capital
with which to conduct its business, and (d) such Person will be able to pay its
debts as they mature. For purposes of this definition, (i) "debt" means
liability on a "claim", and (ii) "claim" means any (x) right to payment, whether
or not such a right is reduced to judgment, liquidated, unliquidated, fixed,
contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured
or unsecured or (y) right to an equitable remedy for breach of performance if
such breach gives rise to a right to payment, whether or not such right to an
equitable remedy is reduced to judgment, fixed, contingent, matured or
unmatured, disputed, undisputed, secured or unsecured.
"Subordinated Notes": (i) the Convertible Subordinated Notes
and (ii) the 8.50% Senior Subordinated Notes of the Company due 2007.
"Subordinated Indebtedness": (i) Indebtedness of the Company
in respect of the Subordinated Notes and (ii) other Indebtedness of the Company
which by its terms is subordinated to the Obligations in a manner and to an
extent satisfactory to the Administrative Agent.
"Subsidiary": as to any Person, a corporation, partnership,
limited liability company or other entity of which shares of stock or other
ownership interests having ordinary voting power (other than stock or such other
ownership interests having such power only by reason of the happening of a
contingency) to elect a majority of the board of directors or other managers of
such corporation, partnership or other entity are at the time owned, or the
management of which is otherwise controlled, directly or indirectly through one
or more intermediaries, or both, by such Person. Unless otherwise qualified, all
references to a "Subsidiary" or to "Subsidiaries" in this Agreement shall refer
to a Subsidiary or Subsidiaries of the Company.
"Subsidiary Borrower": at any time, any Qualified Foreign
Subsidiary of the Company designated as a Subsidiary Borrower by the Company
pursuant to Section 5.13 that has not ceased to be a Subsidiary Borrower
pursuant to such Section.
"Subsidiary Borrower Obligations": the unpaid principal of and
interest on (including, without limitation, interest accruing after the maturity
of the Loans and Reimbursement Obligations and interest accruing after the
filing of any petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding, relating to the relevant Borrower, whether or
not a claim for post-filing or post-petition interest is allowed in such
proceeding) the Loans to and all other obligations and liabilities of any
Subsidiary Borrower to the Administrative Agent or to any Lender (or, in the
case of any Derivative Agreements, any affiliate of any Lender), whether direct
or indirect, absolute or contingent, due or to become due, or now existing or
hereafter incurred, which may arise under, out of, or in connection with, this
Agreement, any other Loan Document, the Letters of Credit, any Derivative
Agreement entered into with any Lender or any affiliate of any Lender or any
other document made, delivered or
29
23
given in connection herewith or therewith, whether on account of principal,
interest, reimbursement obligations, fees, indemnities, costs, expenses
(including, without limitation, all fees, charges and disbursements of counsel
to the Administrative Agent or to any Lender that are required to be paid by any
Subsidiary Borrower pursuant hereto) or otherwise.
"Subsidiary Guarantor": each Subsidiary of the Company other
than any Immaterial Subsidiary or Excluded Foreign Subsidiary.
"Term Commitment": as to any Lender, the obligation of such
Lender, if any, to make a Term Loan to the Company hereunder in a principal
amount not to exceed the amount set forth under the heading "Term Commitment"
opposite such Lender's name on Schedule 1.1A. The original aggregate amount of
the Term Commitments is $70,000,000.
"Term Lender": each Lender that has a Term Commitment or is
the holder of a Term Loan.
"Term Loan": as defined in Section 2.1.
"Term Percentage": as to any Term Lender at any time, the
percentage which such Lender's Term Commitment then constitutes of the aggregate
Term Commitments (or, at any time after the Closing Date, the percentage which
the aggregate principal amount of such Lender's Term Loans then outstanding
constitutes of the aggregate principal amount of the Term Loans then
outstanding).
"Total Aggregate Committed Outstandings": at any time, the
aggregate amount of the Aggregate Committed Outstandings of the Revolving
Lenders outstanding at such time.
"Total Revolving Commitments": at any time, the aggregate
amount of the Revolving Commitments of the Revolving Lenders then in effect.
"Tranche": the collective reference to Eurodollar Loans or
Multicurrency Loans of any Facility the then current Interest Periods with
respect to all of which begin on the same date and end on the same later date
(whether or not such Loans shall originally have been made on the same day).
"Transferee": any Assignee or Participant.
"Type": as to any Term Loan or Dollar Revolving Loan, its
nature as an ABR Loan or a Eurodollar Loan.
"Uniform Customs": the Uniform Customs and Practice for
Documentary Credits (1993 Revision), International Chamber of Commerce
Publication No. 500, as the same may be amended from time to time.
"United States": the United States of America.
30
24
"U.S. Dollar Equivalent": with respect to an amount
denominated in any currency other than U.S. Dollars, the equivalent in U.S.
Dollars of such amount determined at the Exchange Rate on the date of
determination of such equivalent. In making any determination of the U.S. Dollar
Equivalent for purposes of calculating the amount of Loans to be borrowed from
the respective Lenders on any Borrowing Date, the Administrative Agent shall use
the relevant Exchange Rate in effect on the date on which the interest rate for
such Loans is determined pursuant to the provisions of this Agreement and the
other Loan Documents.
"Wholly Owned Subsidiary": as to any Person, any other Person
all of the Capital Stock of which (other than directors' qualifying shares
required by law) is owned by such Person directly and/or through other Wholly
Owned Subsidiaries.
"Wholly Owned Subsidiary Guarantor": any Subsidiary Guarantor
that is a Wholly Owned Subsidiary of the Company.
1.2 Other Definitional Provisions. (a) Unless otherwise
specified therein, all terms defined in this Agreement shall have the defined
meanings when used in the other Loan Documents or any certificate or other
document made or delivered pursuant hereto or thereto.
(b As used herein and in the other Loan Documents, and any
certificate or other document made or delivered pursuant hereto or thereto, (i)
accounting terms relating to the Company and its Subsidiaries not defined in
Section 1.1 and accounting terms partly defined in Section 1.1, to the extent
not defined, shall have the respective meanings given to them under GAAP, (ii)
the words "include", "includes" and "including" shall be deemed to be followed
by the phrase "without limitation", (iii) the word "incur" shall be construed to
mean incur, create, issue, assume, become liable in respect of or suffer to
exist (and the words "incurred" and "incurrence" shall have correlative
meanings), and (iv) the words "asset" and "property" shall be construed to have
the same meaning and effect and to refer to any and all tangible and intangible
assets and properties, including cash, Capital Stock, securities, revenues,
accounts, leasehold interests and contract rights.
(c The words "hereof", "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement, and Section,
Schedule and Exhibit references are to this Agreement unless otherwise
specified.
(d The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
SECTION 2. AMOUNT AND TERMS OF U.S. DOLLAR COMMITMENTS
2.1 Term Commitments. Subject to the terms and conditions
hereof, each Term Lender severally agrees to make a term loan (a "Term Loan") in
U.S. Dollars to the Company on the Closing Date in an amount not to exceed the
amount of the Term Commitment of such
31
25
Lender. The Term Loans may from time to time be Eurodollar Loans or ABR Loans,
as determined by the Company and notified to the Administrative Agent in
accordance with Sections 2.2 and 5.6.
2.2 Procedure for Term Loan Borrowing. The Company shall give
the Administrative Agent irrevocable notice (which notice must be received by
the Administrative Agent prior to 10:00 A.M., New York City time, one Business
Day prior to the anticipated Closing Date) requesting that the Term Lenders make
the Term Loans on the Closing Date and specifying the amount to be borrowed. The
Term Loans made on the Closing Date shall initially be ABR Loans. Upon receipt
of such notice the Administrative Agent shall promptly notify each Term Lender
thereof. Not later than 12:00 Noon, New York City time, on the Closing Date each
Term Lender shall make available to the Administrative Agent at the Funding
Office an amount in immediately available funds equal to the Term Loan to be
made by such Lender. The Administrative Agent shall credit the account of the
Company on the books of such office of the Administrative Agent with the
aggregate of the amounts made available to the Administrative Agent by the Term
Lenders in immediately available funds.
2.3 Repayment of Term Loans; Evidence of Debt. (a) The Term
Loan of each Term Lender shall mature in 20 consecutive quarterly installments,
commencing on February 1, 1999, each of which shall be in an amount equal to
such Lender's Term Percentage multiplied by the amount set forth below opposite
such installment:
Installment Principal Amount
----------- ----------------
February 1, 1999 $2,500,000
May 1, 1999 $2,500,000
August 1, 1999 $2,500,000
November 1, 1999 $2,500,000
February 1, 2000 $3,000,000
May 1, 2000 $3,000,000
August 1, 2000 $3,000,000
November 1, 2000 $3,000,000
February 1, 2001 $3,500,000
May 1, 2001 $3,500,000
August 1, 2001 $3,500,000
November 1, 2001 $3,500,000
February 1, 2002 $4,000,000
May 1, 2002 $4,000,000
August 1, 2002 $4,000,000
November 1, 2002 $4,000,000
February 1, 2003 $4,500,000
May 1, 2003 $4,500,000
August 1, 2003 $4,500,000
November 1, 2003 $4,500,000
32
26
(b The Company hereby unconditionally promises to pay to the
Administrative Agent for the account of the appropriate Term Lender the
principal amount of each Term Loan of such Term Lender in installments according
to the amortization schedule set forth in paragraph (a) above (or on such
earlier date on which the Loans become due and payable pursuant to Section 10).
The Company hereby further agrees to pay interest on the unpaid principal amount
of the Term Loans from time to time outstanding from the date hereof until
payment in full thereof at the rates per annum, and on the dates, set forth in
Section 5.1.
(c Each Term Lender shall maintain in accordance with its
usual practice an account or accounts evidencing indebtedness of the Company to
such Term Lender resulting from each Term Loan of such Term Lender from time to
time, including the amounts of principal and interest payable and paid to such
Term Lender from time to time in respect of such Term Loans under this
Agreement.
(d The Administrative Agent, on behalf of the Company, shall
maintain the Register pursuant to Section 13.6(d), and a subaccount therein for
each Term Lender, in which shall be recorded (i) the amount of each Term Loan
made hereunder and any Note evidencing such Term Loan, the Type thereof and each
Interest Period applicable thereto, (ii) the amount of any principal or interest
due and payable or to become due and payable from the Company to each Term
Lender hereunder and (iii) both the amount of any sum received by the
Administrative Agent hereunder from the Company and each Term Lender's share
thereof.
(e The entries made in the Register and the accounts of each
Term Lender maintained pursuant to Section 2.3(d) shall, to the extent permitted
by applicable law, be prima facie evidence of the existence and amounts of the
obligations of the Company therein recorded; provided, however, that the failure
of any Term Lender or the Administrative Agent to maintain the Register or any
such account, or any error therein, shall not in any manner affect the
obligation of the Company to repay (with applicable interest) the Term Loans by
such Term Lender in accordance with the terms of this Agreement.
(f The Company agrees that, upon the request to the
Administrative Agent by any Term Lender, the Company will execute and deliver to
such Term Lender a promissory note of the Company evidencing any Term Loans of
such Lender, substantially in the form of Exhibit J, with appropriate insertions
as to date and principal amount.
2.4 Revolving Commitments. (a) Subject to the terms and
conditions hereof, each Revolving Lender severally agrees to make revolving
credit loans ("Dollar Revolving Loans") in U.S. Dollars to the Company from time
to time during the Revolving Commitment Period so long as after giving effect
thereto and to any concurrent repayment or prepayment of Loans (i) the Available
Revolving Commitment of each Revolving Lender is greater than or equal to zero
and (ii) the Total Aggregate Committed Outstandings does not exceed the Total
Revolving Commitments. During the Revolving Commitment Period the Company may
use the Revolving Commitments by borrowing, prepaying the Dollar Revolving Loans
in whole or in part, and reborrowing, all in accordance with the terms and
conditions hereof. The Dollar
33
27
Revolving Loans may from time to time be Eurodollar Loans or ABR Loans, as
determined by the Company and notified to the Administrative Agent in accordance
with Sections 2.5 and 5.6.
(b) The Company shall repay all outstanding Dollar Revolving
Loans on the Revolving Termination Date.
2.5 Procedure for Dollar Revolving Loan Borrowing. The Company
may borrow Dollar Revolving Loans under the Revolving Commitments during the
Revolving Commitment Period on any Business Day, provided that the Company shall
give the Administrative Agent irrevocable notice (which notice must be received
by the Administrative Agent prior to 12:00 Noon, New York City time, (a) three
Business Days prior to the requested Borrowing Date, in the case of Eurodollar
Loans, or (b) one Business Day prior to the requested Borrowing Date, in the
case of ABR Loans), specifying (i) the amount and Type of Dollar Revolving Loans
to be borrowed, (ii) the requested Borrowing Date and (iii) in the case of
Eurodollar Loans, the respective amounts of each such Type of Loan and the
respective lengths of the initial Interest Period therefor. Any Dollar Revolving
Loans made on the Closing Date shall initially be ABR Loans. Each borrowing of
Dollar Revolving Loans under the Revolving Commitments shall be in an amount
equal to (x) in the case of ABR Loans, $1,000,000 or a whole multiple thereof
(or, if the then aggregate Available Revolving Commitments are less than
$1,000,000, such lesser amount) and (y) in the case of Eurodollar Loans,
$2,500,000 or a whole multiple of $1,000,000 in excess thereof. Upon receipt of
any such notice from the Company, the Administrative Agent shall promptly notify
each Revolving Lender thereof. Each Revolving Lender will make the amount of its
pro rata share of each Dollar Revolving Loan borrowing available to the
Administrative Agent for the account of the Company at the Funding Office prior
to 12:00 Noon, New York City time, on the Borrowing Date requested by the
Company in funds immediately available to the Administrative Agent. Such
borrowing will then be made available to the Company by the Administrative Agent
crediting the account of the Company on the books of such office with the
aggregate of the amounts made available to the Administrative Agent by the
Revolving Lenders and in like funds as received by the Administrative Agent.
2.6 Commitment Fees, etc. (a) The Company agrees to pay to the
Administrative Agent for the account of each Revolving Lender a commitment fee
for the period from and including the Closing Date to the last day of the
Revolving Commitment Period, computed at the Commitment Fee Rate on the average
daily amount of the Available Revolving Commitment of such Lender during the
period for which payment is made, payable quarterly in arrears on the last day
of each March, June, September and December and on the Scheduled Revolving
Termination Date, commencing on the first of such dates to occur after the date
hereof.
(b The Company agrees to pay to the Administrative Agent the
fees in the amounts and on the dates previously agreed to in writing by the
Company and the Administrative Agent.
2.7 Termination or Reduction of Revolving Commitments. The
Company shall have the right, upon not less than three Business Days' notice to
the Administrative Agent, to
34
28
terminate the Revolving Commitments or, from time to time, to reduce the amount
of the Revolving Commitments; provided that no such termination or reduction of
Revolving Commitments shall be permitted if, after giving effect thereto and to
any prepayments of the Revolving Loans made on the effective date thereof, the
Total Aggregate Committed Outstandings would exceed the Total Revolving
Commitments. Any such reduction shall be in an amount equal to $1,000,000, or a
whole multiple thereof, and shall reduce permanently the Revolving Commitments
then in effect.
2.8 Repayment of Dollar Revolving Loans; Evidence of Debt.
(a) The Company hereby unconditionally promises to pay to the Administrative
Agent for the account of the appropriate Revolving Lender the then unpaid
principal amount of the Dollar Revolving Loans on the Scheduled Revolving
Termination Date and on such other dates and in such other amounts as may be
required from time to time pursuant to this Agreement. The Company hereby
further agrees to pay interest on the unpaid principal amount of the Dollar
Revolving Loans from time to time outstanding until payment thereof in full at
the rates per annum, and on the dates, set forth in Section 5.1.
(b) Each Revolving Lender shall maintain in accordance with
its usual practice an account or accounts evidencing indebtedness of the Company
resulting from each Dollar Revolving Loan made by it from time to time,
including the amounts of principal and interest payable thereon and paid from
time to time under this Agreement.
(c) The Administrative Agent shall maintain the Register
pursuant to Section 13.6(d), and a subaccount therein for each Revolving Lender,
in which shall be recorded (i) the date and amount of each Revolving Loan made
hereunder, (ii) the date and amount of any principal or interest due and payable
or to become due and payable from the Company hereunder in respect of the
Dollars Revolving Loans and (iii) both the date and amount of any sum received
by the Administrative Agent hereunder from the Company in respect of the Dollar
Revolving Loans and each Revolving Lender's share thereof.
(d) The entries made in the Register and the accounts of each
Revolving Lender maintained pursuant to this Section 2.8 shall, to the extent
permitted by applicable law, be prima facie evidence of the existence and
amounts of the obligations of the Company therein recorded; provided, however,
that the failure of any Revolving Lender or the Administrative Agent to maintain
the Register or any such account, or any error therein, shall not in any manner
affect the obligation of the Company to repay (with applicable interest) the
Dollar Revolving Loans made to the Company by each Revolving Lender in
accordance with the terms of this Agreement.
SECTION 3. AMOUNT AND TERMS OF MULTICURRENCY COMMITMENTS
3.1 Multicurrency Commitments. Subject to the terms and
conditions hereof, each Revolving Lender severally agrees to make revolving
credit loans (each, a "Multicurrency Loan") in U.S. Dollars or any Available
Foreign Currency to any Borrower from time to time during the Revolving
Commitment Period so long as after giving effect thereto and to any concurrent
repayment or prepayment of Loans (a) the Available Revolving Commitment of each
35
29
Revolving Lender is greater than or equal to zero, (b) the aggregate outstanding
principal amount of Multicurrency Loans does not exceed an amount of which the
U.S. Dollar Equivalent is $25,000,000 and (c) the Total Aggregate Committed
Outstandings does not exceed the Total Revolving Commitments. During the
Revolving Commitment Period, any Borrower may borrow Multicurrency Loans under
the Revolving Commitments by borrowing, repaying the Multicurrency Loans in
whole or in part, and reborrowing, all in accordance with the terms and
conditions hereof.
3.2 Procedure for Multicurrency Borrowings. Any Borrower may
request the Revolving Lenders to make Multicurrency Loans during the Revolving
Commitment Period on any Business Day provided that such Borrower shall give the
Administrative Agent irrevocable notice (which notice must be received by the
Administrative Agent prior to 10:00 A.M., London time, three Business Days prior
to the requested Borrowing Date), specifying in each case (i) the amount and
currency to be borrowed, (ii) the requested Borrowing Date and (iii) the length
of the initial Interest Period therefor. Each borrowing of Multicurrency Loans
under the Revolving Commitments shall be in an amount in U.S. Dollars equal to,
or an amount in an Available Foreign Currency of which the U.S. Dollar
Equivalent is equal to, at least $2,500,000 (or, if the then Aggregate Available
Revolving Commitments are less than $2,500,000, such lesser amount). Upon
receipt of any such notice from any Borrower, the Administrative Agent shall
promptly notify each Revolving Lender thereof. Not later than 12:00 P.M. Noon,
London time, on the requested Borrowing Date, each Revolving Lender shall make
an amount equal to its Revolving Percentage of the principal amount of
Multicurrency Loans requested to be made on such Borrowing Date available to the
Administrative Agent at the Administrative Agent's funding office for the
applicable currency specified by the Administrative Agent from time to time by
notice to the Revolving Lenders and in immediately available funds. The amounts
made available by each Revolving Lender will then be made available to the
relevant Borrower at the funding office for the relevant Available Foreign
Currency specified from time to time by the Administrative Agent by notice to
the Revolving Lenders and in like funds as received by the Administrative Agent.
3.3 Repayment of Multicurrency Loans; Evidence of Debt. (a)
Each Borrower hereby unconditionally promises to pay to the Administrative Agent
for the account of each Revolving Lender the then unpaid principal amount of
each Multicurrency Loan of such Revolving Lender to such Borrower on the
Revolving Termination Date and on such other date(s) and in such other amounts
as may be required from time to time pursuant to this Agreement. Each Borrower
hereby further agrees to pay interest on the unpaid principal amount of the
Multicurrency Loans advanced to it and from time to time outstanding until
payment thereof in full at the rates per annum, and on the dates, set forth in
Section 5.1.
(b) Each Revolving Lender shall maintain in accordance with
its usual practice an account or accounts evidencing indebtedness of each
Borrower to such Revolving Lender resulting from each Multicurrency Loan of such
Revolving Lender from time to time, including the amounts of principal and
interest payable thereon and paid to such Revolving Lender from time to time
under this Agreement.
36
30
(c) The Administrative Agent shall maintain the Register
pursuant to Section 13.6(d), and a subaccount therein for each Revolving Lender,
in which shall be recorded (i) the amount of each Multicurrency Loan made
hereunder, (ii) the amount of any principal or interest due and payable or to
become due and payable from each Borrower to each Revolving Lender hereunder in
respect of the Multicurrency Loans and (iii) both the amount of any sum received
by the Administrative Agent hereunder from each Borrower in respect of the
Multicurrency Loans and each Revolving Lender's share thereof.
(d) The entries made in the Register and the accounts of each
Multicurrency Lender maintained pursuant to Section 3.3(b) shall, to the extent
permitted by applicable law, be prima facie evidence of the existence and
amounts of the obligations of each Borrower therein recorded; provided, however,
that the failure of any Revolving Lender or the Administrative Agent to maintain
the Register or any such account, or any error therein, shall not in any manner
affect the obligation of such Borrower to repay (with applicable interest) the
Multicurrency Loans made to such Borrower by such Revolving Lender in accordance
with the terms of this Agreement.
SECTION 4. LETTERS OF CREDIT
4.1 L/C Commitment. (a) Subject to the terms and conditions
hereof, the Issuing Lender, in reliance on the agreements of the other Revolving
Lenders set forth in Section 4.4(a), agrees to issue letters of credit ("Letters
of Credit") for the account of the Company on any Business Day during the
Revolving Commitment Period in such form as may be approved from time to time by
the Issuing Lender; provided that the Issuing Lender shall have no obligation to
issue any Letter of Credit if, after giving effect to such issuance, (i) the L/C
Obligations would exceed the L/C Commitment or (ii) the aggregate amount of the
Available Revolving Commitments would be less than zero. Each Letter of Credit
shall (i) be denominated in Dollars and (ii) expire no later than the earlier of
(x) the first anniversary of its date of issuance and (y) the date that is five
Business Days prior to the Scheduled Revolving Termination Date, provided that
any Letter of Credit with a one-year term may provide for the renewal thereof
for additional one-year periods (which shall in no event extend beyond the date
referred to in clause (y) above). Notwithstanding anything to the contrary
herein, the Letter of Credit in the amount of $667,000 described on Schedule 4.1
hereto is deemed to be a "Letter of Credit" hereunder issued by Norwest Bank
Colorado, NA ("Norwest"), and Norwest shall be deemed to be an "Issuing Lender"
hereunder solely with respect to such Letter of Credit.
(b) Each Letter of Credit shall be subject to the Uniform
Customs and, to the extent not inconsistent therewith, the laws of the State of
New York.
(c) The Issuing Lender shall not at any time be obligated to
issue any Letter of Credit hereunder if such issuance would conflict with, or
cause the Issuing Lender or any L/C Participant to exceed any limits imposed by,
any applicable Requirement of Law.
4.2 Procedure for Issuance of Letter of Credit. The Company
may from time to time request that the Issuing Lender issue a Letter of Credit
by delivering to the Issuing Lender at its address for notices specified herein
an Application therefor, completed to the satisfaction of
37
31
the Issuing Lender, and such other certificates, documents and other papers and
information as the Issuing Lender may request. Upon receipt of any Application,
the Issuing Lender will process such Application and the certificates, documents
and other papers and information delivered to it in connection therewith in
accordance with its customary procedures and shall promptly issue the Letter of
Credit requested thereby (but in no event shall the Issuing Lender be required
to issue any Letter of Credit earlier than three Business Days after its receipt
of the Application therefor and all such other certificates, documents and other
papers and information relating thereto) by issuing the original of such Letter
of Credit to the beneficiary thereof or as otherwise may be agreed to by the
Issuing Lender and the Company. The Issuing Lender shall furnish a copy of such
Letter of Credit to the Company promptly following the issuance thereof. The
Issuing Lender shall promptly furnish to the Administrative Agent, which shall
in turn promptly furnish to the Lenders, notice of the issuance of each Letter
of Credit (including the amount thereof).
4.3 Fees and Other Charges. (a) The Company will pay a fee on
all outstanding Letters of Credit at a per annum rate equal to the Applicable
Margin then in effect with respect to Eurodollar Loans under the Revolving
Facility, shared ratably among the Revolving Lenders and payable quarterly in
arrears on each L/C Fee Payment Date after the issuance date. In addition, the
Company shall pay to the Issuing Lender for its own account a fronting fee of
1/8 of 1% per annum on the undrawn and unexpired amount of each Letter of
Credit, payable quarterly in arrears on each L/C Fee Payment Date after the
Issuance Date.
(b) In addition to the foregoing fees, the Company shall pay
or reimburse the Issuing Lender for such normal and customary costs and expenses
as are incurred or charged by the Issuing Lender in issuing, negotiating,
effecting payment under, amending or otherwise administering any Letter of
Credit.
4.4 L/C Participations. (a) The Issuing Lender irrevocably
agrees to grant and hereby grants to each L/C Participant, and, to induce the
Issuing Lender to issue Letters of Credit hereunder, each L/C Participant
irrevocably agrees to accept and purchase and hereby accepts and purchases from
the Issuing Lender, on the terms and conditions hereinafter stated, for such L/C
Participant's own account and risk an undivided interest equal to such L/C
Participant's Revolving Percentage in the Issuing Lender's obligations and
rights under each Letter of Credit issued hereunder and the amount of each draft
paid by the Issuing Lender thereunder. Each L/C Participant unconditionally and
irrevocably agrees with the Issuing Lender that, if a draft is paid under any
Letter of Credit for which the Issuing Lender is not reimbursed in full by the
Company in accordance with the terms of this Agreement, such L/C Participant
shall pay to the Issuing Lender upon demand at the Issuing Lender's address for
notices specified herein an amount equal to such L/C Participant's Revolving
Percentage of the amount of such draft, or any part thereof, that is not so
reimbursed.
(b) If any amount required to be paid by any L/C Participant
to the Issuing Lender pursuant to Section 4.4(a) in respect of any unreimbursed
portion of any payment made by the Issuing Lender under any Letter of Credit is
paid to the Issuing Lender within three Business Days after the date such
payment is due, such L/C Participant shall pay to the Issuing
38
32
Lender on demand an amount equal to the product of (i) such amount, times (ii)
the daily average Federal Funds Effective Rate during the period from and
including the date such payment is required to the date on which such payment is
immediately available to the Issuing Lender, times (iii) a fraction the
numerator of which is the number of days that elapse during such period and the
denominator of which is 360. If any such amount required to be paid by any L/C
Participant pursuant to Section 4.4(a) is not made available to the Issuing
Lender by such L/C Participant within three Business Days after the date such
payment is due, the Issuing Lender shall be entitled to recover from such L/C
Participant, on demand, such amount with interest thereon calculated from such
due date at the rate per annum applicable to ABR Loans under the Revolving
Facility. A certificate of the Issuing Lender submitted to any L/C Participant
with respect to any amounts owing under this Section shall be conclusive in the
absence of manifest error.
(c) Whenever, at any time after the Issuing Lender has made
payment under any Letter of Credit and has received from any L/C Participant its
pro rata share of such payment in accordance with Section 4.4(a), the Issuing
Lender receives any payment related to such Letter of Credit (whether directly
from the Company or otherwise, including proceeds of collateral applied thereto
by the Issuing Lender), or any payment of interest on account thereof, the
Issuing Lender will distribute to such L/C Participant its pro rata share
thereof; provided, however, that in the event that any such payment received by
the Issuing Lender shall be required to be returned by the Issuing Lender, such
L/C Participant shall return to the Issuing Lender the portion thereof
previously distributed by the Issuing Lender to it.
4.5 Reimbursement Obligation of the Company. The Company
agrees to reimburse the Issuing Lender within two Business Days of the date on
which the Issuing Lender notifies the Company of the date and amount of a draft
presented under any Letter of Credit and paid by the Issuing Lender for the
amount of (a) such draft so paid and (b) any taxes, fees, charges or other costs
or expenses incurred by the Issuing Lender in connection with such payment. Each
such payment shall be made to the Issuing Lender at its address for notices
specified herein in lawful money of the United States and in immediately
available funds. Interest shall be payable on any and all amounts remaining
unpaid by the Company under this Section from the date such amounts become
payable (whether at stated maturity, by acceleration or otherwise) until payment
in full at the rate set forth in (i) until the second Business Day following the
date of notice to the Company of the applicable drawing, Section 5.1(b) and (ii)
thereafter, Section 5.1(d).
4.6 Obligations Absolute. The Company's obligations under
this Section 4 shall be absolute and unconditional under any and all
circumstances and irrespective of any setoff, counterclaim or defense to payment
that the Company may have or have had against the Issuing Lender, any
beneficiary of a Letter of Credit or any other Person. The Company also agrees
with the Issuing Lender that the Issuing Lender shall not be responsible for,
and the Company's Reimbursement Obligations under Section 4.5 shall not be
affected by, among other things, the validity or genuineness of documents or of
any endorsements thereon, even though such documents shall in fact prove to be
invalid, fraudulent or forged, or any dispute between or among the Company and
any beneficiary of any Letter of Credit or any other party to which such
39
33
Letter of Credit may be transferred or any claims whatsoever of the Company
against any beneficiary of such Letter of Credit or any such transferee. The
Issuing Lender shall not be liable for any error, omission, interruption or
delay in transmission, dispatch or delivery of any message or advice, however
transmitted, in connection with any Letter of Credit, except for errors or
omissions found by a final and nonappealable decision of a court of competent
jurisdiction to have resulted from the gross negligence or willful misconduct of
the Issuing Lender. The Company agrees that any action taken or omitted by the
Issuing Lender under or in connection with any Letter of Credit or the related
drafts or documents, if done in the absence of gross negligence or willful
misconduct and in accordance with the standards of care specified in the Uniform
Commercial Code of the State of New York, shall be binding on the Company and
shall not result in any liability of the Issuing Lender to the Company.
4.7 Letter of Credit Payments. If any draft shall be
presented for payment under any Letter of Credit, the Issuing Lender shall
promptly notify the Company of the date and amount thereof. The responsibility
of the Issuing Lender to the Company in connection with any draft presented for
payment under any Letter of Credit shall, in addition to any payment obligation
expressly provided for in such Letter of Credit, be limited to determining that
the documents (including each draft) delivered under such Letter of Credit in
connection with such presentment are substantially in conformity with such
Letter of Credit.
4.8 Applications. To the extent that any provision of any
Application related to any Letter of Credit is inconsistent with the provisions
of this Section 4, the provisions of this Section 4 shall apply.
SECTION 5. GENERAL PROVISIONS APPLICABLE TO THE LOANS
5.1 Interest Rates and Payment Dates. (a) Each Eurodollar
Loan shall bear interest for each day during each Interest Period with respect
thereto at a rate per annum equal to the Eurodollar Rate determined for such day
plus the Applicable Margin.
(b) Each ABR Loan shall bear interest for each day it is
outstanding at a rate per annum equal to the ABR for such day plus the
Applicable Margin.
(c) Each Multicurrency Loan shall bear interest (subject to
Section 13.16, payable in the Available Foreign Currency in which such
Multicurrency Loan is denominated) for each day during each Interest Period with
respect thereto at a rate per annum equal to the applicable Eurocurrency Rate
determined for such Interest Period plus the Applicable Margin in effect for
such day.
(d) (i) If all or a portion of the principal amount of any
Loan or Reimbursement Obligation shall not be paid when due (whether at the
stated maturity, by acceleration or otherwise), all outstanding Loans and
Reimbursement Obligations (whether or not overdue) shall bear interest at a rate
per annum equal to (x) in the case of the Loans, the rate that would otherwise
be applicable thereto pursuant to the foregoing provisions of this Section plus
2% or (y) in the case of Reimbursement Obligations, the rate applicable to ABR
Loans under the
40
34
Revolving Facility plus 2%, and (ii) if all or a portion of any interest payable
on any Loan or Reimbursement Obligation or any commitment fee or other amount
payable hereunder shall not be paid when due (whether at the stated maturity, by
acceleration or otherwise), such overdue amount shall bear interest at a rate
per annum equal to the rate then applicable to ABR Loans under the relevant
Facility plus 2% (or, in the case of any such other amounts that do not relate
to a particular Facility, the rate then applicable to ABR Loans under the
Revolving Facility plus 2%), in each case, with respect to clauses (i) and (ii)
above, from the date of such non-payment until such amount is paid in full (as
well after as before judgment).
(e) Interest shall be payable in arrears on each Interest
Payment Date, provided that interest accruing pursuant to paragraph (d) of this
Section shall be payable from time to time on demand.
5.2 Computation of Interest and Fees. (a) Interest and fees
payable pursuant hereto shall be calculated on the basis of a 360-day year for
the actual days elapsed, except that, with respect to ABR Loans the rate of
interest on which is calculated on the basis of the Prime Rate and Loans
denominated in Pounds Sterling, the interest thereon shall be calculated on the
basis of a 365- (or 366-, as the case may be) day year for the actual days
elapsed. The Administrative Agent shall as soon as practicable notify the
Company and the relevant Lenders of each determination of a Eurodollar Rate or a
Eurocurrency Rate. Any change in the interest rate on a Loan resulting from a
change in the ABR or the Eurocurrency Reserve Requirements shall become
effective as of the opening of business on the day on which such change becomes
effective. The Administrative Agent shall as soon as practicable notify the
Company and the relevant Lenders of the effective date and the amount of each
such change in interest rate.
(b) Each determination of an interest rate by the
Administrative Agent pursuant to any provision of this Agreement shall be
conclusive and binding on the Borrowers and the Lenders in the absence of
manifest error. The Administrative Agent shall, at the request of a Borrower,
deliver to such Borrower a statement showing the quotations used by the
Administrative Agent in determining any interest rate pursuant to Section
5.1(a).
(c) (i) If any Multicurrency Reference Lender shall for any
reason no longer have a Revolving Commitment or any Multicurrency Loans, such
Multicurrency Reference Lender shall thereupon cease to be a Multicurrency
Reference Lender, and if, as a result, there shall only be one Multicurrency
Reference Lender remaining, the Administrative Agent (after consultation with
the Company and the Revolving Lenders) shall, by notice to the Company and the
Lenders, designate another Revolving Lender as a Multicurrency Reference Lender
so that there shall at all times be at least two Multicurrency Reference
Lenders.
(ii) Each Multicurrency Reference Lender shall use its best
efforts to furnish quotations of rates to the Administrative Agent as
contemplated hereby. If any of the Multicurrency Reference Lenders shall be
unable or shall otherwise fail to supply such rates to the Administrative Agent
upon its request, the rate of interest shall, subject to the provisions of
Section 5.3, be determined on the basis of the quotations of the remaining
applicable Multicurrency Reference Lenders or Multicurrency Reference Lender, as
applicable.
41
35
5.3 Inability to Determine Interest Rate. If prior to the
first day of any Interest Period:
(a) the Administrative Agent shall have determined (which
determination shall be conclusive and binding upon the Borrowers) that,
by reason of circumstances affecting the relevant market, adequate and
reasonable means do not exist for ascertaining the Eurodollar Rate or
the Eurocurrency Rate with respect to the currency in which a Loan or a
requested Loan is denominated (the "Affected Currency"), as the case
may be, for such Interest Period, or
(b) the Administrative Agent shall have received notice from
the Majority Facility Lenders in respect of the relevant Facility that
the Eurodollar Rate or the Eurocurrency Rate, as the case may be,
determined or to be determined with respect to such Affected Currency
for such Interest Period will not adequately and fairly reflect the
cost to such Lenders (as conclusively certified by such Lenders) of
making or maintaining their affected Loans during such Interest Period,
the Administrative Agent shall give telecopy or telephonic notice thereof to the
Company and the relevant Lenders as soon as practicable thereafter. If such
notice is given (w) any Eurodollar Loans or Multicurrency Loans, as the case may
be, under the relevant Facility requested to be made on the first day of such
Interest Period shall be made as ABR Loans in U.S. Dollars, (x) any Loans under
the relevant Facility that were to have been converted on the first day of such
Interest Period to Eurodollar Loans shall be converted into or continued as ABR
Loans, (y) any outstanding Eurodollar Loans under the relevant Facility shall be
converted, on the last day of the then-current Interest Period, to ABR Loans and
(z) any Multicurrency Loans to which such Interest Period relates shall be
repaid on the last day of the then current Interest Period. Until such notice
has been withdrawn by the Administrative Agent, no further Eurodollar Loans or
Multicurrency Loans under the relevant Facility shall be made or continued as
such, nor shall the Borrowers have the right to convert Loans under the relevant
Facility to Eurodollar Loans, as the case may be, provided that Loans may
continue to be made, converted or continued, as the case may be, in U.S. Dollars
or Available Foreign Currencies other than the Affected Currency.
5.4 Optional Prepayments. (a) The Company may at any time and
from time to time prepay the Dollar Revolving Loans and the Term Loans, in whole
or in part, without premium or penalty, upon irrevocable notice delivered to the
Administrative Agent at least three Business Days prior thereto in the case of
Eurodollar Loans and at least one Business Day prior thereto in the case of ABR
Loans, which notice shall specify the date and amount of prepayment and whether
the prepayment is of Eurodollar Loans or ABR Loans; provided, that if a
Eurodollar Loan is prepaid on any day other than the last day of the Interest
Period applicable thereto, the Company shall also pay any amounts owing pursuant
to Section 5.11. Upon receipt of any such notice the Administrative Agent shall
promptly notify each relevant Lender thereof. If any such notice is given, the
amount specified in such notice shall be due and payable on the date specified
therein, together with (except in the case of Dollar Revolving Loans that are
ABR Loans) accrued interest to such date on the amount prepaid. Partial
prepayments of Term Loans and
42
36
Dollar Revolving Loans shall be in an aggregate principal amount of $1,000,000
or a whole multiple thereof.
(b) The Borrowers may at any time and from time to time
prepay, without premium or penalty, the Multicurrency Loans, in whole or in
part, upon at least three Business Days' irrevocable notice to the
Administrative Agent specifying the date and amount of prepayment; provided,
that if a Multicurrency Loan is prepaid on any day other than the last day of
the Interest Period applicable thereto, the relevant Borrower shall also pay any
amounts owing pursuant to Section 5.11. Upon the receipt of any such notice, the
Administrative Agent shall promptly notify each Revolving Lender thereof. If any
such notice is given, the amount specified in such notice shall be due and
payable on the date specified therein. Partial prepayments of Multicurrency
Loans shall be in an aggregate principal amount of which the U.S. Dollar
Equivalent is at least $1,000,000.
5.5 Mandatory Prepayments and Commitment Reductions. (a) If,
at any time during the Revolving Commitment Period, for any reason the Aggregate
Committed Outstandings of all Revolving Lenders exceed the Total Revolving
Commitments then in effect, (i) the Company shall, without notice or demand,
immediately prepay the Revolving Loans and/or (ii) the Borrowers shall, without
notice or demand, immediately prepay the Multicurrency Loans such that the sum
of (A) the aggregate principal amount of the Revolving Loans so prepaid and (B)
the U.S. Dollar Equivalent of the aggregate principal amount of the
Multicurrency Loans so prepaid, equals or exceeds the amount of such excess.
(b) Unless the Required Prepayment Lenders shall otherwise
agree, if any Capital Stock of the Company shall be sold or issued by the
Company (other than (i) in connection with options exercisable for the purchase
of Capital Stock or compensation-related transactions with officers, employees
or directors, to the extent the aggregate Net Cash Proceeds thereof do not
exceed $15,000,000 in any fiscal year of the Company and (ii) upon issuance of
Capital Stock upon the conversion of the Convertible Subordinated Notes), an
amount equal to 50% of the Net Cash Proceeds thereof shall be applied on the
date of such sale or issuance, unless a Reinvestment Notice shall be delivered
in respect of such sale or issuance, toward the prepayment of the Term Loans and
the Revolving Loans as set forth in Section 5.5(e), provided, that,
notwithstanding the foregoing, on each Reinvestment Prepayment Date, an amount
equal to the Reinvestment Prepayment Amount with respect to the relevant sale or
issuance shall be applied toward the prepayment of Term Loans and the Revolving
Loans as set forth in Section 5.5(e).
(c) Unless the Required Prepayment Lenders shall otherwise
agree, if on any date, the Company or any of its Subsidiaries shall receive Net
Cash Proceeds from any Asset Sale or Recovery Event then, unless a Reinvestment
Notice shall be delivered in respect of such Recovery Event or Asset Sale, such
Net Cash Proceeds shall be applied on such date toward the prepayment of the
Term Loans and the Revolving Loans as set forth in Section 5.5(e); provided,
that, notwithstanding the foregoing, (i) the aggregate Net Cash Proceeds of
Recovery Events that may be excluded from the foregoing requirement pursuant to
a Reinvestment Notice shall not exceed, on any date which this Agreement is in
effect, 20% of the net fixed asset value plus
43
37
inventory of the Company and its Subsidiaries, on a consolidated basis, as of
the last day of the fiscal year of the Company most recently ended prior to such
date and (ii) on each Reinvestment Prepayment Date, an amount equal to the
Reinvestment Prepayment Amount with respect to the relevant Reinvestment Event
shall be applied toward the prepayment of the Term Loans and the Revolving Loans
as set forth in Section 5.5(e).
(d) Notwithstanding the foregoing, mandatory prepayments of
Revolving Loans or Multicurrency Loans that would otherwise be required pursuant
to this Section 5.5 solely as a result of fluctuations in Exchange Rates from
time to time shall only be required to be made pursuant to this Section 5.5 on
the last Business Day of each month on the basis of the Exchange Rate in effect
on such Business Day.
(e) Amounts to be applied in connection with prepayments made
pursuant to Section 5.5 shall be applied, first, to the prepayment of the Term
Loans and, second, to the prepayment of the Dollar Revolving Loans or, if the
Borrowers elect, the Multicurrency Loans. The application of any prepayment of
Term Loans or Dollar Revolving Loans pursuant to this Section 5.5 shall be made,
first, to ABR Loans and, second, to Eurodollar Loans. Each prepayment of the
Loans under this Section 5.5 (except in the case of Dollar Revolving Loans that
are ABR Loans) shall be accompanied by accrued interest to the date of such
prepayment on the amount prepaid.
5.6 Conversion and Continuation Options. (a) The Company may
elect from time to time to convert Eurodollar Loans to ABR Loans by giving the
Administrative Agent at least two Business Days' prior irrevocable notice of
such election, provided that any such conversion of Eurodollar Loans may only be
made on the last day of an Interest Period with respect thereto. The Company may
elect from time to time to convert ABR Loans to Eurodollar Loans by giving the
Administrative Agent at least three Business Days' prior irrevocable notice of
such election (which notice shall specify the length of the initial Interest
Period therefor), provided that no ABR Loan under a particular Facility may be
converted into a Eurodollar Loan when any Event of Default has occurred and is
continuing and the Administrative Agent or the Majority Facility Lenders in
respect of such Facility have determined in its or their sole discretion not to
permit such conversions. Upon receipt of any such notice the Administrative
Agent shall promptly notify each relevant Lender thereof.
(b) Any Eurodollar Loan may be continued as such upon the
expiration of the then current Interest Period with respect thereto by the
Company giving irrevocable notice to the Administrative Agent, in accordance
with the applicable provisions of the term "Interest Period" set forth in
Section 1.1, of the length of the next Interest Period to be applicable to such
Loans, provided that no Eurodollar Loan under a particular Facility may be
continued as such when any Event of Default has occurred and is continuing and
the Administrative Agent has or the Majority Facility Lenders in respect of such
Facility have determined in its or their sole discretion not to permit such
continuations, and provided, further, that if the Company shall fail to give any
required notice as described above in this paragraph or if such continuation is
not permitted pursuant to the preceding proviso such Loans shall be
automatically converted to ABR
44
38
Loans on the last day of such then expiring Interest Period. Upon receipt of any
such notice the Administrative Agent shall promptly notify each relevant Lender
thereof.
(c) Any Multicurrency Loan may be continued as such upon the
expiration of the then current Interest Period with respect thereto by the
relevant Borrower giving the Administrative Agent at least two Business Days'
prior irrevocable notice of such election, provided, that if the relevant
Borrower shall fail to give such notice or if any Default or Event of Default
has occurred and is continuing and the Administrative Agent or the Required
Lenders have determined that such continuation would not be appropriate, such
Multicurrency Loans shall automatically be continued for an Interest Period of
one month.
5.7 Limitations on Tranches. All borrowings, conversions and
continuations of Loans hereunder and all selections of Interest Periods
hereunder shall be in such amounts and be made pursuant to such elections so
that, immediately after giving effect thereto, (a) the aggregate principal
amount of the Eurodollar Loans comprising each Tranche shall be equal to
$2,500,000 or a whole multiple of $1,000,000 in excess thereof and (b) the
aggregate principal amount of the Multicurrency Loans comprising each Tranche
shall be in an amount which is, or of which the U.S. Dollar Equivalent is, at
least $2,500,000.
5.8 Pro Rata Treatment and Payments. (a) Each borrowing by a
Borrower from the Lenders hereunder, each payment by the Borrowers on account of
any commitment fee and any reduction of the Commitments of the Lenders shall be
made pro rata according to the respective Term Percentages or Revolving
Percentages, as the case may be, of the relevant Lenders.
(b) Each payment (including each prepayment) by the Company
on account of principal of and interest on the Term Loans shall be made pro rata
according to the respective outstanding principal amounts of the Term Loans then
held by the Term Lenders. The amount of each principal prepayment of the Term
Loans shall be applied to reduce the then remaining installments of the Term
Loans pro rata based upon the then remaining principal amount thereof. Amounts
prepaid on account of the Term Loans may not be reborrowed.
(c) Each payment (including each prepayment) by the Borrowers
on account of principal of and interest on the Revolving Loans shall be made pro
rata according to the respective outstanding principal amounts of the Revolving
Loans then held by the Revolving Lenders.
(d) All payments (including prepayments) to be made by the
Company hereunder in respect of amounts denominated in Dollars, whether on
account of principal, interest, fees or otherwise, shall be made without setoff
or counterclaim and shall be made prior to 12:00 Noon, New York City time, on
the due date thereof to the Administrative Agent, for the account of the
Lenders, at the Funding Office, in Dollars and in immediately available funds.
The Administrative Agent shall distribute such payments to the Lenders promptly
upon receipt in like funds as received.
45
39
(e) All payments (including prepayments) to be made by a
Borrower on account of Multicurrency Loans hereunder, whether on account of
principal, interest, fees or otherwise, shall be made without set-off or
counterclaim and shall be made prior to 12:00 Noon, London time, on the due date
thereof to the Administrative Agent, for the account of the Revolving Lenders,
at the payment office for the currency of such Multicurrency Loans specified
from time to time by the Administrative Agent by notice to the Revolving
Lenders, in the currency of such Multicurrency Loans and in immediately
available funds. The Administrative Agent shall distribute such payments to the
Revolving Lenders entitled to receive the same promptly upon receipt in like
funds as received.
(f) If any payment hereunder (other than payments on the
Eurodollar Loans or Multicurrency Loans) becomes due and payable on a day other
than a Business Day, such payment shall be extended to the next succeeding
Business Day. If any payment on a Eurodollar Loan or a Multicurrency Loan
becomes due and payable on a day other than a Business Day, the maturity thereof
shall be extended to the next succeeding Business Day unless the result of such
extension would be to extend such payment into another calendar month, in which
event such payment shall be made on the immediately preceding Business Day. In
the case of any extension of any payment of principal pursuant to the preceding
two sentences, interest thereon shall be payable at the then applicable rate
during such extension.
(g) Unless the Administrative Agent shall have been notified
in writing by any Lender prior to a borrowing that such Lender will not make the
amount that would constitute its share of such borrowing available to the
Administrative Agent, the Administrative Agent may assume that such Lender is
making such amount available to the Administrative Agent, and the Administrative
Agent may, in reliance upon such assumption, make available to the Borrower a
corresponding amount. If such amount is not made available to the Administrative
Agent by the required time on the Borrowing Date therefor, such Lender shall pay
to the Administrative Agent, on demand, such amount with interest thereon at a
rate equal to (i) the daily average Federal Funds Effective Rate (in the case of
a borrowing of Dollar Revolving Loans or Term Loans) and (ii) the Administrative
Agent's reasonable estimate of its average daily cost of funds (in the case of a
borrowing of Multicurrency Loans), in each case for the period until such Lender
makes such amount immediately available to the Administrative Agent. A
certificate of the Administrative Agent submitted to any Lender with respect to
any amounts owing under this paragraph shall be conclusive in the absence of
manifest error. If such Lender's share of such borrowing is not made available
to the Administrative Agent by such Lender within three Business Days of such
Borrowing Date, the Administrative Agent shall also be entitled to recover such
amount (together with interest thereon from the date such amount was made
available to such Borrower (i) at the rate per annum applicable to ABR Loans
hereunder (in the case of a borrowing of Dollar Revolving Loans or Term Loans)
or (ii) the Administrative Agent's reasonable estimate of its average daily cost
of funds plus the Applicable Margin applicable to Multicurrency Loans (in the
case of a borrowing of Multicurrency Loans)), on demand, from the applicable
Borrower.
(h) Unless the Administrative Agent shall have been notified
in writing by the applicable Borrower
46
40
prior to the date of any payment being made hereunder that such Borrower will
not make such payment to the Administrative Agent, the Administrative Agent may
assume that such Borrower is making such payment, and the Administrative Agent
may, but shall not be required to, in reliance upon such assumption, make
available to the Lenders their respective pro rata shares of a corresponding
amount. If such payment is not made to the Administrative Agent by such Borrower
within three Business Days of such required date, the Administrative Agent shall
be entitled to recover, on demand, from each Lender to which any amount which
was made available pursuant to the preceding sentence, such amount with interest
thereon at the rate per annum equal to the daily average Federal Funds Effective
Rate. Nothing herein shall be deemed to limit the rights of the Administrative
Agent or any Lender against any Borrower.
5.9 Requirements of Law. (a) If the adoption of or any change
in any Requirement of Law or in the interpretation or application thereof or
compliance by any Lender with any request or directive (whether or not having
the force of law) from any central bank or other Governmental Authority made
subsequent to the date hereof:
(i) shall subject any Lender to any tax of any kind
whatsoever with respect to this Agreement, any Letter of Credit, any
Application or any Eurodollar Loan or Multicurrency Loan made by it,
or change the basis of taxation of payments to such Lender in respect
thereof (except for Excluded Taxes and Non-Excluded Taxes covered by
Section 5.10 and changes in the rate of tax on the overall net income
of such Lender);
(ii) shall impose, modify or hold applicable any reserve,
special deposit, compulsory loan or similar requirement against assets
held by, deposits or other liabilities in or for the account of,
advances, loans or other extensions of credit by, or any other
acquisition of funds by, any office of such Lender that is not
otherwise included in the determination of the Eurodollar Rate or the
Eurocurrency Rate hereunder, including, without limitation, the
imposition of any reserves with respect to Eurocurrency Liabilities
under Regulation D of the Board; or
(iii) shall impose on such Lender any other condition;
and the result of any of the foregoing is to increase the cost to such Lender,
by an amount that such Lender deems to be material, of making, converting into,
continuing or maintaining Eurodollar Loans or Multicurrency Loans or issuing or
participating in Letters of Credit, or to reduce any amount receivable hereunder
in respect thereof, then, in any such case, the applicable Borrower shall
promptly pay such Lender, upon its demand, any additional amounts necessary to
compensate such Lender for such increased cost or reduced amount receivable,
provided that such Lender shall have given notice to the Company within 180 days
after it becomes aware or, in the exercise of reasonable care, should have been
aware of the event giving rise to such payment obligation. If any Lender becomes
entitled to claim any additional amounts pursuant to this paragraph, it shall
promptly notify the Company (with a copy to the Administrative Agent) of the
event by reason of which it has become so entitled.
(b) If any Lender shall have determined that the adoption of
or any change in any Requirement of Law regarding capital adequacy or in the
interpretation or application thereof
47
41
or compliance by such Lender or any corporation controlling such Lender with any
request or directive regarding capital adequacy (whether or not having the force
of law) from any Governmental Authority made subsequent to the date hereof shall
have the effect of reducing the rate of return on such Lender's or such
corporation's capital as a consequence of its obligations hereunder or under or
in respect of any Letter of Credit to a level below that which such Lender or
such corporation could have achieved but for such adoption, change or compliance
(taking into consideration such Lender's or such corporation's policies with
respect to capital adequacy) by an amount deemed by such Lender to be material,
then from time to time, after submission by such Lender to the Company (with a
copy to the Administrative Agent) of a written request therefor, the Company
shall pay to such Lender such additional amount or amounts as will compensate
such Lender for such reduction, provided that such Lender shall have given
notice to the Company within 180 days after it becomes aware or, in the exercise
of reasonable care, should have been aware of the event giving rise to such
payment obligation.
(c) A certificate as to any additional amounts payable
pursuant to this Section submitted by any Lender to the Company (with a copy to
the Administrative Agent) shall be conclusive in the absence of manifest error.
The obligations of the Borrowers pursuant to this Section shall survive the
termination of this Agreement and the payment of the Loans and all other amounts
payable hereunder.
5.10 Taxes. (a) All payments made by the Borrowers under this
Agreement shall be made free and clear of, and without deduction or withholding
for or on account of, any present or future income, stamp or other taxes,
levies, imposts, duties, charges, fees, deductions or withholdings, now or
hereafter imposed, levied, collected, withheld or assessed by any Governmental
Authority, excluding net income taxes and franchise taxes (imposed in lieu of
net income taxes) ("Excluded Taxes") imposed on the Administrative Agent or any
Lender as a result of a present or former connection between the Administrative
Agent or such Lender and the jurisdiction of the Governmental Authority imposing
such tax or any political subdivision or taxing authority thereof or therein
(other than any such connection arising solely from the Administrative Agent or
such Lender having executed, delivered or performed its obligations or received
a payment under, or enforced, this Agreement or any other Loan Document). If any
such non-excluded taxes, levies, imposts, duties, charges, fees, deductions or
withholdings ("Non-Excluded Taxes") or Other Taxes are required to be withheld
from any amounts payable to the Administrative Agent or any Lender hereunder,
the amounts so payable to the Administrative Agent or such Lender shall be
increased to the extent necessary to yield to the Administrative Agent or such
Lender (after payment of all Non-Excluded Taxes and Other Taxes) interest or any
such other amounts payable hereunder at the rates or in the amounts specified in
this Agreement, provided, however, that the Borrowers shall not be required to
increase any such amounts payable to any Lender with respect to any Non-Excluded
Taxes (i) that are attributable to such Lender's failure to comply with the
requirements of paragraph (d) or (e) of this Section or (ii) that are United
States withholding taxes imposed on amounts payable to such Lender at the time
the Lender becomes a party to this Agreement, except, in each case, to the
extent that such Lender's assignor (if any) was entitled, at the time of
assignment, to receive additional amounts from the applicable Borrower with
respect to such Non-Excluded Taxes pursuant to this paragraph.
48
42
(b) In addition, the Borrowers shall pay any Other Taxes to
the relevant Governmental Authority in accordance with applicable law.
(c) Whenever any Non-Excluded Taxes or Other Taxes are
payable by any Borrower, as promptly as possible thereafter such Borrower shall
send to the Administrative Agent for its own account or for the account of the
relevant Lender, as the case may be, a certified copy of an original official
receipt received by such Borrower showing payment thereof. If a Borrower fails
to pay any Non-Excluded Taxes or Other Taxes when due to the appropriate taxing
authority or fails to remit to the Administrative Agent the required receipts or
other required documentary evidence, such Borrower shall indemnify the
Administrative Agent and the Lenders for any incremental taxes, interest or
penalties that may become payable by the Administrative Agent or any Lender as a
result of any such failure.
(d) Each Lender (or Transferee) that is not a United States
person as defined in Section 7701(a)(30) of the Code (a "Non-U.S. Lender") shall
deliver to the Company and the Administrative Agent (or, in the case of a
Participant, to the Lender from which the related participation shall have been
purchased) two copies of either U.S. Internal Revenue Service Form 1001 or Form
4224, or, in the case of a Non-U.S. Lender claiming exemption from U.S. federal
withholding tax under Section 871(h) or 881(c) of the Code with respect to
payments of "portfolio interest", a statement substantially in the form of
Exhibit H and a Form W-8, or any subsequent versions thereof or successors
thereto, properly completed and duly executed by such Non-U.S. Lender claiming
complete exemption from, or a reduced rate of, U.S. federal withholding tax on
all payments by the Company under this Agreement and the other Loan Documents.
Such forms shall be delivered by each Non-U.S. Lender on or before the date it
becomes a party to this Agreement (or, in the case of any Participant, on or
before the date such Participant purchases the related participation). In
addition, each Non-U.S. Lender shall deliver such forms promptly upon the
obsolescence or invalidity of any form previously delivered by such Non-U.S.
Lender. Each Non-U.S. Lender shall promptly notify the Company at any time it
determines that it is no longer in a position to provide any previously
delivered certificate to the Company (or any other form of certification adopted
by the U.S. taxing authorities for such purpose). Notwithstanding any other
provision of this paragraph, a Non-U.S. Lender shall not be required to deliver
any form pursuant to this paragraph that such Non-U.S. Lender is not legally
able to deliver.
(e) A Lender that is entitled to an exemption from or
reduction of non-U.S. withholding tax under the law of the jurisdiction in which
a Borrower is located, or any treaty to which such jurisdiction is a party, with
respect to payments under this Agreement shall deliver to such Borrower (with a
copy to the Administrative Agent), at the time or times prescribed by applicable
law or reasonably requested by such Borrower, such properly completed and
executed documentation prescribed by applicable law as will permit such payments
to be made without withholding or at a reduced rate, provided that such Lender
is legally entitled to complete, execute and deliver such documentation and in
such Lender's judgment such completion, execution or submission would not
materially prejudice the legal position of such Lender.
49
43
(f) The agreements in this Section shall survive the
termination of this Agreement and the payment of the Loans and all other amounts
payable hereunder.
5.11 Indemnity. Each of the Borrowers agrees to indemnify
each Lender and to hold each Lender harmless from any loss or expense that such
Lender may sustain or incur as a consequence of (a) default by such Borrower in
making a borrowing of, conversion into or continuation of Eurodollar Loans or
Multicurrency Loans after the Borrower has given a notice requesting the same in
accordance with the provisions of this Agreement, (b) default by such Borrower
in making any prepayment of or conversion from Eurodollar Loans or Multicurrency
Loans after the Borrower has given a notice thereof in accordance with the
provisions of this Agreement or (c) the making of a prepayment of Eurodollar
Loans or Multicurrency Loans on a day that is not the last day of an Interest
Period with respect thereto. Such indemnification may include an amount equal to
the excess, if any, of (i) the amount of interest that would have accrued on the
amount so prepaid, or not so borrowed, converted or continued, for the period
from the date of such prepayment or of such failure to borrow, convert or
continue to the last day of such Interest Period (or, in the case of a failure
to borrow, convert or continue, the Interest Period that would have commenced on
the date of such failure) in each case at the applicable rate of interest for
such Loans provided for herein (excluding, however, the Applicable Margin
included therein, if any) over (ii) the amount of interest (as reasonably
determined by such Lender) that would have accrued to such Lender on such amount
by placing such amount on deposit for a comparable period with leading banks in
the interbank eurodollar market. A certificate as to any amounts payable
pursuant to this Section submitted to the Company by any Lender shall be
conclusive in the absence of manifest error. This covenant shall survive the
termination of this Agreement and the payment of the Loans and all other amounts
payable hereunder.
5.12 Change of Lending Office. Each Lender agrees that, upon
the occurrence of any event giving rise to the operation of Section 5.9 or
5.10(a) with respect to such Lender, it will, if requested by the Company, use
reasonable efforts (subject to overall policy considerations of such Lender) to
designate another lending office for any Loans affected by such event with the
object of avoiding the consequences of such event; provided, that such
designation is made on terms that, in the sole judgment of such Lender, cause
such Lender and its lending office(s) to suffer no economic, legal or regulatory
disadvantage, and provided, further, that nothing in this Section shall affect
or postpone any of the obligations of any Borrower or the rights of any Lender
pursuant to Section 5.9 or 5.10(a).
5.13 Subsidiary Borrowers. The Company may designate any
Qualified Foreign Subsidiary of the Company as a Subsidiary Borrower by delivery
to the Administrative Agent of a Borrowing Subsidiary Agreement executed by such
Subsidiary and the Company and upon such delivery such Subsidiary shall for all
purposes of this Agreement be a Subsidiary Borrower and a party to this
Agreement until the Company shall have executed and delivered to the
Administrative Agent a Borrowing Subsidiary Termination with respect to such
Subsidiary, whereupon such Subsidiary shall cease to be a Subsidiary Borrower
and a party to this Agreement. Notwithstanding the preceding sentence, no
Borrowing Subsidiary Termination will become effective as to any Subsidiary
Borrower at a time when any principal of or interest on
50
44
any Loan to such Subsidiary Borrower shall be outstanding hereunder, provided
that such Borrowing Subsidiary Termination shall be effective to terminate such
Subsidiary Borrower's right to make further borrowings under this Agreement.
5.14 Replacement of Lenders. The Company shall be permitted
to replace any Lender that (a) requests reimbursement for amounts owing pursuant
to Section 5.9 or 5.10(a) or (b) defaults in its obligation to make Loans
hereunder, with a replacement financial institution; provided that (i) such
replacement does not conflict with any Requirement of Law, (ii) no Event of
Default shall have occurred and be continuing at the time of such replacement,
(iii) prior to any such replacement, such Lender shall have taken no action
under Section 5.12 so as to eliminate the continued need for payment of amounts
owing pursuant to Section 5.9 or 5.10(a), (iv) the replacement financial
institution shall purchase, at par, all Loans and other amounts owing to such
replaced Lender on or prior to the date of replacement, (v) the Company shall be
liable to such replaced Lender under Section 5.11 if any Eurodollar Loan owing
to such replaced Lender shall be purchased other than on the last day of the
Interest Period relating thereto, (vi) the replacement financial institution, if
not already a Lender, shall be reasonably satisfactory to the Administrative
Agent, (vii) the replaced Lender shall be obligated to make such replacement in
accordance with the provisions of Section 13.6 (provided that the Company shall
be obligated to pay the registration and processing fee referred to therein),
(viii) until such time as such replacement shall be consummated, the Borrowers
shall pay all additional amounts (if any) required pursuant to Section 5.9 or
5.10(a), as the case may be, and (ix) any such replacement shall not be deemed
to be a waiver of any rights that any Borrower, the Administrative Agent or any
other Lender shall have against the replaced Lender.
5.15 Lending Installations. Each Lender may book its Loans at
any Lending Installation selected by such Lender and may change Lending
Installation from time to time; provided that such Lender shall be solely
responsible with respect to any Loans so booked, and the Borrowers and the
Administrative Agent shall be entitled to deal solely with the Lender with
respect to such Loans. All terms of this Agreement shall apply to any such
Lending Installation and the Loans and any Notes issued hereunder shall be
deemed held by each Lender for the benefit of any such Lending Installation.
Each Lender may, by written notice to the Administrative Agent and the Borrower
in accordance with Section 13.2, designate replacement or additional Lending
Installations through which Loans will be made by it and for whose account Loan
payments are to be made.
SECTION 6. REPRESENTATIONS AND WARRANTIES
To induce the Administrative Agent and the Lenders to enter
into this Agreement and to make the Loans and issue or participate in the
Letters of Credit, each of the Company and each Subsidiary Borrower (to the
extent such representation relates to such Subsidiary Borrower) hereby
represents and warrants to the Administrative Agent and each Lender that:
6.1 Financial Condition. (a) The unaudited pro forma
consolidated balance sheet of the Company and its consolidated Subsidiaries as
at September 27, 1998 (the "Pro
51
45
Forma Balance Sheet"), copies of which have heretofore been furnished to each
Lender, has been prepared giving effect (as if such events had occurred on such
date) to (i) the consummation of the Acquisition, (ii) the Loans to be made on
the Closing Date and the use of proceeds thereof, (iii) the loans to be made
under the MTKG Credit Agreement on the Closing Date and the use of the proceeds
thereof and (iv) the payment of fees and expenses in connection with the
foregoing. The Pro Forma Balance Sheet has been prepared based on the best
information available to the Company as of the date of delivery thereof, and
presents fairly on a pro forma basis the estimated financial position of the
Company and its consolidated Subsidiaries as at September 27, 1998, assuming
that the events specified in the preceding sentence had actually occurred at
such date.
(b) The audited consolidated balance sheets of the Company as
at December 28, 1997 and December 29, 1996, and the related consolidated
statements of income and of cash flows for the fiscal years ended on such dates,
reported on by and accompanied by an unqualified report from Deloitte & Touche
LLP and KPMG Peat Marwick LLP, respectively, present fairly the consolidated
financial condition of the Company as at such dates, and the consolidated
results of its operations and its consolidated cash flows for the respective
fiscal years then ended. The unaudited consolidated balance sheet of the Company
as at September 27, 1998, June 28, 1998, and March 31, 1998, and the related
unaudited consolidated statements of income and cash flows for each of the
thirteen-week periods ended on such dates, present fairly the consolidated
financial condition of the Company as at such dates, and the consolidated
results of its operations and its consolidated cash flows for the thirteen-week
periods then ended (subject to normal year-end audit adjustments). All such
financial statements, including the related schedules and notes thereto, have
been prepared in accordance with GAAP applied consistently throughout the
periods involved (except as approved by the aforementioned firms of accountants
and disclosed therein). The Company and its Subsidiaries, taken as a whole, do
not have any material Guarantee Obligations, contingent liabilities and
liabilities for taxes, or any long-term leases or unusual forward or long-term
commitments, including any interest rate or foreign currency swap or exchange
transaction or other obligation in respect of derivatives, that are not
reflected in the most recent financial statements referred to in this paragraph.
During the period from December 29, 1997 to and including the date hereof there
has been no Disposition by the Company of any material part of its business or
property.
6.2 No Change. Since December 28, 1997 there has been no
development or event that has had or could reasonably be expected to have a
Material Adverse Effect, except as disclosed in the Confidential Information
Memorandum (or incorporated by reference therein) or the Company's press release
issued on October 22, 1998, a copy of which has been delivered to each Lender.
6.3 Corporate Existence; Compliance with Law. Each of the
Company and its Subsidiaries (a) is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization, (b) has the
corporate power and authority, and the legal right, to own and operate its
property, to lease the property it operates as lessee and to conduct the
business in which it is currently engaged, (c) is duly qualified as a foreign
corporation and in good standing under the laws of each jurisdiction where its
ownership, lease or operation of property or the conduct of its business
requires such qualification and (d) is in compliance with
52
46
all Requirements of Law, except to the extent that the failure to comply with
any of the foregoing clauses (c) or (d) could not, in the aggregate, reasonably
be expected to have a Material Adverse Effect.
6.4 Corporate Power; Authorization; Enforceable Obligations.
Each Loan Party has the corporate power and authority, and the legal right, to
make, deliver and perform the Loan Documents and Acquisition Documentation to
which it is a party and, in the case of the Borrowers, to borrow hereunder and,
in the case of each Loan Party which is a party to the Acquisition Agreement, to
consummate the Acquisition. Each Loan Party has taken all necessary corporate
action to authorize the execution, delivery and performance of the Loan
Documents to which it is a party and, in the case of the Borrowers, to authorize
the borrowings on the terms and conditions of this Agreement. No consent or
authorization of, filing with, notice to or other act by or in respect of, any
Governmental Authority or any other Person is required in connection with the
Acquisition and the borrowings hereunder or with the execution, delivery,
performance, validity or enforceability of this Agreement or any of the Loan
Documents, except (i) consents, authorizations, filings and notices described in
Schedule 6.4, which consents, authorizations, filings and notices have been
obtained or made and are in full force and effect and (ii) the filings referred
to in Section 6.19. Each Loan Document has been duly executed and delivered on
behalf of each Loan Party party thereto. This Agreement constitutes, and each
other Loan Document upon execution will constitute, a legal, valid and binding
obligation of each Loan Party party thereto, enforceable against each such Loan
Party in accordance with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors' rights generally and by general
equitable principles (whether enforcement is sought by proceedings in equity or
at law).
6.5 No Legal Bar. The execution, delivery and performance of
this Agreement and the other Loan Documents, the issuance of Letters of Credit,
the borrowings hereunder, the use of the proceeds thereof and the consummation
of the Acquisition will not violate any Requirement of Law or any Contractual
Obligation of the Company or any of its Subsidiaries and will not result in, or
require, the creation or imposition of any Lien on any of their respective
properties or revenues pursuant to any Requirement of Law or any such
Contractual Obligation (other than the Liens created by the Security Documents).
No Requirement of Law or Contractual Obligation applicable to the Company or any
of its Subsidiaries could reasonably be expected to have a Material Adverse
Effect.
6.6 Litigation. No litigation, investigation or proceeding of
or before any arbitrator or Governmental Authority is pending or, to the
knowledge of the Company, threatened by or against the Company or any of its
Subsidiaries or against any of their respective properties or revenues (a) with
respect to any of the Loan Documents or any of the transactions contemplated
hereby or thereby or the Acquisition, or (b) that could reasonably be expected
to have a Material Adverse Effect.
6.7 No Default. Neither the Company nor any of its
Subsidiaries is in default under or with respect to any of its Contractual
Obligations in any respect that could reasonably
53
47
be expected to have a Material Adverse Effect. No Default or Event of Default
has occurred and is continuing.
6.8 Ownership of Property; Liens. Each of the Company and its
Subsidiaries has title in fee simple to, or a valid leasehold interest in, all
its real property, and good title to, or a valid leasehold interest in, all its
other property, and none of such property is subject to any Lien except as
permitted by Section 9.3 or, with respect to the Closing Date, any Lien granted
in connection with the Existing Credit Agreement to the extent satisfactory
arrangements shall have been made for the termination thereof.
6.9 Intellectual Property. The Company and each of its
Subsidiaries owns, or is licensed to use, all Intellectual Property necessary
for the conduct of its business as currently conducted. No material claim has
been asserted and is pending by any Person challenging or questioning the use of
any Intellectual Property or the validity or effectiveness of any Intellectual
Property, nor does the Company know of any valid basis for any such material
claim. The use of Intellectual Property by the Company and its Subsidiaries does
not infringe on the rights of any Person in any material respect.
6.10 Taxes. Each of the Company and each of its Subsidiaries
has filed or caused to be filed all Federal, state and other material tax
returns that are required to be filed and has paid all taxes shown to be due and
payable on said returns or on any assessments made against it or any of its
property and all other taxes, fees or other charges imposed on it or any of its
property by any Governmental Authority (other than any the amount or validity of
which are currently being contested in good faith by appropriate proceedings and
with respect to which reserves in conformity with GAAP have been provided on the
books of the Company or its Subsidiaries, as the case may be); no tax Lien has
been filed, and, to the knowledge of such Borrower, no claim is being asserted,
with respect to any such tax, fee or other charge.
6.11 Federal Regulations. No part of the proceeds of any
Loans will be used for "buying" or "carrying" any "margin stock" within the
respective meanings of each of the quoted terms under Regulation U as now and
from time to time hereafter in effect or for any purpose that violates the
provisions of the Regulations of the Board. If requested by any Lender or the
Administrative Agent, the Company will furnish to the Administrative Agent and
each Lender a statement to the foregoing effect in conformity with the
requirements of FR Form G-3 or FR Form U-1, as applicable, referred to in
Regulation U.
6.12 Labor Matters. Except as, in the aggregate, could not
reasonably be expected to have a Material Adverse Effect: (a) there are no
strikes or other labor disputes against the Company or any of its Subsidiaries
pending or, to the knowledge of such party, threatened; (b) hours worked by and
payment made to employees of the Company and its Subsidiaries have not been in
violation of the Fair Labor Standards Act or any other applicable Requirement of
Law dealing with such matters; and (c) all payments due from the Company or any
of its Subsidiaries on account of employee health and welfare insurance have
been paid or accrued as a liability on the books of the Company or the relevant
Subsidiary.
54
48
6.13 ERISA. Neither a Reportable Event nor an "accumulated
funding deficiency" (within the meaning of Section 412 of the Code or Section
302 of ERISA) has occurred during the five-year period prior to the date on
which this representation is made or deemed made with respect to any Plan, and
except as, in the aggregate, could not reasonably be expected to have a Material
Adverse Effect, each Plan has complied in all respects with the applicable
provisions of ERISA and the Code. No termination of a Single Employer Plan has
occurred, and no Lien in favor of the PBGC or a Plan has arisen, during such
five-year period. The present value of all accrued benefits under each Single
Employer Plan (based on those assumptions used to fund such Plans) did not, as
of the last annual valuation date prior to the date on which this representation
is made or deemed made, exceed the value of the assets of such Plan allocable to
such accrued benefits by a material amount. Neither the Company nor any Commonly
Controlled Entity has had a complete or partial withdrawal from any
Multiemployer Plan that has resulted or could reasonably be expected to result
in a material liability under ERISA, and neither the Company nor any Commonly
Controlled Entity would become subject to any material liability under ERISA if
the Company or any such Commonly Controlled Entity were to withdraw completely
from all Multiemployer Plans as of the valuation date most closely preceding the
date on which this representation is made or deemed made. No such Multiemployer
Plan is in Reorganization or Insolvent.
6.14 Investment Company Act; Other Regulations. No Loan Party
is an "investment company", or a company "controlled" by an "investment
company", within the meaning of the Investment Company Act of 1940, as amended.
No Loan Party is subject to regulation under any Requirement of Law (other than
Regulation X of the Board) that limits its ability to incur Indebtedness.
6.15 Subsidiaries. Except as disclosed to the Administrative
Agent by the Company in writing from time to time after the Closing Date, (a)
Schedule 6.15 sets forth the name and jurisdiction of incorporation of each
Subsidiary and, as to each such Subsidiary, the percentage of each class of
Capital Stock owned by any Loan Party and (b) there are no outstanding
subscriptions, options, warrants, calls, rights or other agreements or
commitments (other than stock options and other rights under the Company's 1994
Stock Incentive Plan, 1994 Employee Stock Purchase Plan and Non-Employee
Directors Stock Compensation Plan granted to employees or directors and
directors' qualifying shares) of any nature relating to any Capital Stock of the
Company or any Subsidiary, except as created by the Loan Documents.
6.16 Use of Proceeds. The proceeds of the Term Loans shall be
used to make an equity contribution to DII International Holdings C.V., a wholly
owned Dutch subsidiary of the Company (which will use such proceeds to fund the
purchase price of the Acquisition), and to pay fees and expenses related to the
Acquisition. The proceeds of the Revolving Loans and the Letters of Credit shall
be used to refinance indebtedness of the Company and its Subsidiaries under the
Existing Credit Agreement and for general corporate purposes in the ordinary
course of business.
55
49
6.17 Environmental Matters. Except as, in the aggregate,
could not reasonably be expected to have a Material Adverse Effect:
(a) the facilities and properties owned, leased or operated
by the Company or any of its Subsidiaries (the "Properties") do not
contain, and have not previously contained, any Materials of
Environmental Concern in amounts or concentrations or under
circumstances that constitute or constituted a violation of, or could
give rise to liability under, any Environmental Law;
(b) neither the Company nor any of its Subsidiaries has
received or is aware of any notice of violation, alleged violation,
non-compliance, liability or potential liability regarding
environmental matters or compliance with Environmental Laws with regard
to any of the Properties or the business operated by the Company or any
of its Subsidiaries (the "Business"), nor does such party have
knowledge or reason to believe that any such notice will be received or
is being threatened;
(c) Materials of Environmental Concern have not been
transported or disposed of from the Properties in violation of, or in a
manner or to a location that could give rise to liability under, any
Environmental Law, nor have any Materials of Environmental Concern been
generated, treated, stored or disposed of at, on or under any of the
Properties in violation of, or in a manner that could give rise to
liability under, any applicable Environmental Law;
(d) no judicial proceeding or governmental or administrative
action is pending or, to the knowledge of such party, threatened, under
any Environmental Law to which the Company or any Subsidiary is or will
be named as a party with respect to the Properties or the Business, nor
are there any consent decrees or other decrees, consent orders,
administrative orders or other orders, or other administrative or
judicial requirements outstanding under any Environmental Law with
respect to the Properties or the Business;
(e) there has been no release or threat of release of
Materials of Environmental Concern at or from the Properties, or
arising from or related to the operations of the Company or any
Subsidiary in connection with the Properties or otherwise in connection
with the Business, in violation of or in amounts or in a manner that
could give rise to liability under Environmental Laws;
(f) the Properties and all operations at the Properties are
in compliance, and have in the last five years been in compliance, with
all applicable Environmental Laws, and there is no contamination at,
under or about the Properties or violation of any Environmental Law
with respect to the Properties or the Business; and
(g) neither the Company nor any of its Subsidiaries has
assumed any liability of any other Person under Environmental Laws.
56
50
6.18 Accuracy of Information, etc. Other than the projections
and pro forma financial information referred to in the next sentence, the
statements and information contained in this Agreement, the other Loan
Documents, the Confidential Information Memorandum and all other documents,
certificates and written statements (as the same may have been updated or
supplemented, provided such update or supplement has been furnished to the
Administrative Agent and the Lenders prior to the date of this Agreement)
furnished by or on behalf of the Loan Parties to the Administrative Agent and
the Lenders for use in connection with the transactions contemplated by this
Agreement and the other Loan Documents, do not contain, as of the date of this
Agreement, any untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading. The projections and pro forma
financial information contained in the materials referenced above are based upon
good faith estimates and assumptions believed by management of the Company to be
reasonable at the time made, it being recognized by the Lenders that such
financial information as it relates to future events is not to be viewed as fact
and that actual results during the period or periods covered by such financial
information may differ from the projected results set forth therein by a
material amount. As of the date hereof, the representations and warranties
contained in the Acquisition Documentation are true and correct in all material
respects; provided, that the representations and warranties of Hewlett-Packard
GmbH contained therein are understood to be true and correct in all material
respects to the best of the Company's and MTKG's knowledge. There is no fact
known to any Loan Party that could reasonably be expected to have a Material
Adverse Effect that has not been expressly disclosed herein, in the other Loan
Documents, in the Confidential Information Memorandum or in any other documents,
certificates and statements furnished to the Administrative Agent and the
Lenders for use in connection with the transactions contemplated hereby and by
the other Loan Documents.
6.19 Security Documents. The Guarantee and Collateral
Agreement is effective to create in favor of the Administrative Agent, for the
benefit of the Lenders, a legal, valid and enforceable security interest in the
Collateral described therein and proceeds thereof. In the case of certificated
Pledged Stock described in the Guarantee and Collateral Agreement, when stock
certificates representing such Pledged Stock are delivered to the Administrative
Agent, and in the case of the other Collateral described in the Guarantee and
Collateral Agreement, when financing statements and other filings specified on
Schedule 6.19 in appropriate form are filed in the offices specified on Schedule
6.19, the Guarantee and Collateral Agreement shall constitute a fully perfected
(to the extent perfection is permitted or provided for under any applicable
foreign law) Lien on, and security interest in, all right, title and interest of
the Loan Parties in such Collateral and the proceeds thereof, as security for
the Obligations (as defined in the Guarantee and Collateral Agreement), in each
case prior and superior in right to any other Person (except, in the case of
Collateral other than Pledged Stock, Liens permitted by Section 9.3).
6.20 Solvency. Each Loan Party is, and after giving effect to
the Acquisition and the incurrence of all Indebtedness and obligations being
incurred in connection herewith and therewith will be and will continue to be,
Solvent.
57
51
6.21 Year 2000 Matters. Any reprogramming required to permit
the proper functioning (but only to the extent that such proper functioning
would otherwise be impaired by the occurrence of the year 2000) in and following
the year 2000 of computer systems and other equipment containing embedded
microchips material to the conduct of business, in either case owned or operated
by the Company or any of its Subsidiaries or used or relied upon in the conduct
of their business (including any such systems and other equipment supplied by
others or with which the computer systems of the Company or any of its
Subsidiaries interface), and the testing of all such systems and other equipment
as so reprogrammed, will be completed in all material respects by October 1,
1999. The costs to the Company and its Subsidiaries that have not been incurred
as of the date hereof for such reprogramming and testing and for the other
reasonably foreseeable consequences to them of any improper functioning of other
computer systems and equipment containing embedded microchips due to the
occurrence of the year 2000 could not reasonably be expected to result in a
Default or Event of Default or to have a Material Adverse Effect. Except for any
reprogramming referred to above, the computer systems of the Company and its
Subsidiaries are and, with ordinary course upgrading and maintenance, will
continue for the term of this Agreement to be, sufficient for the conduct of
their business as currently conducted.
6.22 Certain Documents. The Company has delivered to the
Administrative Agent (with a copy for each Lender) a complete and correct copy
of the Acquisition Documentation and the Greatsino Documentation, including any
amendments, supplements or modifications with respect to any of the foregoing.
6.23 Immaterial Subsidiaries. (a) (i) The aggregate book
value of the assets of each Immaterial Subsidiary set forth on Schedule 1.1C
does not exceed, for any such Immaterial Subsidiary, 5% of the aggregate book
value of the assets of the Company and its Subsidiaries taken as a whole and
(ii) the aggregate book value of the assets of all such Immaterial Subsidiaries
taken together does not exceed 10% of the aggregate book value of the assets of
the Company and its Subsidiaries taken as a whole.
(b) (i) The revenues of each Immaterial Subsidiary set forth
on Schedule 1.1C in any fiscal year shall not exceed, for any such
Immaterial Subsidiary, 5% of the revenues of the Company and its
Subsidiaries taken as a whole for such fiscal year and (ii) the
revenues all such Immaterial Subsidiaries taken together shall not
exceed, for any fiscal year, 10% of the revenues of the Company and its
Subsidiaries taken as a whole for such fiscal year.
(c) Notwithstanding the foregoing, the Company shall not be
deemed to have made an untrue representation under this Section 6.23 if
the Company shall redesignate any Immaterial Subsidiary as a Material
Subsidiary by notice to the Administrative Agent delivered at the time
of delivery of the Company's audited financial statements for any
fiscal year demonstrating that such redesignation is required in order
to comply with the foregoing provisions of this Section 6.23.
58
52
SECTION 7. CONDITIONS PRECEDENT
7.1 Conditions to Initial Extension of Credit. The agreement
of each Lender to make the initial extension of credit requested to be made by
it is subject to the satisfaction, prior to or concurrently with the making of
such extension of credit on the Closing Date (but in any event no later than
November 30, 1998), of the following conditions precedent:
(a) Loan Documents. The Administrative Agent shall have
received (i) this Agreement, executed and delivered by the
Administrative Agent, the Company and each Person listed on Schedule
1.1A, (ii) the Guarantee and Collateral Agreement, executed and
delivered by the Company and each Subsidiary Guarantor, (iii) an
Acknowledgment and Consent in the form attached to the Guarantee and
Collateral Agreement, executed and delivered by each Issuer (as defined
therein), if any, that is not a Loan Party, (iv) the Intercreditor
Agreement, executed and delivered by a duly authorized officer of the
parties thereto and (v) each Dutch Pledge Agreement, executed and
delivered by a duly authorized officer of the parties thereto.
In the event that this Agreement has not been duly executed
and delivered by each Person listed on Schedule 1.1A on the date
scheduled to be the Closing Date, the condition referred to in clause
(i) above shall nevertheless be deemed satisfied if on such date the
Company and the Administrative Agent shall have designated one or more
Persons (the "Designated Lenders") to assume, in the aggregate, all of
the Commitments that would have been held by the Persons listed on
Schedule 1.1A (the "Non-Executing Persons") which have not so executed
and delivered this Agreement (subject to each such Designated Lender's
consent and its execution and delivery of this Agreement). Schedule
1.1A shall automatically be deemed to be amended to reflect the
respective Commitments of the Designated Lenders and the omission of
the Non-Executing Persons as Lenders hereunder.
(b) Acquisition, etc. The following transactions shall have
been consummated, in each case on terms and conditions reasonably
satisfactory to the Lenders:
(i) the Company, through MTKG, shall have consummated
the acquisition of Hewlett-Packard GmbH's printed circuit
board manufacturing operation located in Boeblingen, Germany,
pursuant to the Master Asset Purchase Agreement and other
satisfactory documentation, and no material provision thereof
shall have been waived, amended or modified (the
"Acquisition");
(ii) the Acquisition shall have been consummated for
an aggregate purchase price of not more than $95,000,000
(including assumed liabilities);
(iii) (A) The Administrative Agent shall have
received satisfactory evidence that the Existing Credit
Agreement shall have been terminated and all amounts
thereunder shall be paid in full simultaneous with the
Closing and (B)
59
53
satisfactory arrangements shall have been made for the
termination of all Liens granted in connection therewith.
(c) Pro Forma Balance Sheet; Financial Statements. The
Lenders shall have received (i) the Pro Forma Balance Sheet, (ii)
audited consolidated financial statements of the Company for the 1997
and 1996 fiscal years and (iii) satisfactory unaudited interim
consolidated financial statements of the Company for each fiscal
quarterly period ended subsequent to the date of the latest applicable
financial statements delivered pursuant to clause (ii) of this
paragraph as to which such financial statements are available, and such
financial statements shall not, in the reasonable judgment of the
Lenders, reflect any material adverse change in the consolidated
financial condition of the Company, as reflected in the financial
statements or projections contained in the Confidential Information
Memorandum.
(d) Approvals. All governmental and third party approvals
necessary in connection with the Acquisition, the continuing operations
of the Company and its Subsidiaries and the transactions contemplated
hereby shall have been obtained and be in full force and effect, and
all applicable waiting periods shall have expired without any action
being taken or threatened by any competent authority that would
restrain, prevent or otherwise impose adverse conditions on the
Acquisition or the financing contemplated hereby.
(e) Business Plan. The Lenders shall have received a business
plan for the Company and its Subsidiaries for the five fiscal years
ending December 31, 2002 and a written discussion of the assumptions
supporting the business plan of the Company and its Subsidiaries for
the period from the Closing Date through the final maturity of the Term
Loans.
(f) Lien Searches. The Administrative Agent shall have
received the results of a recent lien search in each of the
jurisdictions where assets of the Loan Parties are located, and such
search shall reveal no liens on any of the assets of the Company or its
Subsidiaries except for liens permitted by Section 9.3 or with respect
to which arrangements for the termination thereof shall have been made
as provided in Section 7.1(b)(iii)(B).
(g) Environmental Audit. The Administrative Agent shall have
received an environmental audit from Shield Environmental Associates,
Inc. with respect to the real properties of the Company and its
Subsidiaries specified by the Administrative Agent as set forth on
Schedule 7.1(g).
(h) Fees. The Lenders, the Administrative Agent and the
Arranger shall have received all fees required to be paid, and all
expenses for which invoices have been presented (including the
reasonable fees and expenses of legal counsel), on or before the
Closing Date. All such amounts will be paid with proceeds of Loans made
on the
60
54
Closing Date and will be reflected in the funding instructions given by
the Company to the Administrative Agent on or before the Closing Date.
(i) Closing Certificate. The Administrative Agent shall have
received, with a counterpart for each Lender, a certificate of each
Loan Party, dated the Closing Date, substantially in the form of
Exhibit E, with appropriate insertions and attachments.
(j) Legal Opinions. The Administrative Agent shall have
received the following executed legal opinions:
(i) the legal opinion of Curtis, Mallet-Prevost, Colt
& Mosle counsel to the Company and its Subsidiaries,
substantially in the form of Exhibit G-1;
(ii) the legal opinion of local counsel in each
foreign jurisdiction where a Subsidiary, if any, that is a
Subsidiary Borrower on the Closing Date is incorporated,
which opinion shall be satisfactory to the Administrative
Agent;
(iii) the legal opinion of local counsel in Colorado,
which opinion shall be satisfactory to the Administrative
Agent; and
(iv) the legal opinion of local counsel in The
Netherlands, which opinion shall be satisfactory to the
Administrative Agent.
Each such legal opinion shall cover such other matters incident to the
transactions contemplated by this Agreement as the Administrative Agent
may reasonably require.
(k) Pledged Stock; Stock Powers; Pledged Notes. The
Collateral Agent shall have received (i) the certificates representing
the shares of Capital Stock that are certificated pledged pursuant to
the Guarantee and Collateral Agreement, together with an undated stock
power for each such certificate executed in blank by a duly authorized
officer of the pledgor thereof and (ii) each promissory note (if any)
pledged to the Collateral Agent pursuant to the Guarantee and
Collateral Agreement endorsed (without recourse) in blank (or
accompanied by an executed transfer form in blank) by the pledgor
thereof.
(l) Filings, Registrations and Recordings. Each document
(including any Uniform Commercial Code financing statement) required by
the Security Documents or under law or reasonably requested by the
Collateral Agent to be filed, registered or recorded in order to create
in favor of the Collateral Agent, for the benefit of the Lenders, a
perfected (to the extent perfection is permitted or provided for under
any applicable foreign law) Lien on the Collateral described therein,
prior and superior in right to any other Person (other than with
respect to Liens expressly permitted by Section 9.3), shall be in
proper form for filing, registration or recordation.
61
55
(m) Solvency Certificate. The Administrative Agent shall have
received a solvency certificates substantially in the form of Exhibit I
hereto, from the Chief Financial Officer of the Company.
(n) Insurance. The Administrative Agent shall have received
insurance certificates satisfying the requirements of Section 5.2(b) of
the Guarantee and Collateral Agreement.
7.2 Conditions to Each Extension of Credit. The agreement of
each Lender to make any extension of credit requested to be made by it on any
date (including its initial extension of credit) is subject to the satisfaction
of the following conditions precedent:
(a) Representations and Warranties. Each of the
representations and warranties made by any Loan Party in or pursuant to
the Loan Documents shall be true and correct in all material respects
on and as of such date as if made on and as of such date (it being
understood and agreed that any representation or warranty which by its
terms is made as of a specified date shall be required to be true and
correct in all material respects only as of such specified date).
(b) No Default. No Default or Event of Default shall have
occurred and be continuing on such date or after giving effect to the
extensions of credit requested to be made on such date.
Each borrowing by and issuance of a Letter of Credit on behalf of any Borrower
hereunder shall constitute a representation and warranty by the Company as of
the date of such extension of credit that the conditions contained in this
Section 7.2 have been satisfied. In addition, each borrowing by a Subsidiary
Borrower hereunder shall constitute a representation and warranty by such
Subsidiary Borrower (insofar as such conditions relate to representations and
warranties or covenants or agreements of such Subsidiary Borrower) as of the
date thereof that the conditions contained in this Section 7.2 have been
satisfied.
7.3 Each Subsidiary Borrower Credit Event. The agreement of
each Revolving Lender to make the initial extension of credit requested to be
made by it to any Subsidiary Borrower on any date is subject to the satisfaction
of the following conditions precedent:
(a) Borrowing Subsidiary Agreement. The Administrative Agent
shall have received the Borrowing Subsidiary Agreement for such
Subsidiary Borrower executed and delivered by the Company and such
Subsidiary Borrower.
(b) Opinions. The Administrative Agent shall have received a
satisfactory written opinion of reputable counsel for such Subsidiary
Borrower, substantially in the form of Exhibit G-2, and covering such
other matters relating to such Subsidiary Borrower or its Borrowing
Subsidiary Agreement as the Administrative Agent shall reasonably
request.
62
56
(c) Other Documents. The Administrative Agent shall have
received a Closing Certificate in the form of Exhibit E hereto, with
appropriate insertions and attachments, and such other documents and
certificates as the Administrative Agent or its counsel may reasonably
request relating to the organization, existence and good standing of
such Subsidiary Borrower, the authorization of the transactions
contemplated hereby relating to such Subsidiary Borrower and any other
legal matters relating to such Subsidiary Borrower, its Borrowing
Subsidiary Agreement or such transactions, all in form and substance
satisfactory to the Administrative Agent.
SECTION 8. AFFIRMATIVE COVENANTS
The Company agrees, and each Subsidiary Borrower agrees (to
the extent specifically applicable to such Subsidiary Borrower), that, so long
as the Commitments remain in effect, any Letter of Credit remains outstanding or
any Loan or other amount is owing to any Lender or the Administrative Agent
hereunder, each such party shall and shall cause each of its Subsidiaries to:
8.1 Financial Statements. Furnish to the Administrative Agent
and each Lender:
(a) as soon as available, but in any event within 90 days
after the end of each fiscal year of the Company, a copy of the audited
consolidated balance sheet of the Company and its consolidated
Subsidiaries as at the end of such year and the related audited
consolidated statements of income and of cash flows for such year,
setting forth in each case in comparative form the figures for the
previous year, reported on without a "going concern" or like
qualification or exception, or qualification arising out of the scope
of the audit, by Deloitte & Touche LLP or other independent certified
public accountants of nationally recognized standing; and
(b) as soon as available, but in any event not later than 45
days after the end of each of the first three quarterly periods of each
fiscal year of the Company, the unaudited condensed consolidated
balance sheet of the Company and its consolidated Subsidiaries as at
the end of such quarter and the related unaudited condensed
consolidated statements of income and of cash flows for such quarter
and the portion of the fiscal year through the end of such quarter,
setting forth in each case in comparative form the figures for the
previous year, certified by a Responsible Officer as being fairly
stated in all material respects (subject to normal year-end audit
adjustments).
All such financial statements shall be complete and correct in all material
respects and shall be prepared in reasonable detail and in accordance with GAAP
applied consistently throughout the periods reflected therein and with prior
periods (except as approved by such accountants or officer, as the case may be,
and disclosed therein).
8.2 Certificates; Other Information. Furnish to the
Administrative Agent and each Lender (or, in the case of clause (f), to the
relevant Lender):
63
57
(a) concurrently with the delivery of any financial
statements pursuant to Section 8.1, (i) a certificate of a Responsible
Officer stating that, to the best of such Responsible Officer's
knowledge, each Loan Party during such period has observed or performed
in all material respects all of its covenants and other agreements, and
satisfied in all material respects every condition, contained in this
Agreement and the other Loan Documents to which it is a party to be
observed, performed or satisfied by it, and that such Responsible
Officer has obtained no knowledge of any Default or Event of Default
except as specified in such certificate and (ii) in the case of
quarterly or annual financial statements, (x) a Compliance Certificate
containing all information and calculations necessary for determining
compliance by the Company and its Subsidiaries with the provisions of
this Agreement referred to therein as of the last day of the fiscal
quarter or fiscal year of the Company, as the case may be, and (y) to
the extent not previously disclosed to the Administrative Agent, a
listing of any county or state within the United States where any Loan
Party keeps inventory or equipment acquired by any Loan Party since the
date of the most recent list delivered pursuant to this clause (y) (or,
in the case of the first such list so delivered, since the Closing
Date), together with evidence satisfactory to the Administrative Agent
that all actions required to perfect the security interest (if required
under this Agreement or any other Loan Document) of the Lenders in such
property have been taken;
(b) as soon as available, and in any event no later than 45
days after the end of each fiscal year of the Company, a detailed
consolidated budget for the following fiscal year (including a
projected consolidated balance sheet of the Company and its
Subsidiaries as of the end of the following fiscal year, the related
consolidated statements of projected cash flow, projected changes in
financial position and projected income and a description of the
underlying assumptions applicable thereto), and, as soon as available,
significant revisions, if any, of such budget and projections with
respect to such fiscal year (collectively, the "Projections"), which
Projections shall in each case be accompanied by a certificate of a
Responsible Officer stating that such Projections are based on
reasonable estimates, information and assumptions and that such
Responsible Officer has no reason to believe that such Projections are
incorrect or misleading in any material respect;
(c) within 45 days after the end of each fiscal quarter of
the Company, a narrative discussion and analysis of the financial
condition and results of operations of the Company and its Subsidiaries
for such fiscal quarter and for the period from the beginning of the
then current fiscal year to the end of such fiscal quarter, as compared
to the comparable periods of the previous year;
(d) no later than 5 Business Days prior to the effectiveness
thereof, copies of substantially final drafts of any proposed material
amendment, supplement, waiver or other modification with respect to the
Acquisition Documentation;
(e) within five days after the same are sent, copies of all
financial statements and reports that the Company sends to the holders
of any class of its debt securities or public
64
58
equity securities and, within five days after the same are filed,
copies of all financial statements and reports that the Company may
make to, or file with, the SEC; and
(f) promptly, such additional financial and other information
as any Lender may from time to time reasonably request.
8.3 Payment of Obligations. Pay, discharge or otherwise
satisfy at or before maturity or before they become delinquent, as the case may
be, all its material obligations of whatever nature, except where the amount or
validity thereof is currently being contested in good faith by appropriate
proceedings and reserves in conformity with GAAP with respect thereto have been
provided on the books of the Company or its Subsidiaries, as the case may be.
8.4 Maintenance of Existence; Compliance. (a) (i) Preserve,
renew and keep in full force and effect its corporate existence and (ii) take
all reasonable action to maintain all rights, privileges and franchises
necessary or desirable in the normal conduct of its business, except, in each
case, as otherwise permitted by Section 9.4 and except, in the case of clause
(ii) above, to the extent that failure to do so could not reasonably be expected
to have a Material Adverse Effect; and (b) comply with all Contractual
Obligations and Requirements of Law except to the extent that failure to comply
therewith could not, in the aggregate, reasonably be expected to have a Material
Adverse Effect.
8.5 Maintenance of Property; Insurance. (a) Keep all property
useful and necessary in its business in good working order and condition,
ordinary wear and tear excepted and (b) maintain with financially sound and
reputable insurance companies insurance on all its property in at least such
amounts and against at least such risks (but including in any event public
liability, product liability and business interruption) as are usually insured
against in the same general area by companies engaged in the same or a similar
business.
8.6 Inspection of Property; Books and Records; Discussions.
(a) Keep proper books of records and account in which full, true and correct
entries in conformity with GAAP and all Requirements of Law shall be made of all
dealings and transactions in relation to its business and activities and (b)
permit representatives of any Lender to visit and inspect any of its properties
and examine and make abstracts from any of its books and records at any
reasonable times on any Business Day and as often as may reasonably be desired
and to discuss the business, operations, properties and financial and other
condition of the Company and its Subsidiaries with officers and employees of the
Company and its Subsidiaries and with its independent certified public
accountants, with prior notice to the Company or its Subsidiaries and subject to
reasonable security and confidentiality procedures..
8.7 Notices. Promptly give notice to the Administrative Agent
and each Lender of:
(a) the occurrence of any Default or Event of Default;
(b) any (i) default or event of default under any Contractual
Obligation of the Company or any of its Subsidiaries or (ii)
litigation, investigation or proceeding that may
65
59
exist at any time between the Company or any of its Subsidiaries and
any Governmental Authority, that in either case, if not cured or if
adversely determined, as the case may be, could reasonably be expected
to have a Material Adverse Effect;
(c) any litigation or proceeding affecting the Company or any
of its Subsidiaries in which the amount involved is $5,000,000 or more
and not covered by insurance or in which injunctive or similar relief
is sought;
(d) the following events, as soon as possible and in any
event within 30 days after the Company knows or has reason to know
thereof: (i) the occurrence of any Reportable Event with respect to any
Plan, a failure to make any required contribution to a Plan, the
creation of any Lien in favor of the PBGC or a Plan or any withdrawal
from, or the termination, Reorganization or Insolvency of, any
Multiemployer Plan or (ii) the institution of proceedings or the taking
of any other action by the PBGC or the Company or any Commonly
Controlled Entity or any Multiemployer Plan with respect to the
withdrawal from, or the termination, Reorganization or Insolvency of,
any Plan; and
(e) any development or event that has had or could reasonably
be expected to have a Material Adverse Effect.
Each notice pursuant to this Section 8.7 shall be accompanied by a statement of
a Responsible Officer setting forth details of the occurrence referred to
therein and stating what action the Company or the relevant Subsidiary proposes
to take with respect thereto.
8.8 Environmental Laws. (a) Comply in all material respects
with, and ensure compliance in all material respects by all tenants and
subtenants, if any, with, all applicable Environmental Laws, and obtain and
comply in all material respects with and maintain, and ensure that all tenants
and subtenants obtain and comply in all material respects with and maintain, any
and all licenses, approvals, notifications, registrations or permits required by
applicable Environmental Laws.
(b) Conduct and complete all investigations, studies,
sampling and testing, and all remedial, removal and other actions required under
Environmental Laws and promptly comply in all material respects with all lawful
orders and directives of all Governmental Authorities regarding Environmental
Laws.
8.9 Additional Collateral, etc. (a) With respect to any
property acquired after the Closing Date by the Company or any of its
Subsidiaries (other than (x) any property described in paragraph (b) or (c)
below, (y) any property subject to a Lien expressly permitted by Section 9.3(g)
and (z) property acquired by any Excluded Foreign Subsidiary or Immaterial
Subsidiary) as to which the Collateral Agent, for the benefit of the Lenders,
does not have a perfected (to the extent perfection is permitted or provided for
under any applicable foreign law) Lien, promptly (i) execute and deliver to the
Collateral Agent such amendments to the Guarantee and Collateral Agreement or
such other documents as the Collateral Agent deems necessary or advisable to
grant to the Collateral Agent, for the benefit of the Lenders, a security
interest in
66
60
such property and (ii) take all actions necessary or advisable to grant to the
Collateral Agent, for the benefit of the Lenders, a perfected (to the extent
perfection is permitted or provided for under any applicable foreign law) first
priority security interest in such property, including the filing of Uniform
Commercial Code financing statements in such jurisdictions as may be required by
the Guarantee and Collateral Agreement or by law or as may be requested by the
Collateral Agent.
(b) With respect to any new Subsidiary (other than an
Excluded Foreign Subsidiary or an Immaterial Subsidiary) created or acquired
after the Closing Date by the Company (which, for the purposes of this paragraph
(b), shall include any existing Subsidiary that ceases to be an Excluded Foreign
Subsidiary or an Immaterial Subsidiary), the Company or any of its Subsidiaries,
promptly (i) execute and deliver to the Collateral Agent such amendments to the
Guarantee and Collateral Agreement as the Collateral Agent deems necessary or
advisable to grant to the Collateral Agent, for the benefit of the Lenders, a
perfected (to the extent perfection is permitted or provided for under any
applicable foreign law) first priority security interest in the Capital Stock of
such new Subsidiary that is owned by the Company or any of its Subsidiaries,
(ii) deliver to the Collateral Agent the certificates representing such Capital
Stock, together with undated stock powers, in blank, executed and delivered by a
duly authorized officer of the Company or such Subsidiary, as the case may be,
(iii) cause such new Subsidiary (A) to become a party to the Guarantee and
Collateral Agreement, (B) to take such actions necessary or advisable to grant
to the Collateral Agent for the benefit of the Lenders a perfected first
priority security interest in the Collateral described in the Guarantee and
Collateral Agreement with respect to such new Subsidiary, including the filing
of Uniform Commercial Code financing statements in such jurisdictions as may be
required by the Guarantee and Collateral Agreement or by law or as may be
requested by the Collateral Agent and (C) to deliver to the Collateral Agent a
certificate of such Subsidiary, substantially in the form of Exhibit E, with
appropriate insertions and attachments, and (iv) if requested by the Collateral
Agent, deliver to the Collateral Agent legal opinions relating to the matters
described above, which opinions shall be in form and substance, and from
counsel, reasonably satisfactory to the Collateral Agent.
(c) With respect to any new Excluded Foreign Subsidiary
(other than an Immaterial Subsidiary) created or acquired after the Closing Date
by the Company or any of its Subsidiaries, promptly (i) execute and deliver to
the Collateral Agent such amendments to the Guarantee and Collateral Agreement
as the Collateral Agent deems necessary or advisable to grant to the Collateral
Agent, for the benefit of the Lenders, a perfected (to the extent perfection is
permitted or provided for under any applicable foreign law) first priority
security interest in the Capital Stock of such new Subsidiary that is owned by
the Company or any of its Subsidiaries (provided that in no event shall more
than 65% of the total outstanding Capital Stock of any such new Subsidiary be
required to be so pledged), (ii) deliver to the Collateral Agent the
certificates representing such Capital Stock (if such Capital Stock is
certificated), together with undated stock powers, in blank, executed and
delivered by a duly authorized officer of the Company or such Subsidiary, as the
case may be, and take such other action as may be necessary or, in the opinion
of the Collateral Agent, desirable to perfect (to the extent perfection is
permitted or provided for under any applicable foreign law) the Collateral
Agent's security interest therein, and (iii) if requested by the Collateral
Agent, deliver to the Collateral Agent legal opinions
67
61
relating to the matters described above, which opinions shall be in form and
substance, and from counsel, reasonably satisfactory to the Collateral Agent.
SECTION 9. NEGATIVE COVENANTS
The Company agrees and each Subsidiary Borrower agrees (to
the extent specifically applicable to such Subsidiary Borrower) that, so long as
the Commitments remain in effect, any Letter of Credit remains outstanding or
any Loan or other amount is owing to any Lender or the Administrative Agent
hereunder, each such party shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly:
9.1 Financial Condition Covenants.
(a) Consolidated Leverage Ratio. Permit the Consolidated
Leverage Ratio of the Company as at any day during the periods set forth below
to exceed the ratio set forth below opposite such period (it being understood
that, notwithstanding the dates set forth below, any step-down in the
Consolidated Leverage Ratio shall occur on the last day of the fiscal quarter
concluding closest to any date set forth below):
Consolidated
Period Leverage Ratio
------ --------------
Closing Date -
January 3, 1999 4.25
January 4, 1999 -
January 2, 2000 4.25
January 3, 2000 -
December 31, 2000 3.75
January 1, 2001-
December 30, 2001 3.50
December 31, 2001-
December 29, 2002 3.25
December 30, 2002 and thereafter 3.00
(b) Consolidated Interest Coverage Ratio. Permit the
Consolidated Interest Coverage Ratio for any period of four consecutive fiscal
quarters of the Company (or, if less, the number of full fiscal quarters
subsequent to the Closing Date) ending with the fiscal quarter concluding
closest to any date set forth below to be less than the ratio set forth below
opposite such date:
68
62
Consolidated Interest
Fiscal Quarter Coverage Ratio
-------------- ---------------------
December 31, 1998 3.00
March 31, 1999 3.00
June 30, 1999 3.00
September 30, 1999 3.00
December 31, 1999 3.25
March 31, 2000 3.25
June 30, 2000 3.25
September 30, 2000 3.25
December 31, 2000 and thereafter 3.50
(c) Consolidated Net Worth. Permit Consolidated Net Worth at
any time to be less than (i) the sum of (A) $175,000,000 and (B) 50% of
cumulative Consolidated Net Income for each fiscal quarter of the Company
(beginning with the fiscal quarter ending January 3, 1999) for which
Consolidated Net Income is positive less (ii) the aggregate purchase price of
shares of the Company's common stock repurchased by the Company of up to
$25,000,000.
9.2 Indebtedness. Create, issue, incur, assume, become liable
in respect of or suffer to exist any Indebtedness, except:
(a) Indebtedness of any Loan Party pursuant to any Loan
Document;
(b) (i) Indebtedness of the Company to any Subsidiary and of
any Wholly Owned Subsidiary to the Company or any other Subsidiary so
long as, if applicable, the provisions of Section 9.8(h) are complied
with or (ii) Indebtedness of any Non-Guarantor Subsidiary to any other
Non-Guarantor Subsidiary;
(c) Guarantee Obligations by the Company or any of its
Subsidiaries of obligations of any Wholly Owned Subsidiary;
(d) Indebtedness outstanding on the date hereof and listed on
Schedule 9.2(d) and any refinancings, refundings, renewals or
extensions thereof (without increasing, or shortening the maturity of,
the principal amount thereof);
(e) Indebtedness (including, without limitation, Capital
Lease Obligations) secured by Liens permitted by Section 9.3(g) in an
aggregate principal amount not to exceed $30,000,000 at any one time
outstanding;
(f) (i) Indebtedness of MTKG in respect of the MTKG Credit
Agreement and (ii) Guarantee Obligations of the Company and DII
International Holdings, CV, a wholly-owned foreign subsidiary of the
Company, in respect of such Indebtedness;
(g) additional Indebtedness of the Company or any of its
Subsidiaries in an aggregate principal amount (for the Company and all
Subsidiaries) not to exceed $25,000,000 at any one time outstanding;
69
63
(h) subordinated Indebtedness that requires no principal
repayment prior to the date which is six months following the Scheduled
Revolving Termination Date, has subordination terms reasonably
acceptable to the Administrative Agent and bears interest at an annual
rate of not more than the three month Eurodollar Rate plus 10%;
(i) Indebtedness under Derivative Agreements entered into by
the Company or any of its Subsidiaries to protect against changes in
interest rates or currency exchange rates or commodity prices or
similar risks and not for speculative purposes (but in any event
excluding any Derivative Agreements under which the Company or any of
its Subsidiaries may become obligated to make any payments resulting
from changes in market values of the Subordinated Notes or any Capital
Stock of the Company); and
(j) Indebtedness in connection with one or more standby or
trade letters of credit or performance, surety or appeal bonds issued
in the ordinary course of business or pursuant to self-insurance
obligations and not in connection with the borrowing of money or the
obtaining of advances or credit in an aggregate amount not to exceed
$25,000,000 at any one time outstanding.
9.3 Liens. Create, incur, assume or suffer to exist any Lien
upon any of its property, whether now owned or hereafter acquired, except for:
(a) Liens for taxes, assessments or governmental charges or
levies not yet delinquent or that are being contested in good faith by
appropriate proceedings, provided that adequate reserves with respect
thereto are maintained on the books of the Company or its Subsidiaries,
as the case may be, in conformity with GAAP;
(b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's or other like Liens arising in the ordinary course of
business that are not overdue for a period of more than 60 days or that
are being contested in good faith by appropriate proceedings;
(c) pledges or deposits in connection with workers'
compensation, unemployment insurance and other social security
legislation;
(d) deposits to secure the performance of bids, trade
contracts (other than for borrowed money), leases, statutory
obligations, surety and appeal bonds, performance bonds and other
obligations of a like nature incurred in the ordinary course of
business;
(e) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business that, in the
aggregate, are not substantial in amount and that do not in any case
materially detract from the value of the property subject thereto or
materially interfere with the ordinary conduct of the business of the
Company or any of its Subsidiaries;
(f) Liens in existence on the date hereof listed on Schedule
9.3(f), securing Indebtedness permitted by Section 9.2(d), provided
that no such Lien is spread to cover
70
64
any additional property after the Closing Date and that the amount of
Indebtedness secured thereby is not increased;
(g) (I) Liens securing Indebtedness of the Company or any
other Subsidiary incurred pursuant to Section 9.2(e) to finance the
acquisition of fixed or capital assets, provided that (i) such Liens
shall be created substantially simultaneously with the acquisition of
such fixed or capital assets, (ii) such Liens do not at any time
encumber any property other than the property financed by such
Indebtedness and (iii) the amount of Indebtedness secured thereby (A)
is not increased and (B) does not exceed the acquisition cost of such
fixed or capital assets and (II) Liens on any assets acquired by the
Company or any Subsidiary, which Liens were not created in
contemplation of such acquisition, provided that such Liens do not at
any time encumber any property other than the assets so acquired;
(h) Liens created pursuant to the Security Documents;
(i) any interest or title of a lessor under any lease entered
into by the Company or any other Subsidiary in the ordinary course of
its business and covering only the assets so leased;
(j) Liens created pursuant to the Security Documents under
the MTKG Credit Agreement; and
(k) Liens not otherwise permitted by this Section so long as
neither (i) the aggregate outstanding principal amount of the
obligations secured thereby nor (ii) the aggregate fair market value
(determined as of the date such Lien is incurred) of the assets subject
thereto exceeds (as to the Company and all Subsidiaries) $5,000,000 at
any one time.
9.4 Fundamental Changes. Enter into any merger, consolidation
or amalgamation, or liquidate, wind up or dissolve itself (or suffer any
liquidation or dissolution), or Dispose of, all or substantially all of its
property or business (except as permitted by Section 9.5), except that:
(a) any Subsidiary of the Company may be merged or
consolidated with or into the Company (provided that the Company shall
be the continuing or surviving corporation) or with or into any Wholly
Owned Subsidiary Guarantor (provided that the Wholly Owned Subsidiary
Guarantor shall be the continuing or surviving corporation);
(b) any Subsidiary of the Company may be merged or
consolidated with or into any Person (provided that the continuing or
surviving entity of such merger or consolidation shall be a Subsidiary
and the Company shall comply with the provisions of Section 8.9 with
respect thereto) to the extent the acquisition of such Person is an
Investment permitted under Section 9.8;
71
65
(c) any Non-Guarantor Subsidiary may merge or consolidate
with or into any other Non Guarantor Subsidiary;
(d) any Non-Guarantor Subsidiary may Dispose of any or all of
its assets (upon voluntary liquidation or otherwise) to any other
Subsidiary; and
(e) any Subsidiary of the Company may Dispose of any or all
of its assets (upon voluntary liquidation or otherwise) to the Company
or any Wholly Owned Subsidiary Guarantor.
9.5 Disposition of Property. Dispose of any of its property,
whether now owned or hereafter acquired, or, in the case of any Subsidiary,
issue or sell any shares of such Subsidiary's Capital Stock to any Person,
except:
(a) the Disposition of obsolete or worn out property in the
ordinary course of business;
(b) the sale of inventory in the ordinary course of business;
(c) Dispositions permitted by Section 9.4(d) or (e);
(d)(i) the sale or issuance of any Subsidiary's Capital Stock
to the Company or any Wholly Owned Subsidiary Guarantor or (ii) the
sale or issuance of the Capital Stock of any Non-Guarantor Subsidiary
to any Non-Guarantor Subsidiary;
(e) Dispositions of other property having a fair market
value, in the aggregate on any date while this Agreement is in effect,
not to exceed 10% in respect of fiscal year 1998, 20% in respect of
fiscal year 1999 or 25% thereafter of the net fixed asset value of the
Company and its Subsidiaries, on a consolidated basis, as determined on
the last day of the fiscal year of the Company most recently ended
prior to such date;
(f) Dispositions described on Schedule 9.5(f); and
(g) Dispositions permitted by Section 9.11
9.6 Restricted Payments. Declare or pay any dividend (other
than dividends payable solely in common stock of the Person making such
dividend) on, or make any payment on account of, or set apart assets for a
sinking or other analogous fund for, the purchase, redemption, defeasance,
retirement or other acquisition of, any Subordinated Notes or Capital Stock of
the Company or any Subsidiary, whether now or hereafter outstanding, or make any
other distribution in respect thereof, either directly or indirectly, whether in
cash or property or in obligations of the Company or any Subsidiary or enter
into derivatives or other transaction (other than the sale of puts with respect
to the Company's Capital Stock to the extent the Company would be permitted to
repurchase such Capital Stock under this Agreement) with any financial
institution, commodities or stock exchange or clearinghouse (a "Derivatives
Counterparty")
72
66
obligating it to make payments to such Derivatives Counterparty as a result of
any change in market value of any such Capital Stock (collectively, "Restricted
Payments"), except that:
(a) any Subsidiary may make Restricted Payments to the
Company or any Wholly Owned Subsidiary Guarantor;
(b) any Non-Guarantor Subsidiary may make Restricted Payments
to any other Subsidiary,
(c) so long as no Default or Event of Default shall have
occurred and be continuing, the Company may repurchase the Convertible
Subordinated Notes; provided, that if such repurchase is not financed
with Indebtedness described in Section 9.2(h), (i) the ratio of
Consolidated Senior Funded Debt to Consolidated EBITDA for the four
consecutive fiscal quarters most recently ended shall not exceed
1.5:1.0 and (ii) the ratio of Consolidated Total Debt to Consolidated
EBITDA for the four consecutive fiscal quarters most recently ended
shall not exceed 2.5:1.0, in the case of each of clause (i) and (ii)
after giving effect to the proposed repurchase of Convertible
Subordinated Notes;
(d) so long as no Default or Event of Default shall have
occurred and be continuing, the Company may repurchase shares of its
common stock; provided, that the aggregate amount of such repurchases
shall not exceed $25,000,000 during the term of this Agreement.
9.7 Capital Expenditures. Make or commit to make any Capital
Expenditure, except (a) Capital Expenditures of the Company and its Subsidiaries
in the ordinary course of business not exceeding 10% of the Company's revenues
for the four consecutive fiscal quarters most recently ended less the amount of
the aggregate Capital Expenditures made by the Company and its Subsidiaries for
the current fiscal quarter and the three fiscal quarters most recently ended,
excluding all Capital Expenditures made or committed related to the Acquisition
and the Greatsino Acquisition; provided, that up to $25,000,000 of any such
amount referred to above, if not so expended in the fiscal year for which it is
permitted, may be carried over for expenditure in the next succeeding fiscal
year and (b) Capital Expenditures made with the proceeds of any Reinvestment
Deferred Amount.
9.8 Investments. Make any advance, loan, extension of credit
(by way of guaranty or otherwise) or capital contribution to, or purchase any
Capital Stock, bonds, notes, debentures or other debt securities of, or make any
other Investment in, any Person (all of the foregoing, "Investments"), except:
(a) extensions of trade credit in the ordinary course of
business;
(b) investments in Cash Equivalents;
(c) Guarantee Obligations permitted by Section 9.2;
73
67
(d) loans and advances to any individual employee of the
Company or any Subsidiary of the Company in the ordinary course of
business (including for travel, entertainment and relocation expenses)
in an aggregate amount for the Company or any Subsidiary of the Company
not to exceed $5,000,000 at any one time outstanding;
(e) the Acquisition;
(f) repurchases of the Convertible Subordinated Notes and
Capital Stock by the Company pursuant to Section 9.6(c) and 9.6(d),
respectively;
(g) Investments by the Company in DII International Holdings
CV, a Dutch subsidiary of the Company ("Holdings"), and by Holdings in
MTKG (in the form of capital contribution, direct or indirect
guarantees of Indebtedness or participations in Indebtedness), the
proceeds of which shall be used to fund the purchase price of the
Acquisition and costs and expenses in connection therewith;
(h) Investments by the Company or any of its Subsidiaries in
the Company or any Person that, prior to or as a result of such
Investment, is or becomes a Wholly Owed Subsidiary; provided that if
any such Investment or series of Investments exceeds $500,000 and is
made by the Company or any Subsidiary Guarantor in a Wholly Owned
Subsidiary which is not or does not become a Subsidiary Guarantor, (i)
such Investment is evidenced by a promissory note pledged in favor of
the Administrative Agent for the benefit of the Lenders and (ii) such
Investment constitutes Indebtedness of the primary obligor that is not
subordinate to any other Indebtedness of such obligor;
(i) Investments in any Person engaged or proposing to engage
in the same or a similar line of business as the Company and its
Subsidiaries, provided that (x) such Investments under this clause (i)
aggregate no more than one or a combination of the following
computations: (A) $10,000,000 in any year, provided that any amount not
so invested in any year may be used for such Investments in the next
succeeding fiscal year, less any amount used pursuant to clause (B)(1)
of this clause (i) and (B)(1) any amount not previously used pursuant
to clause (A) plus (2) $10,000,000 less any amount previously invested
pursuant to this clause (B) and (y) Investments made pursuant to this
clause (i) during any fiscal year shall be deemed made, first, in
respect of amounts permitted for such fiscal year as provided above
and, second, in respect of amounts carried over from the prior fiscal
year pursuant to subclause (A) above; provided further that Investments
in minority interests shall not exceed $25,000,000 in the aggregate;
(j) in addition to Investments otherwise expressly permitted
by this Section, Investments by the Company or any of its Subsidiaries
in an aggregate amount (valued at cost) not to exceed $5,000,000 in any
fiscal year; and
(k) Investments described on Schedule 9.8(k).
9.9 Optional Payments and Modifications of Certain Debt
Instruments. (a) Except as permitted by Section 9.6(c), make any optional or
voluntary payment, prepayment,
74
68
repurchase or redemption of or otherwise optionally or voluntarily defease or
segregate funds with respect to any Subordinated Indebtedness or enter into any
derivative or other transaction with any Derivatives Counterparty obligating it
to make payments to such Derivatives Counterparty as a result of any change in
market value of Subordinated Indebtedness, (b) amend, modify, waive or otherwise
change, or consent or agree to any amendment, modification, waiver or other
change to, any of the terms of Subordinated Indebtedness (other than any such
amendment, modification, waiver or other change that (i) would extend the
maturity or reduce the amount of any payment of principal thereof or reduce the
rate or extend any date for payment of interest thereon and (ii) does not
involve the payment of a consent fee) or (c) designate any Indebtedness (other
than obligations of the Loan Parties pursuant to the Loan Documents) as
"Designated Senior Indebtedness" for the purposes of any indenture pursuant to
which Subordinated Indebtedness is issued.
9.10 Transactions with Affiliates. Enter into any transaction
(other than such transactions between Non-Guarantor Subsidiaries), including any
purchase, sale, lease or exchange of property, the rendering of any service or
the payment of any management, advisory or similar fees, with any Affiliate
(other than the Company or any Wholly Owned Subsidiary Guarantor) unless such
transaction is (a) otherwise permitted under this Agreement and upon fair and
reasonable terms no less favorable to the Company or such Subsidiary, as the
case may be, than it would obtain in a comparable arm's length transaction with
a Person that is not an Affiliate, or (b) in the ordinary course of business of
the Company or such Subsidiary, as the case may be, and upon fair and reasonable
terms no less favorable to the Company or such Subsidiary, as the case may be,
than it would obtain in a comparable arm's length transaction with a Person that
is not an Affiliate.
9.11 Sales and Leasebacks. Enter into any arrangement with
any Person providing for the leasing by the Company or any Subsidiary of real or
personal property that has been or is to be sold or transferred by the Company
or such Subsidiary to such Person or to any other Person to whom funds have been
or are to be advanced by such Person on the security of such property or rental
obligations of the Company or such Subsidiary (a "Sale Leaseback Transaction")
other than Sale Leaseback Transactions yielding proceeds not to exceed in the
aggregate 25% of Capital Expenditures for the four consecutive fiscal quarters
most recently ended; provided that any amount referred to above, if not so used
in the period for which it is permitted, may be carried over to a subsequent
period not later than the four quarters after the fiscal quarter in which it
became available; provided further that the aggregate amount of all Sale
Leaseback Transactions shall not exceed $50,000,000.
9.12 Changes in Fiscal Periods. Permit the fiscal year of the
Company to end on a day other than the Sunday closest to December 31 or change
the Company's method of determining fiscal quarters.
9.13 Negative Pledge Clauses. Enter into or suffer to exist
or become effective any agreement that prohibits or limits the ability of the
Company or any of its Subsidiaries to create, incur, assume or suffer to exist
any Lien upon any of its property or revenues, whether now owned or hereafter
acquired, other than (a) this Agreement and the other Loan Documents,
75
69
(b) the MTKG Credit Agreement, (c) the indenture governing the Company's 8.50%
Senior Subordinated Notes due 2007 and (d) any agreements governing any purchase
money Liens or Capital Lease Obligations otherwise permitted hereby (in which
case, any prohibition or limitation shall only be effective against the assets
financed thereby).
9.14 Clauses Restricting Subsidiary Distributions. Enter into
or suffer to exist or become effective any consensual encumbrance or restriction
on the ability of any Subsidiary of the Company to (a) make Restricted Payments
in respect of any Capital Stock of such Subsidiary held by, or pay any
Indebtedness owed to, the Company or any other Subsidiary of the Company, (b)
make loans or advances to, or other Investments in, the Company or any other
Subsidiary of the Company or (c) transfer any of its assets to the Company or
any other Subsidiary of the Company, except for such encumbrances or
restrictions existing under or by reason of (i) any restrictions existing under
the Loan Documents, (ii) the MTKG Credit Agreement, (iii) any restrictions with
respect to a Subsidiary imposed pursuant to an agreement that has been entered
into in connection with the Disposition of all or substantially all of the
Capital Stock or assets of such Subsidiary and (iv) restrictions with respect to
property which is subject to a Lien permitted by Sections 9.3(g) and 9.3(k).
9.15 Lines of Business. Enter into any business, either
directly or through any Subsidiary, except for those businesses in which the
Company and its Subsidiaries are engaged on the date of this Agreement (after
giving effect to the Acquisition) or that are reasonably related thereto.
9.16 Amendments to Acquisition Documents. (a) Amend,
supplement or otherwise modify (pursuant to a waiver or otherwise) the terms and
conditions of the indemnities and licenses furnished to the Company or any of
its Subsidiaries pursuant to the Acquisition Documentation or any other document
delivered by the Seller or any of its affiliates in connection therewith such
that after giving effect thereto such indemnities or licenses shall be
materially less favorable to the interests of the Loan Parties or the Lenders
with respect thereto or (b) otherwise amend, supplement or otherwise modify the
terms and conditions of the Acquisition Documentation or any such other
documents except for any such amendment, supplement or modification that (i)
becomes effective after the Closing Date and (ii) could not reasonably be
expected to have a Material Adverse Effect.
SECTION 10. EVENTS OF DEFAULT
If any of the following events shall occur and be continuing:
(a) any Borrower shall fail to pay any principal of any Loan
or Reimbursement Obligation when due in accordance with the terms
hereof; or any Borrower shall fail to pay any interest on any Loan or
Reimbursement Obligation, or any other amount payable hereunder or
under any other Loan Document, within five days after any such interest
or other amount becomes due in accordance with the terms hereof; or
76
70
(b) any representation or warranty made or deemed made by any
Loan Party herein or in any other Loan Document or that is contained in
any certificate, document or financial or other statement furnished by
it at any time under or in connection with this Agreement or any such
other Loan Document shall prove to have been inaccurate in any material
respect on or as of the date made or deemed made; or
(c) (i) any Loan Party shall default in the observance or
performance of any agreement contained in clause (i) or (ii) of Section
8.4(a) (with respect to the Company only), Section 8.7(a) or Section 9
of this Agreement or Sections 5.5 and 5.7(b) of the Guarantee and
Collateral Agreement; or
(d) any Loan Party shall default in the observance or
performance of any other agreement contained in this Agreement or any
other Loan Document (other than as provided in paragraphs (a) through
(c) of this Section), and such default shall continue unremedied for a
period of 30 days; or
(e) the Company or any of its Subsidiaries shall (i) default
in making any payment of any principal of any Indebtedness (including
any Guarantee Obligation, but excluding the Loans) on the scheduled or
original due date with respect thereto; or (ii) default in making any
payment of any interest on any such Indebtedness beyond the period of
grace, if any, provided in the instrument or agreement under which such
Indebtedness was created; or (iii) default in the observance or
performance of any other agreement or condition relating to any such
Indebtedness or contained in any instrument or agreement evidencing,
securing or relating thereto, or any other event shall occur or
condition exist, the effect of which default or other event or
condition is to cause, or to permit the holder or beneficiary of such
Indebtedness (or a trustee or agent on behalf of such holder or
beneficiary) to cause, with the giving of notice if required, such
Indebtedness to become due prior to its stated maturity or (in the case
of any such Indebtedness constituting a Guarantee Obligation) to become
payable; provided, that a default, event or condition described in
clause (i), (ii) or (iii) of this paragraph (e) shall not at any time
constitute an Event of Default unless, at such time, one or more
defaults, events or conditions of the type described in clauses (i),
(ii) and (iii) of this paragraph (e) shall have occurred and be
continuing with respect to Indebtedness the outstanding principal
amount of which exceeds in the aggregate $5,000,000; or
(f) (i) the Company or any of its Subsidiaries shall commence
any case, proceeding or other action (A) under any existing or future
law of any jurisdiction, domestic or foreign, relating to bankruptcy,
insolvency, reorganization or relief of debtors, seeking to have an
order for relief entered with respect to it, or seeking to adjudicate
it a bankrupt or insolvent, or seeking reorganization, arrangement,
adjustment, winding-up, liquidation, dissolution, composition or other
relief with respect to it or its debts, or (B) seeking appointment of a
receiver, trustee, custodian, conservator or other similar official for
it or for all or any substantial part of its assets, or the Company or
any of its Subsidiaries shall make a general assignment for the benefit
of its creditors; or (ii) there shall be commenced against the Company
or any of its Subsidiaries any case,
77
71
proceeding or other action of a nature referred to in clause (i) above
that (A) results in the entry of an order for relief or any such
adjudication or appointment or (B) remains undismissed, undischarged or
unbonded for a period of 60 days; or (iii) there shall be commenced
against the Company or any of its Subsidiaries any case, proceeding or
other action seeking issuance of a warrant of attachment, execution,
distraint or similar process against all or any substantial part of its
assets that results in the entry of an order for any such relief that
shall not have been vacated, discharged, or stayed or bonded pending
appeal within 60 days from the entry thereof; or (iv) the Company or
any of its Subsidiaries shall take any action in furtherance of, or
indicating its consent to, approval of, or acquiescence in, any of the
acts set forth in clause (i), (ii), or (iii) above; or (v) the Company
or any of its Subsidiaries shall generally not, or shall be unable to,
or shall admit in writing its inability to, pay its debts as they
become due; or
(g) (i) any Person shall engage in any "prohibited
transaction" (as defined in Section 406 of ERISA or Section 4975 of the
Code) involving any Plan, (ii) any "accumulated funding deficiency" (as
defined in Section 302 of ERISA), whether or not waived, shall exist
with respect to any Plan or any Lien in favor of the PBGC or a Plan
shall arise on the assets of the Company or any Commonly Controlled
Entity, (iii) a Reportable Event shall occur with respect to, or
proceedings shall commence to have a trustee appointed, or a trustee
shall be appointed, to administer or to terminate, any Single Employer
Plan, which Reportable Event or commencement of proceedings or
appointment of a trustee is, in the reasonable opinion of the Required
Lenders, likely to result in the termination of such Plan for purposes
of Title IV of ERISA, (iv) any Single Employer Plan shall terminate for
purposes of Title IV of ERISA, (v) the Company or any Commonly
Controlled Entity shall, or in the reasonable opinion of the Required
Lenders is likely to, incur any liability in connection with a
withdrawal from, or the Insolvency or Reorganization of, a
Multiemployer Plan or (vi) any other event or condition shall occur or
exist with respect to a Plan; and in each case in clauses (i) through
(vi) above, such event or condition, together with all other such
events or conditions, if any, could, in the sole judgment of the
Required Lenders, reasonably be expected to have a Material Adverse
Effect; or
(h) one or more judgments or decrees shall be entered against
the Company or any of its Subsidiaries involving in the aggregate a
liability (not paid or fully covered by insurance as to which the
relevant insurance company has acknowledged coverage) of $5,000,000 or
more, and all such judgments or decrees shall not have been vacated,
discharged, stayed or bonded pending appeal within 60 days from the
entry thereof; or
(i) any of the Security Documents shall cease, for any
reason, to be in full force and effect, or any Loan Party or any
Affiliate of any Loan Party shall so assert, or any Lien created by any
of the Security Documents shall cease to be enforceable and of the same
effect and priority purported to be created thereby; or
78
72
(j) the guarantee contained in Section 2 of the Guarantee and
Collateral Agreement shall cease, for any reason, to be in full force
and effect or any Loan Party or any Affiliate of any Loan Party shall
so assert; or
(k) a Change of Control shall occur;
then, and in any such event, (A) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (f) above with respect to the Company,
automatically the Commitments shall immediately terminate and the Loans
hereunder (with accrued interest thereon) and all other amounts owing under this
Agreement and the other Loan Documents (including all amounts of L/C
Obligations, whether or not the beneficiaries of the then outstanding Letters of
Credit shall have presented the documents required thereunder) shall immediately
become due and payable, and (B) if such event is any other Event of Default,
either or both of the following actions may be taken: (i) with the consent of
the Majority Revolving Facility Lenders, the Administrative Agent may, or upon
the request of the Majority Revolving Facility Lenders, the Administrative Agent
shall, by notice to the Company declare the Revolving Commitments to be
terminated forthwith, whereupon the Revolving Commitments shall immediately
terminate; and (ii) with the consent of the Required Lenders, the Administrative
Agent may, or upon the request of the Required Lenders, the Administrative Agent
shall, by notice to the Company, declare the Loans hereunder (with accrued
interest thereon) and all other amounts owing under this Agreement and the other
Loan Documents (including all amounts of L/C Obligations, whether or not the
beneficiaries of the then outstanding Letters of Credit shall have presented the
documents required thereunder) to be due and payable forthwith, whereupon the
same shall immediately become due and payable. With respect to all Letters of
Credit with respect to which presentment for honor shall not have occurred at
the time of an acceleration pursuant to this paragraph, the Company shall at
such time deposit in a cash collateral account opened by the Administrative
Agent an amount equal to the aggregate then undrawn and unexpired amount of such
Letters of Credit. Amounts held in such cash collateral account shall be applied
by the Administrative Agent to the payment of drafts drawn under such Letters of
Credit, and the unused portion thereof after all such Letters of Credit shall
have expired or been fully drawn upon, if any, shall be applied to repay other
obligations of the Borrowers hereunder and under the other Loan Documents. After
all such Letters of Credit shall have expired or been fully drawn upon, all
Reimbursement Obligations shall have been satisfied and all other obligations of
the Borrowers hereunder and under the other Loan Documents shall have been paid
in full, the balance, if any, in such cash collateral account shall be returned
to the Company (or such other Person as may be lawfully entitled thereto).
Except as expressly provided above in this Section, presentment, demand, protest
and all other notices of any kind are hereby expressly waived by each of the
Borrowers.
79
73
SECTION 11. THE ADMINISTRATIVE AGENT
11.1 Appointment. Each Lender hereby irrevocably designates
and appoints the Administrative Agent as the agent of such Lender under this
Agreement and the other Loan Documents, and each such Lender irrevocably
authorizes the Administrative Agent, in such capacity, to take such action on
its behalf under the provisions of this Agreement and the other Loan Documents
and to exercise such powers and perform such duties as are expressly delegated
to the Administrative Agent by the terms of this Agreement and the other Loan
Documents, together with such other powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary elsewhere in this Agreement, the
Administrative Agent shall not have any duties or responsibilities, except those
expressly set forth herein, or any fiduciary relationship with any Lender, and
no implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or any other Loan Document or
otherwise exist against the Administrative Agent.
11.2 Delegation of Duties. The Administrative Agent may
execute any of its duties under this Agreement and the other Loan Documents by
or through agents or attorneys-in-fact and shall be entitled to advice of
counsel concerning all matters pertaining to such duties. The Administrative
Agent shall not be responsible for the negligence or misconduct of any agents or
attorneys in-fact selected by it with reasonable care.
11.3 Exculpatory Provisions. Neither the Administrative Agent
nor any of its officers, directors, employees, agents, attorneys-in-fact or
affiliates shall be (i) liable for any action lawfully taken or omitted to be
taken by it or such Person under or in connection with this Agreement or any
other Loan Document (except to the extent that any of the foregoing are found by
a final and nonappealable decision of a court of competent jurisdiction to have
resulted from its or such Person's own gross negligence or willful misconduct)
or (ii) responsible in any manner to any of the Lenders for any recitals,
statements, representations or warranties made by any Loan Party or any officer
thereof contained in this Agreement or any other Loan Document or in any
certificate, report, statement or other document referred to or provided for in,
or received by the Administrative Agent under or in connection with, this
Agreement or any other Loan Document or for the value, validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or any other Loan
Document or for any failure of any Loan Party a party thereto to perform its
obligations hereunder or thereunder. The Administrative Agent shall not be under
any obligation to any Lender to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, this
Agreement or any other Loan Document, or to inspect the properties, books or
records of any Loan Party.
11.4 Reliance by Administrative Agent. The Administrative
Agent shall be entitled to rely, and shall be fully protected in relying, upon
any instrument, writing, resolution, notice, consent, certificate, affidavit,
letter, telecopy, telex or teletype message, statement, order or other document
or conversation believed by it to be genuine and correct and to have been
signed, sent or made by the proper Person or Persons and upon advice and
statements of legal counsel (including counsel to the Borrowers), independent
accountants and other experts selected by the Administrative Agent. The
Administrative Agent may deem and treat the payee of any
80
74
Note as the owner thereof for all purposes unless a written notice of
assignment, negotiation or transfer thereof shall have been filed with the
Administrative Agent. The Administrative Agent shall be fully justified in
failing or refusing to take any action under this Agreement or any other Loan
Document unless it shall first receive such advice or concurrence of the
Required Lenders (or, if so specified by this Agreement, all Lenders) as it
deems appropriate or it shall first be indemnified to its satisfaction by the
Lenders against any and all liability and expense that may be incurred by it by
reason of taking or continuing to take any such action. The Administrative Agent
shall in all cases be fully protected in acting, or in refraining from acting,
under this Agreement and the other Loan Documents in accordance with a request
of the Required Lenders (or, if so specified by this Agreement, all Lenders),
and such request and any action taken or failure to act pursuant thereto shall
be binding upon all the Lenders and all future holders of the Loans.
11.5 Notice of Default. The Administrative Agent shall not be
deemed to have knowledge or notice of the occurrence of any Default or Event of
Default hereunder unless the Administrative Agent has received notice from a
Lender, the Company referring to this Agreement, describing such Default or
Event of Default and stating that such notice is a "notice of default". In the
event that the Administrative Agent receives such a notice, the Administrative
Agent shall give notice thereof to the Lenders. The Administrative Agent shall
take such action with respect to such Default or Event of Default as shall be
reasonably directed by the Required Lenders (or, if so specified by this
Agreement, all Lenders); provided that unless and until the Administrative Agent
shall have received such directions, the Administrative Agent may (but shall not
be obligated to) take such action, or refrain from taking such action, with
respect to such Default or Event of Default as it shall deem advisable in the
best interests of the Lenders.
11.6 Non-Reliance on Administrative Agent and Other Lenders.
Each Lender expressly acknowledges that neither the Administrative Agent nor any
of its officers, directors, employees, agents, attorneys-in-fact or affiliates
have made any representations or warranties to it and that no act by any Agent
hereinafter taken, including any review of the affairs of a Loan Party or any
affiliate of a Loan Party, shall be deemed to constitute any representation or
warranty by the Administrative Agent to any Lender. Each Lender represents to
the Administrative Agent that it has, independently and without reliance upon
the Administrative Agent or any other Lender, and based on such documents and
information as it has deemed appropriate, made its own appraisal of and
investigation into the business, operations, property, financial and other
condition and creditworthiness of the Loan Parties and their affiliates and made
its own decision to make its Loans hereunder and enter into this Agreement. Each
Lender also represents that it will, independently and without reliance upon the
Administrative Agent or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit analysis, appraisals and decisions in taking or not taking action under
this Agreement and the other Loan Documents, and to make such investigation as
it deems necessary to inform itself as to the business, operations, property,
financial and other condition and creditworthiness of the Loan Parties and their
affiliates. Except for notices, reports and other documents expressly required
to be furnished to the Lenders by the Administrative Agent hereunder, the
Administrative Agent shall not have any duty or responsibility to provide any
Lender with any credit or other information concerning the
81
74
business, operations, property, condition (financial or otherwise), prospects or
creditworthiness of any Loan Party or any affiliate of a Loan Party that may
come into the possession of the Administrative Agent or any of its officers,
directors, employees, agents, attorneys-in-fact or affiliates.
11.7 Indemnification. The Lenders agree to indemnify the
Administrative Agent in its capacity as such (to the extent not reimbursed by
the Borrowers and without limiting the obligation of the Borrowers to do so),
ratably according to their respective Aggregate Exposure Percentages in effect
on the date on which indemnification is sought under this Section (or, if
indemnification is sought after the date upon which the Commitments shall have
terminated and the Loans shall have been paid in full, ratably in accordance
with such Aggregate Exposure Percentages immediately prior to such date), from
and against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind
whatsoever that may at any time (whether before or after the payment of the
Loans) be imposed on, incurred by or asserted against the Administrative Agent
in any way relating to or arising out of, the Commitments, this Agreement, any
of the other Loan Documents or any documents contemplated by or referred to
herein or therein or the transactions contemplated hereby or thereby or any
action taken or omitted by the Administrative Agent under or in connection with
any of the foregoing; provided that no Lender shall be liable for the payment of
any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements that are found by a
final and nonappealable decision of a court of competent jurisdiction to have
resulted from the Administrative Agent's gross negligence or willful misconduct.
The agreements in this Section shall survive the payment of the Loans and all
other amounts payable hereunder.
11.8 Administrative Agent in Its Individual Capacity. The
Administrative Agent and its affiliates may make loans to, accept deposits from
and generally engage in any kind of business with any Loan Party as though the
Administrative Agent was not the Administrative Agent. With respect to its Loans
made or renewed by it and with respect to any Letter of Credit issued or
participated in by it, the Administrative Agent shall have the same rights and
powers under this Agreement and the other Loan Documents as any Lender and may
exercise the same as though it were not the Administrative Agent, and the terms
"Lender" and "Lenders" shall include the Administrative Agent in its individual
capacity.
11.9 Successor Administrative Agent. The Administrative Agent
may resign as Administrative Agent upon 10 days' notice to the Lenders and the
Company. If the Administrative Agent shall resign as Administrative Agent under
this Agreement and the other Loan Documents, then the Required Lenders shall
appoint from among the Lenders a successor agent for the Lenders, which
successor agent shall (unless an Event of Default under Section 10(a) or Section
10(f) with respect to the Company shall have occurred and be continuing) be
subject to approval by the Company (which approval shall not be unreasonably
withheld or delayed), whereupon such successor agent shall succeed to the
rights, powers and duties of the Administrative Agent, and the term
"Administrative Agent" shall mean such successor agent effective upon such
appointment and approval, and the former Administrative Agent's rights, powers
and duties as Administrative Agent shall be terminated, without any other or
further act
82
76
or deed on the part of such former Administrative Agent or any of the parties to
this Agreement or any holders of the Loans. If no successor agent has accepted
appointment as Administrative Agent by the date that is 10 days following a
retiring Administrative Agent's notice of resignation, the retiring
Administrative Agent's resignation shall nevertheless thereupon become effective
and the Lenders shall assume and perform all of the duties of the Administrative
Agent hereunder until such time, if any, as the Required Lenders appoint a
successor agent as provided for above. After any retiring Administrative Agent's
resignation as Administrative Agent, the provisions of this Section 11 shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was Administrative Agent under this Agreement and the other Loan Documents.
11.10 Authorization to Release Guarantees and Liens.
Notwithstanding anything to the contrary contained herein or in any other Loan
Document, the Administrative Agent is hereby irrevocably authorized by each of
the Lenders (without requirement of notice to or consent of any Lender except as
expressly required by Section 13.1) to take any action requested by the Company
having the effect of releasing any Collateral or guarantee obligations to the
extent necessary to permit consummation of any transaction not prohibited by any
Loan Document or that has been consented to in accordance with Section 13.1.
SECTION 12. GUARANTEE
12.1 Guarantee. In order to induce the Administrative Agent
and the Lenders to execute and deliver this Agreement and to make or maintain
the Loans to the Subsidiary Borrowers hereunder, and in consideration thereof,
the Company hereby unconditionally and irrevocably guarantees to the
Administrative Agent, for the ratable benefit of the Lenders, the prompt and
complete payment and performance by the Subsidiary Borrowers when due (whether
at stated maturity, by acceleration or otherwise) of the Subsidiary Borrower
Obligations, and the Company further agrees to pay any and all expenses
(including, without limitation, all reasonable fees, charges and disbursements
of counsel) which may be paid or incurred by the Administrative Agent or by the
Lenders in enforcing, or obtaining advice of counsel in respect of, any of their
rights under the guarantee contained in this Section 12. The guarantee contained
in this Section 12, subject to Section 12.5, shall remain in full force and
effect until the Subsidiary Borrower Obligations are paid in full, the
Commitments are terminated and no Letters of Credit are outstanding,
notwithstanding that from time to time prior thereto the Subsidiary Borrowers
may be free from any Obligations.
The Company agrees that whenever, at any time, or from time
to time, it shall make any payment to the Administrative Agent or any Lender on
account of its liability under this Section 12, it will notify the
Administrative Agent and such Lender in writing that such payment is made under
the guarantee contained in this Section 12 for such purpose. No payment or
payments made by the Subsidiary Borrowers or any other Person or received or
collected by the Administrative Agent or any Lender from the Subsidiary
Borrowers or any other Person by virtue of any action or proceeding or any
setoff or appropriation or application, at any time or from time to time, in
reduction of or in payment of the Subsidiary Borrower Obligations shall be
deemed to modify, reduce, release or otherwise affect the liability of the
Company under this
83
77
Section 12 which, notwithstanding any such payment or payments, shall remain
liable for the Subsidiary Borrower Obligations until, subject to Section 12.5,
the Obligations are paid in full, the Commitments are terminated and no Letters
of Credit are outstanding.
12.2 No Subrogation, Contribution, Reimbursement or
Indemnity. Notwithstanding anything to the contrary in this Section 12, the
Company hereby irrevocably waives all rights which may have arisen in connection
with the guarantee contained in this Section 12 to be subrogated to any of the
rights (whether contractual, under the United States Bankruptcy Code (or similar
action under any successor law or under any comparable law), including Section
509 thereof, under common law or otherwise) of the Administrative Agent or any
Lender against the Subsidiary Borrowers or against the Administrative Agent or
any Lender for the payment of the Subsidiary Borrower Obligations, until all
such Obligations shall have been paid in full, no Letters of Credit shall be
outstanding and the Commitments shall have been terminated. The Company hereby
further irrevocably waives all contractual, common law, statutory and other
rights of reimbursement, contribution, exoneration or indemnity (or any similar
right) from or against the Subsidiary Borrowers or any other Person which may
have arisen in connection with the guarantee contained in this Section 12, until
the Subsidiary Borrower Obligations shall have been paid in full, no Letters of
Credit shall be outstanding and the Commitments shall have been terminated. So
long as the Subsidiary Borrower Obligations remain outstanding, if any amount
shall be paid by or on behalf of the Subsidiary Borrowers to the Company on
account of any of the rights waived in this Section 12.2, such amount shall be
held by the Company in trust, segregated from other funds of the Company, and
shall, forthwith upon receipt by the Company, be turned over to the
Administrative Agent in the exact form received by the Company (duly indorsed by
the Company to the Administrative Agent, if required), to be applied against the
Subsidiary Borrower Obligations, whether matured or unmatured, in such order as
the Administrative Agent may determine. The provisions of this Section 12.2
shall survive the term of the guarantee contained in this Section 12 and the
payment in full of the Subsidiary Borrower Obligations and the termination of
the Commitments.
12.3 Amendments, etc. with respect to the Subsidiary Borrower
Obligations. The Company shall remain obligated under this Section 12
notwithstanding that, without any reservation of rights against the Company, and
without notice to or further assent by the Company, any demand for payment of or
reduction in the principal amount of any of the Subsidiary Borrower Obligations
made by the Administrative Agent or any Lender may be rescinded by the
Administrative Agent or such Lender, and any of such Obligations continued, and
such Obligations, or the liability of any other party upon or for any part
thereof, or any collateral security or guarantee therefor or right of offset
with respect thereto, may, from time to time, in whole or in part, be renewed,
extended, amended, modified, accelerated, compromised, waived, surrendered or
released by the Administrative Agent or any Lender, and this Agreement, any
other Loan Document, and any other documents executed and delivered in
connection therewith may be amended, modified, supplemented or terminated, in
whole or in part, as the Lenders (or the Required Lenders, as the case may be)
may deem advisable from time to time, and any collateral security, guarantee or
right of offset at any time held by the Administrative Agent or any Lender for
the payment of the Subsidiary Borrower Obligations may be sold, exchanged,
waived, surrendered or released. Neither the Administrative Agent nor any Lender
84
78
shall have any obligation to protect, secure, perfect or insure any Lien at any
time held by it as security for the Subsidiary Borrower Obligations or for the
guarantee contained in this Section 12 or any property subject thereto.
12.4 Guarantee Absolute and Unconditional. The Company waives
any and all notice of the creation, renewal, extension or accrual of any of the
Subsidiary Borrower Obligations and notice of or proof of reliance by the
Administrative Agent or any Lender upon the guarantee contained in this Section
12 or acceptance of the guarantee contained in this Section 12; the Subsidiary
Borrower Obligations, and any of them, shall conclusively be deemed to have been
created, contracted or incurred, or renewed, extended, amended or waived, in
reliance upon the guarantee contained in this Section 12; and all dealings
between the Subsidiary Borrowers or the Company, on the one hand, and the
Administrative Agent and the Lenders, on the other, shall likewise be
conclusively presumed to have been had or consummated in reliance upon the
guarantee contained in this Section 12. The Company waives diligence,
presentment, protest, demand for payment and notice of default or nonpayment to
or upon the Subsidiary Borrowers or the Company with respect to the Subsidiary
Borrower Obligations. The guarantee contained in this Section 12 shall be
construed as a continuing, absolute and unconditional guarantee of payment
without regard to (a) the validity or enforceability of this Agreement or any
other Loan Document, any of the Subsidiary Borrower Obligations or any
collateral security therefor or guarantee or right of offset with respect
thereto at any time or from time to time held by the Administrative Agent or any
Lender, (b) any defense, setoff or counterclaim (other than a defense of payment
or performance) which may at any time be available to or be asserted by the
Borrowers against the Administrative Agent or any Lender, or (c) any other
circumstance whatsoever (with or without notice to or knowledge of the
Subsidiary Borrowers or the Company) which constitutes, or might be construed to
constitute, an equitable or legal discharge of the Subsidiary Borrowers for the
Subsidiary Borrower Obligations, or of the Company under the guarantee contained
in this Section 12, in bankruptcy or in any other instance. When the
Administrative Agent or any Lender is pursuing its rights and remedies under
this Section 12 against the Company, the Administrative Agent or any Lender may,
but shall be under no obligation to, pursue such rights and remedies as it may
have against the Subsidiary Borrowers or any other Person or against any
collateral security or guarantee for the Subsidiary Borrowers Obligations or any
right of offset with respect thereto, and any failure by the Administrative
Agent or any Lender to pursue such other rights or remedies or to collect any
payments from the Subsidiary Borrowers or any such other Person or to realize
upon any such collateral security or guarantee or to exercise any such right of
offset, or any release of any Subsidiary Borrower or any such other Person or of
any such collateral security, guarantee or right of offset, shall not relieve
the Company of any liability under this Section 12, and shall not impair or
affect the rights and remedies, whether express, implied or available as a
matter of law, of the Administrative Agent and the Lenders against the Company.
12.5 Reinstatement. The guarantee contained in this Section
12 shall continue to be effective, or be reinstated, as the case may be, if at
any time payment, or any part thereof, of any of the Subsidiary Borrower
Obligations is rescinded or must otherwise be restored or returned by the
Administrative Agent or any Lender upon the insolvency, bankruptcy, dissolution,
liquidation or reorganization of any Subsidiary Borrower or upon or as a result
of the
85
79
appointment of a receiver, intervenor or conservator of, or trustee or similar
officer for, any Subsidiary Borrower or any substantial part of its property, or
otherwise, all as though such payments had not been made.
12.6 Payments. The Company hereby agrees that any payments in
respect of the Subsidiary Borrower Obligations pursuant to this Section 12 will
be paid to the Administrative Agent without setoff or counterclaim in Dollars or
the relevant Available Foreign Currency, as applicable, at the office of the
Administrative Agent specified in Section 13.2.
SECTION 13. MISCELLANEOUS
13.1 Amendments and Waivers. Neither this Agreement, any
other Loan Document, nor any terms hereof or thereof may be amended,
supplemented or modified except in accordance with the provisions of this
Section 13.1. The Required Lenders and each Loan Party party to the relevant
Loan Document may, or, with the written consent of the Required Lenders, the
Administrative Agent and each Loan Party party to the relevant Loan Document
may, from time to time, (a) enter into written amendments, supplements or
modifications hereto and to the other Loan Documents for the purpose of adding
any provisions to this Agreement or the other Loan Documents or changing in any
manner the rights of the Lenders or of the Loan Parties hereunder or thereunder
or (b) waive, on such terms and conditions as the Required Lenders or the
Administrative Agent, as the case may be, may specify in such instrument, any of
the requirements of this Agreement or the other Loan Documents or any Default or
Event of Default and its consequences; provided, however, that no such waiver
and no such amendment, supplement or modification shall (i) forgive the
principal amount or extend the final scheduled date of maturity of any Loan,
extend the scheduled date of any amortization payment in respect of any Term
Loan, reduce the stated rate of any interest or fee payable hereunder or extend
the scheduled date of any payment thereof, or increase the amount or extend the
expiration date of any Lender's Revolving Commitment, in each case without the
consent of each Lender directly affected thereby; (ii) amend, modify or waive
any provision of this Section 13.1 or reduce any percentage specified in the
definition of Required Lenders or Required Prepayment Lenders, consent to the
assignment or transfer by any Borrower of any of its rights and obligations
under this Agreement and the other Loan Documents, release all or substantially
all of the Collateral, release the Company from its obligations under Section 12
or release all or substantially all of the Subsidiary Guarantors from their
obligations under the Guarantee and Collateral Agreement, in each case without
the written consent of all Lenders; (iii) amend, modify or waive any condition
precedent to any extension of credit under the Revolving Facility set forth in
Section 7.2 or 7.3(including in connection with any waiver of an existing
Default or Event of Default) without the written consent of the Majority
Revolving Facility Lenders; (iv) reduce the percentage specified in the
definition of Majority Facility Lenders with respect to any Facility without the
written consent of all Lenders under such Facility; (v) amend, modify or waive
any provision of Section 11 without the written consent of the Administrative
Agent; or (vi) amend, modify or waive any provision of Section 4 without the
written consent of the Issuing Lender. Any such waiver and any such amendment,
supplement or modification shall apply equally to each of the Lenders and shall
be binding upon the Loan Parties, the Lenders, the Administrative Agent and all
future holders of the Loans. In the case of any waiver, the Loan Parties, the
86
80
Lenders and the Administrative Agent shall be restored to their former position
and rights hereunder and under the other Loan Documents, and any Default or
Event of Default waived shall be deemed to be cured and not continuing; but no
such waiver shall extend to any subsequent or other Default or Event of Default,
or impair any right consequent thereon.
13.2 Notices. All notices, requests and demands to or upon
the respective parties hereto to be effective shall be in writing (including by
telecopy), and, unless otherwise expressly provided herein, shall be deemed to
have been duly given or made when delivered, or three Business Days after being
deposited in the mail, postage prepaid, or, in the case of telecopy notice, when
received, addressed as follows in the case of the Borrowers and the
Administrative Agent, and as set forth in an administrative questionnaire
delivered to the Administrative Agent in the case of the Lenders, or to such
other address as may be hereafter notified by the respective parties hereto:
The Borrowers: The DII Group, Inc.
6273 Monarch Park Place
Suite 200
Niwot, Colorado 80503
Attention: Mr. Thomas J. Smach
Telecopy: 303-652-0416
Telephone: 303-652-2221
The Administrative Agent:
With respect to all matters
other than procedures for
borrowing and repaying
Multicurrency Loans: The Chase Manhattan Bank
One Chase Manhattan Plaza
8th Floor
New York, New York 10081
Attention: Loan and Agency Services Group
Telecopy: (212) 552-5668
Telephone: (212) 552-7277
With respect to borrowings
and repayments of
Multicurrency Loans: The Chase Manhattan Bank
9 Thomas Moore Street
London El 9YT
England
Attention: Loan and Agency Services Group
Telecopy: 44-171-777-2360
Telephone: 44-171-777-2353
with a copy to: The Chase Manhattan Bank
2 Court Street, P.O. Box 706
Binghamton, New York 13902
Attention: Michael Brunner
Telecopy: 607-772-9341
Telephone: 607-772-2375
87
81
provided that any notice, request or demand to or upon the Administrative Agent
or the Lenders shall not be effective until received.
13.3 No Waiver; Cumulative Remedies. No failure to exercise
and no delay in exercising, on the part of the Administrative Agent or any
Lender, any right, remedy, power or privilege hereunder or under the other Loan
Documents shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, remedy, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, remedy, power or
privilege. The rights, remedies, powers and privileges herein provided are
cumulative and not exclusive of any rights, remedies, powers and privileges
provided by law.
13.4 Survival of Representations and Warranties. All
representations and warranties made hereunder, in the other Loan Documents and
in any document, certificate or statement delivered pursuant hereto or in
connection herewith shall survive the execution and delivery of this Agreement
and the making of the Loans and other extensions of credit hereunder.
13.5 Payment of Expenses and Taxes. The Company agrees (a) to
pay or reimburse the Administrative Agent for all of its reasonable
out-of-pocket costs and expenses incurred in connection with the development,
preparation and execution of, and any amendment, supplement or modification to,
this Agreement and the other Loan Documents and any other documents prepared in
connection herewith or therewith, and the consummation and administration of the
transactions contemplated hereby and thereby, including the reasonable fees and
disbursements of counsel to the Administrative Agent and filing and recording
fees and expenses, with statements with respect to the foregoing to be submitted
to the Company prior to the Closing Date (in the case of amounts to be paid on
the Closing Date) and from time to time thereafter on a quarterly basis or such
other periodic basis as the Administrative Agent shall deem appropriate, (b) to
pay or reimburse each Lender and the Administrative Agent for all its costs and
expenses incurred in connection with the enforcement or preservation of any
rights under this Agreement, the other Loan Documents and any such other
documents, including the fees and disbursements of counsel (including the
allocated fees and expenses of in-house counsel) to each Lender and of counsel
to the Administrative Agent, (c) to pay, indemnify, and hold each Lender and the
Administrative Agent harmless from, any and all recording and filing fees and
any and all liabilities with respect to, or resulting from any delay in paying,
stamp, excise and other taxes, if any, that may be payable or determined to be
payable in connection with the execution and delivery of, or consummation or
administration of any of the transactions contemplated by, or any amendment,
supplement or modification of, or any waiver or consent under or in respect of,
this Agreement, the other Loan Documents and any such other documents, and (d)
to pay, indemnify, and hold each Lender and the Administrative Agent and their
88
82
respective officers, directors, employees, affiliates, agents and controlling
persons (each, an "Indemnitee") harmless from and against any and all other
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever with respect
to the execution, delivery, enforcement, performance and administration of this
Agreement, the other Loan Documents and any such other documents, including any
of the foregoing relating to the use of proceeds of the Loans or the violation
of, noncompliance with or liability under, any Environmental Law applicable to
the operations of the Company, any of its Subsidiaries or any of the Properties
and the reasonable fees and expenses of legal counsel in connection with claims,
actions or proceedings by any Indemnitee against any Loan Party under any Loan
Document (all the foregoing in this clause (d), collectively, the "Indemnified
Liabilities"), provided, that the Company shall have no obligation hereunder to
any Indemnitee with respect to Indemnified Liabilities to the extent such
Indemnified Liabilities are found by a final and nonappealable decision of a
court of competent jurisdiction to have resulted from the gross negligence or
willful misconduct of such Indemnitee. Without limiting the foregoing, and to
the extent permitted by applicable law, each Borrower agrees not to assert and
to cause its Subsidiaries not to assert, and hereby waives and agrees to cause
its Subsidiaries to so waive, all rights for contribution or any other rights of
recovery with respect to all claims, demands, penalties, fines, liabilities,
settlements, damages, costs and expenses of whatever kind or nature, under or
related to Environmental Laws, that any of them might have by statute or
otherwise against any Indemnitee. All amounts due under this Section 13.5 shall
be payable promptly after written demand therefor. Statements payable by the
Company pursuant to this Section 13.5 shall be submitted to The Chase manhattan
Bank, One chase manhattan Plaza, New York, New York 10081, Attn: Jesus Sang
(Telephone No. (212) 552-7916) (Telecopy No. (212) 552-5650), at the address of
the Company set forth in Section 13.2, or to such other Person or address as may
be hereafter designated by the Company in a written notice to the Administrative
Agent. The agreements in this Section 13.5 shall survive repayment of the Loans
and all other amounts payable hereunder.
13.6 Successors and Assigns; Participations and Assignments.
(a) This Agreement shall be binding upon and inure to the benefit of the
Borrowers, the Lenders, the Administrative Agent, all future holders of the
Loans and their respective successors and assigns, except that no Borrower may
assign or transfer any of its rights or obligations under this Agreement without
the prior written consent of each Lender.
(b) Any Lender may, without the consent of the Borrowers, in
accordance with applicable law, at any time sell to one or more banks, financial
institutions or other entities (each, a "Participant") participating interests
in any Loan owing to such Lender, any Commitment of such Lender or any other
interest of such Lender hereunder and under the other Loan Documents. In the
event of any such sale by a Lender of a participating interest to a Participant,
such Lender's obligations under this Agreement to the other parties to this
Agreement shall remain unchanged, such Lender shall remain solely responsible
for the performance thereof, such Lender shall remain the holder of any such
Loan for all purposes under this Agreement and the other Loan Documents, and the
Borrowers and the Administrative Agent shall continue to deal solely and
directly with such Lender in connection with such Lender's rights and
obligations under this Agreement and the other Loan Documents. In no event shall
any Participant under any such
89
83
participation have any right to approve any amendment or waiver of any provision
of any Loan Document, or any consent to any departure by any Loan Party
therefrom, except to the extent that such amendment, waiver or consent would
reduce the principal of, or interest on, the Loans or any fees payable
hereunder, or postpone the date of the final maturity of the Loans, in each case
to the extent subject to such participation. Each Borrower agrees that if
amounts outstanding under this Agreement and the Loans are due or unpaid, or
shall have been declared or shall have become due and payable upon the
occurrence of an Event of Default, each Participant shall, to the maximum extent
permitted by applicable law, be deemed to have the right of setoff in respect of
its participating interest in amounts owing under this Agreement to the same
extent as if the amount of its participating interest were owing directly to it
as a Lender under this Agreement, provided that, in purchasing such
participating interest, such Participant shall be deemed to have agreed to share
with the Lenders the proceeds thereof as provided in Section 13.7(a) as fully as
if it were a Lender hereunder. Each Borrower also agrees that each Participant
shall be entitled to the benefits of Sections 5.9, 5.10 and 5.12 with respect to
its participation in the Commitments and the Loans outstanding from time to time
as if it was a Lender; provided that, in the case of Section 5.10, such
Participant shall have complied with the requirements of said Section and
provided, further, that no Participant shall be entitled to receive any greater
amount pursuant to any such Section than the transferor Lender would have been
entitled to receive in respect of the amount of the participation transferred by
such transferor Lender to such Participant had no such transfer occurred.
(c) Any Lender (an "Assignor") may, in accordance with
applicable law, at any time and from time to time assign to any Lender or any
Affiliate thereof or, with the consent of the Company and the Administrative
Agent (which, in each case, shall not be unreasonably withheld or delayed), to
an additional bank, financial institution or other entity (an "Assignee") all or
any part of its rights and obligations under this Agreement pursuant to an
Assignment and Acceptance, executed by such Assignee, such Assignor and any
other Person whose consent is required pursuant to this paragraph, and delivered
to the Administrative Agent for its acceptance and recording in the Register;
provided (i) that no such assignment to an Assignee (other than to any Lender or
any affiliate thereof) shall be in an aggregate principal amount of less than
$5,000,000 (other than in the case of an assignment of all of a Lender's
interests under this Agreement) and (ii) the assignor shall have commitments and
Loans aggregating at least $5,000,000 (other than in the case of an assignment
of all of a Lender's interests under this Agreement), unless otherwise agreed by
the Company and the Administrative Agent. Any such assignment need not be
ratable as among the Facilities. Upon such execution, delivery, acceptance and
recording, from and after the effective date determined pursuant to such
Assignment and Acceptance, (x) the Assignee thereunder shall be a party hereto
and, to the extent provided in such Assignment and Acceptance, have the rights
and obligations of a Lender hereunder with a Commitment and/or Loans as set
forth therein, (y) the Assignor thereunder shall, to the extent provided in such
Assignment and Acceptance, be released from its obligations under this Agreement
(and, in the case of an Assignment and Acceptance covering all of an Assignor's
rights and obligations under this Agreement, such Assignor shall cease to be a
party hereto) and (z) the Assignee thereunder shall automatically become a party
to the Intercreditor Agreement and become a Secured Party (as defined therein)
thereunder and have the rights and obligations of a Secured Party as set forth
therein. Notwithstanding any provision of this Section
90
84
13.6, the consent of the Company shall not be required for any assignment that
occurs when an Event of Default pursuant to Section 8(f) shall have occurred and
be continuing with respect to the Company.
(d) The Administrative Agent shall, on behalf of the
Borrowers, maintain at its address referred to in Section 13.2 a copy of each
Assignment and Acceptance delivered to it and a register (the "Register") for
the recordation of the names and addresses of the Lenders and the Commitment of,
and the principal amount of the Loans owing to, each Lender from time to time.
The entries in the Register shall be conclusive, in the absence of manifest
error, and each Borrower, each other Loan Party, the Administrative Agent and
the Lenders shall treat each Person whose name is recorded in the Register as
the owner of the Loans and any Notes evidencing the Loans recorded therein for
all purposes of this Agreement. Any assignment of any Loan, whether or not
evidenced by a Note, shall be effective only upon appropriate entries with
respect thereto being made in the Register (and each Note shall expressly so
provide). Any assignment or transfer of all or part of a Loan evidenced by a
Note shall be registered on the Register only upon surrender for registration of
assignment or transfer of the Note evidencing such Loan, accompanied by a duly
executed Assignment and Acceptance, and thereupon one or more new Notes shall be
issued to the designated Assignee and the old Note shall be returned by the
Administrative Agent to the Company marked "cancelled".
(e) Upon its receipt of an Assignment and Acceptance executed
by an Assignor, an Assignee and any other Person whose consent is required by
Section 13.6(c), together with payment to the Administrative Agent of a
registration and processing fee of $4,000, the Administrative Agent shall (i)
promptly accept such Assignment and Acceptance and (ii) record the information
contained therein in the Register on the effective date determined pursuant
thereto.
(f) For avoidance of doubt, the parties to this Agreement
acknowledge that the provisions of this Section 13.6 concerning assignments of
Loans and Notes relate only to absolute assignments and that such provisions do
not prohibit assignments creating security interests, including any pledge or
assignment by a Lender of any Loan or Note to any Federal Reserve Bank in
accordance with applicable law.
(g) Each Borrower, upon receipt of written notice from the
relevant Lender, agrees to issue Notes to any Lender requiring Notes to
facilitate transactions of the type described in paragraph (f) above.
13.7 Adjustments; Set-off. (a) Except to the extent that this
Agreement expressly provides for payments to be allocated to a particular Lender
or to the Lenders under a particular Facility, if any Lender (a "Benefitted
Lender") shall receive any payment of all or part of the Obligations owing to
it, or receive any collateral in respect thereof (whether voluntarily or
involuntarily, by set-off, pursuant to events or proceedings of the nature
referred to in Section 10(f), or otherwise), in a greater proportion than any
such payment to or collateral received by any other Lender, if any, in respect
of the Obligations owing to such other Lender, such Benefitted Lender shall
purchase for cash from the other Lenders a participating interest in such
91
85
portion of the Obligations owing to each such other Lender, or shall provide
such other Lenders with the benefits of any such collateral, as shall be
necessary to cause such Benefitted Lender to share the excess payment or
benefits of such collateral ratably with each of the Lenders; provided, however,
that if all or any portion of such excess payment or benefits is thereafter
recovered from such Benefitted Lender, such purchase shall be rescinded, and the
purchase price and benefits returned, to the extent of such recovery, but
without interest.
(b) In addition to any rights and remedies of the Lenders
provided by law, each Lender shall have the right, without prior notice to the
Borrowers, any such notice being expressly waived by the Borrowers to the extent
permitted by applicable law, upon any amount becoming due and payable by the
Borrowers hereunder (whether at the stated maturity, by acceleration or
otherwise), to set off and appropriate and apply against such amount any and all
deposits (general or special, time or demand, provisional or final), in any
currency, and any other credits, indebtedness or claims, in any currency, in
each case whether direct or indirect, absolute or contingent, matured or
unmatured, at any time held or owing by such Lender or any branch or agency
thereof to or for the credit or the account of the Borrowers. Each Lender agrees
promptly to notify the Borrowers and the Administrative Agent after any such
setoff and application made by such Lender, provided that the failure to give
such notice shall not affect the validity of such setoff and application.
13.8 Counterparts. This Agreement may be executed by one or
more of the parties to this Agreement on any number of separate counterparts,
and all of said counterparts taken together shall be deemed to constitute one
and the same instrument. Delivery of an executed signature page of this
Agreement by facsimile transmission shall be effective as delivery of a manually
executed counterpart hereof. A set of the copies of this Agreement signed by all
the parties shall be lodged with the Company and the Administrative Agent.
13.9 Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
13.10 Integration. This Agreement and the other Loan
Documents represent the agreement of the Borrowers, the Administrative Agent and
the Lenders with respect to the subject matter hereof, and there are no
promises, undertakings, representations or warranties by the Administrative
Agent or any Lender relative to subject matter hereof not expressly set forth or
referred to herein or in the other Loan Documents.
13.11 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
92
86
13.12 Submission To Jurisdiction; Waivers. Each of the
Borrowers hereby irrevocably and unconditionally:
(a) submits for itself and its property in any legal action
or proceeding relating to this Agreement and the other Loan Documents
to which it is a party, or for recognition and enforcement of any
judgment in respect thereof, to the non-exclusive general jurisdiction
of the courts of the State of New York, the courts of the United States
for the Southern District of New York, and appellate courts from any
thereof;
(b) consents that any such action or proceeding may be
brought in such courts and waives any objection that it may now or
hereafter have to the venue of any such action or proceeding in any
such court or that such action or proceeding was brought in an
inconvenient court and agrees not to plead or claim the same;
(c) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form of mail), postage
prepaid, to the Company at its address set forth in Section 13.2 or at
such other address of which the Administrative Agent shall have been
notified pursuant thereto (and, in the case of each Subsidiary
Borrower, such Subsidiary Borrower hereby irrevocably appoints the
Company to receive and accept any such process on behalf of such
Subsidiary Borrower, and the Company hereby accepts such appointment);
(d) agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law or shall
limit the right to sue in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any
right it may have to claim or recover in any legal action or proceeding
referred to in this Section any special, exemplary, punitive or
consequential damages.
13.13 Acknowledgments. Each of the Borrowers hereby
acknowledges that:
(a) it has been advised by counsel in the negotiation,
execution and delivery of this Agreement and the other Loan Documents;
(b) neither the Administrative Agent nor any Lender has any
fiduciary relationship with or duty to such Borrower arising out of or
in connection with this Agreement or any of the other Loan Documents,
and the relationship between Administrative Agent and Lenders, on one
hand, and such Borrower, on the other hand, in connection herewith or
therewith is solely that of debtor and creditor; and
(c) no joint venture is created hereby or by the other Loan
Documents or otherwise exists by virtue of the transactions
contemplated hereby among the Lenders or among the Borrowers and the
Lenders.
93
87
13.14 Conversion of Currencies. (a) If, for the purpose of
obtaining judgment in any court, it is necessary to convert a sum owing
hereunder in one currency into another currency, each party hereto (including
any Subsidiary Borrower) agrees, to the fullest extent that it may effectively
do so, that the rate of exchange used shall be that at which in accordance with
normal banking procedures in the relevant jurisdiction the first currency could
be purchased with such other currency on the Business Day immediately preceding
the day on which final judgment is given.
(b) The obligations of each Borrower in respect of any sum
due to any party hereto or any holder of the obligations owing hereunder (the
"Applicable Creditor") shall, notwithstanding any judgment in a currency (the
"Judgment Currency") other than the currency in which such sum is stated to be
due hereunder (the "Agreement Currency"), be discharged only to the extent that,
on the Business Day following receipt by the Applicable Creditor of any sum
adjudged to be so due in the Judgment Currency, the Applicable Creditor may in
accordance with normal banking procedures in the relevant jurisdiction purchase
the Agreement Currency with the Judgment Currency; if the amount of the
Agreement Currency so purchased is less than the sum originally due to the
Applicable Creditor in the Agreement Currency, such Borrower agrees, as a
separate obligation and notwithstanding any such judgment, to indemnify the
Applicable Creditor against such loss. The obligations of the Borrowers
contained in this Section 13.14 shall survive the termination of this Agreement
and the payment of all other amounts owing hereunder.
13.15 Confidentiality. Each of the Administrative Agent and
each Lender agrees to keep confidential all non-public information provided to
it by any Loan Party pursuant to this Agreement that is designated by such Loan
Party as confidential; provided that nothing herein shall prevent the
Administrative Agent or any Lender from disclosing any such information (a) to
the Administrative Agent, any other Lender or any affiliate of any Lender, (b)
to any Transferee or prospective Transferee that agrees to comply with the
provisions of this Section, (c) to its employees, directors, agents, attorneys,
accountants and other professional advisors or those of any of its affiliates,
(d) upon the request or demand of any Governmental Authority, (e) in response to
any order of any court or other Governmental Authority or as may otherwise be
required pursuant to any Requirement of Law, (f) if requested or required to do
so in connection with any litigation or similar proceeding, (g) that has been
publicly disclosed, (h) to the National Association of Insurance Commissioners
or any similar organization or any nationally recognized rating agency that
requires access to information about a Lender's investment portfolio in
connection with ratings issued with respect to such Lender, or (i) in connection
with the exercise of any remedy hereunder or under any other Loan Document.
13.16 European Economic and Monetary Union. (a) Definitions.
In this Section 13.16 and in each other provision of this Agreement to which
reference is made in this Section 13.16 expressly or impliedly, the following
terms have the meanings given to them in this Section 13.16:
"commencement of the third stage of EMU" means the date of
commencement of the third stage of EMU (at the date of this Agreement
expected to be January 1, 1999)
94
88
or the date on which circumstances arise which (in the opinion of the
Administrative Agent) have substantially the same effect and result in
substantially the same consequences as commencement of the third stage
of EMU as contemplated by the Treaty on European Union;
"EMU" means economic and monetary union as contemplated in
the Treaty on European Union;
"EMU legislation" means legislative measures of the European
Council for the introduction of, changeover to or operation of a single
or unified European currency (whether known as the euro or otherwise),
being in part the implementation of the third stage of EMU;
"euro" means the single currency of participating member
states of the European Union;
"euro unit" means the currency unit of the euro;
"national currency unit" means the unit of currency (other
than a euro unit) of a participating member state;
"participating member state" means each state so described in
any EMU legislation; and
"Treaty on European Union" means the Treaty of Rome of March
25, 1957, as amended by the Single European Act 1986 and the Maastricht
Treaty (which was signed at Maastricht on February 7, 1992, and came
into force on November 1, 1993), as amended from time to time.
(b) Effectiveness of Provisions. The provisions of paragraphs
(c) to (j) below (inclusive) shall be effective at and from the
commencement of the third stage of EMU, provided, that if and to the
extent that any such provision relates to any state (or the currency of
such state) that is not a participating member state on the
commencement of the third stage of EMU, such provision shall become
effective in relation to such state (and the currency of such state) at
and from the date on which such state becomes a participating member
state.
(c) Redenomination and Alternative Currencies. Each
obligation under this Agreement of a party to this Agreement which has
been denominated in the national currency unit of a participating
member state shall be redenominated into the euro unit in accordance
with EMU legislation, provided, that if and to the extent that any EMU
legislation provides that following the commencement of the third stage
of EMU an amount denominated either in the euro or in the national
currency unit of a participating member state and payable within that
participating member state by crediting an account of the creditor can
be paid by the debtor either in the euro unit or in the national
currency
95
89
unit, each party to this Agreement shall be entitled to pay or repay
any such amount either in the euro unit or in such national currency
unit.
(d) Loans. Any Loan in the currency of a participating member
state shall be made in the euro unit.
(e) Business Days. With respect to any amount denominated or
to be denominated in the euro or a national currency unit, any
reference to a "Business Day" shall be construed as a reference (i) for
purposes of determining each date (a "Rate Fixing Day") on which the
Eurodollar Base Rate applicable thereto may be set, any day (a "TO
Day") (other than a Saturday, Sunday, Christmas, New Year's Day or any
day on which the Trans-European Real-time Gross Settlement Operating
System (or any successor settlement system) is not operating (as
determined by the Administrative Agent) on which the TARGET operating
system is operating for purposes of quoting eurocurrency deposit rates
and (ii) for purposes of determining any day on which any Loan in such
currency may be made hereunder or on which an Interest Period
applicable thereto shall begin or end, a day (other than a Saturday or
Sunday) on which banks are generally open for business in
(i) London and New York City and
(ii) Frankfurt am Main, Germany (or such
principal financial center or centers in
such participating member state or states as
the Administrative Agent may from time to
time nominate for this purpose).
(f) Payments to the Administrative Agent. Sections 3.3 and
5.1(c) shall be construed so that, in relation to the payment of any
amount of euro units or national currency units, such amount shall be
made available to the Administrative Agent in immediately available,
freely transferable, cleared funds to such account with such bank in
Frankfurt am Main, Germany (or such other principal financial center in
such participating member state as the Administrative Agent may from
time to time nominate for this purpose) as the Administrative Agent
shall from time to time nominate for this purpose.
(g) Payments by the Administrative Agent to the Lenders. Any
amount payable by the Administrative Agent to the Lenders under this
Agreement in the currency of a participating member state shall be paid
in the euro unit.
(h) Payments by the Administrative Agent Generally. With
respect to the payment of any amount denominated in the euro or in a
national currency unit, the Administrative Agent shall not be liable to
any Borrower or any of the Lenders in any way whatsoever for any delay,
or the consequences of any delay, in the crediting to any account of
any amount required by this Agreement to be paid by the Administrative
Agent if the Administrative Agent shall have taken all relevant steps
to achieve, on the
96
90
date required by this Agreement, the payment of such amount in
immediately available, freely transferable, cleared funds (in the euro
unit or, as the case may be, in a national currency unit) to the
account with the bank in the principal financial center in the
participating member state which the relevant Borrower or, as the case
may be, any Lender shall have specified for such purpose. In this
paragraph (h), "all relevant steps" means all such steps as may be
prescribed from time to time by the regulations or operating procedures
or such clearing or settlement system as the Administrative Agent may
from time to time determine for the purpose of clearing or settling
payments of the euro.
(i) Basis of Accrual. If the basis of accrual of interest or
fees expressed in this Agreement with respect to the currency of any
state that becomes a participating state shall be inconsistent with any
convention or practice in the London Interbank Market or, as the case
may be, the Paris Interbank Market for the basis of accrual of interest
or fees in respect of the euro, such convention or practice shall
replace such expressed basis effective as of and from the date on which
such state becomes a participating member state; provided, that if any
Loan in the currency of such state is outstanding immediately prior to
such date, such replacement shall take effect, with respect to such
Loan, at the end of the then current Interest Period.
(j) Rounding and Other Consequential Changes. Without
prejudice and in addition to any method of conversion or rounding
prescribed by any EMU legislation and without prejudice to the
respective liabilities for indebtedness of the Borrowers to the Lenders
and the Lenders to the Borrowers under or pursuant to this Agreement:
(i) each reference in this Agreement to a minimum
amount (or an integral multiple thereof) in a national
currency unit to be paid to or by the Administrative Agent
shall be replaced by a reference to such reasonably
comparable and convenient amount (or an integral multiple
thereof) in the euro unit as the Administrative Agent may
from time to time specify; and
(ii) except as expressly provided in this Section
13.16, each provision of this Agreement shall be subject to
such reasonable changes of construction as the Administrative
Agent may from time to time specify to be necessary or
appropriate to reflect the introduction of or changeover to
the euro in participating member states.
(k) Increased Costs. The Borrowers shall from time to time,
at the request of the Administrative Agent, pay to the Administrative
Agent for the account of each Lender the amount of any cost or
increased cost incurred by, or of any reduction in any amount payable
to or in the effective return on its capital to, or of interest or
other return foregone by, such Lender or any holding company of such
Lender as a result of the introduction of, changeover to or operation
of the euro in any participating member state to the extent such
introduction, changeover or operation relates to such Lender's
obligations hereunder; provided that the Borrowers shall not be
required to pay to any Lender any amounts
97
91
under this paragraph for any period prior to the date on which such
Lender gives notice to the Company that such amounts are payable unless
such Lender gives notice within 180 days after it becomes aware or
should have been aware of the event giving rise to such payment
obligation.
13.17 Accounting Changes. In the event that any "Accounting
Change" (as defined below) shall occur and such change results in a change in
the method of calculation of financial covenants, standards or terms in this
Agreement, then the Company and the Administrative Agent agree to enter into
negotiations in order to amend such provisions of this Agreement so as to
equitably reflect such Accounting Changes with the desired result that the
criteria for evaluating the Company's financial condition shall be the same
after such Accounting Changes as if such Accounting Changes had not been made.
Until such time as such an amendment shall have been executed and delivered by
the Company, the Administrative Agent and the Required Lenders, all financial
covenants, standards and terms in this Agreement shall continue to be calculated
or construed as if such Accounting Changes had not occurred. "Accounting
Changes" refers to changes in accounting principles required by the promulgation
of any rule, regulation, pronouncement or opinion by the Financial Accounting
Standards Board of the American Institute of Certified Public Accountants or, if
applicable, the SEC.
13.18 Collateral Agent as Several Creditor. Each of the
Borrowers and the Lenders agree that the Collateral Agent shall be the joint and
several creditor together with the relevant Lender of each and every obligation
of the Company and of each and any of the Subsidiary Borrowers toward each of
the Lenders under this Agreement and the other Loan documents pursuant to
Section 7.2 of the Intercreditor Agreement with such rights as set forth in such
section.
13.19 WAIVERS OF JURY TRIAL. EACH OF THE BORROWERS, THE
ADMINISTRATIVE AGENT AND THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY
WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
98
92
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by their proper and duly authorized
officers as of the day and year first above written.
THE DII GROUP, INC.
By:
----------------------------------------------
Name:
Title:
THE CHASE MANHATTAN BANK, as
Administrative Agent and as a Lender
By:
----------------------------------------------
Name:
Title:
99
Annex A
Pricing Grid
=================================================================================================================
Applicable Margin
for Eurodollar
Loans and
Multicurrency Applicable Margin Commitment Fee
Consolidated Leverage Ratio Loans for ABR Loans Rate
- -----------------------------------------------------------------------------------------------------------------
Less than or equal to 2.00 1.00% 0% 0.250%
- -----------------------------------------------------------------------------------------------------------------
Greater than 2.00, but less than or equal to 2.50 1.25% 0% 0.250%
- -----------------------------------------------------------------------------------------------------------------
Greater than 2.50, but less than or equal to 3.00 1.50% 0% 0.375%
- -----------------------------------------------------------------------------------------------------------------
Greater than 3.00, but less than or equal to 3.50 1.75% 0.25% 0.375%
- -----------------------------------------------------------------------------------------------------------------
Greater than 3.50, but less than or equal to 4.00 2.00% 0.50% 0.500%
- -----------------------------------------------------------------------------------------------------------------
Greater than 4.00 2.25% 0.75% 0.500%
=================================================================================================================
Changes in the Applicable Margin Ratio or in the Commitment Fee Rate resulting
from changes in the Consolidated Leverage Ratio shall become effective on the
date (the "Adjustment Date") on which financial statements are received by the
Administrative Agent pursuant to the terms of the Credit Documentation (but in
any event not later than the 45th day after the end of each of the first three
quarterly periods of each fiscal year or the 90th day after the end of each
fiscal year, as the case may be) and shall remain in effect until the next
change to be effected pursuant to this paragraph. If any financial statements
referred to above are not delivered within the time periods specified above,
then, until such financial statements are delivered, the Consolidated Leverage
Ratio as at the end of the fiscal period that would have been covered thereby
shall for the purposes of this definition be deemed to be greater than 4.00.
Each determination of the Consolidated Leverage Ratio pursuant to this
definition shall be made with respect to the period of four consecutive fiscal
quarters of the Company ending at the end of the period covered by the relevant
financial statements.
Notwithstanding the foregoing, until the first Adjustment Date occurring
following the end of the first full fiscal quarter to be completed after the
Closing Date, the Applicable Margins and Commitment Fee Rate will be as set
forth above opposite the Consolidated Leverage Ratio of greater than 3.50, but
less than or equal to 4.00.