Credit Agreement - Deutsche Bank AG, US Bank NA and Micron Electronics Inc.
CREDIT AGREEMENT
This Credit Agreement ("Agreement") is made as of the 10th
day of June, 1998, by and among the financial institutions from
time to time party hereto (each a "Lender" and collectively, the
"Lenders"), Deutsche Bank AG, New York Branch and U.S. Bank
National Association as co-agents for the Lenders, Deutsche Bank
AG, New York Branch, as administrative agent for Lenders (in such
capacity, the "Agent"), and Micron Electronics, Inc., a Minnesota
corporation (the "Borrower").
AGREEMENT
ARTICLE 1
DEFINITIONS
Section 1.1 Certain Defined Terms. As used in this
Agreement, the following terms have the following meanings:
"Adjusted LIBOR Rate" means a per annum interest rate equal
to the sum of (i) the LIBOR Rate, (ii) the LIBOR Margin, and
(iii) the LIBOR Premium.
"Advances" means Loans and Letters of Credit.
"Agent" means Deutsche Bank AG, New York Branch and any
successor administrative agent selected pursuant to Section 9.6.
"Applicable Interest Period" means, with respect to any Loan
accruing interest at the Adjusted LIBOR Rate, the period
commencing on the first day Borrower elects to have such Adjusted
LIBOR Rate apply to such Loan and ending on a day one, two, three
or six months thereafter, as specified in the Interest Rate
Notice given in respect of such Loan or as otherwise determined
pursuant to Section 2.7(b) provided, however, that no Applicable
Interest Period may be selected for a Loan if it extends beyond
the Maturity Date.
"Applicable Interest Rate" means for each Loan (or portion
thereof), the Reference Rate or the Adjusted LIBOR Rate as
designated by Borrower in an Interest Rate Notice given with
respect to such Loan (or portion thereof) or as otherwise
determined pursuant to Section 2.7(b).
"Borrower" means Micron Electronics, Inc., a Minnesota
corporation, and any permitted Successor or assign pursuant to
Section 11.6.
"Borrower Documents" means this Agreement, the Notes, the
Disclosure Letter, and that certain letter agreement referenced
in Section 2.13(c) hereof.
"Business Day" means any day other than Saturday, Sunday or
another day on which banks are authorized or obligated to close
in New York, New York, San Francisco, California or Portland,
Oregon except that in the context of the selection of a Loan
accruing interest at the Adjusted LIBOR Rate or the calculation
of the LIBOR Rate for any Applicable Interest Period, in which
event "Business Day" means any day other than Saturday or Sunday
on which dealings in foreign currencies and exchange between
banks may also be carried on in London, England.
"Capital Leases" means all leases which shall have been, or
in accordance with GAAP, should be recorded as capital leases.
"Code" means the Internal Revenue Code of 1986, as amended
from time to time.
"Commitment" has the meaning given in Section 2.1.
"Commitment Period" has the meaning given in Section 2.1.
"Controlled Group" means all members of a controlled group
of corporations and all trades or businesses (whether or not
incorporated) under common control which, together with Borrower
or any Subsidiary, are treated as a single employer under Section
414(b) or 414(c) of the Code.
"Debt Ratio" means as of any date of determination the ratio
of Borrower's (a) Funded Debt to (b) Four Quarter EBITDA.
"Default" means any event which but for the passage of time
or the giving of notice or both would be an Event of Default.
"Disclosure Letter" means that certain letter and the
schedules thereto dated as of the date hereof, executed by a
Responsible Officer, and delivered to Agent and Lenders.
"Dividend Payment" has the meaning given in Section 7.1.
"EBITDA" shall mean, for any period, Borrower's Net Income
(or net loss), excluding any taxes associated therewith, plus the
sum of (a) interest expense, (b) income tax expense, (c)
depreciation expense and (d) amortization expense, in each case
determined on a consolidated basis in accordance with GAAP for
such period.
"EBITDA Rating" means a rating determined in accordance with
the following table:
Quarterly EBITDA EBITDA Rating
---------------- -------------
$75,000,0000 or more Level 1
equal to or greater than $45,000,000, Level 2
but less than $75,000,000,
equal to or greater than $25,000,000, Level 3
but less than $45,000,000
equal to or greater than $15,000,000, Level 4
but less than $25,000,000
equal to or greater than $10,000,000 Level 5
but less than $15,000,000,
less than $10,000,000 Level 6
The EBITDA Rating for each fiscal quarter (the "Current Quarter")
shall be determined in accordance with the following procedures
on the basis of Borrower's EBITDA with respect to the immediately
preceding fiscal quarter (the "Prior Quarter") and shall be
effective as of the first day of the Current Quarter. All
resulting adjustments in interest rate margins and fees shall
likewise be effective as of the first day of the Current Quarter
including adjustments to the Adjusted LIBOR Rate during any
Applicable Interest Period. Until the earlier of (i) the date on
which the financial reports are due in respect of the Prior
Quarter pursuant to Sections 6.10(a) and (b) hereof; or (ii) the
date on which such financial reports are received, any payments
of fees or interest due hereunder shall be calculated and paid,
on an interim basis, as if the EBITDA Rating applicable to the
Prior Quarter were the EBITDA Rating applicable to the Current
Quarter. If the financial reports due in respect of the Prior
Quarter are not provided by the date required pursuant to
Sections 6.10(a) and (b) hereof, from and after the date on which
such financial statements are due, any payments of fees or
interest due hereunder shall be calculated and paid, on an
interim basis, as if the EBITDA Rating applicable for the Current
Quarter was one level higher than the EBITDA Rating applicable to
the Prior Quarter. Upon receipt of the financial reports due in
respect of the Prior Quarter pursuant to Sections 6.10(a) and (b)
hereof, any prior overpayment shall be paid by Lenders to Agent
for delivery to Borrower, and any prior underpayment shall be
paid by Borrower to Agent for the account of the Lenders, in each
case, without interest and within one (1) Business Day of notice
thereof.
"Eligible Assignee" means (i) a commercial bank organized
under the laws of the United States, or any state thereof, and
having a combined capital and surplus of at least $500,000,000;
(ii) a commercial bank organized under the laws of any other
country which is a member of the Organization for Economic
Cooperation and Development (the "OECD"), or a political
subdivision of any such country, and having a combined capital
and surplus of at least $500,000,000, provided that such bank is
acting through a branch or agency located in the United States of
America; or (iii) a person that is primarily engaged in the
business of commercial banking and that is (A) a subsidiary of a
Lender, (B) a subsidiary of a person of which a Lender is a
subsidiary, or (C) a person of which a Lender is a subsidiary.
"Environmental Laws" means all federal, state and local
statutes, regulations, ordinances, and requirements, now or
hereafter in effect, pertaining to environmental protection,
contamination or cleanup, including without limitation (i) the
Federal Resource Conservation and Recovery Act of 1976 (42 U.S.C.
Section 6901, et seq.), (ii) the Federal Comprehensive Environmental
Response, Compensation, and Liability Act (42 U.S.C. Section 9601 et
seq.), (iii) the Federal Hazardous Materials Transportation
Control Act (49 U.S.C. Section 1801, et seq.), (iv) the Federal Clean
Air Act (42 U.S.C. Section 7401, et seq.), (v) the Federal Water
Pollution Control Act, Federal Clean Water Act (33 U.S.C. Section 1251
et seq.), (vi) the Federal Insecticide, Fungicide, and
Rodenticide Act, Federal Pesticide Act (7 U.S.C. Section 136, et seq.),
(vii) the Federal Toxic Substances Control Act (15 U.S.C. Section 2601
et seq.), and (viii) the Federal Safe Drinking Water Act (42
U.S.C. Section 300f et seq.), all as now or hereafter amended.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time.
"Eurodollar Reserves" means a fraction (expressed as a
decimal), the numerator of which is the number one and the
denominator of which is the number one minus the aggregate of the
maximum reserve percentages (including, without limitation, any
special, supplemental, marginal or emergency reserves) expressed
as a decimal established by the Board of Governors of the Federal
Reserve System or any other banking authority to which Lenders
are subject for Eurocurrency Liability (as defined in Regulation
D of such Board of Governors). It is agreed that for purposes
hereof, each Loan (or portion thereof) accruing interest at the
Adjusted LIBOR Rate shall be deemed to constitute a Eurocurrency
Liability and to be subject to the reserve requirements of
Regulation D, without benefit of credit or proration, exemptions
or offsets which might otherwise be available to Lenders from
time to time under such Regulation D. Eurodollar Reserves shall
be adjusted automatically on and as of the effective date of any
change in any reserve percentage and shall apply to Applicable
Interest Periods commencing after the effective date of change.
"Event of Default" has the meaning given in Section 8.1.
"Facility Utilization" means the ratio of Total Utilization
to Total Commitment, expressed as a percentage.
"Federal Funds Rate" means, for any period, a fluctuating
interest rate per annum equal for each day during such period to
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 for such day (or, if such
day is not a Business Day, for the next preceding Business Day)
by the Federal Reserve Bank of New York, or, if such rate is not
so published for any day which is a Business Day, the average of
the quotations for such day on such transactions received by
Agent from three federal funds brokers of recognized standing
selected by it.
"Four Quarter EBITDA" means the aggregate EBITDA during
Borrower's most recently completed four fiscal quarters;
provided, however, that (i) during that period when the most
recently completed fiscal quarter is that fiscal quarter ended
May 28, 1998, Four Quarter EBITDA shall mean the product of four
and the EBITDA for the most recently completed fiscal quarter;
(ii) during that period when the most recently completed fiscal
quarter is that fiscal quarter ending September 3, 1998, Four
Quarter EBITDA shall mean the product of two and the aggregate
EBITDA for Borrower's most recently completed two fiscal
quarters; and (iii) during that period when the most recently
completed fiscal quarter is that fiscal quarter ending December
3, 1998, Four Quarter EBITDA shall mean the product of 1.3333 and
the aggregate EBITDA for Borrower's most recently completed three
fiscal quarters.
"Funded Debt" means, as at any date of determination, the
total amount of all interest bearing Indebtedness of Borrower, on
a consolidated basis.
"GAAP" has the meaning given in Section 1.3.
"Government Approval" means an approval, permit, license,
authorization, certificate, or consent of any Governmental
Authority.
"Governmental Authority" means the government of the United
States or any State or any foreign country or any political
subdivision of any thereof or any branch, department, agency,
instrumentality, court, tribunal or regulatory authority which
constitutes a part or exercises any sovereign power of any of the
foregoing.
"Hazardous Substances" means any substance or material
defined or designated as hazardous or toxic waste, hazardous or
toxic material, a hazardous, toxic or radioactive substance, or
other similar terms, by any federal, state or local environmental
statute, regulation or ordinance presently in effect, including
but not limited to the Environmental Laws.
"Indebtedness" means, for any person, without duplication,
(a) all indebtedness for borrowed money; (b) all obligations
issued, undertaken or assumed as the deferred purchase price of
property or services (other than trade payables entered into in
the ordinary course of business on ordinary terms); (c) all non-
contingent reimbursement or payment obligations with respect to
letters of credit, bankers acceptances, surety bonds and similar
instruments; (d) all obligations evidenced by notes, bonds,
debentures or similar instruments, including obligations so
evidenced incurred in connection with the acquisition of
property, assets or businesses; (e) all indebtedness created or
arising under any conditional sale or other title retention
agreement (excluding any operating lease), or incurred as
financing, in either case with respect to property acquired by
the person (even though the rights and remedies of the seller or
bank under such agreement in the event of default are limited to
repossession or sale of such property); (f) all obligations with
respect to Capital Leases or Synthetic Leases; (g) all
indebtedness referred to in clauses (a) through (f) above secured
by (or for which the holder of such Indebtedness has an existing
right, contingent or otherwise, to be secured by) any Lien upon
or in property (including accounts and contracts rights) owned by
such person, even though such person has not assumed or become
liable for the payment of such Indebtedness; and (h) all
liabilities in respect of indebtedness or obligations of others
of the kinds referred to in clauses (a) through (g) above for
which such person is directly or contingently liable as obligor,
guarantor, or otherwise, or in respect of which such person
otherwise assures a creditor against loss. For all purposes of
this Agreement, the Indebtedness of any person shall include all
recourse Indebtedness of any partnership or joint venture formed
as a partnership where such person is a general partner or is
otherwise liable for the Indebtedness of such partnership or
joint venture.
"Interest Rate Notice" has the meaning given in Section
2.7(b).
"Letter of Credit" means any letter of credit issued by
Lenders pursuant to the terms of Article 3 hereof.
"Letter of Credit Risk Participation" means a risk
participation purchased by a Lender pursuant to Article 10 hereof
with respect to a Letter of Credit.
"Letter of Credit Usage" means, as of any date of
determination, the sum of (i) the aggregate face amount of all
outstanding unmatured Letters of Credit plus (ii) the aggregate
amount of all payments made by Lenders under Letters of Credit
and not yet reimbursed by Borrower pursuant to Section 3.4.
"LIBOR Margin" means on any date, a per annum interest rate
determined in accordance with the following table:
EBITDA Rating Margin (expressed per annum)
------------- ----------------------------
Level 1 20.0 basis points
(0.200%)
Level 2 40.0 basis points
(0.400%)
Level 3 55.0 basis points
(0.550%)
Level 4 70.0 basis points
(0.700%)
Level 5 85.0 basis points
(0.850%)*
Level 6 125.0 basis points
(1.25%)
*Initial Pricing Level
"LIBOR Premium" means (i) a per annum interest rate of 0% on any
date on which Facility Utilization is less than or equal to 50%,
and (ii) on any date on which Facility Utilization exceeds 50%, a
per annum interest rate determined in accordance with the
following table:
EBITDA Rating Margin (expressed per annum)
------------- ----------------------------
Level 1 12.5 basis points
(0.125%)
Level 2 7.5 basis points
(0.075%)
Level 3 7.5 basis points
(0.075%)
Level 4 7.5 basis points
(0.075%)
Level 5 5.0 basis points
(.050%)
Level 6 -0-
"LIBOR Rate" means, for any Applicable Interest Period, an
interest rate per annum equal to the product of (i) the Euro-
dollar Rate in effect for such Applicable Interest Period and
(ii) the Eurodollar Reserves in effect on the first day of such
Applicable Interest Period. The "Euro-dollar Rate" will be
determined by reference to that rate (rounded upward, if
necessary, to the next one-sixteenth of one percent (.0625%))
which appears on the display designated as "Page 3750" on the
Telerate Service (or on such other page on that service or such
other service designated by the British Banker's Association for
the display of that Association's interest Settlement Rates for
U..S. Dollar deposits) as of 12:00 noon, London time, on the day
that is two (2) Business Days prior to the first date of the
proposed Applicable Interest Period. If there are no applicable
quotes available through Telerate Service, the Euro-dollar Rate
will be determined by reference to that rate (rounded upward, if
necessary, to the next one-sixteenth of one percent (.0625%))
appearing on the Reuters Screen LIBO Page as of 12:00 noon,
London time, on the day that is two (2) Business Days prior to
the first date of the proposed Applicable Interest Period. If
more than one such rate appears on the display, the rate will be
the arithmetic mean of such rates. If there is no period equal
to the Applicable Interest Period on the display, the LIBOR Rate
shall be determined by straight-line interpolation to the nearest
month (or week or day if expressed in weeks or days)
corresponding to the Applicable Interest Period between the two
nearest neighboring periods on the display. If there are no
applicable quotes available through Telerate Service or on the
Reuters Screen LIBO Page, then the Adjusted LIBOR Rate shall be
deemed unavailable as provided in Section 2.7(d).
"LIBOR Rate Loan" means a Loan or portion thereof bearing
interest at the Adjusted LIBOR Rate.
"Lien" means, for any person, any security interest, pledge,
mortgage, charge, assignment, hypothecation, encumbrance,
attachment, garnishment, execution or other voluntary or
involuntary lien upon such person's interest in real or personal
property whether now owned or hereafter acquired, except (i)
liens for Taxes which are not delinquent or which remain payable
without penalty or the validity or amount of which is being
contested in good faith by appropriate proceedings with
appropriate reserves having been established therefor in
accordance with GAAP; (ii) liens imposed by law (such as
mechanics' liens) incurred in good faith in the ordinary course
of business which are not delinquent or which remain payable
without penalty or the validity or amount of which is being
contested in good faith by appropriate proceedings with, in the
case of liens on property of Borrower, provision having been made
to the satisfaction of Agent for the payment thereof in the event
the contest is determined adversely to Borrower; (iii) deposits
or pledges under worker's compensation, unemployment insurance,
social security or other similar laws or made to secure the
performance of bids, tenders, contracts (except for repayment of
borrowed money), or leases, or to secure statutory obligations or
surety or appeal bonds or to secure indemnity, performance or
other similar bonds given in the ordinary course of business;
(iv) reservations, exceptions, encroachments, easements, rights-
of-way, covenants, conditions, restrictions and other similar
title exceptions or encumbrances affecting real property,
provided such liens do not interfere in any material respect with
the use of such property in the ordinary conduct of business of
Borrower or any Subsidiary; (v) liens on real or personal
property of a Subsidiary to secure obligations of such Subsidiary
(or of another Subsidiary) to Borrower; (vi) liens which
constitute rights of set-off of a customary nature or "bankers'
liens" with respect to amounts on deposit, whether arising by
operation of law or by contract to secure the payment of
customary bank charges assessed for the maintenance of accounts
and related facilities maintained with banks in the ordinary
course of business, but not in connection with working capital
facilities, lines of credit, term loans, or other credit
facilities and similar arrangements.
"Loan" has the meaning set forth in Section 2.1 and may be
either a Reference Rate Loan or a LIBOR Rate Loan.
"Loan Documents" means the Borrower Documents, the Letters
of Credit and all other certificates, instruments and other
documents executed in connection with this Agreement, any other
Loan Document, or the transactions contemplated hereby or
thereby.
"Majority Lenders" means at any time Lenders having an
aggregate Percentage Interest of at least sixty-six and two
thirds percent (66 2/3%).
"Maturity Date" means June 10, 2001.
"Net Income" means for any accounting period the net income
of any person for such period, determined in accordance with
GAAP, excluding, however, (i) proceeds of any life insurance
policy, (ii) gain or loss arising from any write-up or write-down
of capital assets and (iii) special credits or charges,
including, without limitation, extraordinary gains and losses.
"Notes" has the meaning given in Section 2.10.
"Notice of Borrowing" means a written request for a Loan
executed by Borrower substantially in the form attached hereto as
Exhibit B which shall be delivered to Agent prior to 12:00 noon
(New York time) on the requested date of borrowing provided,
however, if Borrower shall at the same time elect to have
interest accrue on such Loan at an Adjusted LIBOR Rate, the
Notice of Borrowing shall be given prior to 12:00 noon (New York
time), on a Business Day at least three (3) Business Days before
the requested date of borrowing. Requests for borrowing received
after the designated hour will be deemed received on the next
succeeding Business Day.
"Officer's Certificate" means a certificate signed in the
name of Borrower by its President, Chief Financial Officer,
Treasury Director or any Vice President.
"PBGC" means the Pension Benefit Guaranty Corporation or any
entity succeeding to any or all of its functions under ERISA.
"Pension Plan" means an "employee pension benefit plan" (as
such term is defined in ERISA) from time to time maintained by
Borrower, any Subsidiary or a member of the Controlled Group.
"Percentage Interest" has the meaning given in Section 2.1
as the same may be adjusted pursuant to Section 11.6 from time to
time hereafter.
"Permitted Swap Obligations" means all obligations
(contingent or otherwise) of Borrower or any Subsidiary existing
or arising under Swap Contracts, provided that each of the
following criteria is satisfied: (a) such obligations are (or
were) entered into by such person in the ordinary course of
business for the purpose of directly mitigating risks associated
with liabilities, commitments or assets held by such person, or
changes in the value of securities issued by such person in
conjunction with a securities repurchase program not otherwise
prohibited hereunder, and not for purposes of speculation or
taking a "market view;" and (b) such Swap Contracts do not
contain any provision ("walk-away" provision) exonerating the non-
defaulting party from its obligation to make payments on
outstanding transactions to the defaulting party. As used
herein, "Swap Contract" shall mean any agreement, whether or not
in writing, relating to any transaction that is a rate swap,
basis swap, forward rate transaction, commodity swap, commodity
option, equity or equity index swap or option, bond, note or bill
option, interest rate option, forward foreign exchange
transaction, cap, collar or floor transaction, currency swap,
cross-currency rate swap, swaption, currency option or any other,
similar transaction (including any option to enter into any of
the foregoing) or any combination of the foregoing, and, unless
the context otherwise clearly requires, any master agreement
relating to or governing any or all of the foregoing.
"Plan" means, at any time, an employee pension benefit plan
which is covered by Title IV of ERISA or subject to the minimum
funding standards under Section 412 of the Code and is either (i)
maintained by Borrower, any Subsidiary or any member of a
Controlled Group for employees of Borrower, any Subsidiary or any
member of such Controlled Group or (ii) maintained pursuant to a
collective bargaining agreement or any other arrangement under
which more than one employer makes contributions and to which
Borrower, any Subsidiary or any member of a Controlled Group is
then making or accruing an obligation to make contributions or
has within the preceding five (5) plan years made contributions.
"Prior Credit Agreement" means that certain Credit Agreement
dated as of June 27, 1997 by and among Borrower, the Lenders
named therein, and Bank of America National Trust and Savings
Association d/b/a Seafirst Bank ("BofA") and United States
National Bank of Oregon as co-agents for lenders, and BofA, as
administrative agent.
"Purchase Money Lien" means a Lien securing Indebtedness
incurred in connection with the acquisition of fixed assets
(including both equipment and real estate) where such Lien arises
after the date of this Agreement so long as (i) such Lien shall
attach only to the property to be acquired (together with
attachments, accessions, and additions thereto or proceeds
thereof), and (ii) the debt incurred shall not exceed the
purchase price of the item or items of fixed assets purchased.
"Reference Rate" means on any day, the higher of (i) the
rate of interest publicly announced from time to time by Agent in
New York, New York, as its "prime lending rate" and (ii) 0.50%
per annum above the Federal Funds Rate. The prime lending rate
is set based on various factors, including Agent's costs and
desired return, general economic conditions, and other factors,
and is used as a reference point for pricing some loans. Agent
may price loans to its customers at, above, or below the prime
lending rate. Any change in the prime lending rate shall take
effect at the opening of business on the day specified in the
public announcement of a change in the prime lending rate.
"Reference Rate Loan" means a Loan or portion thereof
bearing interest at the Reference Rate.
"Responsible Officer" means Borrower's Chief Executive
Officer, Chief Financial Officer, President, Treasury Director,
any Executive Vice President, or any other officer having
substantially the same authority and responsibility.
"Restricted Payments" means, for any period, the sum of (i)
all Dividend Payments made by Borrower during such period other
than Dividend Payments described in Section 7.1(z) hereof; (ii)
all Dividend Payments made by any Subsidiary during such period
to any person in which Borrower has no direct or indirect
ownership interest (an "Unaffiliated Person"); (iii) the product
of (A) all Dividend Payments made by any Subsidiary to any person
which is not an Unaffiliated Person (an "Affiliated Person") and
(B) a percentage equal to the percentage of such Affiliated
Person which is owned directly or indirectly by an Unaffiliated
Person; (iv) an amount equal to the product of (A) the Tangible
Net Worth of any Subsidiary which during such period was the
surviving corporation in any merger or consolidation with any
other Subsidiary calculated as of the moment immediately
following the consummation of such merger or consolidation and
(B) a percentage equal to the percentage of such Subsidiary which
is owned directly or indirectly by an Unaffiliated Person
immediately following the consummation of such merger or
consolidation; (v) an amount equal to the fair market value of
all property distributed to an Unaffiliated Person in connection
with the liquidation or dissolution of a Subsidiary occurring
during such period; and (vi) an amount equal to the product of
(A) the fair market value of all property distributed to an
Affiliated Person in connection with the liquidation or
dissolution of a Subsidiary occurring during such period and (B)
a percentage equal to the percentage of such Affiliated Person
which is owned directly or indirectly by an Unaffiliated Person.
"Subordinated Indebtedness" means Indebtedness of Borrower
which is expressly subordinated to all obligations of Borrower
under this Agreement and the other Loan Documents either (i) by
the terms of the instrument evidencing such Subordinated
Indebtedness, which terms are acceptable to Majority Lenders in
their sole discretion, or (ii) pursuant to one or more
subordination agreements each in form and substance acceptable to
Majority Lenders in their sole discretion.
"Subsidiary" of a person means any corporation, limited
liability company or partnership of which more than 50% of the
voting stock, membership interests or partnership interests is
owned or controlled directly or indirectly by the person, or one
or more of the Subsidiaries of the person, or a combination
thereof. Unless the context otherwise clearly requires,
references herein to a "Subsidiary" refer to a Subsidiary of the
Borrower.
"Successor" means, for any corporation or banking
association, any successor by merger or consolidation, or by
acquisition of substantially all of the assets of the
predecessor.
"Synthetic Lease" means a lease which (i) in accordance with
GAAP, including, without limitation, the requirements of FASB-13,
is accounted for as an "operating lease"; and (ii) where, under
the Code and applicable regulations and rulings issued
thereunder, the lessee thereunder is characterized as the owner
of the leased property.
"Tangible Net Worth" means for any person, the excess of
total assets over Total Liabilities, excluding, however, from the
determination of total assets (i) all assets which should be
classified as intangible assets (such as goodwill, patents,
trademarks, copyrights, franchises, and deferred charges
including unamortized debt discount and research and development
costs), (ii) cash held in a sinking or other similar fund
established for the purpose of redemption or other retirement of
capital stock, (iii) to the extent not already deducted from
total assets, reserves for depreciation, depletion, obsolescence
or amortization of properties and other reserves or
appropriations of retained earnings which have been or should be
established in connection with the business conducted by the
relevant corporation, and (iv) any revaluation or other write-up
in book value of assets subsequent to the fiscal year of such
corporation last ended at the date of this Agreement.
"Tax" means for any person any tax, assessment, duty, levy,
impost or other charge imposed by any Governmental Authority on
such person or on any property, revenue, income, or franchise of
such person and any interest or penalty with respect to any of
the foregoing.
"Total Commitment" means One Hundred Million Dollars
($100,000,000) as the same may be reduced or terminated pursuant
to Section 2.4.
"Total Liabilities" means for any person, all items of
indebtedness or liability of such person which would be included
in determining total liabilities as shown on the liability side
of a balance sheet in accordance with GAAP other than
Subordinated Indebtedness.
"Total Utilization" means, as of any date of determination,
the sum of (i) the aggregate outstanding principal balance of all
Loans; plus (ii) the Letter of Credit Usage.
"Unfunded Vested Liabilities" means, with respect to any
Plan, at any time, the amount (if any) by which (i) the present
value of all vested nonforfeitable benefits under such Plan
exceeds (ii) the fair market value of all Plan assets allocable
to such benefits, all determined as of the then most recent
valuation date for such Plan, but only to the extent that such
excess represents a potential liability of Borrower, any
Subsidiary or any member of the Controlled Group to the PBGC or
the Plan under Title IV of ERISA.
"Wholly-Owned Subsidiary" means any corporation, limited
liability company, or partnership in which 100% of the voting
stock, membership interests or partnership interests (excluding
directors qualifying shares and shares issued to comply with
local ownership requirements) is owned beneficially and of record
by Borrower (or by one or more Wholly-Owned Subsidiaries or by a
combination thereof).
Section 1.2 General Principles Applicable To Definitions.
Definitions given in Section 1.1 shall be equally applicable to
both singular and plural forms of the terms therein defined and
references herein to "he" or "it" shall be applicable to persons
whether masculine, feminine or neuter. References herein to any
document including, but without limitation, this Agreement shall
be deemed a reference to such document as it now exists, and as,
from time to time hereafter, the same may be amended. References
herein to a "person" or "persons" shall be deemed to be
references to an individual, corporation, partnership, trust,
unincorporated association, limited liability company, joint
venture, joint-stock company, government (including political
subdivisions), Governmental Authority or agency or any other
entity.
Section 1.3 Accounting Terms. Except as otherwise provided
herein, accounting terms not specifically defined shall be
construed, and all accounting procedures shall be performed, in
accordance with generally accepted United States accounting
principles consistently applied ("GAAP") and as in effect on the
date of application.
ARTICLE 2
THE LOANS
Section 2.1 Loans. Subject to the terms and conditions of
this Agreement, each Lender hereby severally agrees during the
period from the date hereof until the Maturity Date (the
"Commitment Period") to make loans (the "Loans") to Borrower in
amounts equal to the percentage interest set forth opposite such
Lender's name on Schedule 2.1 hereto (such Lender's "Percentage
Interest") of the aggregate amount requested by Borrower in a
Notice of Borrowing given hereunder provided that, after giving
effect to any such requested borrowing (a) the aggregate of all
Loans from such Lender will not exceed at any one time
outstanding the sum set forth opposite its name on Schedule 2.1
hereto (such Lender's "Commitment") and (b) the Total Utilization
will not exceed the Total Commitment. The line of credit
extended hereunder is a revolving line of credit and, subject to
the terms and conditions hereof, Borrower may borrow, repay and
reborrow.
Section 2.2 [Intentionally deleted].
Section 2.3 Manner Of Borrowing. Borrower shall give Agent
a Notice of Borrowing not later than 12:00 noon (New York time)
on the date of the proposed borrowing in the case of a Reference
Rate Loan or on the date three (3) days prior to the date of the
proposed borrowing in the case of a LIBOR Rate Loan specifying
the date of the borrowing of any Loan and the amount thereof,
which shall be an integral multiple of One Million Dollars
($1,000,000) and not less than Five Million Dollars ($5,000,000).
Such Notice of Borrowing shall be irrevocable and shall be deemed
to constitute a representation and warranty by Borrower that as
of the date of the notice, the statements set forth in Article 5
hereof are true and correct and that no Default or Event of
Default has occurred and is continuing. On receipt of such
notice, Agent shall promptly notify each Lender by telephone
(confirmed immediately by telex, facsimile transmission or
cable), telex, facsimile transmission, or cable of the date of
the borrowing. Each Lender shall before 2:00 p.m. (New York
time), on the date of the borrowing, pay the lesser of (a) such
Lender's Percentage Interest of the aggregate principal amount of
the requested borrowing identified in the Notice of Borrowing or
(b) the maximum amount such Lender is committed to advance
pursuant to the terms of Section 2.1 hereof in immediately
available funds to Agent. Upon fulfillment to Agent's reasonable
satisfaction of the applicable conditions set forth in Article 4,
and after receipt by Agent of such funds, Agent will on that same
day make such funds available to Borrower by depositing them to
an account maintained by Borrower which account may be
designated by Borrower in a writing delivered to Agent from time
to time.
Section 2.4 Reduction Of Commitments. Upon not less than
three (3) Business Days' written notice to Agent, Borrower may
terminate the Total Commitment, in whole or in part, provided
that each partial reduction of the Total Commitment shall be in
an amount not less than Five Million Dollars ($5,000,000) and,
provided, further, that in no event may the Total Commitment be
reduced to an amount less than the Total Utilization. Any
reduction in the Total Commitment shall be deemed to be a
proportionate reduction in each Lender's Commitment such that
after making such reduction, each Lender's Commitment will be in
an amount equal to its Percentage Interest of the then-reduced
Total Commitment.
Section 2.5 Repayment Of Principal. Borrower shall repay to
Agent for the account of Lenders the then outstanding principal
balance of each Loan not later than the Maturity Date.
Section 2.6 Agent's Right To Fund. Unless Agent shall have
received notice from a Lender prior to 12:00 noon (New York time)
on the date of any Loan that such Lender will not make available
to Agent such Lender's Percentage Interest of the requested
borrowing, Agent may assume that such Lender has made such funds
available to Agent on the date of such Loan in accordance with
Section 2.3 hereof and Agent may, in reliance upon such
assumption, make available to Borrower on such date a
corresponding amount. If and to the extent that such Lender
shall not have made such portion available to Agent and if Agent
shall have advanced such portion to Borrower, such Lender and
Borrower severally agree to pay to Agent forthwith on demand such
corresponding amount, together with interest thereon for each day
from the date such amount is made available to Borrower until the
date such amount is repaid to Agent, at (a) in the case of
Borrower, the Applicable Interest Rate (b) in the case of such
Lender, the Federal Funds Rate. Any such repayment by Borrower
shall be without prejudice to any rights it may have against any
Lender that has failed to make its funds available for any
requested borrowing.
Section 2.7 Interest On Loans.
(a) General Provisions. Borrower agrees to pay to
Agent for the account of each Lender interest on the unpaid
principal amount of each Loan from the date of such Loan until
such Loan shall be due and payable at a per annum rate equal to
the Applicable Interest Rate, and, if default shall occur in the
payment when due of any such Loan, from the maturity of that Loan
until it is paid in full at a per annum rate equal to two
percentage points (2%) above the Reference Rate (changing as the
Reference Rate changes). Accrued but unpaid interest on each
LIBOR Rate Loan shall be paid in arrears on the last day of each
Applicable Interest Period, on the date of any principal payment
(to the extent accrued on the principal amount paid), on the
Maturity Date, and, for each LIBOR Rate Loan having an Applicable
Interest Period longer than three months, at the end of the first
three months of such Applicable Interest Period. Accrued but
unpaid interest on each Reference Rate Loan shall be paid on the
last Business Day of each calendar quarter commencing on June 30,
1998 and continuing on the last Business Day of each calendar
quarter thereafter and on the date of any principal payment (to
the extent accrued on the principal amount paid) and on the
Maturity Date. Unpaid interest accruing on amounts in default
shall be payable on demand.
(b) Selection of Alternative Rates. Borrower may,
subject to the requirements of this Section 2.7(b), on at least
three (3) Business Days' prior written notice elect to have
interest accrue on any Loan or any portion thereof at an Adjusted
LIBOR Rate for an Applicable Interest Period. Such notice
(herein, an "Interest Rate Notice") shall be deemed delivered on
receipt by Agent except that an Interest Rate Notice received by
Agent after 12:00 noon (New York time) on any Business Day shall
be deemed to be received on the immediately succeeding Business
Day. Such Interest Rate Notice shall identify, subject to the
conditions of this Section 2.7(b), the Loan or portions thereof
and the Applicable Interest Period which Borrower selects. Any
such Interest Rate Notice shall be irrevocable. On receipt of
such Interest Rate Notice, Agent shall promptly notify each
Lender by facsimile transmission of the information set forth in
the Interest Rate Notice. Borrower's right to select an Adjusted
LIBOR Rate to apply to a Loan or any portion thereof shall be
subject to the following conditions: (i) the aggregate of all
Loans or portions thereof to accrue interest at a particular
Adjusted LIBOR Rate for the same Applicable Interest Period shall
be an integral multiple of One Million Dollars ($1,000,000) and
not less than Five Million Dollars ($5,000,000); (ii) Borrower
shall not have selected more than six (6) different Adjusted
LIBOR Rates or Applicable Interest Periods to be applicable to
portions of the Loans at any one time; (iii) an Adjusted LIBOR
Rate may not be selected for any Loan or portion thereof which is
already accruing interest at an Adjusted LIBOR Rate unless such
selection is only to become effective at the maturity of the
Applicable Interest Period then in effect; (iv) Agent or any
Lender shall not have given notice pursuant to Section 2.7(d)
hereof that the Adjusted LIBOR Rate selected by Borrower is not
available; (v) no Default or Event of Default shall have occurred
and be continuing and (vi) if Borrower elects to have some
portion (but less than all) of the Loans accrue interest at a
designated Adjusted LIBOR Rate, Borrower shall select a portion
of each Lender's Loans to accrue interest at such rate in
proportion to its respective Percentage Interest. In the absence
of an effective request for the application of an Adjusted LIBOR
Rate, the Loans or remaining portions thereof shall accrue
interest at the Reference Rate. Any Interest Rate Notice which
specifies an Adjusted LIBOR Rate but fails to identify an
Applicable Interest Period shall be deemed to be a request for an
Adjusted LIBOR Rate for an Applicable Interest Period of one (1)
month. The Interest Rate Notice may be given with and contained
in any Notice of Borrowing. If Borrower delivers an Interest
Rate Notice with any Notice of Borrowing for a Loan and Borrower
thereafter declines to take such Loan or a condition precedent to
the making of such Loan is not satisfied or waived, Borrower
shall indemnify Agent and each Lender for all losses and any
costs which Agent or any Lender may sustain as a consequence
thereof including, without limitation, the costs of redeployment
of funds at rates lower than the cost to Lenders of such funds.
A certificate of Agent or any Lender setting forth the amount due
to it pursuant to this subparagraph (b) and the basis for, and
the calculation of, such amount shall be prima facie evidence of
the amount due pursuant to this subparagraph (b). Payment of the
amount owed shall be due within fifteen (15) days after
Borrower's receipt of such certificate.
(c) Applicable Days For Computation of Interest. All
computations of interest for Reference Rate Loans shall be made
on the basis of a year of (i) three hundred sixty-five (365) or
three hundred sixty-six (366) days, as the case may be, where the
Reference Rate is determined by the prime lending rate, and (ii)
three hundred sixty (360) days where the Reference Rate is
determined by the Federal Funds Rate, in each case, for the
actual number of days (including the first day but excluding the
last day) occurring in the period for which such interest is
payable. All other computations of interest shall be made on the
basis of a year of three hundred sixty (360) days, in each case,
for the actual number of days (including the first day but
excluding the last day) occurring in the period for which such
interest is payable.
(d) Unavailable LIBOR Rate. If any Lender determines
that for any reason fair and adequate means do not exist for
establishing a particular LIBOR Rate or that accruing interest on
any Loan at an Adjusted LIBOR Rate by such Lender has become
unlawful, such Lender may give notice of that fact to Agent and
Borrower and such determination shall be conclusive and binding
absent manifest error. After such notice has been given and
until such Lender notifies Borrower and Agent that the
circumstances giving rise to such notice no longer exist, such
Adjusted LIBOR Rate shall no longer be available in respect of
Loans. Thereafter, any request by Borrower to have interest
accrue on a Loan at such an Adjusted LIBOR Rate shall be deemed
to be a request for interest to accrue at the Reference Rate. If
the circumstances giving rise to the notice described herein no
longer exist, the Lender shall notify Borrower and Agent in
writing of that fact, and Borrower shall then once again become
entitled to request that such an Adjusted LIBOR Rate apply to the
Loans in accordance with Section 2.7(b) hereof.
Section 2.8 Compensation For Increased Costs. In the event
that after the date hereof any change occurs in any applicable
law, regulation, guideline, treaty or directive or interpretation
thereof by any authority charged with the administration or
interpretation thereof or in any applicable condition imposed by
any such authority, or any condition is imposed by any authority
after the date hereof which:
(a) subjects any Lender to any Tax, or changes the
basis of taxation of any payments to any Lender on account of
principal of or interest on any LIBOR Rate Loan, such Lender's
Note (to the extent such Note evidences LIBOR Rate Loans) or
other amounts payable with respect to LIBOR Rate Loans (other
than a change in the rate of Taxes based solely on the overall
net or gross income of such Lender); or
(b) imposes, modifies or determines applicable any
reserve, deposit or similar requirements against any assets held
by, deposits with or for the account of, or loans or commitments
by, any office of any Lender in connection with its LIBOR Rate
Loans to the extent the amount of which is in excess of, or was
not applicable at the time of computation of, the amounts
provided for in the definition of the related LIBOR Rate; or
(c) affects the amount of capital required to be
maintained by banks generally or by corporations controlling
banks and any Lender determines that the amount by which such
Lender or any corporation controlling such Lender is required or
expected to maintain or increase its capital is increased by, or
based upon, the existence of this Agreement or of such Lender's
Loans, Letters of Credit or Commitment hereunder;
(d) imposes upon any Lender any other condition with
respect to its LIBOR Rate Loans or its obligation to make LIBOR
Rate Loans; which, as a result thereof, (i) increases the cost to
any Lender of making or maintaining its Loans or its Commitment
hereunder, or (ii) reduces the net amount of any payment received
by any Lender in respect of its Loans (whether of principal,
interest, commitment fees or otherwise), or (iii) requires any
Lender to make any payment on or calculated by reference to the
gross amount of any sum received by it in respect of its Loans,
in each case by an amount which such Lender in its sole judgment
deems material, then and in such case Borrower shall pay to Agent
for the account of such Lender on demand such amount or amounts
as will compensate such Lender (on an after-tax basis) for any
increased cost, deduction or payment actually incurred or made by
such Lender. The demand for payment by any Lender shall be
delivered to both Agent and Borrower and shall state the
subjection or change which occurred or the reserve or deposit
requirements or other conditions which have been imposed upon
such Lender or the request, direction or requirement with which
it has complied, together with the date thereof, the amount of
such cost, reduction or payment and the manner in which such
amount has been calculated. The statement of any Lender as to
the additional amounts payable pursuant to this Section 2.8 shall
be prima facie evidence of the amounts payable hereunder
provided, however, that the Borrower shall not be liable for any
such amount attributable to any period prior to the date one
hundred eighty (180) days prior to the date that any officer at
such Lender knew or reasonably should have known of such claim
for reimbursement or compensation.
The protection of this Section 2.8 shall be available to
each Lender regardless of any possible contention of invalidity
or inapplicability of the relevant law, regulation, guideline,
treaty, directive, condition or interpretation thereof. In the
event that Borrower pays any Lender the amount necessary to
compensate such Lender for any charge, deduction or payment
incurred or made by such Lender as provided in this Section 2.8,
and such charge, deduction or payment or any part thereof is
subsequently returned to such Lender as a result of the final
determination of the invalidity or inapplicability of the
relevant law, regulation, guideline, treaty, directive or
condition, then such Lender shall remit to Borrower the amount
paid by Borrower which has actually been returned to such Lender
(together with any interest actually paid to Lender on such
returned amount), less Borrower's pro rata share of such Lender's
costs and expenses incurred in connection with such governmental
regulation or any challenge made by such Lender with respect to
its validity or applicability.
Section 2.9 Prepayments. Upon (i) one (1) Business Day's,
in the case of Reference Rate Loans and (ii) three (3) Business
Days', in the case of LIBOR Rate Loans, prior written notice to
Agent specifying the amount and date of any proposed prepayment,
Borrower shall have the right to prepay the Loans in whole or in
part, provided that each partial prepayment of principal shall be
an integral multiple of One Million Dollars ($1,000,000) but not
less than Five Million Dollars ($5,000,000). Reference Rate
Loans may be repaid at any time without penalty or premium. If a
LIBOR Rate Loan is paid prior to the end of the Applicable
Interest Period, Borrower shall indemnify Agent and each Lender
for all reasonable losses and any reasonable costs which Agent or
any Lender may sustain as a consequence thereof including,
without limitation, the reasonable costs of redeployment of funds
at rates lower than the cost to Lenders of such funds. A
certificate of Agent or any Lender setting forth the amount due
to it pursuant to this Section 2.9 and the basis for, and the
calculation of, such amount shall be prima facie evidence of the
amount due pursuant to this Section 2.9. Payment of the amount
owed shall be due within fifteen (15) days after Borrower's
receipt of such certificate. Such an indemnity payment will be
required in all circumstances where such a Loan is paid prior to
the end of the Applicable Interest Period, regardless of whether
such payment is voluntary, mandatory, required pursuant to
Section 2.5 hereof, or the result of Agent's or Lenders'
collection efforts.
Section 2.10 Notes. The Loans shall be evidenced by
promissory notes of Borrower substantially in the form of Exhibit
A hereto, with appropriate insertions, payable to the order of
the Lenders, dated as of the date hereof, and for each Lender in
the face amount of such Lender's Commitment (the "Notes").
Section 2.11 Manner Of Payments.
(a) All payments and prepayments of principal and
interest on any Loan and all other amounts payable hereunder by
Borrower to Agent or any Lender shall be made by paying the same
in United States Dollars and in immediately available funds to
Agent at its payment office listed on the signature pages hereto
not later than 12:00 noon. (New York time) on the date on which
such payment or prepayment shall become due. All payments to be
made by Borrower shall be made without set-off, recoupment or
counterclaim.
(b) Whenever any payment hereunder or under any other
Loan Document shall be stated to be due or whenever the last day
of any interest period would otherwise occur on a day other than
a Business Day or on a day for which there is no numerically
corresponding day in the applicable calendar month, such payment
shall be made and the last day of such interest period shall
occur on the next succeeding Business Day and such extension of
time shall in such case be included in the computation and
payment of interest or facility fees, as the case may be, unless
such extension would cause such payment to be made or the last
day of such interest period to occur in the next following
calendar month, in which case such payment shall be due and the
last day of such interest period shall occur on the last Business
Day of the current calendar month and such reduction of time
shall in such case reduce the amount of interest and commitment
fees accruing in such period accordingly.
Section 2.12 Application Of Payments. Any payments made
by Borrower in respect of amounts owing by it hereunder or under
any other Loan Document shall be applied in the manner directed
by Borrower and, in the absence of any such direction, such
payments and any prepayments of any Loan shall be applied first
against fees, expenses and indemnities due hereunder; second,
against interest due on matured obligations in respect of any
Letter of Credit, if any; third, against interest due on amounts
in default on any Loan, if any; fourth, against interest due on
any Loan; fifth, against matured obligations in respect of any
Letter of Credit, if any; sixth, against Loan principal amounts
in default; seventh, against Loan principal until the Loans are
paid in full; and thereafter as collateral security for
obligations in respect of unmatured Letters of Credit. Any
payments received by Agent or any Lender by any means and from
any source after the occurrence and during the continuation of an
Event of Default shall be applied to such portions of Borrower's
obligations hereunder or under any other Loan Document and in
such order as Majority Lenders may elect in their sole discretion
or, in the absence of such an election, in such order as Agent
may elect in its sole discretion.
Section 2.13 Fees.
(a) Facility Fees. Borrower agrees to pay to Agent
for the account of Lenders in proportion to their Percentage
Interests a facility fee on the Total Commitment computed daily
at a per annum rate equal to the Facility Fee Rate set forth in
the table below. Facility fees shall be payable in arrears on
the last Business Day of each calendar quarter, on the Maturity
Date, and on demand after default. Computations of facility fees
shall be made on the basis of a year of three hundred sixty (360)
days for the actual number of days (including the first day but
excluding the last day) occurring in the period for which such
fees are payable. As used herein the "Facility Fee Rate" shall
be determined in accordance with the following table:
EBITDA Rating Facility Utilization Facility Fee Rate
------------- -------------------- -----------------
Level 1 < 50% 15.0 basis points (0.150%)
> 50% 17.5 basis points (0.175%)
Level 2 < 50% 20.0 basis points (0.2000%)
> 50% 22.5 basis points (0.225%)
Level 3 < 50% 25.0 basis points (0.250%)
> 50% 27.5 basis points (0.275%)
Level 4 < 50% 30.0 basis points (0.300%)
> 50% 32.5 basis points (0.325%)
Level 5 < 50% 35.0 basis points (0.350%)*
> 50% 40.0 basis points (0.400%)
Level 6 N/A 50.0 basis points (0.500%)
*Initial Pricing Level
(b) Upfront Fee. Borrower agrees to pay to Agent for
the account of Lenders in proportion to their Percentage
Interests, a fee in an amount equal to 10 basis points (0.10%) of
the Total Commitment payable on the execution and delivery of
this Agreement.
(c) Agency Fees. Borrower agrees to pay to Agent, for
its own account, the fees described in that certain letter
agreement dated as of the date hereof by and between Borrower and
Agent.
Section 2.14 Sharing Of Payments, Etc. Each borrowing of
Loans from Lenders under Section 2.1 hereof will be made pro rata
in accordance with each Lender's Percentage Interest. Each
payment and prepayment of the Loans and each payment of interest
on the Loans will be made pro rata to each Lender in accordance
with its Percentage Interest. If any Lender shall obtain any
payment in respect of Borrower's obligations under this Agreement
or the Notes (whether voluntary or involuntary, through the
exercise of any right of set-off or otherwise) in excess of the
share which it would have been entitled to receive had such
payment been made to Agent for the account of the Lenders, such
Lender shall forthwith purchase from the other Lenders such
participations in the Loans made by them as shall be necessary to
cause such purchasing Lender to share the excess payment ratably
with each of them, but if any of such excess payment is afterward
recovered from such purchasing Lender, the purchase shall be
rescinded and the purchase price restored, without interest, to
the extent of such recovery. Borrower authorizes the purchase of
such participations and agrees that any Lender so purchasing a
participation from another Lender may exercise all its rights to
payment (including the right of set off) with respect to such
participation as fully as if such Lender were the direct creditor
of Borrower in the amount of such participation.
Section 2.15 Extension Of Maturity Date. Borrower may
request that Lenders extend the Maturity Date for a period of one
(1) additional calendar year by notifying Lenders and Agent in
writing on a day after the first anniversary date of this
Agreement and not less than ninety (90) days prior to the
Maturity Date. Each Lender shall provide Borrower and Agent with
written notice of its consent or refusal to consent to such
extension within forty-five (45) days of the date on which
Borrower provides Agent and Lenders with a written request for
such an extension. If all Lenders provide Borrower and Agent
with such a written notice the Maturity Date shall be extended
for a period of one (1) additional calendar year. If any Lender
in its sole discretion does not provide a written notice
evidencing its consent as herein provided, the request for
extension shall be deemed denied by all Lenders.
Section 2.16 Replacement Of Lender.
(a) In the event that any Lender makes a demand for
payment pursuant to Section 2.8 hereof or any Lender has
suspended its funding of LIBOR Rate Loans hereunder, Borrower
shall have the right, if no Default or Event of Default then
exists, to replace such Lender in accordance with this Section
2.16.
(b) If Borrower determines to replace a Lender
pursuant to this Section 2.16, Borrower shall have the right to
replace such Lender with an entity that is an Eligible Assignee
(a "Replacement Lender") provided that such Replacement Lender
(i) if it is not already a Lender, shall be acceptable to Agent,
which acceptance shall not be unreasonably withheld, (ii) shall,
in its sole discretion, unconditionally agree in writing (with a
copy to Agent) to purchase on a date therein specified all of the
rights hereunder and under the other Loan Documents of the Lender
being replaced and all of the interest in the Loans owing to such
Lender without recourse at the principal amount of such Note (the
interest and fees accrued thereon to the date of such purchase
shall be paid to the Lender being replaced when the same become
due and owing) and an amount equal to losses and costs which will
be sustained by the Lender being replaced as a consequence of
such sale resulting from the selling Lender's redeployment of
funds at rates lower than the Applicable Interest Rate thereunder
shall be reimbursed by Borrower as provided herein, and (iii)
shall, if such Replacement Lender is not already a Lender,
execute and deliver to Agent an Assignment and Acceptance
substantially in the form of Exhibit D hereto pursuant to which
such Replacement Lender becomes a party hereto with a Commitment
equal to that of the Lender being replaced.
(c) Upon (i) satisfaction of the requirements set
forth in subsection 2.16(b) hereof, (ii) payment to such Lender
by the Replacement Lender of the purchase price in immediately
available funds and (iii) payment to the Lender being replaced by
Borrower of all requested increased costs or additional amounts
accrued to the date of such purchase which Borrower is obligated
to pay under Section 2.8 hereof, all amounts which would have
been paid for the account of such Lender under Section 2.9 hereof
had all of the Loans been fully prepaid on the date of
replacement, and all other amounts owed by Borrower to such
Lender hereunder (other than the principal of and interest on the
Loans of such Lender purchased by the Replacement Lender and
interest and fees accrued thereon to the date of purchase), the
Replacement Lender shall constitute a "Lender" hereunder with a
Commitment as so specified and the Lender being so replaced shall
no longer constitute a "Lender" hereunder (and this Agreement
shall be deemed to be amended to the extent, but only to the
extent, necessary to reflect the addition of the Replacement
Lender) and the Lender being replaced shall be relieved of its
obligations hereunder. Notwithstanding anything in this Section
2.16 to the contrary, the provisions of the Loan Documents shall
continue to inure to the benefit of the Lender being replaced as
to all matters occurring prior to the date of replacement.
ARTICLE 3
LETTERS OF CREDIT
Section 3.1 Letters Of Credit. Borrower may request that
Agent or any Lender issue letters of credit for Borrower's
account in accordance with the terms and conditions of this
Article 3.
Section 3.2 Manner Of Requesting Letters Of Credit.
(a) Letter of Credit Requests. From time to time
during the Commitment Period, Borrower may request that a single
Lender or, alternatively, all Lenders issue commercial or standby
letters of credit ("Letters of Credit") for Borrower's account or
extend or renew existing Letters of Credit. A Letter of Credit
issued by a single Lender shall hereinafter be referred to as
"Single Lender Letter of Credit". Letters of Credit issued by
all Lenders in their respective Percentage Interests shall
hereinafter be referred to as "Multi-Lender Letters of Credit."
Borrower may request a Letter of Credit by delivering a written
request for the issuance, extension or renewal of such a Letter
of Credit to Agent not later than 12:00 noon (New York time) at
least five (5) Business Days prior to the date a new Letter of
Credit is to be issued or an existing Letter of Credit is
scheduled to expire, provided that, any request given orally
shall be confirmed by Borrower in a writing delivered to Agent
not later than 1:00 p.m. (New York time) on the date such oral
request is made. Each such request shall be deemed to constitute
a representation and warranty by Borrower that as of the date of
such request, the statements set forth in Article 5 hereof are
true and correct and that no Default or Event of Default has
occurred and is continuing. Each such written request shall
specify whether Borrower is requesting the issuance of a Single
Lender Letter of Credit or a Multi-Lender Letter of Credit.
Borrower shall request a Multi-Lender Letter of Credit only in
the event that no Lender will agree to issue a Single Lender
Letter of Credit and Agent shall then (a) approve the form of the
proposed Letters of Credit, (b) prepare the reimbursement
agreements to be executed by Borrower in favor of each Lender,
each of such agreements being identical in content and (c) notify
each Lender to issue its Multi-Lender Letter of Credit upon
Borrower's compliance with all conditions precedent to such
issuance. Each request for a Single Lender Letter of Credit
shall specify (i) the Lender requested to issue the Letter of
Credit, (ii) the type of Letter of Credit, (iii) the face amount
of the requested Letter of Credit (the "SLLC Amount"), (iv) the
proposed date of expiration, (v) the name of the intended
beneficiary thereof, and (vi) whether such Letter of Credit is an
extension or renewal of an existing Letter of Credit. If
Borrower is requesting a Multi-Lender Letter of Credit, then the
written request shall specify all of the information provided for
in items (ii), (iv), (v) and (vi) of the proceeding sentence plus
the aggregate face amount of the Letters of Credit (the "MLLC
Amount"). Each Letter of Credit requested hereunder (i) shall be
in a face amount such that after issuance of such Letter of
Credit (A) the Total Utilization will not exceed the Total
Commitment and (B) the Letter of Credit Usage would not exceed
$25,000,000; (ii) shall have an expiration date not later than
five (5) Business Days prior to the Maturity Date and (iii) shall
be in an SLLC Amount or MLLC Amount, as the case may be, which is
an integral multiple of $100,000 and not less than $1,000,000.
(b) Response to Request for Single Lender Letter of
Credit. The Lender identified in Borrower's written request of a
Single Lender Letter of Credit shall not be obligated to issue
the Single Lender Letter of Credit. It shall notify Agent and
Borrower in writing whether or not it intends to issue the
requested Single Lender Letter of Credit within 4 hours of its
receipt, from Agent, of Borrower's written request therefor. Any
issued Single Lender Letter of Credit shall be subject to Article
X hereof.
(c) Letter of Credit Fees. Borrower agrees to pay a
fronting fee to a Lender issuing a Single Lender Letter of Credit
in respect of such Letter of Credit in an amount determined by
the Lender and agreed to by the Borrower. Borrower further
agrees to pay to the Agent for the account of Lenders in
proportion to their Percentage Interests a letter of credit fee
on the face amount of each Letter of Credit from the date such
Letter of Credit is issued until such Letter of Credit shall be
terminated or drawn at a per annum rate equal to the applicable
Letter of Credit Fee Rate. Letter of credit fees shall be
payable in arrears on the last Business Day of each calendar
quarter, on the Maturity Date, and on demand after default.
Computations of letter of credit fees shall be made on the basis
of a year of three hundred sixty (360) days for the actual number
of days (including the first day but excluding the last day)
occurring in the period for which such fees are payable. As used
herein the "Letter of Credit Fee Rate" for each type of letter of
credit shall be determined daily in accordance with the following
table:
EBITDA Facility Commercial ("Performance") Standby ("Financial")
Rating Utilization Letter of Credit Fee Rate Letter of Credit Fee Rate
(expressed per annum) (expressed per annum)
------ ----------- -------------------------- -------------------------
Level 1 < 50% 10 basis points (0.10%) 20 basis points (0.20%)
> 50% 16.25 basis points (0.1625%) 32.5 basis points (0.325%)
Level 2 < 50% 20 basis points (0.20%) 40 basis points (0.40%)
> 50% 23.75 basis points (0.2375%) 47.5 basis points (0.475%)
Level 3 < 50% 27.5 basis points (0.275%) 55 basis points (0.55%)
> 50% 31.25 basis points (0.3125%) 62.5 basis point (0.625%)
Level 4 < 50% 35 basis points (0.35%) 70 basis points (0.70%)
> 50% 38.75 basis points (0.3875%) 77.5 basis points (0.77.5%)
Level 5 < 50% 42.5 basis points (0.42.5%)* 85 basis points (0.85%)*
> 50% 45 basis points (0.45%) 90 basis points (0.90%)
Level 6 N/A 62.5 basis points (0.625%) 125 basis points (0.125%)
*Initial Pricing Level.
(d) Letter of Credit Application Forms. At the
request of the issuing Lender or each Lender, as applicable,
Borrower shall execute a letter of credit application in the
standard form then used by such Lender or Lenders (which shall
not include terms inconsistent with this Agreement), in respect
of each Letter of Credit requested hereunder.
(e) Issuance of Letter of Credit. Subject to the
satisfaction of the conditions precedent set forth in Article 4
and Borrower's compliance with the terms of this Section 3.2, the
issuing Lender or each Lender, as applicable, shall issue and
deliver its Letter of Credit to Borrower or to the designated
beneficiary at such address as Borrower may specify. New Letters
of Credit and extensions or renewals of existing Letters of
Credit shall be in a form acceptable to Lenders.
Section 3.3 Indemnification; Increased Costs. Borrower
agrees to indemnify Agent and any Lender on demand for any and
all additional costs, expenses, or damages incurred by such Agent
or Lender, directly or indirectly, arising out of the issuance,
extension or renewal of any Letter of Credit or the purchase of
any Letter of Credit Risk Participation, including, without
limitation, any costs of maintaining reserves in respect thereof
and any premium rates imposed by the Federal Deposit Insurance
Corporation in connection therewith. A certificate as to such
additional amounts submitted to Borrower by Agent or such Lender
shall be prima facie evidence of the amounts due hereunder.
If at any time after the date hereof the introduction of or
any change in applicable law, rule, or regulation or in the
interpretation or the administration thereof by any Governmental
Authority charged with the interpretation or administration
thereof, or compliance by Agent or Lender with any requests
directed by any such Governmental Authority (whether or not
having the force of law) shall, with respect to any Letter of
Credit or Letter of Credit Risk Participation subject Agent or
such Lender to any Tax or impose, modify, or deem applicable any
reserve, special deposit, or similar requirements against assets
of, deposits with or for the account of, credit extended by Agent
or such Lender or shall impose on Agent or such Lender any other
conditions affecting the Letters of Credit or Letter of Credit
Risk Participation and the result of any of the foregoing is to
increase the cost to Agent or such Lender of issuing a Letter of
Credit or holding a Letter of Credit Risk Participation or to
reduce the amount of any sum received or receivable by Agent or
such Lender hereunder with respect to the Letters of Credit or
Letter of Credit Risk Participation, then, upon demand by Agent
or such Lender, Borrower shall pay to Agent or such Lender such
additional amount or amounts as will compensate Agent or such
Lender for such increased cost or reduction. The written
statement of any Lender as to the additional amounts payable
pursuant to this Section 3.3 shall be prima facie evidence of the
amounts due hereunder provided, however, that the Borrower shall
not be liable for any such amount attributable to any period
prior to the date one hundred eighty (180) days prior to the date
that any officer at such Lender knew or reasonably should have
known of such claim for reimbursement or compensation.
Borrower agrees to indemnify and hold Agent and each Lender
(an "Indemnitee") harmless from and against any and all (a) Taxes
and other fees payable in connection with Letters of Credit,
Letters of Credit Risk Participations or the provisions of this
Agreement relating thereto, and (b) any and all actions, claims,
damages, losses, liabilities, fines, penalties, costs, and
expenses of every nature, including reasonable attorneys' fees,
suffered or incurred by the Indemnitee otherwise arising out of
or relating to this Article 3, any Letter of Credit or any Letter
of Credit Risk Participation; provided, however, any
indemnification under this Section 3.3 shall not apply to the
extent that any such action, claim, damage, loss, liability,
fine, penalty, cost, or expense arises out of or is based solely
upon the Indemnitee's willful misconduct or gross negligence.
Section 3.4 Payment By Borrower. Borrower agrees to fully
reimburse Agent and Lenders for all amounts paid by Agent and
Lenders under any Letter of Credit and to pay interest thereon at
the Reference Rate from the date Agent or Lenders make such
payment until the next Business Day following the date of any
demand for reimbursement by Agent or Lenders. Such payment shall
be made in immediately available funds at each Agent's or
Lender's office for payments not later than 12:00 noon (New York
time) on the next Business Day following the date of any demand
for reimbursement by Agent or Lenders; provided, that, if a
Lender so elects pursuant to the terms of Section 8.2 hereof,
following the occurrence and during the continuance of an Event
of Default, an amount equal to the undrawn face amount of each
Letter of Credit shall become immediately due and payable. If
Borrower shall default in its obligations to reimburse Agent or
Lenders or to make any other payment required hereunder, interest
shall accrue on the unpaid amount thereof at a per annum rate
equal to two (2) percentage points above the Reference Rate
(changing as the Reference Rate changes) from the date such
amount becomes due and payable until payment in full by Borrower.
Interest payable under this Section 3.4 on amounts paid by Agent
or Lenders under any Letter of Credit shall be calculated on the
basis of a year of 360 days and shall be payable on demand.
ARTICLE 4
CONDITIONS TO ADVANCES
Section 4.1 Conditions To Initial Advance. In addition to
the conditions set forth in Section 4.2 hereof, the obligations
of each Lender to make its initial Loan hereunder or to issue its
initial Letter of Credit hereunder are subject to fulfillment of
the following:
(a) Borrower Documents. Agent shall have received the
Borrower Documents, each duly executed and delivered by Borrower
and the other parties thereto.
(b) Borrower Authority. Agent shall have received in
form and substance satisfactory to it (i) a copy of a resolution
adopted by the Board of Directors of Borrower authorizing the
execution, delivery and performance of this Agreement and the
other Borrower Documents certified by the Secretary of Borrower;
(ii) evidence of the authority and specimen signatures of the
persons who have signed this Agreement and the other Borrower
Documents; (iii) Certificates of Good Standing dated as of a
recent date issued by the Secretary of State of Minnesota in
respect of Borrower; and (iv) such other evidence of corporate
authority as Agent shall reasonably require.
(c) Legal Opinion. Agent, on behalf of each Lender,
shall have received the legal opinions of Holland & Hart LLP and
Dorsey & Whitney LLP as counsel to Borrower, in form and
substance acceptable to Agent, and dated as of the date hereof.
(d) Officer's Certificate. Agent shall have received
an Officer's Certificate of Borrower as to the accuracy of
Borrower's representations and warranties set forth in Article 5
and as to the absence of any Default or Event of Default.
(e) Evidence of Insurance. Agent shall have received
certificates of insurance evidencing insurance required to be
maintained by Borrower under this Agreement or, in the
alternative, an Officer's Certificate of Borrower setting forth a
schedule of the insurance so maintained by Borrower.
(f) Other Information. Agent shall have received such
other statements, opinions, certificates, documents, undertakings
and information with respect to the matters contemplated by this
Agreement and the other Loan Documents as Agent or any Lender may
reasonably request.
(g) Payment of Fees. Agent shall have received
payment of all fees then due pursuant to the terms of Section
2.13 hereof.
(h) Prior Credit Agreement. Agent shall have received
evidence satisfactory to it that the Prior Credit Agreement has
been terminated and that all amounts owing thereunder, including,
without limitation, accrued interest and commitment fees, have
been paid in full.
Section 4.2 Conditions To All Advances. The obligations of
each Lender to make any Advance hereunder, including the initial
Advance, and to issue any Letter of Credit, are subject to
fulfillment of the following conditions:
(a) Notice of Borrowing. If such Advance is a Loan,
Agent shall have received the Notice of Borrowing in respect of
such Loan, and, if such Advance is a Letter of Credit, Agent
shall have received from Borrower a request therefor complying
with the requirements of Section 3.2 hereof.
(b) Default, Etc. At the date of the Advance, no
Default or Event of Default shall have occurred and be continuing
or will have occurred as the result of the making of the Advance;
and the representations and warranties of Borrower in Article 5
shall be true on and as of such date with the same force and
effect as if made on and as of such date.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES
Borrower represents and warrants to Lenders and Agent as
follows:
Section 5.1 Corporate Existence And Power. Borrower is a
corporation duly incorporated, validly existing and in good
standing under the laws of the state of Minnesota. Borrower is
duly qualified to do business in each other jurisdiction where
the nature of its activities or the ownership of its properties
requires such qualification, except where the failure to so
qualify would not be reasonably expected to have a material
adverse effect on the business, operations or financial condition
of Borrower. Borrower has full corporate power, authority and
legal right to carry on its business as presently conducted, to
own and operate its properties and assets, and to execute,
deliver and perform the Loan Documents.
Section 5.2 Corporate Authorization. The execution,
delivery and performance by Borrower of this Agreement and the
other Loan Documents and any borrowing hereunder or thereunder,
and the request for the issuance of any Letter of Credit
hereunder or thereunder, have been duly authorized by all
necessary corporate action of Borrower, do not require any
shareholder approval or the approval or consent of any trustee or
the holders of any Indebtedness of Borrower, except such as have
been obtained (certified copies thereof having been delivered to
Agent), do not contravene any law, regulation, rule or order
binding on it or its Articles of Incorporation or Bylaws and do
not contravene the provisions of or constitute a default under
any material indenture, mortgage, contract or other agreement or
instrument to which Borrower is a party or by which Borrower or
any of its properties may be bound or affected.
Section 5.3 Government Approvals, Etc. No Government
Approval or filing or registration with any Governmental
Authority is required for the execution and delivery of the Loan
Documents, in connection with the performance by Borrower of all
its obligations required to be performed under the Loan Documents
prior to the date on which this representation is made or deemed
to have been made, or in connection with any of the transactions
contemplated thereby, except such as have been heretofore
obtained and are in full force and effect.
Section 5.4 Binding Obligations, Etc. This Agreement has
been duly executed and delivered by Borrower and constitutes, and
the other Loan Documents when duly executed and delivered will
constitute, the legal, valid and binding obligations of Borrower
enforceable against Borrower in accordance with their respective
terms, except that the enforceability thereof may be affected by
bankruptcy, insolvency, moratorium and other similar laws
affecting the rights and remedies of creditors generally and by
the effect of general principles of equity.
Section 5.5 Litigation. Except as reflected in the
financial statements referred to in Section 5.6 hereof or
otherwise set forth on Schedule 2 to the Disclosure Letter, there
are no actions, proceedings, investigations, or claims against or
affecting Borrower or any Subsidiary now pending before any
court, arbitrator or Governmental Authority (nor to the knowledge
of Borrower has any thereof been threatened nor does any basis
exist therefor) which would be reasonably expected to have a
material adverse effect on (a) the business, operations or
consolidated financial condition of Borrower; or (b) the ability
of Borrower to perform its obligations under this Agreement and
the other Loan Documents.
Section 5.6 Financial Condition. The consolidated balance
sheet of Borrower and the Subsidiaries as at August 28, 1997, and
the related statements of income and retained earnings of
Borrower and the Subsidiaries for the fiscal year then ended, and
the consolidated balance sheets of Borrower and the Subsidiaries
as at November 27, 1997 and February 26, 1998, and the related
statements of income and retained earnings of Borrower and the
Subsidiaries for the fiscal quarters then ended, copies of which
have been furnished to Agent and Lenders, fairly present in all
material respects the consolidated financial condition of
Borrower and the Subsidiaries as at such dates and the
consolidated results of operations of Borrower for the periods
then ended, all in accordance with GAAP. Since February 26, 1998
there has been no material adverse change in the financial
condition or operations of Borrower or any Subsidiary.
Section 5.7 Title And Liens. Borrower and each Subsidiary
has good and indefeasible title to the respective real properties
reflected in the financial statements referred to in Section 5.6
hereof and good title to all of its other properties and assets
(other than patents, trademarks, service marks, trade names,
copyrights, mask works, contractual franchises and other
comparable items of intellectual property) reflected in such
financial statements (in each case, except such as have been
since sold or otherwise disposed prior to the date of this
Agreement in the ordinary course of business or after the date of
this Agreement in accordance with the terms hereof). All such
real and personal properties are subject to no Lien of any kind
except Liens permitted under this Agreement. All leases
necessary in any material respect for the conduct of the business
of Borrower and each Subsidiary are valid and subsisting and are
in full force and effect.
Section 5.8 Environmental Laws, Etc. All properties of
Borrower and each Subsidiary and Borrower's and such Subsidiary's
use thereof comply in all material respects with applicable
zoning and use restrictions and with applicable laws and
regulations relating to the environment including, without
limitation, the Environmental Laws. Except as disclosed on
Schedule 8 to the Disclosure Letter, without limiting the
foregoing, no Hazardous Substances have been generated,
manufactured, refined, transferred, stored, treated, transported,
handled, managed, discharged or disposed of, whether by Borrower
or, to the best of Borrower's knowledge, by any other person
onto, upon, over, beneath or from any real property owned by
Borrower or other premises owned, leased, operated, used or held
at any time by Borrower or any of the ground water beneath any
such premises (collectively, the "Premises") which in any fashion
could reasonably be expected to result in Borrower, Agent or any
Lender incurring or suffering at any time any material loss,
liability, damages, or obligations including liability for
cleanup and recovery costs and expenses. Except as disclosed on
Schedule 8 to the Disclosure Letter, there are no past or present
events, conditions, circumstances, activities, practices,
incidents or actions at or in connection with the Premises which
could reasonably be expected to interfere with or prevent
continued compliance with any material laws or regulations
pertaining to underground storage tanks or any other
Environmental Laws or give rise to any legal liability or
otherwise form the basis of any claim, action, suit, proceedings,
hearing or investigation against or affecting Borrower under the
Environmental Laws. There has been no disposal from the Premises
by Borrower (or to the best of Borrower's knowledge, by any other
person) directly or indirectly of any Hazardous Substances to, on
or in any site currently listed or formally proposed to be listed
on the National Priorities List under Superfund or any site
listed on any priority cleanup list compiled by any Governmental
Authority.
Section 5.9 Taxes. Borrower and each Subsidiary has filed
all tax returns and reports required of it, and to the best of
Borrower's knowledge, has paid all Taxes which are due and
payable, or has provided adequate reserves for payment of any
Taxes whose payment is being contested. The charges, accruals
and reserves on the books of Borrower and each Subsidiary in
respect of Taxes for all fiscal periods to date are accurate.
There are no material disputes between Borrower or any Subsidiary
and any Governmental Authority with respect to any Taxes except
as disclosed in the balance sheet referred to in Section 5.6
hereof or otherwise disclosed to Agent and Lenders in writing
prior to the date of this Agreement.
Section 5.10 Pari Passu Ranking. The obligations of
Borrower to pay the principal of and interest on any Loan and all
other amounts payable hereunder rank at least pari passu both as
to payment and as to security with all other Indebtedness and
other obligations of Borrower now existing or hereafter incurred
(except (i) Indebtedness given preference as a matter of law
including, without limitation, salary obligations and pension
contribution claims; and (ii) as to security, for Indebtedness
secured by Liens permitted pursuant to Section 7.6 hereof).
Section 5.11 Laws, Orders, Other Agreements. Neither
Borrower nor any Subsidiary is in violation of or subject to any
contingent liability on account of any laws, statutes, rules,
regulations and orders of any Governmental Authority, except for
violations which in the aggregate would not be reasonably
expected to have a material adverse effect on the business,
operations or financial condition of Borrower or such Subsidiary.
Neither Borrower nor any Subsidiary is in material breach of or
default under any material agreement to which it is a party or
which is binding on it or any of its assets.
Section 5.12 Federal Reserve Regulations. Neither
Borrower nor any Subsidiary is engaged principally or as one of
its important activities in the business of extending credit for
the purpose of purchasing or carrying any margin stock (within
the meaning of Federal Reserve Regulation U), and no part of the
proceeds of any Loan will be used to purchase or carry any such
margin stock or to extend credit to others for the purpose of
purchasing or carrying any such margin stock or for any other
purpose that violates the applicable provisions of any Federal
Reserve Regulation. Borrower will furnish to Agent or any Lender
on request a statement conforming with the requirements of
Regulation U.
Section 5.13 ERISA.
(a) The present value of all benefits vested under all
Pension Plans did not, as of the most recent valuation date of
such Pension Plans, exceed the value of the assets of the Pension
Plans allocable to such vested benefits by an amount which would
represent a potential material liability of Borrower or affect
materially the ability of Borrower to perform the Loan Documents.
(b) No Plan or trust created thereunder, or any
trustee or administrator thereof, has engaged in a "prohibited
transaction" (as such term is defined in Section 406 of ERISA or
Section 4975 of the Code) which is not otherwise exempt and which
could subject such Plan or any other Plan, any trust created
thereunder, or any trustee or administrator thereof, or any party
dealing with any Plan or any such trust to the tax or penalty on
prohibited transactions imposed by Section 502 of ERISA or
Section 4975 of the Code.
(c) No Pension Plan or trust has been terminated,
except in accordance with the Code, ERISA, and the regulations of
the Internal Revenue Service and the PBGC as applicable to
solvent plans in which benefits of participants are fully
protected. No "reportable event" as defined in Section 4043 of
ERISA has occurred for which notice has not been waived or for
which alternative notice procedures are permitted.
(d) No Pension Plan or trust created thereunder has
incurred any "accumulated funding deficiency" (as such term is
defined in Section 302 of ERISA) whether or not waived, since the
effective date of ERISA.
(e) The required allocations and contributions to
Pension Plans will not violate Section 415 of the Code.
(f) Neither Borrower nor any Subsidiary has any
withdrawal liability to any trust created pursuant to a multi-
employer pension or benefit plan nor would it be subject to any
such withdrawal liability in excess of One Million Dollars
($1,000,000) if it withdrew from any such plan or if its
participation therein were otherwise terminated.
Section 5.14 Subsidiaries. Schedule 1 to the Disclosure
Letter accurately sets forth the names and jurisdictions of
incorporation or organization of each Subsidiary.
Section 5.15 Patents, Licenses, Franchises, Etc. Except
as set forth in the Forms 10K for the fiscal year ended August
29, 1997 and the Forms 10Q for the fiscal quarters ended November
27, 1997 and February 26, 1998, respectively, and in each case as
filed or amended and filed with the Securities and Exchange
Commission by Borrower, (a) Borrower and the Subsidiaries own or
are licensed to use or otherwise have the right to use (or could
obtain such ownership or licenses or rights on terms and under
circumstances that could not reasonably be expected to have a
material adverse effect on Borrower's ability to perform its
obligations under this Agreement or on the business, operations
or financial condition of Borrower and the Subsidiaries, taken as
a whole) all of the patents, trademarks, service marks, trade
names, copyrights, mask works, contractual franchises and other
items of comparable intellectual property together with all other
rights that are reasonably necessary for the operation of their
respective businesses, and (b) there are no pending or, to the
best knowledge of Borrower, threatened claims that any slogan or
other advertising device, product, process, method, substance,
part or other material now employed by Borrower or any Subsidiary
infringes upon any rights held by any other person, except where
the consequences of any failure to possess any right under clause
(a) or such infringement under clause (b) could not reasonably be
expected to have a material adverse effect on Borrower's ability
to perform its obligations under this Agreement or on the
business, operations or financial condition of Borrower and the
Subsidiaries, taken as a whole.
Section 5.16 Not Investment Company, Etc. Borrower is not
(a) an "investment company" or a company "controlled" by an
investment company within the meaning of the Investment Company
Act of 1940, as amended; or (b) a "holding company" or a
"subsidiary company" of a "holding company" or an "affiliate" of
either a "holding company" or a "subsidiary company" within the
meaning of the Public Utility Holding Company Act of 1935, as
amended.
Section 5.17 Representations As A Whole. This Agreement,
the other Loan Documents and the financial statements referred to
in Section 5.6 hereof, taken as a whole and taken together with
the Form 10K most recently filed by Borrower with the Securities
and Exchange Commission and the Forms 10Q filed by Borrower since
the filing of such Form 10K, do not contain any untrue statement
of a material fact or omit to state any material fact necessary
in order to make the statements contained herein or therein not
misleading in the context made. Projections and forecasts
clearly identified as such and provided by Borrower to Agent or
any Lender are not "facts" for purposes of this Section 5.17.
Each such projection and forecast was made by Borrower in good
faith and represents Borrower's best estimate of the matters
projected or forecasted therein as of the date on which such
projection or forecast was made.
ARTICLE 6
AFFIRMATIVE COVENANTS
So long as Agent or any Lender shall have any Commitment
hereunder or there shall be any outstanding Letter of Credit
Usage and until payment in full of each Loan and the Notes and
performance of all other payment obligations of Borrower under
this Agreement and the other Loan Documents, Borrower agrees to
do all of the following unless Agent (with the consent of
Majority Lenders) shall otherwise consent in writing.
Section 6.1 Use Of Proceeds. Borrower shall use the
proceeds of the Loans and the Letters of Credit for acquisitions,
working capital and general corporate purposes.
Section 6.2 Payment. Borrower shall pay the principal of
and interest on the Loans in accordance with the terms of this
Agreement and the Notes and will pay when due all other amounts
payable by Borrower hereunder and under any other Loan Document.
Section 6.3 Preservation Of Corporate Existence, Etc.
Except as permitted by Section 7.2 hereof, Borrower shall, and
shall cause each Subsidiary to, preserve and maintain their
corporate existence, rights, franchises and privileges in the
jurisdictions of their incorporation and will, and will cause
each Subsidiary to, qualify and remain qualified as foreign
corporations in each jurisdiction where qualification is
necessary or advisable in view of their business and operations
or the ownership of their properties, except where the failure to
so qualify would not have a material adverse effect on the
business, operations or financial condition of Borrower (on a
consolidated basis).
Section 6.4 Visitation Rights. At any reasonable time, and
from time to time, Borrower shall permit Agent or any Lender to
examine and make copies of and abstracts from its and any
Subsidiary's records and books of account, to visit its and any
Subsidiary's properties and to discuss the affairs, finances and
accounts of Borrower and any Subsidiary with any of Borrower's
officers, directors or employees provided, however, that so long
as no Default or Event of Default shall have occurred and be
continuing, all visits to the properties of Borrower or any
Subsidiary shall be made during regular business hours upon
reasonable prior notice.
Section 6.5 Keeping Of Books And Records. Borrower shall
keep and maintain and shall cause each Subsidiary to keep and
maintain financial books of record and account sufficient to
permit Borrower to prepare consolidated and consolidating
financial statements in accordance with GAAP.
Section 6.6 Maintenance Of Property, Etc. Borrower shall
maintain and preserve and shall cause each Subsidiary to maintain
and preserve all of its properties in reasonably good working
order and condition, ordinary wear and tear excepted, and will
from time to time make (and cause each Subsidiary to make) all
needed repairs, renewals and replacements to the extent required
by prudent business practice.
Section 6.7 Compliance With Laws, Etc. Borrower shall
comply and shall cause each Subsidiary to comply in all material
respects with all laws, regulations, rules, and orders of
Governmental Authorities applicable to Borrower or any Subsidiary
or to their respective operations or property, except any thereof
whose validity is being contested in good faith by appropriate
proceedings where reserves or other appropriate provisions
required by GAAP shall have established therefor.
Section 6.8 Other Obligations. Borrower shall pay and
discharge and shall cause each Subsidiary to pay and discharge
before the same shall become delinquent all material
Indebtedness, Taxes and other obligations for which Borrower or
any Subsidiary is liable or to which its income or property is
subject and all claims for labor and materials or supplies which,
if unpaid, could reasonably be expected to become by law a Lien
upon assets of Borrower or any Subsidiary, except any thereof
whose validity or amount is being contested in good faith by
Borrower or such Subsidiary in appropriate proceedings where
reserves or other appropriate provisions required by GAAP shall
have established therefor.
Section 6.9 Insurance. Borrower shall keep in force and
shall cause each Subsidiary to keep in force upon all of
Borrower's or such Subsidiary's properties and operations
policies of insurance carried with responsible companies in such
amounts and covering all such risks as shall be customary in the
industry. From time to time, on request, Borrower will furnish
to Agent certificates of insurance or, at Agent's request,
certified copies of insurance policies evidencing such coverage.
Section 6.10 Financial Information. Borrower shall
deliver to Agent and each Lender:
(a) Annual Audited Financial Statements. As soon as
available and in any event within ninety (90) days after the end
of each fiscal year of Borrower, the consolidated balance sheet
of Borrower and the Subsidiaries as of the end of such fiscal
year and the related consolidated statements of income and
retained earnings and statement of cash flows of Borrower and the
Subsidiaries for such year, accompanied by the audit report
thereon by independent certified public accountants selected by
Borrower and reasonably satisfactory to Agent (which reports
shall be prepared in accordance with generally accepted auditing
standards and shall not be qualified by reason of restricted or
limited examination of any material portion of the records of
Borrower or any Subsidiary and shall contain no disclaimer of
opinion or adverse opinion except such as Agent in its sole
discretion determines to be immaterial);
(b) Quarterly Unaudited Financial Statements. As soon
as available and in any event within forty-five (45) days after
the end of each of the first three fiscal quarters of Borrower,
the unaudited consolidated and consolidating balance sheet of
Borrower as of the end of such fiscal quarter and the unaudited
consolidated and consolidating statement of income and retained
earnings of Borrower for the fiscal year to the end of such
fiscal quarter, accompanied by an Officer's Certificate of
Borrower certifying that such balance sheet and statement of
income and retained earnings have been prepared in accordance
with GAAP and present fairly the consolidated financial position
and the results of operations of Borrower as of the end of and
for such fiscal quarter and that since the fiscal year-end report
referred to in clause (a) there has been no material adverse
change in the financial condition or operations of Borrower or
any Subsidiary as shown on the balance sheet as of said date;
(c) Quarterly Compliance Certificates. As soon as
available and in any event within forty-five (45) days after the
end of each of the first three fiscal quarters of Borrower and
within ninety (90) days after the end of each of Borrower's
fourth fiscal quarter, an Officer's Certificate in the form of
Exhibit C certifying that as of the close of such fiscal quarter
no Default or Event of Default had occurred and was continuing,
and, further, setting forth calculations demonstrating compliance
as of the end of such fiscal quarter with the financial covenants
set forth in Sections 6.13 through 6.15 hereof, and, further,
identifying the amount and nature of the Restricted Payments made
during such fiscal quarter and the amount and nature of the
Restricted Payments made during the period beginning on the date
of this Agreement and continuing through the end of such fiscal
quarter;
(d) Financial Projections. As soon as available and
in any event within ninety (90) days after the beginning of each
fiscal year of Borrower, a consolidated annual set of financial
projections for Borrower for such fiscal year projecting the
expected operations and expected financial condition of Borrower
on a quarter-by-quarter basis;
(e) Shareholder, SEC and Government Reports. As soon
as available, all reports sent by Borrower to its shareholders
and all 8K, 10Q and 10K reports filed by Borrower with the
Securities and Exchange Commission ("SEC"), all within ten (10)
days after filing with the SEC;
(f) Schedule of Insurance. Within ninety (90) days
after the beginning of each fiscal year of Borrower, certificates
of insurance evidencing all insurance required to be maintained
by Borrower under this Agreement, or, in the alternative, an
Officer's Certificate setting forth a schedule of such insurance
coverage; and
(g) Other Information. All other statements, reports
and other information as Agent or any Lender may reasonably
request concerning the financial condition and business affairs
of Borrower or any Subsidiary.
Section 6.11 Notification. Promptly after any Responsible
Officer learns thereof, Borrower shall notify Agent of (a) the
details of any action, proceeding, investigation or claim against
or affecting Borrower or any Subsidiary, instituted before any
court, arbitrator or Governmental Authority or, to Borrower's
knowledge threatened to be instituted, which, if determined
adversely would be likely to result in a judgment or order
against Borrower or any Subsidiary for more than Five Million
Dollars ($5,000,000) or to have a material adverse effect on the
business, operations or financial condition of Borrower and the
Subsidiaries taken as a whole; (b) any substantial dispute
between Borrower or any Subsidiary and any Governmental
Authority; (c) any labor controversy which has resulted in or, to
Borrower's knowledge, threatens to result in a strike which would
materially affect the business operations of Borrower or any
Subsidiary; (d) if Borrower, any Subsidiary or any member of the
Controlled Group gives or is required to give notice to the PBGC
of any "reportable event" (as defined in subsections (b) (1),
(2), (5) or (6) of Section 4043 of ERISA) with respect to any Plan (or
the Internal Revenue Service gives notice to the PBGC of any
"reportable event" as defined in subsection (c) (2) of Section 4043 of
ERISA and Borrower obtains knowledge thereof) which might
constitute grounds for a termination of such Plan under Title IV
of ERISA, or knows that the plan administrator of any Plan has
given or is required to give notice of any such reportable event,
the notice of such reportable event given or required to be given
to the PBGC; and (e) the occurrence of any Default or Event of
Default.
Section 6.12 Additional Payments; Additional Acts. From
time to time and within thirty (30) days of demand by Agent,
Borrower shall (a) pay or reimburse Agent and Lenders for all
Taxes imposed on this Agreement and any other Loan Document; (b)
pay or reimburse Agent and Lenders for all reasonable expenses,
including reasonable legal fees, actually incurred by Agent and
Lenders in connection with the preparation of this Agreement and
the other Loan Documents, provided, however, that Borrower shall
not be liable in respect of this clause (b) for more than
$10,000; and (c) pay or reimburse Agent and Lenders in connection
with the making of any Loan or the issuance of any Letter of
Credit. From time to time, promptly upon demand by Agent,
Borrower shall (a) pay or reimburse Agent and Lenders for all
reasonable expenses including reasonable out-of-pocket legal fees
(including allocated charges of internal legal counsel) incurred
in connection with the enforcement by judicial proceedings or
otherwise of any of the rights of Agent or Lenders under this
Agreement or any other Loan Document, (b) obtain and furnish to
Agent evidence of all such Government Approvals as may be
required to enable Borrower to comply with its obligations under
the Loan Documents; and (c) execute and deliver all such other
instruments and perform all such other acts as Agent or any
Lender may reasonably request to carry out the transactions
contemplated by this Agreement and the other Loan Documents.
Section 6.13 Minimum Tangible Net Worth. Borrower shall
maintain on a consolidated basis as of the end of each fiscal
quarter a Tangible Net Worth equal to or greater than the sum of
(a) eighty percent (80%) of Borrower's Tangible Net Worth as of
the fiscal quarter ended May 28, 1998, (b) seventy-five percent
(75%) of Borrower's Net Income for each fiscal quarter after the
fiscal quarter ended May 28, 1998 in which Borrower has a
positive Net Income and (c) seventy-five percent (75%) of the
amount, if any, by which the shareholders' equity of Borrower has
increased since the fiscal quarter ended May 28, 1998 as a result
of the issuance of common stock or the conversion of debt
securities into common stock.
Section 6.14 Modified Quick Ratio. Borrower shall
maintain on a consolidated basis as of the end of each fiscal
quarter a Modified Quick Ratio of at least 1.25 to 1.00 until
such time as Borrower's Four Quarter EBITDA, as evidenced by an
Officer's Certificate submitted pursuant to Section 6.10(c)
hereof, exceeds One Hundred Twenty-Five Million Dollars
($125,000,000); thereafter Borrower shall maintain on a
consolidated basis as of the end of each fiscal quarter a
Modified Quick Ratio of at least 1.00 to 1.00. As used herein,
"Modified Quick Ratio" shall mean, at any time, the sum of (a)
cash, cash equivalents and accounts receivable, divided by the
sum of (b) current liabilities plus, without duplication, the
outstanding principal amount of the Loans, in each case
determined in accordance with GAAP.
Section 6.15 Maximum Debt Ratio. Borrower shall maintain
on a consolidated basis a Debt Ratio less than or equal to the
applicable requirement set forth below:
For Fiscal Maximum Debt Ratio
Quarter Ending Closest to Requirement
------------------------- ------------------
May 31, 1998 3.00:1.00
August 31, 1998 3.00:1.00
November 30, 1998 2.00:1.00
February 28, 1999 2.00:1.00
May 31, 1999 and 1.50:1.00
thereafter
ARTICLE 7
NEGATIVE COVENANTS
So long as Agent or any Lender shall have any Commitment
hereunder or there shall be any outstanding Letter of Credit
Usage and until payment in full of each Loan and the Notes and
performance of all other payment obligations of Borrower under
this Agreement and the other Loan Documents, Borrower agrees that
it will not, and will cause each Subsidiary not to, do any of the
following unless Agent (with the consent of Majority Lenders)
shall otherwise consent in writing.
Section 7.1 Dividends, Purchase Of Stock, Etc. Borrower
shall not and shall cause each Subsidiary (other than a Wholly-
Owned Subsidiary) to not (a) pay any dividend (except dividends
payable in its capital stock) on any shares of any class of its
capital stock, or (b) apply any assets to the purchase,
redemption or other retirement of, or set aside any sum for the
payment of any dividends on or for the purchase, redemption or
other retirement of, or make any other distribution by reduction
of capital or otherwise in respect of, any shares of any class of
capital stock of Borrower or such Subsidiary (each of the
foregoing being a "Dividend Payment"), provided, however, that
(y) Borrower or any Subsidiary may during any fiscal quarter,
make any Dividend Payment, provided that after giving effect to
such Dividend Payment the sum of all Restricted Payments made
during such fiscal quarter, when taken together with all other
Restricted Payments made after the date of this Agreement and
prior to such fiscal quarter would not exceed twenty-five percent
(25%) of Borrower's consolidated Net Income for the period
commencing on the date of this Agreement and ending on the last
day of the immediately preceding fiscal quarter; and (z) Borrower
may make Dividend Payments to redeem any class of its corporate
stock where the amount of such Dividend Payment is not more than
the net proceeds received by Borrower from the concurrent issue
of replacement shares of its capital stock. Nothing in this
Section 7.1 is intended to limit the payments of interest or
principal on convertible Subordinated Indebtedness prior to
conversion and to the extent expressly provided for by the
Majority Lenders in connection with the approval of any
Subordinated Indebtedness, nothing in this Section 7.1 shall
limit the payment with respect to or the deliveries of
securities, cash or other property upon conversion of such
convertible Subordinated Indebtedness.
Section 7.2 Liquidation, Merger, Sale Of Assets. Borrower
shall not and shall cause each Subsidiary to not merge or enter
into consolidations or liquidate, nor sell, lease or dispose of
all or any portion of its assets, except (a) sales, leases, or
other dispositions of assets in the ordinary course of business,
(b) licenses or sublicenses of software on an exclusive or
nonexclusive basis in accordance with prudent business practices
and in the ordinary course of business, (c) mergers or
consolidations in connection with any Investment permitted under
Section 7.7 hereof, provided that in the case of any such merger
or consolidation involving Borrower, Borrower shall be the
surviving corporation; (d) mergers or consolidations entered into
for the purposes of changing the jurisdiction of incorporation of
Borrower or any Subsidiary; provided that if such merger or
consolidation involves Borrower, the successor entity shall
assume all obligations of Borrower hereunder and under the other
Borrower Loan Documents pursuant to documentation satisfactory to
the Majority Lenders; (e) any Subsidiary may merge or consolidate
with or into Borrower or another Subsidiary provided that
Borrower or a Wholly-Owned Subsidiary is the surviving person;
(f) any Subsidiary may merge or consolidate with any other
Subsidiary where the surviving person is not a Wholly-Owned
Subsidiary provided that, after giving effect to such merger or
consolidation, the aggregate of all Restricted Payments made
after the date of this Agreement would not exceed twenty-five
percent (25%) of Borrower's consolidated Net Income for the
period commencing on the date of this Agreement and ending on the
last day of the immediately preceding fiscal quarter; (g) any
Subsidiary may dissolve or liquidate; provided that after giving
effect to such dissolution or liquidation, the aggregate of all
Restricted Payments made after the date of this Agreement would
not exceed twenty-five percent (25%) of Borrower's consolidated
Net Income for the period commencing on the date of this
Agreement and ending on the last day of the immediately preceding
fiscal quarter; and (h) other sales, leases or other dispositions
of assets made after the date of this Agreement, which on an
aggregate basis for Borrower and the Subsidiaries since the date
of this Agreement, do not exceed an amount equal to ten percent
(10%) of Borrower's consolidated tangible assets as of the last
day of the immediately preceding fiscal quarter of Borrower.
Section 7.3 Indebtedness. Borrower shall not and shall
cause each Subsidiary to not create, incur or become liable for
any Indebtedness except (a) the Loans and Indebtedness hereunder
in respect of the Letters of Credit, (b) existing Indebtedness
reflected on the balance sheets referred to in Section 5.6 hereof
or in Schedule 3 to the Disclosure Letter, (c) current accounts
payable or accrued or other current liabilities (other than
liabilities for borrowed monies) incurred by Borrower or such
Subsidiary in the ordinary course of business, (d) Subordinated
Indebtedness, (e) Indebtedness of Borrower owing to Subsidiaries,
Indebtedness of a Subsidiary owing to Borrower, and Indebtedness
of a Subsidiary owing to another Subsidiary, in each case solely
to the extent such Indebtedness constitutes a permitted
Investment under Section 7.7 hereof, (f) additional Indebtedness
secured by Purchase Money Liens or evidenced by Capital Leases
not to exceed in the aggregate for Borrower and all Subsidiaries
at any time an amount equal to fifty percent (50%) of Borrower's
consolidated net book value of all property, plant and equipment
as at the end of the immediately preceding fiscal quarter; (g)
Permitted Swap Obligations; (h) Indebtedness permitted under
Section 7.4 or Sections 7.5(a) through and including Section
7.5(e) hereof; and (i) Indebtedness in addition to that set forth
above is in an amount which when aggregated with the obligations
described in Section 7.5(f) hereof does not exceed fifteen
percent (15%) of Borrower's consolidated Tangible Net Worth as of
the end of the immediately preceding fiscal quarter.
Section 7.4 Foreign Subsidiary Indebtedness. Without
limiting the restrictions set forth in Section 7.3 above,
Borrower shall not permit the Indebtedness of any Foreign
Subsidiary (a) when taken together with the Indebtedness of all
Foreign Subsidiaries, to exceed at any time the sum of Forty
Million Dollars ($40,000,000), and (b) to be evidenced by
instruments or documents containing terms and conditions more
restrictive than the terms and conditions contained in this
Agreement. As used herein, "Foreign Subsidiary" shall mean any
Subsidiary organized under the laws of any jurisdiction other
than the United States or any of its constituent states.
Section 7.5 Guaranties, Etc. Borrower shall not and shall
cause each Subsidiary to not assume, guaranty, endorse or
otherwise become directly or contingently liable for, nor
obligated to purchase, pay or provide funds for payment of, any
obligation or Indebtedness of any other person, except (a) by
endorsement of negotiable instruments for deposit or collection
or by similar transaction in the ordinary course of business; (b)
in the case of Borrower, a guaranty of any Indebtedness of any
Subsidiary permitted under Section 7.3 hereof; (c) in the case of
a Subsidiary, a guaranty of any Indebtedness of Borrower
permitted under Section 7.3 hereof other than Subordinated
Indebtedness; (d) in the case of a Subsidiary, a guaranty of any
Indebtedness of another Subsidiary permitted under Section 7.3
hereof provided, that the percentage of Borrower's direct or
indirect ownership interest in the Subsidiary providing the
guaranty is not greater than the percentage of Borrower's direct
or indirect ownership interest in the Subsidiary whose
obligations are being guaranteed; (e) guaranty obligations
existing on the date hereof and described on Schedule 6 to the
Disclosure Letter; and (f) guaranty obligations in addition to
those described above in an amount which when aggregated with the
obligations described in Section 7.3(i) hereof does not exceed
fifteen percent (15%) of Borrower's consolidated Tangible Net
Worth as of the end of the immediately preceding fiscal quarter.
Section 7.6 Liens. Borrower shall not and shall cause each
Subsidiary to not create, assume or suffer to exist any Lien on
any of its assets, except (a) existing Liens reflected in the
balance sheets referred to in Section 5.6 hereof, or otherwise
disclosed on Schedule 4 to the Disclosure Letter, (b) Purchase
Money Liens, (c) Liens on the property of any corporation at the
time such corporation becomes a Subsidiary or such corporation is
acquired by, consolidated with or merged into Borrower or a
Subsidiary, and Liens on any property at the time acquired by
Borrower a Subsidiary, provided, in each case, that such Lien was
not incurred in contemplation of such transaction; (d) any Lien
securing renewed, extended or refunded Indebtedness secured by a
Lien prior to such renewal, extension or refunding permitted
under this Section 7.6, provided that the principal amount of
such Indebtedness outstanding at the time of such renewal,
extension or refunding is not increased and such Lien is not
extended to any new property (other than pursuant to its original
terms); (e) Liens in respect of judgments or judicial attachment
liens which secure Indebtedness not exceeding Five Million
Dollars ($5,000,000) in the aggregate at any one time
outstanding; (f) leases and subleases of surplus property at fair
market rental values where Borrower or a Subsidiary is the lessor
or sublessor, provided that such leases and subleases do not in
the aggregate materially interfere with the business of Borrower
and the Subsidiaries taken as a whole; (g) licenses and
sublicenses entered into in the ordinary course of Borrower's or
any Subsidiary's business where Borrower or a Subsidiary is the
licensor or sublicensor provided that such licenses and
sublicenses do not in the aggregate materially interfere with the
business of Borrower and the Subsidiaries taken as a whole; (h)
Liens in favor of a trustee under any indenture relating to
Subordinated Indebtedness with respect to property in the
possession of the trustee securing only amounts due to the
trustee for its trustee fees and indemnities under such
indenture; and (i) additional Liens which do not at any one time
secure Indebtedness exceeding Five Million Dollars ($5,000,000)
in the aggregate for Borrower and the Subsidiaries.
Section 7.7 Investments. Borrower shall not and shall cause
each Subsidiary to not purchase or otherwise acquire the capital
stock, assets or obligations of, or any interest in, any person
or make any loan or advance to any person ("Investments"), except
(a) Investments permitted under Borrower's investment policy as
disclosed on Schedule 7 to the Disclosure Letter, as such
investment policy may be amended from time to time to permit
other substantially comparable Investments or other Investments
acceptable to Agent, (b) extensions of credit in the nature of
accounts receivable or notes receivable arising from the sale or
lease of goods or services in the ordinary course of business,
(c) loans or advances by any Subsidiary to Borrower, (d)
Investments received in connection with the bankruptcy or
reorganization of customers and suppliers and in settlement of
delinquent obligations of, and other disputes with, customers or
suppliers, arising in the ordinary course of business and in the
exercise of the reasonable business judgment of Borrower or a
Subsidiary; (e) loans or advances to employees in the ordinary
course of business or as part of their overall compensation
package; (f) Investments in Permitted Swap Obligations; (g)
Investments existing as of the date hereof disclosed on Schedule
5 to the Disclosure Letter, (h) Investments by Borrower to or in
any Subsidiary (or any other person which as a result of the
Investment becomes a Subsidiary) or to or in any joint venture in
which Borrower or any Subsidiary is a joint venturer, provided
that after making any such Investment the total amount of all
Investments made by Borrower after the date of this Agreement to
or in all Subsidiaries and joint ventures (net of repayments and
return of capital) shall not exceed the sum of Seventy Million
Dollars ($70,000,000) and provided, further, that the total
amount of all equity Investments (as opposed to Investments
consisting of loans or advances) made by Borrower after the date
of this Agreement in all Subsidiaries and joint ventures (net of
return of capital) shall not exceed the sum of Thirty-five
Million Dollars ($35,000,000), and (i) any other Investments in
any person by Borrower provided that after making such additional
Investment that the total amount of all such additional
Investments made by Borrower after the date of this Agreement
does not exceed five percent (5%) of Borrower's Tangible Net
Worth as of the end of the immediately preceding fiscal quarter.
Section 7.8 Transactions With Affiliates. Borrower shall
not, and shall not suffer or permit any Subsidiary to, enter into
any material transaction with any Affiliate of Borrower, except
(a) with respect to any Affiliate which is not a Subsidiary upon
fair and reasonable terms not materially less favorable to
Borrower or such Subsidiary than it would obtain in a comparable
arms-length transaction with a person not an Affiliate of
Borrower or such Subsidiary; and (b) with respect to any
Affiliate which is a Subsidiary, upon fair and reasonable terms.
As used herein, "Affiliate" means, as to any person, any other
person which, directly or indirectly, is in control of, is
controlled by, or is under common control with, such person. A
person shall be deemed to control another person if the
controlling person possesses, directly or indirectly, the power
to direct or cause the direction of the management and policies
of the other person, whether through the ownership of voting
securities, membership interests, by contract, or otherwise.
Section 7.9 Accounting Change. Borrower shall maintain a
fiscal year ending on the Thursday closest to August 31 and shall
not make any significant change in accounting policies or
reporting practices other than changes permitted or required by
GAAP or otherwise required by law.
Section 7.10 ERISA Compliance. Neither Borrower, any
Subsidiary nor any member of the Controlled Group nor any Plan
will: (a) engage in any "prohibited transaction" (as such term is
defined in Section 406 or Section 2003(a) of ERISA) which is not
otherwise exempt and which could result in a material liability
to Borrower or any Subsidiary; (b) incur any "accumulated funding
deficiency" (as such term is defined in Section 302 of ERISA)
whether or not waived which could result in a material liability
to Borrower or any Subsidiary; (c) terminate any Pension Plan in
a manner which could result in a material liability to Borrower
or any Subsidiary or could result in the imposition of a material
Lien on any property of Borrower, any Subsidiary or any member of
the Controlled Group pursuant to Section 4068 of ERISA; or (d)
violate state or federal securities laws applicable to any Plan
in any material respect.
ARTICLE 8
EVENTS OF DEFAULT
Section 8.1 Events Of Default. The occurrence of any of the
following events shall constitute an "Event of Default"
hereunder.
(a) Loan Payment Default. Borrower shall fail to pay
when due (i) any amount of principal on any Loan; (ii) any amount
of interest or facility fees and such failure shall remain
unremedied for five (5) Business Days; or (iii) any amounts due
in respect of Letters of Credit and such failure shall remain
unremedied for five (5) Business Days; or
(b) Other Payment Default. Borrower shall fail to pay
any other amount payable by it hereunder or under any Loan
Document and such failure shall remain unremedied for ten (10)
Business Days; or
(c) Breach of Warranty. Any representation or
warranty made or deemed made by Borrower under or in connection
with this Agreement or the other Loan Documents shall prove to
have been incorrect in any material respect when made or deemed
made; or
(d) Breach of Certain Covenants. Borrower shall have
failed to perform or observe any covenant set forth in Sections
6.3 (in respect of the corporate existence of Borrower or any
Subsidiary), 6.11(e), 6.13 through 6.15 and 7.1 through 7.3
hereof; or
(e) Breach of Other Covenants. Borrower shall fail to
perform or observe any other covenant, obligation or term of this
Agreement or any other Loan Document and such failure shall
remain unremedied for thirty (30) days after the earlier of (i)
the date on which written notice thereof shall have been given to
Borrower by Agent, or (ii) the date upon which a Responsible
Officer knows of such failure; or
(f) Cross-default. Borrower or any Subsidiary shall
fail (i) to pay when due (whether by scheduled maturity, required
prepayment, acceleration, demand or otherwise) any Indebtedness
in excess of Ten Million Dollars ($10,000,000) or any interest or
premium thereon and such failure shall continue after the
applicable grace period, if any, specified in the agreement or
instrument relating to such Indebtedness, or (ii) to perform any
term or covenant on its part to be performed under any agreement
or instrument relating to any such Indebtedness and required to
be performed and such failure shall continue after the applicable
grace period, if any, specified in such agreement or instrument,
if the effect of such failure to perform is to accelerate or to
legally and in accordance with the applicable documents permit
the acceleration of the maturity of such Indebtedness; or
(g) Voluntary Bankruptcy, Etc. Borrower or any
Subsidiary shall: (i) file a petition seeking relief for itself
under Title 11 of the United States Code, as now constituted or
hereafter amended, or file an answer consenting to, admitting the
material allegations of or otherwise not controverting, or fail
timely to controvert a petition filed against it seeking relief
under Title 11 of the United States Code, as now constituted or
hereafter amended; or (ii) file such petition or answer with
respect to relief under the provisions of any other now existing
or future applicable bankruptcy, insolvency, or other similar law
of the United States of America or any state thereof or of any
other country or jurisdiction providing for the reorganization,
winding-up or liquidation of corporations or an arrangement,
composition, extension or adjustment with creditors; or
(h) Involuntary Bankruptcy, Etc. An order for relief
shall be entered against Borrower or any Subsidiary under Title
11 of the United States Code, as now constituted or hereafter
amended, which order is not stayed; or upon the entry of an
order, judgment or decree by operation of law or by a court
haying jurisdiction in the premises which is not stayed adjudging
Borrower or any Subsidiary a bankrupt or insolvent under, or
ordering relief against it under, or approving as properly filed
a petition seeking relief against it under the provisions of any
other now existing or future applicable bankruptcy, insolvency or
other similar law of the United States of America or any state
thereof or of any other country or jurisdiction providing for the
reorganization, winding-up or liquidation of corporations or any
arrangement, composition, extension or adjustment with creditors,
or appointing a receiver, liquidator, assignee, sequestrator,
trustee or custodian of Borrower, or any Subsidiary or of any
substantial part of its or their property, or ordering the
reorganization, winding-up or liquidation of its affairs, or upon
the expiration of sixty (60) days after the filing of any
involuntary petition against Borrower or such Subsidiary seeking
any of the relief specified in Section 8.1(g) hereof or this
Section 8.1(h) without the petition being dismissed prior to that
time; or
(i) Insolvency, Etc. Borrower or any Subsidiary shall
(i) make a general assignment for the benefit of its creditors or
(ii) consent to the appointment of or taking possession by a
receiver, liquidator, assignee, trustee, or custodian of all or a
substantial part of the property of Borrower or any Subsidiary,
as the case may be, or (iii) admit in writing its insolvency or
inability to pay its debts generally as they become due, or (iv)
fail generally to pay its debts as they become due, or (v) take
any action (or suffer any action to be taken by its directors or
shareholders) looking to the dissolution or liquidation of
Borrower or any Subsidiary, as the case may be; or
(j) ERISA. Borrower, any Subsidiary or any member of
the Controlled Group shall fail to pay when due an amount or
amounts aggregating in excess of One Million Dollars ($1,000,000)
which it shall have become liable to pay to the PBGC or to a Plan
under Section 515 of ERISA or Title IV of ERISA; or notice of
intent to terminate a Plan or Plans (other than a multi-employer
plan, as defined in Section 4001(3) of ERISA), having aggregate
Unfunded Vested Liabilities in excess of One Million Dollars
($1,000,000) shall be filed under Title IV of ERISA by Borrower,
any Subsidiary, any member of the Controlled Group, any plan
administrator or any combination of the foregoing; or the PBGC
shall institute proceedings under Title IV of ERISA to terminate
any such Plan or Plans; or
(k) Judgment. One or more final judgments (which are
not subject to appeal by any party) or orders for the payment of
money in excess of Five Million Dollars ($5,000,000) in the
aggregate or its equivalent in another currency shall be rendered
against Borrower or any Subsidiary and such judgments or orders
shall continue unsatisfied and in effect for a period of thirty
(30) consecutive days; or
(l) Government Approvals, Etc. Any Government
Approval or registration or filing with any Governmental
Authority now or hereafter required in connection with the
performance by Borrower of its obligations set forth the Loan
Documents is revoked, withdrawn or withheld or shall fail to
remain in full force and effect, or any act of any Governmental
Authority is taken which, in the reasonable opinion of Agent,
deprives Borrower of any right, privilege or franchise or
substantially restricts the exercise thereof, where such
deprivation or restriction would be likely to have a material
adverse effect on the business, operations or financial condition
of Borrower and the Subsidiaries taken as a whole, and such act
shall not be revoked or rescinded within thirty (30) days after
it shall have become effective; or
(m) Change of Control. If (i) any person or two or
more persons acting in concert, other than Micron Technology,
Inc., shall either acquire beneficial ownership, directly or
indirectly, of, or acquire by contract or otherwise, or enter
into a contract or arrangement which upon consummation will
result in its or their acquisition of, or control over,
securities of Borrower (or other securities convertible into such
securities) representing forty percent (40%) or more of the
combined voting power of all securities of Borrower entitled to
vote in the election of directors; or (ii) during any period of
twelve (12) consecutive months, commencing after the date of this
Agreement, individuals who at the beginning of such twelve (12)
month period were directors of Borrower shall cease for any
reason to constitute a majority of the Board of Directors of
Borrower unless the persons replacing such individuals were
nominated by the Board of Directors of Borrower.
Section 8.2 Consequences Of Default. If an Event of Default
described in Section 8.1(g) or 8.1(h) hereof shall occur and be
continuing, then in any such case, the Total Commitment and
Lender's respective Commitments shall be immediately terminated
and, if any Loans or Letters of Credit shall have been made or
issued, the principal of and interest on the Loans, the face
amounts of all issued and outstanding Letters of Credit, and all
other sums payable by Borrower hereunder and under the other Loan
Documents shall become immediately due and payable all without
protest, presentment, notice or demand, all of which Borrower
expressly waives. If any other Event of Default shall occur and
be continuing, then in any such case and at any time thereafter
so long as any such Event of Default shall be continuing, Agent
may, or shall at the request of the Majority Lenders, immediately
terminate the Total Commitment and Lenders' respective
Commitments and, if any Loans or Letters of Credit shall have
been made, Agent may, or shall at the request of the Majority
Lenders, declare the principal of and the interest on the Loans
and the Notes, the face amounts of all issued and outstanding
Letters of Credit, and all other sums payable by Borrower
hereunder and under the other Loan Documents to be immediately
due and payable, whereupon the same shall become immediately due
and payable all without protest, presentment, notice, or demand,
all of which Borrower expressly waives. Agent agrees to provide
Borrower with prompt notice of any election to declare the
principal of and the interest on the Loans to be immediately due
and payable pursuant to the preceding sentence, it being agreed
that such notice may be provided after any such acceleration is
effective and after Agent and Lenders have exercised any rights
of set-off or recoupment to which they are entitled hereunder or
under applicable law and it being further agreed that the failure
to give such notice shall not affect the validity of such
acceleration, set-off or recoupment. Amounts paid or received
hereunder in respect of issued and outstanding Letters of Credit
which exceed amounts paid by Agent under such Letters of Credit
shall be held (and applied) as cash collateral to secure the
performance of all obligations of Borrower owing to Agent and
Lenders hereunder and under the other Loan Documents. Such
excess shall be returned to Borrower within five (5) Business
Days following demand by Borrower after such time when there are
no outstanding Loans, the Letter of Credit Usage and the Total
Commitments equal zero ($0), and there are no other fees, costs
or charges owing by Borrower to Agent or Lenders hereunder.
ARTICLE 9
THE AGENT
Section 9.1 Authorization And Action. Each Lender hereby
appoints and authorizes Agent to take such action as agent on its
behalf and to exercise such powers under this Agreement as are
delegated to Agent by the terms hereof, together with such powers
as are reasonably incidental thereto. Agent shall have no duties
or responsibilities except those expressly set forth in this
Agreement. The duties of Agent shall be mechanical and
administrative in nature; Agent shall not have by reason of this
Agreement a fiduciary relationship in respect of any Lender; and
nothing in this Agreement or the other Loan Documents, expressed
or implied, is intended to or shall be so construed as to impose
upon Agent any obligations in respect of this Agreement or the
other Loan Documents except as expressly set forth herein. As to
any matters not expressly provided for by this Agreement,
including enforcement or collection of the Loans and Indebtedness
owed in respect of the Letters of Credit, Agent shall not be
required to exercise any discretion or take any action, but shall
be required to act or to refrain from acting (and shall be fully
protected in so acting or refraining) upon the instructions of
the Majority Lenders, and such instructions shall be binding upon
all Lenders and any holders of any Note provided that Agent shall
not be required to take any action which exposes Agent to
personal liability or which is contrary to the Loan Documents or
applicable law and provided, further, that without the consent of
Majority Lenders, Agent shall not amend this Agreement or waive
Borrower's compliance with any provision of this Agreement and
provided, further, that without the consent of all Lenders, Agent
shall not release any cash collateral received under Section 8.2
except in accordance with the terms of such Section and shall not
change or modify the Total Commitment (other than reductions made
pursuant to Section 2.4 hereof), any Lender's Commitment (other
than reductions made pursuant to Section 2.4 hereof), the
definition of "Majority Lenders", the timing or rates of interest
payments, the timing or amount of fees, the timing, amounts or
forgiveness of principal payments due in respect of Loans, or the
terms of Section 3.2(a) with respect to the expiration date of
Letters of Credit and provided, further, that the terms of
Section 2.6, Section 2.13(c) hereof, this Article 9 and Article
10 shall not be amended without the prior written consent of
Agent (acting for its own account). In the absence of
instructions from the Majority Lenders, Agent shall have
authority (but no obligation), in its sole discretion, to take or
not to take any action, unless this Agreement specifically
requires the consent of Lenders or the consent of the Majority
Lenders and any such action or failure to act shall be binding on
all Lenders and on all holders of the Notes. Each Lender and
each holder of any Note shall execute and deliver such additional
instruments as may be necessary or desirable to enable Agent to
exercise its powers hereunder.
Section 9.2 Duties And Obligations.
(a) Neither Agent nor any of its directors, officers,
agents or employees shall be liable for any action taken or
omitted to be taken by it or any of them under or in connection
with this Agreement except for its or their own gross negligence
or willful misconduct. Without limiting the generality of the
foregoing, Agent (i) may treat each Lender which is a party
hereto as the party entitled to receive payments hereunder until
Agent receives written notice of the assignment of such Lender's
interest herein signed by such Lender and made in accordance with
the terms hereof and a written agreement of the assignee that it
is bound hereby as it would have been had it been an original
party hereto, in each case in form satisfactory to Agent; (ii)
may consult with legal counsel (including counsel for Borrower),
independent public accountants and other experts selected by it
and shall not be liable for any action taken or omitted to be
taken in good faith by it in accordance with the advice of such
experts; (iii) makes no warranty or representation to any Lender
and shall not be responsible to any Lender for any statements,
warranties or representations made in or in connection with this
Agreement, the other Loan Documents or in any instrument or
document furnished pursuant hereto or thereto; (iv) shall not
have any duty to ascertain or to inquire as to the performance of
any of the terms, covenants, or conditions of the Loan Documents
on the part of Borrower or as to the use of the Proceeds of any
Loan, or the proceeds received in respect of any Letter of Credit
or as to the existence or possible existence of any Default or
Event of Default; (v) shall not be responsible to any Lender for
the due execution, legality, validity, enforceability,
genuineness, effectiveness, or value of this Agreement or of any
instrument or document furnished pursuant hereto; and (vi) shall
incur no liability under or in respect to this Agreement by
acting upon any oral or written notice, consent, certificate or
other instrument or writing (which may be by telegram, facsimile
transmission, cable or telex) believed by it to be genuine and
signed or sent by the proper party or parties or by acting upon
any representation or warranty of Borrower made or deemed to be
made hereunder. Agent may execute any of its duties under this
Agreement or any other Loan Document by or through agents,
employees or attorneys-in-fact and shall be entitled to advice of
counsel concerning all matters pertaining to such duties. Agent
shall not be responsible for the negligence or misconduct of any
agent or attorney-in-fact that it selects without gross
negligence.
(b) Agent will account to each Lender for its
Percentage Interest of payments of principal of, interest on and
fees in respect of the Loans (other than fees payable to Agent
for its own account) which are received by Agent from Borrower
and will promptly remit to Lenders entitled thereto all such
payments. Agent will transmit to each Lender copies of all
documents received from Borrower pursuant to the requirements of
this Agreement other than documents which by the terms of this
Agreement Borrower is obligated to deliver directly to Lenders.
(c) Each Lender or its assignee organized outside of
the United States shall furnish to Agent in a timely fashion such
documentation (including, but not by way of limitation, IRS Forms
Nos. 1001 and 4224) as may be required by applicable law or
regulation to establish such Lender's status for tax withholding
purposes.
Section 9.3 Dealings Between Agent And Borrower. With
respect to its Commitment and the Loans made by it, Agent shall
have the same rights and powers under this Agreement and the
other Loan Documents as any other Lender and may exercise the
same as though it were not the Agent, and the term "Lender" shall
unless otherwise expressly indicated include Agent in its
individual capacity. Agent may accept deposits from, lend money
to, act and generally engage in any kind of business with
Borrower or any Subsidiary and any person which may do business
with Borrower or any Subsidiary, all as if Agent were not Agent
hereunder and without any duty to account therefor to Lenders.
Section 9.4 Lender Credit Decision. Each Lender
acknowledges that it has, independently and without reliance upon
Agent or any other Lender and based upon such documents and
information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each Lender
also acknowledges that it will, independently and without
reliance upon Agent or any other Lender and based upon such
documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not
taking action under this Agreement.
Section 9.5 Indemnification. Lenders agree to indemnify
Agent (to the extent not reimbursed by Borrower) ratably
according to their respective Percentage Interests from and
against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever which may be
imposed on, incurred by or asserted against Agent in any way
relating to or arising out of this Agreement or any other Loan
Document or any action taken or omitted by Agent under this
Agreement or any other Loan Document, except any such as result
from Agent's gross negligence or willful misconduct. Without
limiting the foregoing, each Lender agrees to reimburse Agent
promptly on demand in proportion to its Percentage Interest for
any out-of-pocket expenses, including legal fees, incurred by
Agent in connection with the administration or enforcement of or
the preservation of any rights under this Agreement or any other
Loan Document (to the extent that Agent is not reimbursed for
such expenses by Borrower) including without limitation, expenses
incurred in connection with any Letter of Credit.
Section 9.6 Successor Agent. Agent may give written notice
of resignation at any time to Lenders and Borrower and may be
removed at any time with cause by the Majority Lenders. Upon any
such resignation or removal, the Majority Lenders shall have the
right to appoint a successor Agent. If no successor Agent shall
have been so appointed by the Majority Lenders and shall have
accepted such appointment within thirty (30) days after Agent's
giving of notice of resignation or the Majority Lenders' removal
of Agent, then Agent may on behalf of Lenders, appoint a
successor Agent, which shall be (a) a Lender or (b) another bank
organized under the laws of the United States or of any state
thereof, or any affiliate of such bank, and having a combined
capital and surplus of at least Five Hundred Million Dollars
($500,000,000). Upon the acceptance of any appointment as Agent
hereunder by a successor Agent, such successor Agent shall
thereupon succeed to and become vested with all the rights,
powers, privileges and duties of the retiring Agent, and the
retiring Agent shall be discharged from its duties and
obligations under this Agreement. Until the acceptance by such a
successor Agent, the retiring Agent shall continue as "Agent"
hereunder. Notwithstanding any retiring Agent's resignation or
removal hereunder as Agent, the provisions of this Article 9
shall inure to its benefit as to any actions taken or omitted to
be taken by it while it was Agent under this Agreement. Any
company into which Agent may be merged or converted or with which
it may be consolidated or any company resulting from any merger,
conversion or consolidation to which it shall be a party or any
company to which Agent may sell or transfer all or substantially
all of its agency relationships shall be the successor to Agent
without the execution or filing of any paper or further act,
anything herein to the contrary notwithstanding.
ARTICLE 10
RISK PARTICIPATIONS
Section 10.1 Sale Of Risk Participations. Any Lender who
issues a Letter of Credit shall be deemed to have sold to each
Lender (including itself), and each Lender severally shall be
deemed to have unconditionally and irrevocably purchased from
such issuing Lender, an undivided risk participation in each
Letter of Credit as of the date such Letter of Credit is issued.
Each risk participation sold hereunder shall be sold to Lenders
in fractional amounts in proportion to their Percentage Interest.
Section 10.2 Notice Of Participations. Via telex,
facsimile transmission, telegram or cable, Agent will advise each
Lender of its respective Percentage Interest of each Letter of
Credit on the same day such Letter of Credit is issued as
requested by Borrower pursuant to Article 3 hereof. Said notice
shall contain the following information: (i) the face amount of
the Letter of Credit issued, (ii) the number of such Letter of
Credit, (iii) the date of issuance, (iv) the identity of the
issuer, and (v) the maturity or expiration date of such Letter of
Credit. Agent shall not have any duty to ascertain or to inquire
as to the accuracy of any information furnished by Borrower to
Agent in respect of any Letter of Credit.
Section 10.3 Payment Obligations.
(a) Reimbursements to Agent. In the event Borrower
fails to fully reimburse any issuing Lender for amounts disbursed
under a Letter of Credit ("Letter of Credit Payment") by 12:00
noon (New York time) on the date reimbursement is demanded, such
issuing Lender shall promptly notify Agent, and each Lender
shall, upon receipt of notice from Agent of such failure, pay to
Agent the amount of such Lender's Percentage Interest of the face
amount of such Letter of Credit Payment, as the case may be,
provided, however, if Borrower pays a portion but less than all
of the face amount of any such Letter of Credit Payment, Lenders
shall pay Agent only their respective Percentage Interests of the
difference between the face amount of the Letter of Credit
Payment and the amount paid by Borrower on account of such Letter
of Credit Payment. Each and every payment to be made by Lenders
to Agent under this Section 10.3(a) shall be made by federal wire
transfer in immediately available funds. If any Lender receives
notice from Agent by 1:00 p.m. (New York time) on any Business
Day of its obligation to make payments under this subsection,
then such Lender shall make such payment no later than 2:00 p.m.
(New York time) on the day such notice is received. If any
Lender receives such notice after 1:00 p.m. (New York time) on
any Business Day, then such Lender shall make such payment by no
later than 1:00 p.m. (New York time) on the next succeeding
Business Day. If any Lender fails to make such payment by the
date and time required, its obligation shall bear interest from
and including the date when such payment was due until paid at
the per annum rate equal to the Federal Funds Rate.
(b) Payments to Lenders. Agent shall promptly remit
to each Lender such Lender's Percentage Interest of any letter of
credit fees or other amounts received from or for the account of
Borrower in respect of any Letter of Credit. In the event Agent
is required to refund any amount which is paid to it or received
by it from or for the account of Borrower, then Lenders, to the
extent they shall have previously received their Percentage
Interest of such amount, agree to repay to Agent their respective
Percentage Interest of such amount.
(c) Reimbursements to Lenders. Borrower agrees to
reimburse any Lender for amounts paid by such Lender to Agent
pursuant to Section 10.3(a) hereof.
ARTICLE 11
MISCELLANEOUS
Section 11.1 No Waiver; Remedies Cumulative. No failure
by Agent or any Lender to exercise, and no delay in exercising,
any right, power or remedy under this Agreement or any other Loan
Document in and of itself shall operate as a waiver thereof, nor
shall any single or partial exercise of any right, power or
remedy under this Agreement or any other Loan Document preclude
any other or further exercise thereof or the exercise of any
other right, power, or remedy. The exercise of any right, power,
or remedy shall in no event constitute a cure or waiver of any
Event of Default under this Agreement or any other Loan Document
nor prejudice the rights of Agent or any Lender in the exercise
of any right hereunder or thereunder. The rights and remedies
provided herein and therein are cumulative and not exclusive of
any right or remedy provided by law.
Section 11.2 Governing Law. This Agreement and the other
Loan Documents shall be governed by and construed in accordance
with the laws of the New York.
Section 11.3 Consent To Jurisdiction. Borrower hereby
irrevocably submits to the nonexclusive jurisdiction of any state
or federal court sitting in New York, New York, in any action or
proceeding brought to enforce or otherwise arising out of or
relating to this Agreement or any other Loan Document and
irrevocably waives to the fullest extent permitted by law any
objection which it may now or hereafter have to the laying of
venue in any such action or proceeding in any such forum, and
hereby further irrevocably waives any claim that any such forum
is an inconvenient forum. Borrower agrees that a final judgment
in any such action or proceeding shall be conclusive and may be
enforced in any other jurisdiction by suit on the judgment or in
any other manner provided by law. Nothing in this Section 11.3
shall impair the right of Agent or any other Lender or the holder
of any Note to bring any action or proceeding against Borrower or
its property in the courts of any other jurisdiction, and
Borrower irrevocably submits to the nonexclusive jurisdiction of
the appropriate courts of the jurisdiction in which Borrower is
incorporated or sitting in any place where property or an office
of Borrower is located.
Section 11.4 Waiver Of Jury Trial. THE PARTIES HERETO
WAIVE ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO
ENFORCE OR DEFEND ANY RIGHTS UNDER OR RELATING TO THIS AGREEMENT
OR ANY OTHER LOAN DOCUMENT, OR ANY AMENDMENT, INSTRUMENT,
DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN THE FUTURE BE
DELIVERED IN CONNECTION HEREWITH OR THEREWITH OR ARISING FROM ANY
RELATIONSHIP EXISTING IN CONNECTION WITH THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT, AND AGREE THAT (A) ANY SUCH ACTION OR
PROCEEDING SHALL NOT BE TRIED BEFORE A JURY AND (B) ANY PARTY
HERETO MAY FILE AN ORIGINAL COUNTERPART OR COPY OF THIS AGREEMENT
WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES
HERETO TO THE WAIVER OF THEIR RESPECTIVE RIGHTS TO A TRIAL BY
JURY.
Section 11.5 Notices. All notices and other
communications provided for in this Agreement (unless otherwise
specified) shall be in writing (including, without limitation,
telex, facsimile transmission, telegram or cable) and shall be
mailed (return receipt requested, except with respect to notices
provided by Agent to Lenders which may be mailed merely with
first class postage prepaid), or sent or delivered to each party
at the address set forth under its name on the signature pages
hereof, or at such other address as shall be designated by such
party in a written notice to each other party. Except as
otherwise specified all notices sent by a nationally recognized
overnight courier service, if duly given, shall be effective one
(1) Business Day after delivery to such courier service and all
other notices and communications if duly given or made shall be
effective upon receipt.
Section 11.6 Assignment And Participations. This
Agreement shall be binding upon and inure to the benefit of the
parties and their respective Successors and assigns, provided
that Borrower may not assign or otherwise transfer all or any
part of its rights or obligations hereunder or under any other
Loan Document without the prior written consent of Agent and all
Lenders, and any such assignment or transfer purported to be made
without such consent shall be ineffective. Any Lender may at any
time sell to any Eligible Assignee participation interests in its
Loans and Commitment. Such sales may be made without the consent
of Agent, any other Lender or Borrower provided, however, (a)
that the selling Lender shall have provided Borrower with prior
written notice of the sale of any participation interest in any
Loan or in such Lender's Commitment; and (b) that the selling
Lender retains the right to vote as a Lender hereunder in respect
of the interest sold without being bound to obtain the consent of
its participant or to exercise its rights in accordance with
instructions received from its participant (except that the
participant's consent can be required for proposed changes to the
timing or amount of principal payments or changes to the timing,
rate or amount of payments of interest or fees). Any Lender may
pledge or assign all or any part of its interest under the Loan
Documents for security purposes to any Federal Reserve Bank. Any
Lender may assign or otherwise transfer to any Eligible Assignee
all or any part of its interest under the Loan Documents pursuant
to an Assignment and Assumption Agreement, substantially in the
form of Exhibit D hereto (y) without the consent of Agent, any
other Lender, or Borrower to any of the assigning Lender's
affiliates or to any other Lender; or (z) with the prior written
consent of Agent and, if no Event of Default shall have occurred
and be continuing, Borrower, (such consents not to be
unreasonably withheld or delayed) but without the consent of the
other Lenders, to any other Eligible Assignee provided, however,
that in either case no such assignment (as distinguished from the
sale of a participation) other than an assignment of a Lender's
entire interest under the Loan Documents (i) shall be made in an
amount less than Ten Million Dollars ($10,000,000) nor (ii) shall
be made if after giving effect to such assignment the aggregate
amount of the Loans and unused Commitment of the assigning Lender
would be less than Ten Million Dollars ($10,000,000) and
provided, further, that in connection with any assignment (as
distinguished from the sale of a participation) the assigning
Lender shall pay to Agent a fee of Three Thousand Five Hundred
Dollars ($3,500) for each proposed assignee that is not then a
Lender or an affiliate thereof. The assignee of any permitted
sale or assignment (including assignments for security and sales
of participations) shall have the same rights and benefits
against Borrower under the Loan Documents (excepting however, in
the case of sales of participations, the right to grant or
withhold consents or otherwise vote in respect thereof) including
the right of setoff, and in the case of any outright assignment
(as distinguished from an assignment for security or the sale of
a participation) the same obligations in respect thereof, as if
such assignee were an original Lender. Except to the extent
otherwise required by the context of this Agreement, the word
"Lender" where used in this Agreement shall mean and include any
holder of a Note originally issued to a Lender hereunder, and
each such holder shall be bound by and have the benefits of this
Agreement the same as if such holder had been a signatory hereto.
Any outright assignment of a Lender's interest hereunder to
another Lender made in conformance with the terms of this Section
11.6 shall result in a corresponding adjustment to the selling
and purchasing Lenders' Commitments and Percentage Interests.
Section 11.7 Borrower's Indemnity. Whether or not the
transactions contemplated hereby shall be consummated, Borrower
shall pay, indemnify and hold each Lender, Agent and each of
their respective officers, directors, employees, counsel, agents
and attorneys-in-fact (each, an "Indemnified Person") harmless
from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, charges,
expenses or disbursements (including reasonable attorney's fees,
which may include the allocated charges of internal legal
counsel) of any kind or nature whatsoever (collectively,
"Losses") which may at any time (including at any time following
repayment of the Loans and the termination, resignation or
replacement of the Agent or replacement of any Lender) be imposed
on, incurred by or asserted against any such person in favor of
any third-party in any way relating to or arising out of this
Agreement or any document contemplated by or referred to herein,
or the transactions contemplated hereby, or any action taken or
omitted by any such person under or in connection with any of the
foregoing, including any Losses resulting from the inaccuracy of
any representation or warranty by Borrower when made or deemed
made by Borrower hereunder and including Losses incurred with
respect to any investigation, litigation or proceeding (including
any insolvency proceeding or appellate proceeding) related to
this Agreement or any other Loan Document or any actual or
proposed use of proceeds of the Loans hereunder, whether or not
any Indemnified Person is a party thereto (all of the foregoing,
collectively the "Indemnified Liabilities"); provided, that
Borrower shall have no obligation hereunder to any Indemnified
Person with respect to Indemnified Liabilities arising from the
gross negligence or willful misconduct of such Indemnified
Person. All amounts owing under this Section 11.8 shall be paid
promptly upon demand. At the election of any Indemnified Person,
Borrower shall defend such Indemnified Person in respect of any
Indemnified Liabilities using legal counsel reasonably
satisfactory to such Indemnified Person at the sole cost and
expense of Borrower.
Section 11.8 Set-Off. In addition to any rights and
remedies of the Lenders provided by law, if an Event of Default
exists or the Loans have been accelerated, each Lender is
authorized at any time and from time to time, without prior
notice to Borrower, any such notice being waived by Borrower to
the fullest extent permitted by law, to set-off and apply any and
all deposits (general or special, time or demand, provisional or
final) at any time held by, and other indebtedness at any time
owing by, such Lender to or for the credit or the account of
Borrower against any and all obligations owing to such Lender,
now or hereafter existing, irrespective of whether or not Agent
or such Lender shall have made demand under this Agreement or any
Loan Document and although such obligations may be contingent or
unmatured. Each Lender agrees promptly to notify Borrower and
Agent after any such set-off and application made by such Lender;
provided, however, that the failure to give such notice shall not
affect the validity of such set-off and application.
Section 11.9 Severability. Any provision of this
Agreement or any other Loan Document which is prohibited or
unenforceable in any jurisdiction shall as to such jurisdiction
be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions
hereof or affecting the validity or enforceability of such
provision in any other jurisdiction. To the extent permitted by
applicable law, the parties waive any provision of law which
renders any provision hereof prohibited or unenforceable in any
respect.
Section 11.10 Survival. The indemnities of Borrower in
favor of Agent and Lenders shall survive indefinitely and,
without limiting the foregoing, shall survive the execution and
delivery of this Agreement and the other Loan Documents, the
making of any Loans, the issuance of any Letters of Credit the
expiration of the Total Commitment and the repayment of all Loans
and other amounts due hereunder.
Section 11.11 Conditions Not Fulfilled. If the Commitments
are not borrowed owing to nonfulfillment of any condition
precedent specified in Article 4, no party hereto shall be
responsible to any other party for any damage or loss by reason
thereof, except that Borrower shall in any event be liable to pay
the fees, Taxes, and expenses for which it is obligated
hereunder. If the conditions precedent specified in Article 4
shall have been satisfied and any Lender (the "Defaulting
Lender") fails to make its Commitment available in accordance
with the terms hereof, neither Agent nor any Lender other than
the Defaulting Lender shall be responsible to Borrower for any
damage or loss by reason thereof, nor shall Borrower or any
Lender other than the Defaulting Lender be excused from its
performance hereunder.
Section 11.12 Entire Agreement; Amendment. This Agreement,
together with the Exhibits and Schedule hereto, the Disclosure
Letter and the letter agreement described in Section 2.13(c)
hereof, comprise the entire agreement of the parties and may not
be amended or modified except by written agreement of Borrower
and Agent executed in conformance with the terms of Section 9.1
hereof. No provision of this Agreement may be waived except in
writing and then only in the specific instance and for the
specific purpose for which given.
Section 11.13 Confidentiality. Each Lender agrees to take
and to cause its affiliates to take normal and reasonable
precautions and exercise due care to maintain the confidentiality
of all confidential information provided to it by Borrower or any
Subsidiary, or by Agent on Borrower's or such Subsidiary's
behalf, under this Agreement or any other Loan Document, and
neither it nor any of its affiliates shall use any such
information other than in connection with or in enforcement of
this Agreement and the other Loan Documents or in connection with
other business now or hereafter existing or contemplated with
Borrower or any Subsidiary; except to the extent such information
(i) was or becomes generally available to the public other than
as a result of disclosure by any Lender, or (ii) was or becomes
available on a non-confidential basis from a source other than
Borrower, provided that such source is not bound by a
confidentiality agreement with Borrower known to Lender;
provided, however, that any Lender may disclose such information
(A) at the request or pursuant to any requirement of any
Governmental Authority to which such Lender is subject or in
connection with an examination of such Lender by any such
authority; (B) pursuant to subpoena or other court process,
provided that such Lender shall use its reasonable, good faith
efforts to provide prior written notice (unless prohibited from
doing so by any applicable laws) to Borrower to allow Borrower to
seek a protective order; (C) when required to do so in accordance
with the provisions of any applicable requirement of law; (D) to
the extent reasonably required in connection with any litigation
or proceeding to which Agent, any Lender or their respective
affiliates may be party provided that except as set forth in
clause (E), provided that such Lender shall use its reasonable,
good faith efforts to provide prior written notice (unless
prohibited from doing so by any applicable laws) to Borrower to
allow Borrower to seek a protective order; (E) to the extent
reasonably required in connection with the exercise of any remedy
hereunder or under any other Loan Document; (F) to such Lender's
independent auditors and other professional advisors provided
such advisors have a need to know such information; (G) to any
participant or assignee, actual or potential, provided that such
person agrees in writing to keep such information confidential to
the same extent required of Lenders hereunder; (H) as to any
Lender or its affiliate, as expressly permitted under the terms
of any other document or agreement regarding confidentiality to
which Borrower or any Subsidiary is party or is deemed party with
such Lender or such affiliate; and (I) to its affiliates. Upon
the execution and delivery of this Agreement by all the parties,
the confidentiality undertaking set forth in this Section 11.13
shall replace and supersede the terms of any confidentiality
agreement between Borrower and any of Agent or Lenders previously
executed prior to the date of this Agreement and shall survive
the termination of this Agreement for a period of twelve (12)
months.
Section 11.14 Headings. The headings of the various
provisions of this Agreement are for convenience of reference
only, do not constitute a part hereof, and shall not affect the
meaning or construction of any provision hereof.
Section 11.15 Counterparts. This Agreement may be executed
in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be
deemed to be an original, and all of which taken together shall
constitute one and the same Agreement.
<PAGE>
In Witness Whereof, the parties hereto have caused this
Agreement to be executed by their respective officers or agents
thereunto duly authorized as of the date first above written.
Borrower: Micron Electronics, Inc.
By T. Erik Oaas
---------------------------------
Its Executive Vice President,
Finance, Chief Financial Officer
---------------------------------
Address: 900 East Karcher Road
Nampa, ID 83687
Attn: Chief Financial Officer
Telephone: (208) 898-3805
Telefax: (208) 898-7411
with a copy to
Address: 900 East Karcher Road
Nampa, ID 83687
Attn: General Counsel
<PAGE>
Agent: Deutsche Bank AG, New York Branch
By Andre Heitbaum
---------------------------------
Its Assistant Vice President
---------------------------------
By Joel Makowsky
---------------------------------
Its Vice President
---------------------------------
Address: 31 West 52nd Street
New York, New York 10019
Attn: Nancy Zorn
Telephone: (212) 469-4112
Telefax: (212) 469-4139
with a copy to: Robert A.Curley
Deutsche Bank
Securities Inc.
800 Oak Grove,
Suite 210
Menlo Park, CA 94026
Telephone: (650) 614-1143
Telefax: (212) 614-1188
Co-Agents: Deutsche Bank AG, New
York Branch
By Andre Heitbaum
---------------------------------
Its Assistant Vice President
---------------------------------
By Joel Makowsky
---------------------------------
Its Vice President
---------------------------------
Address: 31 West 52nd Street
New York, New York 10019
Attn: Nancy Zorn
Telephone: (212) 469-4112
Telefax: (212) 469-4139
<PAGE>
U.S. Bank National
Association
By Ross Beaton
---------------------------------
Its Vice President
---------------------------------
By
---------------------------------
Its
---------------------------------
Address: 111 SW Fifth Avenue, T-4
Portand, OR 97204
Attn:
Telephone: 503-275-6350
Telefax: 503-275-5795
Lenders: Deutsche Bank AG, New York Branch
and/or Cayman Islands Branches
By Andre Heitbaum
---------------------------------
Its Assistant Vice President
---------------------------------
By Joel Makowsky
---------------------------------
Its Vice President
---------------------------------
Address: 31 West 52nd Street
New York, New York 10019
Attn: Nancy Zorn
Telephone: (212) 469-4112
Telefax: (212) 469-4139
<PAGE>
U.S. BANK NATIONAL ASSOCIATION
By Ross Beaton
---------------------------------
Its Vice President
---------------------------------
By
---------------------------------
Its
---------------------------------
Address: Corporate Banking
Division
111 S.W. Fifth Avenue
Suite 400
Portland, OR 97204
Attn: Ross A. Beaton
Telephone:
Telefax: (503) 275-5795
<PAGE>
FLEET NATIONAL BANK
By Frank Benesh
---------------------------------
Its Vice President
---------------------------------
By
---------------------------------
Its
---------------------------------
Address: One Federal Street
MA OFD 07A
Boston, MA 02110
Attn: Frank Benesh
Telephone: (614) 346-0617
Telefax: (617) 346-0568
<PAGE>
KEYBANK NATIONAL ASSOCIATION
By J. T. Taylor
---------------------------------
Its Assistant Vice President
---------------------------------
By
---------------------------------
Its
---------------------------------
Address: 700 Fifth Avenue
48th Floor
Seattle, WA 98104
Attn: J.T. Taylor
Telephone:
Telefax: (206) 684-6035
<PAGE>
THE BANK OF NOVA SCOTIA
By Maarten Van Otterloo
---------------------------------
Its Senior Relationship Manager
---------------------------------
By
---------------------------------
Its
---------------------------------
Address: 580 California Street
Suite 2100
San Francisco, CA 94104
Attn: Maarten Van Otterloo
Telephone: (415) 616-4161
Telefax: (415) 397-0791
<PAGE>
THE SUMITOMO BANK, LIMITED
By R. Kodama
---------------------------------
Its General Manager
---------------------------------
By
---------------------------------
Its
---------------------------------
Address: 277 Park Avenue
6th Floor
New York, NY 10172
Attn: Kelley Coyle
Telephone:
Telefax: (213) 613-6832
and
Address: Los Angeles Branch
Suite 2600
Los Angeles, CA 90017
Attn: Loan Administration
Telephone:
Telefax:
<PAGE>
Exhibits
Exhibit A Form of Promissory Note
Exhibit B Form of Notice of Borrowing
Exhibit C Form of Compliance Certificate
Exhibit D Form of Assignment and Assumption Agreement
Schedules
Schedule 2.1 Commitments
<PAGE>
Schedule 2.1
Commitments
Lender Percentage Commitment
Interest
Deutsche Bank AG, New York 22.5% $ 22,500,000
and/or Cayman Island Branch
U.S. Bank National 22.5% $ 22,500,000
Association
Fleet National Bank 17.5% $ 17,500,000
KeyBank National 17.5% $ 17,500,000
Association
The Bank of Nova Scotia 10.0% $ 10,000,000
The Sumitomo Bank, Ltd. 10.0% $ 10,000,000
Total 100.00000% $100,000,000
<PAGE>
ARTICLE 1 DEFINITIONS
SECTION 1.1 CERTAIN DEFINED TERMS
SECTION 1.2 GENERAL PRINCIPLES APPLICABLE TO DEFINITIONS
SECTION 1.3 ACCOUNTING TERMS
ARTICLE 2 THE LOANS
SECTION 2.1 LOANS
SECTION 2.2 [INTENTIONALLY DELETED]
SECTION 2.3 MANNER OF BORROWING
SECTION 2.4 REDUCTION OF COMMITMENTS
SECTION 2.5 REPAYMENT OF PRINCIPAL
SECTION 2.6 AGENT'S RIGHT TO FUND
SECTION 2.7 INTEREST ON LOANS
SECTION 2.8 COMPENSATION FOR INCREASED COSTS
SECTION 2.9 PREPAYMENTS
SECTION 2.10 NOTES
SECTION 2.11 MANNER OF PAYMENTS
SECTION 2.12 APPLICATION OF PAYMENTS
SECTION 2.13 FEES
SECTION 2.14 SHARING OF PAYMENTS, ETC.
SECTION 2.15 EXTENSION OF MATURITY DATE.
SECTION 2.16 REPLACEMENT OF LENDER
ARTICLE 3 LETTERS OF CREDIT
SECTION 3.1 LETTERS OF CREDIT
SECTION 3.2 MANNER OF REQUESTING LETTERS OF CREDIT
SECTION 3.3 INDEMNIFICATION; INCREASED COSTS
SECTION 3.4 PAYMENT BY BORROWER
ARTICLE 4 CONDITIONS TO ADVANCES
SECTION 4.1 CONDITIONS TO INITIAL ADVANCE
SECTION 4.2 CONDITIONS TO ALL ADVANCES
ARTICLE 5 REPRESENTATIONS AND WARRANTIES
SECTION 5.1 CORPORATE EXISTENCE AND POWER
SECTION 5.2 CORPORATE AUTHORIZATION
SECTION 5.3 GOVERNMENT APPROVALS, ETC.
SECTION 5.4 BINDING OBLIGATIONS, ETC.
SECTION 5.5 LITIGATION
SECTION 5.6 FINANCIAL CONDITION
SECTION 5.7 TITLE AND LIENS
SECTION 5.8 ENVIRONMENTAL LAWS, ETC.
SECTION 5.9 TAXES
SECTION 5.10 PARI PASSU RANKING
SECTION 5.11 LAWS, ORDERS, OTHER AGREEMENTS
SECTION 5.12 FEDERAL RESERVE REGULATIONS
SECTION 5.13 ERISA
SECTION 5.14 SUBSIDIARIES
SECTION 5.15 PATENTS, LICENSES, FRANCHISES, ETC.
SECTION 5.16 NOT INVESTMENT COMPANY, ETC.
SECTION 5.17 REPRESENTATIONS AS A WHOLE
ARTICLE 6 AFFIRMATIVE COVENANTS
SECTION 6.1 USE OF PROCEEDS
SECTION 6.2 PAYMENT
SECTION 6.3 PRESERVATION OF CORPORATE EXISTENCE, ETC.
SECTION 6.4 VISITATION RIGHTS
SECTION 6.5 KEEPING OF BOOKS AND RECORDS
SECTION 6.6 MAINTENANCE OF PROPERTY, ETC.
SECTION 6.7 COMPLIANCE WITH LAWS, ETC.
SECTION 6.8 OTHER OBLIGATIONS
SECTION 6.9 INSURANCE
SECTION 6.10 FINANCIAL INFORMATION
SECTION 6.11 NOTIFICATION
SECTION 6.12 ADDITIONAL PAYMENTS; ADDITIONAL ACTS
SECTION 6.13 MINIMUM TANGIBLE NET WORTH
SECTION 6.14 MODIFIED QUICK RATIO
SECTION 6.15 MAXIMUM DEBT RATIO
ARTICLE 7 NEGATIVE COVENANTS
SECTION 7.1 DIVIDENDS, PURCHASE OF STOCK, ETC.
SECTION 7.2 LIQUIDATION, MERGER, SALE OF ASSETS
SECTION 7.3 INDEBTEDNESS
SECTION 7.4 FOREIGN SUBSIDIARY INDEBTEDNESS
SECTION 7.5 GUARANTIES, ETC.
SECTION 7.6 LIENS
SECTION 7.7 INVESTMENTS
SECTION 7.8 TRANSACTIONS WITH AFFILIATES
SECTION 7.9 ACCOUNTING CHANGE
SECTION 7.10 ERISA COMPLIANCE
ARTICLE 8 EVENTS OF DEFAULT
SECTION 8.1 EVENTS OF DEFAULT
SECTION 8.2 CONSEQUENCES OF DEFAULT
ARTICLE 9 THE AGENT
SECTION 9.1 AUTHORIZATION AND ACTION
SECTION 9.2 DUTIES AND OBLIGATIONS
SECTION 9.3 DEALINGS BETWEEN AGENT AND BORROWER
SECTION 9.4 LENDER CREDIT DECISION
SECTION 9.5 INDEMNIFICATION
SECTION 9.6 SUCCESSOR AGENT
ARTICLE 10 RISK PARTICIPATIONS
SECTION 10.1 SALE OF RISK PARTICIPATIONS
SECTION 10.2 NOTICE OF PARTICIPATIONS
SECTION 10.3 PAYMENT OBLIGATIONS.
ARTICLE 11 MISCELLANEOUS
SECTION 11.1 NO WAIVER; REMEDIES CUMULATIVE
SECTION 11.2 GOVERNING LAW
SECTION 11.3 CONSENT TO JURISDICTION
SECTION 11.4 WAIVER OF JURY TRIAL
SECTION 11.5 NOTICES
SECTION 11.6 ASSIGNMENT AND PARTICIPATIONS
SECTION 11.7 BORROWER'S INDEMNITY
SECTION 11.8 SET-OFF
SECTION 11.9 SEVERABILITY
SECTION 11.10 SURVIVAL
SECTION 11.11 CONDITIONS NOT FULFILLED
SECTION 11.12 ENTIRE AGREEMENT; AMENDMENT
SECTION 11.13 CONFIDENTIALITY
SECTION 11.14 HEADINGS
SECTION 11.15 COUNTERPARTS
<PAGE>
Exhibit A
FORM OF PROMISSORY NOTE
$_____________ ___________, 1998
New York, New York
For Value Received, Micron Electronics, Inc., a Minnesota
corporation ("Borrower"), hereby unconditionally promises to pay
to the order of [Deutsche Bank AG, New York And/Or Cayman
Islands Branches], ("Lender"), in lawful money of the United
States of America and in immediately available funds, the
principal sum of __________________________ Dollars ($__________)
(the "Loan"), or, if less, so much as has been loaned by Lender
to Borrower hereunder, together with accrued and unpaid interest
thereon, each due and payable on the dates and in the manner set
forth below.
This Promissory Note is one of the Notes referred to in and
is executed and delivered in connection with that certain Credit
Agreement dated as of even date herewith and executed by
Borrower, Deutsche Bank AG, New York Branch, as administrative
agent, Deutsche Bank AG, New York Branch, and U.S. Bank, N.A., as
co-agents, and the Lenders named therein (as the same may from
time to time be amended, modified or supplemented or restated,
the "Credit Agreement"). Additional rights of Lender, including
rights of acceleration, are set forth in the Credit Agreement.
All capitalized terms used herein and not otherwise defined
herein shall have the respective meanings given to them in the
Credit Agreement.
1. Principal Repayment. Subject to the terms and
conditions of the Credit Agreement, the entire outstanding
principal amount of the Loan shall be due and payable on the
Maturity Date. Reference Rate Loans may be prepaid at any time
without penalty or premium. Prepayment of any LIBOR Rate Loan,
whether voluntary, mandatory or as the result of Agent's or
Lender's collection efforts, shall be subject to the payment of
fees as described in Section 2.9 of the Credit Agreement.
2. Interest Rate. Borrower further promises to pay
interest on the outstanding principal amount hereof from the date
hereof until payment in full, which interest shall be payable at
the rates per annum and on the dates determined pursuant to the
Credit Agreement. Any principal repayment or interest payment not
paid when due, whether at stated maturity, by acceleration or
otherwise, shall bear interest at a rate per annum equal to the
Reference Rate (changing as the Reference Rate changes) plus 2%.
Notwithstanding anything to the contrary contained herein,
interest shall not accrue at a rate in excess of the maximum rate
permitted by applicable law.
3. Place of Payment. All amounts payable hereunder shall
be payable at the office of Agent set forth on the signature
pages to the Credit Agreement, for the account of Lender, unless
another place of payment shall be specified in writing by Agent.
4. Application of Payments. Payment on this Note shall be
applied in the manner set forth in the Credit Agreement.
5. Default. Each of the following events shall be an
"Event of Default" hereunder:
(a) Borrower fails to pay timely any of the principal
amount due under this Note on the date the same becomes due and
payable or any accrued interest or other amounts due under this
Note within five (5) Business Days after the date the same
becomes due and payable; or
(b) The occurrence of an "Event of Default" under the
Credit Agreement.
Upon the occurrence of an Event of Default hereunder, all unpaid
principal, accrued interest and other amounts owing hereunder
shall, at the option of Lender, and, in the case of an Event of
Default pursuant to Sections 8.1 (g) or (h) of the Credit
Agreement, automatically, be immediately due, payable and
collectible by Lender pursuant to applicable law.
6. Waiver. Borrower waives presentment and demand for
payment, notice of dishonor, protest and notice of protest of
this Note, and shall pay all reasonable costs of collection when
incurred, including, without limitation, reasonable attorneys'
fees, costs and other expenses.
7. Governing Law. This Note shall be governed by, and
construed and enforced in accordance with, the laws of the State
of New York, excluding conflict of laws principles that would
cause the application of laws of any other jurisdiction.
8. Successors and Assigns. The provisions of this Note
shall inure to the benefit of and be binding on any successor to
Borrower and shall extend to any holder hereof.
Borrower Micron Electronics, Inc.
By:
-------------------------------
Printed Name:
---------------------
Title:
----------------------------
<PAGE>
Exhibit B
NOTICE OF BORROWING [AND INTEREST RATE NOTICE]
Date: _______________
To: Deutsche Bank AG, New York Branch, as Agent for the Lenders
31 W. 52nd Street
New York, NY 10019
Attention: Nancy Zorn
Re: Credit Agreement dated as of June __, 1998 (as amended,
modified, supplemented or restated from time to time, the
"Credit Agreement"), by and among Micron Electronics, Inc.,
a Minnesota corporation, as the borrower (the "Borrower"),
the financial institutions from time to time party thereto
and named as Lenders therein (the "Lenders"), Deutsche Bank
AG, New York Branch and U.S. Bank, N.A. as co-agents, and
Deutsche Bank AG, New York Branch, as administrative agent
(the "Agent")
Ladies and Gentlemen:
The undersigned refers to the Credit Agreement, the terms defined
therein used herein as defined, and hereby gives you notice
irrevocably, pursuant to Section 2.3 [and Section 2.7(b)] of the
Credit Agreement, of the [borrowing of a Loan
("Borrowing")]/[request for issuance of a Letter of Credit] as
specified herein:
1. The Borrower/Account Party is Micron Electronics, Inc.
Items 2 through 5 below apply only to the Borrowing of a Loan:
2. The proposed date of the requested Borrowing, which
shall be a Business Day, is _________.
3. The aggregate amount of the requested Borrowing is $________.
4. The requested Borrowing shall consist of $_______ of
Reference Rate Loans and $_________ of LIBOR Rate Loans.
5. The duration of the Applicable Interest Period(s) for
the LIBOR Rate Loan(s) included in the requested Borrowing shall
be as follows:
Amount of Loan Applicable Interest Period
Items 6 through 9 below apply only to the request for the
issuance of a Letter of Credit:
6. The proposed date of the issuance of the requested
Letter of Credit, which shall be a Business Day, is _________.
7. The aggregate amount of the requested Letter of Credit
is $___________.
8. Attached hereto is a duly completed Letter of Credit
application.
9. The requested issuer of the Letter of Credit is __________.
The undersigned hereby certifies to the best of her/her
knowledge that:
(a) the representations and warranties of the Borrower
contained in Article 5 of the Credit Agreement are true,
accurate and complete in all material respects;
(b) no Default or Event of Default has occurred and is
continuing, or would result from such proposed Borrowing;
and
(c) the requested Borrowing will not cause the Total
Utilization to exceed the Total Commitment as of the
proposed date of the Borrowing.
Micron Electronics, Inc.
a Minnesota corporation
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
<PAGE>
Exhibit C
FORM OF COMPLIANCE CERTIFICATE
____________, 199_/200_
Date:_____________
To: Deutsche Bank AG, New York Branch, as Agent for the Lenders
31 W. 52nd Street
New York, NY 10019
Attention: Nancy Zorn
Re: Credit Agreement dated as of June __, 1998 (as amended,
modified, supplemented or restated from time to time, the
"Credit Agreement"), by and among Micron Electronics, Inc.,
a Minnesota corporation, as the borrower (the "Borrower"),
the financial institutions from time to time party thereto
and named as Lenders therein (the "Lenders"), Deutsche Bank
AG, New York Branch and U.S. Bank, N.A., as co-agents, and
Deutsche Bank AG, New York Branch, as administrative agent
(the "Agent")
Ladies and Gentlemen:
Reference is made to the Credit Agreement. Capitalized terms
used in this Compliance Certificate have the same meaning when
used herein as given to them in the Credit Agreement.
Pursuant to Section 6.10(c) of the Credit Agreement, Borrower, by
its undersigned president, chief financial officer, treasury
director or vice president, as applicable (the "Undersigned"),
acting solely in his/her respective capacity as such, hereby
certifies that the information furnished in Schedule 1 attached
hereto and incorporated herein by this reference was true,
accurate and complete as of the last day of the Fiscal Quarter or
Fiscal Year, as applicable, immediately preceding the date of
this Compliance Certificate (the "Relevant Period") and that:
1. The Undersigned has reviewed the terms of the Credit
Agreement and has made, or caused to be made under his or her
supervision, a review in reasonable detail of the material
transactions and financial condition of the Borrower during the
Relevant Period.
2. Such review has not disclosed that as of the last day
of the Relevant Period any Default or Event of Default had
occurred and was continuing, except for such conditions or events
listed on Schedule 2 attached hereto, specifying the nature and
period of existence thereof and what action the Borrower has
taken, is taking and proposes to take with respect thereto.
In Witness Whereof, this Compliance Certificate is executed by
the undersigned this _______ day of__________________, 199_/200_.
Micron Electronics, Inc.
a Minnesota corporation
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
<PAGE>
Schedule 1 To Compliance Certificate
Dated______________________, 19__/200_
FINANCIAL COVENANTS OF THE BORROWER
as of ______________ ____, the last day of the Borrower's
[1st/2nd/3rd] Fiscal [Quarter/Year]
I. Minimum Tangible Net Worth (Section 6.13)
A. Tangible Net Worth $_____________________
B. Minimum Tangible Net Worth $_____________________
1. An amount equal to 80% of TNW
at 05/28/98 $_____________________
2. An amount equal to 75% of
cumulative Net Income of Borrower
(exclusive of losses) commencing
with the Fiscal Quarter ending
09/03/98 $_____________________
3. An amount equal to 75% of net
proceeds received by Borrower
after 05/28/98 from the issuance of
common stock or conversion of debt
securities into common stock $_____________________
4. Minimum Tangible Net Worth
(Line B.1 plus Line B.2 plus
Line B.3) $_____________________
Is Line A equal to or greater than Line B.4?
Yes ___ (in compliance)
No ___ (not in compliance)
II. Modified Quick Ratio (Section 6.14)
A. 1. Cash and Cash Equivalents $_____________________
2. Accounts Receivable $_____________________
3. Line A.1 plus Line A.2 $_____________________
B. 1. Current Liabilities $_____________________
2. Loans outstanding
(without duplication of
amounts in B.1) $_____________________
3. Line B.1 plus Line B.2 $_____________________
C. Modified Quick Ratio (Line A.3
divided by Line B.3) $_____________________
Does Four Quarter EBITDA exceed
$125,000,000, or has it ever exceeded
$125,000,000?
If yes, is Line C greater than or equal to 1.00:1.00?
Yes ____ (in compliance)
No ____ (not in compliance)
If no, is Line C greater than or equal to
1.25:1.00?
Yes ____ (in compliance)
No ____ (not in compliance)
III. Maximum Debt Ratio (Section 6.15)
A. Funded Debt $_____________________
B. Calculation:
EBITDA for quarter ending
5/28/98 $__________ x4= $__________
or EBITDA for quarter ending
5/28/98 and 9/3/98 $__________ x2= $__________
or EBITDA for quarter ending
5/28/98, 9/3/98 and 12/2/98 $__________ x1.333= $__________
or (at 2/28/99 and thereafter)
EBITDA for last four fiscal
quarters $_____________________
C. Debt Ratio
(Line A divided by Line B) :1.00
----------------------------------
Is Line C greater than or equal to 3.00:1.00
(Q3 and 4, 1998)?
2.00:1.00 (Q1 and 2, 1999)?
1.50:1.00 (Q3 1999 and thereafter)?
Yes ____ (in compliance)
No ___ (not in compliance)
IV. Restricted payments (Section 6.10(c))
A. Amount of Restricted Payments
during most recently completed
quarter $_____________________
B. Describe nature of Restricted Payments:
C. Amount of Restricted Payments since
June __, 1998 $_____________________
D. Describe nature of Restricted Payments:
<PAGE>
Schedule 2 to Compliance Certificate
Dated____________________, 19__/200_
LIST OF EXCEPTIONS
Condition(s) or event(s) constituting a Default or an Event of
Default
Period of existence
Remedial action with respect to such condition or event
<PAGE>
Exhibit D
Form Of
ASSIGNMENT AND ASSUMPTION AGREEMENT
This Assignment and Assumption Agreement ("Agreement") is
made as of this _____ day of _______________, _________________,
by and between ____________________ (the "Assignor") and
____________________ (the "Assignee").
Recitals
A. Micron Electronics, Inc., a Minnesota corporation (the
"Borrower"), Assignor, Assignee, ____________________,
____________________, ____________________, ____________________,
____________________, and ____________________ (collectively, the
"Lenders"), Deutsche Bank AG, New York Branch and U.S. Bank,
N.A., as co-agents, and Deutsche Bank AG, New York Branch as
administrative agent for Lenders (the "Agent") are parties to
that certain Credit Agreement dated as of June __, 1998 (as the
same may be amended, modified or extended from time to time the
"Credit Agreement"). Capitalized terms not otherwise defined
herein shall have the meanings given in the Credit Agreement.
B. Pursuant to the terms of the Credit Agreement, Assignor has
a Commitment to make Loans to Borrower under the Credit Agreement
in an aggregate principal amount at any time outstanding not to
exceed _______________ Dollars ($__________).
C. Assignor proposes to assign to Assignee [all] [a portion] of
Assignor's rights under the Credit Agreement, and Assignee
proposes to accept assignment of such rights and assume the
corresponding obligations from Assignor on such terms;
Now, Therefore, in consideration of the foregoing and the
mutual agreements contained herein, the parties hereto agree as
follows:
Agreement
1. Definitions. Capitalized terms used herein and not
otherwise defined shall have the meanings given in the Credit
Agreement.
2. Assignment and Assumption. Assignor hereby assigns and
sells to Assignee a __________ percent (_____%) undivided
interest in all of its Loans, its Commitment, and in all of its
rights under the Credit Agreement and the other Loan Documents,
and Assignee hereby accepts such assignment from Assignor and
assumes a corresponding __________ percent (_____%) undivided
interest of the obligations of Assignor under the Credit
Agreement and the other Loan Documents, including the Commitment.
The percentage interest assigned to and assumed by Assignee from
Assignor as set forth in the preceding sentence is sometimes
hereafter referred to as Assignee's "Assigned Interest."
Assignee hereby agrees, for the benefit of Agent, to be
responsible for its Assigned Interest of each Assignor's
obligations to Agent, whether now existing or hereafter arising,
including, but not limited to, the indemnification obligations
arising under Section 9.5 of the Credit Agreement. Upon the
execution and delivery hereof by Assignor, Assignee, Agent and
Borrower and the payment of the amounts specified in Section 3
hereof required to be paid on the date hereof: (a) Assignee
shall enjoy the rights and be obligated to perform the
obligations of a "Lender" under the Credit Agreement and the
other Loan Documents with respect to the Assigned Interest to the
same extent as if Assignee had been the original Lender with
respect thereto (b) the Commitment of Assignor and Assignee under
the Credit Agreement shall be $_______________ and
$______________ respectively, and (c) the Percentage Interest of
Assignor and Assignee under the Credit Agreement shall be ____%
and ____% respectively. The assignment provided for herein shall
be without recourse to Assignor.
3. Payments. As consideration for the assignment and sale
contemplated in Section 2 hereof, Assignee shall pay to Assignor
on the date hereof in immediately available funds the amount of
$_______________, such amount being the product of: (a) the
Assigned Interest and (b) principal of and accrued interest on
Assignor's Loans outstanding as of the date hereof. It is
understood that the upfront fees paid by Borrower upon the
execution of the Credit Agreement and the facility fees accrued
to the date hereof in respect of the Assigned Interest are for
the account of Assignor and that the facility fees accruing from
and including the date hereof are for the account of Assignor and
Assignee in accordance with their respective Percentage Interests
after giving effect to the assignment and sale contemplated in
Section 2 hereof. Assignor and Assignee each hereby agree that
if it receives any amount under the Credit Agreement which is for
the account of the other party hereto, it shall receive the same
for the account of such other party to the extent of such other
party's interest therein and shall promptly pay the same to such
other party.
4. Non-Reliance on Assignor. Assignor makes no
representation or warranty and assumes no responsibility with
respect to the execution, legality, validity, enforceability,
genuineness, sufficiency or value of this Agreement, the Assigned
Interest, the Loans, the Credit Agreement, any other Loan
Document, any other instrument or document furnished pursuant
thereto or in connection therewith or the transactions
contemplated herein or therein, except that Assignor represents
and warrants that it is legally authorized to enter into this
Agreement, that it has good title to the interest being assigned
by it and that the interest being assigned by it is not subject
to any liens or claims of others arising by, through or under
Assignor. Assignor makes no representation or warranty and
assumes no responsibility with respect to the financial condition
of Borrower. Assignor assumes no responsibility for the
performance or observance by Borrower of any of its obligations
under the Credit Agreement or any other Loan Document or any
other certificate, instrument or document furnished pursuant
thereto. Assignee confirms and agrees that it has received a
copy of the Credit Agreement, any amendments or waivers thereto
and any other documents furnished pursuant thereto, together with
copies of any financial statements requested by it, and that it
has independently and without reliance on Assignor or Agent, and
based on such documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter
into this Agreement and will continue to be responsible for
making its own independent appraisal of the business, affairs and
financial condition of Borrower.
5. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
6. Counterparts. This Agreement may be executed in any
number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be
deemed an original, and all of which when taken together shall
constitute one and the same Agreement.
In Witness Whereof, the parties hereto have caused this
Agreement to be executed by their respective officers or agents
thereunto duly authorized as of the date first above written.
Assignor Assignee
By:___________________________ By:________________________
Its:__________________________ Its:_______________________
<PAGE>
Borrower's Consent and Agreement
Borrower hereby consents to the terms of the foregoing
Agreement. Borrower hereby agrees, as of the date hereof, to
recognize Assignee as a "Lender" under the Credit Agreement and
the other Loan Documents.
Borrower:
Micron Electronics, Inc.
By:___________________________
Its:__________________________
Agent's Consent and Agreement
Agent hereby consents to the terms of the foregoing
Agreement. Agent hereby agrees, as of the date hereof, to
recognize Assignee as a "Lender" under the Credit Agreement and
the other Loan Documents.
Agent:
Deutsche Bank AG, New York Branch
By:___________________________
Its:__________________________