CREDIT AGREEMENT
Dated as of June 30, 1998
among
SCHUFF STEEL COMPANY
The Lenders herein named
and
WELLS FARGO BANK, NATIONAL ASSOCIATION
as Arranger, Administrative Agent, Issuing Bank
and Swing Line Lender
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TABLE OF CONTENTS
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ARTICLE 1 DEFINITIONS AND ACCOUNTING TERMS................................ 1
1.1 Defined Term.................................................... 1
1.2 Use of Defined Terms............................................ 16
1.3 Accounting Terms................................................ 16
1.4 Rounding........................................................ 16
1.5 Exhibits and Schedules.......................................... 17
1.6 References to "Borrower and its Subsidiaries.".................. 17
1.7 Miscellaneous Terms............................................. 17
ARTICLE 2 LOANS........................................................... 18
2.1 Loans - General................................................. 18
2.2 Base Rate Loans................................................. 19
2.3 Eurodollar Rate Loans........................................... 19
2.4 Voluntary Reduction of the Commitment........................... 20
2.5 Administrative Agent's Right to Assume Funds Available for
Advances........................................................ 20
ARTICLE 2A LETTERS OF CREDIT................................................ 21
2A.1 Letters of Credit............................................... 21
2A.2 Notice.......................................................... 22
2A.3 Letter of Credit Participations................................. 22
2A.4 Disbursement and Reimbursement.................................. 22
ARTICLE 2B SWING LINE....................................................... 25
2B.1 Swing Line...................................................... 25
2B.2 Borrowing....................................................... 25
2B.3 Repayments...................................................... 25
ARTICLE 3 PAYMENTS AND FEES; SECURITY DOCUMENTS; GUARANTY................. 26
3.1 Principal and Interest.......................................... 26
3.2 Facility Fee.................................................... 27
3.4 Agency Fee...................................................... 27
3.5 Increased Commitment Costs...................................... 27
3.6 Eurodollar Fees and Costs....................................... 28
3.7 Default Rate.................................................... 30
3.8 Computation of Interest and Fees................................ 30
3.9 Non-Banking Days................................................ 31
3.10 Manner and Treatment of Payments................................ 31
3.11 Funding Sources................................................. 32
3.12 Failure to Charge Not Subsequent Waiver......................... 32
3.13 Administrative Agent's Right to Assume Payments Will be Made
by Borrower..................................................... 32
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3.14 Fee Determination Detail........................................ 33
3.15 Survivability................................................... 33
3.16 Security Documents.............................................. 33
3.17 Guaranty........................................................ 33
ARTICLE 4 REPRESENTATIONS AND WARRANTIES.................................. 34
4.1 Existence and Qualification: Power; Compliance With Laws........ 34
4.2 Authority: Compliance With Other Agreements and Instruments and
Government Regulations.......................................... 34
4.3 No Governmental Approvals Required.............................. 35
4.4 Subsidiaries.................................................... 35
4.5 Financial Statements............................................ 35
4.6 No Other Liabilities; No Material Adverse Effect................ 35
4.7 Title to and Location of Property............................... 35
4.8 Intangible Assets............................................... 36
4.9 Governmental Regulation......................................... 36
4.10 Litigation...................................................... 36
4.11 Binding Obligations............................................. 36
4.12 No Default...................................................... 36
4.13 Pension Plans................................................... 36
4.14 Regulations G, U and X.......................................... 37
4.15 Disclosure...................................................... 37
4.16 Tax Liability................................................... 37
4.17 Priority Status................................................. 37
4.18 Hazardous Materials............................................. 37
ARTICLE 5 AFFIRMATIVE COVENANTS (OTHER THAN INFORMATION
AND REPORTING REQUIREMENTS)..................................... 39
5.1 Payment of Taxes and Other Potential Liens...................... 39
5.2 Preservation of Existence....................................... 39
5.3 Maintenance of Properties....................................... 39
5.4 Maintenance of Insurance........................................ 39
5.5 Compliance With Laws............................................ 40
5.6 Inspection Rights............................................... 40
5.7 Keeping of Records and Books of Account......................... 40
5.8 Compliance With Agreements...................................... 40
5.9 Use of Proceeds................................................. 41
5.10 Hazardous Materials Laws........................................ 41
5.11 New Subsidiaries................................................ 41
ARTICLE 6 NEGATIVE COVENANTS.............................................. 42
6.1 Disposition of Property......................................... 42
6.2 Mergers......................................................... 42
6.3 Investments and Acquisitions.................................... 42
6.4 Liens, Rights of Others and Negative Pledges.................... 42
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6.5 Distributions................................................... 43
6.6 ERISA Compliance................................................ 43
6.7 Change in Nature of Business.................................... 43
6.8 Indebtedness Obligations........................................ 43
6.9 Transactions with Affiliates.................................... 44
6.10 Capital Expenditures............................................ 44
6.11 Financial Covenants............................................. 44
ARTICLE 7 INFORMATION AND REPORTING REQUIREMENTS.......................... 45
7.1 Financial and Business Information.............................. 45
ARTICLE 8 CONDITIONS...................................................... 47
8.1 Initial Advances................................................ 47
8.2 Any Advance, etc................................................ 48
ARTICLE 9 EVENTS OF DEFAULT AND REMEDIES UPON EVENT
OF DEFAULT...................................................... 50
9.1 Events of Default............................................... 50
9.2 Remedies Upon Event of Default.................................. 52
ARTICLE 10 THE ADMINISTRATIVE AGENT........................................ 54
10.1 Appointment and Authorization................................... 54
10.2 Administrative Agent and Affiliates............................. 54
10.3 Proportionate Interest of the Lenders in any Collateral......... 54
10.4 Lenders Credit Decisions........................................ 55
10.5 Action by Administrative Agent; Etc............................. 55
10.6 Liability of Administrative Agent and Arranger.................. 56
10.7 Indemnification................................................. 57
10.8 Successor Administrative Agent.................................. 57
10.9 No Obligations of Borrower...................................... 58
ARTICLE 11 MISCELLANEOUS................................................... 59
11.1 Cumulative Remedies; No Waiver.................................. 59
11.2 Amendments; Consents............................................ 59
11.3 Costs, Expenses and Taxes....................................... 60
11.4 Nature of Lenders' Obligations.................................. 60
11.5 Survival of Representations and Warranties...................... 60
11.6 Notices......................................................... 61
11.7 Execution of Loan Documents; Counterparts....................... 61
11.8 Binding Effect; Assignment...................................... 61
11.9 Setoff Rights................................................... 64
11.10 Sharing of Setoffs.............................................. 64
11.11 Indemnity by Borrower........................................... 64
11.12 Nonliability of the Lenders..................................... 65
11.13 No Third Parties Benefited...................................... 66
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11.14 Further Assurances........................................... 66
11.15 Integration.................................................. 66
11.16 Governing Law................................................ 67
11.17 Severability of Provisions................................... 67
11.18 Independent Covenants........................................ 67
11.19 Headings..................................................... 67
11.20 Time of the Essence.......................................... 67
11.21 Purported Oral Amendments.................................... 67
11.22 Jury Trial Waiver............................................ 67
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List of Schedules and Exhibits:
Schedule 1.1 List of Lenders and Pro Rata Shares
Schedule 3.1 Pricing Grid
Schedule 4.4 Subsidiaries
Schedule 4.6 Contingent Liabilities
Schedule 4.10 Litigation
Schedule 4.13 Pension Plans
Schedule 4.12 Liens
Schedule 4.18 Hazardous Materials
Schedule 6.5 Indebtedness
Exhibit A Form of Commitment Assignment and Acceptance
Exhibit B Form of Compliance Certificate
Exhibit C Form of RLC Note
Exhibit D Form of Guaranty
Exhibit E Form of Request for Loan
Exhibit F Form of Pledge Agreement
Exhibit G Form of Security Agreement
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CREDIT AGREEMENT
Dated as of June 30, 1998
This CREDIT AGREEMENT ("Agreement") is entered into by and between SCHUFF
STEEL COMPANY, a Delaware corporation ("Borrower"), and each lender whose name
is set forth on the signature pages hereof or which may hereafter execute and
deliver a Commitment Assignment and Acceptance with respect to this Agreement
pursuant to Section 11.8 (collectively, the "Lenders" and individually, a
"Lender"), and WELLS FARGO BANK, NATIONAL ASSOCIATION, as Arranger,
Administrative Agent, Issuing Bank and Swing Line Lender. In consideration of
the mutual covenants and agreements herein contained, the parties hereto
covenant and agree as follows:
ARTICLE 1
DEFINITIONS AND ACCOUNTING TERMS
1.1 Defined Term. As used in this Agreement, the following terms shall
have the meanings set forth below:
"Acquisition" means any transaction, or any series of related
transactions, by which Borrower and/or any of its Subsidiaries directly or
indirectly (a) acquires any going business or all or substantially all of the
assets of any firm, partnership, joint venture, corporation or division thereof
whether through purchase of assets, merger or otherwise, (b) acquires (in one
transaction or as the most recent transaction in a series of transactions)
control of at least a majority in ordinary voting power of the securities of a
corporation which have ordinary voting power for the election of directors or
(c) acquires control of more than 50% of the ownership interests in any
partnership, joint venture, limited liability company or other business entity
which does not have outstanding voting securities.
"Administrative Agent" means Wells Fargo Bank, National Association, when
acting in its capacity as the Administrative Agent under any of the Loan
Documents, and any successor Administrative Agent or assign, such successor or
assign to be reasonably acceptable to Borrower.
"Administrative Agent's Office" means the Administrative Agent's address
as set forth on the signature pages of this Agreement, or such other address as
the Administrative Agent hereafter may designate by written notice to Borrower
and the Lenders.
"Advance" means any Advance made or to be made by any Lender to Borrower
as provided in Article 2, and includes each Base Rate Advance and each
Eurodollar Rate Advance.
"Affiliate" means, as to any Person, any other Person which directly or
indirectly Controls, or is under common Control with, or is Controlled by, such
Person.
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"Agreement" means this Loan Agreement either as originally executed or as
it may from time to time be supplemented, modified, amended, restated or
extended.
"Arranger" means Wells Fargo Bank, National Association and any successor
or assign.
"Banking Day" means any Monday, Tuesday, Wednesday, Thursday or Friday,
other than a day on which banks are authorized or required to be closed in
Arizona, California or New York.
"Base Rate" means, as of any date of determination, the higher of (a) the
Prime Rate or (b) the Federal Funds Rate plus one half of one percent per annum.
"Base Rate Advance" means an Advance made hereunder and designated as a
Base Rate Advance in accordance with Article 2.
"Base Rate Loan" means a Loan made hereunder and designated as a Base Rate
Loan in accordance with Article 2.
"Base Rate Spread" means an additional component of interest, which may
vary over the term of any Base Rate Loan, to be added to the Base Rate in
determining the interest rate payable with respect to Base Rate Loans. As of
each date of determination, the Base Rate Spread equals the interest rate per
annum set forth on the Pricing Grid.
"Borrower" means Schuff Steel Company, a Delaware corporation, and its
successors and permitted assigns.
"Capital Lease" means, as to any Person, a lease of any Property by that
Person as lessee that is, or should be in accordance with Financial Accounting
Standards Board Statement No. 13, recorded as a "capital lease" on the balance
sheet of that Person prepared in accordance with GAAP.
"Cash" means, when used in connection with any Person, all monetary and
non-monetary items owned by that Person that are treated as cash in accordance
with GAAP, consistently applied.
"Cash Equivalents" means, when used in connection with any Person, that
Person's Investments in:
(a) Government Securities due within one year after the date of
the making of the Investment;
(b) readily marketable direct obligations of any State of the
United States of America or any political subdivision of any such State
given on the date of such investment a credit rating of at least Aa by
Moody's Investors
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Service, Inc. or AA by Standard & Poor's Rating Group (a division of
McGraw- Hill, Inc.), in each case due within one year after the date of
the making of the Investment;
(c) certificates of deposit issued by, bank deposits in,
eurodollar deposits through, bankers' acceptances of, and reverse
repurchase agreements covering Government Securities executed by, any
Lender or any bank, savings and loan or savings bank doing business in and
incorporated under the Laws of the United States of America or any State
thereof and having on the date of such Investment combined capital,
surplus and undivided profits of at least $250,000,000, in each case due
within one year after the date of the making of the Investment;
(d) certificates of deposit issued by, bank deposits in,
eurodollar deposits through, bankers' acceptances of, and reverse
repurchase agreements covering Government Securities executed by, any
branch or office located in the United States of America of a bank
incorporated under the Laws of any jurisdiction outside the United States
of America having on the date of such Investment combined capital surplus
and undivided profits of at least $500,000,000, in each case due within
one year after the date of the making of the Investment; and
(e) readily marketable commercial paper of corporations doing
business in and incorporated under the Laws of the United States of
America or any State thereof given on the date of such Investment the
highest credit rating by Moody's Investors Service, Inc. and Standard &
Poor's Rating Group (a division of McGraw-Hill, Inc.), in each case due
within 270 days after the date of the making of the Investment.
"Certificate of a Responsible Official" means a certificate signed by a
Responsible Official of the Person providing the certificate.
"Closing Date" means the time and Banking Day on which the conditions set
forth in Section 8.1 are satisfied.
"Code" means the Internal Revenue Code of 1986, as amended or replaced and
as in effect from time to time.
"Collateral" means all of the property of Borrower and of each Subsidiary,
present and future.
"Commercial Letter of Credit" means a Letter of Credit that is not a
Standby Letter of Credit.
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"Commercial Letter of Credit Fee" means one percent (1.0%) of the stated
amount of the Letter of Credit.
"Commitment" means, subject to Section 2.4, $25,000,000. The respective
Pro Rata Shares of the Lenders with respect to the Commitment as of the Closing
Date are set forth in Schedule 1.1.
"Commitment Assignment and Acceptance" means a Commitment Assignment and
Acceptance executed by a Lender and an Eligible Assignee substantially in the
form of Exhibit A and registered with the Administrative Agent pursuant to
Section 11.8.
"Compliance Certificate" means a certificate in the form of Exhibit B,
properly completed and signed by a Senior Officer of Borrower.
"Contingent Obligation" means, as to any Person, any (a) direct or
indirect guarantee of Indebtedness of, or other obligation performable by, any
other Person, including any endorsement (other than for collection or deposit in
the ordinary course of business), co-making or sale with recourse of the
obligations of any other Person, or (b) assurance given to an obligee with
respect to the performance of an obligation by, or the financial condition of,
any other Person, whether direct, indirect or contingent, including any purchase
or repurchase agreement covering such obligation or any collateral security
therefor, any agreement to provide funds (by means of loans, capital
contributions or otherwise) to such other Person, any agreement to support the
solvency or level of any balance sheet item to such other Person, or any
"keep-well," "take-or-pay," "through put" or other arrangement of whatever
nature having the effect of assuring or holding harmless any obligee against
loss with respect to any obligation of such other Person, or (c) any obligation
of a partnership or joint venture of which such Person is a partner or joint
venturer. The amount of any Contingent Obligation shall be deemed to be an
amount equal to the stated or determinable amount of the related primary
obligation (unless the Contingent Obligation is limited by its terms to a lesser
amount, in which case to the extent of such amount) or, if not stated or
determinable, the maximum reasonably anticipated liability in respect thereof as
determined by the Person in good faith.
"Contractual Obligation" means, as to any Person, any material provision
of any outstanding Securities issued by that Person or of any material
agreement, instrument or undertaking to which that Person is a party or by which
it or any of its Property is bound.
"Control" (and the correlative terms, "Controlled by" and "under common
Control with") means possession, directly or indirectly, of power to direct or
cause the direction of management or policies (whether through ownership of
securities or partnership or other ownership interests, by contract or
otherwise); provided that, in any event, any Person that owns, directly or
indirectly, 5% or more of the securities having ordinary voting power for the
election of directors or other governing body of a corporation having 100 or
more record owners of such securities (other than securities having such power
only by reason of the happening of a contingency), or 5% or more of the
partnership or other ownership interests of any other Person having 100 or more
owners of such partnership or other ownership interests
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(other than as a limited partner of such other Person), will be deemed to
control such corporation or other Person.
"Debtor Relief Laws" means the Bankruptcy Code of the United States of
America, as amended from time to time, and all other applicable liquidation,
conservatorship, bankruptcy, moratorium, rearrangement receivership, insolvency,
reorganization, or similar debtor relief Laws from time to time in effect
affecting the rights of creditors generally.
"Default" means any Event of Default or any event that, with the giving of
any applicable notice or passage of time specified in Section 9.1, or both,
would be an Event of Default.
"Default Rate" means the interest rate described in Section 3.7.
"Designated Deposit Account" means a demand deposit account to be
maintained by Borrower with the Administrative Agent, as from time to time
designated by Borrower by written notification to the Administrative Agent.
"Designated Employee" means any natural Person designated by Borrower as
an employee of Borrower authorized to make requests for Loans under this
Agreement on behalf of Borrower pursuant to a written notice thereof signed by a
Responsible Official of Borrower delivered to Administrative Agent.
"Designated Eurodollar Market" means, with respect to any Eurodollar Rate
Loan, the London interbank market.
"Disposition" means the sale, transfer or other disposition in any single
transaction or series of related transactions of any asset or group of related
assets, of Borrower or any of its Subsidiaries (including a sale, transfer or
other disposition by Borrower to one or more of its Subsidiaries or by a
Subsidiary of Borrower to another Subsidiary of Borrower) that has or have at
the date of the Disposition either a book value or fair market value (which
shall be deemed to be equal to the sales price for such asset or assets upon a
sale to a Person that is not an Affiliate of Borrower) equal to or greater than
$50,000,000, other than (a) the sale or other disposition of inventory in the
ordinary course of business, (b) the sale or other disposition of equipment that
is replaced by equipment performing substantially the same function not later
than (30) days after such sale or disposition and (c) the sale or other
disposition of Cash Equivalents in the ordinary course of business.
"Distribution" means, with respect to any shares of capital stock or any
warrant or right to acquire shares of capital stock or any other equity security
issued by a Person, (a) the retirement, redemption, purchase, or other
acquisition for value (other than for common stock of such Person) by such
Person of any such security, (b) the declaration or (without duplication)
payment by such Person of any dividend in Cash or in Property (other than in
common stock of such Person) on or with respect to any such security, (c) any
Investment by such Person in the holder of any such security where such
Investment is made in lieu of, or to
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avoid characterization as, a Distribution described in clauses (a) or (b) above
and (d) any other payment by such Person constituting a distribution under
applicable Laws with respect to such security.
"dollars" or "$" means United States dollars.
"EBITDA" means, as of any date of determination, as to Borrower and its
Subsidiaries, the sum of their income from operations, less interest expense,
taxes, depreciation, amortization and all extraordinary items.
"Eligible Assignee" means (a) with respect to any Lender, any Affiliate of
that Lender, and (b) any other Person (including any Lender) approved in writing
by Borrower and the Arranger, which approval shall not be unreasonably withheld
or delayed.
"ERISA" means the Employee Retirement Income Security Act of 1974, and any
regulations issued pursuant thereto, as amended or replaced and as in effect
from time to time.
"ERISA Affiliate" means, with respect to any Person, any other Person (or
any trade or business, whether or not incorporated) that is under common control
with that Person within the meaning of Section 414 of the Code.
"Eurodollar Banking Day" means any Banking Day on which dealings in dollar
deposits are conducted by and among banks in the Designated Eurodollar Market.
"Eurodollar Base Rate" means, with respect to any Eurodollar Rate Loan,
the interest rate per annum (determined solely by the Administrative Agent and
rounded upward to the next 1/16 of 1%) at which deposits in dollars are offered
to prime banks by major banks in the Designated Eurodollar Market at or about
11:00 a.m. local time in the Designated Eurodollar Market, two (2) Eurodollar
Banking Days before the first day of the applicable Eurodollar Period in an
aggregate amount approximately equal to the amount of such Eurodollar Rate Loan
and for a period of time comparable to the number of days in the applicable
Eurodollar Period. The determination of the Eurodollar Rate by the
Administrative Agent shall be conclusive in the absence of manifest error.
"Eurodollar Lending Office" means, as to each Lender, its office or branch
so designated by written notice to Borrower and the Administrative Agent as its
Eurodollar Lending Office. If no Eurodollar Lending Office is designated by a
Lender, its Eurodollar Lending Office shall be its office at its address for
purposes of notices hereunder.
"Eurodollar Obligations" means eurocurrency liabilities, as defined in
Regulation D.
"Eurodollar Period" means, as to each Eurodollar Rate Loan, the period
commencing on the date specified by Borrower pursuant to Section 2.1(c) and
ending 1, 2, 3 or 6 months thereafter, as specified by Borrower in the
applicable Request for Loan; provided that:
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(a) The first day of any Eurodollar Period shall be a Eurodollar
Banking Day;
(b) Any Eurodollar Period that would otherwise end on a day that
is not a Eurodollar Banking Day shall be extended to the next succeeding
Eurodollar Banking Day unless such Eurodollar Banking Day falls in another
calendar month, in which case such Eurodollar Period shall end on the next
preceding Eurodollar Banking Day; and
(c) No Eurodollar Period shall extend beyond the Maturity Date.
"Eurodollar Rate" means, with respect to any Eurodollar Rate Loan, the
interest rate (rounded upward to the next 1/16 of 1%) determined to be equal to
the Eurodollar Base Rate divided by [1 minus the Eurodollar Reserve Percentage].
"Eurodollar Rate Advance" means an Advance made hereunder and designated
as a Eurodollar Rate Advance in accordance with Article 2.
"Eurodollar Rate Loan" means a Loan made hereunder and designated as a
Eurodollar Rate Loan in accordance with Article 2.
"Eurodollar Rate Spread" means an additional component of interest (which
may vary over the term of any Eurodollar Rate Loan) to be added to the
Eurodollar Rate in determining the interest rate payable with respect to
Eurodollar Rate Loans. As of each date of determination the Eurodollar Rate
Spread equals the interest rate per annum set forth on the Pricing Grid.
"Eurodollar Reserve Percentage" means, with respect to any Eurodollar Rate
Loan, the percentage applicable as of the date of determination of the
Eurodollar Base Rate representing the aggregate reserve requirements of the
Administrative Agent (disregarding any offsetting amounts that may be available
to the Administrative Agent to decrease such requirements to the extent that
such offsetting amounts arose out of transactions other than those contemplated
by this Agreement) under Regulation D and any other applicable Laws with respect
to Eurodollar Obligations in an aggregate amount equal to the amount of such
Eurodollar Rate Loan and for a time period comparable to the number of months in
the applicable Eurodollar Period. The determination by the Administrative Agent
of any applicable Eurodollar Reserve Percentage shall be presumed correct in the
absence of manifest error.
"Event of Default" has the meaning provided in Section 9.1.
"Facility Fee Rate" means, as of each date of determination, the rate per
annum set forth on the Pricing Grid.
"Federal Funds Rate" means, as of any date of determination, the interest
rate per annum equal to the weighted average of the rates on overnight Federal
funds transactions with
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members of the Federal Reserve System arranged by Federal funds brokers, as
published for such day (or, if such day is not a Banking Day, for the next
preceding Banking Day) by the Federal Reserve Bank of New York in its
statistical release H-15 or, if such rate is not so published for any day which
is a Banking Day, the average of the quotations for such day on such
transactions, as received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by it.
"Financial Covenants" means those covenants provided for in Section 6.11.
"Fiscal Quarter" means the fiscal quarter of Borrower consisting of a
three month fiscal period ending on each March 31, June 30, September 30 and
December 31.
"Fiscal Year" means the fiscal year of Borrower consisting of a twelve
month fiscal period ending on each December 31.
"Fixed Charge Coverage Ratio" means, for the prior twelve months ending on
the last day of a Fiscal Quarter, the ratio of (i) EBITDA less all capital
expenditures and taxes paid, to (ii) the sum of interest expenses, lease
payments and scheduled principal payments of Borrower and its Subsidiaries.
"GAAP" means, as of any date of determination, accounting principles set
forth as "generally accepted" in then currently effective Statements of the
Auditing Standards Board of the American Institute of Certified Public
Accountants, or, if no such Statements are then in effect, that are then
approved by such other entity as may be approved by a significant segment of the
accounting profession in the United States of America. The term "consistently
applied," as used in connection therewith, means that the accounting principles
applied are consistent in all material respects to those applied at prior dates
or for prior periods.
"Government Securities" means readily marketable direct full faith and
credit obligations of the United States of America or obligations
unconditionally guaranteed by the full faith and credit of the United States of
America.
"Governmental Agency" means (a) any foreign, federal, state, county or
municipal government or political subdivision thereof, (b) any governmental or
quasi-governmental agency, authority, board, bureau, commission, department
instrumentality or public body, (c) any court or administrative tribunal or (d)
with respect to any Person, any arbitration tribunal or other non-governmental
authority to whose jurisdiction that Person has consented.
"Guaranty" means a Continuing Guaranty from a Subsidiary of Borrower,
substantially in the form attached hereto as Exhibit D.
"Hazardous Materials" means substances defined as hazardous substances
pursuant to the Comprehensive Environmental Response, Compensation and Liability
Act of 1980, 42 U.S.C. Section 9601 et seq., or as hazardous, toxic or pollutant
pursuant to the Hazardous Materials Transportation Act 49 U.S.C. Section 1801,
et seq., the Resource Conservation and Recovery Act 42
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U.S.C. Section6901, et seq., or any other applicable Law governing environmental
health and hygiene, in each case as such Laws are amended from time to time.
"Hazardous Materials Laws" means all federal, state or local laws,
ordinances, rules or regulations governing the disposal of Hazardous Materials
applicable to any of the Property.
"Indebtedness" means, as to any Person, (a) all indebtedness of such
Person for borrowed money, (b) that portion of the obligations of such Person
under Capital Leases which is properly recorded as a liability on a balance
sheet of that Person prepared in accordance with GAAP, (c) any obligation of
such Person that is evidenced by a promissory note or other instrument
representing an extension of credit to such Person, whether or not for borrowed
money, (d) any obligation of such Person for the deferred purchase price of
Property or services (other than trade or other accounts payable in the ordinary
course of business in accordance with customary terms), (e) any obligation of
such Person that is secured by a Lien on assets of such Person, whether or not
that Person has assumed such obligation or whether or not such obligation is
non-recourse to the credit of such Person, but only to the extent of the fair
market value of the assets so subject to the Lien, (f) obligations of such
Person arising under acceptance facilities or under facilities for the discount
of accounts receivable of such Person and (g) obligations of such Person for
unreimbursed draws under letters of credit issued for the account of such
Person.
"Intangible Assets" means assets that are considered intangible assets
under GAAP, including (a) any write-up in book value of any asset subsequent to
its acquisition and (b) customer lists, goodwill, computer software, copyrights,
trade names, trademarks, patents, unamortized deferred charges, unamortized debt
discount capitalized research and development costs and other intangible assets.
"Interest Coverage Ratio" means, for the prior twelve months ending on the
last day of a Fiscal Quarter, the ratio of EBITDA to the interest expense of
Borrower and its Subsidiaries.
"Interest Differential" means, with respect to any prepayment of a
Eurodollar Rate Loan on a day other than the last day of the applicable
Eurodollar Period and with respect to the failure to borrow a Eurodollar Rate
Loan on the date or in the amount specified in a Request for Loan, (a) the per
annum interest rate payable with respect to that Eurodollar Rate Loan as of the
date of the prepayment or failure to borrow, minus (b) the Eurodollar Rate, as
applicable, on or as near as practicable to, the date of the prepayment or
failure to borrow for a Eurodollar Rate Loan commencing on such date and ending
on the last day of the applicable Eurodollar Period. The determination of the
Interest Differential by the Administrative Agent shall be conclusive in the
absence of manifest error.
"Investment" means, when used in connection with any Person, any
investment by or of that Person, whether by means of purchase or other
acquisition of capital stock or other Securities of any other Person or by means
of loan, advance, capital contribution, guaranty or other debt or equity
participation or interest or otherwise, in any other Person, including any
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partnership and joint venture interests of such Person in any other Person. The
amount of any Investment shall be the amount actually invested, without
adjustment for subsequent increases or decreases in the value of such
Investment.
"Issuing Bank" means Wells Fargo Bank, National Association and any
successor or assign.
"Laws" means, collectively, all, foreign, federal, state and local
statutes, treaties, rules, regulations, ordinances, codes and administrative or
controlling precedents of any Governmental Agency.
"Lender" means any of the lenders signatory to this Agreement, their
successors and, upon the effective date after registration with the
Administrative Agent pursuant to Section 11.8 of a Commitment Assignment and
Acceptance executed by an Eligible Assignee, such Eligible Assignee.
"Letter of Credit Balance" means, at any time, the sum of (a) the
aggregate undrawn amount of all Letters of Credit outstanding at such time for
which additional Collateral consisting of Cash Equivalents has not been pledged
plus (b) the aggregate amount which has been drawn under Letters of Credit but
for which the Issuing Bank or the Lenders, as the case may be, have not been
reimbursed by the Borrower.
"Letter of Credit Commitment" means $5,000,000.
"Letter of Credit Disbursement" means any payment or disbursement made by
the Issuing Bank under or pursuant to a Letter of Credit.
"Letters of Credit" means letters of credit issued by the Issuing Bank for
the account of the Borrower pursuant to Article 2A.
"Leverage Ratio" means the ratio of Net Funded Debt of Borrower and its
Subsidiaries to their EBITDA for the prior twelve month period.
"Lien" means any mortgage, deed of trust, pledge, hypothecation,
assignment for security, security interest, encumbrance, lien or charge of any
kind, whether voluntarily incurred or arising by operation of Law or otherwise,
affecting any Property, including any agreement to grant any of the foregoing,
any conditional sale or other title retention agreement, any lease in the nature
of a security interest, and/or the filing of or agreement to give any financing
statement under the Uniform Commercial Code or comparable Law of any
jurisdiction with respect to any Property.
"Loan" means any group of Advances made at any one time by the Lenders
under the Commitment pursuant to Article 2 or a Swing Line Loan.
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"Loan Documents" means, collectively, this Agreement, the Notes, any
Request for Loan, the Security Documents and any other certificates, documents
or agreements of any type or nature heretofore or hereafter executed and
delivered by Borrower to the Administrative Agent or to any Lender in
furtherance of this Agreement, in each case either as originally executed or as
the same may from time to time be supplemented, modified, amended, restated,
extended or supplanted.
"Majority Lenders" means, as of any date of determination, Lenders whose
aggregate Pro Rata Share is at least 51.0% of the Commitment then in effect or,
if the Commitment is then suspended or terminated, Lenders holding Notes
evidencing at least 51.0% of the aggregate Indebtedness evidenced by the Notes.
"Material Adverse Effect" means any set of circumstances or events which
(a) has or could reasonably be expected to have any material adverse effect
whatsoever upon the validity or enforceability of any Loan Document, (b) is or
could reasonably be expected to be material and adverse to the condition
(financial or otherwise) or business operations of Borrower and its
Subsidiaries, taken as a whole, or to the prospects of Borrower and its
Subsidiaries, taken as a whole, (c) materially impairs or could reasonably be
expected to materially impair the ability of Borrower and its Subsidiaries,
taken as a whole, to perform its Obligations or (d) materially impairs or could
reasonably be expected to materially impair the ability of any of the Lenders to
enforce any of its legal remedies pursuant to the Loan Documents.
"Maturity Date" means June 30, 2001.
"Multiemployer Plan" means any employee benefit plan of a type described
in Section 4001(a)(3) of ERISA.
"Negative Pledge" means any covenant binding on Borrower that prohibits
the creation of Liens on any Property of Borrower.
"Net Funded Debt" means the sum of the Indebtedness and Contingent
Obligations of Borrower and its Subsidiaries, less amounts in excess of
$5,000,000 fully collateralized by Cash or Cash Equivalents resulting from the
issuance of the Senior Notes.
"Note" means any of the promissory notes made by Borrower in favor of a
Lender evidencing Advances under that Lender's Pro Rata Share of the Commitment,
substantially in the form of Exhibit C, or the Swing Line Note, either as
originally executed or as the same may from time to time be supplemented,
modified, amended, renewed, extended or supplanted.
"Obligations" means all present and future obligations of every kind or
nature of Borrower at any time and from time to time owed to the Administrative
Agent, the Issuing Bank, the Swing Line Lender or the Lenders or any one or more
of them under any one or more of the Loan Documents, whether due or to become
due, matured or unmatured, liquidated or unliquidated, or contingent or
noncontingent, including obligations of
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performance as well as obligations of payment, and including interest that
accrues after the commencement of any proceeding under any Debtor Relief Law by
or against Borrower or any Subsidiary of Borrower.
"Opinion of Counsel" means the favorable written legal opinion of counsel
to Borrower together with copies of any officer's certificate or legal opinion
of another counsel or law firm relied upon by such counsel in its opinion.
"Outstanding Balance" means the sum at any time of (i) the outstanding
principal amount of the Loans, plus (ii) the Letter of Credit Balance, plus
(iii) the Swing Line Balance.
"Party" means any Person other than the Administrative Agent and the
Lenders, which now or hereafter is a party to any of the Loan Documents.
"PBGC" means the Pension Benefit Guaranty Corporation or any successor
thereto established under ERISA.
"Pension Plan" means any "employee pension benefit plan" that is subject
to Title IV of ERISA and which is maintained for employees of Borrower or any of
its ERISA Affiliates.
"Permitted Encumbrances" means:
(a) material inchoate Liens incident to construction or
maintenance of real property, or Liens incident to construction or
maintenance of real property, now or hereafter filed of record for which
adequate reserves have been set aside and which are being contested in
good faith by appropriate proceedings and have not proceeded to judgment;
(b) material Liens for taxes and assessments on real property
which are not yet past due, or Liens for taxes and assessments on real
property for which adequate reserves have been set aside and are being
contested in good faith by appropriate proceedings and have not proceeded
to judgment;
(c) easements, exceptions, reservations, or other agreements
granted or entered into after the date hereof affecting real property
which in the aggregate do not materially burden or impair the fair market
value or use of such real property for the purposes for which it is or may
reasonably be expected to be held;
(d) rights reserved to or vested in any Governmental Agency by
Law to control or regulate, or obligations or duties under Law to any
Governmental Agency with respect to, the use of any real property;
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(e) rights reserved to or vested in any Governmental Agency by
Law to control or regulate, or obligations or duties under Law to any
Governmental Agency with respect to, any right power, franchise, grant,
license, or permit;
(f) present or future zoning laws and ordinances or other laws
and ordinances restricting the occupancy, use, or enjoyment of real
property;
(g) statutory Liens, other than those described in clauses (a) or
(b) above, arising in the ordinary course of business with respect to
obligations which are not delinquent or are being contested in good faith
by appropriate proceedings, provided that, if delinquent, adequate
reserves have been set aside with respect thereto and, by reason of
nonpayment no Property is subject to a material risk of loss or
forfeiture;
(h) Liens consisting of pledges or deposits to secure obligations
under workers' compensation laws or similar legislation, including Liens
of judgments thereunder which are not currently dischargeable;
(i) Liens consisting of pledges or deposits of Property to secure
performance in connection with operating leases made in the ordinary
course of business to which Borrower or a Subsidiary is a party as lessee;
(j) Liens consisting of deposits of Property to secure statutory
obligations of Borrower or a Subsidiary of Borrower in the ordinary course
of its business; and
(k) Liens consisting of deposits of Property to secure (or in
lieu of) surety, appeal or customs bonds in proceedings to which Borrower
or a Subsidiary of Borrower is a party in the ordinary course of its
business.
"Permitted Right of Others" means a Right of Others consisting of (a) an
interest (other than a legal or equitable co-ownership interest, an option or
right to acquire a legal or equitable co-ownership interest and any interest of
a ground lessor under a ground lease) that does not materially impair the value
or use of Property for the purposes for which it is or may reasonably be
expected to be held, (b) an option or right to acquire a Lien that would be a
Permitted Encumbrance, and (c) the reversionary interest of a landlord under a
lease of Property.
"Person" means any entity, whether an individual, trustee, corporation,
general partnership, limited partnership, limited liability company, joint stock
company, trust, estate, unincorporated organization, business association,
tribe, firm, joint venture, Governmental Agency, or otherwise.
"Pledge Agreement" means a Pledge and Irrevocable Proxy Security Agreement
from Borrower substantially in the form attached hereto as Exhibit F.
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"Pricing Grid" means the Pricing Grid attached hereto as Schedule 3.1.
"Prime Rate" means the rate of interest most recently announced by Wells
Fargo Bank, National Association at its principal office in San Francisco as its
Prime Rate, with the understanding that the Prime Rate is one of several base
rates used by Wells Fargo Bank and serves as the basis upon which effective
rates of interest are calculated for those loans making reference thereto, and
is evidenced by the recording thereof after its announcement in such internal
publication or publications as Wells Fargo Bank may designate. Each change in
the Prime Rate will be effective on the day the change is announced within Wells
Fargo Bank.
"Property" means any interest in any kind of property or asset whether
real, personal or mixed, or tangible or intangible.
"Pro Rata Share" means, with respect to each Lender, the percentage of the
Commitment set forth opposite the name of that Lender on Schedule 1.1.
"Quarterly Payment Date" means June 30, 1998 and each subsequent September
30, December 31, March 31 and June 30 through the Maturity Date.
"Regulations D, G, U and X" mean, respectively, Regulations D, G, U and X,
as at any time amended, of the Board of Governors of the Federal Reserve System,
or any other regulation in substance substituted therefor.
"Request for Loan" means a written request for a Loan substantially in the
form of Exhibit E, signed by a Responsible Official of Borrower and properly
completed to provide all information required to be included therein.
"Requirement of Law" means, as to any Person, the articles or certificate
of incorporation and by-laws or other organizational or governing documents of
such Person, and any Law, or judgment, award, decree, writ or determination of a
Governmental Agency, in each case applicable to or binding upon such Person or
any of its Property or to which such Person or any of its Property is subject.
"Responsible Official" means (a) when used with reference to a Person
other than an individual, any corporate officer of such Person, general partner
of such Person, corporate officer of a corporate general partner of such Person,
or corporate officer of a corporate general partner of a partnership that is a
general partner of such Person, or any other responsible official thereof duly
acting on behalf thereof, and (b) when used with reference to a Person who is an
individual, such Person or his authorized agent acting through a power of
attorney. Any document or certificate hereunder that is signed or executed by a
Responsible Official of a Person shall be conclusively presumed to have been
authorized by all necessary corporate, partnership and/or other action on the
part of that Person.
"Right of Others" means, as to any Property in which a Person has an
interest, (a) any legal or equitable right, title or other interest (other than
a Lien) held by any other Person in or
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with respect to that Property, and (b) any option or right (including any option
or right to acquire a Lien) held by any other Person to acquire any such right,
title or other interest in or with respect to that Property.
"RLC Note" means a Note evidencing Advances made to Borrower pursuant to
Article 2.
"Securities" means any capital stock, share, voting trust certificate,
bond, debenture, note or other evidence of indebtedness, limited partnership
interest, or any warrant, option or other right to purchase or acquire any of
the foregoing.
"Security Agreement" means a Security Agreement from a Subsidiary of
Borrower, substantially in the form attached hereto as Exhibit G.
"Security Documents" has the meaning provided in Section 3.16.
"Senior Notes" means those 10.5% Senior Notes due 2008 issued on June 4,
1998 in the amount of $100,000,000.00.
"Senior Officer" means the (a) chief executive officer, (b) chief
operating officer, (c) chief financial officer, (d) vice president or (e)
treasurer, in each, case whatever the title nomenclature may be, of the Person
designated.
"Special Eurodollar Circumstance" means (a) the adoption of any Law by any
Governmental Agency, central branch or comparable authority with respect to
activities in the Designated Eurodollar Market, or (b) any change in the
interpretation or administration of any existing Law by any Governmental Agency,
central bank or comparable authority charged with the interpretation or
administration thereof, or (c) compliance by any Lender or its Eurodollar
Lending Office with any request or directive (whether or not having the force of
Law) of any such Governmental Agency, central bank or comparable authority, or
(d) the existence or occurrence of circumstances affecting the Designated
Eurodollar Market generally that are beyond the reasonable control of the
Lenders.
"Standby Letter of Credit" means a Letter of Credit intended to secure an
obligation of Borrower to the beneficiary of such Letter of Credit.
"Subsidiary" means, as of any date of determination and with respect to
any Person, any corporation, partnership, joint venture, limited liability
company or other business entity, whether now existing or hereafter organized or
acquired: (a) in the case of a corporation, of which a majority of the
securities having ordinary voting power for the election of directors or other
governing body (other than securities having such power only by reason of the
happening of a contingency) are at the time beneficially owned by such Person
and/or one or more Subsidiaries of such Person, or (b) in the case of a
partnership, joint venture, limited liability company or other business entity,
of which such Person or a Subsidiary of such Person is a general partner or
joint venturer or of which a majority of the partnership or other ownership
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interests are at the time beneficially owned by such Person and/or one or more
of its Subsidiaries.
"Swing Line" means the revolving line of credit established by the Swing
Line Lender in favor of Borrower pursuant to Article 2B.
"Swing Line Balance" means, as of any date of determination, the aggregate
principal Indebtedness of Borrower on all Swing Line Loans then outstanding.
"Swing Line Commitment" means $5,000,000.00.
"Swing Line Lender" means Wells Fargo Bank, National Association.
"Swing Line Loans" means loans made by the Swing Line Lender to Borrower
pursuant to Article 2B.
"Swing Line Note" means that promissory note executed by Borrower in favor
of the Swing Line Lender in connection with the Swing Line.
"Termination Event" means (a) a "reportable event" as defined in Section
4043 of ERISA (other than a "reportable event" that is not subject to the
provision for 30 day notice to the PBGC), (b) the withdrawal of Borrower or any
of its ERISA Affiliates from a Pension Plan during any plan year in which it was
a "substantial employer" as defined in Section 4001(a)(2) of ERISA, (c) the
filing of a notice of intent to terminate a Pension Plan or the treatment of an
amendment to a Pension Plan as a termination thereof pursuant to Section 4041 of
ERISA, (d) the institution of proceedings to terminate a Pension Plan by the
PBGC or (e) any other event or condition which might reasonably be expected to
constitute grounds under ERISA for the termination of, or the apportionment of a
trustee to administer, any Pension Plan.
"Type", when used with respect to any Loan or Advance, means the
designation of whether such Loan or Advance is a Base Rate Loan or Advance or a
Eurodollar Rate Loan or Advance.
1.2 Use of Defined Terms. Any defined term used in the plural shall refer
to all members of the relevant class, and any defined term used in the singular
shall refer to any one or more of the members of the relevant class.
1.3 Accounting Terms. All accounting terms not specifically defined in
this Agreement shall be construed in conformity with, and all financial data
required to be submitted by this Agreement shall be prepared in conformity with,
GAAP applied on a consistent basis, except as otherwise specifically prescribed
herein. In the event that GAAP changes during the term of this Agreement such
that the Financial Covenants would then be calculated in a different manner or
with different components, (a) Borrower and the Lenders agree to promptly amend
this Agreement in such respects as are necessary to conform those covenants as
criteria for evaluating Borrower's financial condition to substantially the same
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criteria as were effective prior to such change in GAAP and (b) unless and until
such an amendment to the Loan Documents is effected, Borrower shall report its
performance with respect to the affected covenants in accordance with GAAP as in
effect prior to such changes.
1.4 Rounding. Any financial ratios required to be maintained by Borrower
pursuant to this Agreement shall be calculated by dividing the appropriate
component by the other component, carrying the result to one place more than the
number of places by which such ratio is expressed in this Agreement and rounding
the result up or down to the nearest number (with a round-up if there is no
nearest number) to the number of places by which such ratio is expressed in this
Agreement.
1.5 Exhibits and Schedules. All Exhibits and Schedules to this Agreement
either as originally existing or as the same may from time to time be
supplemented, modified or amended, are incorporated herein by this reference. A
matter disclosed on any Schedule shall be deemed disclosed on all Schedules.
1.6 References to "Borrower and its Subsidiaries." Any reference herein to
"Borrower and its Subsidiaries" or the like shall refer solely to Borrower
during such times, if any, as Borrower shall have no Subsidiaries.
1.7 Miscellaneous Terms. The term "or" is disjunctive; the term "and" is
conjunctive. The term "shall" is mandatory; the term "may" is permissive.
Masculine terms also apply to females; feminine terms also apply to males. The
term "including" is by way of example and not limitation. Each reference to an
hour or time of the day set forth in any Loan Document, unless otherwise stated,
shall be deemed to be a reference to the hour or time of the day in Phoenix,
Arizona.
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ARTICLE 2
LOANS
2.1 Loans - General.
(a) Subject to the terms and conditions set forth in this
Agreement, at any time and from time to time from the Closing Date through the
Maturity Date, each Lender shall, pro rata according to its Pro Rata Share of
the then applicable Commitment, make Advances to Borrower under the Commitment
in such amounts as Borrower may request that do not exceed in the aggregate at
any one time outstanding the amount of that Lender's pro Rata Share of the then
applicable Commitment; provided that, after giving effect to the Loan of which
such Advance is a part, the Outstanding Balance shall not exceed the Commitment.
Subject to the limitations set forth herein, Borrower may borrow, repay and
reborrow under the Commitment without premium or penalty.
(b) Subject to the next sentence, each Loan shall be made
pursuant to a Request for Loan which shall specify the requested (i) date of
such Loan, (ii) Type of Loan, (iii) amount of such Loan and (iv) if a Eurodollar
Rate Loan is requested, the Eurodollar Period for such Loan. Unless the
Administrative Agent has notified, in its sole and absolute discretion, Borrower
to the contrary, a Loan may be requested by telephone, telecopier or telex by a
Responsible Official of Borrower or by any Designated Employee, in which case
Borrower shall promptly confirm such request by transmitting a telecopy of, or
at Administrative Agent's request by mailing, a Request for Loan conforming to
the preceding sentence to Administrative Agent.
(c) Promptly following receipt of a Request for Loan, the
Administrative Agent shall notify each Lender by telephone, telecopier or telex
of the date and Type of the Loan, any applicable Eurodollar Period, and that
Lender's Pro Rata Share of the Loan. Not later than 11:00 a.m. (California
time), on the date specified for any Loan, each Lender shall make its Pro Rata
Share of the Loan available to the Administrative Agent at the Administrative
Agent's Office in immediately available funds. Upon fulfillment of the
applicable conditions set forth in Article 8, all Advances shall be credited in
immediately available funds to the Designated Deposit Account.
(d) Unless the Majority Lenders otherwise consent, each Base Rate
Loan shall be an integral multiple of $100,000 but not less than $500,000 and
each Eurodollar Rate Loan shall be an integral multiple of $500,000 but not less
than $1,000,000.
(e) The Advances made by each Lender under its Pro Rata Share of
the Commitment shall be evidenced by that Lender's RLC Note.
(f) A Request for Loan shall be irrevocable upon the
Administrative Agent's first notification thereof.
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(g) The purpose of the Commitment is to provide for the working
capital needs and general corporate purposes of the Borrower.
(h) If no Request for Loan (or telephonic or other request for a
Loan referred to in the second sentence of Section 2.1(b), if applicable) has
been made within the requisite notice periods set forth in Sections 2.2 and 2.3
in connection with a Loan which, if made, would not increase the outstanding
principal Indebtedness outstanding under the Commitment, then Borrower shall be
deemed to have requested a Base Rate Loan in an amount equal to the amount
necessary to cause such outstanding principal Indebtedness to remain the same
and, subject to Section 8.2 the Lenders shall make the Advances necessary to
make such Loan notwithstanding Sections 2.1(b) and 2.2.
(i) If a Loan is to be made on the same date that another Loan is
due and payable, Borrower or the Lenders, as the case may be, shall make
available to the Administrative Agent the net amount of funds giving effect to
both such loans, and the effect for purposes of this Agreement shall be the same
as if separate transfers of funds had been made with respect to each such Loan.
2.2 Base Rate Loans. Each request by Borrower for a Base Rate Loan shall
be made pursuant to a Request for Loan (or telephonic or other request for a
Loan referred to in the second sentence of Section 2.1(b), if applicable)
received by the Administrative Agent, at the Administrative Agent's Office, not
later than 11:00 a.m. (California time) on the day prior to the date of the
requested Base Rate Loan. All Loans shall constitute Base Rate Loans unless
properly designated as Eurodollar Rate Loans.
2.3 Eurodollar Rate Loans.
(a) Each request by Borrower for a Eurodollar Rate Loan shall be
made pursuant to a Request for Loan (or telephonic or other request for a Loan
referred to in the second sentence of Section 2.1(b), if applicable) received by
the Administrative Agent, at the Administrative Agent's Office, not later than
11:00 a.m. (California time) at least three (3) Eurodollar Banking Days before
the first day of the applicable Eurodollar Period.
(b) Prior to the first day of the applicable Eurodollar Period,
the Administrative Agent shall determine the applicable Eurodollar Rate (which
determination shall be conclusive in the absence of manifest error) and promptly
shall give notice of the same to Borrower and the Lenders by telephone,
telecopier or telex.
(c) Unless all of the Lenders otherwise consent, no Eurodollar
Rate Loan may be requested during the continuation of a Default or Event of
Default.
(d) Unless the Majority Lenders otherwise consent no more than
six (6) Eurodollar Rate Loans shall be outstanding at any one time.
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(e) Nothing contained herein shall require any Lender to fund any
Eurodollar Rate Advance in the Designated Eurodollar Market.
2.4 Voluntary Reduction of the Commitment. Borrower shall have the right,
at any time and from time to time, without penalty or charge, upon at least five
(5) Banking Days' prior written notice to the Administrative Agent, voluntarily
to reduce, permanently and irrevocably, in aggregate principal amounts in an
integral multiple of $250,000.00 which are not less than $1,000,000, all or a
portion of the then undisbursed portion of the Commitment; provided that any
such reduction shall be accompanied by payment of all accrued and unpaid
facility fees with respect to the portion of the Commitment being reduced.
2.5 Administrative Agent's Right to Assume Funds Available for Advances.
Unless the Administrative Agent shall have been notified by any Lender no later
than the Banking Day prior to the funding by the Administrative Agent of any
Loan that such Lender does not intend to make available to the Administrative
Agent such Lender's Pro Rata Share of the total amount of such Loan (and
provided that the Administrative Agent has given such Lender notice of such Loan
in accordance with Section 2.1(c)), the Administrative Agent may assume that
such Lender has made such amount available to the Administrative Agent on the
date of the Loan and the Administrative Agent may, in reliance upon such
assumption, make available to Borrower a corresponding amount. If the
Administrative Agent has made funds available to Borrower based on such
assumption and such corresponding amount is not in fact made available to the
Administrative Agent by such Lender, the Administrative Agent shall be entitled
to recover such corresponding amount on demand from such Lender. If such Lender
does not pay such corresponding amount forthwith upon the Administrative Agent's
demand therefor, the Administrative Agent promptly shall notify Borrower and
Borrower shall pay such corresponding amount to the Administrative Agent. The
Administrative Agent also shall be entitled to recover from such Lender,
interest on such corresponding amount in respect of each day from the date such
corresponding amount was made available by the Administrative Agent to Borrower
to the date such corresponding amount is recovered by the Administrative Agent
at a rate per annum equal to the Federal Funds Rate.
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ARTICLE 2A
LETTERS OF CREDIT
2A.1 Letters of Credit.
(a) Provided that the Borrower has satisfied the conditions
precedent contained in Section 2A.1(c) hereof, the Issuing Bank agrees, from
time to time, to issue and/or renew Standby Letters of Credit on behalf of the
Borrower so long as upon such issuance and/or renewal, after giving to such
Standby Letter of Credit, (i) the Outstanding Balance will not exceed the
Commitment and (ii) the Letter of Credit Balance will not exceed the Letter of
Credit Commitment. The expiration date of a Standby Letter of Credit may not
exceed the earlier of the Maturity Date or one year after its issuance. On each
Quarterly Payment Date and on the earlier of the expiration date of a Standby
Letter of Credit and the date upon which the Obligations are paid in full and
the Commitment terminated, Borrower shall pay in arrears to the Administrative
Agent, for the account of each Lender according to its Pro Rata Share of the
Commitment, a Standby Letter of Credit fee equal to the Eurodollar Rate Spread
times the undrawn amount of each outstanding Standby Letter of Credit.
(b) Provided that the Borrower has satisfied the conditions
precedent contained in Section 2A.1(c) hereof, the Issuing Bank agrees, from
time to time, to issue and/or renew Commercial Letters of Credit on behalf of
the Borrower so long as upon such issuance and/or renewal, after giving to such
Commercial Letter of Credit, (i) the Outstanding Balance, will not exceed the
Commitment and (ii) the Letter of Credit Balance will not exceed the Letter of
Credit Commitment. The expiration date of a Commercial Letter of Credit may not
exceed the Maturity Date. Borrower shall pay to the Administrative Agent, for
the account of each Lender according to its Pro Rata Share of the Commitment,
the Commercial Letter of Credit Fee upon the issuance and/or renewal of such
Commercial Letter of Credit.
(c) The obligation of the Issuing Bank to issue and/or renew any
Letters of Credit on behalf of the Borrower shall be subject to the following
conditions precedent on the date of issuance or renewal of each such Letter of
Credit:
(i) The Borrower shall execute and deliver to the Issuing Bank
an application for letter of credit, specifying the amount of the
requested Letter of Credit, the requested term thereof, the Type of Letter
of Credit and the beneficiary thereof; and
(ii) The Borrower shall pay to the Issuing Bank, for its own
account, such reasonable fronting, issuance, drawing, amendment, transfer,
obligation and other fees as shall be agreed upon by Borrower and the
Issuing Bank from time to time.
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(iii) No Event of Default which has not been waived by the
Administrative Agent and the Majority Lenders shall exist and no event or
condition shall exist that after notice or lapse of time, or both would
constitute an Event of Default.
(d) That Letter of Credit No. NZS300285 in the stated amount of
$1,071,000.00 dated June 3, 1998, previously issued by Issuing Bank for the
account of Borrower, shall be deemed to be a Standby Letter of Credit and,
effective as of the Closing Date, shall be deemed to be outstanding under this
Agreement.
2A.2 Notice. The Issuing Bank shall give the Administrative Agent, which
shall in turn give to each Lender, prompt written or telecopy advice of any
notice received from the Borrower pursuant to this Section 2A.
2A.3 Letter of Credit Participations.
(a) By the issuance of a Letter of Credit and without any further
action on the part of the Issuing Bank or the Lenders in respect thereof, the
Issuing Bank hereby grants to each Lender, and each Lender hereby acquires from
the Issuing Bank, a participation in such Letter of Credit equal to such
Lender's Pro Rata Share, based upon the Pro Rata Shares in effect at the time of
any drawing thereunder (or, if the Commitment shall have been terminated, the
Pro Rata Shares in effect immediately prior to such termination), of the face
amount of such Letter of Credit, effective upon the issuance of such Letter of
Credit; provided, however, that no Lender shall be required to acquire
participations in Letters of Credit that would result in its Pro Rata Share of
the Letter of Credit Balance exceeding its Pro Rata Share of the Commitment. In
consideration and in furtherance of the foregoing, each Lender hereby absolutely
and unconditionally agrees to pay to the Administrative Agent, for the account
of the Issuing Bank, in accordance with Section 2A.4 below, such Lender's pro
rata percentage of each unreimbursed Letter of Credit Disbursement made by the
Issuing Bank.
(b) Each Lender acknowledges and agrees that its acquisition of
participations pursuant to paragraph (a) above in respect of Letters of Credit
is absolute and unconditional and shall not be affected by any circumstance
whatsoever, including without limitation the occurrence and continuance of any
Event of Default hereunder, and that each such payment shall be made without any
offset, abatement, withholding or reduction whatsoever; provided that nothing
herein shall constitute a waiver of any rights a Lender may have by reason of
the gross negligence or wilful misconduct of the Issuing Bank.
2A.4 Disbursement and Reimbursement.
(a) Promptly after it shall have ascertained that any draft and
any accompanying documents presented under a Letter of Credit appear to be in
strict conformity with the terms and conditions of such Letter of Credit, the
Issuing Bank shall give telephone and telecopy notice to the Borrower and the
Administrative Agent of the receipt and amount of such draft and the date on
which payment thereon will be made. If the Administrative Agent
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shall not have received from the Borrower the payment required pursuant to
paragraph (b) below by 11:00 a.m. (California time), one Banking Day after the
date on which payment of a draft presented under any Letter of Credit has been
made, the Administrative Agent shall promptly so notify the Issuing Bank and
each Lender, specifying in the notice to each Lender such Lender's pro rata
percentage of such Letter of Credit Disbursement. Each Lender shall pay to the
Administrative Agent, not later than 11:00 a.m. (California time), on such date,
such Lender's percentage of such Letter of Credit Disbursement, which the
Administrative Agent shall promptly pay to the Issuing Bank. The Administrative
Agent will promptly remit to each Lender such Lender's percentage of any amounts
subsequently received by the Administrative Agent from the Borrower in respect
of such Letter of Credit Disbursement; provided that (i) amounts so received for
the account of any Lender prior to payment by such Lender of amounts required to
be paid by it hereunder in respect of any Letter of Credit Disbursement and (ii)
amounts representing interest on any Letter of Credit Disbursement for the
period prior to the payment by such Lender of such amounts shall in each case be
remitted to the Issuing Bank.
(b) If the Issuing Bank shall pay any draft presented under a
Letter of Credit, the Borrower shall pay to the Issuing Bank or to the
Administrative Agent for the account of the Issuing Bank or, if the
Administrative Agent shall have received the payments provided in paragraph (a)
above with respect to such drawing, for the accounts of the Lenders, an amount
equal to the amount of such draft before 11:00 a.m. (California time), on the
Banking Day immediately following the date of payment of such draft, together
with interest on such amount at a rate per annum equal to the interest rate in
effect for Base Rate Loans from (and including) the date of payment of such
draft to (but excluding) the date of such payment by the Borrower. The
obligation of the Borrower to pay the amounts referred to above in this
paragraph (b) shall be absolute, unconditional and irrevocable and shall be
satisfied strictly in accordance with their terms irrespective of:
(i) any lack of validity or enforceability of any Letter of
Credit (except as set forth in subparagraphs (iv) or (v) below);
(ii) the existence of any claim, setoff, defense or other
right which the Borrower or any other Person may at any time have against
the beneficiary under any Letter of Credit, the Administrative Agent, any
Issuing Bank or any Lender (other than the defense of payment in
accordance with the terms of this Agreement or a defense based on the
gross negligence or wilful misconduct of the Issuing Bank) or any other
Person in connection with this Agreement or any other transaction;
(iii) any draft or other document presented under a Letter of
Credit proving to be forged, fraudulent or invalid in any respect or any
statement therein being untrue or inaccurate in any respect; provided that
payment by the Issuing Bank under such Letter of Credit against
presentation of such draft or document shall not have constituted gross
negligence or wilful misconduct;
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(iv) payment by the Issuing Bank under a Letter of Credit
against presentation of a draft or other document which does not comply in
any immaterial respect with the terms of such Letter of Credit; provided
that such payment shall not have constituted gross negligence or wilful
misconduct; or
(v) any other circumstance or event whatsoever, whether or not
similar to any of the foregoing; provided that such other circumstance or
event shall not have been the result of gross negligence or wilful
misconduct of the Issuing Bank.
It is understood that in making any payment under a Letter of
Credit (1) the Issuing Bank's exclusive reliance on the documents presented to
it under such Letter of Credit as to any and all matters set forth therein,
including without limitation, reliance on the amount of any draft presented
under such Letter of Credit, whether or not the amount due to the beneficiary
equals the amount of such draft and whether or not any document presented
pursuant to such Letter of Credit proves to be forged, fraudulent or invalid in
any respect, if such document on its face appears to be in order, and whether or
not any other statement or any other document presented pursuant to such Letter
of Credit proves to be forged or invalid or any statement therein proves to be
inaccurate or untrue in any respect whatsoever, and (2) any noncompliance in any
immaterial respect of the documents presented under a Letter of Credit with the
terms thereof shall, in either case, not be deemed wilful misconduct or gross
negligence of the Issuing Bank.
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ARTICLE 2B
SWING LINE
2B.1 Swing Line. The Swing Line Lender, for its own account, shall from
time to time from the Closing Date through the day prior to the Maturity Date
make Swing Line Loans to Borrower in such amounts as Borrower may request,
provided that (a) after giving effect to such Swing Line Loan, the Swing Line
Balance does not exceed the Swing Line Commitment, (b) after giving effect to
such Swing Line Loan, the Outstanding Balance does not exceed the Commitment,
and (c) no Swing Line Loan may be made during the continuation of a Default or
an Event of Default unless such Default or Event of Default has been waived by
the Administrative Agent and the Majority Lenders. Borrower may borrow, repay
and reborrow under the Swing Line Commitment without premium or penalty.
2B.2 Borrowing. Unless notified to the contrary by the Swing Line Lender,
borrowings under the Swing Line may be made in amounts which are integral
multiples of $1.00 upon telephonic request by a Responsible Official made to the
Administrative Agent not later than 11:00 a.m. (California time), on the Banking
Day of the requested borrowing (which telephonic request shall be promptly
confirmed in writing by telecopier). Promptly after receipt of such a request
for borrowing, the Administrative Agent shall provide telephonic verification to
the Swing Line Lender that availability for Swing Line Loans exists under
Section 2B.1 (and such verification shall be promptly confirmed in writing by
telecopier). Unless notified to the contrary by the Swing Line Lender, each
repayment of a Swing Line Loan shall be in an amount which is an integral
multiple of $1.00.
2B.3 Repayments.
(a) Swing Line Loans shall bear interest at a fluctuating rate
per annum equal to the Base Rate plus Base Rate Spread. Interest shall be
payable on such dates, not more frequent than monthly, as may be specified by
the Swing Line Lender and in any event on the Maturity Date. The Swing Line
Lender shall be responsible for invoicing Borrower for such interest. The
interest payable on Swing Line Loans is solely for the account of the Swing Line
Lender.
(b) The principal of a Swing Line Loan shall be payable no later
than ten (10) Banking Days after the date the Swing Line Loan is made by the
Swing Line Lender and in any event on the Maturity Date.
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ARTICLE 3
PAYMENTS AND FEES; SECURITY
DOCUMENTS; GUARANTY
3.1 Principal and Interest.
(a) Interest shall be payable on the outstanding daily
unpaid principal amount of each Advance from the date thereof until payment in
full is made and shall accrue and be payable at the rates set forth herein
before and after an Event of Default, before and after maturity, before and
after judgment, and before and after the commencement of any proceeding under
any Debtor Relief Law, with interest on overdue interest to bear interest at the
Default Rate to the fullest extent permitted by applicable Laws.
(b) Interest accrued on each Base Rate Loan through the
last day of each calendar month shall be due and payable on the fifth Banking
Day following that day. Except as otherwise provided in Section 3.7, the unpaid
principal amount of each Base Rate Loan shall bear interest at a fluctuating
rate per annum equal to the Base Rate plus the Base Rate Spread. Each change in
the interest rate applicable to Base Rate Loans shall take effect simultaneously
with the corresponding changes in the Base Rate. Each change in the Base Rate
shall be effective as of 12:01 a.m. on the Banking Day on which such change in
the Base Rate is announced, unless otherwise specified in such announcement in
which case the change shall be effective as so specified.
(c) Interest accrued on each Eurodollar Rate Loan which is
for a term of three months or less shall be due and payable on the last day of
the related Eurodollar Period. Interest accrued on each other Eurodollar Rate
Loan shall be due and payable on each Quarterly Payment Date and on the last day
of the related Eurodollar Period. Except as otherwise provided in Section 3.7
the unpaid principal amount of any Eurodollar Rate Loan shall bear interest at a
rate per annum equal to the Eurodollar Rate for that Eurodollar Rate Loan plus
the applicable Eurodollar Rate Spread.
(d) If not sooner paid, the principal Indebtedness
evidenced by the Notes shall be payable as follows:
(i) the principal amount of each Eurodollar Rate Loan
shall be payable immediately on the last day of the Eurodollar Period
for such Loan;
(ii) the principal Indebtedness evidenced by the
Notes shall be payable immediately in immediately available funds, to
the extent that the outstanding principal amount of the Loans at any
time exceeds the Commitment and in an amount sufficient to reduce the
amount outstanding to an amount equal to or less than the Commitment;
and
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(iii) the principal Indebtedness evidenced by the
Notes shall in any event be payable immediately in immediately
available funds on the Maturity Date.
(e) The Notes may, at any time and from time to time,
voluntarily be paid or prepaid in whole or in part without premium or penalty,
except that with respect to any voluntary prepayment under this subsection, (i)
any partial prepayment of Loans shall be in an integral multiple of $500,000,
but not less than $1,000,000, (ii) the Administrative Agent shall have received
written notice of any prepayment at least one (1) Banking Day, in the case of a
Base Rate Loan, and three (3) Banking Days, in the case of a Eurodollar Rate
Loan, before the date of prepayment which notice shall identify the date and
amount of the prepayment and the Loan(s) being prepaid, (iii) each prepayment of
principal shall be accompanied by payment of interest accrued through the date
of payment on the amount of principal paid and (iv) any payment or prepayment or
conversion of all or any part of any Eurodollar Rate Loan on a day other than
the last day of the applicable Eurodollar Period shall be subject to Section
3.6(d).
3.2 Facility Fee. On each Quarterly Payment Date and on the earlier of
the Maturity Date and the date upon which the Obligations are paid in full and
the Commitment terminated, Borrower shall pay in arrears to the Administrative
Agent, for the account of each Lender according to its Pro Rata Share of the
Commitment, a facility fee equal to the then applicable Facility Fee Rate times
the average unused portion of the Commitment for the period since the last
Quarterly Payment Date. For purposes of calculation of the facility fee, the
average unused portion of the Commitment shall not be reduced by the amount of
any Swing Line Loans made.
3.3 [Intentionally left blank.]
3.4 Agency Fee. Borrower shall pay to the Administrative Agent an
agency fee in such amounts and at such times as agreed upon by letter agreement
dated of even date herewith between Borrower and the Administrative Agent. The
agency fee paid to the Administrative Agent is solely for its own account and is
nonrefundable.
3.5 Increased Commitment Costs. If any Lender reasonably determines in
good faith that compliance with any Law or regulation enacted or promulgated
after the Closing Date, or with any guideline or request from any central bank
or other Governmental Agency issued or made after the Closing Date (whether or
not having the force of Law) has or would have the effect of materially reducing
the rate of return on the capital of such Lender or any corporation controlling
such Lender as a consequence of, or with reference to, such Lender's portion of
the Commitment or its making or maintaining of Advances or Swing Line Loans,
below the rate which the Lender or such other corporation could have achieved
but for such compliance (taking into account the policies of such Lender or
corporation with regard to capital), then the Borrower shall from time to time,
upon demand by such Lender (with a copy of such demand to the Administrative
Agent), immediately pay to such Lender additional amounts reasonably sufficient
to compensate such Lender or other corporation for such reduction. A certificate
as to such amounts, submitted to the Borrower and the Administrative
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Agent by such Lender, shall be conclusive and binding for all purposes, absent
manifest error. Each Lender agrees promptly to notify the Borrower and the
Administrative Agent of any circumstances that would cause the Borrower to pay
additional amounts pursuant to this Section, provided that the failure to give
such notice shall not affect the Borrower's obligation to pay such additional
amounts hereunder.
3.6 Eurodollar Fees and Costs.
(a) If, after the date hereof, the existence or occurrence
of any Special Eurodollar Circumstance:
(1) shall materially subject any Lender or its
Eurodollar Lending Office to any tax, duty or other charge or cost with
respect to any Eurodollar Rate Advance, its Notes or its obligation to
make Eurodollar Rate Advances, or shall materially change the basis of
taxation of payments to any Lender of the principal of or interest on
any Eurodollar Rate Advance or any other amounts due under this
Agreement in respect of any Eurodollar Rate Advance, its Notes or its
obligation to make Eurodollar Rate Advances (except for changes in any
tax on the overall net income, gross income or gross receipts of such
Lender or its Eurodollar Lending Office);
(2) shall impose, modify or deem applicable any
reserve (including, without limitation, any reserve imposed by the
Board of Governors of the Federal Reserve System), special deposit or
similar requirements against assets of, deposits with or for the
account of, or credit extended by, any Lender or its Eurodollar Lending
Office; or
(3) shall impose on any Lender or its Eurodollar
Lending Office or the Designated Eurodollar Market any other condition
affecting any Eurodollar Rate Advance, its Notes, its obligation to
make Eurodollar Rate Advances or this Agreement or shall otherwise
affect any of the same;
and the result of any of the foregoing, as determined by such Lender, materially
increases the cost to such Lender or its Eurodollar Lending Office of making or
maintaining any Eurodollar Rate Advance or in respect of any Eurodollar Rate
Advance, its Notes or its obligation to make Eurodollar Rate Advances or
materially reduces the amount of any sum received or receivable by such Lender
or its Eurodollar Lending Office with respect to any Eurodollar Rate Advance,
its Notes or its obligation to make Eurodollar Rate Advances (assuming such
Lender's Eurodollar Lending Office had funded 100% of its Eurodollar Rate
Advance in the Designated Eurodollar Market), then, upon demand by such Lender
(with a copy to the Administrative Agent), Borrower shall pay to such Lender
such additional amount or amounts as will reasonably compensate such Lender for
such increased cost or reduction (determined as though such Lender's Eurodollar
Lending Office had funded 100% of its Eurodollar Rate Advance in the Designated
Eurodollar Market). A statement of any Lender claiming compensation under this
subsection shall be conclusive in the absence of manifest error. Each Lender
agrees to
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endeavor promptly to notify Borrower of any event of which it has actual
knowledge, occurring after the Closing Date, which will entitle such Lender to
compensation pursuant to this Section, and agrees to designate a different
Eurodollar Lending Office if such designation will avoid the need for or reduce
the amount of such compensation and will not, in the judgment of such Lender,
otherwise be disadvantageous to such Lender. If any Lender claims compensation
under this Section, Borrower may at any time, upon at least two (2) Eurodollar
Banking Days' prior notice to the Administrative Agent and Lenders and upon
payment in full of the amounts provided for in this Section through the date of
such payment plus any prepayment fee required by Section 3.6(d), pay in full all
Eurodollar Rate Advances or request that all Eurodollar Rate Advances be
converted to Base Rate Advances.
(b) If after the date hereof, the existence or occurrence
of any Special Eurodollar Circumstance shall, in the opinion of any Lender, make
it unlawful, impossible or impracticable for such Lender or its Eurodollar
Lending Office to make, maintain or fund its portion of any Eurodollar Rate
Loan, or materially restrict the authority of such Lender to purchase or sell,
or to take deposits of, dollars in the Designated Eurodollar Market or to
determine or charge interest rates based upon the Eurodollar Rate, and such
Lender shall so notify the Administrative Agent and the other Lenders, then the
Lender's obligation to make Eurodollar Rate Advances shall be suspended for the
duration of such illegality, impossibility or impracticability and the
Administrative Agent forthwith shall give notice thereof to Borrower. Upon
receipt of such notice, the outstanding principal amount of all Eurodollar Rate
Advances, together with accrued interest thereon, automatically shall be
converted to Base Rate Advances with Eurodollar Periods corresponding to the
Eurodollar Loans of which such Eurodollar Rate Advances were a part on either
(1) the last day of the Eurodollar Period(s) applicable to such Eurodollar Rate
Advances if the affected Lender may lawfully continue to maintain and fund such
Eurodollar Rate Advances to such day(s) or (2) immediately if the affected
Lender may not lawfully continue to fund and maintain such Eurodollar Rate
Advances to such day(s), provided that in such event the conversion shall not be
subject to payment of a prepayment fee under Section 3.6(d).
(c) If, with respect to any proposed Eurodollar Rate Loan:
(1) the Administrative Agent reasonably determines
that, by reason of circumstances affecting the Designated Eurodollar
Market generally that are beyond the reasonable control of the Lenders,
deposits in dollars (in the applicable amounts) are not being offered
to each of the Lenders in the Designated Eurodollar Market for the
applicable Eurodollar Period; or
(2) the Majority Lenders advise the Administrative
Agent that the Eurodollar Rate as determined by the Administrative
Agent (i) does not represent the effective pricing to such Lenders for
deposits in dollars in the Designated Eurodollar Market in the relevant
amount for the applicable Eurodollar Period, or (ii) will not
adequately and fairly reflect the cost to such Lenders of making the
applicable Eurodollar Rate Advances;
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then the Administrative Agent forthwith shall give notice thereof to Borrower
and the Lenders, whereupon until the Administrative Agent notifies Borrower that
the circumstances giving rise to such suspension no longer exist the obligation
of the Lenders to make any future Eurodollar Rate Advances shall be suspended.
If at the time of such notice there is then pending a Request for Loan that
specifies a Eurodollar Rate Loan, such Request for Loan shall be deemed to
specify a Base Rate Loan.
(d) Upon payment or prepayment of any Eurodollar Rate
Advance, on a day other than the last day in the applicable Eurodollar Period
(whether voluntarily, involuntarily, by reason of acceleration, or otherwise),
or upon the failure of Borrower to borrow on the date or in the amount specified
for a Eurodollar Rate Loan in any Request for Loan, Borrower shall pay to the
appropriate Lender a prepayment fee or failure to borrow fee, as the case may
be, calculated as follows (and determined as though 100% of the Eurodollar Rate
Advance had been funded in the Designated Eurodollar Market):
(1) principal amount of the Eurodollar Rate Advance,
times [number of days between the date of prepayment and the last day
in the applicable Eurodollar Period], divided by 360, times the
applicable Interest Differential; plus
(2) all actual out-of-pocket expenses (other than
those taken into account in the calculation of the Interest
Differential) incurred by the Lender (excluding allocations of any
expense internal to that Lender) and reasonably attributable to such
payment or prepayment;
provided that no prepayment fee or failure to borrow fee shall be payable (and
no credit or rebate shall be required) if the product of the foregoing formula
is not a positive number. Each Lender's determination of the amount of any
prepayment fee or failure to borrow fee payable under this Section 3.6(d) shall
be conclusive in the absence of manifest error.
3.7 Default Rate. From and after the occurrence of any Event of Default
the Loans shall bear interest at a fluctuating interest rate per annum at all
times equal to the sum of the Base Rate plus 3% per annum, to the fullest extent
permitted by applicable Laws. Accrued and unpaid interest on past due amounts
(including, without limitation, interest on past due interest) shall be
compounded annually, on the last day of each calendar quarter, to the fullest
extent permitted by applicable Laws.
3.8 Computation of Interest and Fees. Computation of interest and on
all fees shall be calculated on the basis of a year of 360 days and the actual
number of days elapsed. Borrower acknowledges that this calculation method will
result in a higher yield to the Lenders than a method based on a year of 365 or
366 days. Any Loan that is repaid on the same day on which it is made shall bear
interest for one day. Notwithstanding anything in this Agreement to the
contrary, interest in excess of the maximum amount permitted by applicable Laws
shall not accrue or be payable hereunder or under the Notes, and any amount paid
as
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interest hereunder or under the Notes which would otherwise be in excess of such
maximum permitted amount shall instead be treated as a payment of principal.
3.9 Non-Banking Days. If any payment to be made by Borrower or any
other Party under any Loan Document shall come due on a day other than a Banking
Day, payment shall instead be considered due on the next succeeding Banking Day
and the extension of time shall be reflected in computing interest.
3.10 Manner and Treatment of Payments.
(a) Each payment hereunder or on the Notes or under any
other Loan Document shall be made to the Administrative Agent for the account of
each of the Lenders, or the Administrative Agent as the case may be, in
immediately available funds not later than 12:00 noon (California time) on the
day of payment (which must be a Banking Day). The amount of all payments
received by the Administrative Agent for the account of each Lender shall be
promptly paid by the Administrative Agent to the applicable Lender in
immediately available funds. Should the Administrative Agent fail to remit to
any Lender any funds actually received by the Administrative Agent and due to
that Lender on the same Banking Day upon which such funds are deemed received by
the Administrative Agent as set forth above, that Lender shall be entitled to
recover interest on such funds solely from the Administrative Agent at a rate
per annum equal to the Federal Funds Rate. All payments shall be made in lawful
money of the United States of America.
(b) Each payment or prepayment on account of any Loan
shall be applied pro rata according to the outstanding Advances made by each
Lender comprising such Loan.
(c) Each Lender shall use its best efforts to keep a
record of Advances made by it and payments received by it with respect to its
Note and such record shall be presumptive evidence of the amounts owing, absent
manifest error. Notwithstanding the foregoing sentence, no Lender shall be
liable to any Party for any failure to keep such a record.
(d) Each payment of any amount payable by Borrower or any
other Party under this Agreement or any other Loan Document shall be made free
and clear of, and without reduction by reason of any taxes, assessments or other
charges imposed by any Governmental Agency, central bank or comparable authority
(other than taxes on income or gross receipts generally applicable to banks). To
the extent that Borrower is obligated by applicable Laws to make any deduction
or withholding on account of taxes, assessments or other charges imposed by any
Governmental Agency from any amount payable to any Lender under any Loan
Document Borrower shall (i) make such deduction or withholding and pay the same
to the relevant Governmental Agency and (ii) pay such additional amount to that
Lender as is necessary to result in that Lender's receiving a net after-tax (or
after-assessment or after- charge) amount equal to the amount to which that
Lender would have been entitled under the Loan Document absent such deduction or
withholding. If and when receipt of such payment results in an excess payment or
credit to that Lender on account of such taxes, assessments or other charges,
that Lender shall refund such excess to Borrower.
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(e) Each Lender which is organized outside the United
States of America shall promptly deliver to Borrower and the Administrative
Agent a completed Internal Revenue Service Form 4224 and any other certificate
or statement or exemption required by applicable Laws, properly completed and
duly executed by such Lender, to establish that such payment is (1) not subject
to withholding under the Code because such payment is effectively connected with
the conduct by such Lender of a trade or business in the United States of
America or (2) totally exempt from United States tax under a provision of an
applicable tax treaty. Unless Borrower and the Administrative Agent have
received such Form or other documents satisfactory to them indicating that
payments hereunder or under the Notes are not subject to United States
withholding tax or are subject to such tax at a rate reduced by an applicable
tax treaty, the Administrative Agent shall withhold the taxes from such payment
at the applicable statutory rate in the case of payments to or for any Lender
organized under the Laws of a jurisdiction outside the United States of America
and Section 3.10(d) shall not apply thereto.
3.11 Funding Sources. Nothing in this Agreement shall be deemed to
obligate any Lender to obtain the funds for any Loan in any particular place or
manner or to constitute a representation by any Lender that it has obtained or
will obtain the funds for any Loan in any particular place or manner.
3.12 Failure to Charge Not Subsequent Waiver. Any decision by the
Administrative Agent or any Lender not to require payment of any interest
(including interest arising under Section 3.7), fee, cost or other amount
payable under any Loan Document, or to calculate any amount payable by a
particular method, on any occasion shall in no way limit or be deemed a waiver
of the Administrative Agent's or such Lender's right to require full payment of
any interest (including interest arising under Section 3.7), fee, cost or other
amount payable under any Loan Document or to calculate an amount payable by
another method, on any other or subsequent occasion.
3.13 Administrative Agent's Right to Assume Payments Will be Made by
Borrower. Unless the Administrative Agent shall have been notified by Borrower
prior to the date on which any payment to be made by Borrower hereunder is due
that Borrower does not intend to remit such payment, the Administrative Agent
may, in its discretion, assume that Borrower has remitted such payment when so
due and the Administrative Agent may, in its discretion and in reliance upon
such assumption, make available to each Lender on such payment date an amount
equal to such Lender's share of such assumed payment. If Borrower has not in
fact remitted such payment to the Administrative Agent, each Lender shall
forthwith on demand repay to the Administrative Agent the amount of such assumed
payment made available to such Lender, together with interest thereon in respect
of each day from and including the date such amount was made available by the
Administrative Agent to such Lender to the date such amount is repaid to the
Administrative Agent at a rate per annum equal to the actual cost to the
Administrative Agent of funding such amount as notified by the Administrative
Agent to such Lender.
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3.14 Fee Determination Detail. The Administrative Agent, and any
Lender, shall provide reasonable detail to Borrower regarding the manner in
which the amount of any payment to the Lenders, or that Lender, under Article 3
has been determined.
3.15 Survivability. All of Borrower's obligations under Sections 3.5
and 3.6 shall survive the date on which all Loans are fully paid.
3.16 Security Documents. The Obligations shall be secured at all times
by valid and effective grants of security interest in the Collateral pursuant to
security documents (collectively, the "Security Documents") executed by Borrower
and each Subsidiary, present and future, subject to no prior Liens except for
Permitted Encumbrances, which Security Documents shall include among other
things the following:
(i) Security Agreements from Borrower and each Subsidiary,
present and future.
(ii) Pledge Agreements from Borrower as to each
Subsidiary, present and future.
3.17 Guaranty. The Obligations shall be guaranteed by each Subsidiary,
present and future, pursuant to a Guaranty.
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ARTICLE 4
REPRESENTATIONS AND WARRANTIES
Borrower represents and warrants to the Lenders that:
4.1 Existence and Qualification: Power; Compliance With Laws. Borrower
is a corporation duly formed, validly existing and in good standing under the
Laws of Delaware. Borrower is duly qualified to transact business, and is in
good standing, in Arizona and each other jurisdiction in which the conduct of
its business or the ownership or leasing of its Properties makes such
qualification or registration necessary, except where the failure so to qualify
or register and to be in good standing would not constitute a Material Adverse
Effect. Borrower has all requisite corporate power and authority to conduct its
business, to own and lease its Properties and to execute and deliver each Loan
Document to which it is a Party and to perform the Obligations. All outstanding
shares of capital stock of Borrower are duly authorized, validly issued, fully
paid, nonassessable and issued in compliance with all applicable state and
federal securities and other Laws. Borrower is in compliance with all Laws and
other legal requirements applicable to its business, has obtained all
authorizations, consents, approvals, orders, licenses and permits from, and has
accomplished all filings, registrations and qualifications with, or obtained
exemptions from any of the foregoing from, any Governmental Agency that are
necessary for the transaction of its business, except where the failure so to
comply, file, register, qualify or obtain exemptions does not constitute a
Material Adverse Effect.
4.2 Authority: Compliance With Other Agreements and Instruments and
Government Regulations. The execution, delivery and performance by each Party of
the Loan Documents to which it is a party have been duly authorized by all
necessary corporate action, and do not:
(a) Require any consent or approval not heretofore
obtained of any partner, director, stockholder, security holder or creditor of
such Party;
(b) Violate or conflict with any provision of such Party's
certificate of incorporation or bylaws;
(c) Result in or require the creation or imposition of any
Lien or Right of Others upon or with respect to any Property now owned or leased
or hereafter acquired by such Party;
(d) Violate any Requirement of Law applicable to such
Party;
(e) Result in a breach of or default under, or would, with
the giving of notice or the lapse of time or both, constitute a breach of or
default under, or cause or permit the acceleration of any obligation owed under,
any indenture or loan or credit agreement or
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any other Contractual Obligation to which such Party is a party or by which such
Party or any of its Property is bound or affected;
and no such Party is in violation to or default under, any Requirement of Law or
Contractual Obligation, or any indenture, loan or credit agreement described in
Section 4.2(e), in any respect that constitutes a Material Adverse Effect.
4.3 No Governmental Approvals Required. Subject to the representations
of the Lenders contained in Section 11.8, no authorization, consent approval,
order, license or permit from, or filing, registration or qualification with,
any Governmental Agency is required to authorize or permit under applicable Laws
the execution, delivery and performance by each Party of the Loan Documents to
which it is a party.
4.4 Subsidiaries.
(a) Schedule 4.4 hereto correctly sets forth the names,
the form of legal entity, number of shares of capital stock issued and
outstanding, jurisdictions of organization and chief executive offices of all
Subsidiaries of Borrower. Except as described in Schedule 4.4, Borrower does not
own any capital stock or equity interest in any Person.
(b) Each Subsidiary of Borrower is in compliance with all
Laws and other requirements applicable to its business and has obtained all
authorizations, consents, approvals, orders, licenses, and permits from, and
each such Subsidiary has accomplished all filings, registrations, and
qualifications with, or obtained exemptions from any of the foregoing from, any
Governmental Agency that are necessary for the transaction of its business,
except where the failure so to comply, file, register, qualify or obtain
exemptions does not constitute a Material Adverse Effect.
4.5 Financial Statements. Borrower has furnished to the Lenders the
audited consolidated financial statements of Borrower and its Subsidiaries as at
December 31, 1997 and for the Fiscal Year then ended. Such financial statements
fairly present the financial condition and the results of operations of Borrower
and its Subsidiaries as at such date and for such period in accordance with
GAAP, consistently applied.
4.6 No Other Liabilities; No Material Adverse Effect. Borrower and its
Subsidiaries do not have any material liability or material contingent liability
not reflected or disclosed in the balance sheet or notes thereto described in
Section 4.5, other than liabilities and contingent liabilities arising in the
ordinary course of business subsequent to March 31, 1998 or as disclosed on
Schedule 4.6 hereto. No event or circumstance has occurred that constitutes a
Material Adverse Effect with respect to Borrower and its Subsidiaries since
March 31, 1998.
4.7 Title to and Location of Property. Borrower and its Subsidiaries
have good and valid title to all the Property reflected in the balance sheet
described in Section 4.5, other than Property subsequently sold or disposed of
in the ordinary course of business, free and
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clear of all Liens and Rights of Others, other than (i) Liens and Rights of
Others permitted by Section 6.8.
4.8 Intangible Assets. Borrower owns, or possesses the right to use to
the extent necessary in its business, all trademarks, trade names, copyrights,
patents, patent rights, computer software, licenses and other Intangible Assets
that are used in the conduct of its business as now operated and which are
material to the condition (financial or otherwise), business or operations of
Borrower, and no such Intangible Asset, to the best knowledge of Borrower,
conflicts with the valid trademark, trade name, copyright, patent, patent right
or Intangible Asset of any other Person to the extent that such conflict
constitutes a Material Adverse Effect.
4.9 Governmental Regulation. Borrower and its Subsidiaries have
obtained all approvals necessary, if any, from Governmental Agencies to permit
the execution, delivery and performance of the Obligations under the Loan
Documents. Neither Borrower nor any of its Subsidiaries is subject to regulation
under the Interstate Commerce Act, the Investment Company Act of 1940 or to any
other Law limiting or regulating its ability to incur Indebtedness for money
borrowed.
4.10 Litigation. Except for (a) any matter fully covered (subject to
applicable deductibles and retentions) by insurance for which the insurance
carrier has assumed full responsibility, (b) any matter, or series of related
matters, involving a claim against Borrower or any of its Subsidiaries of less
than $1,000,000, (c) matters described in public documents filed with
Governmental Agencies and previously delivered to the Lenders, and (d) matters
set forth in Schedule 4.10, there are no actions, suits, proceedings or
investigations pending as to which Borrower or any of its Subsidiaries have been
served or have received notice or, to the best knowledge of Borrower, threatened
against, or affecting Borrower or any of its Subsidiaries or any Property of any
of them before any Governmental Agency. Except for matters set forth in Schedule
4.10, there is no reasonable basis, to the best knowledge of Borrower, for any
action, suit, proceeding or investigation against or affecting Borrower or any
of its Subsidiaries or any Property of any of them before any Governmental
Agency which would constitute a Material Adverse Effect.
4.11 Binding Obligations. Each of the Loan Documents will when executed
and delivered by any Party, constitute the legal, valid and binding obligation
of such Party, enforceable against such Party in accordance with its terms,
except as enforcement may be limited by Debtor Relief Laws or equitable
principles relating to the granting of specific performance and other equitable
remedies as a matter of judicial discretion.
4.12 No Default. No event has occurred and is continuing that is a
Default or Event of Default.
4.13 Pension Plans. Schedule 4.13 correctly lists each Pension Plan
which, as of the Closing Date, Borrower or any of its ERISA Affiliates maintains
or to which, as of the Closing Date, Borrower or any ERISA Affiliate contributes
or is required to contribute. As of
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the Closing Date, all contributions required to be made under any such Pension
Plan have been made to such plan or have been reflected as a liability on the
consolidated balance sheet described in Section 4.5. There is no "accumulated
funding deficiency" within the meaning of Section 302 of ERISA or any liability
to the PBGC with respect to any Pension Plan other than a Multiemployer Plan.
4.14 Regulations G, U and X. No part of the proceeds of any Advance,
Letter of Credit Disbursement or Swing Line Loan hereunder will be used to
purchase or carry, or to extend credit to others for the purpose of purchasing
or carrying, any "margin stock" (as such term is defined in Regulation G) in
violation of Regulations G, U or X. Neither Borrower nor any of its Subsidiaries
is engaged principally, or as one of its important activities, in the business
of extending credit for the purpose of purchasing or carrying any such margin
stock."
4.15 Disclosure. No written statement made by a Responsible Official of
Borrower to the Administrative Agent the Arranger or any Lender in connection
with this Agreement or in connection with any Advance contains any untrue
statement of a material fact or omits a material fact necessary to make the
statement made not misleading in light of all, the circumstances existing at the
date the statement was made. Borrower has not intentionally withheld from the
Lenders any information with respect to any circumstance or event which
constitutes a Material Adverse Effect.
4.16 Tax Liability. Borrower and its Subsidiaries have filed all tax
returns which are required to be filed, and have paid, or made provision for the
payment of, all taxes with respect to the periods, Property or transactions
covered by said returns, or pursuant to any assessment received by Borrower or
any of its Subsidiaries, except (a) taxes for which Borrower has been fully
indemnified and (b) such taxes, if any, as are being contested in good faith by
appropriate proceedings and as to which adequate reserves have been established
and maintained. To the best knowledge of Borrower, there is no tax assessment
contemplated or proposed by any Governmental Agency against Borrower or any of
its Subsidiaries that would constitute a Material Adverse Effect.
4.17 Priority Status. No Indebtedness of Borrower or any of its
Subsidiaries is entitled to priority of payment over the Obligations, whether by
contract or by operation of law. The Property of Borrower and its Subsidiaries
is not subject to any Lien or Negative Pledge not described on Schedule 4.17 or
Schedule 6.8.
4.18 Hazardous Materials. Except as described in Schedule 4,18, (a)
neither Borrower nor any Subsidiary of Borrower at any time has disposed of,
discharged, released or threatened the release of any Hazardous Materials on,
from or under the Property in violation of any Hazardous Materials Law that
would individually or in the aggregate constitute a Material Adverse Effect, (b)
to the best knowledge of Borrower, no condition exists that violates any
Hazardous Material Law affecting any Property except for such violations that
would not individually or in the aggregate have a Material Adverse Effect, (c)
no Property or any portion thereof is or has been utilized by Borrower or any
Subsidiary of Borrower as a site for the manufacture of any Hazardous Materials
and (d) to the extent that any Hazardous
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Materials are used, generated or stored by Borrower or any Subsidiary of
Borrower on any Property, or transported to or from such Property by Borrower or
any Subsidiary of Borrower, such use, generation, storage and transportation are
in compliance in all material respects with all Hazardous Materials Laws.
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ARTICLE 5
AFFIRMATIVE COVENANTS
(OTHER THAN INFORMATION AND
REPORTING REQUIREMENTS)
So long as any Advance or Swing Line Loan remains unpaid or any Letter
of Credit outstanding, or any other Obligation remains unpaid or unperformed, or
any portion of the Commitment remains in force, Borrower shall, and shall cause
each of its Subsidiaries to, unless the Administrative Agent (with the approval
of the Majority Lenders) otherwise consents in writing:
5.1 Payment of Taxes and Other Potential Liens. Pay and discharge
promptly all taxes, assessments and governmental charges or levies imposed upon
any of them, upon their respective Property or any part thereof upon their
respective income or profits or any part thereof or upon any right or interest
of the Administrative Agent or any Lender under any Loan Document, except that
Borrower and its Subsidiaries shall not be required to pay or cause to be paid
(a) any income or gross receipts tax or any other tax on or measured by income
generally applicable to banks or (b) any tax, assessment, charge or levy that is
not yet past due, or is being contested in good faith by appropriate
proceedings, so long as the relevant entity has established and maintains
adequate reserves for the payment of the same and by reason of such nonpayment
and contest no material item or portion of Property of Borrower and its
Subsidiaries, taken as a whole, is in jeopardy of being seized, levied upon or
forfeited.
5.2 Preservation of Existence. Preserve and maintain their respective
existences in the jurisdiction of their formation and all authorizations,
rights, franchises, privileges, consents, approvals, orders, licenses, permits,
or registrations from any Governmental Agency that are necessary for the
transaction of their respective business, and quality and remain qualified to
transact business in each jurisdiction in which such qualification is necessary
in view of their respective business or the ownership or leasing of their
respective Properties. The Borrower may, with the consent of the Administrative
Agent and the approval of the Majority Lenders, dissolve or otherwise
discontinue the operations of a Subsidiary if the Borrower's Board of Directors
concludes that it is in the best interests of the Borrower to do so.
5.3 Maintenance of Properties. Maintain, preserve and protect all of
their respective depreciable Properties in good order and condition, subject to
wear and tear in the ordinary course of business, and not permit any waste of
their respective Properties.
5.4 Maintenance of Insurance. Maintain liability, casualty and other
insurance (subject to customary deductibles and retentions), in scope and amount
not less than, and not less extensive than, the scope and amount of insurance
coverages customary in the trades or businesses in which Borrower and its
Subsidiaries are from time to