CREDIT AGREEMENT
dated as of
April 30, 1997
among
SOLECTRON CORPORATION,
The Banks Party Hereto
and
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION,
Agent and Issuing Bank
BANCAMERICA SECURITIES, INC.
as Arranger
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TABLE OF CONTENTS
Page
ARTICLE I. Definitions 1
SECTION 1.01 Defined Terms 1
SECTION 1.02 Classification of Loans and Borrowings 14
SECTION 1.03 Terms Generally 14
SECTION 1.04 Accounting Terms; GAAP 14
ARTICLE II. The Credits 14
SECTION 2.01 Amounts and Terms of Commitments 14
(a) The Revolving Credit 14
(b) Additional Borrowers 15
SECTION 2.02 Loan Accounts 15
SECTION 2.03 Procedure for Borrowing 15
SECTION 2.04 Conversion and Continuation Elections 16
SECTION 2.05 Utilization of Revolving Commitments in Offshore
Currencies 17
SECTION 2.06 Voluntary Termination or Reduction of Total
Commitment 19
SECTION 2.07 Prepayments 19
SECTION 2.08 Repayment 20
SECTION 2.09 Interest 20
SECTION 2.10 The Letter of Credit Subfacility 21
SECTION 2.11 Issuance, Amendment and Renewal of Letters of Credit 22
SECTION 2.12 Participations, Drawings and Reimbursements 24
SECTION 2.13 Automatic Renewals 25
SECTION 2.14 Repayment of Participations 25
SECTION 2.15 Role of the Issuing Bank 26
SECTION 2.16 Obligations Absolute 26
SECTION 2.17 Cash Collateral Pledge 27
SECTION 2.18 Letter of Credit Fees 28
SECTION 2.19 The Borrowers' Agent 28
SECTION 2.20 Uniform Customs and Practice 29
SECTION 2.21 Other Fees 29
(a)Arrangement Fee; Agency Fee 29
(b)Commitment Fees 29
(c)Fees Nonrefundable 29
SECTION 2.22 Computation of Fees and Interest 29
SECTION 2.23 Payments by the Borrowers 30
SECTION 2.24 Payments by the Banks to the Agent 31
SECTION 2.25 Sharing of Payments, Etc. 31
SECTION 2.26 Taxes 32
SECTION 2.27 Illegality 34
SECTION 2.28 Increased Costs and Reduction of Return 34
SECTION 2.29 Funding Losses 35
SECTION 2.30 Inability to Determine Rates 35
SECTION 2.31 Certificates of Banks 35
SECTION 2.32 Substitution of Banks 36
ARTICLE III Representations and Warranties 36
SECTION 3.01 Existence and Power 36
SECTION 3.02 Binding Effect 36
SECTION 3.03 Corporate Authorization; No Conflict 36
SECTION 3.04 Subsidiaries 36
SECTION 3.05 Financial Condition 36
SECTION 3.06 Litigation 37
SECTION 3.07 Governmental Authorization 37
SECTION 3.08 Title to Properties 37
SECTION 3.09 ERISA Compliance 37
SECTION 3.10 Use of Proceeds; Margin Regulations 37
SECTION 3.11 Taxes 37
SECTION 3.12 Environmental Matters 38
SECTION 3.13 Copyrights, Patents, Trademarks and Licenses, Etc. 38
SECTION 3.14 Full Disclosure 38
SECTION 3.15 Regulated Entities 38
SECTION 3.16 Insurance 38
ARTICLE IV Conditions 38
SECTION 4.01 Closing Date 38
SECTION 4.02 Each Credit Event 39
ARTICLE V Affirmative Covenants 40
SECTION 5.01 Financial Statements and Other Information 40
SECTION 5.02 Notices of Material Events 41
SECTION 5.03 Existence; Conduct of Business 41
SECTION 5.04 Payment of Obligations 41
SECTION 5.05 Maintenance of Properties; Insurance 41
SECTION 5.06 Books and Records; Inspection Rights 41
SECTION 5.07 Compliance with Laws 42
SECTION 5.08 Use of Proceeds and Letters of Credit 42
SECTION 5.09 Accession by Subsidiary 42
ARTICLE VI Negative Covenants 42
SECTION 6.01 Subsidiary Indebtedness 42
SECTION 6.02 Liens 43
SECTION 6.03 Sale and Leaseback Transactions 44
SECTION 6.04 Fundamental Changes 44
SECTION 6.05 Margin Stock; Unfriendly Acquisitions 45
SECTION 6.06 Fiscal Year 45
SECTION 6.07 Restrictive Agreements 45
SECTION 6.08 Distributions 46
SECTION 6.09 Adjusted Leverage Ratio 46
SECTION 6.10 Consolidated Tangible Net Worth 46
ARTICLE VII Events of Default 46
ARTICLE VIIIThe Agent 48
SECTION 8.01 Appointment and Authorization 48
SECTION 8.02 Delegation of Duties 49
SECTION 8.03 Liability of Agent and Issuing Bank 49
SECTION 8.04 Reliance by Agent 49
SECTION 8.05 Notice of Default 49
SECTION 8.06 Credit Decision 50
SECTION 8.07 Indemnification 50
SECTION 8.08 Agent in Individual Capacity 51
SECTION 8.09 Successor Agent 51
ARTICLE IX Miscellaneous 51
SECTION 9.01 Notices 51
SECTION 9.02 Waivers; Amendments 52
SECTION 9.03 Expenses; Indemnity; Damage Waiver 52
SECTION 9.04 Successors and Assigns 53
SECTION 9.05 Survival 55
SECTION 9.06 Counterparts; Integration; Effectiveness 55
SECTION 9.07 Severability 56
SECTION 9.08 Automatic Debits of Fees 56
SECTION 9.09 Right of Setoff 56
SECTION 9.10 Governing Law; Jurisdiction; Consent to Service of
Process 56
SECTION 9.11 WAIVER OF JURY TRIAL 57
SECTION 9.12 Headings 57
SECTION 9.13 Confidentiality 57
SECTION 9.14 Interest Rate Limitation 58
SECTION 9.15 Judgment Currency 58
SECTION 9.16 No Third Parties Benefited 58
SECTION 9.17 Entire Agreement 58
SCHEDULES:
Schedule 2.01 Commitments
Schedule 3.04 Borrower's Subsidiaries
Schedule 3.05 Liabilities
Schedule 3.06 Litigation
Schedule 3.09 ERISA Matters
Schedule 3.13 Intellectual Property
Schedule 6.01 Indebtedness
Schedule 6.02 Liens
Schedule 6.07 Restrictions
Schedule 9.01 Addresses for Notices; Lending Offices
EXHIBITS:
Exhibit A Form of Assignment and Acceptance
Exhibit B Form of Compliance Certificate
Exhibit C Form of Notice of Borrowing
Exhibit D Form of Notice of Conversion/Continuation
Exhibit E Form of Additional Borrower Notice
Exhibit F Form of Legal Opinion of Borrower's Counsel
Exhibit G Form of Additional Borrower Request and Assumption Agreement
Exhibit H Form of Continuing Guaranty (Multicurrency)
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CREDIT AGREEMENT dated as of April 30, 1997, among SOLECTRON
CORPORATION, a Delaware corporation, the BANKS party hereto, and BANK OF
AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, as Agent and Issuing
Bank.
The Company (such term and each other capitalized term used but not
otherwise defined herein having the meaning assigned to it in Article I)
has requested the Banks to establish the credit facilities provided for
herein to be used for the general corporate purposes of the Borrowers
and the Subsidiaries. The Banks are willing to establish such credit
facilities upon the terms and subject to the conditions set forth
herein. Accordingly, the parties hereto agree as follows:
I. DEFINITIONS
1. DEFINED TERMS. As used in this Agreement, the following terms have
the meanings specified below:
"ABR," when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, are bearing
interest at a rate determined by reference to the Alternate Base Rate.
"ADDITIONAL BORROWER" has the meaning specified in subsection
2.01(b).
"ADDITIONAL BORROWER NOTICE" has the meaning specified in subsection
2.01(b).
"ADDITIONAL BORROWER REQUEST AND ASSUMPTION AGREEMENT" has the
meaning specified in Section 5.09.
"ADJUSTED LEVERAGE RATIO" means, in respect of the Company and its
Subsidiaries on a consolidated basis at the end of any fiscal quarter,
the ratio of (a) (without duplication) (i) Consolidated Funded Debt PLUS
(ii) Guarantee obligations PLUS (iii) Indebtedness with respect to
synthetic leases and securitized assets PLUS (iv) Indebtedness in
respect of letters of credit (including the Letters of Credit) MINUS (v)
Permitted Subordinated Indebtedness, to (b) (i) operating income PLUS
(ii) depreciation and amortization charges, in each case, for the period
of four fiscal quarters ended on the applicable date of determination.
"ADJUSTED LIBO RATE" means, with respect to any Eurocurrency
Borrowing for any Interest Period, an interest rate per annum (rounded
upwards, if necessary, to the next 1/16 of 1%) equal to (a) the LIBO
Rate for such Interest Period multiplied by (b) the Eurocurrency Reserve
Percentage.
"AFFILIATE" means, with respect to a specified Person, another
Person that directly, or indirectly through one or more intermediaries,
Controls or is Controlled by or is under Control with the Person
specified.
"AGENT" means BofA, in its capacity as agent for the Banks
hereunder.
"AGENT/IB-RELATED PERSONS" means BofA as Agent and Issuing Bank, and
any successor Agent arising under Section 8.09, together with their
respective Affiliates, and the officers, directors, employees, agents
and attorneys-in-fact of such Persons and Affiliates.
"AGGREGATE L/C COMMITMENT" means the combined L/C Commitments of the
Banks, in the initial aggregate amount of $25,000,000, as such amount
may be reduced from time to time pursuant to this Agreement. The
Aggregate L/C Commitment is a part of the Total Commitment rather than a
separate, independent commitment.
"AGREED ALTERNATE CURRENCY" has the meaning specified in
subsection 2.05(e).
"ALTERNATE BASE RATE" means, for any day, a rate per annum equal to
the greater of (a) the Reference Rate in effect on such day and (b) the
Federal Funds Effective Rate in effect on such day plus one-half of 1%.
Any change in the Alternate Base Rate due to a change in the Reference
Rate or the Federal Funds Effective Rate shall be effective from and
including the effective date of such change in the Reference Rate or the
Federal Funds Effective Rate, respectively.
"APPLICABLE MARGIN" means, for any day, with respect to any
Eurocurrency Loan, CD Rate Loan or ABR Loan or with respect to the
commitment fees and letter of credit fees payable hereunder, as the case
may be, the applicable margin or fee set forth in the pricing grid
attached as Annex I, as determined in accordance with the parameters for
calculation and adjustment of such margin or fee also set forth on
Annex I.
"APPLICABLE PERCENTAGE" means, with respect to any Bank, the
percentage of the Total Commitment represented by such Bank's
Commitment. If the Commitments have terminated or expired, the
Applicable Percentages shall be determined based upon the Commitments
most recently in effect, giving effect to any assignments.
"ASSIGNMENT AND ACCEPTANCE" means an assignment and acceptance
entered into by a Bank and an assignee (with the consent of any party
whose consent is required by Section 9.04), and accepted by the Agent,
in substantially the form of EXHIBIT A or any other form approved by the
Agent.
"ATTORNEY COSTS" means and includes all reasonable fees and
disbursements of any law firm or other external counsel, the allocated
cost of internal legal services and all disbursements of internal
counsel, PROVIDED that "Attorney Costs" shall mean and include ALL fees
and disbursements of any law firm or other external counsel, the
allocated cost of internal legal services and all disbursements of
internal counsel if incurred by the Agent, the Issuing Bank or any Bank
in connection with the enforcement or protection of its rights under
this Agreement or any other Loan Document.
"AVAILABILITY PERIOD" means the period from and including the
Closing Date to but excluding the Maturity Date.
"BANKS" means the Persons listed on SCHEDULE 2.01 and any other
Person that shall have become a party hereto pursuant to an Assignment
and Acceptance, other than any such Person that ceases to be a party
hereto pursuant to an Assignment and Acceptance. References to "Banks"
shall include BofA, including in its capacity as Issuing Bank; for
purposes of clarification only, to the extent that BofA may have any
rights or obligations in addition to those of the Banks due to its
status as Issuing Bank, its status as such will be specifically
referenced.
"BOARD" means the Board of Governors of the Federal Reserve System
of the United States of America.
"BofA" means Bank of America National Trust and Savings Association.
"BORROWERS" means the Company and each Additional Borrower.
"BORROWERS' AGENT" means the Company, and any successor agent for
the Borrowers pursuant to Section 2.19.
"BORROWING" means Revolving Loans of the same Type made, converted
or continued on the same date and, in the case of Eurocurrency Loans or
CD Rate Loans, as to which a single Interest Period is in effect.
"BUSINESS DAY" means any day that is not a Saturday, Sunday or other
day on which commercial banks in New York City or San Francisco are
authorized or required by law to remain closed: PROVIDED that, when used
in connection with a Eurocurrency Loan, the term "BUSINESS DAY" shall
also exclude any day on which banks are not open for dealings in Dollar
deposits in the London interbank market, and with respect to any
disbursement and payments in calculations pertaining to any Offshore
Currency Loan, a day on which commercial banks are open for foreign
exchange business in London, England, and on which dealings in the
relevant Offshore Currency are carried on in the applicable offshore
foreign exchange interbank market in which disbursements of or payments
in such Offshore Currency will be made or received hereunder.
"CAPITAL ADEQUACY REGULATION" means any guideline, request or
directive of any central bank or other Governmental Authority, or any
other law, rule or regulation, whether or not having the force of law,
in each case, regarding capital adequacy of any bank or of any
corporation controlling a bank.
"CAPITAL LEASE OBLIGATIONS" of any Person means the obligations of
such Person to pay rent or other amounts under any lease of (or other
arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under
GAAP, and the amount of such obligations shall be the capitalized amount
thereof determined in accordance with GAAP.
"CD RATE" means, for each Interest Period in respect of CD Rate
Loans comprising a part of the same Borrowing, the rate of interest
(rounded upward to the nearest 1/100th of 1%) as determined by the Agent
pursuant to the following formula:
CD Rate = Certificate of Deposit Rate
--------------------------- + Assessment Rate
1.00 - Reserve Percentage
Where:
"Assessment Rate" means the maximum net annual assessment rate
(whether or not applicable to any Bank) determined by the Agent to be in
effect on the first day of such Interest Period payable by banks to the
Federal Deposit Insurance Corporation, or any successor, for insuring
time deposits made in Dollars at the offices of banks in the United
States.
"Certificate of Deposit Rate" means for any Interest Period
for CD Rate Loans the rate of interest per annum determined by the Agent
to be the arithmetic mean (rounded upward to the nearest 1/100th of 1%)
of the rates notified to the Agent as the rates of interest bid by two
or more certificate of deposit dealers of recognized standing selected
by the Agent for the purchase at face value of Dollar certificates of
deposit issued by major United States banks, for a maturity comparable
to such Interest Period and in the approximate amount of BofA's CD Rate
Loan, at the time selected by the Agent on the first day of such
Interest Period.
"Reserve Percentage" means for any Interest Period for CD Rate
Loans the maximum reserve percentage (expressed as a decimal, rounded
upward to the nearest 1/100th of 1%), as determined by the Agent, in
effect on the first day of such Interest Period (including any ordinary,
marginal, emergency, supplemental, special and other reserve
percentages) prescribed by the Board for determining the maximum
reserves to be maintained by member banks of the Federal Reserve System
with deposits exceeding $1,000,000,000 for new non-personal time
deposits for a period comparable to such Interest Period and in an
amount of $100,000 or more.
"CD RATE LOAN" means a Revolving Loan that bears interest based on
the CD Rate.
"CHANGE IN CONTROL" means (a) the acquisition of ownership, directly
or indirectly, beneficially or of record, by any Person or group (within
the meaning of the Securities Exchange Act of 1934 and the rules of the
Securities and Exchange Commission thereunder as in effect on the date
hereof) other than an employee benefit plan or related trust of the
Company or of the Company and any Subsidiaries, of shares representing
more than 35% of the aggregate ordinary voting power represented by the
issued and outstanding capital stock of the Company; or (b) occupation
of a majority of the seats (other than vacant seats) on the board of
directors of the Company by Persons who were neither (i) nominated by
the board of directors of the Borrower nor (ii) appointed by directors
so nominated.
"CHANGE IN LAW" means (a) the adoption of any law, rule or
regulation after the date of this Agreement, (b) any change in any law,
rule or regulation or in the interpretation or application thereof by
any Governmental Authority after the date of this Agreement or (c)
compliance by any Bank or the Issuing Bank (or by any lending office of
such Bank or by such Bank's or the Issuing Bank's holding company, if
any) with any request, guideline or directive (whether or not having the
force of law) of any Governmental Authority made or issued after the
date of this Agreement.
"CLASS," when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, are
Eurocurrency Loans, CD Rate Loans or ABR Loans.
"CLOSING DATE" means the date on which the conditions specified in
Section 4.01 and 4.02 are satisfied (or waived in accordance with
Section 9.02).
"CODE" means the Internal Revenue Code of 1986, as amended from time
to time.
"COMMITMENT" means, with respect to each Bank, the commitment of
such Bank to make Revolving Loans and to acquire participations in
Letters of Credit hereunder, as such Commitment may be (a) reduced from
time to time pursuant to Section 2.06 and (b) reduced or increased from
time to time pursuant to assignments by or to such Bank pursuant to
Section 9.04. The initial amount of each Bank's Commitment is set forth
on SCHEDULE 2.01, or in the Assignment and Acceptance pursuant to which
such Bank shall have assumed its Commitment, as applicable.
"COMPANY" means Solectron Corporation, a California corporation.
"COMPLIANCE CERTIFICATE" means a certificate in the form of
EXHIBIT B.
"COMPUTATION DATE" has the meaning specified in subsection 2.05(a).
"CONSOLIDATED FUNDED DEBT" means, as of the last day of any fiscal
quarter, the sum for the Company and its Subsidiaries as of such day,
of, without duplication, (a) the aggregate outstanding principal amount
of the Loans, (b) the aggregate outstanding principal amount of
Indebtedness for borrowed money and (c) the aggregate outstanding
capitalized amount of Capital Lease Obligations, all as determined on a
consolidated basis in accordance with GAAP.
"CONSOLIDATED TANGIBLE ASSETS" means, as of the last day of any
fiscal quarter, all tangible assets on the consolidated balance sheet of
the Company and its Subsidiaries, as determined on a consolidated basis
in accordance with GAAP.
"CONSOLIDATED TANGIBLE NET WORTH" means, as of the last day of any
fiscal quarter, (a) total shareholders' equity of the Company and its
Subsidiaries MINUS (b) the aggregate amount of all intangible assets on
the consolidated balance sheet of the Company and its Subsidiaries, all
as determined on a consolidated basis in accordance with GAAP.
"CONTRACTUAL OBLIGATIONS" means, as to any Person, any provision of
any security issued by such Person or of any agreement, undertaking,
contract, indenture, mortgage, deed of trust or other instrument,
document or agreement to which such Person is a party or by which it or
any of its property is bound.
"CONTROL" means the possession, directly or indirectly, of the power
to direct or cause the direction of the management or policies of a
Person, whether through the ability to exercise voting power, by
contract or otherwise. "CONTROLLING" and "CONTROLLED" have meanings
correlative thereto.
"CONVERSION DATE" means any date on which the Borrowers' Agent on
behalf of itself or another Borrower elects to convert an ABR Loan to a
CD Rate Loan or a Eurocurrency Loan in Dollars; a CD Rate Loan to a
Eurocurrency Loan in Dollars or an ABR Loan; or a Eurocurrency Loan in
Dollars to a CD Rate Loan or an ABR Loan.
"DEFAULT" means any event or condition which constitutes an Event of
Default or which upon notice, lapse of time or both would, unless cured
or waived, becomes an Event of Default.
"DOLLARS" or "$" refers to lawful money of the United States of
America.
"EFFECTIVE AMOUNT" means (a) with respect to any Revolving Loans on
any date the aggregate outstanding principal amount thereof after giving
effect to any Borrowings and prepayments or repayments of Revolving
Loans occurring on such date; and (b) with respect to any outstanding
L/C Obligations on any date the amount of such L/C Obligations on such
date after giving effect to any issuances, amendments and renewals of
Letters of Credit occurring on such date and any other changes in the
aggregate amount of the L/C Obligations as of such date, including as a
result of any reimbursements of outstanding unpaid drawings under any
Letters of Credit or any reductions in the maximum amount available for
drawing under Letters of Credit taking effect on such date. For
purposes of determining the Effective Amount in respect of any Offshore
Currency Loans to be made as part of a Borrowing or of any outstanding
Offshore Currency Loans, the amount of any such Offshore Currency Loans
shall be the Equivalent Amount in Dollars thereof, and for purposes of
determining the Effective Amount in respect of any Letters of Credit to
be issued in an Offshore Currency or any Offshore Currency L/C
Obligations outstanding, the amount of any such Letters of Credit and
other Offshore Currency L/C Obligations shall be the Equivalent Amount
in Dollars thereof, in each case based upon the calculation thereof as
of the most recent Computation Date therefor pursuant to
subsection 2.05(a). Additionally, for purposes of Section 2.07, the
Effective Amount shall be determined without giving effect to any
mandatory prepayments to be made under subsection 2.07(b) or 2.07(c),
until such payments are made.
"ELIGIBLE ASSIGNEE" means (a) a commercial bank organized under the
laws of the United States, or any state thereof, and having a combined
capital and surplus of at least $100,000,000; (b) a commercial bank
organized under the laws of any other country which is a member of the
Organization for Economic Cooperation and Development (the "OECD"), or a
political subdivision of any such country, and having a combined capital
and surplus of at least $100,000,000, provided that such bank is acting
through a branch or agency located in the United States; and (c) a
Person that is primarily engaged in the business of commercial banking
and that is (i) a subsidiary of a Bank, (ii) a subsidiary of a Person of
which a Bank is a subsidiary, or (iii) a Person of which a Bank is a
subsidiary.
"ENVIRONMENTAL LAWS" means all (a) laws, rules, regulations, codes
and ordinances and (b) all orders, decrees, injunctions or binding
agreements issued, promulgated or entered into by any Governmental
Authority and by or affecting the Borrower, in each case relating in any
way to the environment, preservation or reclamation of natural
resources, the management, release or threatened release of any
Hazardous Material or to health and safety matters.
"ENVIRONMENTAL LIABILITY" means any liability, contingent or
otherwise (including any liability for damages, costs of environmental
remediation, fines, penalties or indemnities), of the Borrower or any
Subsidiary directly or indirectly resulting from or based upon (a)
violation of any Environmental Law, (b) the generation, use, handling,
transportation, storage, treatment or disposal of any Hazardous
Materials, (c) exposure to any Hazardous Materials, (d) the release or
threatened release of any Hazardous Materials into the environment or
(e) any contract, agreement or other consensual arrangement pursuant to
which liability is assumed or imposed with respect to any of the
foregoing.
"EQUIVALENT AMOUNT" means (a) whenever this Agreement requires or
permits a determination on any date of the equivalent in Dollars of an
amount expressed in an Offshore Currency, the equivalent amount in
Dollars of an amount expressed in an Offshore Currency as determined by
the Agent on such date on the basis of the Spot Rate for the purchase of
such Offshore Currency with Dollars on the relevant Computation Date
provided for hereunder; or (b) whenever this Agreement requires or
permits a determination on any date of the equivalent in an Offshore
Currency of an amount expressed in Dollars, the equivalent amount in an
Offshore Currency of an amount expressed in Dollars as determined by the
Agent on such date on the basis of the Spot Rate for the purchase of
Dollars with such Offshore Currency on the relevant Computation Date
provided for hereunder.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended from time to time.
"ERISA AFFILIATE" means any trade or business (whether or not
incorporated) that, together with the Borrower, is treated as a single
employer under Section 414(b) or (c) of the Code or, solely for purposes
of Section 302 of ERISA and Section 412 of the Code, is treated as a
single employer under Section 414 of the Code.
"ERISA EVENT" means (a) any "reportable event," as defined in
Section 4043 of ERISA or the regulations issued thereunder with respect
to a Plan (other than an event for which the 30-day notice period is
waived); (b) the existence with respect to any Plan of an "accumulated
funding deficiency" (as defined in Section 412 of the Code or Section
302 of ERISA), whether or not waived; (c) the filing pursuant to Section
412(d) of the Code or Section 303(d) of ERISA of an application for a
waiver of the minimum funding standard with respect to any Plan; (d) the
incurrence by the Company or any of its ERISA Affiliates of any
liability under Title IV of ERISA with respect to the termination of any
Plan; (e) the receipt by the Company or any ERISA Affiliate from the
PBGC or a plan administrator of any notice relating to an intention to
terminate any Plan or Plans or to appoint a trustee to administer any
Plan; (f) the incurrence by the Company or any of its ERISA Affiliates
of any liability with respect to the withdrawal or partial withdrawal
from any Plan or Multiemployer Plan; or (g) the receipt by the Company
or any ERISA Affiliate of any notice, or the receipt by any
Multiemployer Plan from the Company or any ERISA Affiliate of any
notice, concerning the imposition of Withdrawal Liability or a
determination that a Multiemployer Plan is, or is expected to be,
insolvent or in reorganization, within the meaning of Title IV of ERISA.
"EUROCURRENCY," when used in reference to any Loan or Borrowing,
refers to whether such Loan, or the Loans comprising such Borrowing, are
bearing interest at a rate determined by reference to the Adjusted LIBO
Rate.
"EUROCURRENCY RESERVE PERCENTAGE" for any day for any Interest
period the reserve percentage applicable during such Interest Period
under regulations issued from time to time by the Board or any successor
and, in the case of Offshore Currency Loans denominated in pounds
sterling, the reserve percentage applicable during such Interest Period
under regulations issued from time to time by the Bank of England or any
successor and, in the case of Offshore Currency Loans denominated in
other foreign currencies, the reserve percentage applicable during such
Interest Period under regulations issued from time to time by such other
foreign central bank or any successors thereto (or, in each case, if
different percentages shall be applicable during different periods
within such Interest Period, the daily average of such percentages
during such Interest Period) for determining the maximum reserve
percentage (expressed as a decimal, rounded upward to the next 1/100th
of 1%) in effect on such day (whether or not applicable to any Bank and
including any emergency, supplemental or other marginal reserve
requirement) with respect to Eurocurrency funding (currently referred to
as "Eurocurrency liabilities").
"EVENT OF DEFAULT" has the meaning assigned to such term in Article
VII.
"EXISTING FACILITY" means the $100,000,000 credit facility under
that certain Multicurrency Credit Agreement dated as of June 30, 1993,
among the Company and certain of its Subsidiaries, the financial
institutions from time to time party thereto, and BofA as "Agent" and
"Issuing Bank" thereunder (as the same may have been amended, modified
or otherwise supplemented).
"FEDERAL FUNDS EFFECTIVE RATE" means, for any day, the rate set
forth in the weekly statistical release designated as H.15(519), or any
successor publication, published by the Federal Reserve Bank of New York
(including any such successor, "H.15(519)") on the preceding Business
Day opposite the caption "Federal Funds (Effective)"; or, if for any
relevant day such rate is not so published on any such preceding
Business Day, the rate for such day will be the arithmetic mean as
determined by the Agent of the rates for the last transaction in
overnight Federal funds arranged prior to 9:00 a.m. (New York City time)
on that day by each of three leading brokers of Federal funds
transactions in New York City selected by the Agent.
"FINANCIAL OFFICER" means the chief financial officer, Vice
President-Finance, principal accounting officer, treasurer or controller
of the Company.
"FURTHER TAXES" means any and all present or future taxes, levies,
assessments, imposts, duties, deductions, fees, withholdings or similar
charges (including, without limitation, net income taxes and franchise
taxes), and all liabilities with respect thereto, imposed by any
jurisdiction on account of amounts payable or paid pursuant to Section
2.26.
"GAAP" means generally accepted accounting principles in the United
States of America.
"GOVERNMENTAL AUTHORITY" means the government of the United States
of America, any other nation or any political subdivision thereof,
whether state or local, and any agency, authority, instrumentality,
regulatory body, court, central bank or other entity exercising
executive, legislative, judicial, taxing, regulatory or administrative
powers or functions of or pertaining to government.
"GUARANTEE" of or by any Person (the "GUARANTOR") means any
obligation, contingent or otherwise, of the guarantor guaranteeing or
having the economic effect of guaranteeing any Indebtedness or other
obligation of any other Person (the "PRIMARY OBLIGOR") in any matter,
whether directly or indirectly, and including any obligation of the
guarantor, direct or indirect, (a) to purchase or pay (or advance or
supply funds for the purchase or payment of) such Indebtedness or other
obligation or to purchase (or to advance or supply funds for the
purchase of) any security for the payment thereof (b) to purchase or
lease property, securities or services for the purpose of assuring the
owner of such Indebtedness or other obligation of the payment thereof,
(c) to maintain working capital, equity capital or any other financial
statement condition or liquidity of the primary obligor so as to enable
the primary obligor to pay such Indebtedness or other obligation or (d)
as an account party in respect of any letter of credit or letter of
guaranty issued to support such Indebtedness or obligation; PROVIDED
that the term Guarantee shall not include endorsements for collection or
deposit in the ordinary course of business.
"HAZARDOUS MATERIALS" means all explosive or radioactive substances
or wastes and all hazardous or toxic substances, wastes or other
pollutants, including petroleum or petroleum distillates, asbestos or
asbestos containing materials, polychlorinated biphenyls, radon gas,
infectious or medical wastes regulated pursuant to any Environmental
Law.
"HEDGING AGREEMENT" means any interest rate protection agreement,
foreign currency exchange agreement, commodity price protection
agreement or other interest or currency exchange rate or commodity price
hedging arrangement.
"INDEBTEDNESS" of any Person means, without duplication, (a) all
obligations of such Person for borrowed money or with respect to
deposits or advances of any kind, (b) all obligations of such Person
evidenced by bonds, debentures, notes or similar instruments, (c) all
obligations of such Person upon which interest charges are customarily
paid (excluding deferred compensation obligations owed to current and
former directors, officers and employees), (d) all obligations of such
Person under conditional sale or other title retention agreements
relating to property acquired by such Person, (e) all obligations of
such Person in respect of the deferred purchase price of property or
services (excluding current accounts payable, measured in accordance
with GAAP, incurred in the ordinary course of business), (f) all
Indebtedness of others secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise to be
secured by) any Lien on property owned or acquired by such Person,
whether or not the Indebtedness secured thereby has been assumed, (g)
all Guarantees by such Person of Indebtedness of others, (h) all Capital
Lease Obligations of such Person, (i) all obligations, contingent or
otherwise, of such Person as an account party in respect of letters of
credit and letters of guaranty supporting Indebtedness, (j) all
obligations, contingent or otherwise, of such Person in respect of
bankers' acceptances, and (k) all obligations, contingent or otherwise,
with respect to synthetic leases or securitized assets. The
Indebtedness of any Person shall include the Indebtedness of any other
entity (including any partnership in which such Person is a general
partner) to the extent such Person is liable therefor as a result of
such Person's ownership interest in or other relationship with such
entity, except to the extent the terms of such Indebtedness provide that
such Person is not liable therefor.
"INDEX DEBT" means senior, unsecured, long-term indebtedness for
borrowed money of the Borrower that is not guaranteed by any other
Person or subject to any other credit enhancement.
"INTEREST PAYMENT DATE" means, with respect to any CD Rate Loan or
Eurocurrency Loan, the last day of each Interest Period applicable to
such Loan and, with respect to ABR Loans, the last Business Day of each
calendar quarter and each date an ABR Loan is converted into a
Eurocurrency Loan or a CD Rate Loan; PROVIDED, HOWEVER, that if any
Interest Period for a CD Rate Loan or a Eurocurrency Loan exceeds 90
days or three months, respectively, interest shall also be paid on the
date which falls 90 days or three months after the beginning of such
Interest Period.
"INTEREST PERIOD" means, (a) with respect to any Eurocurrency Loan,
the period commencing on the Business Day the Eurocurrency Loan is
disbursed or continued or on the Conversion Date on which a Loan is
converted to the Eurocurrency Loan and ending on the date one, two,
three or six months thereafter, as selected by the Borrowers' Agent on
behalf of itself or another Borrower in its Notice of Borrowing or
Notice of Conversion/Continuation, or on the date one week thereafter,
in the case of any Eurocurrency Loans made on the date of a drawing
under a Letter of Credit as provided in Section 2.12 (whether as part of
any Borrowing of Offshore Currency Loans or as part of any L/C
Borrowing) and (b) with respect to any CD Rate Loan, the period
commencing on the Business Day the CD Rate Loan is disbursed or
continued or on the Conversion Date on which a Loan is converted to the
CD Rate Loan and ending on the date 30, 60, 90 or 180 days thereafter,
as selected by the Borrowers' Agent on behalf of itself or another
Borrower in its Notice of Borrowing or Notice of
Conversion/Continuation; PROVIDED that: (i) if any Interest Period
pertaining to a Eurocurrency Loan or CD Rate Loan would otherwise end on
a day which is not a Business Day, that Interest Period shall be
extended to the next succeeding Business Day unless, in the case of a
Eurocurrency Loan, the result of such extension would be to carry such
Interest Period into another calendar month, in which event such
Interest Period shall end on the immediately preceding Business Day;
(ii) any Interest Period pertaining to a Eurocurrency Loan that begins
on the last Business Day of a calendar month (or on a day for which
there is no numerically corresponding day in the ending calendar month
of such Interest Period) shall end on the last Business Day of the
ending calendar month of such Interest Period; and (iii) no Interest
Period for any Loan shall extend beyond the Maturity Date.
"ISSUING BANK" means BofA, in its capacity as issuer of Letters of
Credit hereunder, and its successors in such capacity. The Issuing Bank
may, in its discretion, arrange for one or more Letters of Credit to be
issued by Affiliates of such Issuing Bank, in which case the term
"Issuing Bank" shall include any such Affiliate with respect to Letters
of Credit issued by such Affiliate.
"L/C ADVANCE" means each Bank's participation in any L/C Borrowing
in accordance with its Applicable Percentage.
"L/C AMENDMENT APPLICATION" means an amendment application form for
amendments of outstanding performance or standby letters of credit as
shall at any time be in use at BofA, as BofA shall request.
"L/C APPLICATION" means an application form for issuances of standby
letters of credit as shall at any time be in use at BofA, as BofA shall
request.
"L/C BORROWING" means an extension of credit resulting from a
drawing under any Letter of Credit which shall not have been reimbursed
on the date when made nor converted into a Borrowing of Revolving Loans
under subsection 2.12(b).
"L/C COMMITMENT" means for each Bank the commitment to participate
in Letters of Credit issued or outstanding pursuant to Article II and to
make L/C Advances, in an aggregate amount not to exceed on any date the
amount set forth with respect to such date opposite the Bank's name in
SCHEDULE 2.01) under the heading "L/C Commitment," as the same shall be
reduced as a result of a reduction in the Aggregate L/C Commitment
pursuant to Section 2.06 or as a result of any assignment pursuant to
Section 9.04; PROVIDED that each Bank's L/C Commitment is a part of its
Commitment rather than a separate, independent commitment.
"L/C OBLIGATIONS" means at any time the sum of (a) the aggregate
undrawn amount of all Letters of Credit, PLUS (b) the amount of all
unreimbursed drawings under all Letters of Credit, including all L/C
Borrowings.
"L/C-RELATED DOCUMENTS" means the Letters of Credit, the L/C
Applications, the L/C Amendment Applications and any other consents,
waivers and other agreements and instruments entered into by any
Borrower with (or in favor of) the Agent, the Issuing Bank or any of the
Banks and relating to any Letter of Credit, including any of the Issuing
Bank's standard form documents for letter of credit issuances, and
delivered to the Agent, the Issuing Bank or the Banks pursuant to the
requirements of this Agreement or in connection with any Letter of
Credit.
"LENDING OFFICE" means with respect to each Bank, the office of such
Bank designated as such on SCHEDULE 9.01 or such other office of such
Bank as such Bank may from time to time specify to the Borrower and the
Agent.
"LETTER OF CREDIT" means a standby letter of credit issued pursuant
to this Agreement.
"LIBO RATE" means the rate of interest per annum determined by the
Agent to be the rate of interest per annum appearing on Telerate display
page 3750 (or such other display page on the Telerate System as may
replace such page) for Dollar deposits in the approximate amount of the
Offshore Rate Loan to be made, continued or converted by BofA and having
a maturity comparable to such Interest Period, at approximately
11:00 a.m. (London time) two Business Days prior to the commencement of
such Interest Period (rounded upwards if necessary to the next 1/16 of
1%). In the event that such rate is not available at such time for any
reason, then the "LIBO Rate" with respect to such Eurocurrency Borrowing
for such Interest Period shall be the rate at which deposits in Dollars
or in the applicable Offshore Currency approximately equal in principal
amount to such Eurocurrency Borrowing and for a maturity comparable to
such Interest Period are offered by the principal London office of the
Agent in immediately available funds in the London interbank market (or
other applicable offshore interbank market) at approximately 11:00 a.m.,
London time, two Business Days prior to the commencement of such
Interest Period.
"LIEN" means, with respect to any asset, (a) any mortgage, deed of
trust, lien, pledge, hypothecation, encumbrance or security interest in,
on or of such asset, and (b) the interest of a vendor or a lessor under
any conditional sale agreement, capital lease or title retention
agreement relating to such asset.
"LOAN DOCUMENTS" means this Agreement, the L/C-Related Documents and
any and all other consents, waivers, documents, agreements, instruments
and certificates delivered to the Agent, the Issuing Bank or the Banks
in connection herewith or therewith.
"LOANS" means the loans and L/C Advances made by the Banks to the
Borrowers pursuant to this Agreement.
"MARGIN STOCK" means "margin stock" as such term is defined in
Regulation U promulgated by the Board.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on (a) the
business, assets, operations, prospects or condition, financial or
otherwise, of the Company and the Subsidiaries taken as a whole, (b) the
ability of any Borrower to perform any of its obligations under this
Agreement or (c) the rights of or benefits available to the Banks
pursuant to this Agreement.
"MATERIAL INDEBTEDNESS" means Indebtedness (other than the Loans and
Letters of Credit), or obligations in respect of one or more Hedging
Agreements, of any one or more of the Company and its Subsidiaries in an
aggregate principal amount exceeding $10,000,000. For purposes of
determining Material Indebtedness, the "principal amount" of the
obligations of the Company or any Subsidiary in respect of any Hedging
Agreement at any time shall be the maximum aggregate amount (giving
effect to any netting agreements) that the Company or such Subsidiary
would be required to pay if such Hedging Agreement were terminated at
such time.
"MATURITY DATE" means the fifth anniversary of the date of this
agreement or such earlier date on which the Commitments terminate as
provided herein.
"MOODY'S" means Moody's Investors Service, Inc.
"MULTIEMPLOYER PLAN" means a multiemployer plan as defined in
Section 4001(a)(3) of ERISA.
"NOTICE OF BORROWING" means a notice given by the Borrowers' Agent
on behalf of itself or another Borrower to the Agent pursuant to
Section 2.03, in substantially the form of EXHIBIT C.
"NOTICE OF CONVERSION/CONTINUATION" means a notice given by the
Borrowers' Agent on behalf of itself or another Borrower to the Agent
pursuant to Section 2.04, in substantially the form of EXHIBIT D.
"OFFSHORE CURRENCY" means at any time English pounds sterling,
French francs, German deutsche marks, Italian lira and any Agreed
Alternate Currency.
"OFFSHORE CURRENCY COMMITMENT" means $50,000,000. The Offshore
Currency Commitment is part of the Total Commitment rather than a
separate, independent Commitment.
"OFFSHORE CURRENCY L/C OBLIGATIONS" means any L/C Obligations
denominated in an Offshore Currency or in Offshore Currencies.
"OFFSHORE CURRENCY LOAN" means any Eurocurrency Loan denominated in
an Offshore Currency.
"ORGANIZATION DOCUMENTS" means, for any corporation, the certificate
or articles of incorporation, the bylaws, any certificate of
determination or instrument relating to the rights of preferred
shareholders of such corporation, and all applicable resolutions of the
board of directors (or any committee thereof) of such corporation.
"OTHER TAXES" means any and all present or future stamp or
documentary taxes or any other excise or property taxes, charges or
similar levies arising from any payment made hereunder or from the
execution, delivery or enforcement of, or otherwise with respect to,
this Agreement.
"OVERNIGHT RATE" means, for any day, (a) the rate of interest per
annum, as determined by the Agent, at which overnight deposits in the
relevant Offshore Currency, in an amount approximately equal to the
amount with respect to which such rate is being determined, would be
offered for such day by BofA's London Branch (or other applicable
office, as selected by the Agent) to major banks in the London or other
applicable offshore interbank market; or (b), if no such overnight
deposits are offered by BofA in any Offshore Currency, the rate of
interest per annum, as determined by the Agent, equal to the cost of
funding the amount with respect to which such rate is being determined
for such day.
"PBGC" means the Pension Benefit Guaranty Corporation referred to
and defined in ERISA and any successor entity performing similar
functions.
"PERMITTED ENCUMBRANCES" means:
(a) Liens imposed by law by any Governmental Authority for taxes
that are not yet due or are being contested in compliance with Section
5.04;
(b) carriers', warehousemen's, mechanics', material men's,
repairmen's and other like Liens imposed by law, and any other
involuntary, statutory or common law Lien arising in the ordinary course
of business and securing obligations that are not overdue by more than
30 days or are being contested in compliance with Section 5.04;
(c) pledges and deposits made in the ordinary course of business in
compliance with workers' compensation, unemployment insurance and other
social security laws or regulations;
(d) deposits to secure the performance of bids, trade contracts,
leases, statutory obligations, surety and appeal bonds, performance
bonds and other obligations of a like nature, in each case in the
ordinary course of business;
(e) easements, zoning restrictions, rights-of-way and similar
encumbrances on real property imposed by law or arising in the ordinary
course of business that do not secure any monetary obligations and do
not materially detract from the value of the affected property or
interfere with the ordinary conduct of business of the Company or any
Subsidiary;
(f) Liens arising from judgments, decrees or attachments in
circumstances not constituting an Event of Default;
(g) Liens which constitute rights of set-off of a customary nature
or banker's Liens with respect to amounts on deposit arising by
operation of law in connection with arrangements entered into with banks
in the ordinary course of business;
(h) Liens in favor or customs and revenue authorities arising as a
matter of law to secure payment of customs duties in connection with the
importation of goods;
(i) leases or subleases and licenses and sublicenses granted to
others in the ordinary course of business not interfering in any
material respect with the business of the Company or its Subsidiaries
taken as a whole, and any interest or title of any lessor or licensor
under any lease or license;
PROVIDED that the term "Permitted Encumbrances" shall not include any
Lien securing Indebtedness.
"PERMITTED SUBORDINATED INDEBTEDNESS" means Indebtedness of the
Company which is subordinated (on terms satisfactory to the Agent and
the Required Banks) to the Indebtedness of the Borrowers owing or
arising under this Agreement and the other Loan Documents, including the
Company's 6% Convertible Subordinated Notes due 2001.
"PERSON" means any natural person, corporation, limited liability
company, joint venture, association, company, partnership, Governmental
Authority or other entity.
"PLAN" means any employee pension benefit plan (other than a
Multiemployer Plan) subject to the provisions of Title IV of ERISA or
Section 412 of the Code or Section 302 of ERISA, and in respect of which
the Borrower or any ERISA Affiliate is (or, if such plan were
terminated, would under Section 4069 of ERISA be deemed to be) an
"employer" as defined in Section 3(5) of ERISA.
"REFERENCE RATE" means the rate of interest per annum publicly
announced from time to time by BofA as its "reference rate" in effect at
its principal office in San Francisco; each change in the Reference Rate
shall be effective from and including the date on which a change in the
reference rate is publicly announced as being effective.
"REGISTER" has the meaning set forth in subsection 9.04(c).
"RELATED PARTIES" means, with respect to any specified Person, such
Person's Affiliates and the respective directors, officers, employees,
agents and advisors of such Person and such Person's Affiliates.
"REQUIRED BANKS" means at any time Banks then holding in excess of
66-2/3% of the then aggregate unpaid principal amount of the Loans, or,
if no such principal amount is then outstanding, Banks then having in
excess of 66-2/3% of the Commitments.
"REQUIREMENT OF LAW" means, as to any Person, any law (statutory or
common), treaty, rule or regulation or determination of an arbitrator or
of a Governmental Authority, in each case applicable to or binding upon
the Person or any of its property or to which the Person or any of its
property is subject.
"REVOLVING LOAN" has the meaning set forth in subsection 2.01.
"S&P" means Standard & Poor's Rating Group of Standard & Poor's
Corporation.
"SAME DAY FUNDS" means (a) with respect to disbursements and
payments in Dollars, immediately available funds, and (b) with respect
to disbursements and payments in an Offshore Currency, same day or other
funds as may be determined by the Agent to be customary in the place of
disbursement or payment for the settlement of international banking
transactions in the relevant Offshore Currency.
"SPECIAL PURPOSE SUBSIDIARY" shall mean any bankruptcy remote
special purpose subsidiary of the Company formed for the purpose of
selling undivided interests in accounts receivable and/or other assets
transferred by the Company and/or any of its Subsidiaries to such
subsidiary for financing purposes, including Solectron Funding
Corporation, a corporation to be organized under the laws of the State
of Delaware.
"SPOT RATE" for a currency means the rate quoted by BofA as the spot
rate for the purchase by BofA of such currency with another currency
through its Foreign Exchange Trading Center located in San Francisco,
California, at approximately 8:00 a.m. (San Francisco time) on the date
two Banking Days prior to the date as of which the foreign exchange
computation is made.
"subsidiary" means, with respect to any Person (the "parent") at any
date, any corporation, limited liability company, partnership,
association or other entity the accounts of which would be consolidated
with those of the parent in the parent's consolidated financial
statements if such financial statements were prepared in accordance with
GAAP as of such date.
"Subsidiary" means any subsidiary of the Company and any Special
Purpose Subsidiary.
"TAXES" means any and all present or future taxes, levies, deposits,
duties, deductions, charges or withholdings imposed by any Governmental
Authority.
"TOTAL COMMITMENT" means, at any time, the aggregate amount of
Commitments in effect at such time.
"TRANSACTIONS" means the execution, delivery and performance by the
Borrowers of this Agreement, the borrowing of Loans, the use of the
proceeds thereof and the issuance of Letters of Credit hereunder.
"TYPE," when used in reference to any Loan or Borrowing, refers to
whether the rate of interest on such Loan, or on the Loans comprising
such Borrowing, is determined by reference to the Adjusted LIBO Rate,
the Alternate Base Rate or the CD Rate.
"UNFRIENDLY ACQUISITION" means any Acquisition that has not, at the
time of the first public announcement of an offer relating thereto, been
approved by the board of directors (or other legally recognized
governing body) of the Person to be acquired. For purposes of this
definition, "ACQUISITION" shall mean any transaction or series of
related transactions for the purpose of or resulting, directly or
indirectly, in (a) the acquisition of in excess of 50% of the capital
stock, partnership interests, membership interests or equity of any
Person, or otherwise causing any Person to become a subsidiary, or (b) a
merger or consolidation or any other combination with another Person
(other than a Person that is a Subsidiary) in which the Company or a
Subsidiary is the surviving entity.
"WITHDRAWAL LIABILITY" means liability to a Multiemployer Plan as a
result of a complete or partial withdrawal from such Multiemployer Plan,
as such terms are defined in Part l of Subtitle E of Title IV of ERISA.
2. CLASSIFICATION OF LOANS AND BORROWINGS. For purposes of this
Agreement, Loans may be classified and referred to by Class (E.G. a
"Revolving Loan") or by Type (E.G., a "Eurocurrency Loan") or by Class
and Type (E.G., a "Eurocurrency Revolving Loan"). Borrowings also may
be classified and referred to by Class (E.G., a "Revolving Borrowing")
or by Type (E.G., a "Eurocurrency Borrowing") or by Class and Type
(E.G., a "Eurocurrency Revolving Borrowing").
3. TERMS GENERALLY. The definitions of terms herein shall apply equally
to the singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the corresponding
masculine, feminine and neuter forms. The words "include", "includes"
and "including" shall be deemed to be followed by the phrase "without
limitation." The word "will" shall be construed to have the same
meaning and effect as the word "shall." Unless the context requires
otherwise (a) any definition of or reference to any agreement,
instrument or other document herein shall be construed as referring to
such agreement, instrument or other document as from time to time
amended, supplemented or otherwise modified (subject to any restrictions
on such amendments, supplements or modifications set forth herein), (b)
any reference herein to any Person shall be construed to include such
Person's successors and assigns. (c) the words "herein", "hereof and
hereunder", and words of similar import, shall be construed to refer to
this Agreement in its entirety and not to any particular provision
hereof, (d) all references herein to Articles, Sections, Exhibits and
Schedules shall be construed to refer to Articles and Sections of, and
Exhibits and Schedules to, this Agreement and (e) the words "asset" and
"property'" shall be construed to have the same meaning and effect and
to refer to any and all tangible and intangible assets and properties,
including all securities, accounts and contract rights. This Agreement
and other Loan Documents may use several different limitations, tests or
measurements to regulate the same or similar matters. All such
limitations, tests and measurements are cumulative and shall each be
performed in accordance with their terms. Unless otherwise expressly
provided, any reference to any action of the Agent or the Banks by way
of consent, approval or waiver shall be deemed modified by the phrase
"in its/their sole discretion." This Agreement and the other Loan
Documents are the result of negotiations among and have been reviewed by
counsel to the Agent, the Company and the other parties, and are the
products of all parties. Accordingly, they shall not be construed
against the Banks or the Agent merely because of the Agent's or Banks'
involvement in their preparation.
4. ACCOUNTING TERMS; GAAP. Except as otherwise expressly provided
herein, all terms of an accounting or financial nature shall be
construed in accordance with GAAP, as in effect from time to time;
PROVIDED that, if the Company notifies the Agent that the Company
requests an amendment to any provision hereof to eliminate the effect of
any change occurring after the date hereof in GAAP or in the application
thereof on the operation of such provision (or if the Agent notifies the
Company that the Required Banks request an amendment to any provision
hereof for such purpose), regardless of whether any such notice is given
before or after such change in GAAP or in the application thereof, then
such provision shall be interpreted on the basis of GAAP as in effect
and applied immediately before such change shall have become effective
until such notice shall have been withdrawn or such provision amended in
accordance herewith.
II. THE CREDITS
1. AMOUNTS AND TERMS OF COMMITMENTS.
(a) THE REVOLVING CREDIT. Each Bank severally agrees, on the terms
and conditions hereinafter set forth, to make Loans in Dollars or an
Offshore Currency to the Company, and (subject to compliance with
subsection 2.01(b)) in an Offshore Currency to each Additional Borrower
(each such Loan, sometimes referred to as a "Revolving Loan" and,
collectively, the "Revolving Loans") from time to time on any Business
Day during the Availability Period, in an aggregate amount (determined
in Dollars, including, when applicable, in accordance with the
Equivalent Amount of any requested and outstanding Offshore Currency
Loans pursuant to subsection 2.05(a)) not to exceed at any time
outstanding the Dollar amount set forth opposite such Bank's name in
SCHEDULE 2.01 under the heading "Commitment" (such amount as the same
may be reduced as a result of a reduction in the Commitments pursuant to
Section 2.06 or as a result of any assignment pursuant to Section 9.04,
such Bank's "COMMITMENT"); PROVIDED, HOWEVER, that the Effective Amount
of all Revolving Loans PLUS the Effective Amount of all L/C Obligations
shall not exceed the Total Commitment; PROVIDED FURTHER that the
Effective Amount of all Offshore Currency Loans shall not exceed the
Offshore Currency Commitment; and PROVIDED FURTHER, that the Effective
Amount of the Revolving Loans of any Bank PLUS the participation of such
Bank in the Effective Amount of all L/C Obligations shall not exceed
such Bank's Commitment. Revolving Loans may be made in Dollars (in the
case of ABR Loans and CD Rate Loans) and in Dollars or Offshore
Currencies (in the case of Eurocurrency Loans and Letters of Credit).
Within the foregoing limits, and subject to the other terms and
conditions hereof, the Borrowers may from time to time borrow under this
subsection 2.01(a), prepay pursuant to Section 2.07 and reborrow
pursuant to this subsection 2.01(a). The Total Commitment on the date
of this Agreement is $100,000,000 and is allocated among the Banks as
set forth in SCHEDULE 2.01.
(b) ADDITIONAL BORROWERS. The Banks and the Agent in their sole
discretion may hereafter agree that a Subsidiary that becomes a party
hereto after the Closing Date pursuant to Section 5.09 (an "ADDITIONAL
BORROWER") shall be entitled to request Offshore Currency Loans and
Letters of Credit denominated in an Offshore Currency hereunder. The
parties hereto acknowledge and agree that prior to any Additional
Borrower so becoming entitled to utilize the credit facilities provided
for herein the Agent and the Banks shall have first received (i) an
Additional Borrower Request and Assumption Agreement as provided in
Section 5.09, (ii) the parent guaranty specified in Section 5.09, and
(iii) such other documents or information (including a legal opinion
covering such matters as the Agent or any Bank may reasonably request),
in form and substance satisfactory to the Agent and the Banks, as may be
required by the Agent or any of the Banks in their sole discretion. If
the Agent and the Banks shall agree that an Additional Borrower shall be
entitled to request Revolving Loans and Letters of Credit hereunder, the
Agent shall send a notice in substantially the form of EXHIBIT E (an
"Additional Borrower Notice") to the Borrowers' Agent and the Banks
designating the effective date thereof, whereupon each of the Banks
agrees to permit such Additional Borrower to request Offshore Currency
Loans, and the Issuing Bank and the Banks agree to permit such
Additional Borrower to request Letters of Credit in an Offshore
Currency, on the terms and conditions set forth herein, and each of the
parties agrees that such Additional Borrower otherwise shall be a
Borrower for all purposes of this Agreement.
2. LOAN ACCOUNTS. The Loans made by each Bank shall be evidenced by
one or more loan accounts maintained by such Bank in the ordinary course
of business. The loan accounts or records maintained by the Agent and
each Bank shall be PRIMA FACIE evidence as to the amount of the Loans
made by the Banks to the Borrowers and the interest and payments
thereon. Any failure so to record or any error in doing so shall not,
however, limit or otherwise affect the obligation of the Borrowers
hereunder to pay any amount owing with respect to the Loans. In case of
a discrepancy between the entries in the Agent's books and any Bank's
books, such Bank's books shall constitute PRIMA FACIE evidence of the
accuracy of the information so recorded.
3. PROCEDURE FOR BORROWING.
(a) Each Borrowing shall be made upon the Borrowers' Agent's
irrevocable written notice delivered to the Agent in accordance with
Section 9.01 in the form of a Notice of Borrowing (which notice must be
received by the Agent prior to 9:00 a.m. (San Francisco time) (i) five
Business Days prior to the requested Borrowing date, in the case of
Offshore Currency Loans; (ii) three Business Days prior to the requested
Borrowing date, in the case of CD Rate Loans and Eurocurrency Loans
denominated in Dollars; and (iii) one Business Day prior to the
requested Borrowing date, in the case of ABR Loans, specifying in each
case: (1) the identity of the Borrower; (2) the amount of the Borrowing
(in the case of a Borrowing in an Offshore Currency, expressed in
Dollars), which shall be in an aggregate minimum principal amount of
$5,000,000 or any integral multiple of $1,000,000 in excess thereof;
(3) the requested Borrowing date, which shall be a Business Day;
(4) whether the Borrowing is to be comprised of Eurocurrency Loans, CD
Rate Loans or ABR Loans; (5) in the case of a Borrowing comprised of
Offshore Currency Loans, the currency thereof; and (6) the duration of
the Interest Period applicable to such Loans included in such notice.
If the Notice of Borrowing shall fail to specify the duration of the
Interest Period for any Borrowing comprised of CD Rate Loans or
Eurocurrency Loans, such Interest Period shall be 90 days or three
months, respectively. The Equivalent Amount of any Borrowing in an
Offshore Currency requested in Dollars as provided above will be
determined by the Agent for such Borrowing on the Computation Date
therefor in accordance with subsection 2.05(a).
(b) Upon receipt of the Notice of Borrowing, the Agent will promptly
notify each Bank thereof and of the amount of such Bank's Applicable
Percentage of the Borrowing. In the case of a Borrowing comprised of
Offshore Currency Loans, such notice will consist of the approximate
amount of each Bank's Applicable Percentage of the Borrowing, and the
Agent will, upon the determination of the Equivalent Amount of the
Dollar amount of the Borrowing as specified in the Notice of Borrowing
(determined on the Computation Date as provided in subsection 2.05(a)),
promptly notify each Bank of the exact amount of such Bank's Applicable
Percentage of the Borrowing.
(c) Each Bank will make the amount of its Applicable Percentage of
the Borrowing available to the Agent for the account of the applicable
Borrower at the Agent's Payment Office on the Borrowing date requested
by the Borrowers' Agent in Same Day Funds and in the requested currency
(i) in the case of a Borrowing comprised of Revolving Loans in Dollars,
by 11:00 a.m. (San Francisco time), and (ii) in the case of a Borrowing
comprised of Offshore Currency Loans, by such time as the Agent may
specify. The proceeds of all such Revolving Loans will then be made
available to the applicable Borrower by the Agent by wire transfer or by
crediting the account of the applicable Borrower on the books of BofA
with the aggregate of the amounts made available to the Agent by the
Banks and in like funds as received by the Agent, unless on the date of
the Borrowing all or any portion of the proceeds thereof shall then be
required to be applied to the reimbursement of any outstanding drawings
under Letters of Credit pursuant to Section 2.12, in which case such
proceeds or portion thereof shall be applied to the reimbursement of
such Letter of Credit drawings.
(d) After giving effect to any Borrowing, there shall not be more
than six different Interest Periods in effect.
4. CONVERSION AND CONTINUATION ELECTIONS. (a) The Borrowers' Agent
may upon irrevocable written notice to the Agent in accordance with
subsection 2.04(b): (i) elect to convert on any Business Day, any ABR
Loans of a Borrower (or any part thereof in an amount not less than
$5,000,000, or that is in an integral multiple of $1,000,000 in excess
thereof) into Eurocurrency Loans in Dollars or CD Rate Loans; (ii) elect
to convert on the last day of the current Interest Period any
Eurocurrency Loans in Dollars maturing at the end of such Interest
Period (or any part thereof in an amount not less than $5,000,000, or
that is in an integral multiple of $1,000,000 in excess thereof) into
ABR Loans or CD Rate Loans; (iii) elect to convert on the last day of
the current Interest Period any CD Rate Loans maturing at the end of
such Interest Period (or any part thereof in an amount not less than
$5,000,000, or that is in an integral multiple of $1,000,000 in excess
thereof) into ABR Loans or Eurocurrency Loans in Dollars; or (iv) elect
to renew on the last day of the current Interest Period any Eurocurrency
Loans of a Borrower (whether in Dollars or in an Offshore Currency) or
CD Rate Loans maturing at the end of such Interest Period as such (or
any part thereof in an amount not less than $5,000,000 (or the
Equivalent Amount thereof in an Offshore Currency as determined as of
the most recent Computation Date), or that is in an integral multiple of
$1,000,000 (or the Equivalent Amount thereof in an Offshore Currency as
determined as of the most recent Computation Date) in excess thereof in
the same currency; PROVIDED, that if the aggregate amount of CD Rate
Loans or Eurocurrency Loans denominated in Dollars shall have been
reduced, by payment, prepayment, or conversion of part thereof to be
less than $5,000,000, such CD Rate Loans or Eurocurrency Loans shall
automatically convert into ABR Loans, and on and after such date the
right of the Borrowers' Agent to continue such Loans as, and convert
such Loans into, Eurocurrency Loans or CD Rate Loans, as the case may
be, on behalf of itself or any other Borrower, shall terminate.
(a) The Borrowers' Agent shall deliver a Notice of Conversion/
Continuation in accordance with Section 9.01 to be received by the Agent
not later than 9:00 a.m. (San Francisco time) (i) at least five Business
Days in advance of the continuation date, if the Loans are to be
continued as Offshore Currency Loans; (ii) at least three Business Days
in advance of the Conversion Date or continuation date, if the Loans are
to be converted into or continued as CD Rate Loans or Eurocurrency Loans
denominated in Dollars; and (iii) at least one Business Day in advance
of the Conversion Date, if the Loans are to be converted into ABR Loans,
specifying in each case: (A) the Loans to be continued or converted;
(B) the proposed Conversion Date or continuation date; (C) the aggregate
amount of Loans to be converted or continued; (D) the nature of the
proposed conversion or continuation; and (E) the duration of any
requested Interest Period.
(b) If the Borrowers' Agent has failed to select a new Interest
Period to be applicable to CD Rate Loans or Eurocurrency Loans
denominated in Dollars prior to the third Business Day in advance of the
expiration date of the current Interest Period applicable thereto as
provided in subsection 2.04(b), or if any Default or Event of Default
shall then exist, the Borrowers' Agent shall be deemed to have elected
to convert such CD Rate Loans or Eurocurrency Loans into ABR Loans
effective as of the expiration date of such current Interest Period. If
the Borrowers' Agent has failed to select a new Interest Period to be
applicable to Offshore Currency Loans prior to the fifth Business Day in
advance of the expiration date of the current Interest Period applicable
thereto as provided in subsection 2.04(b), or if any Default or Event of
Default shall then exist, subject to the provisions of subsection
2.05(d), the Borrowers' Agent shall be deemed to have elected to
continue such Offshore Currency Loans on the basis of a one-month
Interest Period.
(c) Upon receipt of a Notice of Conversion/Continuation, the Agent
will promptly notify each Bank thereof, or, if no timely notice is
provided by the Borrowers' Agent, the Agent will promptly notify each
Bank of the details of any automatic conversion or continuation, as the
case may be. All conversions and continuations shall be made pro rata
according to the respective outstanding principal amounts of the Loans
with respect to which the notice was given held by each Bank.
(d) Unless the Required Banks shall otherwise agree, during the
existence of a Default or Event of Default, the Borrowers' Agent may not
elect to have a Loan in Dollars converted into or continued as a
Eurocurrency Loan or a CD Rate Loan or to have an Offshore Currency Loan
continued on the basis of an Interest Period exceeding one month.
(e) Notwithstanding any other provision contained in this Agreement,
after giving effect to any conversion or continuation of any Loans,
there shall not be more than six different Interest Periods in effect.
5. UTILIZATION OF REVOLVING COMMITMENTS IN OFFSHORE CURRENCIES. (a)
The Agent shall determine the Equivalent Amount with respect to any
(i) Borrowing comprised of Offshore Currency Loans as of the requested
Borrowing date, (ii) outstanding Offshore Currency Loans or other
amounts due hereunder and denominated in an Offshore Currency as of the
last Business Day of each calendar quarter, (iii) Letters of Credit to
be issued in an Offshore Currency as of the requested date of issuance,
(iv) outstanding Letters of Credit denominated in an Offshore Currency
as of the last Business Day of each calendar quarter, and
(v) outstanding Offshore Currency Loans as of any redenomination date
pursuant to this Section 2.05 or Section 2.28 or Section 2.30 (each such
date under clauses (i) through (v) a "Computation Date"), PROVIDED that
the Required Banks may in writing instruct the Agent to determine such
Equivalent Amount as of a date in addition to the last Business Day of
each month, and the Issuing Bank may in writing instruct the Agent to
determine such Equivalent Amount as of a conversion date (if not on the
last Banking Day of a month) in connection with a redenomination of any
amounts payable in an Offshore Currency pursuant to subsection 2.12(b),
in which case such alternative date or dates shall also be a Computation
Date or Dates.
(a) In the case of a proposed Borrowing pursuant to Section 2.03
comprised of Offshore Currency Loans, the Banks shall be under no
obligation to make Offshore Currency Loans in the requested Offshore
Currency as part of such Borrowing if the Agent has received notice from
any of the Banks by 8:00 a.m. (San Francisco time) four Business Days
prior to the day of such Borrowing that such Bank cannot provide Loans
in the requested Offshore Currency, in which event the Agent will give
notice to the Borrowers' Agent not later than 9:00 a.m. (San Francisco
time) on the fourth Business Day prior to the requested date of such
Borrowing that the Borrowing in the requested Offshore Currency is not
then available, and notice thereof also will be given promptly by the
Agent to the Banks. If the Agent shall have so notified the Borrowers'
Agent that any such Borrowing in a requested Offshore Currency is not
then available, the Borrowers' Agent may, by notice to the Agent not
later than the 5:00 p.m. (San Francisco time) four Business Days prior
to the requested date of such Borrowing, withdraw the Notice of
Borrowing relating to such requested Borrowing. If the Borrowers' Agent
does so withdraw such Notice of Borrowing, the Borrowing requested
therein shall not occur and the Agent will promptly so notify each Bank.
If the Borrowers' Agent does not so withdraw such Notice of Borrowing,
the Agent will promptly so notify each Bank and such Notice of Borrowing
shall be deemed to be a Notice of Borrowing which requests a Borrowing
comprised of ABR Loans in an aggregate amount equal to amount of the
originally requested Borrowing as expressed in Dollars in the Notice of
Borrowing; and in such notice by the Agent to each Bank the Agent will
state such aggregate amount of such Borrowing in Dollars and such Bank's
Applicable Percentage thereof.
(b) In the case of a proposed continuation of Offshore Currency
Loans for an additional Interest Period pursuant to Section 2.04, the
Banks shall be under no obligation to continue such Offshore Currency
Loans if the Agent has received notice from any of the Banks by 8:00
a.m. (San Francisco time) four Business Days prior to the day of such
continuation that such Bank cannot continue to provide Loans in the
relevant Offshore Currency, in which event the Agent will give notice to
the Borrowers' Agent not later than 9:00 a.m. (San Francisco time) on
the fourth Business Day prior to the requested date of such continuation
that the continuation of such Offshore Currency Loans in the relevant
Offshore Currency is not then available, and notice thereof also will be
given promptly by the Agent to the Banks. If the Agent shall have so
notified the Borrowers' Agent that any such continuation of Offshore
Currency Loans is not then available, any Notice of
Continuation/Conversion with respect thereto shall be deemed withdrawn
and such Offshore Currency Loans shall be redenominated into ABR Loans
in Dollars with effect from the last day of the Interest Period with
respect to any such Offshore Currency Loans. The Agent shall promptly
notify the Borrowers' Agent and the Banks of any such redenomination and
in such notice by the Agent to each Bank the Agent will state the
aggregate Equivalent Amount of the redenominated Offshore Currency Loans
in Dollars as of the Computation Date with respect thereto and such
Bank's Applicable Percentage thereof.
(c) Notwithstanding anything herein to the contrary, during the
existence of a Default or an Event of Default, upon the request of the
Required Banks all or any part of any outstanding Offshore Currency
Loans shall be redenominated into ABR Loans in Dollars with effect from
the last day of the Interest Period, with respect to any such Offshore
Currency Loans, and all or any part of any other outstanding amount
payable in an Offshore Currency shall be redenominated into Dollars on
the date specified by the Required Banks. The Agent shall promptly
notify the Borrowers' Agent of any such redenomination request.
(d) The Borrowers' Agent shall be entitled to request that Revolving
Loans hereunder also be permitted to be made, and Letters of Credit
hereunder also be permitted to be issued, in any other lawful currency
constituting a eurocurrency (other than Dollars), in addition to the
eurocurrencies specified in the definition of "Offshore Currency"
herein, that in the opinion of all of the Banks is at such time freely
traded in the offshore interbank foreign exchange markets and is freely
transferable and freely convertible into Dollars (an "AGREED ALTERNATE
CURRENCY"). The Borrowers' Agent shall deliver to the Agent any request
for designation of an Agreed Alternate Currency in accordance with
Section 9.01, to be received by the Agent not later than 10:00 a.m. (San
Francisco time) at least ten Business Days in advance of the date of any
Borrowing hereunder proposed to be made in such Agreed Alternate
Currency or any Letter of Credit proposed to be issued hereunder in such
Agreed Alternate Currency. Upon receipt of any such request the Agent
shall promptly notify the Banks thereof, and each Bank shall use its
best efforts to respond to such request within two Business Days of
receipt thereof. Each Bank may grant or accept such request in its sole
discretion, and each of the Borrowers understands that there is no
commitment by or understanding with any Bank with respect to the
approval of any Agreed Alternate Currency. The Agent will promptly
notify the Borrowers' Agent of the acceptance (which shall require the
approval of ALL Banks) or rejection of any such request.
6. VOLUNTARY TERMINATION OR REDUCTION OF TOTAL COMMITMENT. The
Borrowers' Agent may, on behalf of the Borrowers, upon not less than
five Business Days' prior notice to the Agent, terminate the Total
Commitment (including the Aggregate L/C Commitment and Offshore Currency
Commitment) or permanently reduce the Total Commitment (including the
Aggregate L/C Commitment and Offshore Currency Commitment if specified
by the Borrowers' Agent) by an aggregate minimum amount of $1,000,000 or
any multiple of $1,000,000; PROVIDED that no such reduction or
termination shall be permitted if the Effective Amount of Revolving
Loans and L/C Obligations would exceed the amount of the Total
Commitment then in effect; and PROVIDED FURTHER that once reduced in
accordance with this Section 2.06, the Total Commitment may not be
increased. Any reduction of the Total Commitment and the Aggregate L/C
Commitment pursuant to this Section 2.06 shall be applied to each Bank's
Commitment and L/C Commitment in accordance with such Bank's Applicable
Percentage. The amount of any such Total Commitment reduction shall not
be applied to the Aggregate L/C Commitment or the Offshore Currency
Commitment unless otherwise specified by the Borrower. All accrued
commitment and letter of credit fees to, but not including, the
effective date of any such termination shall be payable on the effective
date of such termination.
7. PREPAYMENTS. (a) Subject to Section 2.29, the Borrowers' Agent
may, on behalf of itself or the applicable Borrower, at any time or from
time to time, ratably prepay Loans made to it in whole or in part, in
amounts of $1,000,000 (or, in the case of Offshore Currency Loans, the
Equivalent Amount thereof in an Offshore Currency as determined as of
the most recent Computation Date with respect thereto) or any multiple
of $1,000,000 (or, in the case of Offshore Currency Loans, the
Equivalent Amount thereof in an Offshore Currency as determined as of
the most recent Computation Date with respect thereto) in excess
thereof. The Borrowers' Agent shall deliver a notice of prepayment on
behalf of itself or the applicable Borrower in accordance with
Section 9.01 to be received by the Agent not later than 9:00 a.m. (San
Francisco time) (i) at least five Business Days in advance of the
prepayment date if the Loans to be prepaid are Offshore Currency Loans,
(ii) at least three Business Days in advance of the prepayment date if
the Loans to be prepaid are CD Rate or Eurocurrency Loans denominated in
Dollars, and (iii) at least one Business Day in advance of the
prepayment date if the Loans to be prepaid are ABR Loans.
(a) Subject to subsection 2.07(c) and Section 2.29, if on any date
the Effective Amount of all Revolving Loans PLUS the Effective Amount of
all L/C Obligations shall exceed the Total Commitment, the Borrowers
shall immediately, and without notice or demand, prepay the outstanding
principal amount of the Revolving Loans and L/C Advances by an amount
equal to the applicable excess. Additionally, subject to
subsection 2.07(c), (i) if on any date the Effective Amount of L/C
Obligations shall exceed the Aggregate L/C Commitment, the Borrowers
shall cash collateralize, in Dollars, on such date the outstanding
Letters of Credit in an amount equal to the excess of the maximum amount
then available to be drawn under the Letters of Credit over the
Aggregate L/C Commitment (in the case of any Offshore Currency L/C
Obligations, such amounts to be determined on the basis of the
Equivalent Amount thereof in Dollars as of the most recent Computation
Date); and (ii) if on any date the Effective Amount of all Offshore
Currency Loans and the Effective Amount of all Offshore Currency L/C
Obligations (in each case, determined on the basis of the Equivalent
Amount thereof in Dollars as of the most recent Computation Date) shall
exceed the Offshore Currency Commitment, the Borrowers shall
immediately, and without notice or demand, prepay the outstanding amount
of the Offshore Currency Loans and the Offshore Currency L/C Advances by
an amount equal to the applicable excess.
(b) Subject to Section 2.29, if on any Computation Date the Agent
shall have determined that the Effective Amount of all Revolving Loans
PLUS the Effective Amount of all L/C Obligations shall exceed the Total
Commitment by more than $100,000 due to a change in applicable rates of
exchange between Dollars and Offshore Currencies, the Agent shall give
notice to the Borrowers' Agent that a prepayment by the Borrowers is
required hereunder, and the Borrowers shall thereupon be required to
make a prepayment of Revolving Loans and L/C Advances hereunder, such
that the Effective Amount of all Revolving Loans PLUS the Effective
Amount of all L/C Obligations (after giving effect to such prepayment)
will be equal to or less than the Total Commitment.
(c) Any notice of prepayment given by the Borrowers' Agent under
subsection 2.07(a) shall specify the date and amount of the proposed
prepayment. In connection with any prepayment pursuant to this Section
2.07, the Borrowers' Agent shall specify whether such prepayment is of
ABR Loans, CD Rate Loans or Eurocurrency Loans, or any combination
thereof, and identify any Offshore Currency Loans that are the subject
of the prepayment and shall identify the Borrower or Borrowers making
the prepayment. Any notice of prepayment given by the Borrowers' Agent
under subsection 2.07(a) shall not thereafter be revocable by the
Borrowers' Agent. The Agent will promptly notify each Bank of any
proposed prepayment and of such Bank's Applicable Percentage of such
prepayment.
(d) If any notice of prepayment is given, the Borrowers shall make
the prepayment described in such notice and the payment amount specified
in such notice shall be due and payable on the date specified therein,
together with accrued interest to such date on the amount prepaid and
any amounts required pursuant to Section 2.29.
8. REPAYMENT. Each Borrower shall repay to the Banks in full on the
Maturity Date the aggregate principal amount of the Revolving Loans made
to such Borrower outstanding on the Maturity Date.
9. INTEREST.
(a) Subject to Section 9.14, each Revolving Loan shall bear interest
on the outstanding principal amount thereof from the date when made
until it becomes due (i) during such periods as such Revolving Loan is a
Eurocurrency Loan, at a rate per annum equal during each Interest Period
for such Eurocurrency Loan to the Adjusted LIBO Rate for such Interest
Period PLUS the Applicable Margin, (ii) during such periods as such
Revolving Loan is a CD Rate Loan, at a rate per annum equal during each
Interest Period for such CD Rate Loan to the CD Rate for such Interest
Period PLUS the Applicable Margin, and (iii) during such periods as such
Revolving Loan is an ABR Loan, at a rate per annum equal to the
Alternate Base Rate PLUS the Applicable Margin.
(b) Each Borrower agrees to pay interest on each Loan made to it, in
arrears, on each Interest Payment Date. Interest shall also be paid by
each Borrower on the date of any prepayment of Loans pursuant to Section
2.07 for the portion of the Loans so prepaid and upon payment (including
prepayment) in full thereof and, during the existence of any Event of
Default, interest shall be paid on demand.
(c) If any amount of principal of or interest on any Loan, or any
other amount payable hereunder or under any of the other Loan Documents
by any Borrower is not paid in full when due (whether at stated
maturity, by acceleration, demand or otherwise), such Borrower agrees to
pay interest on such unpaid principal or other amount, from the date
such amount becomes due until the date such amount is paid in full, and
after as well as before any entry of judgment thereon to the extent
permitted by law, payable on demand, at a rate per annum equal to the
Alternate Base Rate PLUS 1%.
10. THE LETTER OF CREDIT SUBFACILITY. (a) On the terms and conditions
set forth herein (i) the Issuing Bank hereby agrees, (A) from time to
time on any Business Day during the period from the Closing Date to the
Maturity Date to issue Letters of Credit for the account of any Borrower
in accordance with subsection 2.11(a), and to amend or renew Letters of
Credit previously issued by it in accordance with subsections 2.11(c)
and 2.11(d), in an aggregate amount (determined in Dollars, including,
when applicable, in accordance with the Equivalent Amount of any
requested and outstanding Letters of Credit denominated in Offshore
Currencies pursuant to subsection 2.05(a)) not to exceed at any time the
Aggregate L/C Commitment, and (B) to honor drafts under the Letters of
Credit; and (ii) the Banks severally agree to participate in Letters of
Credit issued for the account of any Borrower; PROVIDED, that the
Issuing Bank shall not be obligated to issue any Letter of Credit if
(1) the Effective Amount of all L/C Obligations PLUS the Effective
Amount of all Revolving Loans shall exceed the Total Commitment, (2) the
Effective Amount of all Offshore Currency L/C Obligations PLUS the
Effective Amount of all Offshore Currency Loans (in each case,
determined on the basis of the Equivalent Amount thereof in Dollars as
of the most recent Computation Date) shall exceed the Offshore Currency
Commitment, (3) the participation of any Bank in the Effective Amount of
all L/C Obligations PLUS the Effective Amount of the Revolving Loans of
such Bank shall exceed such Bank's Commitment, or (4) the Effective
Amount of L/C Obligations shall exceed the Aggregate L/C Commitment.
Within the foregoing limits, and subject to the other terms and
conditions hereof, each Borrower's ability to obtain Letters of Credit
shall be fully revolving, and, accordingly, each Borrower may, during
the foregoing period, obtain Letters of Credit to replace Letters of
Credit which have expired or which have been drawn upon and reimbursed.
(a) The Issuing Bank shall be under no obligation to issue, amend or
reinstate any Letter of Credit if:
(i) any order, judgment or decree of any Governmental Authority
or arbitrator shall by its terms purport to enjoin or restrain the
Issuing Bank from issuing, amending or reinstating such Letter of
Credit, or any Requirement of Law applicable to the Issuing Bank or any
request or directive (whether or not having the force of law) from any
Governmental Authority with jurisdiction over the Issuing Bank shall
prohibit, or request that the Issuing Bank refrain from, the issuance,
amendment or reinstatement of letters of credit generally or such Letter
of Credit in particular or shall impose upon the Issuing Bank with
respect to such Letter of Credit any restriction, reserve or capital
requirement (for which the Issuing Bank is not otherwise compensated)
not in effect on the Closing Date, or shall impose upon the Issuing Bank
any unreimbursed loss, cost or expense which was not applicable on the
Closing Date and which the Issuing Bank in good faith deems material to
it;
(ii) the Issuing Bank has received written notice from any Bank,
the Agent or the Borrowers' Agent, at least one Business Day prior to
the requested date of issuance, amendment or reinstatement of such
Letter of Credit, that one or more of the applicable conditions
contained in Section 4.02 is not then satisfied;
(iii) the expiry date of any requested Letter of Credit is
(A) more than 365 days after the date of issuance, unless the Required
Banks have approved such expiry date in writing, or (B) more than 365
days after the Maturity Date, unless all of the Banks have approved such
expiry date in writing; PROVIDED, that a Letter of Credit may state that
the expiry date thereof is extendible for an additional term as shall be
satisfactory to the Issuing Bank (either upon prior notice or
automatically) so long as the next succeeding additional term at any
time is not more than 365 days;
(iv) any requested Letter of Credit does not provide for drafts,
or is not otherwise in form and substance acceptable to the Issuing
Bank, or the issuance, amendment or renewal of a Letter of Credit shall
violate any applicable policies of the Issuing Bank;
(v) any standby Letter of Credit is for the purpose of
supporting the issuance of any letter of credit by any other Person;
(vi) such Letter of Credit is (A) in a face amount less than
$1,000,000 (or the Equivalent Amount thereof in an Offshore Currency, as
determined as of the Computation Date for an Offshore Currency Letter of
Credit), (B) to be used to support workers' compensation obligations,
(C) to be used to support the obligations of any Person other than the
Borrowers and the Subsidiaries, or (D) denominated in a currency other
than Dollars or an Offshore Currency; or
(vii) in respect of any Letter of Credit to be denominated in an
Offshore Currency, the Issuing Bank has determined that it is unable to
fund obligations in the requested Offshore Currency.
(b) The Issuing Bank will use its best efforts promptly following
receipt of a request to issue, amend or reinstate a Letter of Credit to
notify the Agent and the Borrowers' Agent of any unreimbursed material
loss, cost or expense imposed on the Issuing Bank referred to in
subsection (b)(i) above that may prevent such issuance, amendment or
reinstatement from occurring as provided in this Article II, PROVIDED
that any failure to provide such notice shall not impose any additional
obligations under this Article II.
11. ISSUANCE, AMENDMENT AND RENEWAL OF LETTERS OF CREDIT. (a) Each
Letter of Credit shall be issued upon the irrevocable written request of
the Borrowers' Agent received by the Issuing Bank (with a copy sent by
the Borrowers' Agent to the Agent) at least four Business Days (or in
each case such shorter time as the Issuing Bank may agree in a
particular instance in its sole discretion), prior to the proposed date
of issuance. Each such request for issuance of a Letter of Credit shall
be by facsimile, confirmed immediately in an original writing, in the
form of an L/C Application, and shall specify in form and detail
satisfactory to the Issuing Bank: (i) the proposed date of issuance of
the Letter of Credit (which shall be a Business Day); (ii) the face
amount of the Letter of Credit (and applicable Offshore Currency, if
such Letter of Credit is not denominated in Dollars); (iii) the expiry
date of the Letter of Credit; (iv) the name and address of the
beneficiary thereof; (v) the documents to be presented by the
beneficiary of the Letter of Credit in case of any drawing thereunder;
(vi) the full text of any certificate to be presented by the beneficiary
in case of any drawing thereunder; (vii) the identity of the Person
whose obligations will be supported by such Letter of Credit (which, if
other than the Borrower, must be a Subsidiary); and (viii) such other
matters as the Issuing Bank may require. The Equivalent Amount of any
Letter of Credit to be denominated in an Offshore Currency as provided
above will be determined by the Agent for such Letter of Credit on the
Computation Date therefor in accordance with subsection 2.05(a).
(a) Not more than one Business Day following receipt of any request
for the issuance of any Letter of Credit or any amendment or renewal of
any Letter of Credit, the Issuing Bank will confirm with the Agent (by
telephone or in writing) that the Agent has received a copy of the L/C
Application or L/C Amendment Application from the Borrowers' Agent and,
if not, the Issuing Bank will provide the Agent with a copy thereof.
Unless the Issuing Bank has received notice on or before the Business
Day immediately preceding the date the Issuing Bank is to issue, amend
or renew a requested Letter of Credit from the Agent (A) directing the
Issuing Bank not to issue, amend or renew such Letter of Credit because
such issuance, amendment or renewal is not then permitted under
subsection 2.10(a) as a result of the limitations set forth in clauses
(1) through (4) thereof or subsection 2.10(b)(iii); or (B) that one or
more conditions specified in Section 4.02 are not then satisfied; THEN,
subject to the terms and conditions hereof, the Issuing Bank shall, on
the requested date, issue a Letter of Credit for the account of the
applicable Borrower or amend or renew a Letter of Credit, as the case
may be, in accordance with the Issuing Bank's usual and customary
business practices.
(b) From time to time while a Letter of Credit is outstanding and
prior to the Maturity Date, the Issuing Bank will, upon the written
request of the Borrowers' Agent received by the Issuing Bank (with a
copy sent by the Borrowers' Agent to the Agent) at least four Business
Days (or in each case such shorter time as the Issuing Bank may agree in
a particular instance in its sole discretion), prior to the proposed
date of amendment, amend any Letter of Credit issued by it. Each such
request for amendment of a Letter of Credit shall be made by facsimile,
confirmed immediately in an original writing, made in the form of an L/C
Amendment Application and shall specify in form and detail satisfactory
to the Issuing Bank: (i) the Letter of Credit to be amended; (ii) the
proposed date of amendment of the Letter of Credit (which shall be a
Business Day); (iii) the nature of the proposed amendment; and (iv) such
other matters as the Issuing Bank may require. The Issuing Bank shall
be under no obligation to amend any Letter of Credit, and shall not
permit the amendment of a Letter of Credit, if: (A) the Issuing Bank
would have no obligation at such time to issue such Letter of Credit in
its amended form under the terms of this Agreement; or (B) the
beneficiary of any such Letter of Credit does not accept the proposed
amendment to the Letter of Credit.
(c) The Issuing Bank and the Banks agree that, while a Letter of
Credit is outstanding and prior to the Maturity Date, at the option of
the Borrowers' Agent and upon the written request of the Borrowers'
Agent received by the Issuing Bank (with a copy sent by the Borrowers'
Agent to the Agent) at least four Business Days (or in each case such
shorter time as the Issuing Bank may agree in a particular instance in
its sole discretion), prior to the proposed date of notification of
renewal, the Issuing Bank shall be entitled to authorize the automatic
renewal of any Letter of Credit issued by it. Each such request for
renewal of a Letter of Credit shall be made by facsimile, confirmed
immediately in an original writing, in the form of an L/C Amendment
Application, and shall specify in form and detail satisfactory to the
Issuing Bank: (i) the Letter of Credit to be renewed; (ii) the proposed
date of notification of renewal of the Letter of Credit (which shall be
a Business Day); (iii) the revised expiry date of the Letter of Credit;
and (iv) such other matters as the Issuing Bank may require. The
Issuing Bank shall be under no obligation so to renew any Letter of
Credit, and shall not permit any renewal (including any automatic
renewal of a Letter of Credit), if: (A) the Issuing Bank would have no
obligation at such time to issue or amend such Letter of Credit in its
renewed form under the terms of this Agreement; or (B) the beneficiary
of any such Letter of Credit does not accept the proposed renewal of the
Letter of Credit. If any outstanding Letter of Credit shall provide
that it shall be automatically renewed unless the beneficiary thereof
receives notice from the Issuing Bank that such Letter of Credit shall
not be renewed, and if at the time of renewal the Issuing Bank would be
entitled to authorize the automatic renewal of such Letter of Credit in
accordance with this subsection 2.11(d) upon the request of the
Borrowers' Agent but the Issuing Bank shall not have received any L/C
Amendment Application from the Borrowers' Agent with respect to such
renewal or other written direction by the Borrowers' Agent with respect
thereto, the Issuing Bank shall nonetheless be permitted to allow such
Letter of Credit to renew, and the Borrowers and the Banks hereby
authorize such renewal, and, accordingly, the Issuing Bank shall be
deemed to have received an L/C Amendment Application from the Borrowers'
Agent requesting such renewal.
(d) The Issuing Bank may, at its election (or as required by the
Agent at the direction of the Required Banks), deliver any notices of
termination or other communications to any Letter of Credit beneficiary
or transferee, or take any other action as necessary or appropriate, at
any time and from time to time, in order to cause the expiry date of
such Letter of Credit to be a date not later than the Maturity Date.
(e) This Agreement shall control in the event of any conflict with
any L/C-Related Document (other than any Letter of Credit).
(i) The Issuing Bank will also deliver to the Agent,
concurrently with or promptly following its delivery of a Letter of
Credit, or amendment to or renewal of a Letter of Credit, to an advising
bank or a beneficiary, a true and complete copy of each such Letter of
Credit or amendment to or renewal of a Letter of Credit.
(ii) The Agent will promptly notify the Banks of the issuance,
amendment or renewal of a Letter of Credit hereunder (including the date
thereof and the amount, currency, expiry and reference number of such
Letter of Credit).
12. PARTICIPATIONS, DRAWINGS AND REIMBURSEMENTS. (a) Immediately upon
the issuance of each Letter of Credit, the Issuing Bank shall be deemed
irrevocably to have sold and transferred to each Bank without recourse
or warranty, and each Bank shall be deemed to, and hereby irrevocably
and unconditionally agrees to, purchase and accept from the Issuing
Bank, for such Bank's own account and risk, an undivided interest and
participation in such Letter of Credit and each drawing thereunder in an
amount equal to the product of (i) the Applicable Percentage of such
Bank, times (ii) the maximum amount available to be drawn under such
Letter of Credit and the amount of such drawing, respectively. For
purposes of subsection 2.10(a), each issuance of a Letter of Credit
shall be deemed to utilize the Commitment of each Bank by an amount
equal to the amount of such participation.
(a) In the event of any request for a drawing under a Letter of
Credit by the beneficiary thereof, the Issuing Bank shall immediately
notify the Borrowers' Agent, the applicable Borrower and the Agent. The
applicable Borrower shall reimburse the Issuing Bank on each date that
any amount is paid by the Issuing Bank under any Letter of Credit, in an
amount equal to the amount paid by the Issuing Bank on such date under
such Letter of Credit, in the currency in which such Letter of Credit is
payable; PROVIDED that the Issuing Bank may at its election (a
"CONVERSION ELECTION"), require payment in respect of any Letter of
Credit payable in an Offshore Currency to be made in Dollars in an
amount equal to the Equivalent Amount in Dollars as of the date of
payment by the Issuing Bank on such Letter of Credit. Such
reimbursement shall be made by the applicable Borrower prior to 9:00
a.m. (San Francisco time) on such payment date in the case of payments
to be made in Dollars (whether originally payable in Dollars or
redenominated into Dollars as a result of a Conversion Election), and no
later than the time specified by the Issuing Bank on such payment date
in the case of payments to be made in an Offshore Currency. In the
event the applicable Borrower shall fail to reimburse the Issuing Bank
for the full amount of any drawing under any Letter of Credit by the
required time as provided above on the same date such drawing is honored
by the Issuing Bank, the Issuing Bank will promptly notify the Agent,
and the Agent will promptly notify each Bank thereof (including the
amount and currency of the drawing and such Bank's Commitment Percentage
thereof), and the applicable Borrower shall be deemed to have requested
that (i) ABR Loans be made by the Banks in the case of any reimbursement
obligation in Dollars, or (ii) Offshore Currency Loans be made in the
currency of any outstanding reimbursement obligations in an Offshore
Currency, on the basis of a one week Interest Period, to be disbursed on
the date of payment by the Issuing Bank under such Letter of Credit,
subject to the amount of the unutilized portion of the Total Commitment
and subject to the conditions set forth in Section 4.02. Each of the
Borrowers hereby directs that the proceeds of any such Loans deemed to
be made by it shall be used to pay its reimbursement obligations in
respect of any such drawing. Solely for the purposes of making such
Loans, the minimum borrowing amount limitations set forth in
Section 2.03 shall not be applicable. Any notice given by the Issuing
Bank or the Agent pursuant hereto may be oral if immediately confirmed
in writing (including by facsimile); PROVIDED that the lack of such an
immediate confirmation shall not affect the conclusiveness or binding
effect of such notice.
(b) Each Bank shall upon receipt of any notice pursuant to
subsection 2.12(b) make available to the Agent for the account of the
relevant Issuing Bank an amount in the specified currency and in Same
Day Funds equal to its Applicable Percentage of the amount of the
drawing, whereupon the participating Banks shall (subject to subsection
2.12(d)) each be deemed to have made a Revolving Loan consisting of an
ABR Loan or Offshore Currency Loan, as the case may be, to the
applicable Borrower in that amount. If any Bank so notified shall fail
to make available to the Agent for the account of the Issuing Bank the
amount of such Bank's Applicable Percentage of the amount of the drawing
on the date such drawing was honored by the Issuing Bank (the
"PARTICIPATION DATE"), in the case of a drawing in to be reimbursed in
Dollars (whether originally payable in Dollars or redenominated into
Dollars as a result of a Conversion Election), by no later than 12:00
noon (San Francisco time), and in the case of a drawing to be reimbursed
in an Offshore Currency, by such time as the Agent may specify, then
interest shall accrue on such Bank's obligation to make such payment,
from the Participation Date to the date such Bank makes such payment, at
(i), in the case of payments to be made in Dollars, (A) the Federal
Funds Effective Rate in effect from time to time during the period
commencing on the Participation Date and ending on the date three
Business Days thereafter, and (B) thereafter at the Alternate Base Rate
as in effect from time to time, and (ii) in the case of payment to be
made in an Offshore Currency, at the Overnight Rate, as in effect for
each day during the period such amount remains unpaid. The Agent will
promptly give notice of the occurrence of the Participation Date, but
failure of the Agent to give any such notice on the Participation Date
or in sufficient time to enable any Bank to effect such payment on such
date shall not relieve such Bank from its obligations under this Section
2.12.
(c) With respect to any unreimbursed drawing which is not converted
into Revolving Loans consisting of ABR Loans or Offshore Currency Loans,
as the case may be, to the applicable Borrower in whole or in part,
because of such Borrower's failure to satisfy the conditions set forth
in Section 4.02 or for any other reason, such Borrower shall be deemed
to have incurred from the Issuing Bank an L/C Borrowing in the amount of
such drawing, which L/C Borrowing shall be due and payable on demand
(together with interest) and (i) if denominated in Dollars, shall bear
interest at the rate specified in subsection 2.09(c) for overdue amounts
payable in Dollars, and (ii) if denominated in an Offshore Currency,
shall initially have a one week Interest Period and bear interest at the
rate specified in subsection 2.09(c) for overdue amounts payable in an
Offshore Currency and each Bank's payment to the Issuing Bank pursuant
to subsection 2.12(c) shall be deemed payment in respect of its
participation in such L/C Borrowing and shall constitute an L/C Advance
from such Bank in satisfaction of its participation obligation under
this Section 2.12.
(d) Each Bank's obligation in accordance with this Agreement to make
the Revolving Loans or L/C Advances, as contemplated by this
Section 2.12, as a result of a drawing under a Letter of Credit, shall
be absolute and unconditional and shall not be affected by any
circumstance, including (i) any set-off, counterclaim, recoupment,
defense or other right which such Bank may have against the Issuing
Bank, any Borrower or any other Person for any reason whatsoever;
(ii) the occurrence or continuance of a Default, an Event of Default or
a Material Adverse Effect; or (iii) any other circumstance, happening or
event whatsoever, whether or not similar to any of the foregoing.
13. AUTOMATIC RENEWALS. If any outstanding Letter of Credit for the
account of any Borrower shall provide that it shall be automatically
renewed unless the beneficiary thereof receives notice from the Issuing
Bank that such Letter of Credit shall not be renewed, and if at the time
of renewal the Issuing Bank would be entitled to authorize the automatic
renewal of such Letter of Credit in accordance with subsection 2.11(d)
upon the request of the Borrowers' Agent but the Issuing Bank shall not
have received any L/C Amendment Application from the Borrowers' Agent
with respect to such renewal or other written direction by the
Borrowers' Agent with respect thereto, the Issuing Bank shall
nonetheless be permitted to allow such Letter of Credit to renew, and,
notwithstanding anything in this Agreement to the contrary, the
Borrowers and the Banks hereby authorize such renewal (unless the
Required Banks notify the Agent and the Issuing Bank in writing that
non-renewal of any Letter of Credit is desired and such notice is
received by the Agent and the Issuing Bank no less than 30 days prior to
the last date on which the Issuing Bank is entitled to notify the
beneficiary of any such Letter of Credit of its non-renewal), and,
accordingly, the Issuing Bank shall be deemed to have received an L/C
Amendment Application from the Borrowers' Agent requesting such renewal.
14. REPAYMENT OF PARTICIPATIONS. (a) Upon (and only upon) receipt by
the Agent for the account of the Issuing Bank of funds from a Borrower
(i) in reimbursement of any payment made by the Issuing Bank under the
Letter of Credit with respect to which any Bank has theretofore paid the
Agent for the account of the Issuing Bank for such Bank's participation
in the Letter of Credit pursuant to Section 2.12, or (ii) in payment of
interest thereon, the Agent will pay to each Bank, in the same funds and
currency so received by the Agent for the account of the Issuing Bank,
the amount of such Bank's Applicable Percentage thereof, and the Issuing
Bank shall receive the amount of the Applicable Percentage thereof with
respect to any Bank that did not so pay the Agent for the account of the
Issuing Bank.
(a) If the Agent or the Issuing Bank is required at any time to
return to any Borrower or to a trustee, receiver, liquidator, custodian,
or any official in any Insolvency Proceeding, any portion of the
payments made by any Borrower to the Agent for the account of the
Issuing Bank pursuant to subsection 2.14(a) in reimbursement of a
payment made under the Letter of Credit or interest thereon, each Bank
shall, on demand of the Agent, forthwith return to the Agent or the
Issuing Bank the amount of its Applicable Percentage of any amounts so
returned by the Agent or the Issuing Bank and in the currency in which
any such amounts were so returned PLUS interest thereon from the date
such demand is made to the date such amounts are returned by such Bank
to the Agent or the Issuing Bank, at a rate per annum equal to (i) the
Federal Funds Effective Rate in effect from time to time with respect to
any such amounts denominated in Dollars, and (ii) the Overnight Rate
with respect to any amounts denominated in an Offshore Currency, for and
determined as of each day during such period.
15. ROLE OF THE ISSUING BANK. (a) Each of the Banks and the Borrowers
agrees that, in paying any drawing under a Letter of Credit, the Issuing
Bank shall not have any responsibility to obtain any document (other
than any sight draft and certificates expressly required by the Letter
of Credit) or to ascertain or inquire as to the validity or accuracy of
any such document or the authority of the Person executing or delivering
any such document.
(a) No Agent/IB-Related Person nor any of the respective
correspondents, participants or assignees of the Issuing Bank shall be
liable to any Bank for: (i) any action taken or omitted in connection
herewith at the request or with the approval of the Banks (including the
Required Banks, as applicable); (ii) any action taken or omitted in the
absence of gross negligence or wilful misconduct; or (iii) the due
execution, effectiveness, validity or enforceability of any L/C-Related
Document.
(b) Each Borrower hereby assumes all risks of the acts or omissions
of any beneficiary or transferee with respect to its use of any Letter
of Credit; PROVIDED, HOWEVER, that this assumption is not intended to,
and shall not, preclude such Borrower's pursuing such rights and
remedies as it may have against the beneficiary or transferee at law or
under any other agreement. No Agent/IB-Related Person, nor any of the
respective correspondents, participants or assignees of the Issuing
Bank, shall be liable or responsible for any of the matters described in
clauses (i) through (vii) of Section 2.10(b); PROVIDED, HOWEVER,
anything in such clauses to the contrary notwithstanding, that such
Borrower may have a claim against the Issuing Bank, and the Issuing Bank
may be liable to such Borrower, to the extent, but only to the extent,
of any direct, as opposed to consequential or exemplary, damages
suffered by such Borrower which the Borrower proves were caused by the
Issuing Bank's willful misconduct or gross negligence or the Issuing
Bank's willful failure to pay under any Letter of Credit after the
presentation to it by the beneficiary of a sight draft and
certificate(s) strictly complying with the terms and conditions of a
Letter of Credit. In furtherance and not in limitation of the
foregoing: (i) the Issuing Bank may accept documents that appear on
their face to be in order, without responsibility for further
investigation, regardless of any notice or information to the contrary;
and (ii) the Issuing Bank shall not be responsible for the validity or
sufficiency of any instrument transferring or assigning or purporting to
transfer or assign a Letter of Credit or the rights or benefits
thereunder or proceeds thereof, in whole or in part, which may prove to
be invalid or ineffective for any reason.
16. OBLIGATIONS ABSOLUTE. The obligations of each Borrower under this
Agreement and any L/C-Related Document to reimburse the Issuing Bank for
a drawing under a Letter of Credit, and to repay any L/C Borrowing and
any drawing under a Letter of Credit converted into Revolving Loans,
shall be unconditional and irrevocable, and shall be paid strictly in
accordance with the terms of this Agreement and each such other
L/C-Related Document under all circumstances, including the following:
(i) any lack of validity or enforceability of this Agreement or any
L/C-Related Document; (ii) any change in the time, manner or place of
payment of, or in any other term of, all or any of the obligations of
such Borrower in respect of any Letter of Credit or any other amendment
or waiver of or any consent to departure from all or any of the
L/C-Related Documents in accordance with their terms; (iii) the
existence of any claim, set-off, defense or other right that such
Borrower may have at any time against any beneficiary or any transferee
of any Letter of Credit (or any Person for whom any such beneficiary or
any such transferee may be acting), the Issuing Bank or any other
Person, whether in connection with this Agreement, the transactions
contemplated hereby or by the L/C-Related Documents or any unrelated
transaction; (iv) any draft, demand, certificate or other document
presented under any Letter of Credit proving to be forged, fraudulent,
invalid or insufficient in any respect or any statement therein being
untrue or inaccurate in any respect; (v) any payment by the Issuing
Bank under any Letter of Credit against presentation of a draft or
certificate that does not strictly comply with the terms of any Letter
of Credit; (vi) any payment made by the Issuing Bank under any Letter of
Credit to any Person purporting to be a trustee in bankruptcy,
debtor-in-possession, assignee for the benefit of creditors, liquidator,
receiver or other representative of or successor to any beneficiary or
any transferee of any Letter of Credit, including any arising in
connection with any Insolvency Proceeding; (vii) any exchange, release
or non-perfection of any collateral, or any release or amendment or
waiver of or consent to departure from any other guarantee, for all or
any of the obligations of any Borrower in respect of any Letter of
Credit; or (viii) any other circumstance or happening whatsoever,
whether or not similar to any of the foregoing, including any other
circumstance that might otherwise constitute a defense available to, or
a discharge of, any Borrower or a guarantor.
17. CASH COLLATERAL PLEDGE. Upon (i) the request of the Agent, if the
Issuing Bank has honored any full or partial drawing request on any
Letter of Credit and such drawing has resulted in an L/C Borrowing
hereunder, (ii) the occurrence of the Maturity Date, if any Letters of
Credit may for any reason remain outstanding and partially or wholly
undrawn, or (iii) the occurrence of the circumstances described in
subsection 2.07(b) requiring any Borrower to cash collateralize Letters
of Credit, such Borrower shall immediately pay over cash, in Dollars, in
an amount equal to the L/C Obligations of such Borrower to the Agent for
the benefit of the Banks to be held by the Agent as cash collateral
subject to the terms of this Section 2.17. Such amount, together with
any amount received by the Agent in respect of outstanding Letters of
Credit pursuant to Article VII and any additional amounts received by
the Agent as provid