<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) APRIL 10, 1996
WHITTAKER CORPORATION
(Exact Name of Registrant as Specified in Its Charter)
DELAWARE
(State or Other Jurisdiction of Incorporation)
1-5407 95-4033076
(Commission File Number) (I.R.S. Employer Identification No.)
1955 N. SURVEYOR AVENUE, SIMI VALLEY, CA 93063
(Address of Principal Executive Offices)
(805) 526-5700
(Registrant's Telephone Number, Including Area Code)
<PAGE>
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
(a) Pursuant to a Stock Purchase Agreement dated as of March 2, 1996, by and
between Whittaker Corporation (the "Registrant") and Raytheon Company
("Raytheon"), the Registrant acquired all of the issued and outstanding
common stock (the "Shares") of Xyplex, Inc. ("Xyplex"), a wholly-owned
subsidiary of Raytheon, for consideration consisting of (i)
$67,287,016.71 in cash, to be increased or decreased to the extent that
as of April 10, 1995 the net amount of working capital of Xyplex is
greater than or less than $12,625,000, as the case may be; and (ii)
1,974,333 shares of common stock of the Registrant. The transaction
closed on April 10, 1996.
The cash portion of the consideration paid by the Registrant was
furnished by a combination of working capital and borrowings under the
Registrant's Amended and Restated Credit Agreement with NationsBank of
Texas, N.A., as agent, and the financial institutions named therein as
lenders thereto, dated April 10, 1996.
In connection with the issuance of Registrant's common stock to
Raytheon, Registrant and Raytheon entered into a Stockholder's
Agreement, dated as of April 10, 1996.
(b) The acquisition of the Shares entitles the Registrant to indirect
ownership of the equipment and other physical property of Xyplex, and
the leasehold interests of Xyplex in plant facilities. Such assets have
been used by Xyplex primarily for the manufacturing and sale of certain
data networking telecommunications products, and the Registrant intends
to continue such use.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a)-(b) It is impracticable to provide the required financial statements for the
acquisition described in Item 2 as of the date hereof. Such financial
statements will be filed as soon as practicable, but not later than 60
days following the filing hereof.
(C) EXHIBITS
Exhibit No. Description
----------- -----------
4.1 Stockholder's Agreement dated as of April 10, 1996, between
Registrant and Raytheon Company
4.2 Term Note, dated April 10, 1996.
4.3 Revolving Note, dated April 10, 1996.
10.1 Stock Purchase Agreement dated as of March 2, 1996, between
Registrant and Raytheon Company
10.2 Amended and Restated Credit Agreement dated as of April 10,
1996, among Registrant, NationsBank of Texas, N.A., as
Agent, and the financial institutions named therein as
Initial Lenders.
2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
WHITTAKER CORPORATION
By: /s/ Richard B. Levin
------------------------------------
Richard B. Levin
Vice President, Secretary
and Chief Financial Officer
Dated: April 24, 1996
3
<PAGE>
EXHIBIT INDEX
-------------
<TABLE>
<CAPTION>
Exhibit No. Description Page
- ----------- ----------- ----
<S> <C> <C>
4.1 Stockholder's Agreement dated as of __
April 10, 1996, between Registrant and
Raytheon Company
4.2 Term Note, dated April 10, 1996. __
4.3 Revolving Note, dated April 10, 1996. __
10.1 Stock Purchase Agreement dated as of __
March 2, 1996, between Registrant and
Raytheon Company
10.2 Amended and Restated Credit __
Agreement dated as of April 10, 1996,
among Registrant, NationsBank of
Texas, N.A., as Agent, and the
financial institutions named therein as
Initial Lenders.
</TABLE>
4
<PAGE>
EXHIBIT 4.1
STOCKHOLDER'S AGREEMENT
THIS STOCKHOLDER'S AGREEMENT (the "Agreement") is made as of April 10,
1996, by and between Whittaker Corporation, a Delaware corporation ("Whittaker")
and Raytheon Company, a Delaware corporation ("Raytheon").
This Agreement is made pursuant to a Stock Purchase Agreement dated March
2, 1996 (the "Purchase Agreement"), between Whittaker and Raytheon.
In order to induce Raytheon to enter into the Purchase Agreement and to
consummate the transactions contemplated thereby, Whittaker has agreed to
provide the registration rights set forth in this Agreement.
The parties hereto agree as follows:
1. Definitions.
------------
"Commission" means the Securities and Exchange Commission.
"Common Stock" means the Common Stock, $.01 par value per share, of
Whittaker.
"Person" means an individual, partnership, corporation, association,
trust, joint venture, unincorporated organization, or any government,
governmental department or agency or political subdivision thereof.
"Purchase Agreement" has the meaning specified in the preamble.
"Registrable Securities" means (i) any Common Stock issued or issuable
to Raytheon under the Purchase Agreement and (ii) any securities issued or
issuable with respect to the securities referred to in clause (i) by way of a
stock dividend or stock split or in connection with a combination of shares,
recapitalization, merger, consolidation or other reorganization. As to any
particular Registrable Securities, such securities will cease to be Registrable
Securities when they have been distributed to the public through a broker,
dealer or market purchaser in compliance with Rule 144 under the Securities Act
(or any similar rule then in force) or sold pursuant to an effective
registration statement under the Securities Act.
"Registration Expenses" has the meaning specified in Section 4.
"Registration Statement" has the meaning specified in Section 2.
"Securities Act" means the Securities Act of 1933, as amended or any
successor federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.
<PAGE>
-2-
"Securities Exchange Act" means the Securities Exchange Act of 1934, as
amended, or any successor federal statute, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the time.
2. Registration on Form S-3. On or before May 15, 1996, Whittaker will
------------------------
prepare and file with the Commission a registration statement on Form S-3
covering all of the shares of Common Stock issued to Raytheon pursuant to the
Purchase Agreement (the "Registration Statement"). The Registration Statement
will permit delayed or continuous offerings pursuant to Rule 415 under the
Securities Act.
3. Registration Procedures. Whittaker agrees to use its best efforts to
-----------------------
effect the registration of the Registrable Securities in accordance with the
intended method of disposition thereof, and pursuant thereto Whittaker will as
expeditiously as possible:
(i) use its best efforts to cause the Registration Statement to become
effective (provided that before filing the Registration Statement or
prospectus or any amendments or supplements thereto, Whittaker will furnish
to Raytheon copies of all such documents proposed to be filed, which
documents will be subject to the timely review of Raytheon's counsel);
(ii) prepare and file with the Commission such amendments and
supplements to the Registration Statement and the prospectus used in
connection therewith as may be necessary to keep such registration
statement effective until the earlier of the third anniversary of the
effective date of the Registration Statement or such time as all of the
Registrable Securities covered by such registration statement have been
sold and to comply with the provisions of the Securities Act with respect
to the disposition of all securities covered by the Registration Statement
during such effective period in accordance with the intended methods of
disposition by Raytheon set forth in the Registration Statement;
(iii) furnish to Raytheon such number of copies of the Registration
Statement, each amendment and supplement thereto, the prospectus included
in the Registration Statement (including each preliminary prospectus) and
such other documents as Raytheon may reasonably request in order to
facilitate the disposition of the Registrable Securities owned by Raytheon;
(iv) use its best efforts to register or qualify the Registrable
Securities under such other securities or blue sky laws of such states of
the United States as Raytheon reasonably requests and do any and all other
acts and things which may be necessary or advisable to enable Raytheon to
consummate the disposition of the Registrable Securities in jurisdictions
where Raytheon desires to effect such sales or other disposition;
(v) notify Raytheon, at any time when a prospectus relating thereto is
required to be delivered under the Securities Act, of the happening of any
event as a result of which the prospectus included in the Registration
Statement contains an untrue statement of a material fact or omits any fact
necessary to make the statements therein not misleading, and, at the
request of any such seller,
<PAGE>
-3-
Whittaker will promptly prepare (and, when completed, give notice to
Raytheon) a supplement or amendment to such prospectus so that, as
thereafter delivered to the purchasers of Registrable Securities, such
prospectus will not contain an untrue statement of a material fact or omit
to state any fact necessary to make the statements therein not misleading;
(vi) cause all the Registrable Securities to be listed on each
securities exchange on which similar securities issued by Whittaker are
then listed;
(vii) provide a transfer agent and registrar for all the Registrable
Securities not later than the effective date of such registration
statement;
(viii) in connection with any underwritten offering enter into such
customary agreements (including underwriting agreements in customary form)
and take all such other actions as Raytheon or the underwriters, if any,
reasonably request in order to expedite or facilitate the disposition of
the Registrable Securities; and
(ix) in the event of the issuance of any stop order suspending the
effectiveness of the Registration Statement, or of any order suspending or
preventing the use of any related prospectus or suspending the
qualification of any Registrable Securities included in the Registration
Statement for sale in any jurisdiction, Whittaker will use its best efforts
promptly to obtain the withdrawal of such order.
4. Registration Expenses. Except as otherwise expressly set forth in
---------------------
Section 5(d) hereof, all expenses incident to Whittaker's performance of or
compliance with this Agreement, including without limitation all registration
and filing fees, fees and expenses of compliance with securities or blue sky
laws, printing expenses, messenger and delivery expenses, and fees and
disbursements of counsel for Whittaker and all independent certified public
accountants and other Persons retained by Whittaker (all such expenses being
herein called "Registration Expenses") and Whittaker's internal expenses
(including, without limitation, all salaries and expenses of its officers and
employees performing legal or accounting duties) the expense of any annual audit
or quarterly review, the expense of any liability insurance for Whittaker and
its board of directors and the expenses and fees for listing the securities to
be registered on each securities exchange on which similar securities issued by
Whittaker are then listed, will be borne by Whittaker.
5. Certain Rights and Obligations with Respect to the Registrable
--------------------------------------------------------------
Securities.
----------
(a) Trading Procedures. Raytheon agrees that it will not, during any
------------------
calendar week, sell Registrable Securities in excess of ten percent (10%) of the
average weekly trading volume in the shares of Common Stock during the
immediately preceding thirteen weeks; provided, however, that the foregoing
restriction shall not apply to negotiated block trades to "qualified
institutional buyers" as that term is defined in Rule 144A promulgated under the
Securities Act.
<PAGE>
-4-
Raytheon agrees that it will notify Whittaker (via telephone and/or
facsimile) prior to executing sales of Registrable Securities in excess of
100,000 shares. The notification shall indicate the number of Registrable
Securities to be sold as well as the identity of the prospective purchaser and
shall include an offer to sell such Registrable Securities to Whittaker on the
same terms and conditions governing the proposed sale to such other Person.
Whittaker may accept Raytheon's offer at any time within twenty-four hours after
receipt thereof. If Whittaker fails to accept the offer to purchase such shares
in its entirety within the required time period, Raytheon shall be free to
proceed with the proposed sale.
In addition, Raytheon agrees that it will not in any single transaction or
series of related transactions, (i) sell Registrable Securities representing
more than five percent (5%) of the issued and outstanding shares of Common Stock
to any Person or (ii) sell Registrable Securities to Persons owning more than
five percent (5%) of the issued and outstanding shares of Common Stock who have
been identified to Raytheon by Whittaker, in each case without the prior consent
of Whittaker, which consent shall not be unreasonably withheld.
(b) Voting Agreement. For a period of one year following the date hereof,
----------------
Raytheon agrees that it will vote the Registrable Securities upon matters
recommended by Whittaker management at least in the same proportion as cast by
all other holders of shares of Common Stock.
Raytheon further agrees that in the event that shares of Whittaker Common
Stock close above $26.00 per share as reported by the New York Stock Exchange
("NYSE") Composite Transactions for a period of twenty (20) consecutive NYSE
trading days and Raytheon has not sold at least fifty percent (50%) of the
maximum number of shares allowed pursuant to the weekly volume limitation set
forth in Section 5(a) of the Agreement during such time period (excluding the
proviso regarding block trades), then voting restrictinos shall be extended for
an additional one year period on that number of shares equal to the maximum
number that Raytheon could have sold minus the number of shares actually sold.
(c) Restrictions on Additional Purchases. So long as Raytheon holds
------------------------------------
Registrable Securities, it will not (i) purchase additional shares of Common
Stock other than purchases by or on behalf of pension funds or other employee
benefit plans or trusts, (ii) hedge its ownership of the Registrable Securities
in any single transaction or series of related transactions, in each case
without the prior consent of Whittaker.
(d) Secondary Distribution. Whittaker agrees to use its best efforts to
----------------------
effect an underwritten secondary distribution of the Registrable Securities as
soon as practicable following the date hereof and, in the event that the public
offering price is $25.325 or greater, Raytheon shall make its Registrable
Securities available for such secondary offering. The procedures set forth in
Section 3 hereof shall apply to such secondary distribution; provided, however,
that Raytheon shall be responsible for reasonable underwriting discounts and
commissions and Registration Expenses up to a maximum amount determined by
multiplying the number of shares of Registrable Securities included under the
registration statement for such offering times the difference obtained by
subtracting the per share public offering price minus $25.325. Accordingly,
<PAGE>
-5-
Raytheon shall not have any obligation with respect to underwriting discounts to
the extent that such per share offering price is equal to or less than $25.325.
(e) Redistribution of Registrable Securities. For a period of three years
----------------------------------------
following the date hereof, Whittaker shall have the right to redistribute the
Registrable Securities.
6. Indemnification. (a) Whittaker agrees to indemnify, to the extent
---------------
permitted by law, Raytheon, its officers and directors and each Person who
controls Raytheon (within the meaning of the Securities Act), and each
underwriter if any, of Whittaker's securities, with respect to any registration,
qualification or compliance which has been effected pursuant to this Agreement,
against all expenses, losses, claims, damages and liabilities caused by any
untrue or alleged untrue statement of material fact contained in any
registration statement, prospectus or preliminary prospectus or any amendment
thereof or supplement thereto or any omission or alleged omission of a material
fact required to be stated therein or necessary to make the statements therein
not misleading, except insofar as the same are caused by or contained in any
information furnished in writing to Whittaker by Raytheon expressly for use
therein.
(b) In connection with any registration, qualification or compliance which
has been effected pursuant to this Agreement, Raytheon will furnish to Whittaker
in writing such information and affidavits as Whittaker reasonably requests for
use in connection with any such registration statement or prospectus and, to the
extent permitted by law, will indemnify Whittaker, its directors and officers
and each Person who controls Whittaker (within the meaning of the Securities
Act) against any expenses, losses, claims, damages and liabilities resulting
from any untrue or alleged untrue statement of material fact contained in any
registration statement, prospectus or preliminary prospectus or any amendment
thereof or supplement thereto or any omission or alleged omission of a material
fact required to be stated therein or necessary to make the statements therein
not misleading, but only to the extent that such untrue statement or omission is
contained in any information or affidavit so furnished in writing by Raytheon;
provided that Raytheon's obligation to indemnify will be limited to the net
amount of proceeds received by Raytheon from the sale of Registrable Securities
pursuant to any such registration statement.
(c) Any Person entitled to indemnification hereunder will (i) give prompt
written notice to the indemnifying party of any claim with respect to which it
seeks indemnification and (ii) unless in such indemnified party's reasonable
judgment a conflict of interest between such indemnified and indemnifying
parties may exist with respect to such claim, permit such indemnifying party to
assume the defense of such claim with counsel reasonably satisfactory to the
indemnified party; provided, however, that the failure of an indemnified party
to give notice as provided herein shall not relieve an indemnifying party of its
obligations hereunder unless the failure to give such notice is materially
prejudicial to the indemnifying party's ability to defend such action. If such
defense is assumed, (i) no compromise or settlement thereof may be effected by
the indemnifying party without the indemnified party's consent (which shall not
be unreasonably withheld) unless (a) there is no finding or admission of any
violation of law or any violation of the rights of any person and no effect on
any other claims that may be made against the indemnified party and (b) the sole
relief provided is monetary damages that are paid in full by the indemnifying
party and (ii) the indemnifying party
<PAGE>
-6-
will not be subject to any liability for any settlement made by the indemnified
party without its consent (but such consent will not be unreasonably withheld).
An indemnifying party who is not entitled to, or elects not to, assume the
defense of a claim will not be obligated to pay the fees and expenses of more
than one counsel for all parties indemnified by such indemnifying party with
respect to such claim, unless in the reasonable judgment of any indemnified
party a conflict of interest may exist between such indemnified party and any
other of such indemnified parties with respect to such claim. Subject to the
foregoing terms and provisions of this Section 6(c), each indemnifying party
hereunder will reimburse the person entitled to indemnification hereunder for
all legal and other expenses reasonably incurred in connection with
investigating and defending the action or claim for which such indemnified party
seeks indemnification, as such expenses are incurred.
(d) The indemnification provided for under this Agreement will remain in
full force and effect regardless of any investigation made by or on behalf of
the indemnified party or any officer, director or controlling Person of such
indemnified party and will survive the transfer of securities. Whittaker also
agrees to make such provisions, as are requested by any indemnified party, for
contribution to such party in the event Whittaker's indemnification is
unavailable for any reason.
7. Participation in Underwritten Registrations. In the case of any offering
-------------------------------------------
hereunder which is underwritten, Raytheon agrees that it will complete and
execute all questionnaires, powers of attorney, indemnities, underwriting
agreements and other documents required under the terms of such underwriting
arrangements; provided, however, that Raytheon shall not be required to make any
representations or warranties to Whittaker or the underwriters other than
representations and warranties regarding itself and its intended method of
distribution.
8. Noncompetition. Raytheon agrees that for a period of two (2) years after
--------------
date hereof (the "Restricted Period"), none of Raytheon or any subsidiary of
Raytheon (the "Raytheon Group"), will engage directly or indirectly in
competition with Xyplex, Inc., whether individually or as a consultant, partner,
owner or stockholder owning more than five percent (5%) of a corporation, in the
business of manufacturing network terminal servers, internetworking hubs, wide
area bridge routers, FDDI bridge routers and modular Ethernet workgroup switches
for sale in non-government markets (the "Restricted Business"). Notwithstanding
the foregoing, nothing herein shall prohibit any member of the Raytheon Group
from (a) owning, directly or indirectly, less than fifteen percent (15%) of any
class of securities listed on a national securities exchange or traded publicly
in the over-the-counter market, (b) directly or indirectly acquiring a business
which engages in the Restricted Business if such business is 25% or less
(measured by net revenues) of a larger business so acquired by such member of
the Raytheon Group, or (c) acquiring a business which engages in the Restricted
Business if such business is more than 25% (measured by net revenues) of a
larger business so acquired by such member of the Raytheon Group, provided that
such member of the Raytheon Group places such competitive business for sale
promptly after its acquisition and uses reasonable commercial efforts to
complete such sale within the Restricted Period, (d) continuing to produce and
sell those products now being produced and sold by members of the Raytheon Group
(including within the foregoing all products that Raytheon can demonstrate to
have been under development as of the date hereof).
<PAGE>
-7-
9. Miscellaneous. (a) No Inconsistent Agreements. Whittaker will no
------------- --------------------------
hereafter enter into any agreement with respect to its securities which is
inconsistent with the rights granted to Raytheon under this Agreement.
(b) Adjustments Affecting Registrable Securities. Whittaker will not take
--------------------------------------------
any action, or permit any change to occur, with respect to its securities which
would materially and adversely affect the ability of Raytheon to include
Registrable Securities in a registration undertaken pursuant to this Agreement
or which would materially and adversely affect the marketability of such
Registrable Securities.
(c) Remedies. Any Person having rights under any provision of this
--------
Agreement will be entitled to enforce such rights specifically, to recover
damages caused by reason of any breach of any provision of this Agreement and to
exercise all other rights granted by law. The parties hereto agree and
acknowledge that money damages may not be an adequate remedy for any breach of
the provisions of this Agreement and that any party may in its sole discretion
apply to any court of law or equity of competent jurisdiction (without posting
any bond or other security) for specific performance and for other injunctive
relief in order to enforce or prevent violation of the provisions of this
Agreement.
(d) Amendments and Waivers. Except as otherwise provided herein, the
----------------------
provisions of this Agreement may be amended or waived only upon the prior
written consent of the parties hereto.
(e) Successors and Assigns. All covenants and agreements in this Agreement
----------------------
by or on behalf of any of the parties hereto will bind and inure to the benefit
of the respective successors and assigns of the parties hereto whether so
expressed or not. In addition, whether or not any express assignment has been
made, the provisions of this Agreement which are for the benefit of purchasers
or holders of Registrable Securities are also for the benefit of, and
enforceable by, any subsequent holder of Registrable Securities.
(f) Severability. Whenever possible, each provision of this Agreement will
------------
be interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement is held to be prohibited by or invalid
under applicable law, such provision will be ineffective only to the extent of
such prohibition or invalidity without invalidating the remainder of this
Agreement.
(g) Counterparts. This Agreement may be executed simultaneously in
------------
counterparts, each of which when executed and delivered shall be an original and
all of which taken together will constitute one and the same Agreement.
(h) Descriptive Headings. The descriptive headings of this Agreement are
--------------------
inserted for convenience only and do not constitute a part of this Agreement.
(i) GOVERNING LAW. THIS AGREEMENT AND THE EXHIBITS AND SCHEDULES HERETO
-------------
WILL BE GOVERNED BY AND CONSTRUED IN
<PAGE>
-8-
ACCORDANCE WITH THE INTERNAL LAW, AND NOT THE LAW OF CONFLICTS, OF THE STATE OF
DELAWARE.
(j) Notices. All notices, demands or other communications to be given or
-------
delivered under or by reason of the provisions of this Agreement shall be in
writing and shall be deemed to have been given (i) if mailed by certified or
registered mail, postage prepaid, return receipt requested, when received, (ii)
if by telex or facsimile transmission, when sent answerback or electronic
confirmation of receipt is received on a day on which business is being
conducted by the recipient, and (iii) if by overnight courier, when receipted
for, in each case when addressed to the applicable party hereto as follows or at
such other address as any party may designate by written notice to the other, in
accordance herewith:
If to Whittaker:
Whittaker Corporation
1955 N. Surveyor Avenue
Simi Valley, California 93063
Telecopier: (805) 584-4195
Attention: General Counsel
If to Raytheon:
Raytheon Company
141 Spring Street
Lexington, MA 02173
Telecopier: (617) 860-2924
Attention: General Counsel
or to such other address or to the attention of such other person as the
recipient party has specified by prior written notice to the sending party.
<PAGE>
-9-
IN WITNESS WHEREOF, the parties hereto have executed this Stockholder's
Agreement as of the date first above written.
WHITTAKER CORPORATION
By: /s/ Lynne M. O. Brickner
-------------------------------
Name: Lynne M. O. Brickner
Title: Assistant Vice President
RAYTHEON COMPANY
By: /s/ David S. Dwelley
---------------------------------
Name: David S. Dwelley
Title: Vice President -
Strategic Business
Development
<PAGE>
EXHIBIT 4.2
TERM NOTE
$85,000,000 April 10, 1996
FOR VALUE RECEIVED, the undersigned, WHITTAKER CORPORATION, a Delaware
corporation (the "BORROWER"), HEREBY PROMISES TO PAY to the order of NATIONSBANK
--------
OF TEXAS, N.A. (the "LENDER") the principal sum of Eighty Five Million Dollars
------
($85,000,000), in twenty (20) consecutive quarterly installments until such
principal sum shall be paid in full, on the 21st day of each April, July,
October and January of each year (other than the last installment owing
hereunder, which shall be payable on April 9, 2001), commencing July 21, 1996,
the amount payable on each such installment being equal to the amount set forth
below opposite the period in which such installment is stated to be due below,
as such installment has been reduced by any prepayment received pursuant to
Section 2.05 of the Credit Agreement and applied to such installment:
<TABLE>
<CAPTION>
AMOUNT OF QUARTERLY
PERIOD INSTALLMENT
- ------ -----------
<S> <C>
July 21, 1996 to and including October
21, 1996 $2,000,000
January 21, 1997 to and including
October 21, 1997 $2,500,000
January 21, 1998 to and including October
21, 1998 $4,500,000
January 21, 1999 to and including October
21, 1999 $5,000,000
January 21, 2000 to and including April
9, 2001 $5,500,000
</TABLE>
provided, however that the last such installment shall be in the amount
- -------- -------
necessary to repay in full the aggregate unpaid principal amount of this Note
and shall, in any event, be due and payable on April 9, 2001.
The Borrower promises to pay interest on the unpaid principal amount
of this Note from the date hereof until such principal amount is paid in full,
at such interest rates, and payable at such times, as are specified in the
Credit Agreement.
Both principal and interest are payable in lawful money of the United
States of America and in same day funds to the Lender in accordance with the
provisions of Section 2.09(a) of the Credit Agreement. All advances and
payments made on account of principal hereof shall be recorded by the Lender
and, prior to any transfer hereof, endorsed on the grid attached hereto which is
part of this Note; provided, however, that any failure to make such endorsement
-------- -------
on such grid shall in no way alter, impair or endanger the Borrower's
obligations hereunder.
This Note is one of the Term Notes referred to in, and is entitled to
the benefits of, (i) the Amended and Restated Credit Agreement dated as of April
10, 1996 (said Amended and Restated Credit Agreement, as it may hereafter be
amended, supplemented or otherwise modified from time to time, being the "CREDIT
------
AGREEMENT") among the Borrower, the Lender and certain other lenders and
- ---------
NationsBank of Texas, N.A., as Agent for the Lender and such other lenders, and
(ii) the other Loan Documents
<PAGE>
referred to therein and entered into pursuant thereto. The Credit Agreement,
among other things, (a) provides for the making of Term Advances (as defined in
the Credit Agreement) to the Borrower, the indebtedness of the Borrower
resulting from such Term Advance of the Lender being evidenced by this Note, and
(b) contains provisions for acceleration of the maturity hereof upon the
happening of certain stated events and also for prepayments on account of
principal hereof prior to the maturity hereof upon the terms and conditions
therein specified.
This Note shall be governed by, and construed in accordance with, the
laws of the State of New York.
WHITTAKER CORPORATION,
a Delaware corporation
By: /S/ JOHN K. OTTO
--------------------
Title: Treasurer
2
<PAGE>
ADVANCES AND PAYMENTS OF PRINCIPAL
<TABLE>
<CAPTION>
DATE AMOUNT OF TYPE OF PRINCIPAL UNPAID NOTATION
ADVANCE ADVANCE PAYMENTS PRINCIPAL MADE BY
BALANCE
<S> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------
- -----------------------------------------------------------------------
- -----------------------------------------------------------------------
- -----------------------------------------------------------------------
- -----------------------------------------------------------------------
=======================================================================
</TABLE>
3
<PAGE>
EXHIBIT 4.3
REVOLVING NOTE
$85,000,000 April 10, 1996
FOR VALUE RECEIVED, the undersigned, WHITTAKER CORPORATION, a Delaware
corporation (the "BORROWER"), HEREBY PROMISES TO PAY to the order of NATIONSBANK
--------
OF TEXAS, N.A. (the "LENDER"), for the account of its Applicable Lending Office
------
(as defined in the Credit Agreement (as hereinafter defined)), the aggregate
principal amount of the Revolving Advances (as defined below) owing to the
Lender by the Borrower pursuant to the Credit Agreement on the Revolving
Commitment Termination Date (as defined in the Credit Agreement).
The Borrower promises to pay interest on the unpaid principal amount
of each Revolving Advance from the date of such Revolving Advance until such
principal amount is paid in full, at such interest rates, and payable at such
times, as are specified in the Credit Agreement.
Both principal and interest are payable in lawful money of the United
States of America and in same day funds to the Lender in accordance with the
provisions of Section 2.09(a) of the Credit Agreement. Each Revolving Advance
owing to the Lender by the Borrower and the maturity thereof, and all payments
made on account of principal thereof, shall be recorded by the Lender and, prior
to any transfer hereof, endorsed on the grid attached hereto, which is part of
this Note; provided, however, that any failure to make such endorsement on such
-------- -------
grid shall in no way alter, impair or endanger the Borrower's obligations
hereunder.
This Note is one of the Revolving Notes referred to in, and is
entitled to the benefits of, (i) the Amended and Restated Credit Agreement dated
as of April 10, 1996 (said Amended and Restated Credit Agreement, as it may
hereafter be amended, supplemented or otherwise modified from time to time,
being the "CREDIT AGREEMENT") among the Borrower, the Lender and certain other
----------------
lenders party thereto, and NationsBank of Texas, N.A., as Agent for the Lender
and such other lenders, and (ii) the other Loan Documents referred to therein
and entered into pursuant thereto. The Credit Agreement, among other things,
(a) provides for the making of revolving advances (the "REVOLVING ADVANCES") by
------------------
the Lender to the Borrower from time to time in an aggregate amount not to
exceed at any time outstanding the U.S. dollar amount first above mentioned, the
indebtedness of the Borrower resulting from each such Revolving Advance being
evidenced by this Note, and (b) contains provisions for acceleration of the
maturity hereof upon the happening of certain stated events and also for
prepayments on account of principal hereof prior to the maturity hereof upon the
terms and conditions therein specified.
This Note shall be governed by, and construed in accordance with, the
laws of the State of New York.
WHITTAKER CORPORATION,
a Delaware corporation
By: /s/ John K. Otto
--------------------------
Title: Treasurer
<PAGE>
ADVANCES AND PAYMENTS OF PRINCIPAL
<TABLE>
<CAPTION>
DATE AMOUNT OF TYPE OF PRINCIPAL UNPAID NOTATION
ADVANCE ADVANCE PAYMENTS PRINCIPAL MADE BY
BALANCE
<S> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------
- -----------------------------------------------------------------------
- -----------------------------------------------------------------------
- -----------------------------------------------------------------------
- -----------------------------------------------------------------------
=======================================================================
</TABLE>
2
<PAGE>
EXHIBIT 10.1
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT made and entered into this 2nd day of March
1996 by and between RAYTHEON COMPANY, a Delaware corporation ("Seller"), and
WHITTAKER CORPORATION, a Delaware corporation ("Buyer").
WHEREAS, Seller owns one thousand (1,000) shares of common stock (the
"Shares"), which comprise all of the issued and outstanding shares of the
capital stock of XYPLEX, INC., a Massachusetts corporation ("Xyplex"); and
WHEREAS, Buyer desires to purchase from Seller, and Seller desires to
sell to Buyer, the Shares on the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the mutual agreements herein
contained the parties agree as follows:
1 PURCHASE AND SALE
1.1 Purchase and Sale of the Shares. Subject to the terms and conditions set
-------------------------------
forth in this Agreement Buyer agrees to purchase from Seller, and Seller agrees
to sell to Buyer, on the Closing Date (as defined in Section 1.3 hereof) the
Shares free and clear of all claims, liens, pledges, restrictions or
encumbrances of any nature whatsoever ("Liens") and together with all rights now
and hereafter attaching thereto.
1.2 Purchase Price; Payment. The purchase price for the Shares shall total
-----------------------
One Hundred Seventeen Million Five Hundred Thousand Dollars ($117,500,000) (the
"Purchase Price") and shall be comprised of (i) cash in the amount of Sixty-
Seven Million Five Hundred Thousand Dollars ($67,500,000) and (ii) such whole
number of newly issued shares of common stock of Buyer (the "Whittaker Shares")
which (x) shall have an aggregate value of Fifty Million Dollars ($50,000,000)
and (y) shall be calculated based on a per share price equal to the average of
the closing price of Buyer's common stock as reported on the New York Stock
Exchange ("NYSE") Composite Transactions for the ten NYSE trading days prior to
the date of the public announcement of the execution and delivery of this
Agreement. In the event that Seller is entitled to a fraction of a share
following the calculation of the number of Whittaker Shares pursuant to clause
(ii) above, Seller shall in lieu thereof receive an additional amount in cash
equal to the dollar value of such fractional share and such additional payment,
if any, together with the $67,500,000 shall comprise the "Cash Payment." On the
Closing Date, Buyer shall pay the Cash Payment by wire transfer of immediately
available funds to an account designated in writing by Seller not less than two
business days prior to the Closing Date and deliver a certificate(s)
representing the Whittaker Shares.
1.3 Closing. Closing of the purchase and sale of the Shares shall occur at a
-------
time and place and on a date mutually agreed by the parties, which date shall be
not later than the fifth business day following the satisfaction of all
conditions to Closing as set forth in Sections 6 and 7 hereof. The date upon
which the closing occurs is herein referred to as the "Closing Date."
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<PAGE>
1.4 Closing Deliveries.
------------------
1.4.1 Seller's Deliveries. At the closing Seller will deliver to Buyer the
-------------------
following:
(i) a stock certificate or certificates, duly endorsed, or with stock
powers attached, for transfer of the Shares;
(ii) the Stockholder's Agreement described in Section 5.6 hereof, duly
executed by Seller;
(iii) the release described in Section 1.5 hereof;
(iv) the certificates, consents, waivers and approvals required under
Sections 6.1, 6.2 and 6.4 hereof;
(v) letters of resignation of all directors and officers of Xyplex;
(vi) a long-form certificate of good standing of Xyplex certified by
the Commonwealth of Massachusetts;
(vii) certificates of qualification or authority and good standing
certified by the states in which Xyplex conducts business;
(viii) tax clearance certificates or certificates of good standing issued
by the appropriate taxing authority in each state in which Xyplex
conducts business; and
(ix) such other instruments and documents as reasonably may be
requested by Buyer at or prior to the Closing Date.
1.4.2 Buyer's Deliveries. At the closing Buyer shall pay or deliver to Seller
------------------
the following:
(i) the Cash Payment;
(ii) a stock certificate representing the Whittaker Shares;
(iii) the certificates, consents, waivers and approvals required under
Sections 7.1, 7.2 and 7.4 hereof;
(iv) the Stockholder's Agreement described in Section 5.6 hereof, duly
executed by Buyer; and
(v) such other instruments and documents as reasonably may be
requested by Seller at or prior to the Closing Date.
1.5 Release. Concurrently with the sale of the Shares to Buyer at the
-------
Closing, Seller shall be deemed, without any further action, to have released
Xyplex from all
-2-
<PAGE>
agreements, commitments, indebtedness, obligations and claims then existing or
which, to the extent arising from or in connection with any act, omission or
state of facts taken or existing on or prior to the Closing Date, may exist
after the Closing Date (except for amounts due or that will become due with
respect to tax liabilities incurred by Xyplex and its Subsidiaries for the
period prior to the Closing Date in accordance with the tax sharing agreement
between Seller, Xyplex and its Subsidiaries (the "Tax Sharing Agreement").
Seller (a) shall execute and deliver to Xyplex at the Closing a release
embodying the terms of this Section 1.5 and (b) shall not assert in any manner
(including, but not limited to, by way of defense, offset or counterclaim) any
matter purported to be released by the preceding sentence.
1.6 Adjustment to Cash Purchase Price.
---------------------------------
1.6.1 Attached as Schedule 1.6.1 is an unaudited Statement of Working
Capital of Xyplex as of December 31, 1995, prepared in accordance
with generally accepted accounting principles ("GAAP") (the "1995
Statement of Working Capital"). The net amount of working capital
shown in such 1995 Statement of Working Capital is $12,838,000,
which is equal to Total Current Assets of $33,462,000 minus Total
Current Liabilities of $20,624,000, and is hereinafter referred to
as the "Base Amount."
1.6.2 Seller shall prepare and deliver to Buyer, at least two business
days prior to the Closing Date, an unaudited Statement of Working
Capital of Xyplex as of the Closing Date (the "Proposed Statement
of Working Capital"). The Proposed Statement of Working Capital
shall be prepared in accordance with GAAP, applied on a basis
consistent with that employed in the preparation of the 1995
Statement of Working Capital, using the same accounting methods,
policies, practices and procedures with consistent
classifications, judgments and valuation and estimation
methodologies used in preparing the 1995 Statement of Working
Capital. The net amount of working capital shown in the Proposed
Statement of Working Capital is referred to herein as the
"Proposed Amount."
1.6.3 The Cash Payment at Closing shall be increased (decreased) by any
positive (negative) difference obtained by subtracting the Base
Amount from the Proposed Amount; provided, however, that there
shall be no adjustment in the Cash Payment at Closing if the
positive or negative difference between the Proposed Amount and
the Base Amount is $50,000 or less.
1.6.4 Within 35 days following the Closing Date Seller shall cause to be
prepared and delivered to Buyer an audited balance sheet of Xyplex
as at the Closing Date and related audited statements of cash
flows and income from January 1, 1996 to the Closing Date
("Closing Date Financial Statements"). The Closing Date Financial
Statements shall be prepared in accordance with GAAP, applied on a
basis consistent with that employed in the preparation of the 1995
Statement of Working Capital, using the same accounting methods,
policies, practices and procedures with
-3-
<PAGE>
consistent classifications, judgments and valuation and estimation
methodologies used in preparing the 1995 Statement of Working
Capital. The amount of working capital as of the Closing Date
reflected on the Closing Date Financial Statements is referred to
herein as the "Final Amount." The Proposed Statement of Working
Capital, as adjusted to reflect the Final Amount, is referred to
herein as the "Final Statement of Working Capital."
1.6.5 In the event of any dispute regarding the Final Statement of
Working Capital and the parties' inability to resolve such dispute
within ten (10) days following the date of issuance of the Final
Statement of Working Capital, the parties shall submit such
dispute for final and binding resolution to Arthur Andersen & Co.
("Arbiter"). Promptly, but not later than 60 days after its
appointment, the Arbiter shall determine, based solely on
presentations made by Seller and Buyer and not by independent
determination by the Arbiter, those items in dispute and shall
render a report as to the disputed items. In resolving any
disputed item, the Arbiter may not assign a value to any
particular item greater than the greatest value for such item
claimed by either party or less than the smallest value for such
item claimed by either party, in each case as presented to the
Arbiter. The determination of the Final Amount by the Arbiter,
including all components necessary for the determination thereof,
shall be conclusive as to the valuation and amount of all items so
valued therein and such items may not be the subject of any
indemnification claim arising from any alleged breach of any
representation or warranty contained in this Agreement.
1.6.6 Each party shall cooperate with and make available to the other
party, and to the Arbiter, all information, records, data,
auditors' workpapers and access to its personnel and facilities,
as may be reasonably required in connection with the analysis
required under this Section 1.6 and the resolution of any
disputes. The fees and expenses of the Arbiter relating to the
resolution of any dispute shall be shared equally by Seller and
Buyer.
1.6.7 If the Final Amount is greater than the Proposed Amount, Buyer
shall pay Seller the difference, plus interest at the rate of 7%
from the Closing Date to the date of payment, by wire transfer of
immediately available funds to such account as shall be specified
by Seller. If the Final Amount is less than the Proposed Amount,
Seller shall pay Buyer the difference, plus interest at the rate
of 7% from the Closing Date to the date of payment, by wire
transfer of immediately available funds to such account as shall
be specified by Buyer. Such payment shall be made within five
business days of the later of the determination of the Final
Statement of Working Capital or the determination by the Arbiter
of the Final Amount.
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<PAGE>
2 REPRESENTATIONS AND WARRANTIES AS TO SELLER
Seller hereby represents and warrants to Buyer as follows:
2.1 Organization and Authority. Seller is a corporation duly organized,
--------------------------
validly existing and in good standing under the laws of the State of Delaware
with full corporate power and authority to enter into and perform its
obligations under this Agreement.
2.2 Authorization and Enforceability of Agreement. The execution, delivery
---------------------------------------------
and performance of this Agreement by Seller have been duly authorized by all
requisite corporate action on the part of Seller, and this Agreement constitutes
the valid, binding and enforceable obligation of Seller, except to the extent
that such enforcement may be limited by bankruptcy, insolvency, moratorium and
other laws now or hereafter in effect relating to the enforcement of creditors'
rights generally and except that equitable principles may limit the right to
obtain specific performance or other equitable remedies.
2.3 No Conflicts. The execution, delivery and performance of this
------------
Agreement and the consummation of the transactions contemplated herein by
Seller do not and will not:
2.3.1 conflict with the Restated Certificate of Incorporation or By-Laws of
Seller, in each case as amended to the date hereof;
2.3.2 conflict with, result in a breach or termination of or constitute a
default under any agreement, commitment or other instrument, or any
order, judgment or decree to which Seller is a party or by which Seller
or any of its assets is bound other than any conflict, breach or default
which would not individually or in the aggregate have a material adverse
effect on SellerOs business or financial condition; or
2.3.3 constitute a violation by Seller of any law or regulation applicable to
Seller the enforcement of which would materially impair Seller's ability
to consummate the sale of the Shares pursuant to this Agreement.
2.4 Consents, Waivers and Approvals. No consent, waiver, approval or
-------------------------------
authorization of or designation, declaration or filing with any governmental
authority or other third party is required on the part of Seller in connection
with Seller's execution, delivery and performance of this Agreement except as
may be required by the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended (the "HSR Act").
2.5 Title to the Shares. Seller has good and marketable title to the Shares,
-------------------
free and clear of any Liens thereon and has the absolute right, power and
capacity to sell, assign and transfer the same to Buyer free and clear of any
Liens, other than restrictions imposed generally by state and federal securities
laws with respect to unregistered securities.
3 REPRESENTATIONS AND WARRANTIES AS TO XYPLEX
-5-
<PAGE>
Seller hereby further represents and warrants to Buyer as follows:
3.1 Organization and Authority; Subsidiaries.
----------------------------------------
3.1.1 Xyplex is a corporation duly organized, validly existing and in good
standing under the laws of the State of Massachusetts and has all
requisite authority and corporate power to conduct its business as it is
now being conducted and to own, lease and operate the properties and
assets it now owns, leases and operates.
3.1.2 Schedule 3.1(a) hereto lists each subsidiary of Xyplex ("Subsidiary") and
the jurisdiction of its incorporation. Each Subsidiary is a corporation
duly organized, validly existing and in good standing under the laws of
the jurisdiction of its incorporation and has all requisite authority and
corporate power to conduct its business as it is now being conducted and
to own, lease and operate the properties and assets it now owns, leases
and operates.
3.1.3 As set forth on Schedule 3.1(b), Xyplex and each of its Subsidiaries is
duly qualified or licensed and in good standing to do business in each
jurisdiction in which the property owned, leased or operated by it or the
nature of the business conducted by it makes such qualification
necessary, except in such jurisdictions described in Schedule 3.1(b) and
where the failure to be so duly qualified or licensed and in good
standing would not individually or in the aggregate have a material
adverse effect on the business, operations, assets, financial condition
or results of operations of Xyplex and its Subsidiaries taken as a whole
(a "Xyplex Material Adverse Effect").
3.1.3 Attached hereto as Exhibit A is a true and correct copy of the Restated
Articles of Organization of Xyplex as filed with the Secretary of State
of Massachusetts, which Restated Articles of Organization have not been
amended, modified or repealed.
3.1.4 Attached hereto as Exhibit B is a true and correct copy of the By-Laws of
Xyplex, as certified by the Secretary of Xyplex, which By-Laws have not
been altered, amended, modified or rescinded since the date hereof and
remain in full force and effect on the date hereof.
3.2 [Intentionally Omitted]
3.3 No Conflicts. Except as set forth on Schedule 3.3 hereto, the execution,
------------
delivery and performance of this Agreement and the consummation of the
transactions contemplated herein by Seller do not and will not:
3.3.1 conflict with the Restated Articles of Organization of By-Laws of Xyplex,
in each case as amended to the date hereof;
-6-
<PAGE>
3.3.2 conflict with, result in a breach or termination of or constitute a
default under any agreement, commitment or other instrument, or any
order, judgment or decree to which Xyplex is a party or by which Xyplex
or any of its assets is bound other than any conflict, breach or default
which would not individually or in the aggregate have a Xyplex Material
Adverse Effect; or
3.3.3 constitute a violation by Xyplex of any law or regulation applicable to
Xyplex other than violations which would not individually or in the
aggregate have a Xyplex Material Adverse Effect.
3.4 Consents, Waivers and Approvals. Except as set forth on Schedule 3.4
-------------------------------
hereto, no consent, waiver, approval or authorization of or designation,
declaration or filing with any governmental authority or other third party is
required on the part of Xyplex in connection with Seller's execution, delivery
and performance of this Agreement except as may be required by the HSR Act.
3.5 Capitalization. The authorized capital of Xyplex is 1,000 shares of
--------------
common stock, $1.00 par value, all of which are duly authorized, validly issued,
fully paid and non-assessable and owned legally and beneficially by Seller free
and clear of all Liens. As of the date hereof, except for this Agreement there
are no outstanding:
3.5.1 securities convertible into or exchangeable for capital stock of Xyplex
or any Subsidiary;
3.5.2 options, warrants or other rights to purchase or subscribe for capital
stock of Xyplex or any Subsidiary; or
3.5.3 contracts, commitments, agreements, understandings or arrangements of any
kind relating to the issuance of any capital stock of Xyplex or any
Subsidiary, any such convertible or exchangeable securities or any such
options, warrants or rights.
3.5.4 The outstanding shares of capital stock of each Subsidiary are duly
authorized, validly issued, fully paid and non-assessable and are owned
legally and beneficially by Xyplex free and clear of all Liens.
3.6 No Violation. Compliance with this Agreement will not:
------------
3.6.1 require Xyplex to file or register with or obtain any permit,
authorization, consent or approval of any governmental authority or
agency except for filings required under the HSR Act or filings, permits,
authorizations, consents or approvals the failure of which to file,
register or obtain would not have a Xyplex Material Adverse Effect or
materially impair Xyplex's ability to consummate the transactions
contemplated hereby;
3.6.2 violate any provision of the Restated Articles of Organization or By-Laws
of Xyplex; or
-7-
<PAGE>
3.6.3 either itself or with notice or lapse of time or both violate, be in
conflict with, constitute a default under, result in the termination of,
accelerate the performance required by, cause the acceleration of the
maturity of any debt or obligation pursuant to, or result in the creation
or imposition of any encumbrance upon any of the assets and properties of
Xyplex under any agreement or commitment to which Xyplex is a party or by
which Xyplex is bound or to which any of the assets and properties of
Xyplex are subject, except for (i) such violations, conflicts, defaults,
terminations or accelerations which individually or in the aggregate
would not have a Xyplex Material Adverse Effect or materially impair
Xyplex's ability to consummate the transactions contemplated hereby and
(ii) insurance contracts or coverage of Xyplex by such contracts that
will terminate on or about the Closing Date.
3.7 Financial Statements. Seller has delivered to Buyer the 1995 financial
--------------------
statements of Xyplex and its consolidated Subsidiaries (the "1995 Financial
Statements"). Such financial statements were prepared in accordance with
generally accepted accounting principles and present fairly in all material
respects the financial position and results of operations of Xyplex and its
consolidated Subsidiaries as at the respective dates of the balance sheets
included in such financial statements and for the periods ended on the dates of
those balance sheets.
3.8 Interim Operations. Except as otherwise contemplated by this Agreement,
------------------
since December 31, 1995 the business of Xyplex and its Subsidiaries has been
conducted in the ordinary course and there has not been any material adverse
change in the business, financial condition or results of operations of Xyplex
and its Subsidiaries.
3.9 No Undisclosed Liabilities. Neither Xyplex nor any Subsidiary has any
--------------------------
debts, liabilities or obligations of any nature which properly should be
reflected or reserved against in financial statements prepared in accordance
with generally accepted accounting principles and which are material to its
business except to the extent the same are:
3.9.1 reflected or reserved against in the 1995 Financial Statements and not
heretofore paid or discharged;
3.9.2 incurred in the ordinary course of business on or prior to the date of
the balance sheet included among the 1995 Financial Statements and which
were not required to be disclosed in the 1995 Financial Statements and
which have not been heretofore paid or discharged; or
3.9.3 incurred in the ordinary course of business since the date of the balance
sheet included in the 1995 Financial Statements and arising from events
or circumstances which would not constitute a breach of any
representation, warranty, covenant or agreement relating to Xyplex in
this Agreement and which have not been heretofore paid or discharged.
3.10 Title to Properties; Encumbrances; Completeness of Assets.
---------------------------------------------------------
-8-
<PAGE>
3.10.1 The assets, properties and rights owned, leased and licensed by or to
Xyplex and the Subsidiaries constitute all of the assets, properties and
rights necessary for the operation of the business of Xyplex and the
Subsidiaries as currently conducted.
3.10.2 Except as set forth on Schedule 3.10 hereto, Xyplex or the relevant
Subsidiary has good and marketable title to the assets and properties
which it purports to own (except for assets and properties sold or
disposed of prior to the Closing Date in the ordinary course of
business), free and clear of encumbrances, except:
(i) as reflected in the 1995 Financial Statements;
(ii) for any such encumbrance or minor imperfection of title which is
not substantial in amount and does not materially detract from the
value or impair the use of the property subject thereto or the
operations of Xyplex or the relevant Subsidiary; and
(iii) for any encumbrance for current taxes not yet due and payable or
being contested by appropriate proceedings and as to which
adequate reserves have been provided.
3.11 Compliance with Laws.
--------------------
3.11.1 The business of Xyplex and its Subsidiaries is being operated in
compliance with all applicable laws, regulations and other requirements
of all governmental authorities having jurisdiction over Xyplex,
including, without limitation, all such laws, regulations and
requirements relating to antitrust, consumer protection, currency
exchange, equal opportunity, health, occupational safety, pension,
securities, import-export, and trading-with-the-enemy matters, and Xyplex
and the Subsidiaries have all permits, certificates, licenses, approvals
and other authorizations required in connection with the operation of
their respective business, the absence of which individually or in the
aggregate would have a Xyplex Material Adverse Effect.
3.11.2 Except as set forth on Schedule 3.11 hereto, no notice has been received
and, to the best of Seller's knowledge, no investigation or review is
pending or threatened by any governmental agency or authority with
respect to (i) any alleged violation by Xyplex or any Subsidiary of any
law which would have a Xyplex Material Adverse Effect, or (ii) any
alleged failure to have all permits, certificates, licenses, approvals
and other authorizations required in connection with the operation of the
business of Xyplex or any Subsidiary which failure would have a Xyplex
Material Adverse Effect.
3.12 Patents, Trademarks, Tradenames, Etc.
------------------------------------
3.12.1 Schedule 3.12 hereto lists all patents, trademarks, tradenames, service
marks or registered copyrights currently used in the business of Xyplex
and/or the Subsidiaries and owned, controlled or licensed by Xyplex
and/or its Subsidiaries.
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<PAGE>
3.12.2 Except as set forth on Schedule 3.12 hereto, no claims have been made or
are pending or, to the best of Seller's knowledge, are currently
threatened in writing against Xyplex or any Subsidiary alleging that
Xyplex or such Subsidiary is violating any patents, trademarks, trade
names or copyrights or other intellectual property rights of any other
person.
3.12.3 To the best of Seller's knowledge, the use by Xyplex or any Subsidiary
after the Closing Date of any intellectual property currently being used
will not infringe the existing intellectual property rights of any third
party (where the consequences of such violation would be material to
Xyplex or such Subsidiary) provided that the business of Xyplex or such
Subsidiary is thereafter conducted substantially as it is being conducted
at present.
3.12.4 Xyplex owns the patents and registered trademarks, service marks,
tradenames and copyrights listed in Schedule 3.12 ("Xyplex Intellectual
Property"), including the right to use, assert and license same, and the
transactions contemplated herein will not alter or impair any such
rights. Xyplex is a party to the license agreements listed in Schedule
3.12 and, except as otherwise indicated in Schedule 3.12, the
transactions contemplated herein will not alter or impair the rights of
Xyplex under such license agreements. As of the date of this Agreement,
no claims have been asserted against Xyplex or any Subsidiary, unless
otherwise listed in Schedule 3.12, by any party challenging or
questioning the validity or effectiveness of any such Xyplex Intellectual
Property or license agreements and to Seller's knowledge as of the date
of this Agreement, there is no valid basis for any such claim as to which
there is a reasonable probability of a determination adverse to Xyplex.
Except as set forth in Schedule 3.12 and as of the date of this
Agreement, no claims have been made or asserted or are pending, or to the
best of Seller's knowledge are currently threatened in writing alleging
that the use of Xyplex Intellectual Property or of any other technology,
know-how, processes, names or the like in the conduct of Xyplex's
business as conducted prior to the date of this Agreement infringes the
rights of any other party. Except as set forth in Schedule 3.12 and as of
the date of this Agreement, Seller has no knowledge of any third party
intellectual property rights (not presently licensed to Xyplex) which
would be infringed by the use of Xyplex Intellectual Property or of any
other technology, know-how processes, names or the like in the conduct of
Xyplex's business as conducted prior to the date of this Agreement.
3.13 Contracts and Commitments. Schedule 3.13 hereto lists all:
-------------------------
3.13.1 leases, agreements and contracts which are material to Xyplex and the
Subsidiaries;
3.13.2 distribution or dealership contracts that are material to Xyplex and that
are not cancelable by Xyplex or such Subsidiary on notice of 90 days or
less or without liability, penalty or premium;
3.13.3 employment agreements or other agreements between Xyplex or any
Subsidiary and its employees that are material to Xyplex or such
Subsidiary and that contain
-10-
<PAGE>
any severance or termination pay liabilities or obligations of Xyplex
that are not cancelable by Xyplex or such Subsidiary on less than six
months' notice without liability, penalty or premium;
3.13.4 collective bargaining or union contracts or agreements covering any
employee of Xyplex or any Subsidiary;
3.13.5 non-competition or other agreements between Xyplex or any Subsidiary and
any third party that restrict the business of Xyplex or such Subsidiary;
3.13.6 debt obligations, mortgages, notes or guaranties that are material to
Xyplex or any Subsidiary; and
3.13.7 leases, agreements, contracts and commitments between Seller or any of
its Subsidiaries and Xyplex or any Subsidiary that are material to Xyplex
or such Subsidiary.
3.14 Agreements Not in Default. Except as set forth on Schedule 3.14
-------------------------
hereto, neither Xyplex nor any Subsidiary is in default and, to the
best of Seller's knowledge, there is no basis for any valid claim that it is in
default under or is unable to enforce rights under any agreement referred to in
Section 3.13 which would result in a Xyplex Material Adverse Effect.
3.15 Insurance. Schedule 3.15 hereto lists all material policies of fire,
---------
liability, workers' compensation and other forms of insurance covering the
business, assets or operations of Xyplex and the Subsidiaries. All such
policies are in full force and effect, all premiums with respect thereto
covering all periods up to and including the Closing Date have been or will be
paid, and, to the best of Seller's knowledge, no notice of premature
cancellation or termination has been given with respect to any current policy.
Such policies are sufficient for compliance with all requirements of law and
of all agreements to which Xyplex is a party; are valid, outstanding and
enforceable policies; provide adequate insurance coverage for the assets and
operations of Xyplex consistent with industry standards; will remain in full
force and effect through the Closing Date without the payment of additional
premiums; and will not in any way be affected by, or terminate or lapse by
reason of, the execution and delivery of this Agreement. No insurance has been
refused with respect to any operations or property assets of Xyplex, nor has the
coverage of any insurance been limited, by any insurance carrier which has
carried, or received any application for, any such insurance during the last
three years. Nothing in this Agreement shall be deemed to oblige Seller,
Xyplex or any Subsidiary to maintain any such policy of insurance in effect or
to maintain insurance coverage on any of the assets and properties of Xyplex or
such Subsidiary or with respect to the business of Xyplex or such Subsidiary on
and after the Closing Date.
3.16 Litigation. Except as set forth on Schedule 3.16, there is no action,
----------
suit, proceeding or investigation by or before any governmental agency or
authority or any action, suit or proceeding by or on behalf of any third party
pending or, to the best of Seller's knowledge, threatened against or involving
Xyplex or any Subsidiary which if adversely determined would have a Xyplex
Material Adverse Effect or which questions
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<PAGE>
or challenges the validity of this Agreement or any action taken or to be taken
by Seller pursuant to this Agreement or in connection with the transactions
contemplated hereby. Neither Xyplex nor any Subsidiary is subject to any
judgment, order or decree entered in any lawsuit or proceeding which, considered
in the aggregate, may materially impair the ability of Xyplex or such Subsidiary
to conduct its business.
3.17 Environmental Protection.
------------------------
3.17.1 In connection with the conduct of the business of Xyplex and the
Subsidiaries and any real property owned, occupied or leased by Xyplex or
any Subsidiary in connection therewith, Xyplex or the relevant Subsidiary
has all permits, licenses and other authorizations required under
environmental laws except where the failure to obtain such permits,
licenses and other authorizations, individually or in the aggregate,
would not have a Xyplex Material Adverse Effect. Xyplex and each
Subsidiary is in material compliance with all terms and conditions of
such permits, licenses and authorizations, including all limitations,
restrictions, conditions, standards, prohibitions, requirements,
obligations, schedules and timetables contained therein, except to the
extent that any such non-compliance, individually or in the aggregate,
would not have a Xyplex Material Adverse Effect. Xyplex and each
Subsidiary is in material compliance with all terms and conditions of any
plan, order, decree, judgment, notice or letter issued, entered into,
promulgated or approved under any applicable environmental laws, except
to the extent that any such non-compliance would not have a Xyplex
Material Adverse Effect.
3.17.2 To the best of Seller's knowledge, there have been no violations of
environmental laws by Xyplex or any Subsidiary with respect to any real
property owned, occupied or leased by Xyplex or such Subsidiary except to
the extent that any such violation, individually or in the aggregate,
would not have a Xyplex Material Adverse Effect.
3.18 Labor Matters.
-------------
3.18.1 There is no unfair labor practice, charge or complaint or charge of
discrimination pending or, to the best of Seller's knowledge, threatened
to be instituted against Xyplex or any Subsidiary, an adverse
determination of which would result in a Material Adverse Effect to
Xyplex.
3.18.2 There is no labor strike or material dispute, slowdown, stoppage or other
labor difficulty actually pending or, to the best of Seller's knowledge,
threatened against or affecting Xyplex or any Subsidiary.
3.18.3 There are no pending labor negotiations that are material to Xyplex or
any Subsidiary.
3.19 Taxes.
-----
For purposes of this Section 3.19 the following terms shall have the
following
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<PAGE>
meanings:
(i) "Return" means any return, report or other document required to be
filed in connection with any Tax;
(ii) "Tax" means all federal, state or municipal income, sales, use,
franchise, payroll, employment, real property or personal
property, foreign, value added, goods and services or excise tax
together with any penalties and interest with respect thereto; and
(iii) "Tax Authority" means any federal, state or municipal agency,
board, bureau, body, department or authority having jurisdiction
with respect to any Tax.
3.19.1 All Returns required to have been filed with any Tax Authority by or with
respect to Xyplex and the Subsidiaries, including without limitation the
consolidated federal income tax return and any comparable state or
foreign unitary or combined return for periods in which Xyplex and the
Subsidiaries have been members of Seller's affiliated group, have been
duly filed. All Taxes shown on such Returns, which are currently due and
payable, have been paid and, if such Taxes are not currently due and
payable, Xyplex and its Subsidiaries have made adequate provision for
payment of all Taxes that may become due pursuant to those Returns. All
Returns for the period up to and including the Closing Date for any group
of corporations that includes Xyplex and its Subsidiaries have been or
will be timely filed, and all Taxes for such period will be paid by
Seller, without reimbursement by Xyplex and its Subsidiaries except as
provided in Section 8.6. The charges, accruals and reserves with respect
to Taxes as reflected on the 1995 Financial Statements are adequate
(determined in accordance with GAAP) and are at least equal to Xyplex's
and its Subsidiaries, liability for Taxes. All Taxes that Xyplex and its
Subsidiaries are or were required by law to withhold or collect have been
duly withheld or collected, and, to the extent required, have been paid
to the proper Tax Authority.
3.19.2 None of Xyplex, any Subsidiary, or to the extent applicable, Seller (i)
is a party to any agreement extending the time within which to file any
Return or (ii) has waived any statute of limitations in respect of Taxes
or agreed to any extension of time with respect to any Tax assessment or
deficiency. The Returns of Xyplex and its Subsidiaries have been audited
by the relevant Tax Authorities or are closed by the applicable statute
of limitations for all taxable years through December 31, 1991.
3.19.3 There is no audit dispute or claim material to Xyplex concerning any Tax
liability of Xyplex and the Subsidiaries, or, to the extent relevant,
Seller either (i) claimed or raised by any Tax Authority in writing or
(ii) otherwise known to Xyplex or Seller. There is no pending or proposed
assessment relating to Taxes against Xyplex and its Subsidiaries or
against the Seller (to the extent Xyplex and its Subsidiaries may be
liable therefor).
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<PAGE>
3.19.4 Neither Xyplex nor its Subsidiaries has any liability for the Taxes of
any person other than Xyplex and its Subsidiaries under Treas. Reg.
(S)1.1502-6 (or any similar provision of state, local, or foreign law).
3.19.5 Any tax sharing agreement between Seller and Xyplex and any of its
Subsidiaries will be terminated as of the Closing Date and will have no
further effect for any period beginning on or after the Closing Date.
3.20 Employee Benefit Plans, ERISA.
-----------------------------
3.20.1 Schedule 3.20.1 hereto lists all Employee Pension Benefit Plans (as
defined in Section 3(2) of the Employee Retirement Income Security Act of
1974, as amended, and the rules and regulations promulgated thereunder
("ERISA")) and all Employee Welfare Benefit Plans (as defined in Section
3(1) of ERISA) (collectively the "Employee Benefit Plans") that Xyplex or
any Subsidiary maintains or to which it contributes for the benefit of
any current or former employee. None of the Employee Benefit Plans has
been amended since the date of the 1995 Financial Statements or will be
amended prior to the Closing Date other than customary amendments in the
ordinary course.
3.20.2 Each Employee Benefit Plan (and each related trust or insurance contract)
complies in form and in operation in all material respects with the
applicable requirements of ERISA and the Internal Revenue Code of 1986,
as amended (the "Code"). All contributions (including all employer
contributions and employee salary reduction contributions) which are due
have been paid to each Employee Pension Benefit Plan. There are no
accrued but unpaid contributions to any of the Employee Benefit Plans.
The Employee Benefit Plans have operated in accordance with the
applicable requirements of ERISA and the Code. No reportable event (as
defined in Section 4043 (e) or ERISA), prohibited transaction (as defined
in Section 406 of ERISA or Section 4975 of the Code), accumulated funding
deficiency (as defined in Section 302 of ERISA) or plan termination (as
defined in Title IV of ERISA or Section 411 (d) of the Code) has occurred
with respect to any of the Employee Benefit Plans. None of the Employee
Benefit Plans is a multi-employer plan (as defined in Section 3 (37) of
ERISA) and Xyplex has no actual or potential liability with respect to
any multi-employer plan or a past or present withdrawal therefrom. Except
as set forth on Schedule 3.20 hereto, no filing, application or other
matter with respect to any of the Employee Benefit Plans is pending with
the Internal Revenue Service, Pension Benefit Guaranty Corporation,
United States Department of Labor or other Governmental Body, none of the
Employee Benefit Plans has been terminated, the Pension Benefit Guaranty
Corporation has not taken any action to terminate any of the Employee
Benefit Plans and no trustee has been appointed by any court to
administer any of the Employee Benefit Plans. Each Employee Pension
Benefit Plan (except for plans relating to deferred compensation which
are exempt under ERISA Sections 201, 301, and 401 and which are
identified in Schedule 3.20.1) has received or will timely apply for a
determination letter from the Internal Revenue Service to the effect that
it meets the requirements of Section 401(a) of the Code, and no facts
exist that would adversely affect the qualified status of
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<PAGE>
any such Employee Pension Benefit Plan other than the failure to make any
required amendments the time for the adoption of which has not expired.
No Employee Benefit Plan is subject to Title IV of ERISA.
3.20.3 No charge, complaint, action, suit, proceeding, hearing, investigation,
claim or demand with respect to the administration or investment of the
assets of any Employee Benefit Plan that Xyplex or any Subsidiary
maintains or to which Xyplex or any Subsidiary contributes for the
benefit of any current or former employee (other than routine claims for
benefits) is pending.
3.20.4 Xyplex has delivered or made available to Buyer correct and complete
copies of (i) the plan documents and summary plan descriptions, (ii) the
most recent Form 5500 Annual Report, and (iii) all related trust
agreements, insurance contracts and other agreements which implement each
such Employee Benefit Plan.
3.20.5 Neither Xyplex nor any entity considered under common control with Xyplex
(within the meaning of sub-section (b) or (c) of Section 414 of the Code)
has incurred any liability in connection with the termination of a
pension plan subject to Title IV of ERISA, the complete or partial
withdrawal from a multi-employer plan subject to Title IV of ERISA, or
the failure to make contributions due under Section 412 of the Code or
premiums due to the Pension Benefit Guaranty Corporation under Title IV
of ERISA, which liability has not been satisfied prior to Completion.
3.21 Brokers. Except for Cowen & Company, whose fees and expenses will be
-------
paid by Seller, no finder, broker, agent or other intermediary has worked for or
on behalf of Seller in connection with the negotiation or consummation of the
transactions contemplated hereby.
3.22 Banking Relationships. There is no indebtedness of Xyplex for borrowed
---------------------
money owed to any bank or other holder of, or trustee with respect thereto,
pursuant to any note, loan, guaranty, credit or similar agreement. Schedule
3.22 hereto sets forth the names and locations of all banks, trust companies,
savings and loan associations and other financial institutions at which Xyplex
maintains safe deposit boxes or accounts of any nature and the names of all
persons authorized to have access thereto, draw thereon or make withdrawals
therefrom.
3.23 Disclosure. No representations or warranties made by Seller in this
----------
Agreement and no statement contained in the Disclosure Schedule hereto, the
documents listed in Schedule 3.23 hereof or the 1995 Financial Statements
contains any untrue statement of a material fact or omits to state a material
fact necessary in order to make the statements contained herein or therein in
light of the circumstances in which they were made not misleading. There is no
fact known to Seller on the date of this Agreement that affects in a materially
adverse manner BuyerOs ability to conduct the business of Xyplex substantially
as conducted prior to such date.
3.24 Investment Intent. Seller is acquiring the Whittaker Shares for
-----------------
investment for its own account. Seller acknowledges that it has received or had
access to all information
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<PAGE>
which it considers necessary or advisable to enable it to make a decision
concerning its purchase of the Whittaker Shares. Seller is an "accredited
investor" as that term is defined in Regulation D of the Securities Act of 1933,
as amended (the "Act").
3.25 Product Warranties. Buyer has been provided with a copy of the standard
------------------
product warranty currently extended by Xyplex with respect to its products and
services. To the knowledge of Seller (which for the purposes of only this
Section 3.25 is limited to the actual knowledge of Peter J. Nesbeda, Gregor
Ferguson, George Conant and Raymond W. DeZenzo) there have not been any written
claims with respect to warranties on products or services provided by Xyplex
except for claims which, individually or in the aggregate, are not reasonably
expected to have a Xyplex Material Adverse Effect, taking into account any
reserves included in the 1995 Financial Statements or in the Final Statement of
Working Capital.
4 BUYER'S REPRESENTATIONS AND WARRANTIES
Buyer hereby represents and warrants to Seller as follows:
4.1 Organization and Authority. Buyer is a corporation duly organized,
--------------------------
validly existing and in good standing under the laws of the State of Delaware
with full corporate power and authority to enter into and perform its
obligations under this Agreement.
4.2 Authorization and Enforceability of Agreement. The execution, delivery
---------------------------------------------
and performance of this Agreement by Buyer have been duly authorized by all
requisite corporate action on the part of Buyer, and this Agreement constitutes
the valid, binding and enforceable obligation of Buyer, except to the extent
that such enforcement may be limited by bankruptcy, insolvency, moratorium and
other laws now or hereafter in effect relating to the enforcement of creditors'
rights generally and except that equitable principles may limit the right to
obtain specific performance or other equitable remedies.
4.3 No Conflicts. The execution, delivery and performance of this Agreement
------------
by Buyer do not and will not:
4.3.1 conflict with the Restated Certificate of Incorporation of By-Laws of
Buyer, in each case as amended to the date hereof;
4.3.2 conflict with, result in a breach or termination of or constitute a
default under any agreement (except that certain Credit Agreement dated
January 23, 1995 and as amended April 21, 1995 among Buyer, NationsBank
of Texas, N.A., as Agent, and the several banks named therein),
commitment or other instrument, or any order, judgment or decree to which
Buyer is a party or by which Buyer or any of its assets is bound other
than any conflict, breach or default which would not individually or in
the aggregate have a material adverse effect on Buyer's business or
financial condition; or
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<PAGE>
4.3.3 constitute a violation by Buyer of any law or regulation applicable to
Buyer the enforcement of which would materially impair Buyer's ability to
consummate the purchase of the Shares pursuant to this Agreement.
4.4 Consents, Waivers and Approvals. No consent, waiver, approval or
-------------------------------
authorization of or designation, declaration or filing with any governmental
authority or other third party is required on the part of Buyer in connection
with Buyer's execution, delivery and performance of this Agreement except as may
be required by the HSR Act.
4.5 Investment Intent. Buyer is acquiring the Shares for investment for its
-----------------
own account. Buyer acknowledges that it has received or had access to all
information which it considers necessary or advisable to enable it to make a
decision concerning its purchase of the Shares. Buyer is a "qualified
institutional buyer" as that term is defined in Rule 144A promulgated under the
Act.
4.6 Financing. Buyer has sufficient funds and/or available financing to
---------
purchase the Shares and to pay all related fees and expenses related to the
transactions contemplated hereby.
4.7 Brokers. Except for CS First Boston Corporation, whose fees and expenses
-------
will be paid by Buyer, no finder, broker, agent or other intermediary has worked
for or on behalf of Buyer in connection with the negotiation or consummation of
the transactions contemplated hereby.
4.8 Whittaker Shares. The Whittaker Shares, upon issuance and delivery
----------------
pursuant to the provisions of this Agreement, will be duly authorized, validly
issued, fully paid and nonassessable. The Whittaker Shares when so issued will
be free and clear of all Liens.
5 ACTIONS PENDING CLOSING
5.1 Covenants of Seller. Seller hereby covenants with Buyer that during the
-------------------
period from the date hereof to the Closing Date:
5.1.1 Seller will promptly notify Buyer of the occurrence of any event or state
of facts which is inconsistent with any of the representations,
warranties and covenants of Seller contained herein; and
5.1.2 Seller will not, without prior written consent of Buyer, except as
contemplated by this Agreement:
(i) sell, transfer, pledge, hypothecate or otherwise dispose of or
encumber or enter into any agreement to sell, transfer, pledge,
hypothecate or otherwise dispose of or encumber, any of the
Shares;
(ii) take any action which is inconsistent with Seller's
representations, warranties and covenants contained in this
Agreement; or
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<PAGE>
(iii) enter into any agreement (other than this Agreement) to do any of
the things described in clauses (i) and (ii).
5.1.3 Seller will cause Xyplex to:
(i) not take any action (other than action taken in the ordinary
course of business or as otherwise specifically provided for
herein) which would cause the representations and warranties as to
Xyplex contained herein to be materially inaccurate on the Closing
Date;
(ii) afford Buyer, its accountants, counsel and other representatives
full access during normal business hours to the offices, business,
personnel, equipment, properties, records, files, contracts,
agreements, books of account and tax returns of Xyplex and furnish
Buyer with all information concerning the foregoing as Buyer
reasonably may request;
(iii) conduct its business only in the usual, regular and ordinary
course in substantially the same manner as heretofore conducted;
(iv) use all reasonable efforts to preserve the present business
organization and relationships with employees, suppliers,
customers and others having business relationships with Xyplex;
(v) not amend its Restated Articles of Organization or By-Laws;
(vi) not take any action or omit to take any action which will result
in a material violation of any applicable law or cause a breach of
any material agreement, contract or commitment; and
(vii) promptly notify Buyer in writing of any change which has or is
reasonably expected to have a Xyplex Material Adverse Effect.
5.1.4 Seller shall cause any group of corporations that includes Xyplex and its
Subsidiaries to file on a timely basis all Returns required to be filed
prior to such date by or with respect to any of such corporations. Seller
shall deliver to Buyer copies of such Returns and any Returns relating to
Xyplex and its Subsidiaries for the period prior to the Closing Date
within 10 days of the filing of such Returns with the appropriate Tax
Authority.
5.1.5 Seller shall cause the winding-up and dissolution of the Subsidiaries or
shall otherwise transfer ownership of the Subsidiaries to Seller.
5.3 Covenants of Buyer. Buyer hereby covenants with Seller that during the
------------------
period from the date hereof to the Closing Date Buyer will promptly notify
Seller of the occurrence of any event or state of facts which is inconsistent
with any of the representations, warranties and covenants of Buyer contained
herein.
5.4 Consents, Waivers and Approvals. Seller and Buyer hereby agree that each
-------------------------------
will,
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upon the execution and delivery of this Agreement, use all commercially
reasonable efforts in order to obtain the consents, waivers and approvals
described in Sections 2.4 and 4.4 hereof and any other consents, waivers and
approvals necessary to permit the consummation of the transactions contemplated
by this Agreement.
5.5 No Solicitation. Prior to any termination of this Agreement pursuant to
---------------
Section 9 hereof, Seller shall not, and shall not permit Xyplex to, solicit or
enter into any agreement with respect to a merger or other business combination
involving, or sale of any substantial assets (other than in the ordinary course
of business), by, Xyplex, except for the acquisition of the Shares by Buyer.
5.6 Stockholder's Agreement. Prior to the Closing Date, Seller and Buyer
-----------------------
shall execute in definitive form a stockholder's agreement (the "Stockholder's
Agreement")with respect to Seller's rights and obligations as a holder of the
Whittaker Shares and Buyer's rights and obligations as the issuer of the
Whittaker Shares. The Stockholder's Agreement shall include, among other
things, terms and conditions regarding:
5.6.1 the grant to Seller of (i) one demand registration right for the
Whittaker Shares commencing one year following the Closing Date and (ii)
two "piggy back" registration rights for the Whittaker Shares (provided
that Whittaker's investment banker determines such rights do not
interfere with Whittaker's financing objectives);
5.6.2 Seller's payment of expenses and underwriting discounts attributable to
the registration of the Whittaker Shares if registration is requested by
Seller;
5.6.3 Seller's payment of expenses and underwriting discounts attributable to
an offering of the Whittaker Shares if the Whittaker Shares are offered
in a secondary offering, subject to a maximum limit on Seller's payment
of expenses and underwriting discounts;
5.6.4 Buyer's right to redistribute the Whittaker Shares during the three years
following the Closing Date and Buyer's right of first refusal on sales by
Seller in excess of 100,000 shares;
5.6.5 Seller's agreement to refrain, during any given weekly period, from
selling Whittaker Shares in excess of 10% of the average weekly trading
volume during the immediately preceding thirteen weeks, provided that
this trading restriction shall not apply to negotiated block trades to
"qualified institutional investors;"
5.6.6 limitations on Seller's right to resell the Whittaker Shares to certain
holders of 5% or more of the outstanding shares of the Buyer's Common
Stock;
5.6.7 Seller's agreement, for a period of one year following the Closing Date,
to vote the Whittaker Shares upon matters recommended by management in
favor of such matters at least in the same proportion as cast by all
other stockholders;
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<PAGE>
5.6.8 Seller's agreement to refrain from purchasing additional shares of
Buyer's common stock and from hedging its ownership of the Whittaker
Shares;
5.6.9 Buyer's agreement to register the Whittaker Shares for resale in
accordance with federal and applicable state securities laws and to use
its best efforts to effect a secondary offering of the Whittaker Shares
as soon as practicable following the Closing Date; and
5.6.10 Seller's agreement to refrain for a period of two years following the
Closing Date from competing against Xyplex; provided, however, that
nothing therein shall prevent Seller from conducting its business
operations as currently conducted.
6 CONDITIONS TO BUYER'S OBLIGATION
The obligation of Buyer to consummate the transactions contemplated by
this Agreement is subject to the satisfaction of each of the following
conditions:
6.1 Representations and Warranties of Seller. All representations and
----------------------------------------
warranties of Seller set forth herein shall be true and correct in all material
respects on the Closing Date as if then made, and Buyer shall have been
furnished a certificate of Seller to such effect.
6.2 Compliance. Seller shall have performed and complied in all material
----------
respects with all obligations and agreements required in this Agreement to be
performed or complied with by it prior to the Closing Date, and Buyer shall have
been furnished a certificate of Seller to such effect.
6.3 No Injunctions, Etc. There shall not be in effect any injunction or
-------------------
restraining order issued by a court of competent jurisdiction or other
governmental body having jurisdiction against the consummation of the
transactions contemplated by this Agreement.
6.4 Consents, Waivers and Approvals. The consents, waivers and
-------------------------------
approvals described in Sections 2.4 and 4.4 hereof and any other consents,
waivers and approvals necessary to permit the consummation of the transactions
contemplated by this Agreement shall have been obtained in form and substance
reasonably satisfactory to Buyer.
6.5 Closing Deliveries. Seller shall have delivered to Buyer the items
------------------
required to be delivered pursuant to Section 1.4.1 hereof.
7 CONDITIONS TO SELLER'S OBLIGATION
The obligation of Seller to consummate the transactions contemplated by
this Agreement is subject to the satisfaction at or prior to the Closing Date of
each of the following conditions:
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<PAGE>
7.1 Representations and Warranties of Buyer. All representations and
---------------------------------------
warranties of Buyer set forth herein shall be true and correct in all material
respects on the Closing Date as if then made, and Seller shall have been
furnished a certificate of Buyer to such effect.
7.2 Compliance. Buyer shall have performed and complied in all material
----------
respects with all obligations and agreements required in this Agreement to be
performed or complied with by Buyer prior to the Closing Date, and Seller shall
have been furnished a certificate of Buyer to such effect.
7.3 No Injunctions, Etc. There shall not be in effect any injunction or
-------------------
restraining order issued by a court of competent jurisdiction or other
governmental body having jurisdiction against the consummation of the
transactions contemplated by this Agreement.
7.4 Consents, Waivers and Approvals. The consents, waivers and approvals
-------------------------------
described in Sections 2.4 and 4.4 hereof and any other consents, waivers and
approvals necessary to permit the consummation of the transactions contemplated
by this Agreement, shall have been obtained in form and substance reasonably
satisfactory to Seller.
7.5 Closing Deliveries. Buyer shall have delivered to Seller the items
------------------
required to be delivered pursuant to Section 1.4.2 hereof.
8 POST-CLOSING COVENANTS
8.1 Further Assurances. At any time and from time to time after closing each
------------------
party shall, without further consideration, execute and deliver such other
instruments of transfer or other documents and shall take such other actions as
another party may reasonably request in order to carry out and accomplish the
sale of the Shares contemplated by this Agreement.
8.2 Seller's Indemnification of Buyer.
---------------------------------
8.2.1 Seller hereby agrees to indemnify, defend and hold harmless Buyer from
and against any loss, damage or expense (including reasonable attorneys'
fees) suffered by Buyer resulting from (i) any breach of Seller's
representations and warranties set forth in Sections 2, 3.1, 3.3, 3.4,
3.5, 3.6, 3.7, 3.8, 3.9 and 3.23 herein, and (ii) any breach of Seller's
covenants and agreements set forth herein, provided, however, that
Seller's liability under this Section 8.2.1 shall in no event exceed the
Purchase Price.
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<PAGE>
8.2.2 Seller hereby agrees to indemnify, defend and hold harmless Buyer from
and against any loss, damage or expense (including reasonable attorneys'
fees), less any insurance proceeds received by Xyplex with respect to any
such loss, damage or cost, suffered by Buyer resulting from any breach of
Seller's representation and warranties set forth herein (other than that
made in Sections 2, 3.1, 3.3, 3.4, 3.5, 3.6, 3.7, 3.8, 3.9 and 3.23);
provided, however, that Seller shall not be required to indemnify Buyer
under this Section 8.2.2 unless and until the aggregate amount of all
such losses, damages and costs (excluding matters set forth or referred
to on Schedule 3.16 hereto) exceeds $500,000 and then Seller shall
indemnify Buyer for the amount of such losses, damages and costs in
excess of such amount; provided, further that if the aggregate amount of
all losses, damages and costs exceeds $1,000,000 then Seller shall
indemnify Buyer in full for the amount of such losses, damages and costs;
and provided, further that Seller's liability under this Section 8.2.2
shall in no event exceed $25 million.
8.3 Buyer's Indemnification of Seller. Buyer hereby agrees to indemnify,
---------------------------------
defend and hold harmless Seller from and against any loss, damage or expense
(including reasonable attorneys' fees) suffered by Seller resulting from (i) any
breach of Buyer's representations and warranties set forth herein or from
any breach of any of Buyer's covenants and agreements set forth herein or (ii)
any operations or business of Xyplex or any Subsidiary conducted, or any action
or omission by Xyplex or any Subsidiary, after the Closing Date.
8.4 No Indemnification for Intentional Acts. The provisions of Sections 8.2
---------------------------------------
and 8.3, with respect to indemnification by Seller and Buyer, respectively,
shall not apply to any intentional misrepresentation or breach of warranty or an
intentional failure to perform or comply with any agreement and Buyer and
Seller, respectively, shall be liable for all damages with respect thereto.
8.5 Procedure for Indemnification. Promptly after receipt by an indemnified
-----------------------------
party under Section 8.2 or 8.3 of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against an
indemnifying party under such section, give notice to the indemnifying party of
the commencement thereof, but the failure so to notify the indemnifying party
shall not relieve it of any liability that it may have to any indemnified party
except to the extent the indemnifying party demonstrates that the defense of
such action is prejudiced thereby. In case any such action shall be brought
against an indemnified party and it shall give notice to the indemnifying party
of the commencement thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it shall wish, to assume the defense
thereof with counsel satisfactory to such indemnified party and, after notice
from the indemnifying party to such indemnified party of its election so to
assume the defense thereof, the indemnifying party shall not be liable to such
indemnified party under such section for any fees of other counsel or any other
expenses, in each case subsequently incurred by such indemnified party in
connection with the defense thereof, other than reasonable costs of
investigation. If an indemnifying party assumes the defense of such an action,
(i) no compromise or settlement thereof may be effected by the indemnifying
party without the indemnified party's consent (which shall not be unreasonably
withheld) unless (a) there is no finding or admission of any violation of law or
any
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violation of the rights of any person and no effect on any other claims that may
be made against the indemnified party and (b) the sole relief provided is
monetary damages that are paid in full by the indemnifying party and (ii) the
indemnifying party shall have no liability with respect to any compromise or
settlement thereof effected without its consent (which shall not be unreasonably
withheld). If notice is given to an indemnifying party of the commencement of
any action and it does not, within ten (10) days after the indemnified party's
notice is given, give notice to the indemnified party of its election to assume
the defense thereof, the indemnifying party shall be bound by any determination
made in such action or any compromise or settlement thereof effected by the
indemnified party. Notwithstanding the foregoing, if an indemnified party
determines in good faith that there is a reasonable probability that an action
may adversely affect it or its affiliates other than as a result of monetary
damages, such indemnified party may, by notice to the indemnifying party, assume
the exclusive right to defend, compromise or settle such action, but the
indemnifying party shall not be bound by any determination of an action so
defended or any compromise or settlement thereof effected without its consent
(which shall not be unreasonably withheld).
8.6 Certain Tax Matters.
-------------------
8.6.1 Seller agrees to indemnify Buyer, Xyplex, and its Subsidiaries from and
against any loss, damage or expense any of such entities may suffer
resulting from, arising out of, relating to, in the nature or, or caused
by any liability of, Xyplex and any of its Subsidiaries and for taxes of
any person other than Xyplex and its Subsidiaries with respect to the Tax
Sharing Agreement under Treas. Reg. (S)1.1502-6 (or any similar provision
of state, local or foreign law).
8.6.2 Seller will include the income of Xyplex and its Subsidiaries on Seller's
Returns for all periods through the Closing Date in which Xyplex and its
Subsidiaries were included in such Returns and account for and pay any
federal income taxes attributable to such income on such returns. Seller
shall deliver to Buyer copies of such Returns and any Returns relating to
Xyplex and its Subsidiaries for the period prior to the Closing Date
within 10 days of the filing of such Returns with the appropriate Tax
Authority. Xyplex and its Subsidiaries shall be responsible for and shall
pay to Seller the portion of the consolidated tax liability for such
periods chargeable to Xyplex and its Subsidiaries under the principles of
Treas. Reg. (S)1.1552-1(a)(2) and applicable state and local laws and
regulations. Xyplex and its Subsidiaries will furnish tax information to
Seller for inclusion in Seller's Returns for the period which includes
the Closing Date in accordance with Xyplex's past custom and practice.
The income of Xyplex and its Subsidiaries will be apportioned between the
period up to and including the Closing Date and the period after the
Closing Date by closing the books of Xyplex and its Subsidiaries as of
the end of the Closing Date.
8.6.3 At Seller's request, Buyer will cause Xyplex and any of its Subsidiaries
to make or join with Seller in making any election if the making of such
election does not have a material adverse impact on Buyer (or Xyplex and
its Subsidiaries) for any tax period beginning on or after the Closing
Date.
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8.6.4 It is agreed and understood that the parties shall not make an election
under Section 338(h)(10) of the Code in respect of the purchase and sale
of the Shares pursuant to this Stock Purchase Agreement.
8.6.5 Any refunds received after the Closing Date by Seller attributable to any
Tax losses or Tax credits of Xyplex arising after the Closing Date shall
be remitted promptly to Buyer.
8.6.6 Each of Seller and Buyer shall (i) make available for inspection and
copying upon the reasonable request of the other party all working
papers, books of account and records relating to the periods before and
after, respectively, the Closing Date, and (ii) shall cooperate with each
other in the event of any Tax audit, dispute or protest.
8.7 Financial Statements. Seller shall deliver to Buyer: (i) audited
--------------------
consolidated balance sheets of Xyplex as at December 31 in each of the years
1993, 1994 and 1995, and audited consolidated statements of income and cash
flows for each of the fiscal years then ended, together with the report thereon
of Arthur Andersen & Co. for fiscal year 1993 and of Coopers & Lybrand LLP
("Coopers & Lybrand") for the fiscal years 1994 and 1995 and (ii) if the Closing
Date is later than May 1, 1996, an unaudited consolidated balance sheet of
Xyplex as at March 31, 1996 (the "Interim Balance Sheet") and unaudited
consolidated statements of income and cash flows for the three months then
ended, including in each case the notes thereto, as reviewed by Coopers &
Lybrand. Such financial statements and notes will be true, complete and
accurate and fairly present the assets, liabilities, financial condition and
results of operation of Xyplex as at the respective dates thereof and for the
periods therein referred to, all in accordance with GAAP consistently applied
throughout the periods involved.
8.8 Auditor's Letter. Simultaneously with the delivery by Seller of the
----------------
audited financial statements for fiscal years 1994 and 1995 in accordance with
Section 8.7 hereof, Seller shall cause Coopers & Lybrand to deliver to Buyer a
letter in form and substance reasonably satisfactory to Buyer to the effect that
(i) Buyer may rely on the reports of such firm referred to in Section 8.7 as if
addressed to Buyer and (ii) on the basis of such procedures as are set forth
therein, nothing has come to their attention that gives them reason to believe
that the audited financial statements delivered to Buyer pursuant to Section 8.7
were not fairly presented in conformity with GAAP.
8.9 Employee Matters. Following the Closing Date, Seller shall discharge all
----------------
of its obligations under the terms of (i) the existing employment agreements
between Seller and certain individuals employed by Xyplex and (ii) certain
severance and or bonus arrangements entered into with various Xyplex employees.
9 TERMINATION OF AGREEMENT
9.1 Termination of Agreement. Notwithstanding anything herein to the
------------------------
contrary, this Agreement and the transactions contemplated hereby may be
terminated:
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9.1.1 By written consent of the parties hereto;
9.1.2 By Seller if the conditions set forth in Section 7 hereof have not been
met on or July 31, 1996;
9.1.3 By Buyer if the conditions set forth in Section 6 hereof have not been
met on or before July 31, 1996; or
9.1.4 By either Buyer or Seller if closing has not occurred on or before July
31, 1996.
9.2 Termination of Obligations. In the event that this Agreement shall be
--------------------------
terminated pursuant to Section 9.1 hereof, all further obligations of the
parties under this Agreement shall terminate without further liability of any
party to another and each party shall pay all of its own costs and expenses
incident to the negotiation and preparation of this Agreement; provided,
however, that nothing herein shall relieve any party from liability for such
party's willful breach of this Agreement.
10 MISCELLANEOUS PROVISIONS
10.1 Assignment of Agreement. Neither this Agreement nor any of the rights or
-----------------------
obligations hereunder may be assigned by any party without the prior written
consent of the other parties hereto; provided, however, that no consent will be
required for Buyer's assignment of its right to acquire the Shares hereunder to
a wholly-owned subsidiary of Buyer in which event Buyer shall remain liable for
all of its obligations hereunder. Subject to the foregoing, this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns and no other person shall have any right,
benefit or obligation hereunder.
10.2 Applicable Law. This Agreement and the legal relations among the parties
--------------
hereto shall be governed by and construed in accordance with the laws of the
Commonwealth of Massachusetts.
10.3 Headings. The section and other headings of this Agreement are for
--------
reference purposes only and shall not affect the meaning, interpretation or
construction of this Agreement.
10.4 Waivers and Amendments. Any party may by written notice to the others
----------------------
waive:
10.4.1 any inaccuracies in the representations or warranties of another party
contained in this Agreement;
10.4.2 compliance with any of the covenants of another party contained in this
Agreement; or
10.4.3 performance of any of the obligations of another party.
-25-
<PAGE>
This Agreement may be amended, modified or supplemented only by a written
instrument executed by the parties hereto.
10.5 Expenses. Each party shall be responsible for the fees and expenses
--------
incurred by it incident to the negotiation, preparation, execution and
consummation of the transactions contemplated by this Agreement, including
attorneys' fees and the fees of any advisors employed or retained by such party,
whether or not the transactions contemplated by this Agreement are consummated.
10.6 Entire Agreement; Survival. This Agreement embodies the entire agreement
--------------------------
and understanding of the parties with respect to the subject matter hereof, and
there are no promises, representations, warranties, covenants or undertakings of
any party to another with respect to such subject matter other than those
expressly set forth or referred to herein. This Agreement supersedes all prior
discussions, agreements, writings and undertakings among the parties with
respect to such subject matter. The representations and warranties of the
parties shall survive the closing of the purchase and sale of the Shares being
sold hereunder for a period of two years following the Closing Date.
10.7 Notices. All notices, requests, demands and other communications which
-------
are required or may be given under this Agreement shall be in writing and shall
be deemed to have been duly given when delivered personally or transmitted by
telex or telecopier, receipt acknowledged, or in the case of documented
overnight delivery service or registered or certified mail, return receipt
requested, postage prepaid, on the date shown on the receipt therefor,
if to Seller or Xyplex addressed to:
Raytheon Company
141 Spring Street
Lexington, Massachusetts 02173
Telecopier: (617) 860-2494
Attention: General Counsel
if to Buyer, addressed to:
Whittaker Corporation
1955 N. Surveyor Avenue
Simi Valley, California 93063
Telecopier: (805) 584-4195
Attention: General Counsel
or to such other addresses as the party shall specify by notice in accordance
herewith to the others.
10.8 Publicity. Prior to the Closing Date, neither Seller nor Buyer shall,
---------
and Seller shall
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cause Xyplex not to, issue any press release or public announcement of any kind
concerning the transactions contemplated by this Agreement without the prior
consent of the other party, provided, however, that nothing in this Section 10.8
shall prevent a party from making public announcements required by law or the
stock exchange(s) on which such party's securities are traded provided that the
disclosing party shall to the extent practicable give prior notice to the other
parties of the contents of and requirements for such disclosure.
10.9 Counterparts. This Agreement may be executed in counterparts, each of
------------
which when executed and delivered shall be an original and all of which together
shall constitute one and the same instrument.
10.10 Interpretation. As used in this Agreement, the terms "knowledge" and
--------------
"best knowledge" with respect to Seller shall mean the actual knowledge of
Philip W. Cheney, David S. Dwelley, Philip H. Fiske, Peter J. Nesbeda, Gregor
Ferguson, George Conant, Raymond W. DeZenzo and William R. Clark (with respect
to matters covered by Section 3.12) and John W. Kapples (with respect to matters
covered by Section 3.16).
10.11 Waiver of Jury Trial. To the fullest extent permitted by law, each of
--------------------
the parties hereto agree that in the event of an action or proceeding to
interpret or enforce the provisions of this Agreement, such proceeding shall be
determined by a judicial trier of fact and each party shall waive, and shall
not request, a trial by jury.
IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement as of the date first set forth above
RAYTHEON COMPANY
By: /s/ DAVID S. DWELLEY
----------------------------------
Name: David S. Dwelley
Title: Vice President - Strategic
Business Development
WHITTAKER CORPORATION
By: /s/ RICHARD LEVIN
----------------------------------
Name: Richard Levin
Title: Vice President
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Exhibit 10.2
=======================================
$170,000,000
AMENDED AND RESTATED
CREDIT AGREEMENT
Dated as of April 10, 1996
Among
WHITTAKER CORPORATION
as Borrower
-- --------
and
THE FINANCIAL INSTITUTIONS NAMED HEREIN
as Initial Lenders
-- ------- -------
and
NATIONSBANK OF TEXAS, N.A.
as Agent
-- -----
=======================================
<PAGE>
TABLE OF CONTENTS
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ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms............................................ 2
SECTION 1.02. Computation of Time Periods...................................... 23
SECTION 1.03. Accounting Terms................................................. 23
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
SECTION 2.01. The Advances...................................................... 23
(a) The Term Advances....................................... 23
(b) Revolving Advances...................................... 24
SECTION 2.02. Making the Advances............................................... 24
(a) Initial Borrowings...................................... 24
(b) Subsequent Revolving Borrowings......................... 24
(c) Advances by Lenders..................................... 25
(d) Disbursement of Advances................................ 25
(e) Nature of Lenders' Obligations.......................... 25
SECTION 2.03. Repayment......................................................... 25
(a) Term Advances........................................... 25
(b) Revolving Advances...................................... 26
(c) L/C Advances............................................ 26
SECTION 2.04. Reduction of the Revolving Commitments and the L/C Sublimit....... 26
(a) Voluntary Reductions of the Revolving Commitments....... 26
(b) Mandatory Reductions of the Revolving Commitments....... 26
(c) Automatic Reductions of L/C Subfacility................. 26
SECTION 2.05. Prepayments....................................................... 27
(a) Optional Prepayments.................................... 27
(b) Mandatory Prepayments................................... 27
SECTION 2.06. Interest.......................................................... 29
(a) Interest on Base Rate Advances.......................... 29
(b) Interest Periods for Eurodollar Rate Advances........... 29
(c) Interest on Eurodollar Rate Advances.................... 30
(d) Default Interest........................................ 30
(e) Suspension of Eurodollar Rate Advances.................. 31
SECTION 2.07. Fees.............................................................. 32
(a) Agent's Fees............................................ 32
(b) Revolving Commitment Fees............................... 32
(c) Absolute Obligation..................................... 32
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SECTION 2.08. Increased Costs, Etc............................................. 32
(a) Increased Costs......................................... 32
(b) Capital Requirements.................................... 32
(c) Limitations on Borrower's Compensation Obligations...... 33
SECTION 2.09. Payments and Computations........................................ 33
(a) Payments by Borrower.................................... 33
(b) Computations............................................ 33
(c) Payments Assumed........................................ 34
(d) Application of Payments Specified by the Borrower....... 34
(e) Application of Payments Not Otherwise Specified......... 34
(f) Payments on Business Days............................... 34
(g) Certain Terms........................................... 35
SECTION 2.10. Taxes............................................................ 35
(a) Withholding Taxes....................................... 35
(b) Other Taxes............................................. 35
(c) Indemnification......................................... 35
(d) Evidence of Payment..................................... 36
(e) Foreign Lenders and Issuing Banks....................... 36
(f) Failure to Provide Forms................................ 37
(g) Change of Applicable Lending Office..................... 37
(h) Cooperation by Lenders.................................. 37
(i) Survival................................................ 37
SECTION 2.11. Sharing of Payments, Etc......................................... 37
SECTION 2.12. Use of Proceeds.................................................. 38
SECTION 2.13. Evidence of Debt................................................. 38
(a) Maintenance of Accounts by Lenders...................... 38
(b) Maintenance of Accounts by Agent........................ 38
(c) Execution of Promissory Notes by Borrower............... 38
ARTICLE III
AMOUNTS AND TERMS OF LETTERS OF CREDIT
SECTION 3.01. The Letter of Credit Subfacility................................. 39
SECTION 3.02. Issuance of Letters of Credit.................................... 39
(a) Notice of Issuance...................................... 39
(b) Conditions to Issuance.................................. 39
(c) Reports by Issuing Banks................................ 40
SECTION 3.03. Drawing and Reimbursement........................................ 40
SECTION 3.04. Obligations Absolute............................................. 40
SECTION 3.05. Letter of Credit Compensation.................................... 41
SECTION 3.06. Use of Letters of Credit......................................... 42
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ARTICLE IV
CONDITIONS OF LENDING
SECTION 4.01. Conditions Precedent to Initial Borrowing........................ 42
(a) The Xyplex Acquisition.................................. 42
(b) Certain Payments in Respect of Original Credit Agreement 42
(c) Surviving Debt.......................................... 43
(d) Material Adverse Change; Accuracy of Information........ 43
(e) Litigation.............................................. 43
(f) Payment of Fees......................................... 43
(g) Assignments Under Original Credit Agreement............. 43
(h) Delivery of Documents................................... 43
SECTION 4.02. Conditions Precedent to Each Borrowing and Issuance.............. 45
SECTION 4.03. Determinations Under Article IV.................................. 46
ARTICLE V
REPRESENTATIONS AND WARRANTIES
SECTION 5.01. Representations and Warranties of the Borrower................... 46
(a) Organization; Corporate Powers.......................... 46
(b) Authority; Enforceability............................... 47
(c) Subsidiaries and Ownership of Capital Stock............. 47
(d) No Conflict............................................. 47
(e) Governmental Consents................................... 47
(f) Governmental Regulation................................. 48
(g) Financial Statements and Condition...................... 48
(h) Debt.................................................... 48
(i) Solvency................................................ 48
(j) Litigation; Adverse Effect.............................. 48
(k) No Material Adverse Effect; Adverse Agreements.......... 49
(l) Tax Examinations........................................ 49
(m) Payment of Taxes........................................ 49
(n) Performance of Contractual Obligations.................. 49
(o) Margin Stock............................................ 49
(p) Disclosure.............................................. 50
(q) Requirements of Law..................................... 50
(r) Intellectual Property................................... 50
(s) Environmental Matters................................... 50
(t) ERISA Matters........................................... 51
(u) Noncontravention........................................ 52
(v) Collateral.............................................. 52
(w) Investments............................................. 52
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ARTICLE VI
COVENANTS OF THE BORROWER
SECTION 6.01. Affirmative Covenants............................................ 52
(a) Compliance with Laws, Etc............................... 52
(b) Payment of Taxes, Etc................................... 52
(c) Maintenance of Properties, Insurance.................... 52
(d) Preservation of Corporate Existence, Etc................ 53
(e) Visitation Rights; Books and Records.................... 53
(f) Collateral Documents.................................... 53
(g) Additional Guarantors................................... 53
(h) Interest Rate Hedging................................... 53
(i) Intellectual Property................................... 54
SECTION 6.02. Negative Covenants............................................... 54
(a) Liens, Etc.............................................. 54
(b) Debt.................................................... 55
(c) Negative Pledge......................................... 56
(d) Mergers, Etc............................................ 56
(e) Sales, Etc. of Assets................................... 56
(f) Investments in Other Persons............................ 57
(g) Dividends, Etc.......................................... 59
(h) Change in Nature of Business............................ 60
(i) Charter Amendments...................................... 60
(j) Accounting Changes...................................... 60
(k) Prepayments, Etc. of Certain Debt; Certain Amendments... 60
(l) Partnerships............................................ 60
(m) Margin Regulations...................................... 60
(n) Transactions with Affiliates............................ 60
(o) HLS Contingent Payments, Etc............................ 61
SECTION 6.03. Reporting Requirements........................................... 62
(a) Default Notice.......................................... 62
(b) Monthly Reports......................................... 62
(c) Quarterly Financials.................................... 62
(d) Annual Financials....................................... 63
(e) Compliance Certificates................................. 63
(f) Annual Forecasts........................................ 63
(g) ERISA Events and ERISA Reports.......................... 63
(h) Plan Terminations....................................... 64
(i) Multiemployer Plan Notices.............................. 64
(j) Litigation.............................................. 64
(k) Securities Reports...................................... 64
(l) Creditor Reports........................................ 64
(m) Environmental Conditions................................ 64
(n) Other Information....................................... 65
(o) Xyplex Financial Statements............................. 65
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SECTION 6.04. Financial Covenants.............................................. 65
(a) Fixed Charge Coverage Ratio............................. 65
(b) Leverage Ratio.......................................... 65
(c) Cash Flow Ratio......................................... 66
(d) Consolidated Net Worth.................................. 66
ARTICLE VII
EVENTS OF DEFAULT
SECTION 7.01. Events of Default................................................ 67
SECTION 7.02. Actions in Respect of the Letters of Credit Upon Default......... 70
ARTICLE VIII
THE AGENT
SECTION 8.01. Authorization and Action......................................... 70
SECTION 8.02. Agent's Reliance, Etc............................................ 70
SECTION 8.03. NationsBank and Affiliates....................................... 71
SECTION 8.04. Lender Credit Decision........................................... 71
SECTION 8.05. Indemnification.................................................. 71
SECTION 8.06. Successor Agents................................................. 72
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. Amendments, Etc.; Release of Collateral.......................... 73
(a) Amendments, Etc......................................... 73
(b) Release of Collateral................................... 73
SECTION 9.02. Notices, Etc..................................................... 74
SECTION 9.03. No Waiver; Remedies.............................................. 74
SECTION 9.04. Costs, Expenses.................................................. 74
SECTION 9.05. Right of Set-off................................................. 75
SECTION 9.06. Binding Effect................................................... 76
SECTION 9.07. Assignments and Participations................................... 76
SECTION 9.08. Governing Law.................................................... 78
SECTION 9.09. Execution in Counterparts........................................ 78
SECTION 9.10. No Liability of the Issuing Banks................................ 79
SECTION 9.11. Change in Accounting Principles.................................. 79
SECTION 9.12. Limitation of Liability.......................................... 79
SECTION 9.13. Consent to Jurisdiction and Service of Process................... 80
SECTION 9.14. Performance of Obligations....................................... 80
SECTION 9.15. Lenders' Action for Their Own Protection Only.................... 80
SECTION 9.16. Confidentiality; Disclosure...................................... 81
SECTION 9.17. Entire Agreement................................................. 81
SECTION 9.18. WAIVER OF JURY TRIAL............................................. 81
SECTION 9.19. Notices Under HLS Acquisition Agreement.......................... 82
</TABLE>
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TABLES AND EXHIBITS
<TABLE>
<S> <C>
SCHEDULES
Schedule I Commitments and Applicable Lending Offices
Schedule 5.01(c) Subsidiaries and Ownership of Capital Stock
Schedule 5.01(h) Surviving Debt
Schedule 5.01(w) Existing Investments
Schedule 6.02(a) Existing Liens
Schedule 6.02(e)(v) Assets Identified for Sale
Schedule 6.02(g) Outstanding Claims
EXHIBITS
Exhibit A-1 Form of Term Note
Exhibit A-2 Form of Revolving Note
Exhibit B Form of Notice of Borrowing
Exhibit C Form of Notice of Issuance
Exhibit D Form of Assignment and Acceptance
Exhibit E Form of Amendment to Security Agreement
Exhibit F Form of Amendment to Guaranty
Exhibit G Form of Opinion of Davis Polk & Wardwell
Exhibit H Form of Opinion of Vice President-General Counsel of the Borrower
Exhibit I Form of Opinion of Sidley & Austin
Exhibit J Form of Compliance Certificate
Exhibit K Form of Omnibus Amendment and Consent
Exhibit L Form of Opinion of Ropes & Gray
ANNEXES
Annex I Guaranty
Annex II Security Agreement
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vi
<PAGE>
AMENDED AND RESTATED CREDIT AGREEMENT
AMENDED AND RESTATED CREDIT AGREEMENT (as it may be amended,
supplemented or otherwise modified from time to time, this "AGREEMENT") dated as
---------
of April 10, 1996 among WHITTAKER CORPORATION, a Delaware corporation (the
"BORROWER"), the financial institutions (the "INITIAL LENDERS") listed on the
- --------- ---------------
signature pages hereof, and NATIONSBANK OF TEXAS, N.A. ("NATIONSBANK"), as agent
-----------
(in such capacity, together with any successor appointed pursuant to Article
VIII, the "AGENT") for the Lenders hereunder and as L/C Bank (as hereinafter
-----
defined).
PRELIMINARY STATEMENTS:
(1) The Borrower has entered into the Credit Agreement dated as of
January 23, 1995, as amended by the First Amendment dated as of April 21, 1995
(and as further amended, supplemented or otherwise modified through the date
hereof, the "ORIGINAL CREDIT AGREEMENT") with the financial institutions party
-------------------------
thereto as Lenders (as defined in the Original Credit Agreement, hereinafter the
"ORIGINAL LENDERS") and NationsBank, as L/C Bank (as defined therein) and as
----------------
agent thereunder for such Original Lenders and for the Issuing Banks (as defined
in the Original Credit Agreement, hereinafter the "ORIGINAL ISSUING BANKS").
----------------------
(2) Pursuant to the Original Credit Agreement, (a) the Original
Lenders have made (i) Term Advances (as defined in the Original Credit
Agreement, hereinafter the "ORIGINAL TERM ADVANCES"), which may be evidenced by
----------------------
Term Notes (as defined in the Original Credit Agreement, hereinafter the
"ORIGINAL TERM NOTES"), and (ii) Revolving Advances (as defined in the Original
-------------------
Credit Agreement, hereinafter the "ORIGINAL REVOLVING ADVANCES" and, together
---------------------------
with the Original Term Advances, collectively, the "ORIGINAL ADVANCES") which
-----------------
may be evidenced by Revolving Notes (as defined in the Original Credit
Agreement, hereinafter the "ORIGINAL REVOLVING NOTES" and together with the
------------------------
Original Term Notes, collectively, the "ORIGINAL NOTES" and individually an
--------------
"ORIGINAL NOTE"), and (b) the Original Issuing Banks have issued Letters of
-------------
Credit (as defined in the Original Credit Agreement, hereinafter the "ORIGINAL
--------
LETTERS OF CREDIT").
- -----------------
(3) The Obligations (as defined in the Original Credit Agreement,
hereinafter the "ORIGINAL OBLIGATIONS") of the Borrower and the other Loan
--------------------
Parties (as defined in the Original Credit Agreement, hereinafter the "ORIGINAL
--------
LOAN PARTIES") under the Original Notes and the other Loan Documents (as defined
- ------------
in the Original Credit Agreement, hereinafter the "ORIGINAL LOAN DOCUMENTS") are
-----------------------
secured by the Collateral (as defined in the Original Credit Agreement,
hereinafter the "ORIGINAL COLLATERAL") and are guaranteed or supported or
-------------------
otherwise benefited by the Original Loan Documents.
(4) Pursuant to the Stock Purchase Agreement dated as of March 2, 1996
(as amended, supplemented or otherwise modified from time to time, the "XYPLEX
------
STOCK PURCHASE AGREEMENT") by and between the Borrower and Raytheon Company, a
- ------------------------
Delaware corporation ("RAYTHEON"), the Borrower agreed to purchase all of the
--------
issued and outstanding shares of capital stock of Xyplex, Inc., a Massachusetts
corporation ("XYPLEX"), from Raytheon (the "XYPLEX ACQUISITION").
------ ------------------
(5) The Borrower has requested that the parties hereto (which parties
constitute all parties to the Original Credit Agreement as of the effectiveness
of this Agreement) amend and restate the Original Credit Agreement to provide
for, among other things, (a) the agreement of the Revolving Lenders (as
<PAGE>
hereinafter defined) to make Revolving Advances (as hereinafter defined) to the
Borrower from time to aggregate amount of Letter of Credit Obligations (as
hereinafter defined) outstanding at such time), (b) the agreement of the Term
Lenders (as hereinafter defined) to make Term Advances (as hereinafter defined)
to the Borrower on the Closing Date (as hereinafter defined) in an aggregate
principal amount not to exceed $85,000,000 (less the aggregate principal amount
of Original Term Advances outstanding on the Closing Date), (c) the agreement of
the L/C Bank and the other Issuing Banks (as hereinafter defined) to issue
Letters of Credit (as hereinafter defined) for the account of the Borrower from
time to time in an aggregate Available Amount (as hereinafter defined) not to
exceed at any time outstanding $40,000,000, and (d) the consummation of the
Xyplex Acquisition (which would not be permitted pursuant to the terms of the
Original Credit Agreement).
(6) Subject to the terms and conditions set forth in this Agreement,
(a) the Lenders have agreed severally to make such Revolving Advances and Term
Advances to the Borrower, and (b) the L/C Bank has agreed to issue such Letters
of Credit for the account of the Borrower.
(7) The parties hereto intend that (a) the Original Obligations
(other than Original Obligations in respect of Excluded Original Letters of
Credit) (as hereinafter defined) shall continue to exist under, and to be
evidenced by, this Agreement and the Notes (as hereinafter defined), if any,
issued hereunder, (b) the Original Advances shall be Advances under and as
defined in this Agreement and the Notes, (c) the Original Letters of Credit
(other than the Excluded Original Letters of Credit) shall be Letters of Credit
under and as defined in this Agreement, and (d) the Original Collateral and the
Original Loan Documents shall continue to secure, guarantee, support and
otherwise benefit the Original Obligations as well as the other Obligations of
the Borrower under this Agreement and the Notes and other Loan Documents
hereunder.
NOW, THEREFORE, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. CERTAIN DEFINED TERMS. As used in this Agreement, the
---------------------
following terms shall have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):
"ADVANCE" means a Term Advance, a Revolving Advance or an L/C Advance.
-------
"AFFILIATE" means, as to any Person, any other Person that, directly
---------
or indirectly, controls, is controlled by or is under common control with such
Person or is a director or officer of such Person. For purposes of this
definition, the term "control" (including the terms "controlling," "controlled
by" and "under common control with") of a Person means the possession, direct or
indirect, of the power to direct or cause the direction of the management and
policies of such Person, whether through the ownership of Voting Stock, by
contract or otherwise.
"AGENT" has the meaning specified in the recital of parties to this
-----
Agreement.
2
<PAGE>
"AGENT'S ACCOUNT" means the account of the Agent maintained by the
---------------
Agent with NationsBank at its office at 901 Main Street, Dallas, Texas 75202,
Account No. 1292000883, Corporate Loans, Attention: Agency Services, Reference:
Whittaker.
"APPLICABLE LENDING OFFICE" means, with respect to each Lender, such
-------------------------
Lender's Domestic Lending Office in the case of a Base Rate Advance and such
Lender's Eurodollar Lending Office in the case of a Eurodollar Rate Advance.
"APPLICABLE MARGIN" means, with respect to any Base Rate Advances or
-----------------
Eurodollar Rate Advances, a percentage per annum determined by reference to the
applicable Cash Flow Ratio as set forth below:
<TABLE>
<CAPTION>
Applicable Margin for Applicable Margin for
Cash Flow Ratio Base Rate Advances Eurodollar Rate Advances
- --------------------------- ---------------------- -------------------------
<S> <C> <C>
less than 1.75:1.0 0.0% 1.00%
1.75:1.0 or greater, but 0.0% 1.375%
less than 2.50:1.0
2.50:1.0 or greater, but 0.25% 1.625%
less than 3.25:1.0
3.25:1.0 or greater, but 0.50% 1.875%
less than 4.00:1.0
4.00:1.0 or greater 1.00% 2.250%
</TABLE>
The Applicable Margin for each Base Rate Advance and Eurodollar Rate Advance
shall be determined by reference to the Cash Flow Ratio in effect from time to
time; provided, however, that (i) until receipt by the Agent of the Borrower's
-------- -------
unaudited financial statements for the fiscal quarter ended July 31, 1996 and
the Compliance Certificate required pursuant to Section 6.03(e) with respect to
such fiscal quarter, the Cash Flow Ratio shall be deemed to be 4.00:1.0 or
greater, (ii) no change (except as provided in clause (iii) below) in the
Applicable Margin shall be effective until three Business Days after the date on
which the Agent receives financial statements pursuant to Section 6.03(c) or (d)
and a Compliance Certificate delivered pursuant to Section 6.03(e),
demonstrating such Cash Flow Ratio, (iii) if at any time, and for so long as, a
Default has occurred and is continuing based on the Borrower's failure to
deliver the financial statements and Compliance Certificates required pursuant
to Section 6.03(c), (d) and (e), as the case may be, the Cash Flow Ratio shall
be deemed to be 4.00:1.0 or greater and any change in the Applicable Margin
resulting from such deemed Cash Flow Ratio shall be effective, (iv) except as
provided in the following clause (v), upon the effectiveness of any change in
the Applicable Margin, the new Applicable Margin shall be given retroactive
effect as to each outstanding Advance to the then most recent of (a) the first
day of the then current fiscal quarter of the Borrower, and (b) the last date on
which interest was due and payable in respect of such Advance, and (v) upon the
effectiveness of any change in the Applicable Margin pursuant to the foregoing
clause (ii) at any time when the Applicable Margin is determined pursuant to the
foregoing clause (iii), the new Applicable Margin shall be given effect only as
of the effectiveness thereof (and shall not be given retroactive effect).
3
<PAGE>
"APPROPRIATE LENDER" means, at any time, with respect to either the
------------------
Term Facility or the Revolving Facility, a Lender that has a Commitment with
respect to, or to which Advances are owing under, such Facility at such time.
"ARRANGER" means NationsBanc Capital Markets, Inc.
--------
"ASSIGNMENT AND ACCEPTANCE" means an assignment and acceptance entered
-------------------------
into by a Lender and an Eligible Assignee, and accepted by the Agent, in
accordance with Section 9.07 and in substantially the form of Exhibit D hereto.
"AVAILABLE AMOUNT" of any Letter of Credit means, at any time, the
----------------
maximum amount available to be drawn under such Letter of Credit at such time
(assuming compliance at such time with all conditions to drawing).
"BANK OF AMERICA" means Bank of America National Trust and Savings
---------------
Association.
"BASE RATE" means a fluctuating interest rate per annum in effect from
---------
time to time, which rate per annum shall at all times be equal to the highest
of: (a) the rate of interest announced publicly by NationsBank from time to time
as NationsBank's prime rate; and (b) 1/2 of one percent per annum above the
Federal Funds Rate.
"BASE RATE ADVANCE" means an Advance that bears interest as provided
-----------------
in Section 2.06(a).
"BERMITE DEVELOPMENT AGREEMENT" means the Development Agreement by and
-----------------------------
among the Borrower, Whittaker Porta Bella Development, Inc. (as successor in
interest to Whittaker Bermite Corporation) and Northholme Partners (as successor
in interest to The Anden Group) dated as of August 1, 1991, relating to the
development of the Bermite Land, as amended to date and as such agreement may
hereafter be amended, supplemented or otherwise modified from time to time.
"BERMITE LAND" means certain real property located in the city of
------------
Santa Clarita consisting of approximately 996 acres and owned by Whittaker Porta
Bella Development, Inc.
"BERMITE/SANTA CLARITA AGREEMENT" means the Development Agreement
-------------------------------
dated as of March 28, 1996 by and between the City of Santa Clarita and
Whittaker Porta Bella Development, Inc. relating to the development of the
Bermite Land.
"BORROWER" has the meaning set forth in the recital of parties to
--------
this Agreement.
"BORROWER'S ACCOUNT" means the account of the Borrower maintained by
------------------
the Borrower with Bank of America at its office at 555 South Flower Street, Los
Angeles, CA 90071, Account No. 1257300191.
"BORROWING" means each (i) Borrowing (as defined in the Original
---------
Credit Agreement) outstanding on the Closing Date, (ii) Term Borrowing, and
(iii) Revolving Borrowing.
4
<PAGE>
"BUSINESS DAY" means a day of the year other than a Saturday, Sunday
------------
or any other day on which banks are not required or authorized by law to close
in New York City, Los Angeles, California or Dallas, Texas and, if the
applicable Business Day relates to any Eurodollar Rate Advances, on which
dealings are carried on in the London interbank market.
"CAPITAL EXPENDITURES" means, for any period, the aggregate of all
--------------------
expenditures (whether paid in cash or accrued as a liability (but without
duplication) during that period and including that portion of Capitalized Leases
which is capitalized on the Consolidated balance sheet of the Borrower and its
Subsidiaries) made or incurred during such period which, in conformity with
GAAP, are required to be included in or reflected by the Borrower's or any of
its Subsidiaries' fixed asset accounts as reflected in any of their balance
sheets (including expenditures for equipment purchased simultaneously with the
trade-in of existing equipment owned by the Borrower or any of its Subsidiaries
to the extent the gross amount of such purchase price exceeds the book value of
the equipment being traded in, minus expenditures made in connection with the
-----
replacement or restoration of assets, to the extent reimbursed or financed from
insurance proceeds or condemnation awards) but, in any event, excluding any such
expenditures which, when made, are designated by the Borrower as Operating
Investments permitted under Section 6.02(f)(vi).
"CAPITALIZED LEASES" has the meaning specified in clause (e) of
------------------
the definition of Debt.
"CASH EQUIVALENTS" means: (a) readily marketable direct obligations
----------------
issued or unconditionally guaranteed by the United States government or issued
by an agency thereof and backed by the full faith and credit of the United
States in each case maturing within 90 days after the date of acquisition
thereof; (b) readily marketable direct obligations issued by any state of the
United States of America or any political subdivision of any such state or any
public instrumentality thereof maturing within 90 days after the date of
acquisition thereof and, at the time of acquisition, having one of the two
highest ratings obtainable from either Standard & Poor's Rating Services or
Moody's Investors Service, Inc. (or, if at any time neither Standard & Poor's
Rating Services nor Moody's Investors Service, Inc. shall be rating such
obligations, then one of the two highest ratings from any other nationally
recognized rating service acceptable to the Required Lenders); (c) commercial
paper, other than commercial paper issued by the Borrower or any of its
Affiliates, maturing no later than 90 days after the date of the acquisition
thereof and, at the time of acquisition, having a rating of at least either A-1
from Standard & Poor's Rating Services or P-1 from Moody's Investors Service,
Inc. (or, if at any time neither Standard & Poor's Rating Services nor Moody's
Investors Service, Inc. shall be rating such obligations, then the highest
rating from any other nationally recognized rating service acceptable to the
Required Lenders); (d) money market accounts, domestic and Eurodollar
certificates of deposit or time deposits or bankers' acceptances maturing within
90 days after the date of acquisition thereof issued by any commercial bank
organized under the laws of the United States of America or any state thereof or
the District of Columbia or any country which is a member of the OECD and having
combined capital and surplus of not less than $500,000,000 or by any Lender; (e)
repurchase or reverse repurchase agreements issued with any commercial bank
organized under the laws of the United States of America or any state thereof or
the District of Columbia having combined capital and surplus of not less than
$500,000,000 or with any Lender, provided that such agreements comply with the
--------
guidelines set forth in the Federal Financial Institutions Examination Council
Supervisory Policy-Repurchase Agreements of Depository Institutions With
Securities Dealers and Others as adopted by the Comptroller of the Currency on
October 31, 1985; and (f) investments in money market funds.
"CASH FLOW RATIO" means, at any time of determination, the ratio of
---------------
(i) Consolidated Total Debt as of the end of the most recently ended fiscal
quarter of the Borrower to (ii) EBITDA for the
5
<PAGE>
Borrower and its Subsidiaries on a Consolidated basis for the four fiscal
quarter period ending as of the then most recently ended fiscal quarter of the
Borrower (it being understood and agreed that the EBITDA attributable to any
Operating Investment shall only be included in such calculation for that period
commencing with the date of ownership of such Operating Investment by the
Borrower or any of its Subsidiaries).
"CERCLA" means the Comprehensive Environmental Response, Compensation
------
and Liability Act of 1980.
"CLOSING DATE" means the date on which the first Advances are
------------
made hereunder.
"COLLATERAL" means all "Collateral" referred to in the Collateral
----------
Documents and all other property that is subject to any Lien in favor of the
Agent, the Lenders or any Issuing Bank.
"COLLATERAL DOCUMENTS" means the Security Agreement, the Confirmation
--------------------
and any other instrument or agreement granting to the Agent a security interest
to secure the Obligations of the Loan Parties under the Loan Documents.
"COMMERCIAL LETTER OF CREDIT" means any letter of credit that is
---------------------------
issued under the Letter of Credit Subfacility for the benefit of a supplier of
goods to the Borrower or any of its Subsidiaries in the ordinary course of
business to effect payment for such goods, the conditions to drawing under which
include the presentation to the Issuing Bank of negotiable bills of lading,
invoices and related documents.
"COMMITMENT" means a Term Commitment or a Revolving Commitment.
----------
"COMMITMENT FEE PERCENTAGE" means a percentage per annum determined by
-------------------------
reference to the Cash Flow Ratio as set forth below:
<TABLE>
<CAPTION>
Cash Flow Ratio Commitment Fee Percentage
- ---------------------------------------------- --------------------------
<S> <C>
less than 1.75:1.0 0.25%
1.75:1.0 or greater, but less than 2.50:1.0 0.25%
2.50:1.0 or greater, but less than 3.25:1.0 0.3125%
3.25:1.0 or greater, but less than 4.00:1.0 0.375%
4.00:1.0 or greater 0.50%
</TABLE>
Except as set forth in the immediately following proviso, the Commitment Fee
Percentage shall be determined by reference to the Cash Flow Ratio in effect
from time to time; provided, however, that (i) until receipt by the Agent of the
-------- -------
Borrower's unaudited financial statements for the fiscal quarter ended July 31,
1996 and the Compliance Certificate required pursuant to Section 6.03(e) with
respect to such fiscal quarter, the Cash Flow Ratio shall be deemed to be
4.00:1.0 or greater, (ii) no change (except as provided in clause (iii) below)
in the Commitment Fee Percentage shall be effective until three Business Days
after the date on which the Agent receives financial statements pursuant to
Section 6.03(c) or (d) and a Compliance Certificate delivered pursuant to
Section 6.03(e) demonstrating such Cash Flow Ratio, (iii) if at any time, and
for so long as, a Default has occurred and is continuing based on the Borrower's
failure to deliver the financial statements and Compliance Certificates required
pursuant to Section 6.03(c), (d) or (e), as the case may be, the Cash Flow Ratio
shall be deemed to be 4.00:1.0 or greater
6
<PAGE>
and any change in the Commitment Fee Percentage resulting from such deemed Cash
Flow Ratio shall be effective, (iv) except as provided in the following clause
(v), upon the effectiveness of any change in the Commitment Fee Percentage, the
new Commitment Fee Percentage shall be given retroactive effect to the first day
of the then current fiscal quarter of the Borrower, and (v) upon the
effectiveness of any change in the Commitment Fee Percentage pursuant to the
foregoing clause (ii) at any time when the Commitment Fee Percentage is
determined pursuant to the foregoing clause (iii), the new Commitment Fee
Percentage shall be given effect only as of the effectiveness thereof (and shall
not be given retroactive effect).
"CONFIDENTIAL INFORMATION" means information that the Borrower
------------------------
furnishes to the Agent or any Lender on a confidential basis, but does not
include any such information that is or becomes generally available to the
public other than as a result of a breach by the Agent or any Lender of its
obligations hereunder or that is or becomes available to the Agent or such
Lender from a source other than the Borrower that is not, to the best of the
Agent's or such Lender's knowledge, acting in violation of a confidentiality
agreement with the Borrower.
"CONSOLIDATED" refers to the consolidation of accounts in accordance
------------
with GAAP.
"CONFIRMATION" has the meaning specified in Section 6.01(i).
------------
"CONSOLIDATED INTEREST EXPENSE" means, for any period, total interest
-----------------------------
expense (including the interest component of Capitalized Leases), of the
Borrower and its Subsidiaries on a Consolidated basis determined for such period
in conformity with GAAP, including, without limitation, all commissions,
discounts and other fees and charges owed with respect to letters of credit and
net costs under Hedge Agreements, excluding charges in such period for the
amortization or write-off of capitalized (i) fees and expenses incurred in
connection with the Original Credit Agreement, (ii) amounts payable under the
letter referred to in Section 2.07(a), and (iii) other expenses relating to the
negotiation and preparation of, and initial Borrowing under, this Agreement.
"CONSOLIDATED NET INCOME" means, for any period, the net earnings (or
-----------------------
loss) after taxes of the Borrower and its Subsidiaries on a Consolidated basis
determined for such period in conformity with GAAP.
"CONSOLIDATED NET WORTH" means the total assets of the Borrower and
----------------------
its Subsidiaries determined on a Consolidated basis in accordance with GAAP
minus all liabilities of the Borrower and its Subsidiaries determined on a
- -----
Consolidated basis in accordance with GAAP.
"CONSOLIDATED TOTAL CAPITALIZATION" means, at any time of
---------------------------------
determination, the sum of (i) Consolidated Total Debt, and (ii) Consolidated Net
Worth, in each case, as of such time.
"CONSOLIDATED TOTAL DEBT" means, as of any time of determination, all
-----------------------
funded debt and all other indebtedness for borrowed money (including Capitalized
Leases), in each case of the Borrower and its Subsidiaries at such time
determined on a Consolidated basis.
"CONTRACTUAL OBLIGATION", as applied to any Person, means any
----------------------
provision of any indenture, mortgage, deed of trust, contract, undertaking,
document or other agreement, instrument or
7
<PAGE>
Securities to which that Person is a party or by which it or any of its
properties is bound, or to which it or any of its properties is subject.
"CONVERSION," "CONVERT" and "CONVERTED" each refer to a conversion of
---------- ------- ---------
Advances of one Interest Type into Advances of the other Interest Type pursuant
to Section 2.06 or 2.08.
"CURRENCY HEDGING AGREEMENTS" means currency swap agreements, currency
---------------------------
future or option contracts and other similar agreements.
"DEBT" of any Person means, without duplication, (a) all indebtedness
----
of such Person for borrowed money, (b) all Obligations of such Person for the
deferred purchase price of property or services (except accounts payable and
accrued expenses arising in the ordinary course of business but only if and so
long as the same are payable on conventional terms and in any event no later
than one year after the incurrence thereof), (c) all Obligations of such Person
evidenced by notes, bonds, debentures or other similar instruments, (d) all
Obligations of such Person created or arising under any conditional sale or
other title retention agreement with respect to property acquired by such Person
(even though the rights and remedies of the seller or lender under such
agreement in the event of default are limited to repossession or sale of such
property), (e) all Obligations of such Person as lessee under leases that have
been or should be, in accordance with GAAP, recorded as capital leases
("CAPITALIZED LEASES"), (f) all Obligations, contingent or otherwise, of such
------------------
Person under acceptance, letter of credit or similar facilities, (g) all
Obligations of such Person to purchase or redeem Redeemable Preferred Stock
valued at the greater of its voluntary or involuntary liquidation preference
plus accrued and unpaid dividends, (h) all Obligations of such Person in respect
of Hedge Agreements, (i) all Debt of others referred to in clauses (a) through
(h) above guaranteed directly or indirectly in any manner by such Person, or in
effect guaranteed directly or indirectly by such Person through an agreement (i)
to pay or purchase such Debt or to advance or supply funds for the payment or
purchase of such Debt, (ii) to purchase, sell or lease (as lessee or lessor)
property, or to purchase or sell services, primarily for the purpose of enabling
the debtor to make payment of such Debt or to assure the holder of such Debt
against loss, (iii) to supply funds to or in any other manner invest in the
debtor (including any agreement to pay for property or services irrespective of
whether such property is received or such services are rendered) or (iv)
otherwise to assure a creditor against loss, and (j) all Debt referred to in
clauses (a) through (h) above secured by (or for which the holder of such Debt
has an existing right, contingent or otherwise, to be secured by) any Lien on
property (including, without limitation, accounts and contract rights) owned by
such Person, even though such Person has not assumed or become liable for the
payment of such Debt; provided, however, that HLS Contingent Payments shall not
-------- -------
constitute "Debt" hereunder.
"DEFAULT" means any Event of Default or any event that would
-------
constitute an Event of Default but for the requirement that notice be given or
time elapse or both.
"DEFAULT RATE" has the meaning specified in Section 2.06(d).
------------
"DOMESTIC GUARANTOR" means a Guarantor (a) all of whose capital stock
------------------
is owned, directly or through one or more other Domestic Guarantors, by the
Borrower; and (b) which is organized under the laws of the United States or any
state thereof.
"DOMESTIC LENDING OFFICE" means, with respect to any Lender, the
-----------------------
office of such Lender specified as its "Domestic Lending Office" opposite its
name on Schedule I hereto or in the Assignment
8
<PAGE>
and Acceptance pursuant to which it became a Lender, or such other office of
such Lender as such Lender may from time to time specify to the Borrower and the
Agent.
"EBITDA" means, for any period, net income (or net loss) plus, in each
------ ----
case to the extent deducted in determining net income, the sum of (a) interest
expense, (b) income tax expense, (c) depreciation expense, (d) amortization
expense, (e) non-cash write-offs of in-process technology associated with the
Xyplex Acquisition and incurred within twelve months of the Closing Date, and
(f) other non-cash charges not to exceed $5,000,000 associated with the Xyplex
Acquisition and incurred within twelve months of the Closing Date, in each case
determined in accordance with GAAP for such period.
"ELIGIBLE ASSIGNEE" means (a) any Lender and any Affiliate of any
-----------------
Lender so long as such Affiliate directly or through one or more of its
Subsidiaries engages in commercial financing transactions in the ordinary course
of its business, and (b) any commercial bank, savings and loan association,
savings bank, finance company, insurance company, mutual fund or other financial
institution, fund or investor which has been approved in writing (or, in the
case of the Borrower, deemed approved as provided below) by the Borrower and the
Agent as an Eligible Assignee for purposes of this Agreement, provided that in
--------
each such case such approval shall not be unreasonably withheld, and provided,
--------
further, that if the Borrower is requested at any time to approve any Person as
- -------
an Eligible Assignee hereunder and the Agent has not received notice from the
Borrower, within seven Business Days after receipt by the Borrower of such
request, that the Borrower does not approve such Person as an Eligible Assignee,
the Borrower shall be deemed to have approved such Person as an Eligible
Assignee.
"ENVIRONMENTAL ACTION" means any administrative, regulatory or
--------------------
judicial action, suit, demand, demand letter, claim, notice of non-compliance or
violation, investigation, proceeding, consent order or consent agreement
relating in any way to any Environmental Law or any Environmental Permit
including, without limitation, (a) any claim by any governmental or regulatory
authority for enforcement, cleanup, removal, response, remedial or other actions
or damages pursuant to any Environmental Law and (b) any claim by any third
party seeking damages, contribution, indemnification, cost recovery,
compensation or injunctive relief resulting from Hazardous Materials or arising
from alleged injury or threat of injury to health, safety or the environment.
"ENVIRONMENTAL LAW" means any foreign, federal, state or local law,
-----------------
rule, regulation, order, writ, judgment, injunction, decree, determination or
award relating to the environment, health, safety or Hazardous Materials,
including, without limitation, CERCLA, the Resource Conservation and Recovery
Act, the Hazardous Materials Transportation Act, the Clean Water Act, the Toxic
Substances Control Act, the Clean Air Act, the Safe Drinking Water Act, the
Atomic Energy Act, the Federal Insecticide, Fungicide and Rodenticide Act and
the Occupational Safety and Health Act.
"ENVIRONMENTAL PERMIT" means any permit, approval, identification
--------------------
number, license or other authorization required under any Environmental Law.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
-----
amended from time to time, and the regulations promulgated and rulings issued
thereunder.
"ERISA AFFILIATE" of any Person means any other Person that for
---------------
purposes of Title IV of ERISA is a member of such Person's controlled group, or
under common control with such Person, within the meaning of Section 414 of the
Internal Revenue Code.
9
<PAGE>
"ERISA EVENT" with respect to any Person means (a) (i) the occurrence
-----------
of a reportable event, within the meaning of Section 4043 of ERISA, with respect
to any Plan of such Person or any of its ERISA Affiliates unless the 30-day
notice requirement with respect to such event has been waived by the PBGC, or
(ii) the requirements of subsection (1) of Section 4043(b) of ERISA are met
(taking into account subsection (2) of such Section) with respect to a
contributing sponsor, as defined in Section 4001(a)(13) of ERISA, of a Plan of
such Person or any of its ERISA Affiliates, and an event described in paragraph
(9), (10), (11), (12) or (13) of Section 4043(c) of ERISA is reasonably expected
to occur with respect to such plan within the following 30 days; (b) the
provision by the administrator of any Plan of such Person or any of its ERISA
Affiliates of a notice of intent to terminate such Plan, pursuant to Section
4041(c) of ERISA (including any such notice with respect to a plan amendment
referred to in Section 4041(e) of ERISA); (c) the cessation of operations at a
facility of such Person or any of its ERISA Affiliates in the circumstances
described in Section 4062(e) of ERISA; (d) the withdrawal by such Person or any
of its ERISA Affiliates from a Multiple Employer Plan during a plan year for
which it was a substantial employer, as defined in Section 4001(a)(2) of ERISA;
(e) the failure by such Person or any of its ERISA Affiliates to make a payment
to a Plan if the conditions for the imposition of a lien under Section 302(f)(1)
of ERISA are satisfied; (f) the adoption of an amendment to a Plan of such
Person or any of its ERISA Affiliates requiring the provision of security to
such Plan, pursuant to Section 307 of ERISA; or (g) the institution by the PBGC
of proceedings to terminate a Plan of such Person or any of its ERISA
Affiliates, pursuant to Section 4042 of ERISA, or the occurrence of any event or
condition described in Section 4042 of ERISA that could constitute grounds for
the termination of, or the appointment of a trustee to administer, such Plan.
"EUROCURRENCY LIABILITIES" has the meaning specified in Regulation D
------------------------
of the Board of Governors of the Federal Reserve System, as in effect from time
to time.
"EURODOLLAR LENDING OFFICE" means, with respect to any Lender, the
-------------------------
office of such Lender specified as its "Eurodollar Lending Office" opposite its
name on Schedule I hereto or in the Assignment and Acceptance pursuant to which
it became a Lender (or, if no such office is specified, its Domestic Lending
Office), or such other office of such Lender as such Lender may from time to
time specify to the Borrower and the Agent.
"EURODOLLAR RATE" means, for any Interest Period for any Eurodollar
---------------
Rate Advance, an interest rate per annum (rounded upward to the nearest whole
multiple of 0.01% per annum) equal to the rate per annum obtained by dividing
(a) the rate per annum at which deposits in U.S. dollars are offered by the
principal office of NationsBank in London, England to prime banks in the London
interbank market at 11:00 A.M. (London time) two Business Days before the first
day of such Interest Period in an amount substantially equal to NationsBank's
Eurodollar Rate Advance to be outstanding during such Interest Period and for a
period equal to such Interest Period by (b) a percentage equal to 100% minus the
Eurodollar Rate Reserve Percentage for such Interest Period.
"EURODOLLAR RATE ADVANCE" has the meaning specified in Section
-----------------------
2.06(b).
"EURODOLLAR RATE RESERVE PERCENTAGE" for any Interest Period for any
----------------------------------
Eurodollar Rate Advance means the reserve percentage applicable two Business
Days before the first day of such Interest Period under regulations issued from
time to time by the Board of Governors of the Federal Reserve System (or any
successor) for determining the maximum reserve requirement (including, without
limitation, any emergency, supplemental or other marginal reserve requirement)
for a member bank of the Federal Reserve System in New York City with respect to
liabilities or assets consisting of or
10
<PAGE>
including Eurocurrency Liabilities (or with respect to any other category of
liabilities that includes deposits by reference to which the interest rate on
Eurodollar Rate Advances is determined) having a term equal to such Interest
Period.
"EVENTS OF DEFAULT" has the meaning specified in Section 7.01.
-----------------
"EXCESS CASH FLOW" means, for any period, the excess, if any, of (a)
----------------
EBITDA of the Borrower and its Subsidiaries for such period over (b) the sum of
(i) cash tax expense of the Borrower and its Subsidiaries for such period, (ii)
cash interest expense paid by the Borrower and its Subsidiaries for such period,
(iii) the aggregate amount of (a) all payments of the principal amount of the
Term Advances made during such period in accordance with the provisions of
Section 2.03(a) or 2.05(a), and (b) all scheduled payments of the principal
amount of any other funded debt or other indebtedness for borrowed money
(including Capitalized Leases) of the Borrower and its Subsidiaries (determined
in accordance with GAAP but excluding any Revolving Advances and L/C Advances)
required to be made during such period, (iv) the aggregate amount equal to the
amount of all Capital Expenditures of the Borrower and its Subsidiaries paid in
cash during such period to the extent permitted by this Agreement, (v) if there
was a net decrease in Consolidated current accounts payable and current accrued
liabilities of the Borrower and its Subsidiaries during such period, the amount
of such net decrease, (vi) if there was a net increase in Consolidated current
receivables and current inventories of the Borrower and its Subsidiaries during
such period, the amount of such net increase, (vii) the aggregate amount of any
HLS Contingent Payments during such period, and (viii) cash dividends paid by
the Borrower during such period to the extent permitted under Section 6.02(g).
"EXCLUDED ORIGINAL LETTERS OF CREDIT" means, subject to Section
-----------------------------------
3.01(b), Original Letters of Credit issued by Bank of America.
"EXISTING DEBT" means Debt of the Company and its Subsidiaries
-------------
outstanding on the date hereof (other than Debt under the Original Credit
Agreement).
"EXISTING LIENS" means the Liens on assets of the Borrower and its
--------------
Subsidiaries identified as such on Schedule 6.02(a).
"FACILITY" means the Term Facility, the Revolving Facility or the
--------
Letter of Credit Subfacility.
"FEDERAL FUNDS RATE" means, for any period, a fluctuating interest
------------------
rate per annum equal for each day during such period to the weighted average of
the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rate is not so published for any
day that is a Business Day, the average of the quotations for such day for such
transactions received by the Agent from three Federal funds brokers of
recognized standing selected by it.
"FINANCIAL STANDBY LETTER OF CREDIT" means any letter of credit that
----------------------------------
is issued under the Letter of Credit Subfacility for purposes of providing
credit support for financial obligations.
11
<PAGE>
"FIXED CHARGE COVERAGE RATIO" means, subject to Section 6.02(o), for
---------------------------
any period, the quotient obtained by dividing (a) Consolidated EBITDA of the
Borrower and its Subsidiaries for such period minus the sum of (i) Consolidated
-----
Capital Expenditures of the Borrower and its Subsidiaries in such period and
(ii) the amount of any HLS Contingent Payments accrued in such period by (b) the
sum of Consolidated Interest Expense for such period plus scheduled payments of
----
the principal amount of (i) the Term Advances required to be made during such
period in accordance with the provisions of Section 2.03(a) (as such scheduled
payments may be reduced by any prepayments of the Term Advances) and (ii) any
other funded debt or other indebtedness for borrowed money (including
Capitalized Leases) of the Borrower and its Subsidiaries (determined in
accordance with GAAP but excluding any Revolving Advances and L/C Advances)
required to be made during such period.
"FOREIGN SUBSIDIARY" means any Subsidiary of the Borrower identified
------------------
as such on Schedule 5.01(c) and, in addition, any Subsidiary of the Borrower
acquired, incorporated or otherwise established by the Borrower after the
Closing Date which is organized under the laws of a jurisdiction other than the
United States of America or any State thereof and more than 80% of the sales,
earnings or assets (determined on a Consolidated basis for such Subsidiary) of
which are located or derived from operations in territories of the United States
of America and jurisdictions outside the United States of America.
"GAAP" has the meaning specified in Section 1.03.
----
"GOVERNMENTAL AUTHORITY" means any nation, state, sovereign or any
----------------------
political subdivision thereof and any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government.
"GUARANTOR" means each Subsidiary of the Borrower that has executed
---------
the Guaranty or that has executed an amendment to the Guaranty pursuant to
Section 6.01(g) of this Agreement or of the Original Credit Agreement.
"GUARANTY" means the Guaranty dated as of January 23, 1995 made by
--------
Blue Bell Lease, Inc., a California corporation, Metropolitan Financial Services
Corporation, a Colorado corporation, Park Chemical Company, a Michigan
corporation, Whittaker Controls, Inc., a California corporation, Whittaker
Corp., a Maine corporation, Whittaker Ordnance, Inc., a Delaware corporation,
Whittaker Porta Bella Development, Inc., a California corporation, Whittaker
Services Corporation, a California corporation, Whittaker Technical Products,
Inc., a Colorado corporation, and Whittaker Development Co., a Delaware
corporation, in favor of the Lenders (as defined therein) and the Agent, a copy
of which is attached hereto as Annex I, as amended through the date hereof and
as the same may hereafter be amended, supplemented or otherwise modified from
time to time.
"HAZARDOUS MATERIALS" means (a) petroleum or petroleum products,
-------------------
natural or synthetic gas, asbestos in any form that is or could become friable,
urea formaldehyde foam insulation and radon gas, (b) any substances defined as
or included in the definition of "hazardous substances," "hazardous wastes,"
"hazardous materials," "extremely hazardous wastes," "restricted hazardous
wastes," "toxic substances," "toxic pollutants," "contaminants" or "pollutants,"
or words of similar import, under any Environmental Law and (c) any other
substance exposure to which is regulated under any Environmental Law.
"HEDGE AGREEMENTS" means Interest Rate Contracts and Currency Hedging
----------------
Agreements.
12
<PAGE>
"HLS" means Hughes LAN Systems, Inc., a California corporation.
---
"HLS ACQUISITION" means the acquisition by the Borrower of 100% of
---------------
the capital stock of HLS.
"HLS ACQUISITION AGREEMENT" means the Stock Purchase Agreement dated
-------------------------
as of March 23, 1995 by and between Hughes Aircraft Company, a Delaware
corporation and the Borrower.
"HLS ACQUISITION DOCUMENTS" means the HLS Acquisition Agreement, the
-------------------------
HLS Subordinated Debt Documents and each other document, instrument and
agreement executed and/or delivered in connection with the HLS Acquisition.
"HLS CONTINGENT PAYMENTS" means (i) "Contingent Payments" as defined
-----------------------
in Exhibit 1.3(c) to the HLS Acquisition Agreement, (ii) HLS Mandatory Payments,
and (iii) any other amounts payable by the Borrower or any of its Subsidiaries
to Hughes Aircraft Company, a Delaware corporation or any of its Affiliates
based on the revenues or income of HLS; provided, however, that any amounts
-------- -------
required to be paid as a result of adjustments, pursuant to Section 1.6 of the
HLS Acquisition Agreement, to the purchase price payable in connection with the
HLS Acquisition shall not constitute HLS Contingent Payments.
"HLS MANDATORY PAYMENTS" means mandatory payments under Section 2.2 of
----------------------
Exhibit 1.3(c) to the HLS Acquisition Agreement.
"HLS SUBORDINATED DEBT" means the 7% convertible Subordinated Debt in
---------------------
the original principal amount of $15,000,000 incurred by the Borrower in
connection with the HLS Acquisition.
"HLS SUBORDINATED DEBT DOCUMENTS" means (i) the HLS Subordinated Note,
-------------------------------
and (ii) any other instruments and agreements evidencing and governing the HLS
Subordinated Debt.
"HLS SUBORDINATED NOTE" means the 7% Convertible Subordinated Note due
---------------------
May 1, 2005 in the original principal amount of $15,000,000 and any note or
notes issued in exchange therefor or replacement thereof so long as each such
note is in substantially the form of Exhibit 1.3(b) to the HLS Acquisition
Agreement.
"INDEMNIFIED PARTY" has the meaning specified in Section 9.04(b).
-----------------
"INFORMATION MEMORANDUM" means the information memorandum (to be
----------------------
prepared by the Agent based on information provided by the Borrower) to be used
by the Agent in connection with the syndication of the Commitments and the
Advances.
"INITIAL LENDERS" has the meaning specified in the recital of parties
---------------
to this Agreement.
"INSUFFICIENCY" means, with respect to any Plan, the amount, if any,
-------------
of its unfunded benefit liabilities, as defined in Section 4001(a)(18) of ERISA.
"INTEREST PERIOD" has the meaning specified in Section 2.06(b).
---------------
13
<PAGE>
"INTEREST RATE CONTRACTS" means interest rate swap, cap or collar
-----------------------
agreements, interest rate future or option contracts and other similar
agreements.
"INTEREST TYPE" refers to the distinction between Advances bearing
-------------
interest with reference to the Base Rate and Advances bearing interest with
reference to the Eurodollar Rate.
"INTERNAL REVENUE CODE" means the Internal Revenue Code of 1986, as
---------------------
amended from time to time, and the regulations promulgated and rulings issued
thereunder.
"INVESTMENT" in any Person means any loan or advance to such Person,
----------
any purchase or other acquisition of any capital stock, warrants, rights,
options, obligations or other securities of such Person, any capital
contribution to such Person or any other investment in such Person, including,
without limitation, any arrangement pursuant to which the investor incurs Debt
of the types referred to in clauses (i) and (j) of the definition of "DEBT" in
----
respect of such Person.
"ISSUE" means, with respect to any Letter of Credit, either issue such
-----
Letter of Credit, extend the expiry of such Letter of Credit (other than any
such extension occurring pursuant to the terms of such Letter of Credit), renew
such Letter of Credit (other than any such renewal occurring pursuant to the
terms of such Letter of Credit), or increase the amount of such Letter of
Credit, and the terms "Issued", "Issuing", and "Issuance" shall have
------ ------- --------
corresponding meanings.
"ISSUING BANK" means the L/C Bank or any Lender that is a commercial
------------
bank, acting through a domestic branch, in each case in its capacity as issuer
of a Letter of Credit.
"LENDERS" means the Initial Lenders listed on the signature pages
-------
hereof and each Eligible Assignee that shall become a party hereto pursuant to
Section 9.07, including any of the foregoing in its capacity as an Issuing Bank.
"L/C ADVANCE" means a payment made by an Issuing Bank under a Letter
-----------
of Credit.
"L/C BANK" means NationsBank in its capacity as an Issuing Bank.
--------
"L/C CASH COLLATERAL ACCOUNT" has the meaning specified in the
---------------------------
Security Agreement.
"L/C RELATED DOCUMENTS" has the meaning specified in Section 3.04(a).
---------------------
"L/C SUBLIMIT" means, at any time of determination, $40,000,000, as
------------
such amount may have been reduced at or prior to such time pursuant to the terms
hereof; provided, however, that the L/C Sublimit shall not at any time exceed
-------- -------
the aggregate Revolving Commitments of the Revolving Lenders at such time minus
the sum of all Revolving Advances and Unreimbursed Letter of Credit Liability
then outstanding.
"LETTER OF CREDIT" means a Commercial Letter of Credit, a Financial
----------------
Standby Letter of Credit, a Performance Standby Letter of Credit or an Original
Letter of Credit (other than an Excluded Original Letter of Credit).
"LETTER OF CREDIT AGREEMENT" has the meaning specified in Section
--------------------------
3.02(a).
14
<PAGE>
"LETTER OF CREDIT OBLIGATIONS" as of any date of determination, with
----------------------------
respect to any Letter of Credit, shall consist of the sum of (a) the then
outstanding Available Amount of such Letter of Credit, and (b) the aggregate
amount of the Unreimbursed Letter of Credit Liability thereunder.
"LETTER OF CREDIT SUBFACILITY" has the meaning specified in Section
----------------------------
3.01.
"LIEN" means any lien, security interest or other charge or
----
encumbrance of any kind, or any other type of preferential arrangement,
including, without limitation, the lien or retained security title of a
conditional vendor and any easement, right of way or other encumbrance on title
to real property.
"LOAN DOCUMENTS" means this Agreement, the Notes, if any, the
--------------
Guaranty, the Collateral Documents, the Omnibus Amendment and Consent, each
Letter of Credit Agreement executed in connection with the issuance of any
Letter of Credit, each amendment to the Guaranty required to be delivered
hereunder and each amendment to the Security Agreement required to be delivered
hereunder, in each case as amended, supplemented or otherwise modified from time
to time.
"LOAN PARTIES" means the Borrower and each Guarantor.
------------
"MARGIN STOCK" has the meaning specified in Regulation U.
------------
"MATERIAL ADVERSE CHANGE" means any material adverse change in the
-----------------------
business, condition (financial or otherwise), operations, performance,
properties or prospects of the Borrower and its Subsidiaries taken as a whole.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on (a) the
-----------------------
business, condition (financial or otherwise), operations, performance,
properties or prospects of the Borrower and its Subsidiaries taken as a whole,
or (b) the ability of the Loan Parties, taken as a whole, to perform under the
Loan Documents.
"MULTIEMPLOYER PLAN" of any Person means a multiemployer plan, as
------------------
defined in Section 4001(a)(3) of ERISA, to which such Person or any of its ERISA
Affiliates is making or accruing an obligation to make contributions, or has
within any of the preceding five plan years made or accrued an obligation to
make contributions.
"MULTIPLE EMPLOYER PLAN" of any Person means a single employer plan,
----------------------
as defined in Section 4001(a)(15) of ERISA, that (a) is maintained for employees
of such Person or any of its ERISA Affiliates and at least one Person other than
such Person and its ERISA Affiliates or (b) was so maintained and in respect of
which such Person or any of its ERISA Affiliates could have liability under
Section 4064 or 4069 of ERISA in the event such plan has been or were to be
terminated.
"NET CASH PROCEEDS" means, with respect to any sale, lease, transfer
-----------------
or other disposition of any asset or the sale or issuance of any capital stock
or other ownership or profit interest, any securities convertible into or
exchangeable for capital stock or other ownership or profit interest or any
warrants, rights, options or other securities to acquire capital stock or other
ownership or profit interest by any Person, the aggregate amount of cash
received from time to time (whether as initial consideration or through payment
or disposition of deferred consideration) by or on behalf of such Person in
connection with such transaction after deducting therefrom only (without
duplication) (a) brokerage commissions,
15
<PAGE>
underwriting fees and discounts, legal fees, finder's fees and other similar
fees and commissions payable within 12 months, (b) the amount of taxes payable
within 12 months in connection with or as a direct result of such transaction
and (c) the amount of any Debt secured by a Lien on such asset that, by the
terms of such transaction, is required to be repaid upon such disposition, in
each case to the extent, but only to the extent, that the amounts so deducted
are properly attributable to such transaction or to the asset that is the
subject thereof and are actually paid to a Person that is not an Affiliate of
such Person or any Loan Party or any Affiliate of any Loan Party.
"NORTHHOLME PARTNERS" means Northholme Partners, a
-------------------
California limited partnership.
"NOTE" means a Term Note or a Revolving Note.
----
"NOTICE OF BORROWING" means (a) in the case of the initial Borrowings
-------------------
hereunder, a notice substantially in the form of Exhibit B, and (b) in the case
of any other Borrowings, either (i) a notice substantially in the form of
Exhibit B, or (ii) notice by teletransmission or telephonic notice of the
information required by Exhibit B. Any Notice of Borrowing given in accordance
with clause (ii) above shall be promptly confirmed by the Borrower in writing by
a notice substantially in the form of Exhibit B.
"NOTICE OF ISSUANCE" means a notice substantially in
------------------
the form of Exhibit C.
"OBLIGATION" means, with respect to any Person, any obligation of such
----------
Person of any kind, including, without limitation, any liability of such Person
on any claim, whether or not the right of any creditor to payment in respect of
such claim is reduced to judgment, liquidated, unliquidated, fixed, contingent,
matured, disputed, undisputed, legal, equitable, secured or unsecured, and
whether or not such claim is discharged, stayed or otherwise affected by any
proceeding referred to in Section 7.01(f). Without limiting the generality of
the foregoing, the Obligations of the Loan Parties under the Loan Documents
include (a) the obligation to pay principal, interest, Letter of Credit
commissions, charges, expenses, fees, attorneys' fees and disbursements,
indemnities and other amounts payable by any Loan Party under any Loan Document
and (b) the obligation to reimburse any amount in respect of any of the
foregoing that any Lender, in its sole discretion, may elect in accordance with
the Loan Documents to pay or advance on behalf of such Loan Party.
"OECD" means the Organization for Economic
----
Cooperation and Development.
"OFFICERS' CERTIFICATE" means, as to any corporation, a certificate
---------------------
executed on behalf of such corporation by (a) its chairman or vice-chairman of
the board (if an officer) or its president or any vice-president, and (b) by its
chief financial officer, its controller, its treasurer or any assistant
treasurer.
"OMNIBUS AMENDMENT AND CONSENT" has the meaning
-----------------------------
specified in Section 4.01(h)(vii).
"OPERATING INVESTMENT" means (a) the acquisition by the Borrower or
--------------------
any Domestic Guarantor of a business or a line of business, whether through the
purchase of all of the outstanding equity Securities of the owner thereof or
directly through the purchase of the assets thereof, or (b) the Investment by
the Borrower or any Domestic Guarantor in Securities constituting at least 30%
of the combined voting power of all outstanding Voting Stock of the issuer
thereof if the purpose and result of such Investment is to be actively engaged
in the business of such issuer.
16
<PAGE>
"OPERATING LEASE" means any lease of any property
---------------
(whether real, personal or mixed) which is not a Capitalized Lease.
"ORIGINAL ADVANCES" has the meaning specified in
-----------------
Preliminary Statement (2).
"ORIGINAL CLOSING DATE" means the Closing Date as
---------------------
defined in the Original Credit Agreement.
"ORIGINAL COLLATERAL" has the meaning specified in
-------------------
Preliminary Statement (3).
"ORIGINAL CREDIT AGREEMENT" has the meaning specified
-------------------------
in Preliminary Statement (1).
"ORIGINAL ISSUING BANK" has the meaning specified in
---------------------
Preliminary Statement (1).
"ORIGINAL LENDERS" has the meaning specified in
----------------
Preliminary Statement (1).
"ORIGINAL LETTERS OF CREDIT" has the meaning
--------------------------
specified in Preliminary Statement (2).
"ORIGINAL LOAN DOCUMENTS" has the meaning specified
-----------------------
in Preliminary Statement (3).
"ORIGINAL LOAN PARTIES" has the meaning specified in
---------------------
Preliminary Statement (3).
"ORIGINAL NOTE" has the meaning specified in
-------------
Preliminary Statement (2).
"ORIGINAL OBLIGATIONS" has the meaning specified in
--------------------
Preliminary Statement (3).
"ORIGINAL REVOLVING ADVANCES" has the meaning
---------------------------
specified in Preliminary Statement (2).
"ORIGINAL REVOLVING NOTES" has the meaning specified
------------------------
in Preliminary Statement (2).
"ORIGINAL TERM ADVANCES" has the meaning specified in
----------------------
Preliminary Statement (2).
"ORIGINAL TERM NOTES" has the meaning specified in
-------------------
Preliminary Statement (2).
"OTHER TAXES" has the meaning specified in Section
-----------
2.10(b).
"PBGC" means the Pension Benefit Guaranty
----
Corporation.
"PERFORMANCE STANDBY LETTER OF CREDIT" means any letter of credit
------------------------------------
(other than a Financial Standby Letter of Credit or a Commercial Letter of
Credit) that is issued under the Letter of Credit Subfacility for purposes of
assuring performance of Contractual Obligations, including the return by the
Borrower of advance payments received by it.
"PERMITTED LIENS" means such of the following as to which no
---------------
enforcement, collection, execution, levy or foreclosure proceeding shall have
been commenced: (a) Liens for taxes, assessments and governmental charges or
levies (other than Liens arising under ERISA or any Environmental Law) to the
extent not required to be paid under Section 6.01(b) hereof; (b) Liens imposed
by law (other than
17
<PAGE>
Liens arising under ERISA or any Environmental Law), such as materialmen's,
mechanics', carriers', workmen's and repairmen's Liens and other similar Liens
arising in the ordinary course of business securing obligations that are not
overdue for a period of more than 30 days; (c) pledges or deposits to secure
obligations under workers' compensation laws or similar legislation or to secure
public or statutory obligations; (d) easements, rights of way and other
encumbrances on title to real property that do not render title to the property
encumbered thereby unmarketable or materially adversely affect the use of such
property for its present purposes; (e) pledges or deposits required by law to
secure the performance of tenders, bids, leases, contracts (other than for the
repayment of Debt) and other similar obligations arising in the ordinary course
of business (including, without limitation, obligations arising as a result of
progress payments under government contracts); and (f) Liens on property of the
Borrower or any of its Subsidiaries arising in the ordinary course of its
business which (i) do not secure Debt, (ii) do not secure obligations in an
aggregate amount, as to all such obligations, exceeding $1,000,000 and (iii) do
not in the aggregate materially detract from the value of such Person's assets
or materially impair the use thereof in the operation of its business.
"PERMITTED REFINANCING" means Debt of the Borrower
---------------------
(and not of any Subsidiary of the Borrower):
(a) which does not impose at issuance or at any time thereafter (as a
result of any amendments or otherwise) upon the Borrower or any of its
Subsidiaries any restrictions upon the ability of any of them to grant
security interests in their property, to pay dividends, to incur additional
indebtedness or to sell or transfer assets (except restrictions no less
favorable to the Borrower than those contained in this Agreement), or to
take any action permitted under this Agreement;
(b) which does not impose upon the Borrower or any of its Subsidiaries
any financial tests or defaults based on financial condition or results of
operations which are less favorable to the Borrower than those set forth in
Section 6.04 (as a result of any amendments or otherwise);
(c) with respect to which no principal repayments are due prior to six
months after the last date on which any Advances are required to be paid
(as a result of any amendments or otherwise);
(d) which is either unsecured or, with the prior written consent of,
and on terms and conditions approved in writing by, the Required Lenders,
secured together with the Obligations under the Loan Documents by the
Collateral (but not by any other property of the Borrower or any of its
Subsidiaries); and
(e) 100% of the proceeds of which will be used to repay the Term
Advances and the Revolving Advances and reduce the Revolving Commitments in
accordance with Section 2.05.
"PERSON" means an individual, partnership, corporation (including a
------
business trust), limited liability company, joint stock company, trust,
unincorporated association, joint venture or other entity, or a government or
any political subdivision or agency thereof.
"PLAN" means a Single Employer Plan or a Multiple Employer Plan.
----
18
<PAGE>
"PREFERRED STOCK" means, with respect to any corporation, capital
---------------
stock issued by such corporation that is entitled to a preference or priority
over any other capital stock issued by such corporation upon any distribution of
such corporation's assets, whether by dividend or upon liquidation.
"RAYTHEON" has the meaning specified in Preliminary Statement (4).
--------
"REDEEMABLE" means, with respect to any capital stock, Debt or other
----------
right or Obligation, any such capital stock, Debt or other right or Obligation
that (a) the issuer has undertaken to redeem at a fixed or determinable date or
dates, whether by operation of a sinking fund or otherwise, or upon the
occurrence of a condition not solely within the control of the issuer, or (b) is
redeemable at the option of the holder.
"REGISTER" has the meaning specified in Section 9.07(c).
--------
"REGULATION U" means Regulation U of the Board of Governors of the
------------
Federal Reserve System, as in effect from time to time.
"RELEASE" shall mean release, spill, emission, leaking, pumping,
-------
injection, deposit, disposal, discharge, dispersal, leaching or migration into
the indoor or outdoor environment or into or out of any property, including the
movement of Hazardous Materials through or in the air, soil, surface water,
groundwater or property.
"REQUIRED LENDERS" means at any time Lenders owed or holding at least
----------------
60% of the sum of (a) the aggregate principal amount of the Advances outstanding
at such time, (b) the aggregate Available Amount of all Letters of Credit
outstanding at such time, (c) the aggregate unused Term Commitments under the
Term Facility at such time and (d) the aggregate Unused Revolving Commitments at
such time. For purposes of this definition, the aggregate principal amount of
outstanding L/C Advances and the Available Amount of each Letter of Credit shall
be considered to be owed to the Revolving Lenders ratably in accordance with
their respective Revolving Commitments.
"REQUIREMENTS OF LAW" shall mean, as to any Person, the charter and
-------------------
bylaws or other organizational or governing documents of such Person, and any
law, rule or regulation, permit (including, without limitation, any
Environmental Law or Environmental Permit), or order, writ, judgment,
injunction, decree or other determination of an arbitrator or a court or other
Governmental Authority, in each case applicable to or binding upon such Person
or any of its property or to which such Person or any of its property is
subject.
"REQUISITE LENDERS" means at any time Lenders owed or holding at least
-----------------
80% of the sum of (a) the aggregate principal amount of the Advances outstanding
at such time, (b) the aggregate Available Amount of all Letters of Credit
outstanding at such time, (c) the aggregate unused Term Commitments under the
Term Facility at such time and (d) the aggregate Unused Revolving Commitments at
such time. For purposes of this definition, the aggregate principal amount of
outstanding L/C Advances and the Available Amount of each Letter of Credit shall
be considered to be owed to the Revolving Lenders ratably in accordance with
their respective Revolving Commitments.
"REVOLVING ADVANCE" means each (i) Original Revolving Advance
-----------------
outstanding on the Closing Date, and (ii) Advance by a Revolving Lender to the
Borrower pursuant to Section 2.01(b).
19
<PAGE>
"REVOLVING BORROWING" means a borrowing consisting of simultaneous
-------------------
Revolving Advances of the same Interest Type made by the Revolving Lenders.
"REVOLVING COMMITMENT" means, with respect to any Revolving Lender at
--------------------
any time, the amount set forth opposite such Lender's name on Schedule I hereto
under the caption "Revolving Commitment" or, if such Lender has entered into one
or more Assignments and Acceptances, set forth for such Lender in the Register
maintained by the Agent pursuant to Section 9.07(c) as such Lender's "Revolving
Commitment", as such amount may be reduced at or prior to such time pursuant to
Section 2.04.
"REVOLVING COMMITMENT TERMINATION DATE" means the earlier of (i) April
-------------------------------------
9, 2001 and (ii) the date of termination in whole of the Revolving Commitments
pursuant to Section 2.04 or 7.01.
"REVOLVING FACILITY" means, at any time, the aggregate amount of the
------------------
Revolving Lenders' Revolving Commitments at such time.
"REVOLVING LENDER" means any Lender that has a Revolving Commitment.
----------------
"REVOLVING NOTE" means a promissory note of the Borrower payable to
--------------
the order of any Revolving Lender, in substantially the form of Exhibit A-2
hereto, evidencing the aggregate indebtedness of the Borrower to such Lender
resulting from the Revolving Advances made by or otherwise owing to such Lender.
"REVOLVING PRO RATA SHARE" of any amount means, with respect to any
------------------------
Revolving Lender at any time, the product of (a) a fraction the numerator of
which is the amount of such Lender's Revolving Commitment (without giving effect
to any termination thereof pursuant to Section 7.01) at such time and the
denominator of which is the Revolving Facility (without giving effect to any
termination of Commitments pursuant to Section 7.01) at such time times (b) such
-----
amount.
"SECURITIES" means any stock, shares, voting trust certificates,
----------
bonds, debentures, notes or other evidences of indebtedness, secured or
unsecured, convertible, subordinated or otherwise, or in general any instruments
commonly known as "SECURITIES", or any certificates of interest, shares, or
----------
participations in temporary or interim certificates for the purchase or
acquisition of, or any right to subscribe to, purchase or acquire any of the
foregoing, but shall not include any evidence of the Obligations hereunder.
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended to
--------------
the date hereof and from time to time hereafter, and any successor statute.
"SECURITIES EXCHANGE ACT" shall mean the Securities Exchange Act of
-----------------------
1934, as amended to the date hereof and from time to time hereafter, and any
successor statute.
"SECURITY AGREEMENT" means the Security Agreement dated as of January
------------------
23, 1995 made by the Borrower, Blue Bell Lease, Inc., a California corporation,
Metropolitan Financial Services Corporation, a Colorado corporation, Park
Chemical Company, a Michigan corporation, Whittaker Controls, Inc., a California
corporation, Whittaker Corp., a Maine corporation, Whittaker Ordnance, Inc., a
Delaware corporation, Whittaker Porta Bella Development, Inc., a California
corporation,
20
<PAGE>
Whittaker Services Corporation, a California corporation, Whittaker Technical
Products, Inc., a Colorado corporation, and Whittaker Development Co., a
Delaware corporation, in favor of and for the benefit of NationsBank, as agent
for the Secured Parties (as defined therein), a copy of which is attached hereto
as Annex II, as amended through the date hereof and as the same may hereafter be
amended, supplemented or otherwise modified from time to time.
"SINGLE EMPLOYER PLAN" of any Person means a single employer plan, as
--------------------
defined in Section 4001(a)(15) of ERISA, that (a) is maintained for employees of
such Person or any of its ERISA Affiliates and no Person other than such Person
and its ERISA Affiliates or (b) was so maintained and in respect of which such
Person or any of its ERISA Affiliates could have liability under Section 4069 of
ERISA in the event such plan has been or were to be terminated.
"SOLVENT" and "SOLVENCY" mean, with respect to any Person on a
------- --------
particular date, that on such date (a) the fair value of the property of such
Person is greater than the total amount of liabilities, including, without
limitation, contingent liabilities, of such Person, (b) the present fair salable
value of the assets of such Person is not less than the amount that will be
required to pay the probable liability of such Person on its debts as they
become absolute and matured, (c) such Person does not intend to, and does not
believe that it will, incur debts or liabilities beyond such Person's ability to
pay as such debts and liabilities mature and (d) such Person is not engaged in
business or a transaction, and is not about to engage in business or a
transaction, for which such Person's property would constitute an unreasonably
small capital. The amount of contingent liabilities at any time shall be
computed as the amount that, in the light of all the facts and circumstances
existing at such time, represents the amount that can reasonably be expected to
become an actual or matured liability.
"SPECIFIED BERMITE LAND PROCEEDS" means the cash proceeds from the
-------------------------------
sale, transfer, lease (other than the existing lease with the City of Santa
Clarita and any other lease with a term, including all extension options, of two
years or less) or other disposition of all or any portion of the Bermite Land
(including any sale or other disposition of any Securities of or any other
equity interest in any Affiliate of the Borrower with any ownership interest in
the Bermite Land) to any Person other than the Borrower or a wholly owned
Subsidiary of the Borrower, net of (a) all reasonable costs incurred and payable
within twelve months of, and as a result of, the applicable transaction by the
Borrower or any of its Subsidiaries to a Person that is not its Affiliate, (b)
the amount (as estimated by the Borrower in good faith) of income, franchise,
transfer or other taxes payable by the Borrower in cash within 12 months as a
result of such transaction (after giving effect to all deductions, credits and
other items which reduce tax liability and, at the time of determination, are
available or reasonably anticipated to be available), and (c) amounts payable to
Northholme Partners or its successors in connection with the applicable
transaction pursuant to the terms of the Bermite Development Agreement, in each
case to the extent, but only to the extent, that the amounts so deducted are, at
the time of receipt of the applicable cash proceeds, paid or payable to a Person
that is not its Affiliate and are properly attributable to the transaction.
"SUBORDINATED DEBT" means Debt of the Borrower (and not of any
-----------------
Subsidiary of the Borrower) incurred after the date hereof (i) with respect to
which no principal payments are due prior to the date which is one year after
the then scheduled Termination Date, and (ii) which is subordinated in right of
payment to the Borrower's Obligations under the Loan Documents on, and is
otherwise subject to, terms and conditions (including, without limitation, terms
in respect of maturities, covenants, defaults and remedies and interest rates)
approved in writing by the Agent and the Required Lenders; provided
--------
21
<PAGE>
that the term "Subordinated Debt" shall not include Debt permitted by Section
6.02(b)(v) which is subordinated pursuant to the Guaranty.
"SUBSIDIARY" of any Person means any corporation, partnership, limited
----------
liability company, joint venture, trust or estate of which (or in which) more
than 50% of (a) the issued and outstanding capital stock having ordinary voting
power to elect a majority of the Board of Directors of such corporation
(irrespective of whether at the time capital stock of any other class or classes
of such corporation shall or might have voting power upon the occurrence of any
contingency), (b) the interest in the capital or profits of such partnership,
limited liability company or joint venture or (c) the beneficial interest in
such trust or estate is at the time directly or indirectly owned or controlled
by such Person, by such Person and one or more of its other Subsidiaries or by
one or more of such Person's other Subsidiaries.
"SURVIVING DEBT" has the meaning specified in Section 4.01(c).
--------------
"SURVIVING DEBT AGREEMENT" means any agreement or instrument setting
------------------------
forth the terms and conditions of any Surviving Debt.
"TAXES" has the meaning specified in Section 2.10(a).
-----
"TERM ADVANCE" means each (i) Original Term Advance outstanding on the
------------
Closing Date, and (ii) Advance by a Term Lender to the Borrower pursuant to
Section 2.01(a).
"TERM ADVANCE PAYMENT DATE" has the meaning specified in Section
-------------------------
2.03(a).
"TERM BORROWING" means a borrowing consisting of simultaneous Term
--------------
Advances of the same Interest Type made by the Term Lenders.
"TERM COMMITMENT" means, with respect to each Initial Lender that is a
---------------
Term Lender, the amount set forth opposite such Lender's name on Schedule I
hereto under the caption "Term Commitment".
"TERM FACILITY" means (i) at any time prior to the Term Borrowing
-------------
hereunder, the sum of (a) the aggregate principal amount of Original Term
Advances outstanding at such time, plus, (b) the aggregate amount of the Term
----
Lenders' Term Commitments at such time, and (ii) at any time after the Term
Borrowing hereunder, the aggregate principal amount of Term Advances outstanding
at such time.
"TERM LENDER" means any Lender that has a Term Commitment or that
-----------
holds any Term Advances.
"TERMINATION DATE" means the earlier of April 9, 2001 and the date of
----------------
termination in whole of the Total Commitments pursuant to Section 7.01.
"TERM NOTE" means a promissory note of the Borrower payable to the
---------
order of any Term Lender, in substantially the form of Exhibit A-1 hereto,
evidencing the indebtedness of the Borrower to such Lender resulting from the
Term Advance made by or otherwise owing to such Lender.
22
<PAGE>
"TERM PRO RATA SHARE" of any amount means, with respect to any Term
-------------------
Lender at any time, the product of (a) a fraction the numerator of which is the
aggregate principal amount of Term Advances owing to such lender at such time
and the denominator of which is the aggregate principal amount of Term Advances
owing to all Term Lenders at such time times (b) such amount.
-----
"TOTAL COMMITMENT" means, with respect to each Lender at any time, the
----------------
aggregate of such Lender's Term Commitment and Revolving Commitment at such
time.
"TYPE" refers to the distinction between Revolving Advances and Term
----
Advances.
"UNREIMBURSED LETTER OF CREDIT LIABILITY" means, as of any date of
---------------------------------------
determination with respect to any Letter of Credit, the aggregate amount of all
L/C Advances which have been made by, and not reimbursed to, the Issuing Bank
under such Letter of Credit.
"UNUSED REVOLVING COMMITMENT" means, with respect to any Revolving
---------------------------
Lender at any time, (a) such Lender's Revolving Commitment at such time, minus
-----
(b) the sum of (i) the aggregate principal amount of all Revolving Advances of
such Lender outstanding at such time, plus (ii) such Lender's Revolving Pro Rata
----
Share of the aggregate Letter of Credit Obligations outstanding at such time.
"VOTING STOCK" means capital stock issued by a corporation, or
------------
equivalent interests in any other Person, the holders of which are ordinarily,
in the absence of contingencies, entitled to vote for the election of directors
(or persons performing similar functions) of such Person, even though the right
so to vote has been suspended by the happening of such a contingency.
"WELFARE PLAN" means a welfare plan, as defined in Section 3(1) of
------------
ERISA.
"WITHDRAWAL LIABILITY" has the meaning specified in Part I of Subtitle
--------------------
E of Title IV of ERISA.
"XYPLEX" has the meaning specified in Preliminary Statement (4).
------
"XYPLEX ACQUISITION" has the meaning specified in Preliminary
------------------
Statement (4).
"XYPLEX STOCK PURCHASE AGREEMENT" has the meaning specified in
-------------------------------
Preliminary Statement (4).
SECTION 1.02. COMPUTATION OF TIME PERIODS. In this Agreement in the
---------------------------
computation of periods of time from a specified date to a later specified date,
the word "from" means "from and including" and the words "to" and "until" each
mean "to but excluding".
SECTION 1.03. ACCOUNTING TERMS. All accounting terms not
----------------
specifically defined herein shall be construed in accordance with generally
accepted accounting principles consistent with those applied in the preparation
of the financial statements referred to in Section 5.01(g) ("GAAP").
----
23
<PAGE>
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
SECTION 2.01. THE ADVANCES.
------------
(A) THE TERM ADVANCES. On the Closing Date, simultaneously with the
-----------------
making of the initial Advances hereunder, the Original Term Advances then held
by any Term Lender shall convert automatically for all purposes of this
Agreement to Term Advances hereunder (provided that any Interest Period (as
defined in the Original Credit Agreement) applicable to any Original Advance
which is a Eurodollar Rate Advance (as defined in the Original Credit Agreement)
shall end on the Closing Date) owing to such Lender, as if such Original Term
Advances had been made by such Lender to the Borrower hereunder on the Closing
Date. In addition, each Initial Lender that is a Term Lender severally agrees,
on the terms and conditions hereinafter set forth, to make a single advance to
the Borrower on the Closing Date in an amount not to exceed such Lender's Term
Commitment (less the aggregate principal amount of Original Term Advances held
by such Lender and converted to Term Advances pursuant to this Section 2.01(a))
on the Closing Date. Term Advances that are repaid or prepaid may not be
reborrowed.
(B) REVOLVING ADVANCES. On the Closing Date, simultaneously with the
------------------
making of the initial Advances hereunder, the Original Revolving Advances then
held by any Revolving Lender shall convert automatically for all purposes of
this Agreement to Revolving Advances hereunder (provided that any Interest
Period (as defined in the Original Credit Agreement) applicable to any Original
Advance which is a Eurodollar Rate Advance (as defined in the Original Credit
Agreement) shall end on the Closing Date) owing to such Lender, as if such
Original Revolving Advances had been made by such Lender to the Borrower
hereunder on the Closing Date. In addition, each Revolving Lender severally
agrees, on the terms and conditions hereinafter set forth, to make advances to
the Borrower from time to time on any Business Day during the period from the
Closing Date until the Revolving Commitment Termination Date in an amount for
each such Advance not to exceed such Lender's Unused Revolving Commitment on
such Business Day. Each Revolving Borrowing shall be in an aggregate amount of
$4,000,000 or an integral multiple of $1,000,000 in excess thereof and shall
consist of Revolving Advances made by the Revolving Lenders ratably according to
their respective Revolving Commitments. Within the limits of each Revolving
Lender's Unused Revolving Commitment in effect from time to time, the Borrower
may borrow under this Section 2.01(b), prepay pursuant to Section 2.05 and
reborrow under this Section 2.01(b).
SECTION 2.02. MAKING THE ADVANCES.
-------------------
(A) INITIAL BORROWINGS. The initial Borrowings hereunder shall be
------------------
made on the Closing Date and shall be made on notice received by the Agent from
the Borrower (pursuant to a Notice of Borrowing) not later than 12:00 noon
(Dallas, Texas time) (or such later time as the Agent may agree) on the Business
Day immediately preceding the Closing Date. Such Notice of Borrowing shall be
irrevocable upon receipt by the Agent. Each Appropriate Lender shall, before
2:00 p.m. (Dallas, Texas time) on the Closing Date, make available for the
account of its Applicable Lending Office to the Agent such Lender's ratable
share of such Borrowings by depositing same day funds in the Agent's Account.
(B) SUBSEQUENT REVOLVING BORROWINGS. Each Revolving Borrowing
-------------------------------
occurring after the Closing Date shall be made on notice received by the Agent
from the Borrower (pursuant to a Notice of Borrowing) not later than 12:00 noon
(Dallas, Texas time) (a) on the Business Day prior to the date
24
<PAGE>
of such Borrowing if such Borrowing consists of Base Rate Advances, and (b) on
the third Business Day prior to the date of such Borrowing if such Borrowing
consists of Eurodollar Rate Advances. Each Notice of Borrowing hereunder
(including the Notice of Borrowing referred to in Section 2.02(a)) shall be
irrevocable upon receipt by the Agent and, in the case of any Notice of
Borrowing for Eurodollar Rate Advances, the Borrower shall indemnify each
Appropriate Lender against any loss, cost or expense incurred by such Lender as
a result of any failure to fulfill on or before the date specified by such
Notice of Borrowing the applicable conditions set forth in this Section 2.02 or
Article IV, including, without limitation, any loss (including loss of
anticipated profits), cost or expense incurred by reason of the liquidation or
reemployment of deposits or other funds acquired by such Lender to fund the
Advance to be made by such Lender as a part of such Borrowing when such Advance,
as a result of such failure, is not made on such date.
(C) ADVANCES BY LENDERS. If the Agent receives a Notice of Borrowing,
-------------------
the Agent shall promptly (and, in any event not later than 4:00 p.m. (Dallas,
Texas time) on the Business Day prior to the date of such Borrowing or, if such
Borrowing consists of Eurodollar Rate Advances, the third Business Day prior to
the date of such Borrowing) give each Appropriate Lender notice of such Notice
of Borrowing. Each Appropriate Lender shall before 2:00 p.m. (Dallas, Texas
time) on the date of such Borrowing, make available for the account of its
Applicable Lending Office to the Agent such Lender's ratable portion of such
Borrowing by depositing same day funds in the Agent's Account. Unless the Agent
shall have received written notice from an Appropriate Lender prior to the date
of any Borrowing under a Facility under which such Lender has a Commitment that
such Lender will not make available to the Agent such Lender's ratable portion
of such Borrowing, the Agent may assume that such Lender has made such ratable
portion available to the Agent on the date of such Borrowing in accordance with
the terms hereof and the Agent may, in reliance upon such assumption, but shall
not be required to, make available to or for the account of the Borrower on such
date a corresponding amount. If and to the extent that such Lender shall not
have so made such ratable portion available to the Agent and the Agent makes
such ratable portion available to the Borrower, such Lender and the Borrower,
without prejudice to any rights or remedies that the Borrower may have against
such Lender, severally agree to repay to the Agent forthwith on demand such
corresponding amount together with interest thereon, for each day from the date
such amount is made available to or for the account of the Borrower until the
date such amount is repaid to the Agent, at (A) in the case of the Borrower, the
interest rate applicable at the time to the Advances comprising such Borrowing,
and (B) in the case of such Lender, the Federal Funds Rate. If such Lender
shall pay to the Agent such amount, such amount so paid shall constitute such
Lender's Advance as part of the relevant Borrowing for purposes of this
Agreement and, to the extent that the Borrower previously paid such amount to
the Agent, the Agent will refund to the Borrower such amount so paid, but
without interest.
(D) DISBURSEMENT OF ADVANCES. Upon fulfillment of the applicable
------------------------
conditions set forth in Article IV, the Agent will make funds for any Borrowing
available to the Borrower by crediting the Borrower's Account, subject to the
-------
Agent's receipt of funds from the Lenders, and provided that the Agent shall
--------
first make a portion of such funds equal to any outstanding L/C Advance under
any Letter of Credit, and any interest accrued and unpaid thereon to and as of
such date, available to the applicable Issuing Bank for reimbursement of such
L/C Advance and payment of such interest.
(E) NATURE OF LENDERS' OBLIGATIONS. The failure of any Lender to make
------------------------------
the Advance to be made by it as part of any Borrowing shall not relieve any
other Lender of its obligation, if any, hereunder to make its Advance on the
date of such Borrowing, but no Lender shall be responsible for the
25
<PAGE>
failure of any other Lender to make the Advance to be made by such other Lender
on the date of any Borrowing.
SECTION 2.03. REPAYMENT.
---------
(A) TERM ADVANCES. The Borrower shall repay to each Term Lender (in
-------------
accordance with the provisions of Section 2.09(a)) the aggregate principal
amount of all Term Advances owing to such Lender in 20 consecutive quarterly
installments until such principal amount has been paid in full. Such
installments (other than the last installment owing hereunder, which shall be
due and payable on April 9, 2001) shall be due and payable on the 21st day of
each April, July, October and January (each a "TERM ADVANCE PAYMENT DATE"),
-------------------------
commencing July 21, 1996 and each such installment payable to
26
<PAGE>
each Term Lender shall be in an amount equal to such Lender's Term Pro Rata
Share of the amount set forth below opposite the period in which such Term
Advance Payment Date is stated to occur:
<TABLE>
<CAPTION>
PERIOD QUARTERLY INSTALLMENT
------ ---------------------
<S> <C>
July 21, 1996 to and including
October 21, 1996 $2,000,000
January 21, 1997 to and including
October 21, 1997 $2,500,000
January 21, 1998 to and including
October 21, 1998 $4,500,000
January 21, 1999 to and including
October 21, 1999 $5,000,000
January 21, 2000 to and including
April 9, 2001 $5,500,000
</TABLE>
provided, however, that the last such installment shall be in the amount
- -------- -------
necessary to repay in full the aggregate unpaid principal amount of the Term
Advances and shall, in any event, be due and payable on April 9, 2001.
(B) REVOLVING ADVANCES. The Borrower shall repay to each Revolving
------------------
Lender (in accordance with the provisions of Section 2.09(a)) on the Revolving
Commitment Termination Date the aggregate principal amount of all Revolving
Advances owing to such Lender outstanding on the Revolving Commitment
Termination Date.
(C) L/C ADVANCES. The Borrower shall repay each L/C
------------
Advance as provided in Section 3.03.
SECTION 2.04. REDUCTION OF THE REVOLVING COMMITMENTS
--------------------------------------
AND THE L/C SUBLIMIT.
- --------------------
(A) VOLUNTARY REDUCTIONS OF THE REVOLVING COMMITMENTS. The
-------------------------------------------------
Borrower shall have the right, upon at least five Business Days' notice to the
Agent, to terminate in whole or reduce ratably in part the unused portions of
the respective Revolving Commitments of the Revolving Lenders; provided,
--------
however, that (i) each partial reduction shall be in an amount of $4,000,000 or
- -------
any multiple of $1,000,000 in excess thereof, and (ii) the aggregate amount of
the Revolving Commitments shall not be reduced pursuant to this Section 2.04 to
an amount less than the sum of (A) the aggregate principal amount of all
Revolving Advances then outstanding, and (B) the aggregate amount of all Letter
of Credit Obligations then outstanding.
(B) MANDATORY REDUCTIONS OF THE REVOLVING COMMITMENTS. The Revolving
-------------------------------------------------
Commitments of the Revolving Lenders shall be automatically and permanently
reduced on such dates and in such amounts as is required pursuant to Section
2.05(b).
(C) AUTOMATIC REDUCTIONS OF L/C SUBFACILITY. The L/C Sublimit shall
---------------------------------------
be automatically and permanently reduced from time to time on the date of each
reduction in the Revolving Commitments by the amount, if any, by which the
amount of the L/C Sublimit exceeds the aggregate
27
<PAGE>
Revolving Commitments of the Revolving Lenders after giving effect to such
reduction of the Revolving Commitments.
SECTION 2.05. PREPAYMENTS.
-----------
(A) OPTIONAL PREPAYMENTS. The Borrower may, upon prior notice to the
--------------------
Agent (which shall be given (i) at least one Business Day in advance in the case
of prepayment of Revolving Advances which consist of Base Rate Advances and (ii)
three Business Days in advance in the case of prepayment of any Term Advances or
in the case of prepayment of Revolving Advances which are Eurodollar Rate
Advances), stating the proposed date and aggregate principal amount of the
prepayment and the Type and Interest Type of Advances to be prepaid (and if such
notice is given the Borrower shall), prepay in whole or in part the outstanding
principal of Advances of such Type and Interest Type, together with, in the case
of prepayment of Eurodollar Rate Advances, interest thereon to the date of such
prepayment on the principal amounts prepaid (plus, in the case of prepayment of
Eurodollar Rate Advances prior to the end of the applicable Interest Period, any
additional amount for which the Borrower shall be obligated pursuant to Section
9.04(c)); provided, however, that each partial prepayment shall be in an
-------- -------
aggregate principal amount of $4,000,000 or any multiple of $1,000,000 in excess
thereof. Each such optional prepayment of the Term Advances shall be applied to
the installments thereof in the inverse order of maturity.
(B) MANDATORY PREPAYMENTS.
---------------------
(I) EXCESS ADVANCES. If, at any time, the then outstanding
---------------
aggregate principal amount of all Revolving Advances shall exceed the
aggregate amount of the Revolving Commitments of the Revolving Lenders at
such time minus the aggregate amount of the Letter of Credit Obligations
-----
then outstanding, the Borrower shall immediately prepay, for the ratable
account of the Revolving Lenders, the outstanding principal amount of
Revolving Advances in an aggregate amount equal to such excess.
(II) PERMITTED REFINANCINGS AND CERTAIN OTHER DEBT. When the
---------------------------------------------
Borrower issues, creates, or otherwise incurs Debt which is a Permitted
Refinancing or, prior to the payment in full of all Term Advances, which is
Debt permitted under Section 6.02(b)(iii), the Borrower shall, on the date
of receipt of the proceeds thereof, pay to each Appropriate Lender (in
accordance with the provisions of Section 2.09(a)) such Lender's Revolving
Pro Rata Share and/or Term Pro Rata Share, as the case may be, of an amount
equal to the principal amount of such Debt so incurred (or, if greater in
the case of any revolving credit or working capital facility, the maximum
amount available to be borrowed (assuming compliance with all conditions
for borrowing)), under such facility. Such payment shall be applied, (A)
in the case of Debt which is a Permitted Refinancing, first, to the
prepayment of scheduled principal installments of the Term Advances in
inverse order of maturity, until the Term Advances are repaid in full, and
then to the prepayment of the Revolving Advances then outstanding and the
permanent reduction of each Revolving Lender's Revolving Commitment, and
(B) in the case of Debt which is permitted under Section 6.02(b)(iii),
ratably to the Term Advances and the installments thereof until the Term
Advances are repaid in full.
(III) SPECIFIED BERMITE LAND PROCEEDS. On the first Business
-------------------------------
Day after any Specified Bermite Land Proceeds are received by the Borrower
or any of its Subsidiaries, the Borrower shall pay to each Term Lender (in
accordance with the provisions of Section 2.09(a))
28
<PAGE>
such Lender's Term Pro Rata Share of an amount equal to such Specified
Bermite Land Proceeds, to be applied to the prepayment of each scheduled
principal installment of the Term Advances (ratably in accordance with the
respective principal amounts of each such installment), until the Term
Advances are repaid in full.
(IV) OTHER ASSET SALE PROCEEDS. Except as otherwise provided in
-------------------------
Section 2.05(b)(iii), the Borrower shall, on the first Business Day after
receipt by the Borrower or any of its Subsidiaries of Net Cash Proceeds
from the sale, lease (entered into after the Closing Date), transfer or
other disposition of any assets of the Borrower or any of its Subsidiaries
(other than (A) sales of inventory in the ordinary course of business, (B)
sales of damaged, worn or obsolete equipment to the extent the proceeds
thereof are intended to be used to purchase replacements for such equipment
within 180 days or sales of damaged, worn or obsolete equipment made after
the purchase of replacements for such equipment, (C) sales, leases,
transfers and other dispositions of assets, or a series of sales, leases,
transfers and other dispositions of related assets, which are sold, leased,
transferred or otherwise disposed of for an amount, or an aggregate amount,
less than $500,000, except to the extent that the aggregate of all such
------
sales, leases, transfers, and other dispositions in any fiscal year exceeds
$2,000,000, (D) sales of Cash Equivalents for cash, and (E) any sale of the
Bermite Land, as to which Section 2.05(b)(iii) shall govern), pay to each
Term Lender (in accordance with Section 2.09(a)) such Lender's Term Pro
Rata Share of the amount of such Net Cash Proceeds, to be applied to the
prepayment of scheduled principal installments of the Term Advances
(ratably in accordance with the respective principal amounts of each such
installment), until the Term Advances are repaid in full.
(V) PROCEEDS FROM THE ISSUANCE OF EQUITY. The Borrower shall, on
------------------------------------
the first Business Day after receipt of the Net Cash Proceeds by the
Borrower or any of its Subsidiaries from the sale or issuance by the
Borrower or any of its Subsidiaries of any capital stock or other ownership
or profit interest, any securities (other than Debt securities subject to
the provisions of Section 2.05(b)(ii)) convertible into or exchangeable for
capital stock or other ownership or profit interest or any warrants, rights
or options to acquire capital stock or other ownership or profit interest,
in each case of the Borrower or such Subsidiary, (other than (A) any Net
Cash Proceeds from the exercise of employee stock options, (B) Net Cash
Proceeds received by a Subsidiary of the Borrower in connection with the
issuance of any such items to the Borrower or any Domestic Guarantor, and
(C) any sale of the Bermite Land, as to which Section 2.05(b)(iii) shall
govern), pay to each Term Lender (in accordance with Section 2.09(a)) such
Lender's Term Pro Rata Share of 50% of the amount of such Net Cash
Proceeds, to be applied to the prepayment of scheduled principal
installments of the Term Advances (ratably in accordance with the
respective principal amounts of each such installment), until the Term
Advances are repaid in full; provided, however, that this Section
-------- -------
2.05(b)(v) shall not be applicable to the Net Cash Proceeds of any such
sale or issuance consummated after the date, if any, on which the Cash Flow
Ratio has been less than 4.00:1.00 for at least two consecutive fiscal
quarters of the Borrower (as evidenced by financial statements and
Compliance Certificates delivered to the Agent pursuant to Section 6.03).
(VI) EXCESS CASH FLOW. Except with respect to the fiscal year of
----------------
the Borrower ending on October 31, 1996, the Borrower shall, no later than
the 30th day following the date on which it delivers the financial
statements referred to in Section 6.03(d) (but in any event within 120 days
after the end of each fiscal year of the Borrower), pay to each Term Lender
(in accordance with Section 2.09(a)) such Lender's Term Pro Rata Share of
50% of the amount
29
<PAGE>
of Excess Cash Flow for such fiscal year, to be applied to the prepayment
of scheduled principal installments of the Term Advances (ratably in
accordance with the respective principal amounts of each such installment),
until the Term Advances are repaid in full; provided, however, that this
-------- -------
Section 2.05(b)(vi) shall not be applicable to any fiscal year ending on or
after the date, if any, on which the Cash Flow Ratio has been less than
4.00:1.00 for at least two consecutive fiscal quarters of the Borrower (as
evidenced by financial statements and Compliance Certificates delivered to
the Agent pursuant to Section 6.03).
(VII) CASH COLLATERAL FOR LETTER OF CREDIT OBLIGATIONS. If, at
------------------------------------------------
any time, the aggregate Available Amount of all Letters of Credit then
outstanding exceeds the L/C Sublimit, the Borrower shall immediately pay to
the Agent for deposit in the L/C Cash Collateral Account an amount
sufficient to cause the aggregate amount on deposit in such account to
equal the amount of such excess.
SECTION 2.06. INTEREST. The Borrower shall pay interest on the
--------
unpaid principal amount of each Advance from the date of such Advance until such
principal is paid in full at the applicable rate set forth below.
(A) INTEREST ON BASE RATE ADVANCES. Except to the extent that the
------------------------------
Borrower shall elect to pay interest on all or any part of any Advance made or
to be made to the Borrower under Section 2.01 for any Interest Period pursuant
to subsections (b) and (c) of this Section 2.06, the Borrower shall pay interest
on the unpaid principal amount of each Advance, from the date of such Advance
until such principal amount is paid in full, payable quarterly in arrears on the
21st day of each April, July, October and January, commencing April 21, 1996,
and, with respect to Revolving Advances, on the Revolving Commitment Termination
Date and, with respect to Term Advances, on the Termination Date, in each case
at a fluctuating interest rate per annum equal, subject to Section 2.06(d), to
the sum of the Base Rate in effect from time to time plus the Applicable Margin
----
for Base Rate Advances in effect from time to time.
(B) INTEREST PERIODS FOR EURODOLLAR RATE ADVANCES. The Borrower may,
---------------------------------------------
pursuant to Section 2.06(c), elect to have the interest on the principal amount
of all or any portion of any Advances made or to be made to the Borrower under
Section 2.01, in each case ratably according to the respective outstanding
principal amounts of Advances of the same Type owing to each Appropriate Lender
(each such principal amount owing to a Lender as to which such election has been
made being a "EURODOLLAR RATE ADVANCE" owing to such Lender) determined and
-----------------------
payable for a specified period (an "INTEREST PERIOD" for such Eurodollar Rate
---------------
Advance) in accordance with subsection (c) below, provided, however, that the
-------- -------
Borrower may not have more than ten Eurodollar Rate Advances owing to any Lender
outstanding at any one time. Each Interest Period shall be one, two, three, or
six months, at the Borrower's selection pursuant to subsection (c) below,
provided, however, that:
- -------- -------
(i) The first day of an Interest Period for any Eurodollar Rate
Advance shall be either the last day of any then current Interest Period
for such Advance or, if there shall be no then current Interest Period for
such Advance, any Business Day.
(ii) The Borrower may not select any Interest Period that ends
after any principal repayment installment date unless, after giving effect
to such selection, the aggregate principal amount of Base Rate Advances and
of Eurodollar Rate Advances having Interest Periods
30
<PAGE>
that end on or prior to such principal repayment installment date shall be
at least equal to the aggregate principal amount of Advances due and
payable on or prior to such date.
(iii) Whenever the last day of any Interest Period would
otherwise occur on a day other than a Business Day, the last day of such
Interest Period shall be extended to occur on the next succeeding Business
Day; provided, however, that if such extension would cause the last day of
-------- -------
such Interest Period to occur in the next following month, the last day of
such Interest Period shall occur on the next preceding Business Day.
(iv) Whenever the first day of any Interest Period occurs on a
day of the month for which there is no numerically corresponding day in the
calendar month that succeeds such initial calendar month by the number of
months equal to the number of months of such Interest Period, such Interest
Period shall end on the last Business Day of such succeeding calendar
month.
(C) INTEREST ON EURODOLLAR RATE ADVANCES. The Borrower may from time
------------------------------------
to time, on the condition that no Event of Default has occurred and is
continuing, and subject to the provisions of Sections 2.06(b) and 2.06(e), elect
to pay interest on all or any portion of any Advances of the same Type during
any Interest Period therefor at a rate per annum equal to the sum of the
Eurodollar Rate for such Interest Period for such Advances plus the Applicable
Margin for Eurodollar Rate Advances in effect from time to time, by notice,
specifying the Type and amount of the Advances as to which such election is made
(which amount shall aggregate at least $4,000,000 or any multiple of $1,000,000
in excess thereof) and the first day and duration of such Interest Period,
received by the Agent before 12:00 noon (Dallas, Texas time) three Business Days
prior to the first day of such Interest Period. If the Borrower has made such
election for Eurodollar Rate Advances for any Interest Period, the Borrower
shall pay interest on the unpaid principal amount of such Eurodollar Rate
Advances during such Interest Period, payable in arrears on the last day of such
Interest Period and, in the case of any Interest Period of six months, on the
date which is three months after the first day of such Interest Period, in each
case at a rate equal, subject to Section 2.06(d), to the sum of the Eurodollar
Rate for such Interest Period for such Eurodollar Rate Advances plus the
Applicable Margin for Eurodollar Rate Advances in effect from time to time
during such Interest Period. On the last day of each Interest Period for any
Eurodollar Rate Advance, the unpaid principal balance thereof shall
automatically become and bear interest as a Base Rate Advance, except to the
extent that the Borrower has elected to pay interest on all or any portion of
such amount for a new Interest Period commencing on such day in accordance with
this Section 2.06(c). Each notice by the Borrower under this Section 2.06(c)
shall be irrevocable upon receipt by the Agent, and the Borrower shall indemnify
each Appropriate Lender against any loss, cost or expense incurred by such
Lender as a result of any failure to fulfill on or before the date specified by
such notice the applicable conditions set forth in this Section 2.06(c) or
Article IV, including, without limitation, any loss (including loss of
anticipated profits), cost or expense incurred by reason of the liquidation or
reemployment of deposits or other funds acquired by such Lender to fund any such
Eurodollar Rate Advance when such Eurodollar Rate Advance, as a result of such
failure, is not made or does not become effective.
(D) DEFAULT INTEREST. If either (i) any Event of Default occurs and
----------------
is continuing as a result of the failure by the Borrower to pay when due any
amount of principal, interest or fees payable by the Borrower under the Loan
Documents, or (ii) upon the occurrence and during the continuance of any other
Event of Default the Agent shall give written notice to the Borrower (which
notice shall only be given, and may thereafter only be withdrawn, at the
direction of the Required Lenders) declaring default interest to be applicable,
then, so long as any such Event of Default is continuing, the Borrower
31
<PAGE>
shall, at the dates set forth herein for the payment of interest and upon
demand, (A) pay interest on all Base Rate Advances and any other amounts owing
hereunder not paid when due (other than then outstanding Eurodollar Rate
Advances) at a rate per annum (the "DEFAULT RATE") equal at all times to the
------------
rate otherwise applicable to Base Rate Advances plus 2.00% per annum, and (B)
----
pay interest on each then outstanding Eurodollar Rate Advance at a rate per
annum equal at all times to the rate otherwise applicable to such Eurodollar
Rate Advance plus 2.00% per annum.
----
(E) SUSPENSION OF EURODOLLAR RATE ADVANCES.
--------------------------------------
(I) ILLEGALITY. Notwithstanding any other provision of this
----------
Agreement, if the introduction of or any change in or in the interpretation
of any law or regulation shall make it unlawful, or any central bank or
other governmental authority shall assert that it is unlawful, for any
Lender or its Eurodollar Lending Office to perform its obligations
hereunder to make Eurodollar Rate Advances or to continue to fund or
maintain Eurodollar Rate Advances hereunder, then, on notice thereof and
demand therefor by such Lender to the Borrower through the Agent, (A) each
Eurodollar Rate Advance will automatically, upon such demand (or, if
permitted by applicable law, at the end of the then applicable Interest
Period), be converted into a Base Rate Advance and (B) the obligation of
the Appropriate Lenders to make or maintain, or to convert Advances into,
Eurodollar Rate Advances shall be suspended until the Agent shall notify
the Borrower that such Lender has determined that the circumstances causing
such suspension no longer exist; provided, however, that, before making any
-------- -------
such demand, each Lender agrees to use reasonable efforts (consistent with
its internal policy and legal and regulatory restrictions) to designate a
different Eurodollar Lending Office if the making of such a designation
would allow such Lender or its Eurodollar Lending Office to continue to
perform its obligations to make Eurodollar Rate Advances or to continue to
fund or maintain Eurodollar Rate Advances and would not, in the judgment of
such Lender, be otherwise disadvantageous to such Lender.
(II) OTHER CIRCUMSTANCES. If, with respect to any Eurodollar
-------------------
Rate Advances, the Required Lenders notify the Agent that the Eurodollar
Rate for any Interest Period for such Advances will not adequately reflect
the cost to such Lenders of making, funding or maintaining their Eurodollar
Rate Advances for such Interest Period, the Agent shall forthwith so notify
the Borrower and the Lenders, whereupon (i) each such Eurodollar Rate
Advance will automatically, on the last day of the then existing Interest
Period therefor, convert into a Base Rate Advance and (ii) the obligation
of the Lenders to make, or to convert Advances into, Eurodollar Rate
Advances shall be suspended until the Agent shall notify the Borrower that
such Lenders have determined that the circumstances causing such suspension
no longer exist.
(III) LENDERS' OBLIGATION TO NOTIFY AGENT. If any Lender shall
-----------------------------------
give notice to the Agent under Section 2.06(e)(i) or (ii) and such Lender
shall thereafter determine that the circumstances causing such notice no
longer exist, such Lender shall promptly give written notice thereof to the
Borrower and the Agent, and the Agent shall thereafter give notice thereof
to the Borrower and the other Lenders.
(IV) SUSPENSION ON EVENT OF DEFAULT. Upon the occurrence and
------------------------------
during the continuance of any Event of Default, (i) each Eurodollar Rate
Advance will automatically, on the last day of the then existing Interest
Period therefor, convert into a Base Rate Advance and (ii) the obligation
of the Lenders to make, or to convert Advances into, Eurodollar Rate
Advances shall be suspended.
32
<PAGE>
SECTION 2.07. FEES.
----
(A) AGENT'S FEES. The Borrower agrees to pay to the Agent, for its
------------
own account, the fees in the amounts and at the times set forth in the fee
letter dated February 29, 1996 from NationsBank and NationsBanc Capital Markets,
Inc., to the Borrower, and agreed to and accepted by the Borrower on March 1,
1996.
(B) REVOLVING COMMITMENT FEES. The Borrower agrees to pay to the
-------------------------
Agent a commitment fee on the average daily Unused Revolving Commitment of each
Revolving Lender, for the account of such Lender, from the Closing Date in the
case of each Initial Lender and from the effective date specified in the
Assignment and Acceptance pursuant to which it became a Lender in the case of
each other Revolving Lender until the Revolving Commitment Termination Date, at
the rate per annum equal to the Commitment Fee Percentage in effect from time to
time, payable in arrears on the 21st day of each April, July, October and
January, commencing April 21, 1996, and on the Revolving Commitment Termination
Date.
(C) ABSOLUTE OBLIGATION. The Borrower's obligation hereunder to pay
-------------------
the fees referred to in this Section 2.07 shall be absolute and unconditional
and shall survive the making and repayment of Advances, the termination of all
Letter of Credit Obligations and the termination of this Agreement. All fees
which are due or become due pursuant to this Section 2.07 are nonrefundable.
SECTION 2.08. INCREASED COSTS, ETC.
--------------------
(A) INCREASED COSTS. If, due to either (i) the introduction of or any
---------------
change after the date hereof in or in the interpretation of any law or
regulation or (ii) the compliance with any guideline or request from any central
bank or other governmental authority (whether or not having the force of law)
issued or made after the date hereof, there shall be any increase in the cost to
any Lender of agreeing to make or of making, funding or maintaining Eurodollar
Rate Advances or of agreeing to issue or of issuing or maintaining or purchasing
participations in Letters of Credit, then the Borrower shall from time to time,
within five Business Days of written demand by such Lender (with a copy of such
demand to the Agent), pay to the Agent for the account of such Lender additional
amounts sufficient to compensate such Lender for such increased cost; provided,
--------
however, that, before making any such demand, each Lender agrees to use
- -------
reasonable efforts (consistent with its internal policy and legal and regulatory
restrictions) to designate a different Applicable Lending Office if the making
of such a designation would avoid the need for, or reduce the amount of, such
increased cost and would not, in the reasonable judgment of such Lender, be
otherwise disadvantageous to such Lender. A certificate as to the amount of
such increased cost, submitted to the Borrower by such Lender, shall be
conclusive and binding for all purposes, absent manifest error.
(B) CAPITAL REQUIREMENTS. If any Lender determines that compliance
--------------------
with any law or regulation or any guideline or request from any central bank or
other governmental authority (whether or not having the force of law) which is
issued or made after the date hereof affects or would affect the amount of
capital required or expected to be maintained by such Lender or any corporation
controlling such Lender and that the amount of such capital is increased by or
based upon the existence of such Lender's commitment to lend or to issue or
purchase participations in Letters of Credit hereunder and other commitments of
such type or the issuance or maintenance of or purchase of participations in the
Letters of Credit (or similar contingent obligations), then, within five
Business Days of written demand by such Lender (with a copy of such demand to
the Agent), the Borrower shall pay to the Agent for the
33
<PAGE>
account of such Lender, from time to time as specified by such Lender,
additional amounts sufficient to compensate such Lender in the light of such
circumstances, to the extent that such Lender reasonably determines such
increase in capital to be allocable to the existence of such Lender's commitment
to lend or to issue or purchase participations in Letters of Credit hereunder or
to the issuance or maintenance of or purchase of participations in any Letters
of Credit. A certificate as to such amounts submitted to the Borrower by such
Lender, shall be conclusive and binding for all purposes, absent manifest error.
(C) LIMITATIONS ON BORROWER'S COMPENSATION OBLIGATIONS.
--------------------------------------------------
Notwithstanding any other provision of this Agreement to the contrary, the
Borrower shall not be obligated to make any payment to any Lender pursuant to
this Section 2.08 in respect of any amounts or costs (i) accruing in or
allocable to any period prior to the 180th day preceding written demand by such
Lender for payment therefor (unless such amounts or costs prior to such 180 day
period result from the retroactive effect of any of the events described in the
foregoing Sections 2.08(a) or 2.08(b) giving rise to such written demand and
which occurred during such 180 day period) or (ii) resulting from a change in
the Lender's Applicable Lending Office.
SECTION 2.09. PAYMENTS AND COMPUTATIONS.
-------------------------
(A) PAYMENTS BY BORROWER. The Borrower shall make each payment
--------------------
hereunder and under any other Loan Document to which it is a party, irrespective
of and without condition or deduction for any counterclaim, defense, recoupment
or setoff, in lawful money of the United States and in same day funds delivered
to the Agent not later than 1:00 p.m. (Dallas, Texas time) on the day when due
by deposit of such funds to the Agent's Account. Any payment so delivered to
the Agent after 1:00 p.m. (Dallas, Texas time) on any Business Day, or on any
day which is not a Business Day, shall be deemed received by the Agent on the
next succeeding Business Day. The Agent will promptly after receipt of each
payment cause to be distributed like funds relating to the payment of principal,
interest, commitment fees or letter of credit fees ratably to the Lenders for
the account of their respective Applicable Lending Offices, and like funds
relating to the payment of any other amount payable to any Lender or any Issuing
Bank (including payments with respect to Letters of Credit and payments for the
account of any Lender under Sections 2.08, 2.10 or 9.04(c)) to such Lender for
the account of its Applicable Lending Office or to such Issuing Bank, in each
case to be applied in accordance with, and subject to, the terms of this
Agreement, including Section 2.09(e) below. Upon its acceptance of an
Assignment and Acceptance and recording of the information contained therein in
the Register pursuant to Section 9.07(c), from and after the effective date
specified in such Assignment and Acceptance, the Agent shall make all payments
hereunder and under any other Loan Document in respect of the interest assigned
thereby to the Lender assignee thereunder, and the parties to such Assignment
and Acceptance shall make all appropriate adjustments in such payments for
periods prior to such effective date directly between themselves.
(B) COMPUTATIONS. All computations of interest in respect of Base
------------
Rate Advances (and in respect of any other amount payable hereunder other than
Eurodollar Rate Advances and Letter of Credit fees) and all computations in
respect of commitment fees shall be made by the Agent on the basis of a year of
365 days and all computations of interest in respect of Eurodollar Rate Advances
and all computations in respect of Letter of Credit fees shall be made by the
Agent on the basis of a year of 360 days, in each case for the actual number of
days (including the first day but excluding the last day) occurring in the
period for which such interest or fees are payable; provided that if any Advance
--------
is repaid on the same day on which it is made, one day's interest shall be paid
on such Advance. Each determination by the Agent of an interest rate, fee,
commission or discount rate hereunder shall be conclusive and binding for all
purposes, absent manifest error.
34
<PAGE>
(C) PAYMENTS ASSUMED. Unless the Agent shall have received notice
----------------
from the Borrower prior to the date on which any payment is due to the Lenders
or any Issuing Bank hereunder that the Borrower will not make such payment in
full, the Agent may assume that the Borrower has made such payment in full to
the Agent on such date and the Agent may, in reliance upon such assumption, but
shall not be required to, cause to be distributed to each Lender or such Issuing
Bank on such due date an amount equal to the amount then due to such Lender or
such Issuing Bank. If and to the extent that the Borrower shall not have so
made such payment in full to the Agent, each Lender and Issuing Bank shall repay
to the Agent forthwith on demand such amount distributed to such Lender or
Issuing Bank together with interest thereon, for each day from the date such
amount is distributed to such Lender or Issuing Bank until the date such Lender
or Issuing Bank repays such amount to the Agent, at the Federal Funds Rate.
(D) APPLICATION OF PAYMENTS SPECIFIED BY THE BORROWER. Except as
-------------------------------------------------
otherwise specified herein, so long as no Event of Default has occurred and is
continuing, all payments shall be applied as instructed by the Borrower if such
instructions are received by the Agent prior to or contemporaneously with
receipt of funds therefor.
(E) APPLICATION OF PAYMENTS NOT OTHERWISE SPECIFIED. If the Agent
-----------------------------------------------
receives funds for application to the Advances or any Letter of Credit
Obligations or other Obligations of the Borrower under the Loan Documents under
circumstances for which the Loan Documents do not specify the Advances or the
Facility or the Obligations to which, or the manner in which, such funds are to
be applied, the Agent may elect to distribute such funds first, to the Issuing
-----
Banks ratably in payment of the principal of and interest on any outstanding L/C
Advances, second, to each Lender ratably in accordance with such Lender's
------
proportionate share of all Advances then outstanding, in repayment or prepayment
of such of the outstanding Advances, and for application to such principal
installments, as the Agent may direct, and thereafter ratably to the Lenders in
repayment or prepayment of any other Obligations of the Borrower then
outstanding under the Loan Documents as the Agent shall direct, provided that if
--------
an Event of Default has occurred and is continuing and the Advances have been
declared, or have become, due and payable in full and the Revolving Commitments
of the Lenders have been terminated in full, the Agent shall distribute any
payments and any proceeds of any collection, sale or other realization or
liquidation of any Collateral first, to the payment of all costs and expenses of
-----
the Agent under the Loan Documents, second, to the Issuing Banks ratably in
------
payment of the principal of and interest on any outstanding L/C Advances, and
third, to each Lender ratably in accordance with such Lender's proportionate
- -----
share of the principal amount of all Advances and Letter of Credit Obligations
then outstanding, in payment or prepayment of such Obligations owed to such
Lender under the Loan Documents, and for application to such principal
installments (if applicable) as the Agent shall direct.
(F) PAYMENTS ON BUSINESS DAYS. Whenever any payment hereunder shall
-------------------------
be stated to be due on a day other than a Business Day, such payment shall be
made on the next succeeding Business Day, and such extension of time shall in
such case be included in the computation of payment of interest and commitment
and other fees; provided, however, if such extension would cause payment of
-------- -------
interest on or principal of any Eurodollar Rate Advance to be made in the next
following month, such payment shall be made on the next preceding Business Day.
(G) CERTAIN TERMS. The terms "pay", "paid" or "payment" under this
-------------
Agreement shall include prepay, prepaid or prepayment, respectively, under this
Agreement, and the term "due" under this Agreement shall include due by reason
of a mandatory prepayment (including upon an actual
35
<PAGE>
or deemed entry of an order for relief with respect to the Borrower or any
Guarantor under the Federal Bankruptcy Code or upon acceleration).
SECTION 2.10. TAXES.
-----
(A) WITHHOLDING TAXES. Any and all payments by the Borrower hereunder
-----------------
shall be made, in accordance with Section 2.09, free and clear of and without
deduction for any and all present or future taxes, levies, imposts, deductions,
charges or withholdings, and all liabilities with respect thereto imposed by the
United States, any other jurisdiction resulting from a prior or present
connection between such jurisdiction and the Borrower, or any political
subdivision of any of the foregoing, excluding, in the case of each Lender, net
---------
income taxes that are imposed by the United States and franchise taxes and
income taxes that are imposed on such Lender by the state or foreign
jurisdiction under the laws of which such Lender is organized or any political
subdivision thereof or therein, and franchise taxes based on income and income
taxes that are imposed on such Lender by any jurisdiction or any political
subdivision thereof or therein in which is located such Lender's Applicable
Lending Office or principal office (all such non-excluded taxes, levies,
imposts, deductions, charges, withholdings and liabilities being hereinafter
referred to as "TAXES"). If the Borrower shall be required by law to deduct any
-----
Taxes from or in respect of any sum payable hereunder or under any other Loan
Document to any Lender, any Issuing Bank or the Agent, (i) the sum payable shall
be increased as may be necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this Section
2.10) such Lender, Issuing Bank or the Agent (as the case may be) receives an
amount equal to the sum it would have received had no such deductions been made,
(ii) the Borrower shall make such deductions, and (iii) the Borrower shall pay
the full amount deducted to the relevant taxation authority or other authority
in accordance with applicable law.
(B) OTHER TAXES. In addition, the Borrower shall pay any present or
-----------
future stamp, recording, documentary, excise or similar taxes, charges or levies
that arise from any payment made hereunder or from the execution, delivery or
registration of any Loan Document (hereinafter referred to as "OTHER TAXES").
-----------
(C) INDEMNIFICATION. The Borrower shall indemnify each Lender,
---------------
Issuing Bank and the Agent for the full amount of Taxes and Other Taxes, and for
the full amount of taxes imposed by any jurisdiction on amounts payable under
this Section 2.10, paid by such Lender, Issuing Bank or the Agent, as the case
may be, and any liability (including penalties, additions to tax, interest and
expenses) arising therefrom or with respect thereto. Payments pursuant to this
indemnification shall be made within 30 days from the date such Lender, Issuing
Bank or the Agent, as the case may be, makes written demand therefor setting
forth in reasonable detail the basis of the Borrower's obligation to indemnify
such Lender, Issuing Bank or the Agent, as the case may be, pursuant to this
Section 2.10; provided, however, that (i) in the case of any Taxes or Other
-------- -------
Taxes not required by law to be deducted by the Borrower from or in respect of
any sum payable hereunder to any Lender, Issuing Bank or the Agent, as the case
may be, the Borrower shall be obligated to make payment to the Lender, Issuing
Bank or the Agent, as the case may be, pursuant to this Section 2.10 (A) in
respect of such Taxes or Other Taxes only if written demand therefor has been
made by the Lender, Issuing Bank or the Agent, as the case may be, within 180
days from the date on which the Lender, Issuing Bank or the Agent, as the case
may be, actually makes payment of the Taxes or Other Taxes to the relevant
taxing authority, and (B) in respect of penalties and additions to tax
attributable to late payment only to the extent that such penalties or additions
to tax are accrued after the written demand therefor has been made by the
Lender, Issuing Bank or the Agent, as
36
<PAGE>
the case may be, and (ii) the Borrower shall not be obligated to pay any Taxes
or Other Taxes to the extent the Taxes or Other Taxes result from a change in
the Lender's Applicable Lending Office.
(D) EVIDENCE OF PAYMENT. Within 30 days after the date of any payment
-------------------
of Taxes pursuant to Section 2.10(a) or (b), the Borrower shall furnish to the
Agent, at its address referred to in Section 9.02, evidence reasonably
satisfactory to the Agent of payment thereof. In the case of any payment
hereunder for the account of any Lender, Issuing Bank or the Agent, as the case
may be, which is made by the Borrower through an account or branch outside the
United States or on behalf of the Borrower by a payor that is not a United
States person, if the Borrower determines that no Taxes are payable in respect
thereof, the Borrower shall, except where such mode of payment is at the request
of such Lender, Issuing Bank or the Agent, as the case may be, furnish, or cause
such payor to furnish, to the Agent, at such address, a certificate from the
appropriate taxing authority or authorities or an opinion of counsel acceptable
to the Agent, in either case stating that such payment is exempt from Taxes.
For purposes of this subsection (d) and of subsection (e), the terms "UNITED
------
STATES" and "UNITED STATES PERSON" shall have the meanings specified in Section
- ------ --------------------
7701 of the Internal Revenue Code.
(E) FOREIGN LENDERS AND ISSUING BANKS. Each Initial Lender organized
---------------------------------
under the laws of a jurisdiction outside the United States shall, on or prior to
the date of its execution and delivery of this Agreement, and on the date of the
Assignment and Acceptance pursuant to which it became a Lender in the case of
each other Lender organized under the laws of a jurisdiction outside the United
States, and from time to time thereafter if any applicable form previously
provided by such Lender is no longer valid because such Lender has changed its
Applicable Lending Office or its principal office, place of incorporation or
fiscal residence or if otherwise requested in writing by the Borrower or the
Agent (but only so long thereafter as such Lender remains lawfully able to do
so), provide the Agent and the Borrower with (i) an accurate, complete and duly
executed Internal Revenue Service form 1001 or 4224, as appropriate, or any
successor form prescribed by the Internal Revenue Service, certifying that such
Lender is entitled to benefits under an income tax treaty to which the United
States is a party that reduces the rate of withholding tax on payments under
this Agreement or certifying that the income receivable pursuant to this
Agreement is effectively connected with the conduct of a trade or business in
the United States, and (ii) in the event that, by virtue of a change in law or
regulations, such forms are no longer valid evidence of a person's exemption
from withholding which is reasonably satisfactory to the Borrower, other
appropriate evidence supporting such person's exemption from withholding as the
Borrower may reasonably request. If the form provided by a Lender at the time
such Lender first becomes a party to this Agreement indicates a United States
interest withholding tax rate in excess of zero, withholding tax at such rate
shall be considered excluded from Taxes; provided, however, that, if at the date
-------- -------
of the Assignment and Acceptance pursuant to which a Lender assignee becomes a
party to this Agreement, the Lender assignor was entitled to payments under
subsection (a) in respect of United States withholding tax with respect to
interest paid at such date, then, to such extent, the term Taxes shall include
(in addition to withholding taxes that may be imposed in the future or other
amounts otherwise includable in Taxes) United States withholding tax, if any,
applicable with respect to the Lender assignee on such date. If any form or
document referred to in this subsection (e) requires the disclosure of
information, other than information necessary to compute the tax payable and
information required on the date hereof by Internal Revenue Service form 1001 or
4224, that the Lender reasonably considers to be confidential, the Lender shall
give notice thereof to the Borrower and shall not be obligated to include in
such form or document such confidential information.
(F) FAILURE TO PROVIDE FORMS. For any period with respect to which a
------------------------
Lender has failed to provide the Borrower with the appropriate form described in
subsection (e) at the times specified
37
<PAGE>
in subsection (e) whether or not such Lender is lawfully able to do so (other
-----
than if such failure is due to a change in law occurring after the date on which
- ----
a form originally was required to be provided), such Lender shall not be
entitled to indemnification under subsection (a) or (c) with respect to Taxes
imposed by the United States to the extent that the imposition of such Taxes is
attributable to the failure to deliver such form; provided, however, that should
-------- -------
a Lender become subject to Taxes because of its failure to deliver a form
required hereunder, the Borrower shall take such reasonable steps as such Lender
shall reasonably request to assist such Lender to recover such Taxes.
(G) CHANGE OF APPLICABLE LENDING OFFICE. In the event that the
-----------------------------------
Borrower becomes obligated to make an indemnification payment pursuant to
Section 2.10 to any Lender, the Borrower may request that such Lender change the
jurisdiction of its Applicable Lending Office in order to avoid the need for or
reduce the amount of any such indemnification payment which may thereafter
accrue. The Borrower shall make such request by delivering to such Lender a
notice in writing (with a copy to the Agent), in form and substance reasonably
satisfactory to such Lender, in which the Borrower identifies the jurisdiction
to which the Borrower requests such Lender change its Applicable Lending Office
(which must be a jurisdiction in which such Lender has a lending office) and
promises to indemnify such Lender against all reasonable out-of-pocket costs
such Lender incurs in connection with such change, and to which is attached an
opinion of nationally recognized tax counsel, in form and substance reasonably
satisfactory to such Lender, to the effect that such change will avoid the need
for or reduce the amount of any such indemnification payment which may
thereafter accrue. Upon receipt of such notice, such Lender shall use
reasonable efforts (consistent with legal and regulatory restrictions) to
change the jurisdiction of its Applicable Lending Office if such change would
not, in the reasonable judgment of such Lender, be disadvantageous to such
Lender.
(H) COOPERATION BY LENDERS. Each Lender agrees that it will (i) take
----------------------
all reasonable actions reasonably requested by the Borrower that are without
risk or material cost to such Lender to maintain all exemptions, if any,
available to it from withholding taxes (whether available by treaty or existing
administrative waiver), and (ii) to the extent reasonable and without risk or
material cost to it, otherwise cooperate with the Borrower to minimize any
amounts payable by the Borrower under this Section 2.10.
(I) SURVIVAL. Without prejudice to the survival of any other
--------
agreement of the Borrower hereunder, the agreements and obligations of the
Borrower contained in this Section 2.10 shall survive the payment in full of
principal and interest hereunder.
SECTION 2.11. SHARING OF PAYMENTS, ETC. If any Lender shall obtain
------------------------
at any time any payment (whether voluntary, involuntary, through the exercise of
any right of set-off, or otherwise) (a) on account of Obligations due and
payable to such Lender hereunder at such time in excess of its ratable share
(according to the proportion of (i) the amount of such Obligations due and
payable to such Lender at such time to (ii) the aggregate amount of the
Obligations due and payable to all Lenders hereunder at such time) of payments
on account of the Obligations due and payable to all Lenders hereunder at such
time obtained by all the Lenders at such time or (b) on account of Obligations
owing (but not due and payable) to such Lender hereunder at such time in excess
of its ratable share (according to the proportion of (i) the amount of such
Obligations owing (but not due and payable) to such Lender at such time to (ii)
the aggregate amount of the Obligations owing (but not due and payable) to all
Lenders hereunder at such time) of payments on account of the Obligations owing
(but not due and payable) to all Lenders hereunder at such time obtained by all
the Lenders at such time, such Lender shall forthwith purchase from the other
Lenders such participations in the Obligations due and payable or owing to them,
as the
38
<PAGE>
case may be, as shall be necessary to cause such purchasing Lender to share the
excess payment ratably with each of them; provided, however, that if all or any
-------- -------
portion of such excess payment is thereafter recovered from such purchasing
Lender, such purchase from each other Lender shall be rescinded and such other
Lender shall repay to the purchasing Lender the purchase price to the extent of
such other Lender's ratable share (according to the proportion of (i) the
purchase price paid to such Lender to (ii) the aggregate purchase price paid to
all Lenders) of such recovery together with an amount equal to such Lender's
ratable share (according to the proportion of (i) the amount of such other
Lender's required repayment to (ii) the total amount so recovered from the
purchasing Lender) of any interest or other amount paid or payable by the
purchasing Lender in respect of the total amount so recovered. The Borrower
agrees that any Lender so purchasing a participation from another Lender
pursuant to this Section 2.11 may, to the fullest extent permitted by law,
exercise all its rights of payment (including the right of set-off) with respect
to such participation as fully as if such Lender were the direct creditor of the
Borrower in the amount of such participation.
SECTION 2.12. USE OF PROCEEDS. The proceeds of the Advances shall be
---------------
available (and the Borrower agrees that it shall use such proceeds) to pay the
cash consideration for the Xyplex Acquisition, to pay transaction fees and
expenses, to provide working capital for the Borrower and its Subsidiaries and
for other general corporate purposes of the Borrower and its Subsidiaries.
SECTION 2.13. EVIDENCE OF DEBT.
----------------
(A) MAINTENANCE OF ACCOUNTS BY LENDERS. Each Lender shall maintain in
----------------------------------
accordance with its usual practice an account or accounts evidencing the
indebtedness of the Borrower to such Lender resulting from each Advance owing to
such Lender from time to time, including the amounts of principal and interest
payable and paid to such Lender from time to time hereunder.
(B) MAINTENANCE OF ACCOUNTS BY AGENT. The Register maintained by the
--------------------------------
Agent pursuant to Section 9.07(c) shall include a control account, and a
subsidiary account for each Lender, in which accounts (taken together) shall be
recorded (i) the date and amount of each Borrowing made hereunder, the Type and
Interest Type of the Advances comprising such Borrowing and any Interest Period
applicable thereto, (ii) the terms of each Assignment and Acceptance delivered
to and accepted by it, (iii) the amount of any principal or interest due and
payable or to become due and payable from the Borrower to each Lender hereunder,
and (iv) the amount of any sum received by the Agent from the Borrower hereunder
and each Lender's share thereof. The entries made in the Register shall be
conclusive and binding for all purposes, absent manifest error.
(C) EXECUTION OF PROMISSORY NOTES BY BORROWER. The Borrower hereby
-----------------------------------------
agrees that if, in the opinion of any Lender, a promissory note or other
evidence of debt is required, appropriate or desirable to reflect or enforce the
indebtedness of the Borrower resulting from the Term Advances or Revolving
Advances made, or to be made, by such Lender, then upon request of such Lender,
the Borrower shall promptly execute and deliver to such Lender, for each of the
Advances made or to be made by such Lender, a promissory note substantially in
the form of Exhibit A-1 for Term Advances and Exhibit A-2 for Revolving
Advances, each payable to the order of such Lender in an amount equal to the
Term Advances or Revolving Commitment (as the case may be) of such Lender.
39
<PAGE>
ARTICLE III
AMOUNTS AND TERMS OF LETTERS OF CREDIT
SECTION 3.01. THE LETTER OF CREDIT SUBFACILITY. (a) The Borrower
--------------------------------
may request any Revolving Lender, on the terms and conditions hereinafter set
forth, to Issue, and any such Lender may, if in its sole discretion it elects to
do so, and the L/C Bank shall, if no other Revolving Lender elects to do so,
Issue Letters of Credit for the account of the Borrower from time to time on any
Business Day during the period after the Closing Date until the Revolving
Commitment Termination Date (i) in an aggregate Available Amount for all Letters
of Credit (including the Original Letters of Credit other than the Excluded
Original Letters of Credit) not to exceed at any time the L/C Sublimit at such
time (the "LETTER OF CREDIT SUBFACILITY"), and (ii) in an Available Amount for
----------------------------
each such Letter of Credit not to exceed the Unused Revolving Commitments of the
Revolving Lenders on such Business Day. No Letter of Credit shall have an
expiration date (including all rights of the Borrower or the beneficiary to
require renewal) later than the Revolving Commitment Termination Date. As of
the Closing Date, each Original Letter of Credit other than the Excluded
Original Letters of Credit shall constitute, for all purposes of this Agreement
and the other Loan Documents, a Letter of Credit issued and outstanding
hereunder and shall, for purposes of Section 3.05, be deemed to be Issued
hereunder on the Closing Date. Within the limits of the Letter of Credit
Subfacility, and subject to the limits referred to above, the Borrower may
request the Issuance of one or more Letters of Credit under this Section 3.01,
repay amounts due resulting from L/C Advances thereunder pursuant to Section
3.03, and request the Issuance of one or more additional Letters of Credit under
this Section 3.01.
(b) If (i) Bank of America shall become a Lender hereunder pursuant to
an Assignment and Acceptance, and (ii) each then outstanding Letter of Credit,
if any, issued by NationsBank in order to back or support any Excluded Original
Letter of Credit shall be cancelled and returned to NationsBank, then, to the
extent that Excluded Original Letters of Credit which are then outstanding could
be Issued hereunder on such date, such Excluded Original Letters of Credit shall
no longer constitute Excluded Original Letters of Credit and shall constitute,
for all purposes of this Agreement and the other Loan Documents, Letters of
Credit Issued and outstanding hereunder and shall, for purposes of Section 3.05,
be deemed to be Issued hereunder on such date.
SECTION 3.02. ISSUANCE OF LETTERS OF CREDIT.
-----------------------------
(A) NOTICE OF ISSUANCE. Each Letter of Credit shall be Issued
------------------
pursuant to a Notice of Issuance, which must be received by the Agent and the
Issuing Bank not later than 12:00 noon (Dallas, Texas time) on the third
Business Day prior to the date of the proposed Issuance of such Letter of Credit
(or such shorter period as may be acceptable to the applicable Issuing Bank).
Each such Notice of Issuance shall specify whether such Letter of Credit is to
be a Commercial Letter of Credit, a Financial Standby Letter of Credit or a
Performance Standby Letter of Credit and shall further specify therein the
requested (i) date of such Issuance (which shall be a Business Day), (ii)
Available Amount of such Letter of Credit, (iii) expiration date of such Letter
of Credit, (iv) name and address of the beneficiary of such Letter of Credit,
and (v) form of such Letter of Credit, and shall be accompanied by such
customary application and agreement for letter of credit of the Issuing Bank (a
"LETTER OF CREDIT AGREEMENT") as the Issuing Bank may specify to the Borrower
--------------------------
for use in connection with such requested Letter of Credit.
(B) CONDITIONS TO ISSUANCE. If (i) the requested form of such Letter
----------------------
of Credit is acceptable to the Agent and the Issuing Bank in the reasonable
discretion of each, (ii) in the case of any
40
<PAGE>
Issuing Bank other than the L/C Bank, such Issuing Bank elects in its sole
discretion to Issue the requested Letter of Credit, and (iii) such Issuing Bank
has not received notice from the Agent or Lenders holding at least 60% of the
Revolving Commitments that the Issuance of such Letter of Credit is not
authorized because such Issuance would not comply with the requirements of
clause (a) or (b) of Section 3.01 or one or more of the conditions set forth in
Section 4.02 has not been satisfied, then such Issuing Bank will, upon
fulfillment of the applicable conditions set forth in Section 4.02 and subject
to the provisions of this Article III, make such Letter of Credit available to
the Borrower at its office referred to in Section 9.02 or as otherwise agreed
upon with the Borrower in connection with such Issuance. In the event and to
the extent that the provisions of any Letter of Credit Agreement shall conflict
with this Agreement, the provisions of this Agreement shall govern.
(C) REPORTS BY ISSUING BANKS. Each Issuing Bank shall furnish to the
------------------------
Agent (i) on the fifth Business Day of each month a written report summarizing
Issuance and expiration dates of Letters of Credit Issued by such Issuing Bank
during the preceding month and L/C Advances during such month under all Letters
of Credit Issued by such Issuing Bank, and (ii) two Business Days prior to the
21st day of each January, April, July and October, a written report setting
forth the average daily aggregate Available Amount during the preceding calendar
quarter of all Letters of Credit Issued by such Issuing Bank.
SECTION 3.03. DRAWING AND REIMBURSEMENT. The Borrower agrees to
-------------------------
reimburse the Issuing Bank under each Letter of Credit, within one Business Day
after it has notice of any L/C Advance by such Issuing Bank thereunder (which
notice such Issuing Bank agrees promptly to give but the failure to give such
notice shall not reduce the Borrower's obligations hereunder), for the principal
amount of such L/C Advance, and shall pay to such Issuing Bank, on demand,
interest on the unreimbursed principal of such L/C Advance at a rate per annum
equal to (a) from the date of such L/C Advance to the first Business Day after
notice thereof has been given to the Borrower, the rate applicable to Base Rate
Advances in effect from time to time, and (b) from and after such first Business
Day, the Default Rate. If the Borrower shall fail to so reimburse the Issuing
Bank within one Business Day after the Borrower receives notice that any such
L/C Advance has been made, then upon demand by the Issuing Bank, and whether or
not a Default has occurred and is continuing or any conditions set forth in
Section 4.02 are satisfied, each Revolving Lender shall purchase from such
Issuing Bank, and such Issuing Bank shall sell and assign to each Revolving
Lender, such Lender's Revolving Pro Rata Share of such outstanding L/C Advance
as of the date of such purchase, by making available for the account of such
Issuing Bank, by deposit to the Agent's Account, in same day funds, an amount
equal to the sum of (i) the portion of the outstanding principal amount of such
L/C Advance to be purchased by such Lender, plus (ii) interest on such amount,
for each day from the date on which such L/C Advance is made until the date such
amount is paid to the Agent, at the Federal Funds Rate. Each Revolving Lender
agrees to purchase its Revolving Pro Rata Share of an outstanding L/C Advance on
(A) the Business Day on which demand therefor is made by the Issuing Bank which
made such L/C Advance, provided notice of such demand is given not later than
12:00 noon (Dallas, Texas time) on such Business Day, or (B) the first Business
Day next succeeding such demand if notice of such demand is given after such
time. Upon any such assignment by an Issuing Bank to any Revolving Lender of a
portion of an L/C Advance, such Issuing Bank represents and warrants to such
Lender that such Issuing Bank is the legal and beneficial owner of such interest
being assigned by it, but makes no other representation or warranty and assumes
no responsibility with respect to such L/C Advance, the Loan Documents or any
Loan Party.
SECTION 3.04. OBLIGATIONS ABSOLUTE. The Obligations of the Borrower
--------------------
under this Agreement, any Letter of Credit Agreement and any other agreement or
instrument relating to any Letter
41
<PAGE>
of Credit shall be unconditional and irrevocable, and shall be paid strictly in
accordance with the terms of this Agreement, such Letter of Credit Agreement and
such other agreement or instrument under all circumstances, including, without
limitation, the following circumstances:
(a) any lack of validity or enforceability of this Agreement, any
Letter of Credit Agreement, any Letter of Credit or any other agreement or
instrument relating thereto (this Agreement and all of the other foregoing
being collectively referred to herein as the "L/C RELATED DOCUMENTS");
---------------------
(b) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Obligations of the Borrower in respect of any
L/C Related Document or any other amendment or waiver of or any consent to
departure from all or any of the L/C Related Documents;
(c) the existence of any claim, set-off, defense or other right that
the Borrower or any of its Subsidiaries may have at any time against any
beneficiary or any transferee of a Letter of Credit (or any Persons for whom any
such beneficiary or any such transferee may be acting), any Issuing Bank or any
other Person, whether in connection with the transactions contemplated by the
L/C Related Documents or any unrelated transaction;
(d) any statement or any other document presented under a 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;
(e) payment by any Issuing Bank under a Letter of Credit against
presentation of a draft or certificate that does not strictly comply with the
terms of such Letter of Credit;
(f) any exchange, release or non-perfection of any Collateral or other
collateral, or any release or amendment or waiver of or consent to departure
from any guarantee, for all or any of the Obligations of the Borrower in respect
of the L/C Related Documents; or
(g) any other circumstance or happening whatsoever, whether or not
similar to any of the foregoing, including, without limitation, any other
circumstance that might otherwise constitute a defense available to, or a
discharge of, the Borrower or a guarantor.
SECTION 3.05. LETTER OF CREDIT COMPENSATION.
-----------------------------
(a) The Borrower shall pay to the Agent:
(i) for the account of the Issuing Bank which Issues a Letter of
Credit, an issuance fee in an amount equal to 1/8 of 1% per annum of the
average daily Available Amount of such Letter of Credit outstanding from
time to time; and
(ii) for the account of each Revolving Lender, a letter of credit
fee with respect to each Letter of Credit, in each case in an amount equal
to
(A) with respect to each Financial Standby Letter of Credit,
a rate per annum equal to the Applicable Margin for Eurodollar Rate
Advances in effect from time to time on such Lender's Revolving Pro
Rata Share of the average daily Available Amount of such Letter of
Credit outstanding from time to time;
42
<PAGE>
(B) with respect to each Performance Standby Letter of
Credit, a rate per annum equal to the Applicable Margin for Eurodollar
Rate Advances in effect from time to time minus 0.50% on such Lender's
-----
Revolving Pro Rata Share of the average daily Available Amount of such
Letter of Credit outstanding from time to time; and
(C) with respect to each Commercial Letter of Credit, 0.25%
of the amount of such Lender's Revolving Pro Rata Share of the
Available Amount of such Letter of Credit as of the date of Issuance
thereof.
The letter of credit and issuance fees payable under this Section 3.05(a) shall
be payable quarterly in arrears on the 21st day of each April, July, October and
January, commencing April 21, 1996, and on the Revolving Commitment Termination
Date except that the letter of credit fee payable under Section 3.05(a)(ii)(C)
shall be payable upon issuance of the applicable Letter of Credit. For purposes
of computing any fees under this Section 3.05(a), the determination of the
maximum amount available to be drawn under a Letter of Credit at any time shall
assume strict compliance with all conditions for drawing. Any fees paid
pursuant to this Section 3.05(a) are nonrefundable.
(b) The Borrower shall pay to each Issuing Bank, for its own account
and on demand, such other commissions, issuance fees, transfer fees and other
fees, charges and expenses in connection with the Issuance, amendment, transfer,
cancellation or administration of each Letter of Credit as the Borrower and such
Issuing Bank shall agree; provided that in no event shall any Issuing Bank
--------
require, after giving effect to the amounts payable to it pursuant to Section
3.05(a) above (in the case of the Issuance of any Letter of Credit), more than
the standard fees, charges and expenses which it normally charges in connection
with such matters.
SECTION 3.06. USE OF LETTERS OF CREDIT. Any Letters of Credit Issued
------------------------
hereunder shall be used solely (a) to support Obligations of the Borrower and
its Subsidiaries not prohibited hereunder, and (b) for the purposes described in
the definition of "Commercial Letter of Credit".
ARTICLE IV
CONDITIONS OF LENDING
SECTION 4.01. CONDITIONS PRECEDENT TO INITIAL BORROWING. The
-----------------------------------------
obligation of each Lender to make an Advance on the occasion of the initial
Borrowing is subject to the following conditions precedent:
(A) THE XYPLEX ACQUISITION. All conditions to the consummation of the
----------------------
Xyplex Acquisition, other than the funding of the purchase price, shall have
been satisfied and, concurrently with the initial Borrowing hereunder, the
Xyplex Acquisition shall be consummated strictly in accordance with the terms of
the Xyplex Stock Purchase Agreement (as in effect on March 2, 1996), without any
waiver or amendment not consented to by the Lenders of any term, provision or
condition set forth therein, and in compliance with all applicable laws. The
Xyplex Stock Purchase Agreement shall be in full force and effect.
(B) CERTAIN PAYMENTS IN RESPECT OF ORIGINAL CREDIT AGREEMENT. The
--------------------------------------------------------
Borrower shall have paid to the Agent for the account of the Original Lenders,
the Original Issuing Banks and the Agent, as appropriate, (i) all unpaid accrued
interest on the Original Advances, (ii) all unpaid accrued fees
43
<PAGE>
payable by the Borrower under the Original Credit Agreement, and (iii) to the
extent set forth in a written demand received by the Borrower prior to the
Closing Date from any Original Lender, any amounts that such Lender would be
entitled to pursuant to Section 9.04(c) of the Original Credit Agreement if all
Original Advances that are Eurodollar Rate Advances under the Original Credit
Agreement were prepaid on the Closing Date (it being understood and agreed that
the failure of any Original Lender to submit such written demand prior to the
Closing Date shall not affect the Borrower's Obligations to such Original Lender
in respect of any amounts to which such Original Lender is entitled pursuant to
Section 9.04(c) of the Original Credit Agreement).
(C) SURVIVING DEBT. All Existing Debt, other than the Debt identified
--------------
on Schedule 5.01(h) (the "SURVIVING DEBT"), shall have been prepaid, redeemed or
--------------
defeased in full or otherwise satisfied and extinguished.
(D) MATERIAL ADVERSE CHANGE; ACCURACY OF INFORMATION. There shall not
------------------------------------------------
have occurred since October 31, 1995 a Material Adverse Change, and all written
information provided by or on behalf of the Borrower or any of its Subsidiaries
to the Agent or the Lenders on or prior to the date hereof shall be true and
correct in all material respects and not incomplete by omitting any information
necessary to make the information provided not misleading in any material
respect.
(E) LITIGATION. There shall exist no action, suit, investigation,
----------
litigation or proceeding affecting the Borrower or any of its Subsidiaries
pending or threatened before any court, governmental agency or arbitrator that
(i) could reasonably be expected to have a Material Adverse Effect, or (ii)
purports to affect the legality, validity or enforceability of this Agreement,
any other Loan Document, the Xyplex Stock Purchase Agreement or the consummation
of the transactions contemplated hereby or thereby.
(F) PAYMENT OF FEES. The Borrower shall have paid all accrued fees
---------------
and expenses of the Agent and the Lenders (including any fees payable to the
Agent on the Closing Date pursuant to Section 2.07 and, to the extent set forth
in a written billing statement delivered to the Borrower prior to the Closing
Date, the accrued fees and expenses of counsel to the Agent).
(G) ASSIGNMENTS UNDER ORIGINAL CREDIT AGREEMENT. One or more
-------------------------------------------
Assignment and Acceptances shall have been entered into pursuant to which each
Original Lender (other than NationsBank) shall have assigned to NationsBank 100%
of each such Original Lender's rights and obligations under the Original Credit
Agreement (including, without limitation, such Original Lender's Commitments and
outstanding Advances under the Original Credit Agreement), subject only to the
satisfaction of the other conditions set forth in this Section 4.01 and in
Section 4.02.
(H) DELIVERY OF DOCUMENTS. The Agent shall have received on or before
---------------------
the day of the initial Borrowing the following, each dated such day (unless
otherwise specified) and (except for the Notes, if any) in sufficient copies for
each Lender:
(i) Notes to the order of each Lender that shall have submitted a
written request therefor to the Agent not fewer than 2 Business Days prior
to the Closing Date.
(ii) Certified copies of the resolutions of the Board of
Directors of the Borrower and each other Loan Party approving the
execution, delivery and performance of this Agreement, any Notes issued
hereunder and each other Loan Document to which it is or is to be
44
<PAGE>
a party, and of all documents evidencing other necessary corporate action
and governmental approvals, if any, with respect to this Agreement, the
Notes, if any, and each other Loan Document.
(iii) A copy of the certificate or articles of incorporation of
the Borrower and each other Loan Party and each amendment thereto,
certified (as of a date reasonably near the date of the initial Borrowing)
by the Secretary of State of the state of such Loan Party's incorporation
as being a true and correct copy thereof.
(iv) With respect to each Loan Party, a copy of a certificate of
the Secretary of State of the state of such Loan Party's incorporation,
dated reasonably near the date of the initial Borrowing, listing the
certificate or articles of incorporation of such Loan Party and each
amendment thereto on file in such Secretary of State's office and
certifying that (A) such amendments are the only amendments to such Loan
Party's certificate or articles of incorporation on file in such Secretary
of State's office, (B) such Loan Party has paid all franchise taxes to the
date of such certificate (to the extent such certification is available),
and (C) such Loan Party is duly incorporated and in good standing under the
laws of such state.
(v) A certificate of each Loan Party, signed on behalf of such
Loan Party by its President or a Vice President and its Secretary or any
Assistant Secretary, dated the date of the initial Borrowing (the
statements made in which certificate shall be true on and as of the date of
the initial Borrowing), certifying as to (A) the absence of any amendments
to the charter of such Loan Party since the date of the Secretary of
State's certificate with respect to such Loan Party referred to in Section
4.01(h)(iv), (B) a true and correct copy of the bylaws of such Loan Party
as in effect on the date of the initial Borrowing, (C) the due
incorporation and good standing of such Loan Party as a corporation
organized under the laws of the state of such Loan Party's incorporation,
and the absence of any proceeding for the dissolution or liquidation of
such Loan Party, (D) the truth of the representations and warranties of
such Loan Party contained in the Loan Documents as though made on and as of
the date of the initial Borrowing and (E) the absence of any event
occurring and continuing, or resulting from the initial Borrowing, that
constitutes a Default.
(vi) A certificate of the Secretary or an Assistant Secretary of
each Loan Party certifying the names and true signatures of the officers of
such Loan Party authorized to sign the Loan Documents to which such Loan
Party is or is to be a party and the other documents to be delivered
hereunder and thereunder.
(vii) An omnibus amendment and consent in substantially the form
of Exhibit K (as amended, supplemented or otherwise modified from time to
time, the "OMNIBUS AMENDMENT AND CONSENT"), duly executed by each Loan
-----------------------------
Party.
(viii) An amendment to the Guaranty in substantially the form of
Exhibit F, duly executed by Xyplex.
(ix) an amendment to the Security Agreement in substantially the
form of Exhibit E, duly executed by Xyplex, together with:
45
<PAGE>
(A) certificates representing the Pledged Shares referred to
therein, accompanied by undated stock powers executed in blank and
instruments evidencing the Pledged Debt, if any, referred to therein
indorsed in blank;
(B) UCC financing statements executed by Xyplex and each of
its Subsidiaries with respect to such jurisdictions and in such form
as the Agent may require;
(C) evidence of the completion of all other recordings and
filings of or with respect to the Security Agreement that the Agent or
the Required Lenders may request in order to perfect and protect the
Liens created thereby;
(D) evidence reasonably obtainable prior to the date of the
initial Borrowing of the insurance required by the terms of the
Security Agreement (including loss payee endorsements);
(E) evidence that all other action that the Agent or the
Required Lenders may request in order to perfect and protect the Liens
created by the Security Agreement has been taken.
(x) A copy of the Xyplex Stock Purchase Agreement, certified as
true, correct and complete by a Vice President of the Borrower.
(xi) A favorable opinion of (i) Davis Polk & Wardwell, special
counsel to the Borrower, in substantially the form of Exhibit G and as to
such other matters as the Agent or the Required Lenders may reasonably
request, (ii) the Vice President-General Counsel of the Borrower, in
substantially the form of Exhibit H and as to such other matters as the
Agent or the Required Lenders may reasonably request, (iii) Sidley &
Austin, special California counsel to the Borrower, in substantially the
form of Exhibit I and (iv) Ropes & Gray, special Massachusetts counsel to
the Borrower, in substantially the form of Exhibit L.
(xii) A favorable opinion of Shearman & Sterling, counsel for
the Agent, in form and substance satisfactory to the Agent.
(xiii) Such other financial, business and other information
regarding each Loan Party as the Agent or the Required Lenders shall have
reasonably requested, including, without limitation, information regarding
the Xyplex Acquisition, including, without limitation, the Xyplex Stock
Purchase Agreement, unaudited financial statements of Xyplex for its fiscal
years 1994 and 1995 and for the months of January and February 1996, and
the audited financial statements of Xyplex for fiscal year 1993 and the
financial statements required to be delivered by Raytheon pursuant to the
Xyplex Stock Purchase Agreement prior to the Closing Date.
SECTION 4.02. CONDITIONS PRECEDENT TO EACH BORROWING AND ISSUANCE.
---------------------------------------------------
The obligation of each Appropriate Lender to make an Advance (other than an L/C
Advance) on the occasion of each Borrowing (including the initial Borrowing),
and the right of the Borrower to request the issuance of Letters of Credit,
shall be subject to the further conditions precedent that on the date of such
Borrowing or Issuance (a) the following statements shall be true (and each of
the giving of the applicable Notice of Borrowing or Notice of Issuance and the
acceptance by the Borrower of the proceeds of such Borrowing
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or of such Letter of Credit shall constitute a representation and warranty by
the Borrower that on the date of such Borrowing or issuance such statements are
true):
(i) the representations and warranties contained in each Loan
Document are correct on and as of the date of such Borrowing or issuance,
before and after giving effect to such Borrowing or issuance and to the
application of the proceeds therefrom (including, with respect to the
initial Borrowing, after giving effect to the Xyplex Acquisition), as
though made on and as of such date other than any such representations or
warranties that, by their terms, are specifically made as of a date other
than the date of such Borrowing or Issuance; and
(ii) no event has occurred and is continuing, or would result
from such Borrowing or issuance or from the application of the proceeds
therefrom, that constitutes a Default;
and (b) the Agent shall not have received any notification from the Required
Lenders (sufficiently in advance of any proposed Borrowing or issuance of a
Letter of Credit to act thereupon) that any condition precedent set forth above
in this Section 4.02 (and, in the case of the initial Borrowing, Section 4.01)
has not then been satisfied.
SECTION 4.03. DETERMINATIONS UNDER ARTICLE IV. For purposes of
-------------------------------
determining compliance with the conditions specified in Sections 4.01 and 4.02,
each Lender shall be deemed to have consented to, approved or accepted or to be
satisfied with each document or other matter required thereunder to be consented
to or approved by or acceptable or satisfactory to the Lenders (or the Required
Lenders) unless an officer of the Agent responsible for the transactions
contemplated by the Loan Documents shall have received written notice from such
Lender prior to the applicable Borrowing or Issuance specifying its objection
thereto and, in the case of any such Borrowing, such Lender shall not have made
available to the Agent such Lender's ratable portion of such Borrowing. In the
absence of any such notice or actual knowledge to the contrary, the Agent shall
be entitled to assume that such conditions are satisfied and shall have no
liability or duty for the making or funding of any Advances, or the Issuance of
any Letters of Credit, at a time when any applicable condition set forth in
Section 4.01 or 4.02 has not been met.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
SECTION 5.01. REPRESENTATIONS AND WARRANTIES OF THE BORROWER. The
----------------------------------------------
Borrower represents and warrants as follows:
(A) ORGANIZATION; CORPORATE POWERS. Each Loan Party (i) is a
------------------------------
corporation duly organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation, (ii) is duly qualified and in good
standing as a foreign corporation in each other jurisdiction in which it owns or
leases property or in which the conduct of its business requires it to so
qualify or be licensed except where the failure to so qualify or be licensed
would not have a Material Adverse Effect and (iii) has all requisite corporate
power and authority to own or lease and operate and encumber its properties and
to carry on its business as now conducted and as proposed to be conducted.
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(B) AUTHORITY; ENFORCEABILITY. Each Loan Party has the requisite
-------------------------
corporate power and authority (i) to execute, deliver and perform the Xyplex
Stock Purchase Agreement (in the case of the Borrower) and each of the Loan
Documents executed or to be executed by it, and (ii) to file the Loan Documents
and, if applicable, the Xyplex Stock Purchase Agreement, filed by it, or to be
filed by it, with each appropriate Governmental Authority. The execution,
delivery and performance (or filing, as the case may be) by the Borrower of the
Xyplex Stock Purchase Agreement and by each Loan Party of each of the Loan
Documents to which it is or is to be a party and the consummation of the
transactions contemplated thereby, have been duly approved by the Board of
Directors of such Loan Party and no other corporate proceedings on the part of
such Loan Party are necessary to consummate such transactions. Each Loan
Document to which the Borrower or any of its Subsidiaries is, or is required by
the terms hereof, to be party and which is required to have been delivered on or
before each date that this representation and warranty is made or is deemed to
have been made, has been duly executed and delivered by the Borrower and/or such
Subsidiary, as the case may be, and constitutes each such Person's legal, valid
and binding obligation, enforceable against such Person in accordance with its
terms, and is in full force and effect.
(C) SUBSIDIARIES AND OWNERSHIP OF CAPITAL STOCK. Set forth on
-------------------------------------------
Schedule 5.01(c) hereto is a complete and accurate list, as of the date hereof
(after giving effect to the Xyplex Acquisition), of all Subsidiaries of the
Borrower whose total assets are equal to or greater than $1,000,000. Schedule
5.01(c) hereto also sets forth as of the date hereof (i) the number of issued
and authorized shares of each class of capital stock of each such Subsidiary of
the Borrower and (ii) the identity of the holders of all shares of each class of
capital stock of each such Subsidiary of the Borrower. Except as set forth on
Schedule 5.01(c), as of the Closing Date, no capital stock (or any securities,
instruments, warrants, option or purchase rights, conversion or exchange rights,
calls, commitments or claims of any character convertible into or exercisable
for capital stock) of the Borrower or any Subsidiary of the Borrower is subject
to issuance under any security, instrument, warrant, option or purchase rights,
conversion or exchange rights, call, commitment or claim of any right, title or
interest therein or thereto. The outstanding capital stock of the Borrower and
each Subsidiary of the Borrower is duly authorized, validly issued, fully paid
and nonassessable.
(D) NO CONFLICT. The execution, delivery and performance by the
-----------
Borrower of the Xyplex Stock Purchase Agreement and by each Loan Party of each
Loan Document to which it is party and the consummation of the Xyplex
Acquisition and the other transactions contemplated hereby and thereby do not
and will not (i) constitute a tortious interference with any Contractual
Obligation of the Borrower or any of its Subsidiaries to any Person, or (ii)
conflict with or violate such Loan Party's certificate or articles of
incorporation or bylaws, or other organizational documents, as the case may be,
or (iii) conflict with, result in a breach of or constitute (with or without
notice or lapse of time or both) a default under any material Requirement of Law
or material Contractual Obligation of the Borrower or any of its Subsidiaries,
or require termination of any material Contractual Obligation of any such
Person, or (iv) result in or require the creation or imposition of any Lien
whatsoever upon any of the properties or assets of the Borrower or any of its
Subsidiaries (other than Liens in favor of the Agent arising pursuant to the
Loan Documents or Liens permitted pursuant to Section 6.02(a)), or (v) require
any approval of stockholders or any approval or consent of any Person under any
Contractual Obligation of any Loan Party, except for corporate authorizations
described in Section 5.01(b) which have been obtained and are in full force and
effect on the Closing Date.
(E) GOVERNMENTAL CONSENTS. The execution, delivery and performance by
---------------------
the Borrower of the Xyplex Stock Purchase Agreement and by each Loan Party of
each Loan Document to
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which it is a party and consummation of the Xyplex Acquisition and the other
transactions contemplated hereby and thereby do not and will not require any
registration with, consent or approval of, or notice to, or other action to,
with or by any Governmental Authority, except for (i) filings with the
Securities and Exchange Commission under the Securities Exchange Act and filings
to perfect the Liens created by the Collateral Documents which have been, or
will in due course prior to the time required, be made and (ii) filings required
for the Agent to receive payments directly from the United States government
under the Assignment of Claims Act, 31 U.S.C. (S) 3277 and 41 U.S.C. (S) 15,
which shall be made upon the request of the Agent in accordance with Section 8
of the Security Agreement. All applicable waiting periods (including, without
limitation, any waiting periods under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended, and the rules and regulations promulgated
thereunder) in connection with the Xyplex Acquisition and the other transactions
contemplated hereby and thereby have expired without any action having been
taken by any competent authority restraining, preventing or imposing materially
adverse conditions upon the Xyplex Acquisition or the rights of the Loan Parties
or their Subsidiaries freely to transfer or otherwise dispose of, or to create
any Lien on, any properties now owned or hereafter acquired by any of them.
(F) GOVERNMENTAL REGULATION. Neither the Borrower nor any Subsidiary
-----------------------
of the Borrower is subject to regulation under (i) the Public Utility Holding
Company Act of 1935, the Federal Power Act, the Interstate Commerce Act, the
Investment Company Act of 1940, or (ii) any other federal or state regulatory
scheme such that its ability to incur Debt is limited or its ability to
consummate the transactions contemplated hereby is materially impaired.
(G) FINANCIAL STATEMENTS AND CONDITION. Complete and accurate copies
----------------------------------
of the following financial statements and materials have been delivered to each
of the Lenders: the Annual Report of the Borrower on Form 10-K for fiscal year
1995 (including audited financial statements) and the Quarterly Report of the
Borrower on Form 10-Q for the first quarter of fiscal year 1996. All financial
statements included in such materials furnished to any Lender, and all Annual
Reports of the Borrower on Form 10-K and Quarterly Reports of the Borrower on
Form 10-Q delivered after the Closing Date, were prepared in conformity with
GAAP consistently applied, except as otherwise noted therein, and fairly present
the Consolidated financial position of the Borrower and its Subsidiaries as at
the respective dates thereof and the Consolidated results of operations and
statement of cash flows of the Borrower and its Subsidiaries for each of the
periods covered thereby, subject, in the case of any unaudited interim financial
statements, to changes resulting from audit and normal year-end adjustments.
(H) DEBT. Set forth on Schedule 5.01(h) hereto is a complete and
----
accurate list of all Surviving Debt, showing as of the date hereof the principal
amount outstanding thereunder for each issue of Debt having an outstanding
principal amount in excess of $250,000.
(I) SOLVENCY. Each Loan Party is, individually and together with its
--------
Subsidiaries, Solvent.
(J) LITIGATION; ADVERSE EFFECT. There is no action, suit, proceeding,
--------------------------
governmental investigation or arbitration, at law or in equity, or before or by
any Governmental Authority, pending, or to the knowledge of the Borrower,
threatened against the Borrower or any of its Subsidiaries or any property of
any of them which has had or is reasonably likely to have a Material Adverse
Effect. Neither the Borrower nor any of its Subsidiaries is (i) in violation of
any applicable law which violation has had or is reasonably likely to have a
Material Adverse Effect, or (ii) subject to or in default with respect to
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any final judgment, writ, order, injunction, decree, rule or regulation of any
court or Governmental Authority which has had or is reasonably likely to have a
Material Adverse Effect.
(K) NO MATERIAL ADVERSE EFFECT; ADVERSE AGREEMENTS. Since October 31,
----------------------------------------------
1995, after giving effect to this Agreement and the transactions contemplated by
the Loan Documents, there has occurred no event which has had or is reasonably
likely to have a Material Adverse Effect. Neither the Borrower nor any
Subsidiary of the Borrower is a party to or subject to any Contractual
Obligation or other restriction contained in their respective charters, bylaws,
partnership documents or similar governing documents which has had or is
reasonably likely to have a Material Adverse Effect.
(L) TAX EXAMINATIONS. As of the date hereof, the Federal income tax
----------------
returns of the Borrower for the fiscal years ended (i) October 31, 1991 and
prior have been examined and are closed by the applicable statutes of
limitation, (ii) October 31, 1992 has been settled with the IRS, (iii) October
31, 1993 has been reviewed by the IRS and accepted by the Borrower, and (iv)
October 31, 1994 has been filed with the IRS. All deficiencies which have been
asserted against the Borrower as a result of such examinations have been fully
paid or finally settled or are being contested in good faith, and no issue has
been raised in any such examinations which, by application of similar
principles, reasonably can be expected to result in assertion of a material
deficiency for any other year not so examined that has not been accrued on the
Borrower's audited financial statements for its fiscal year ended October 31,
1995 that would be required to be so accrued in accordance with GAAP. The
Borrower does not anticipate any further material tax liability with respect to
any years which have not been closed, taken as a whole. The Borrower has no
knowledge of any material Federal income tax liability with respect to open
taxable years in excess of amounts accrued on the Borrower's audited financial
statements which would be required to be so accrued in accordance with GAAP.
For purposes of this Section, the term "THE BORROWER" shall include each other
------------
corporation with which the Borrower files consolidated or combined income tax
returns or reports.
(M) PAYMENT OF TAXES. All federal and state income tax returns of the
----------------
Borrower and all other material tax returns and reports of the Borrower and each
Subsidiary of the Borrower required to be filed, have been timely filed, and all
taxes, assessments, fees and other governmental charges thereupon and upon their
respective properties, assets, income and franchises which are shown on such
returns as being due and payable, have been paid when due and payable, except
such taxes, if any, that are reserved against in accordance with GAAP, such
taxes as are being contested in good faith by appropriate proceedings or such
taxes the failure to make payment of which when due and payable would not have,
in the aggregate, a Material Adverse Effect. The Borrower has no knowledge of
any proposed tax assessment against it or any of its Subsidiaries that is
reasonably likely to have a Material Adverse Effect.
(N) PERFORMANCE OF CONTRACTUAL OBLIGATIONS. Neither the Borrower nor
--------------------------------------
any Subsidiary of the Borrower is in default in the performance, observance or
fulfillment of any of the obligations, covenants or conditions contained in any
Contractual Obligation applicable to it, and no condition exists which, with the
giving of notice or the lapse of time or both, would constitute a default under
such Contractual Obligation, except, in any such case, where the consequences,
direct or indirect, of such default or defaults, if any, would not have or are
not reasonably likely to have a Material Adverse Effect.
(O) MARGIN STOCK. Neither the Borrower nor any of its Subsidiaries is
------------
engaged in the business of extending credit for the purpose of purchasing or
carrying any Margin Stock. Following
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application of the proceeds of each Advance, not more than 25 percent of the
value of the assets (either of the Borrower only or of the Borrower and its
Subsidiaries on a Consolidated basis) subject to the provisions of Section
6.02(a) or 6.02(e) or subject to any restriction contained in any agreement or
instrument between the Borrower and any Lender or any Affiliate of any Lender
relating to Debt and within the scope of Section 7.01(e) will be Margin Stock.
(P) DISCLOSURE. Neither the Information Memorandum,when completed,
----------
nor the schedules, certificates and other written statements and materials and
information furnished by or on behalf of the Borrower or any of its Subsidiaries
to the Agent and the Lenders contain any material misstatement of fact or omit
to state a material fact necessary in order to make the statements contained
therein, in light of the circumstances under which they were made and taken as a
whole, not misleading. Neither the Borrower nor any of its Subsidiaries has
intentionally withheld any fact known to it which has had or is reasonably
likely to have a Material Adverse Effect which has not been set forth or
referred to in this Agreement, the other Loan Documents, or such schedules,
certificates, statements or information furnished to the Agent and the Lenders.
(Q) REQUIREMENTS OF LAW. The Borrower and each of its Subsidiaries is
-------------------
in compliance with all Requirements of Law (including, without limitation, the
Securities Act and the Securities Exchange Act, and the applicable rules and
regulations thereunder, state securities laws and "blue sky" laws) applicable to
--------
them and their respective businesses, in each case, where the failure to so
comply would have or is reasonably likely to have a Material Adverse Effect.
(R) INTELLECTUAL PROPERTY. The Borrower and each of its Subsidiaries
---------------------
own, are licensed or otherwise have the lawful right to use, or have all permits
and other governmental approvals, patents, trademarks, trade names, copyrights,
technology, know-how and processes used in or necessary for the conduct of their
businesses as currently conducted which are material to their condition
(financial or otherwise), operations, performance and prospects, taken as a
whole. The use of such permits and other governmental approvals, patents,
trademarks, trade names, copyrights, technology, know-how and processes by the
Borrower and each of its Subsidiaries does not infringe on the rights of any
Person, subject to such claims and infringements as do not, in the aggregate,
give rise to any liability on the part of the Borrower or any of its
Subsidiaries which has or is reasonably likely to have a Material Adverse
Effect.
(S) ENVIRONMENTAL MATTERS.
---------------------
(i)(A) Except as has not had and is not reasonably likely to have
a Material Adverse Effect, the operations and properties of the Borrower
and each of its Subsidiaries comply in all material respects with all
Environmental Laws, all necessary Environmental Permits have been obtained
and are in effect for the operations and properties of the Borrower and its
Subsidiaries and the Borrower and its Subsidiaries are in compliance in all
material respects with all such Environmental Permits, and (B) no
circumstances exist that would be reasonably likely to (1) form the basis
of an Environmental Action against the Borrower or any of its Subsidiaries
or any of their properties that would be reasonably likely to have a
Material Adverse Effect or (2) cause any such property to be subject to any
restrictions on ownership, occupancy, use or transferability under any
Environmental Law that would be reasonably likely to have a Material
Adverse Effect.
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(ii) Except as has not had and is not reasonably likely to have a
Material Adverse Effect, none of the properties of the Borrower or any of
its Subsidiaries is listed or, to the Borrower's knowledge, is proposed for
listing on the National Priorities List under CERCLA or on the
Comprehensive Environmental Response, Compensation and Liability
Information System maintained by the Environmental Protection Agency or any
analogous state list of sites requiring investigation or cleanup or is
adjacent to any such property, and no underground storage tanks, as such
term is defined in 42 U.S.C.(S) 6991, are located on any property of the
Borrower or any of its Subsidiaries or, to the Borrower's knowledge, on any
adjoining property.
(iii) Except as has not had and is not reasonably likely to have
a Material Adverse Effect, neither the Borrower nor any of its Subsidiaries
has transported or arranged for the transportation of any Hazardous
Materials to any location that is listed or proposed for listing on the
National Priorities List under CERCLA or on the Comprehensive Environmental
Response, Compensation and Liability Information System maintained by the
Environmental Protection Agency or any analogous state list, Hazardous
Materials have not been generated, used, treated, handled, stored or
disposed of on, or released or transported to or from, any property of the
Borrower or any of its Subsidiaries or, to the Borrower's knowledge, any
adjoining property, except in compliance with all Environmental Laws and
Environmental Permits, and all other wastes generated at any such
properties have been disposed of in compliance with all Environmental Laws
and Environmental Permits.
(T) ERISA MATTERS.
-------------
(i) No ERISA Event has occurred or is reasonably expected to
occur with respect to any Plan of any Loan Party or any of its ERISA
Affiliates that has resulted in or is reasonably likely to result in a
material liability of any Loan Party or any of its ERISA Affiliates.
(ii) Schedule B (Actuarial Information) to the most recently
filed annual report (Form 5500 Series) for each Plan of any Loan Party or
any of its ERISA Affiliates, copies of which have been filed with the
Internal Revenue Service, is complete and accurate and fairly presents the
funding status of such Plan, and since the date of such Schedule B there
has been no adverse change in such funding status that has had or would be
reasonably likely to have a Material Adverse Effect.
(iii) Neither any Loan Party nor any of its ERISA Affiliates has
incurred or is reasonably expected to incur any Withdrawal Liability to any
Multiemployer Plan in an amount which has had or would be reasonably likely
to have a Material Adverse Effect.
(iv) Neither any Loan Party nor any of its ERISA Affiliates has
been notified by the sponsor of a Multiemployer Plan of any Loan Party or
any of its ERISA Affiliates that such Multiemployer Plan is in
reorganization or has been terminated, within the meaning of Title IV of
ERISA, and to the best knowledge of any Loan Party and any of its ERISA
Affiliates, no such Multiemployer Plan is reasonably expected to be in
reorganization or to be terminated, within the meaning of Title IV of
ERISA, in each case except for any such reorganization or termination which
would not be reasonably likely to have a Material Adverse Effect.
(v) Except as set forth in the financial statements referred to
in Sections 5.01 and 6.03, the Borrower and its Subsidiaries have no
material liability with respect to "expected
52
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post retirement benefit obligations" within the meaning of Statement of
Financial Accounting Standards No. 106.
(U) NONCONTRAVENTION. Except as otherwise permitted hereunder, no
----------------
Contractual Obligation to which the Borrower or any of its Subsidiaries is a
party or by which any of them or any of their respective properties is bound or
to which any of them or any of their respective properties is subject restricts
any of them from granting Liens in their respective property.
(V) COLLATERAL. Each Loan Party has good and marketable title with
----------
respect to the Collateral in which a security interest has been granted to the
Agent by it, and all such Collateral is free and clear of all Liens except Liens
permitted by Section 6.02(a).
(W) INVESTMENTS. Set forth on Schedule 5.01(w) hereto is a complete
-----------
and accurate list of all Investments held by any Loan Party (other than Cash
Equivalents and Subsidiaries of such Loan Party) as of the Closing Date, showing
as of the Closing Date, the amount, obligor or issuer and maturity, if any,
thereof.
ARTICLE VI
COVENANTS OF THE BORROWER
SECTION 6.01. AFFIRMATIVE COVENANTS. So long as any Advance shall
---------------------
remain unpaid, any Letter of Credit shall be outstanding or any Lender shall
have any Commitment hereunder, the Borrower will, unless the Required Lenders
shall otherwise consent in writing:
(A) COMPLIANCE WITH LAWS, ETC. Comply, and cause each of its
-------------------------
Subsidiaries to comply, with all Requirements of Law, Contractual Obligations
and all restrictive covenants, noncompliance with which would be likely to have
a Material Adverse Effect.
(B) PAYMENT OF TAXES, ETC. Pay, and cause each of its Subsidiaries to
---------------------
pay, (i) all taxes, assessments and other governmental charges imposed upon it
or on any of its properties or assets or in respect of any of its franchises,
business, income or property before any penalty or interest accrues thereon, and
(ii) all claims (including, without limitation, claims for labor, services,
materials and supplies) for sums, nonpayment of which would have a Material
Adverse Effect, which have become due and payable and which by law have or may
become a Lien (other than a Permitted Lien) upon any of the Borrower's or such
Subsidiary's properties or assets, prior to the time when any penalty or fine
shall be incurred with respect thereto; provided that no such taxes, assessments
--------
and governmental charges referred to in clause (i) above or claims referred to
in clause (ii) above need be paid if being contested in good faith by
appropriate proceedings promptly instituted and diligently conducted and if such
reserve or other appropriate provision, if any, as shall be required in
conformity with GAAP shall have been made therefor.
(C) MAINTENANCE OF PROPERTIES, INSURANCE. Maintain, and cause each of
------------------------------------
its Subsidiaries to maintain, in good repair, working order and condition,
excepting ordinary wear and tear and damage due to casualty, all properties
material to its or its Subsidiary's operations and make, and cause each of its
Subsidiaries to make, all appropriate repairs, renewals and replacements
thereof, consistent with past practice. Maintain, and cause each of its
Subsidiaries to maintain, with financially
53
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sound and reputable insurers, insurance policies and programs consistent with
its past practice and customary industry standards for it and its Subsidiaries.
(D) PRESERVATION OF CORPORATE EXISTENCE, ETC. Maintain, and cause
----------------------------------------
each of its Subsidiaries to maintain, its corporate existence (other than
Subsidiaries which are not Guarantors, if the failure to maintain their
corporate existence would not, in the aggregate for all such Subsidiaries, have
a Material Adverse Effect and except as permitted by Section 6.02(d)) and
preserve and keep in full force and effect its rights and franchises the loss or
termination of which would be likely to have a Material Adverse Effect.
(E) VISITATION RIGHTS; BOOKS AND RECORDS. Permit, and cause each of
------------------------------------
its Subsidiaries to permit, any authorized representative designated by the
Agent or any Lender to visit and inspect any of the properties of the Borrower
or any of its Subsidiaries, including their financial and accounting records,
and to make copies and take extracts therefrom, and to discuss their affairs,
finances and accounts with their officers and independent certified public
accountants, all upon reasonable notice and at such reasonable times during
normal business hours, as often as may be reasonably requested (each such
visitation and inspection by or on behalf of any Lender shall be at such
Lender's expense and, for so long as no Default shall have occurred or is
continuing, each such visitation and inspection by or on behalf of the Agent
shall be at the Agent's expense) and keep, and cause each of its Subsidiaries to
keep, proper books of record and account in which entries in conformity with
GAAP (and all legal requirements) shall be made of all dealings and transactions
in relation to their businesses and activities.
(F) COLLATERAL DOCUMENTS. Deliver, and cause each of its Subsidiaries
--------------------
to deliver, share certificates and other instruments and documents (including,
without limitation, evidence of the insurance required by the Security
Agreement) and take actions, and cause each of its Subsidiaries to take actions,
necessary or desirable in the judgment of, or requested by, the Agent or the
Required Lenders to perfect, preserve, protect or evidence any Lien securing, or
intended to secure, the Obligations of the Loan Parties under the Loan Documents
or the priority thereof.
(G) ADDITIONAL GUARANTORS. Promptly cause each Guarantor and each
---------------------
Subsidiary of the Borrower (other than a Foreign Subsidiary) which at any time
has total assets with a value (determined in accordance with GAAP) equal to or
greater than $2,000,000 to execute and deliver to the Agent an amendment to the
Guaranty, in substantially the form of Exhibit F (whereby such Subsidiary shall
become a Guarantor) and promptly execute and deliver to the Agent, and cause
such Subsidiary to execute and deliver to the Agent, an amendment to the
Security Agreement, in substantially the form of Exhibit E (whereby such
Subsidiary shall grant a Lien on those of its assets described in the Security
Agreement) and promptly pledge to the Agent or cause to be pledged to the Agent
all of the outstanding capital stock of such Subsidiary owned by any Loan Party
to secure the Obligations under the Loan Documents and promptly take, and cause
such Subsidiary and each other Loan Party to take all action necessary or (in
the opinion of the Agent or the Required Lenders) desirable to perfect and
protect the Liens intended to be created by the Collateral Documents, as amended
pursuant to this Section 6.01(g).
(H) INTEREST RATE HEDGING. Enter into within 60 days after the
---------------------
Closing Date, and maintain at all times thereafter, interest rate Hedge
Agreements with Persons acceptable to the Agent, covering a notional amount of
not less than 50% of the outstanding Term Advances and on such other terms and
provisions as are acceptable to the Agent.
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(I) INTELLECTUAL PROPERTY. Within 60 days after the Closing Date,
---------------------
the Borrower shall deliver to the Agent a confirmation and grant of security
interest in intellectual property granting to the Agent on behalf of the Secured
Parties (as defined in the Security Agreement) a first priority security
interest in such intellectual property rights of the Loan Parties as the Agent
may reasonably require, in form and substance satisfactory to the Agent (as
amended, supplemented or otherwise modified from time to time, the
"CONFIRMATION"), duly executed by such Loan Parties as the Agent may reasonably
------------
require and in appropriate form for recording with such filing offices and other
authorities as the Agent may reasonably require.
SECTION 6.02. NEGATIVE COVENANTS. So long as any Advance shall
------------------
remain unpaid, any Letter of Credit shall be outstanding or any Lender shall
have any Commitment hereunder, the Borrower will not, at any time, without the
written consent of the Required Lenders or, if required under Section 9.01, of
all of the Lenders:
(A) LIENS, ETC. Create, incur, assume or suffer to exist, or permit
----------
any of its Subsidiaries to create, incur, assume or suffer to exist, any Lien on
or with respect to any of its properties of any character (including, without
limitation, accounts) whether now owned or hereafter acquired, or sign or file,
or permit any of its Subsidiaries to sign or file, under the Uniform Commercial
Code of any jurisdiction, a financing statement (other than financing statements
filed for protective purposes in connection with true leases) that names the
Borrower or any of its Subsidiaries as debtor, or sign, or permit any of its
Subsidiaries to sign, any security agreement authorizing any secured party
thereunder to file such financing statement, or assign, or permit any of its
Subsidiaries to assign, any accounts or other right to receive income,
excluding, however, from the operation of the foregoing restrictions the
- --------- -------
following:
(i) Liens created by the Collateral Documents and (with the
consent of the Required Lenders) Liens securing Permitted Refinancings;
(ii) Liens set forth on Schedule 6.02(a) and Liens on the same
property securing any refinancing permitted under Section 6.02(b)(ii) of
Debt secured by such Liens;
(iii) Permitted Liens;
(iv) Liens with respect to judgments or attachments which do not
result in a Default under or other breach of any other provision of this
Agreement or any other Loan Document;
(v) purchase money Liens (including the interest of a lessor
under a Capitalized Lease) and Liens on property existing at the time of
acquisition thereof by the Borrower or any of its Subsidiaries securing
Debt permitted by Section 6.02(b)(vi), and Liens on the same property
securing any refinancing of any such Debt (without increase in the
principal amount of such Debt);
(vi) payments to Northholme Partners under the Bermite
Development Agreement; and
(vii) Liens in favor of the City of Santa Clarita (not securing
Debt) created pursuant to the Bermite/Santa Clarita Agreement.
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(B) DEBT. Create, incur, assume or suffer to exist, or permit any of
----
its Subsidiaries to create, incur, assume or suffer to exist, any Debt other
than:
(i) Debt under the Loan Documents;
(ii) the Surviving Debt, and Debt of a Person extending,
renewing, replacing or refinancing Surviving Debt (other than the HLS
Subordinated Debt and any such Surviving Debt consisting of letters of
credit) of that Person (or Debt of the Borrower extending, renewing,
replacing or refinancing Surviving Debt of any of its Subsidiaries) on
terms (when incurred and as amended from time to time) not materially less
favorable to the Person incurring such Debt than the terms of such
Surviving Debt and in any event not resulting in an increase in the
principal amount outstanding thereunder;
(iii) Subordinated Debt (including HLS Subordinated Debt) in an
aggregate outstanding principal amount not to exceed at any time
$50,000,000;
(iv) unsecured Debt (in addition to Debt otherwise expressly
permitted hereunder) of the Borrower and its Subsidiaries in an aggregate
principal amount outstanding at any time under this clause (iv) not to
exceed $5,000,000;
(v) (A) Debt of the Borrower to any Subsidiary of the Borrower,
(B) Debt of any Domestic Guarantor to the Borrower or any Subsidiary of the
Borrower and (C) Debt of any Subsidiary of the Borrower (other than a
Domestic Guarantor) to the Borrower or any Subsidiary of the Borrower,
provided, that the aggregate outstanding principal amount of Debt for all
--------
such Subsidiaries permitted by clause (C) shall not at any time exceed
$3,000,000;
(vi) Capitalized Leases and purchase money Debt incurred to
finance the acquisition of fixed assets, and Debt incurred to refinance
such Capitalized Leases and purchase money Debt, in an aggregate
outstanding principal amount not at any one time exceeding $5,000,000;
(vii) Permitted Refinancings;
(viii) Debt of the Borrower consisting of guaranties of Debt of
the Borrower's Subsidiaries permitted under this Section 6.02(b) or other
Obligations of the Borrower's Subsidiaries permitted hereunder;
(ix) Debt in respect of surety bonds and appeal bonds required in
the ordinary course of business or in connection with the enforcement of
rights or claims of the Borrower or its Subsidiaries or in connection with
judgments which do not result in an Event of Default hereunder or other
breach hereof;
(x) Debt consisting of dividends and other payments permitted by
Section 6.02(g);
(xi) (A) Debt (in an aggregate principal amount not in excess of
$1,000,000 outstanding at any time) in respect of letters of credit (other
than Letters of Credit issued hereunder and other than letters of credit to
the extent backstopped by Letters of Credit issued
56
<PAGE>
hereunder) and (B) Debt in respect of letters of credit to the extent
backstopped by Letters of Credit issued hereunder, provided, that any such
--------
Debt under this clause (xi) is not at any time more than three Business
Days past due;
(xii) Debt of the Borrower with respect to Interest Rate
Contracts entered into to protect against fluctuations in interest rates
(and not for speculative investment), provided, that the aggregate notional
--------
amount of all Interest Rate Contracts outstanding on any day does not
exceed $150,000,000;
(xiii) Debt of the Borrower with respect to Currency Hedging
Agreements, provided, that the aggregate notional amount of all Currency
--------
Hedging Agreements outstanding on any day does not exceed $25,000,000;
(xiv) judgments or attachments secured by Liens permitted by
Section 6.02(a)(iv); and
(xv) obligations under the Bermite Development Agreement to pay
fees or other cash remuneration or compensation to or for the account of
Northholme Partners for development services.
(C) NEGATIVE PLEDGE. Create or otherwise permit to exist or become
---------------
effective, or permit any of its Subsidiaries to create or otherwise permit to
exist or become effective, any consensual restriction on the ability of the
Borrower or any of its Subsidiaries to grant Liens on its property or assets
other than (i) restrictions contained in agreements for the sale or lease of
assets if such sale or lease is permitted hereunder, (ii) restrictions with
respect to the Bermite Land contained in the Bermite/Santa Clarita Agreement,
and (iii) restrictions applicable to assets subject to Liens permitted
hereunder.
(D) MERGERS, ETC. Merge into or consolidate with any Person or permit
------------
any Person to merge into it, or permit any of its Subsidiaries to do so, except
that a Subsidiary of the Borrower may merge into the Borrower or another
Subsidiary of the Borrower, provided, that (A) before and after giving effect to
--------
the merger, no Default has occurred and is continuing and (B) if one Subsidiary
party to the merger is a Guarantor and is not the surviving entity, the merger
shall not be permitted until all actions necessary to cause the surviving entity
to become a Guarantor and to preserve and protect the Liens on the property and
capital stock of the Guarantor created by the Collateral Documents (and the
priority thereof) shall have been taken.
(E) SALES, ETC. OF ASSETS. Sell, lease, transfer or otherwise dispose
---------------------
of, or permit any of its Subsidiaries to sell, lease, transfer or otherwise
dispose of, any Collateral (other than sales of inventory in the ordinary course
of business), the Bermite Land or any substantial part of its assets other than
Collateral, including, without limitation, any manufacturing plant or
substantially all assets constituting the business of a division, branch or
other unit operation, or grant any option or other right to purchase, lease or
otherwise acquire any Collateral other than inventory to be sold in the ordinary
course of its business, except:
(i) sales of equipment by the Borrower or any of its Subsidiaries
to the extent that such equipment is traded in for credit against the
purchase price of similar replacement equipment or that the proceeds of
such sale are promptly applied to the purchase price of such replacement
equipment;
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(ii) sales or other dispositions of obsolete equipment;
(iii) sales of Cash Equivalents for cash;
(iv) transfers which are Investments permitted (when made) under
Section 6.02(f);
(v) the sale, lease, transfer or other disposition by the
Borrower and its Subsidiaries of assets identified on Schedule 6.02(e)(v)
so long as (A) each such sale, lease, transfer or other disposition is for
fair market value, and (B) the consideration received in each such
transaction is cash (except for non-cash consideration in the form of
promissory notes or similar instruments in an aggregate amount for all such
transactions (and all transactions under Section 6.02(e)(vii)) at any time
outstanding not to exceed $4,000,000 so long as each such promissory note
or similar instrument is, promptly upon receipt thereof, pledged to the
Agent pursuant to the Security Agreement);
(vi) the sale, lease, transfer or other disposition of assets in
the ordinary course of business (A) by the Borrower to any Domestic
Guarantor, and (B) by any Subsidiary of the Borrower to the Borrower or any
Domestic Guarantor;
(vii) the sale, lease, transfer or other disposition of assets
by the Borrower and its Subsidiaries not otherwise permitted under this
Section 6.02(e) in an aggregate amount (based on the fair market value of
such assets as determined in good faith by the Borrower) for all such
transactions since the Closing Date not to exceed 10% of the Consolidated
Net Worth of the Borrower and its Subsidiaries as of the most recently
ended fiscal quarter of the Borrower and its Subsidiaries prior to the
consummation of such transaction (which determination shall be made as of
the consummation of each such transaction) so long as (A) each such sale,
lease, transfer or other disposition is for fair market value, and (B) the
consideration received in each such transaction is cash (except for non-
cash consideration in the form of promissory notes or similar instruments
in an aggregate amount for all such transactions (and all transactions
under Section 6.02(e)(v)) at any time outstanding not to exceed $4,000,000
so long as each such promissory note or similar instrument is, promptly
upon receipt thereof, pledged to the Agent pursuant to the Security
Agreement); provided, however, that this clause (vii) shall permit the sale
-------- -------
of capital stock of any Subsidiary of any Person only to the extent that
such sale consists of 100% of such capital stock and is otherwise permitted
hereunder; and
(viii) the sale, lease, transfer or other disposition of
portions of the Bermite Land to the City of Santa Clarita (or school
districts and the like) for public use pursuant to the Bermite/Santa
Clarita Agreement.
(F) INVESTMENTS IN OTHER PERSONS. Make or hold, or permit any of its
----------------------------
Subsidiaries to make or hold, any Investment in any Person other than
(i) Investments in Cash Equivalents;
(ii) Investments existing on the Closing Date and identified on
Schedule 5.01(w) and Investments in Subsidiaries made prior to the Closing
Date;
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(iii) Investments consisting of capital contributions made by
the Borrower or any Domestic Guarantor after the Closing Date to any
Subsidiary of the Borrower, provided that the unrecovered amount of all
--------
such Investments made after the Closing Date in Subsidiaries which are not
wholly owned Domestic Guarantors shall not exceed $1,000,000 and, at the
time any such Investment is made, no Default has occurred and is
continuing;
(iv) Investments consisting of Debt permitted pursuant to Section
6.02(b);
(v) From and after the first anniversary of the Closing Date,
Operating Investments (in addition to Investments otherwise expressly
permitted hereunder) so long as no Default has occurred and is continuing
or would occur as a result of the consummation thereof and so long as:
(A) the amount of each such Investment (or series of related
Investments) does not exceed 10% of the total assets of the Borrower
and its Subsidiaries (determined on a Consolidated basis in accordance
with GAAP at the time of such Investment); and
(B) the cumulative amount of all Operating Investments made
during any period of twelve consecutive months, whether or not
outstanding or recovered, does not exceed $10,000,000;
(vi) other Investments in joint ventures in which the Borrower or
any Domestic Guarantor has an interest, provided that the aggregate amount
--------
of all such Investments in joint ventures pursuant to this clause (vi)
shall not exceed $2,000,000;
(vii) Investments constituting non-cash consideration permitted
to be received in connection with dispositions of assets permitted under
Section 6.02(e);
(viii) other Investments (in addition to Investments otherwise
expressly permitted hereunder) provided, that the sum of the outstanding
--------
amount of all such Investments which are Debt and the unrecovered amount of
all such equity Investments shall not at any time exceed $3,000,000;
(ix) Investments by the Borrower and its Subsidiaries received in
settlement of delinquent obligations of, and other disputes with, customers
and suppliers arising in the ordinary course of business;
(x) Investments in HLS existing on the Closing Date plus, to the
----
extent payable after the Closing Date, amounts payable in respect of the
HLS Subordinated Note (as in effect on the closing date of the HLS
Acquisition) and HLS Contingent Payments;
(xi) the Xyplex Acquisition, subject to the conditions set forth
in Section 4.01(a); and
(xii) Investments consisting of indemnities in favor of the City
of Santa Clarita under the Bermite/Santa Clarita Agreement.
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(G) DIVIDENDS, ETC. Declare or pay any dividends, purchase, redeem,
--------------
retire, defease or otherwise acquire for value any of its capital stock or any
warrants, rights or options to acquire such capital stock, now or hereafter
outstanding, return any capital to its stockholders as such, make any
distribution of assets, capital stock, warrants, rights, options, obligations or
securities to its stockholders as such, or permit any of its Subsidiaries to pay
any dividends or purchase, redeem, retire, defease or otherwise acquire for
value any capital stock of the Borrower or any warrants, rights or options to
acquire such capital stock or to issue or sell (except to the Borrower or a
Domestic Guarantor) any of such Subsidiary's capital stock or any warrants,
rights or options to acquire such capital stock, except:
(i) any dividends or distributions on the capital stock of a
Subsidiary of the Borrower to the Borrower or any of its Subsidiaries and
ratably to any other holder of such capital stock, provided, that if any
--------
such dividends or distributions are paid to any Subsidiary of the Borrower,
then the Subsidiary or Subsidiaries receiving such dividend or distribution
shall simultaneously pay a dividend or distribution to the Borrower in the
same amount;
(ii) so long as no Event of Default has occurred and is
continuing, any dividend by the Borrower or any of its Subsidiaries in
respect of (and paid to the holders of) such Person's common stock which
dividend is payable solely in shares of such Person's common stock;
(iii) so long as no Event of Default has occurred and is
continuing, payments due on outstanding claims or rights with respect to
unclaimed dividends and other similar claims or rights with respect to the
Borrower's capital stock (and the capital stock of present and former
Subsidiaries of the Borrower) listed on Schedule 6.02(g), provided, that
--------
the aggregate amount of such payments since the Closing Date shall not
exceed $2,000,000;
(iv) so long as no Event of Default has occurred and is
continuing, cash dividends on the Series D Participating Convertible
Preferred Stock, par value $1.00 per share, of the Borrower in accordance
with the terms thereof, but in any event in an aggregate amount not
exceeding $5,000 multiplied by the number of years (or fractions thereof)
during which such Securities have been outstanding;
(v) so long as no Event of Default has occurred and is
continuing, cash dividends on the $5.00 Cumulative Convertible Preferred
Stock, par value $1.00 per share, of the Borrower in accordance with the
terms thereof, but in any event in an amount not exceeding $100,000 in any
period of twelve consecutive months since the Closing Date;
(vi) so long as no Event of Default has occurred and is
continuing, cash dividends on the common stock of the Borrower (or cash
payments in connection with the redemption, retirement or acquisition by
the Borrower of its common stock (including in connection with the exercise
of employee stock options)) after the Closing Date, provided, that at the
--------
time of any such dividend or payment (A) the Fixed Charge Coverage Ratio
for the four quarter period ending on the last day of the then most
recently ended fiscal quarter of the Borrower is greater than 1.75 to 1.00
and (B) the cumulative amount of all such dividends and payments does not
exceed $100,000 plus 20% of the Consolidated Net Income of the Borrower and
----
its Subsidiaries from the first day of the first fiscal quarter of the
Borrower that begins after the Closing Date through the last day of the
then most recently ended fiscal quarter of the Borrower and computed on a
cumulative basis in accordance with GAAP;
60
<PAGE>
(vii) so long as no Event of Default has occurred and is
continuing, cash expenditures by the Borrower in connection with the
exercise of employee stock options in an aggregate amount not to exceed
$1,000,000 since the Closing Date;
(viii) so long as no Event of Default has occurred and is
continuing, payments not exceeding $200,000 in the aggregate since the
Closing Date in respect of the redemption or conversion of the $5.00
Cumulative Convertible Preferred Stock, par value $1.00 per share, of the
Borrower; and
(ix) any Foreign Subsidiary may issue or sell capital stock to
Persons other than the Borrower or a Domestic Guarantor to the extent
necessary to comply with applicable laws of non-U.S. jurisdictions relating
to investments by foreigners.
(H) CHANGE IN NATURE OF BUSINESS. Engage, or permit any of its
----------------------------
Subsidiaries to engage, in any business other than (i) the businesses engaged in
by it and its Subsidiaries as of the Closing Date, (ii) any business entered
into in connection with an Operating Investment, and (iii) any business or
activities which it deems substantially similar, related or incidental thereto.
(I) CHARTER AMENDMENTS. Adopt, or permit any of its Subsidiaries to
------------------
adopt, any amendment to the certificate of incorporation or bylaws of the
Borrower or any of its Subsidiaries, other than any amendment which could not
impair the rights or interests of the Agent or any Lender.
(J) ACCOUNTING CHANGES. Make or permit, or permit any of its
------------------
Subsidiaries to make or permit, any change (i) in accounting policies or
reporting practices, except as required or permitted by generally accepted
accounting principles, or (ii) in its fiscal year.
(K) PREPAYMENTS, ETC. OF CERTAIN DEBT; CERTAIN AMENDMENTS. Prepay,
-----------------------------------------------------
redeem, purchase, defease or otherwise satisfy prior to the scheduled maturity
thereof in any manner, or make any payment in violation of any subordination
terms of, any Subordinated Debt or the HLS Subordinated Debt, or amend, modify
or change in any manner any term or condition of any Subordinated Debt, the HLS
Subordinated Debt, the HLS Acquisition Documents or the Xyplex Stock Purchase
Agreement (other than amendments, modifications and changes which, either
individually or in the aggregate, could not adversely affect the rights or
interests of the Agent or any Lender), or permit any of its Subsidiaries to do
any of the foregoing.
(L) PARTNERSHIPS. Become a general partner in any general or limited
------------
partnership, or permit any of its Subsidiaries to do so, other than any
Subsidiary the sole assets of which consist of its interest in such partnership.
(M) MARGIN REGULATIONS. Apply, or permit any of its Subsidiaries to
------------------
apply, the proceeds of any credit extended under this Agreement in any manner
which might cause the extension of credit or the application of such proceeds to
violate any regulation of the Board of Governors of the Federal Reserve System
or to violate the Securities Exchange Act or the Securities Act, in each case as
in effect on the date or dates such credit is extended.
(N) TRANSACTIONS WITH AFFILIATES. Enter into or permit to exist, or
----------------------------
permit any of its Subsidiaries to enter into or permit to exist, directly or
indirectly, any transaction (including, without limitation, the purchase, sale,
lease or exchange of any property or the rendering of any service) with any
61
<PAGE>
Affiliate of the Borrower, on terms that are less favorable to the Borrower or
such Subsidiary than those that might be obtained in an arm's length transaction
at the time from Persons who are not such an Affiliate; provided, however, that
-------- -------
nothing contained in this Section 6.02(n) shall prohibit:
(i) any transaction expressly permitted by Section 6.02(b)(v) and
(viii), 6.02(f) or 6.02(g);
(ii) customary directors' and officers' indemnities;
(iii) customary directors' fees;
(iv) reasonable compensation to officers consistent with past
practice;
(v) any transaction among the Borrower and its Subsidiaries
expressly permitted by Section 6.02(e)(vi); and
(vi) administrative services provided by the Borrower to its
Subsidiaries in the ordinary course of business consistent with past
practice.
(O) HLS CONTINGENT PAYMENTS, ETC. Make or permit to be made any
----------------------------
payment in respect of any HLS Contingent Payment if, at the time of such
payment, the Fixed Charge Coverage Ratio (determined as set forth below in the
case of any HLS Mandatory Payment) for the period of the four most recently
ended fiscal quarters of the Borrower is less than 1.50 to 1.0, or prepay prior
to the scheduled maturity thereof in any manner any HLS Contingent Payments, or
amend, modify or change in any manner Section 2.6 of Exhibit 1.3(c) to the HLS
Acquisition Agreement or any other term or provision of the HLS Acquisition
Documents if such amendment, modification or change would increase the amount
of, or accelerate the date for payment of, any HLS Contingent Payment. For
purposes of determining the amount of any HLS Mandatory Payment which may be
made at any time (and only for such purposes), the term "Fixed Charge Coverage
Ratio" means, the quotient obtained by dividing (a) Consolidated EBITDA of the
Borrower and its Subsidiaries for such period minus the sum of (i) Consolidated
-----
Capital Expenditures of the Borrower and its Subsidiaries in such period, and
(ii) the amount of any HLS Contingent Payments accrued in such period, and (iii)
without duplication of any amount included under the foregoing clause (ii), the
amount of any HLS Mandatory Payments made in such period and any HLS Mandatory
Payments proposed to be made in the next subsequent fiscal quarter, plus the
----
amount of any cash proceeds received by the Borrower or any of its Subsidiaries
in such period (and, without duplication, in the next subsequent fiscal quarter)
in connection with any sale of any capital stock or assets of HLS which
constitutes a "Trigger Event" as defined in Exhibit 1.3(c) to the HLS
Acquisition Agreement (net of all taxes and expenses incurred by the Borrower in
connection with such sale, in each case as determined by the Borrower in good
faith) by (b) the sum of Consolidated Interest Expense for such period plus
----
scheduled payments of the principal amount of (i) the Term Advances required to
be made during such period in accordance with the provisions of Section 2.03(a)
(as such scheduled payments may be reduced by any prepayments of the Term
Advances) and (ii) any other funded debt or other indebtedness for borrowed
money (including Capitalized Leases) of the Borrower and its Subsidiaries
(determined in accordance with GAAP but excluding any Revolving Advances and L/C
Advances) required to be made during such period. Prior to making any HLS
Mandatory Payment, the Borrower shall deliver to the Agent an Officers'
Certificate of the Borrower setting forth the amount of such HLS Mandatory
Payment and the calculation of the Fixed Charge Coverage Ratio (as set forth in
this Section
62
<PAGE>
6.02(o)) for the period of the four most recently ended fiscal quarters of the
Borrower after giving effect to such HLS Mandatory Payment.
SECTION 6.03. REPORTING REQUIREMENTS. So long as any Advance shall
----------------------
remain unpaid, any Letter of Credit shall be outstanding or any Lender shall
have any Commitment hereunder, the Borrower will, unless the Required Lenders
shall otherwise consent in writing, furnish (or cause to be furnished) to the
Lenders:
(A) DEFAULT NOTICE. Promptly, and in any event within five Business
--------------
Days, upon any officer of the Borrower or any of its Subsidiaries obtaining
knowledge of (i) the existence of a Default, or becoming aware that any Lender
has given any notice with respect to a claimed Default under this Agreement, or
(ii) any condition or event which has or would be reasonably likely to have a
Material Adverse Effect, an Officers' Certificate specifying the nature and
period of existence of any such condition or event, or specifying the notice
given by such Lender and the nature of such claimed Default, event or condition,
and what action the Borrower has taken, is taking and proposes to take with
respect thereto.
(B) MONTHLY REPORTS. Not later than 21 Business Days after the end
---------------
of each fiscal month of the Borrower (subject to the proviso set forth below), a
written report for such fiscal month, which shall be signed by the chief
financial officer, controller or treasurer of the Borrower and which shall set
forth, for such month and as of the last Business Day of such month, in
substantially the form submitted to the Lenders (as defined therein) pursuant to
the Original Credit Agreement, Consolidated and consolidating summaries of sales
and profits for that month and for the period from the beginning of the current
fiscal year to the end of that month, showing in comparative form for such month
and year-to-date periods (i) the Consolidated figures for the corresponding
periods of the previous fiscal year and (ii) the Consolidated figures for the
corresponding periods contained in the most recent plan or budget delivered
pursuant to Section 6.03(f); provided, however, that in the case of a fiscal
-------- -------
month which (A) is the last fiscal month of any of the first three fiscal
quarters of a fiscal year, the foregoing report for that month shall be
delivered no later than 45 calendar days after the last day of that month, and
(B) is the last fiscal month of a fiscal year, the foregoing report for that
month shall be delivered no later than 90 calendar days after the last day of
that month.
(C) QUARTERLY FINANCIALS. As soon as practicable, and in any event
--------------------
within 45 days after the end of each fiscal quarter in each fiscal year (or 90
days after the end of fiscal quarters which are the last fiscal quarter of a
fiscal year), the Consolidated balance sheet of the Borrower and its
Subsidiaries as at the end of such quarter and related Consolidated statements
of income and Consolidated statements of cash flow of the Borrower and its
Subsidiaries for such quarter, setting forth in comparative form on the basis of
fiscal quarterly periods in each case (i) the Consolidated figures for the
corresponding periods of the previous fiscal year and (ii) the Consolidated
figures for the corresponding periods contained in the most recent financial
projections delivered pursuant to Section 6.03(f) (or, if no such financial
projections have yet been so delivered, the financial projections delivered
prior to the Closing Date), together with a summary consolidating schedule of
aged accounts and inventory, all in reasonable detail and certified by the chief
financial officer, controller or treasurer of the Borrower as, to the extent
applicable, having been prepared in accordance with GAAP and as fairly
presenting the financial condition, results of operations and cash flows of the
Borrower and its Subsidiaries as at the dates and for the periods indicated,
subject to changes resulting from audit and normal year-end adjustments.
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(D) ANNUAL FINANCIALS. As soon as practicable, and in any event
-----------------
within 90 days after the end of each fiscal year, Consolidated balance sheets of
the Borrower and its Subsidiaries as at the end of such fiscal year and the
related Consolidated statements of income and Consolidated statements of cash
flow of the Borrower and its Subsidiaries for such fiscal year, setting forth in
each case in comparative form the Consolidated figures for the Borrower and its
Subsidiaries for the previous fiscal year, all in reasonable detail and
accompanied by (i) a report thereon of independent certified public accountants
of recognized national standing satisfactory to the Required Lenders, which
report shall be unqualified (or otherwise be acceptable to the Required Lenders)
and shall state without qualification that such Consolidated financial
statements present fairly, in all material respects, the financial position of
the Borrower and its Subsidiaries as at the dates indicated and the results of
their operations and cash flows for the periods indicated in conformity with
GAAP and that the examination by such accountants in connection with such
Consolidated financial statements has been made in accordance with generally
accepted auditing standards, and (ii) a written statement of such independent
certified public accountants that nothing has come to their attention to cause
such independent certified public accountants to believe that the calculations
contained in the Compliance Certificate delivered pursuant to Section 6.03(e)
(together with such financial statements) are inaccurate.
(E) COMPLIANCE CERTIFICATES. Together with each delivery of any
-----------------------
financial statements pursuant to Sections 6.03(c) and 6.03(d), (i) an Officers'
Certificate of the Borrower, stating that the executive officers signatory
thereto have reviewed the terms of this Agreement, and have made, or caused to
be made under their supervision, a review in reasonable detail of the
transactions and condition of the Borrower and its Subsidiaries taken as a
whole, during the accounting period covered by such financial statements, and
that such review has not disclosed the existence during or at the end of such
accounting period, and that the signers do not have knowledge of the existence
as at the date of the Officers' Certificate, of any condition or event which
constitutes a Default, or, if any such condition or event existed or exists,
specifying the nature and period of existence thereof and what action the
Borrower or any Subsidiary has taken, is taking and proposes to take with
respect thereto, and (ii) an Officers' Certificate, in substantially the form of
Exhibit J, demonstrating (and showing calculations) in reasonable detail
compliance at the end of such accounting periods with the covenants contained in
Sections 6.02 and 6.04 (each such Officers' Certificate, a "Compliance
Certificate").
(F) ANNUAL FORECASTS. Within 30 days after the beginning of each
----------------
fiscal year, the five-year plan for the Borrower and its Subsidiaries, with
financial projections (including, without limitation, projected cash flow),
prepared on a quarterly basis for that fiscal year and on an annual basis for
each of the four succeeding fiscal years, and no later than 90 days after the
beginning of each fiscal year, the annual budget of the Borrower and its
Subsidiaries, prepared on a monthly basis for that fiscal year, in each case in
substantially the form submitted to the Lenders (as defined therein) pursuant to
the Original Credit Agreement, together with all supporting details reasonably
requested by the Agent, and certified by the chief executive officer, president,
chief financial officer, controller or treasurer of the Borrower as being based
on the Borrower's best estimates, information and assumptions at the time, and
all such statements to be in reasonable detail and supported by a schedule or
schedules enumerating the assumptions therein.
(G) ERISA EVENTS AND ERISA REPORTS. (i) Promptly and in any event
------------------------------
within 15 days after any Loan Party or any of its ERISA Affiliates knows or has
reason to know that any ERISA Event with respect to any Loan Party or any of its
ERISA Affiliates has occurred, a statement of the chief financial officer,
controller or treasurer of the Borrower describing such ERISA Event and the
action, if any, that such Loan Party or such ERISA Affiliate has taken and
proposes to take with respect thereto
64
<PAGE>
and (ii) promptly and in any event within 15 days after the date any records,
documents or other information must be furnished to the PBGC with respect to any
Plan of any Loan Party or any of its ERISA Affiliates pursuant to Section 4010
of ERISA, a copy of such records, documents and information.
(H) PLAN TERMINATIONS. Promptly and in any event within five Business
-----------------
Days after receipt thereof by any Loan Party or any of its ERISA Affiliates,
copies of each notice from the PBGC stating its intention to terminate any Plan
of any Loan Party or any of its ERISA Affiliates or to have a trustee appointed
to administer any such Plan.
(I) MULTIEMPLOYER PLAN NOTICES. Promptly and in any event within 30
--------------------------
days after receipt thereof by any Loan Party or any of its ERISA Affiliates from
the sponsor of a Multiemployer Plan of any Loan Party or any of its ERISA
Affiliates, copies of each notice concerning (i) the imposition of Withdrawal
Liability in excess of $5,000,000 by any such Multiemployer Plan, or (ii) the
reorganization or termination, within the meaning of Title IV of ERISA, of any
such Multiemployer Plan which has resulted or is reasonably expected to result
in an increase in contributions for any plan year or the imposition of a
liability to the Plan in excess of $1,000,000 or (iii) the amount of liability
incurred, or that may be incurred, by such Loan Party or any of its ERISA
Affiliates in connection with any event described in clause (i) or (ii).
(J) LITIGATION. Promptly upon any officer of the Borrower or any of
----------
its Subsidiaries obtaining knowledge thereof, notice of (i) the institution of,
or threat of, any action, suit, proceeding, governmental investigation or
arbitration against or affecting the Borrower or any such Subsidiary or any
property of the Borrower or any such Subsidiary not previously disclosed in
writing by the Borrower to the Lenders pursuant to this Section 6.03(j) or
Section 5.01(j), or (ii) any material development in any action, suit,
proceeding, governmental investigation or arbitration already disclosed, which,
in either case, has had or is reasonably likely to have a Material Adverse
Effect, and such other information as may be reasonably available to enable the
Lenders and their counsel to evaluate such matters.
(K) SECURITIES REPORTS. Promptly upon becoming available, copies of
------------------
all financial statements, reports and notices, if any, sent or made available
generally by the Borrower to the holders of its securities or filed with the
Securities and Exchange Commission, and of all press releases made available
generally by the Borrower or any of its Subsidiaries to the public concerning
material developments in the business of the Borrower or any such Subsidiary and
all notifications on Schedule 13-D received by the Borrower pursuant to the
Securities Exchange Act and the rules promulgated thereunder evidencing an
increase in ownership of the Borrower's capital stock of 5% or more.
(L) CREDITOR REPORTS. Promptly after the furnishing thereof, copies
----------------
of any material statement or report furnished to any other holder of the
securities of any Loan Party or of any of its Subsidiaries pursuant to the terms
of any indenture, loan or credit or similar agreement relating to Debt in excess
of $5,000,000 and not otherwise required to be furnished to the Lenders pursuant
to any other clause of this Section 6.03.
(M) ENVIRONMENTAL CONDITIONS. Promptly after the occurrence thereof,
------------------------
notice of any condition or occurrence on any property of any Loan Party or any
of its Subsidiaries that would be reasonably likely to (i) form the basis of an
Environmental Action against any Loan Party or any of its Subsidiaries or such
property that would be reasonably likely to have a Material Adverse Effect or
(ii) cause any such property to be subject to any restrictions on ownership,
occupancy, use or transferability under any Environmental Law that would be
reasonably likely to have a Material Adverse Effect.
65
<PAGE>
(N) OTHER INFORMATION. Such other information regarding the business,
-----------------
condition (financial or otherwise), operations, performance, properties or
prospects of any Loan Party or any of its Subsidiaries as any Lender may from
time to time reasonably request.
(O) XYPLEX FINANCIAL STATEMENTS. As soon as practicable, and in any
---------------------------
event not later than 40 days after the Closing Date, a Consolidated balance
sheet of Xyplex and its Subsidiaries as at the end of fiscal year 1995 and the
related Consolidated statements of income and Consolidated statements of cash
flow of Xyplex and its Subsidiaries for such fiscal year, all in reasonable
detail and accompanied by a report thereon of independent certified public
accountants of recognized national standing satisfactory to the Required
Lenders, which report shall be unqualified (or otherwise be acceptable to the
Required Lenders) and shall state without qualification that such Consolidated
financial statements present fairly, in all material respects, the financial
position of Xyplex and its Subsidiaries as at the dates indicated and the
results of their operations and cash flows for the periods indicated in
conformity with GAAP and that the examination by such accountants in connection
with such Consolidated financial statements has been made in accordance with
generally accepted auditing standards.
SECTION 6.04. FINANCIAL COVENANTS. So long as any Advance shall
-------------------
remain unpaid, any Letter of Credit shall be outstanding or any Lender shall
have any Commitment hereunder, the Borrower will, unless the Required Lenders
otherwise consent in writing:
(A) FIXED CHARGE COVERAGE RATIO. Maintain for each period of four
---------------------------
consecutive fiscal quarters ending on the last day of any fiscal quarter set
forth below a Fixed Charge Coverage Ratio of not less than the ratio set forth
opposite such fiscal quarter below:
<TABLE>
<CAPTION>
PERIOD RATIO
------ -----------
<S> <C>
second and third fiscal quarters 1996 1.50 to 1.0
fourth fiscal quarter 1996 and first fiscal quarter 1997 1.65 to 1.0
second fiscal quarter 1997 through third fiscal quarter 1998 1.75 to 1.0
fourth fiscal quarter 1998 and each fiscal quarter thereafter 2.00 to 1.0
</TABLE>
(B) LEVERAGE RATIO. Maintain at all times during each period set
--------------
forth below a ratio of Consolidated Total Debt to Consolidated Total
Capitalization of not greater than the ratio set forth opposite such period
below:
<TABLE>
<CAPTION>
PERIOD RATIO
--------- ----------
<S> <C>
Closing Date to (but not including) end of third fiscal quarter 1996 0.60 to 1.0
end of third fiscal quarter 1996
to (but not including) end of second fiscal quarter 1997 0.55 to 1.0
end of second fiscal quarter 1997
to (but not including) end of fourth fiscal quarter 1997 0.50 to 1.0
</TABLE>
66
<PAGE>
<TABLE>
<S> <C>
end of fourth fiscal quarter 1997
to (but not including) end of third fiscal quarter 1999 0.45 to 1.0
end of third fiscal quarter 1999 and thereafter 0.40 to 1.0
</TABLE>
(C) CASH FLOW RATIO. Maintain at all times during each period set
---------------
forth below a Cash Flow Ratio of not more than the ratio set forth opposite such
period below:
<TABLE>
<CAPTION>
PERIOD RATIO
------ -----------
<S> <C>
Closing Date to (but not including) end of third fiscal quarter 1996 4.50 to 1.0
end of third fiscal quarter 1996
to (but not including) end of fourth fiscal quarter 1996 4.25 to 1.0
end of fourth fiscal quarter 1996
to (but not including) end of second fiscal quarter 1997 4.00 to 1.0
end of second fiscal quarter 1997
to (but not including) end of fourth fiscal quarter 1997 3.75 to 1.0
end of fourth fiscal quarter 1997
to (but not including) end of second fiscal quarter 1998 3.50 to 1.0
end of second fiscal quarter 1998
to (but not including) end of third fiscal quarter 1999 3.00 to 1.0
end of third fiscal quarter 1999 and thereafter 2.75 to 1.0
</TABLE>
(D) CONSOLIDATED NET WORTH. Maintain a Consolidated Net Worth, as
----------------------
determined as of the last day of each fiscal quarter, of not less than the sum
of (i) 50% of cumulative Consolidated Net Income for all fiscal quarters
commencing with and including the fiscal quarter ending July 31, 1996 (but
excluding Consolidated Net Income for any fiscal quarter for which Consolidated
Net Income is a negative number), (ii) 75% of (A) the net proceeds from the
issuance or sale by the Borrower of any of its equity securities (excluding the
proceeds from the exercise of employee stock options) and (B) the amount of
Subordinated Debt and HLS Subordinated Debt, if any, converted to any equity
interest in the Borrower or any of its Subsidiaries, and (iii) $130,000,000.
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<PAGE>
ARTICLE VII
EVENTS OF DEFAULT
SECTION 7.01. EVENTS OF DEFAULT. If any of the following events
-----------------
("EVENTS OF DEFAULT") shall occur and be continuing:
- -------------------
(a) the Borrower shall fail to pay (i) any principal of any Advance
when the same becomes due and payable (or, if such failure to pay is due solely
to a failure of the wire transfer payments system and is not attributable to a
failure of the Borrower to timely initiate (or attempt to initiate) payment,
within one Business Day of the due date thereof), or (ii) interest on any
Advance or any fee payable hereunder or any Loan Party shall fail to make any
other payment under any Loan Document, in each case under this clause (ii)
within three Business Days of the date when the same becomes due and payable; or
(b) any representation or warranty made by any Loan Party (or any of
its officers) under or in connection with any Loan Document shall prove to have
been incorrect in any material respect when made; or
(c) the Borrower shall fail to perform or observe any term, covenant
or agreement contained in Section 6.02, 6.03(a) or 6.04; or
(d) any Loan Party shall fail to perform any other term, covenant or
agreement contained in any Loan Document on its part to be performed or observed
if such failure shall remain unremedied for 30 days after written notice thereof
shall have been given to the Borrower by the Agent or any Lender; or
(e) any Loan Party or any of its Subsidiaries shall fail to pay any
principal of, premium or interest on or any other amount payable in respect of
any Debt (excluding Debt outstanding hereunder) that is outstanding in a
principal amount of at least $5,000,000 in the aggregate (it being understood
that the principal amount of any Hedge Agreement for purposes of this Section
7.01(e) shall be determined on a "marked to market" basis) of such Loan Party or
such Subsidiary (as the case may be), when the same becomes due and payable
(whether by scheduled maturity, required prepayment, acceleration, demand or
otherwise), and such failure shall continue after the applicable grace period,
if any, specified in the agreement or instrument relating to such Debt; or any
other event shall occur or condition shall exist under any agreement or
instrument relating to any such Debt and shall continue after the applicable
grace period, if any, specified in such agreement or instrument, if the effect
of such event or condition is to accelerate, or to permit the acceleration of,
the maturity of such Debt or otherwise to cause, or to permit the holder thereof
to cause, such Debt to mature; or any such Debt shall be declared to be due and
payable or required to be prepaid or redeemed (other than by a regularly
scheduled required prepayment or redemption and other than prepayments required
as a result of the sale of an asset which is permitted hereunder or casualty or
condemnation), purchased or defeased, or an offer to prepay, redeem, purchase or
defease such Debt shall be required to be made, in each case prior to the stated
maturity thereof; or
(f) any Loan Party or any of its Subsidiaries shall generally not pay
its debts as such debts become due, or shall admit in writing its inability to
pay its debts generally, or shall make a general
68
<PAGE>
assignment for the benefit of creditors; or any proceeding shall be instituted
by or against any Loan Party or any of its Subsidiaries seeking to adjudicate it
a bankrupt or insolvent, or seeking liquidation, winding up, reorganization,
arrangement, adjustment, protection, relief, or composition of it or its debts
under any law relating to bankruptcy, insolvency or reorganization or relief of
debtors, or seeking the entry of an order for relief or the appointment of a
receiver, trustee, or other similar official for it or for any substantial part
of its property and, in the case of any such proceeding instituted against it
(but not instituted by it) that is being diligently contested by it in good
faith, either such proceeding shall remain undismissed or unstayed for a period
of 60 days or any of the actions sought in such proceeding (including, without
limitation, the entry of an order for relief against, or the appointment of a
receiver, trustee, custodian or other similar official for, it or any
substantial part of its property) shall occur; or any Loan Party or any of its
Subsidiaries shall take any corporate action to authorize any of the actions set
forth above in this subsection (f); or
(g) any judgment or order for the payment of money in excess of
$5,000,000 shall be rendered against any Loan Party or any of its Subsidiaries
and there shall be any period of 60 consecutive days during which a stay of
enforcement of such judgment or order, by reason of a pending appeal or
otherwise, shall not be in effect; or
(h) any material provision of any Loan Document after delivery thereof
pursuant to the terms hereof or of any other Loan Document shall for any reason
cease to be valid and binding on or enforceable against any Loan Party party to
it, or any such Loan Party shall so state in writing; or
(i) any Collateral Document after delivery thereof pursuant to the
terms hereof or of any other Loan Document shall for any reason (other than
pursuant to the terms thereof) cease to create a valid and perfected first
priority Lien on the Collateral purported to be covered thereby and the Required
Lenders shall have determined that such cessation has or is reasonably likely to
have a material adverse effect on the rights and remedies of the Agent and/or
the Lenders under the Loan Documents; or
(j) (i) any Person or two or more Persons acting in concert shall have
acquired beneficial ownership (within the meaning of Rule 13d-3 of the
Securities and Exchange Commission under the Securities Exchange Act of 1934),
directly or indirectly, of Voting Stock of the Borrower (or other securities
convertible into such Voting Stock) representing 35% or more of the combined
voting power of all Voting Stock of the Borrower; or (ii) during any period of
up to 24 consecutive months, commencing after the date of this Agreement,
individuals who at the beginning of such 24-month period were directors of the
Borrower (together with any new directors whose election by the Borrower's board
of directors or whose nomination for election by the Borrower's shareholders was
approved by a vote of at least two-thirds of the directors then still in office
who either were directors at the beginning of such period or whose election or
nomination for election was previously so approved) shall cease for any reason
to constitute a majority of the board of directors of the Borrower; or (iii) any
Person or two or more Persons acting in concert shall have acquired by contract
or otherwise, or shall have entered into a contract or arrangement that, upon
consummation, will result in its or their acquisition of, control over Voting
Stock of the Borrower (or other securities convertible into such securities)
representing 35% or more of the combined voting power of all Voting Stock of the
Borrower; or
(k) any ERISA Event shall have occurred with respect to a Plan of any
Loan Party or any of its ERISA Affiliates and the sum (determined as of the date
of occurrence of such ERISA Event) of the Insufficiency of such Plan and the
Insufficiency of any and all other Plans of the Loan
69
<PAGE>
Parties and their ERISA Affiliates with respect to which an ERISA Event shall
have occurred and then exist (or the liability of the Loan Parties and their
ERISA Affiliates related to such ERISA Event) exceeds $5,000,000; or
(l) any Loan Party or any of its ERISA Affiliates shall be in default,
as defined in Section 4219(c)(5) of ERISA, with respect to any payment of
Withdrawal Liability and the sum of the outstanding balance of such Withdrawal
Liability and any amounts awarded under Section 502(g)(2) of ERISA and the
outstanding balance of any other Withdrawal Liability that any Loan Party or any
of its ERISA Affiliates has incurred exceeds $5,000,000; or
(m) any Loan Party or any of its ERISA Affiliates shall have been
notified by the sponsor of a Multiemployer Plan of any Loan Party or any of its
ERISA Affiliates that such Multiemployer Plan is in reorganization or is being
terminated, within the meaning of Title IV of ERISA, and as a result of such
reorganization or termination the aggregate annual contributions of the Loan
Parties and their ERISA Affiliates to all Multiemployer Plans that are then in
reorganization or being terminated have been or will be increased over the
amounts contributed to such Multiemployer Plans for the plan years of such
Multiemployer Plans immediately preceding the plan year in which such
reorganization or termination occurs by an amount which would reasonably be
expected to have a Material Adverse Effect; or
(n) there shall be any suspension or debarment of any contracting
rights of the Whittaker Electronic Systems division of the Borrower (or a
division of that division) in effect for more than 120 days from its
commencement (or the Borrower shall learn that any such suspension or debarment
shall be imposed for a period in excess of 120 days) or there shall be a
suspension or debarment of any contracting rights of any other division or
Subsidiary of the Borrower in effect for more than 30 days from its commencement
(or the Borrower shall learn that any such suspension or debarment will be
imposed for a period in excess of 30 days); or
(o) any order, judgment or decree shall be entered against the
Borrower or any of its Subsidiaries decreeing its involuntary dissolution or
split up and such order shall remain undischarged and unstayed for a period in
excess of 60 days; or the Borrower or any of its Subsidiaries shall otherwise
dissolve or cease to exist except as specifically permitted by this Agreement;
then, and in any such event, the Agent (i) shall at the request, or may with the
consent, of the Required Lenders, by notice to the Borrower, declare the Total
Commitments and the obligation of each Appropriate Lender to make Advances and
of each Issuing Bank to issue Letters of Credit to be terminated, whereupon the
same shall forthwith terminate, and (ii) shall at the request, or may with the
consent, of the Required Lenders, by notice to the Borrower, declare the Notes,
if any, the Advances, all interest thereon and all other amounts payable under
this Agreement and the other Loan Documents to be forthwith due and payable,
whereupon any such Notes, all outstanding Advances, all such interest and all
such amounts shall become and be forthwith due and payable, without presentment,
demand, protest or further notice of any kind, all of which are hereby expressly
waived by the Borrower; provided, however, that in the event of an actual or
-------- -------
deemed entry of an order for relief with respect to any Loan Party or any of its
Subsidiaries under the Federal Bankruptcy Code, (x) the Total Commitments and
the obligation of each Lender to make Advances and of each Issuing Bank to issue
Letters of Credit shall automatically be terminated and (y) the Notes, if any,
all outstanding Advances, all such interest and all such amounts shall
automatically become and be due and payable, without presentment, demand,
protest or any notice of any kind, all of which are hereby expressly waived by
the Borrower.
70
<PAGE>
SECTION 7.02. ACTIONS IN RESPECT OF THE LETTERS OF CREDIT UPON
------------------------------------------------
DEFAULT. If any Event of Default shall have occurred and be continuing, the
- -------
Agent may, irrespective of whether it is taking any of the actions described in
Section 7.01 or otherwise, make demand upon the Borrower to, and forthwith upon
such demand the Borrower will, pay to the Agent on behalf of the Lenders in same
day funds at the Agent's office designated in such demand, for deposit in the
L/C Cash Collateral Account, an amount equal to the aggregate Available Amount
of all Letters of Credit then outstanding. If at any time the Agent determines
that any funds held in the L/C Cash Collateral Account are subject to any right
or claim of any Person other than the Agent and the Lenders or that the total
amount of such funds is less than the aggregate Available Amount of all Letters
of Credit, the Borrower will, forthwith upon demand by the Agent, pay to the
Agent, as additional funds to be deposited and held in the L/C Cash Collateral
Account, an amount equal to the excess of (a) such aggregate Available Amount
over (b) the total amount of funds, if any, then held in the L/C Cash Collateral
Account that the Agent determines to be free and clear of any such right and
claim.
ARTICLE VIII
THE AGENT
SECTION 8.01. AUTHORIZATION AND ACTION. Each Lender hereby appoints
------------------------
and authorizes the Agent to enter into the Collateral Documents and to take such
action as agent on its behalf and to exercise such powers and discretion under
this Agreement and the other Loan Documents as are delegated to the Agent by the
terms hereof and thereof, together with such powers and discretion as are
reasonably incidental thereto. As to any matters not expressly provided for by
the Loan Documents (including, without limitation, enforcement or collection of
the Notes, if any, and the Debt resulting from the Advances), the Agent shall
not be required to exercise any discretion or take any action, but shall be
required to act or to refrain from acting (and shall be fully protected in so
acting or refraining from acting) upon the instructions of the Required Lenders,
and such instructions shall be binding upon all Lenders and all holders of
Notes; provided, however, that the Agent shall not be required to take any
-------- -------
action that exposes the Agent to personal liability or that is contrary to this
Agreement or applicable law. The Agent agrees to give to each Lender prompt
notice of each notice given to it by the Borrower pursuant to the terms of this
Agreement.
SECTION 8.02. AGENT'S RELIANCE, ETC. Neither the Agent nor any of
---------------------
its directors, officers, agents or employees shall be liable for any action
taken or omitted to be taken by it or them under or in connection with the Loan
Documents, except for its or their own gross negligence or willful misconduct.
Without limitation of the generality of the foregoing, the Agent: (i) may treat
the payee of any Note as the holder thereof and the Lender that made any Advance
as the holder of the Debt resulting therefrom until the Agent receives and
accepts an Assignment and Acceptance entered into by the Lender that is the
payee of such Note and/or such Lender, as the case may be, as assignor, and an
Eligible Assignee, as assignee, as provided in Section 9.07; (ii) may consult
with legal counsel (including counsel for any Loan Party), independent public
accountants and other experts selected by it and shall not be liable for any
action taken or omitted to be taken in good faith by it in accordance with the
advice of such counsel, accountants or experts; (iii) makes no warranty or
representation to any Lender and shall not be responsible to any Lender for any
statements, warranties or representations made in or in connection with the Loan
Documents; (iv) shall not have any duty to ascertain or to inquire as to the
performance or observance of any of the terms, covenants or conditions of any
Loan Document on the part of any Loan Party or to inspect the property
(including the books and records) of any Loan Party; (v) shall not be
responsible to any Lender for the due execution, legality, validity,
enforceability, genuineness, sufficiency
71
<PAGE>
or value of any Loan Document or any other instrument or document furnished
pursuant hereto; and (vi) shall incur no liability under or in respect of any
Loan Document by acting upon any notice, consent, certificate or other
instrument or writing (which may be by telegram, telecopy, cable or telex)
believed by it to be genuine and signed or sent by the proper party or parties.
SECTION 8.03. NATIONSBANK AND AFFILIATES. With respect to its
--------------------------
Commitments, and the Advances made by it and the Notes, if any, issued to it,
NationsBank shall have the same rights and powers under the Loan Documents as
any other Lender and may exercise the same as though it were not the Agent; and
the term "Lender" or "Lenders" shall, unless otherwise expressly indicated,
include NationsBank in its individual capacity. NationsBank and its affiliates
may accept deposits from, lend money to, act as trustee under indentures of,
accept investment banking engagements from and generally engage in any kind of
business with, any Loan Party, any of its Subsidiaries and any Person who may do
business with or own securities of any Loan Party or any such Subsidiary, all as
if NationsBank were not the Agent and without any duty to account therefor to
the Lenders.
SECTION 8.04. LENDER CREDIT DECISION. Each Lender acknowledges that
----------------------
it has, independently and without reliance upon the Agent or any other Lender
and based on the financial statements referred to in Section 4.01, Section 5.01
and/or Section 6.03, as the case may be, and such other documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Lender also acknowledges that it
will, independently and without reliance upon the Agent or any other Lender and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under this Agreement.
SECTION 8.05. INDEMNIFICATION. (a) Each Lender severally agrees to
---------------
indemnify the Agent (to the extent not promptly reimbursed by the Borrower),
from and against such Lender's ratable share (determined as provided below) of
any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever that may be imposed on, incurred by, or asserted against the Agent in
any way relating to or arising out of the Loan Documents or any action taken or
omitted by the Agent under the Loan Documents; provided, however, that no Lender
-------- -------
shall be liable for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting solely from the Agent's gross negligence or willful misconduct.
Without limitation of the foregoing, each Lender agrees to reimburse the Agent
promptly upon demand for such Lender's ratable share of any costs and expenses
payable by the Borrower under Section 9.04, to the extent that the Agent is not
promptly reimbursed for such costs and expenses by the Borrower. For purposes
of this Section 8.05(a), the Lenders' respective ratable shares of any amount
shall be determined, at any time, according to the sum of (a) the aggregate
principal amount of the Advances outstanding at such time and owing to the
respective Lenders, (b) their respective Revolving Pro Rata Shares, if any, of
the aggregate Available Amount of all Letters of Credit outstanding at such
time, (c) the aggregate unused portions of their respective Term Commitments at
such time and (d) their respective Unused Revolving Credit Commitments at such
time; provided, that the aggregate principal amount of Letter of Credit Advances
--------
owing to any Issuing Bank shall be considered to be owed to the Revolving
Lenders ratably in accordance with their respective Revolving Credit
Commitments. The failure of any Lender to reimburse the Agent promptly upon
demand for its ratable share of any amount required to be paid by the Lenders to
the Agent as provided herein shall not relieve any other Lender of its
obligation hereunder to reimburse the Agent for its ratable share of such
amount, but no Lender shall be responsible for the failure of any other Lender
to reimburse the Agent for such other Lender's ratable share of such amount.
Without prejudice to the survival of any other agreement of any Lender
hereunder,
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<PAGE>
the agreement and obligations of each Lender contained in this Section 8.05(a)
shall survive the payment in full of principal, interest and all other amounts
payable hereunder and under the other Loan Documents.
(b) Each Lender severally agrees to indemnify each Issuing Bank (to
the extent not promptly reimbursed by the Borrower) from and against such
Lender's ratable share (determined as provided below) of any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever that may be
imposed on, incurred by, or asserted against such Issuing Bank in any way
relating to or arising out of the Loan Documents or any action taken or omitted
by such Issuing Bank under the Loan Documents; provided, however, that no Lender
-------- -------
shall be liable for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from such Issuing Bank's gross negligence or willful misconduct.
Without limitation of the foregoing, each Lender agrees to reimburse such
Issuing Bank promptly upon demand for its ratable share of any costs and
expenses (including, without limitation, fees and expenses of counsel) payable
by the Borrower under Section 9.04, to the extent that such Issuing Bank is not
promptly reimbursed for such costs and expenses by the Borrower. For purposes
of this Section 8.05(b), the Lenders' respective ratable shares of any amount
shall be determined, at any time, according to the sum of (a) the aggregate
principal amount of the Advances outstanding at such time and owing to the
respective Lenders, (b) their respective Revolving Pro Rata Shares, if any, of
the aggregate Available Amount of all Letters of Credit outstanding at such
time, (c) the aggregate unused portions of their respective Term Commitments at
such time plus (d) their respective Unused Revolving Credit Commitments at such
----
time; provided, that the aggregate principal amount of Letter of Credit
--------
Advances owing to any Issuing Bank shall be considered to be owed to the
Revolving Lenders ratably in accordance with their respective Revolving Credit
Commitments. The failure of any Lender to reimburse such Issuing Bank promptly
upon demand for its ratable share of any amount required to be paid by the
Lenders to such Issuing Bank as provided herein shall not relieve any other
Lender of its obligation hereunder to reimburse such Issuing Bank for its
ratable share of such amount, but no Lender shall be responsible for the failure
of any other Lender to reimburse such Issuing Bank for such other Lender's
ratable share of such amount. Without prejudice to the survival of any other
agreement of any Lender hereunder, the agreement and obligations of each Lender
contained in this Section 8.05(b) shall survive the payment in full of
principal, interest and all other amounts payable hereunder and under the other
Loan Documents.
SECTION 8.06. SUCCESSOR AGENTS. The Agent may resign as to all (but
----------------
not less than all) of the Facilities at any time by giving written notice
thereof to the Lenders and the Borrower and the Agent may be removed at any time
by written notice with or without cause by the Required Lenders. Upon any such
resignation or removal, the Required Lenders shall have the right to appoint a
successor Agent; provided, however, that so long as no Event of Default has
-------- -------
occurred and is continuing, the Borrower shall have the right to approve any
such successor Agent, such approval not to be unreasonably withheld or delayed.
If no successor Agent shall have been so appointed by the Required Lenders (and
approved by the Borrower, if applicable), and shall have accepted such
appointment, within 30 days after the retiring Agent's giving of notice of
resignation or the Required Lenders' removal of the retiring Agent, then the
retiring Agent may, on behalf of the Lenders, appoint a successor Agent, which
shall be a commercial bank organized under the laws of the United States or of
any State thereof and having a combined capital and surplus of at least
$500,000,000; provided, however, that so long as no Event of Default has
-------- -------
occurred and is continuing, the Borrower shall have the right to approve any
such successor Agent, such approval not to be unreasonably withheld or delayed.
Upon the acceptance of any appointment as Agent hereunder by a successor Agent,
and upon the execution and filing or recording of
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such financing statements, or amendments thereto and such other instruments or
notices, as may be necessary or desirable, or as the Required Lenders may
request, in order to continue the perfection of the Liens granted or purported
to be granted by the Collateral Documents, such successor Agent shall succeed to
and become vested with all the rights, powers, discretion, privileges and duties
of the retiring Agent, and the retiring Agent shall be discharged from its
duties and obligations under the Loan Documents. After any retiring Agent's
resignation or removal hereunder, the provisions of this Article VIII shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was Agent under this Agreement.
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. AMENDMENTS, ETC.; RELEASE OF COLLATERAL.
---------------------------------------
(A) AMENDMENTS, ETC. No amendment or waiver of any provision of this
----------------
Agreement, the Notes, if any, or any other Loan Document nor consent to any
departure by the Borrower therefrom, shall in any event be effective unless the
same shall be in writing and signed by the Borrower and the Required Lenders,
and then such waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given; provided, however, that no
-------- -------
amendment, waiver or consent shall, unless in writing and signed by the Borrower
and the Requisite Lenders, waive any mandatory reduction of the Revolving
Commitments required pursuant to Section 2.04(b) or any mandatory prepayment
required pursuant to Section 2.05(b)(ii) through 2.05(b)(vi); provided, further,
-------- -------
that no amendment, waiver or consent shall, unless in writing and signed by the
Borrower and all the Lenders, do any of the following at any time: (A) change
the percentage of the Commitments or of the aggregate unpaid principal amount of
the Notes, if any, and Advances, or the number of Lenders, that shall be
required for the Lenders or any of them to take any action hereunder, (B) amend
this Section 9.01, (C) subject the Lenders to any additional obligations, (D)
reduce the principal of, or interest on, the Notes or Advances or any fees or
other amounts payable hereunder, or (E) postpone any date fixed for any payment
of principal of, or interest on, the Notes or Advances or any fees or other
amounts payable hereunder; provided further that no amendment, waiver or consent
-------- -------
shall, unless in writing and signed by the L/C Bank and each other Lender that
is then an Issuing Bank, in addition to the Lenders required above to take such
action, affect the rights or obligations of the Issuing Banks under this
Agreement; and provided further that no amendment, waiver or consent shall,
-------- -------
unless in writing and signed by the Agent in addition to the Lenders required
above to take such action, affect the rights or duties of the Agent under this
Agreement or any Note or any other Loan Documents.
(B) RELEASE OF COLLATERAL. So long as no Default under Section
---------------------
7.01(a) or (f) and no Event of Default has occurred and is continuing: (i) upon
the request of the Borrower, and without the consent of the Lenders or the
Required Lenders, the Agent is authorized to (A) release from the Lien of any
Collateral Document any item or items of Collateral comprising less than all or
substantially all of the Collateral at the time of such release (and, if such
Collateral consists of all of the Borrower's or any of its Subsidiaries'
interest in any Guarantor, to simultaneously release such Guarantor from its
obligations under the Guaranty and the Collateral Documents) and (B) to execute
any documents or instruments reasonably requested by the Borrower (as determined
by the Agent) in connection therewith, but in each case only if (A) such release
is requested in conjunction with the consummation of any sale or other
disposition of such Collateral by the Borrower or any of its Subsidiaries (or
the creation of any Lien) that is not prohibited by this Agreement, and (B) the
Borrower has delivered to the Agent (which shall deliver a copy to each Lender)
an Officers' Certificate certifying that no Default under Section 7.01(a) or (f)
or
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Event of Default has occurred and is continuing and that such sale or other
disposition (or such creation of a Lien) is not prohibited by this Agreement
(and the Agent shall be entitled to rely on such Officers' Certificate in the
absence of actual knowledge to the contrary).
SECTION 9.02. NOTICES, ETC. Except as otherwise expressly provided
------------
herein, all notices and other communications provided for hereunder shall be in
writing (including telegraphic, telecopy, telex or cable communication) and
mailed, telegraphed, telecopied, telexed, cabled or delivered, if to the
Borrower, at its address at 1955 N. Surveyor Avenue, Simi Valley, California
93063-3386, Telecopier No.: (805) 584-4182, Attention: John K. Otto; if to any
Initial Lender, at its Domestic Lending Office specified opposite its name on
Schedule I hereto; if to any other Lender, at its Domestic Lending Office
specified in the Assignment and Acceptance pursuant to which it became a Lender;
and if to the Agent, at its address at 901 Main Street, 13th Floor, Dallas,
Texas 75202, Telecopier No.: (214) 508-2515, Attention: Marie Lancaster,
Agency Services, with a copy to NationsBank, 444 South Flower Street, Suite
4100, Los Angeles, California 90071, Attn: Andrea Defterios; or, as to each
party, at such other address as shall be designated by such party in a written
notice to the other parties. All such notices and communications shall, when
mailed, telegraphed, telecopied, telexed or cabled, be effective when deposited
in the mails, delivered to the telegraph company, transmitted by telecopier,
confirmed by telex answerback or delivered to the cable company, respectively,
except that notices and communications to the Agent pursuant to Article II, IV
or VIII shall not be effective until received by the Agent.
SECTION 9.03. NO WAIVER; REMEDIES. No failure on the part of any
-------------------
Lender or the Agent to exercise, and no delay in exercising, any right hereunder
or under any Note shall operate as a waiver thereof; nor shall any single or
partial exercise of any such right preclude any other or further exercise
thereof or the exercise of any other right. The remedies herein provided are
cumulative and not exclusive of any remedies provided by law.
SECTION 9.04. COSTS, EXPENSES. (a) The Borrower agrees to pay on
---------------
demand (i) all reasonable costs and expenses of the Agent and the Arranger in
connection with the preparation, execution, delivery, administration,
modification and amendment of the Loan Documents (including, without limitation,
(A) all due diligence, syndication, transportation, computer, duplication,
appraisal, audit, insurance, consultant, search, filing and recording fees and
expenses and (B) the reasonable fees and expenses of counsel for the Agent with
respect thereto, with respect to advising the Agent as to its rights and
responsibilities, or the perfection, protection or preservation of rights or
interests, under the Loan Documents, with respect to negotiations with any Loan
Party or with other creditors of any Loan Party or any of its Subsidiaries
arising out of any Default or any events or circumstances that may give rise to
a Default and with respect to presenting claims in or otherwise participating in
or monitoring any bankruptcy, insolvency or other similar proceeding involving
creditors' rights generally and any proceeding ancillary thereto) and (ii) all
costs and expenses of the Agent and the Lenders in connection with the
enforcement of the Loan Documents, whether in any action, suit or litigation,
any bankruptcy, insolvency or other similar proceeding affecting creditors'
rights generally or otherwise (including, without limitation, the reasonable
fees and expenses of counsel for the Agent and each Lender with respect
thereto).
(b) The Borrower agrees to indemnify and hold harmless the Agent, the
Arranger, each Lender, each Original Lender, each Issuing Bank and each Original
Issuing Bank and each of their respective Affiliates and their officers,
directors, employees, agents and advisors (each, an "INDEMNIFIED PARTY") from
-----------------
and against any and all claims, damages, losses, liabilities and expenses
(including, without limitation, reasonable fees and expenses of counsel) that
may be incurred by or asserted or awarded
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against any Indemnified Party, in each case arising out of or in connection with
or by reason of, or in connection with the preparation for a defense of, any
investigation, litigation or proceeding arising out of, related to or in
connection with (i) any Advances or Original Advances or Letters of Credit or
Original Letters of Credit, any use of the proceeds thereof, any syndication by
NationsBank and the Arranger of the Advances or the Commitments, or any of the
transactions contemplated hereby, by the other Loan Documents, by the Original
Credit Agreement or by the Original Loan Documents and any enforcement of rights
and remedies hereunder or thereunder, (ii) any acquisition or proposed
acquisition by the Borrower or any of its Subsidiaries (including, without
limitation, the Xyplex Acquisition), or (iii) the actual or alleged presence of
Hazardous Materials on any property of the Borrower or any of its Subsidiaries
or any Environmental Action relating in any way to the Borrower or any of its
Subsidiaries, in each case whether or not such investigation, litigation or
proceeding is brought by any Loan Party, its directors, shareholders or
creditors or an Indemnified Party or any Indemnified Party is otherwise a party
thereto and whether or not the transactions contemplated hereby are consummated,
except to the extent such claim, damage, loss, liability or expense is found in
a final, non-appealable judgment by a court of competent jurisdiction to have
resulted solely from such Indemnified Party's gross negligence or willful
misconduct.
(c) If any payment of principal of, or Conversion of, any Eurodollar
Rate Advance is made by the Borrower to or for the account of a Lender other
than on the last day of the Interest Period for such Advance, as a result of a
prepayment pursuant to Section 2.05, a payment or Conversion pursuant to Section
2.06 or 2.08, acceleration of the maturity of the Notes or Advances pursuant to
Section 7.01 or for any other reason, or by an Eligible Assignee to a Lender
other than on the last day of the Interest Period for such Advance upon an
assignment of rights and obligations under this Agreement pursuant to Section
9.07 as a result of a demand by the Borrower pursuant to Section 9.07(a), the
Borrower shall, upon demand by such Lender (with a copy of such demand to the
Agent), pay to the Agent for the account of such Lender any amounts required to
compensate such Lender for any additional losses, costs or expenses that it may
reasonably incur as a result of such payment, including, without limitation, any
loss (including loss of anticipated profits), cost or expense incurred by reason
of the liquidation or reemployment of deposits or other funds acquired by any
Lender to fund or maintain such Advance. A certificate as to such amounts
submitted to the Borrower and the Agent by such Lender shall be conclusive and
binding for all purposes, absent manifest error. Any calculation or
determination under Sections 2.06, 2.08 or this Section 9.04(c) shall be made on
the assumption that each Lender has funded or will fund each Eurodollar Rate
Advance in the applicable interbank market, provided that each such Lender shall
be under no obligation to actually fund any Eurodollar Rate Advance in such
manner.
(d) Anything contained herein to the contrary notwithstanding, if any
Lender has sold a participation in any of its rights or obligations hereunder
and is entitled to any compensation, reimbursement or other payment under
Section 2.06, 2.08, 2.10, or this Section 9.04, the amount payable to such
Lender shall be determined and calculated as though no such participation had
been sold.
SECTION 9.05. RIGHT OF SET-OFF. Upon (a) the occurrence and during
----------------
the continuance of any Event of Default and (b) the making of the request or the
granting of the consent specified by Section 7.01 to authorize the Agent to
declare the Notes and Advances due and payable pursuant to the provisions of
Section 7.01, each Lender and each of is Affiliates is hereby authorized at any
time and from time to time, to the fullest extent permitted by law, to set off
and otherwise apply any and all deposits (general or special, time or demand,
provisional or final) at any time held and other indebtedness at any time owing
by such Lender or such Affiliate to or for the credit or the account of the
Borrower against any and all of the Obligations of the Borrower now or hereafter
existing under this Agreement and
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the Note or Notes, if any, held by such Lender, irrespective of whether such
Lender shall have made any demand under this Agreement or any such Note or Notes
and although such obligations may be unmatured. Each Lender agrees promptly to
notify the Borrower after any such set-off and application; provided, however,
-------- -------
that the failure to give such notice shall not, to the fullest extent permitted
by law, affect the validity of such set-off and application. The rights of each
Lender and its Affiliates under this Section are in addition to other rights and
remedies (including, without limitation, other rights of set-off) that such
Lender and its Affiliates may have.
SECTION 9.06. BINDING EFFECT. (a) This Agreement shall become
--------------
effective when it shall have been executed by the Borrower and the Agent and
when the Agent shall have been notified by each Initial Lender that such Initial
Lender has executed it and thereafter shall be binding upon and inure to the
benefit of the Borrower, the Agent and each Lender and their respective
successors and assigns, except that the Borrower shall not have the right to
assign its rights hereunder or any interest herein without the prior written
consent of the Lenders.
(b) On and after the Closing Date, each reference in the other Loan
Documents to "the Credit Agreement", "thereunder", "thereof", or words of like
import referring to the Credit Agreement shall mean and be a reference to this
Agreement.
(c) All other Loan Documents existing on the Closing Date are and
shall continue to be in full force and effect and are hereby in all respects
ratified and confirmed. Without limiting the generality of the foregoing, the
Collateral Documents existing on the Closing Date and all of the Collateral
described therein do and shall continue to secure the payment of all of the
Original Obligations (now evidenced by this Agreement and the Notes) as well as
the other Obligations of the Borrower under this Agreement and the Notes and
other Loan Documents.
SECTION 9.07. ASSIGNMENTS AND PARTICIPATIONS. (a) Each Lender may
------------------------------
and, if demanded by the Borrower (following a demand by such Lender for
compensation pursuant to Section 2.08 or 2.10 upon at least 10 Business Days'
notice to such Lender and the Agent), will, assign to one or more banks or other
entities all or a portion of its rights and obligations under this Agreement
(including, without limitation, all or a portion of its Commitments and the
Advances owing to it and the Note or Notes, if any, held by it); provided,
--------
however, that (i) each such assignment shall (unless otherwise consented to in
- -------
writing by the Agent and the Borrower) be of a uniform, and not a varying,
percentage of all rights and obligations under and in respect of all of the
Facilities, (ii) except in the case of an assignment to a Person that,
immediately prior to such assignment, was a Lender or an assignment of all of a
Lender's rights and obligations under this Agreement, the aggregate amount of
the Commitments and Advances of the assigning Lender being assigned pursuant to
each such assignment shall in no event be less than $10,000,000 and shall be an
integral multiple of $1,000,000, (iii) each such assignment shall be to an
Eligible Assignee, (iv) each such assignment made as a result of a demand by the
Borrower pursuant to this Section 9.07(a) shall be arranged by the Borrower
after consultation with the Agent and shall be either an assignment of all of
the rights and obligations of the assigning Lender under this Agreement or an
assignment of a portion of such rights and obligations made concurrently with
another such assignment or other such assignments that together cover all of the
rights and obligations of the assigning Lender under this Agreement, (v) no
Lender shall be obligated to make any such assignment as a result of a demand by
the Borrower pursuant to this Section 9.07(a) unless and until such Lender shall
have received one or more payments from either the Borrower or one or more
Eligible Assignees in an aggregate amount at least equal to the aggregate
outstanding principal amount of the Advances owing to such Lender, together with
accrued interest thereon to the date of payment of such principal amount
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and all other amounts payable to such Lender under this Agreement, and (vi) the
parties to each such assignment shall execute and deliver to the Agent, for its
acceptance and recording in the Register, an Assignment and Acceptance, together
with any Note or Notes subject to such assignment and a processing and
recordation fee of $3,500. Upon such execution, delivery, acceptance and
recording, from and after the effective date specified in such Assignment and
Acceptance, (x) the assignee thereunder shall be a party hereto and, to the
extent that rights and obligations hereunder have been assigned to it pursuant
to such Assignment and Acceptance, have the rights and obligations of a Lender
hereunder and (y) the Lender assignor thereunder shall, to the extent that
rights and obligations hereunder have been assigned by it pursuant to such
Assignment and Acceptance, relinquish its rights and be released from its
obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all or the remaining portion of an assigning Lender's rights
and obligations under this Agreement, such Lender shall cease to be a party
hereto).
(b) By executing and delivering an Assignment and Acceptance, the
Lender assignor thereunder and the assignee thereunder confirm to and agree with
each other and the other parties hereto as follows: (i) other than as provided
in such Assignment and Acceptance, such assigning Lender makes no representation
or warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this Agreement or
the execution, legality, validity, enforceability, genuineness, sufficiency or
value of this Agreement or any other instrument or document furnished pursuant
hereto; (ii) such assigning Lender makes no representation or warranty and
assumes no responsibility with respect to the financial condition of any Loan
Party or the performance or observance by any Loan Party of any of its
obligations under this Agreement or any other instrument or document furnished
pursuant hereto; (iii) such assignee confirms that it has received a copy of
this Agreement, together with copies of the financial statements referred to in
Section 5.01 and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into such
Assignment and Acceptance; (iv) such assignee will, independently and without
reliance upon the Agent, such assigning Lender or any other Lender and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
this Agreement; (v) such assignee confirms that it is an Eligible Assignee; (vi)
such assignee appoints and authorizes the Agent to take such action as agent on
its behalf and to exercise such powers and discretion under this Agreement as
are delegated to the Agent by the terms hereof, together with such powers and
discretion as are reasonably incidental thereto; and (vii) such assignee agrees
that it will perform in accordance with their terms all of the obligations that
by the terms of this Agreement are required to be performed by it as a Lender.
(c) The Agent shall maintain at its address referred to in Section
9.02 a copy of each Assignment and Acceptance delivered to and accepted by it
and a register for the recordation of the names and addresses of the Lenders and
the Commitment under each Facility of, and principal amount of the Advances
owing to, each Lender from time to time (the "REGISTER"). The entries in the
--------
Register shall be conclusive and binding for all purposes, absent manifest
error, and the Borrower, the Agent and the Lenders may treat each Person whose
name is recorded in the Register as a Lender hereunder for all purposes of this
Agreement. The Register shall be available for inspection by the Borrower or
any Lender at any reasonable time and from time to time upon reasonable prior
notice.
(d) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender and an assignee, together with any Note or Notes subject to
such assignment, the Agent shall, if such Assignment and Acceptance has been
completed and is in substantially the form of Exhibit D hereto, (i) accept such
Assignment and Acceptance, (ii) record the information contained therein in the
Register
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and (iii) give prompt notice thereof to the Borrower. Within five Business Days
after its receipt of such notice, the Borrower, at its own expense, shall, if so
requested in writing, execute and deliver to the Agent in exchange for any
surrendered Note or Notes a new Note or new Notes to the order of such Eligible
Assignee in an amount equal to the Commitment assumed by it under a Facility
pursuant to such Assignment and Acceptance and, if the assigning Lender has
retained a Commitment hereunder under such Facility, a new Note or New Notes to
the order of the assigning Lender in an amount equal to the Commitments retained
by it hereunder. Such new Note or Notes shall be in an aggregate principal
amount equal to the aggregate principal amount of such surrendered Note or
Notes, shall be dated the effective date of such Assignment and Acceptance and
shall otherwise be in substantially the form of the applicable Exhibit hereto.
(e) Each Lender may sell participations in or to all or a portion of
its rights and obligations under this Agreement (including, without limitation,
all or a portion of its Commitments, the Advances owing to it and any Note or
Notes held by it); provided, however, that (i) such Lender's obligations under
-------- -------
this Agreement (including, without limitation, its Commitments) shall remain
unchanged, (ii) such Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations, (iii) such Lender shall remain
the holder of any such Note and such Advances for all purposes of this
Agreement, (iv) the Borrower, the Agent and the other Lenders shall continue to
deal solely and directly with such Lender in connection with such Lender's
rights and obligations under this Agreement and (v) no participant under any
such participation shall have any right to approve any amendment or waiver of
any provision of any Loan Document, or any consent to any departure by any Loan
Party therefrom, except to the extent that such amendment, waiver or consent
would reduce the principal of, or interest on, the Notes or Advances or any fees
or other amounts payable hereunder, in each case to the extent subject to such
participation, or postpone any date fixed for any payment of principal of, or
interest on, the Notes or Advances or any fees or other amounts payable
hereunder, in each case to the extent subject to such participation.
(f) Any Lender may, in connection with any assignment or participation
or proposed assignment or participation pursuant to this Section 9.07, disclose
to the assignee or participant or proposed assignee or participant, any
information relating to the Borrower and its Subsidiaries furnished to such
Lender by or on behalf of the Borrower or any of its Subsidiaries; provided,
--------
however, that, prior to any such disclosure, the assignee or participant or
- -------
proposed assignee or participant shall agree to preserve (in accordance with
Section 9.16) the confidentiality of any Confidential Information received by it
from such Lender.
(g) Notwithstanding any other provision set forth in this Agreement,
any Lender may at any time create a security interest in all or any portion of
its rights under this Agreement (including, without limitation, the Advances
owing to it and any Note or Notes held by it) in favor of any Federal Reserve
Bank in accordance with Regulation A of the Board of Governors of the Federal
Reserve System.
SECTION 9.08. GOVERNING LAW. This Agreement and the Notes, if any,
-------------
shall be governed by, and construed in accordance with, the laws of the State of
New York.
SECTION 9.09. EXECUTION IN COUNTERPARTS. This Agreement may be
-------------------------
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of a signature page to this
Agreement by telecopier shall be effective as delivery of a manually executed
counterpart of this Agreement.
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SECTION 9.10. NO LIABILITY OF THE ISSUING BANKS. The Borrower
---------------------------------
assumes all risks of the acts or omissions of any beneficiary or transferee of
any Letter of Credit with respect to its use of such Letter of Credit. Neither
any Issuing Bank nor any of its officers or directors shall be liable or
responsible for: (a) the use that may be made of any Letter of Credit or any
acts or omissions of any beneficiary or transferee in connection therewith; (b)
the validity, sufficiency or genuineness of documents, or of any endorsement
thereon, even if such documents should prove to be in any or all respects
invalid, insufficient, fraudulent or forged; (c) payment by such Issuing Bank
against presentation of documents that do not comply with the terms of a Letter
of Credit, including failure of any documents to bear any reference or adequate
reference to the Letter of Credit; or (d) any other circumstances whatsoever in
making or failing to make payment under any Letter of Credit, except that the
------
Borrower shall have a claim against such Issuing Bank, and such Issuing Bank
shall be liable to the Borrower, to the extent of any direct, but not
consequential, damages suffered by the Borrower that the Borrower proves were
caused solely by (i) such Issuing Bank's willful misconduct or gross negligence
in determining whether documents presented under any Letter of Credit comply
with the terms of the Letter of Credit or (ii) such Issuing Bank's willful
failure to make lawful payment under a Letter of Credit after the presentation
to it of a draft and certificates strictly complying with the terms and
conditions of the Letter of Credit. In furtherance and not in limitation of the
foregoing, such 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.
SECTION 9.11. CHANGE IN ACCOUNTING PRINCIPLES. Except as otherwise
-------------------------------
provided herein, if any changes in accounting principles from those used in the
preparation of the financial statements referred to in Section 5.01(g) are
hereafter required or permitted by the rules, regulations, pronouncements and
opinions of the Financial Accounting Standards Board or the American Institute
of Certified Public Accountants (or successors thereto or agencies with similar
functions) and are adopted by the Borrower with the agreement of its independent
certified public accountants and such changes result in a change in the method
of calculation of any of the financial covenants, standards or terms found in
Sections 6.02 or 6.04, the parties hereto agree to enter into negotiations in
order to amend such provisions so as to reflect equitably such changes with the
desired result that the criteria for evaluating the Borrower's financial
condition shall be the same after such changes as if such changes had not been
made; provided, that no change in generally accepted accounting principles that
--------
would affect the method of calculation of any of the financial covenants,
standards or terms shall be given effect in such calculations until such
provisions are amended, in a manner satisfactory to the Required Lenders, to so
reflect such change in accounting principles.
SECTION 9.12. LIMITATION OF LIABILITY. No claim may be made by the
-----------------------
Borrower, any Lender or any other Person against the Agent, or any Lender or the
Affiliates, directors, officers, employees, or agents of any of them for any
special, indirect, consequential or punitive damages in respect of any claim for
breach of contract or any other theory of liability arising out of or related to
the transactions contemplated by this Agreement, or any act, omission or event
occurring in connection therewith, and the Borrower and each Lender hereby
waives, releases and agrees not to sue upon any claim for any such damages,
whether or not accrued and whether or not known or suspected to exist in its
favor.
SECTION 9.13. CONSENT TO JURISDICTION AND SERVICE OF PROCESS. ALL
----------------------------------------------
JUDICIAL PROCEEDINGS BROUGHT AGAINST THE BORROWER WITH RESPECT TO THIS AGREEMENT
OR ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF
COMPETENT JURISDICTION IN THE STATE OF NEW YORK, AND BY EXECUTION AND
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DELIVERY OF THIS AGREEMENT, THE BORROWER ACCEPTS, FOR ITSELF AND IN CONNECTION
WITH ITS PROPERTIES, GENERALLY AND UNCONDITIONALLY, THE NONEXCLUSIVE
JURISDICTION OF THE AFORESAID COURTS, AND IRREVOCABLY AGREES TO BE BOUND BY ANY
FINAL JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE
OTHER LOAN DOCUMENTS FROM WHICH NO APPEAL HAS BEEN TAKEN OR IS AVAILABLE. THE
BORROWER IRREVOCABLY DESIGNATES AND APPOINTS CT CORPORATION SYSTEMS, 1633
BROADWAY, NEW YORK, NEW YORK 10019 AS ITS AGENT TO RECEIVE ON ITS BEHALF SERVICE
OF ALL PROCESS IN ANY SUCH COURT, SUCH SERVICE BEING HEREBY ACKNOWLEDGED BY SUCH
PERSONS TO BE EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT. THE BORROWER
IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OF ANY OF THE AFOREMENTIONED
COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY
REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO ITS NOTICE ADDRESS SPECIFIED
ON THE SIGNATURE PAGES HEREOF, SUCH SERVICE TO BECOME EFFECTIVE 10 DAYS AFTER
SUCH MAILING. EACH OF THE BORROWER, THE AGENT AND THE LENDERS IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION
(INCLUDING WITHOUT LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON
THE GROUNDS OF FORUM NON CONVENIENS) WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
BRINGING OF ANY SUCH ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT IN ANY JURISDICTION SET FORTH ABOVE. NOTHING HEREIN SHALL
AFFECT THE RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL
LIMIT THE RIGHT OF ANY LENDER TO BRING PROCEEDINGS AGAINST THE BORROWER IN THE
COURTS OF ANY OTHER JURISDICTION.
SECTION 9.14. PERFORMANCE OF OBLIGATIONS. The Borrower agrees that
--------------------------
the Agent may, but shall have no obligation to, make any payment or perform any
act required of the Borrower under any Loan Document or take any other action
which the Agent in its discretion deems necessary or desirable to protect or
preserve the Collateral, including, without limitation, any action to (a) pay or
discharge taxes, liens, security interests or other encumbrances levied or
placed on or threatened against any Collateral and (b) effect any repairs or
obtain any insurance called for by the terms of any of the Loan Documents and to
pay all or any part of the premiums therefor and the costs thereof. The Agent
shall use its best efforts to give the Borrower notice of any action taken under
this Section 9.14 prior to the taking of such action or promptly thereafter.
Any funds advanced by the Agent under this Section 9.14 shall constitute
Obligations hereunder and shall be repaid by the Borrower on demand with
interest from the date of disbursement by the Agent to the date of payment by
the Borrower accrued at the rate applicable at the time interest accrues to a
Borrowing of Base Rate Advances.
SECTION 9.15. LENDERS' ACTION FOR THEIR OWN PROTECTION ONLY. The
---------------------------------------------
authority herein conferred upon the Agent and the Lenders, and any action taken
by the Agent and the Lenders to review, approve, consult with or be consulted by
or otherwise affect the business and operations of the Borrower, will be
exercised and taken by the Lenders, their agents and representatives for their
own protection only and may not be relied upon by the Borrower or any third
party for any purposes whatever; and neither the Lenders, nor their agents or
representatives shall be assumed to have assumed any responsibility to the
Borrower with respect to any such action herein authorized or taken with respect
to the Borrower, or the business or operations of the Borrower. Any review,
investigation or inspection conducted by the Lenders or their agents or
representatives in order to verify independently the Borrower's satisfaction of
any conditions precedent to the disbursement of any Advances, the Borrower's
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performance of any of its covenants, agreements and obligations under the Loan
Documents, or the validity of any representations and warranties made by the
Borrower under the Loan Documents (regardless of whether or not the party
conducting such review, investigation or inspection should have discovered that
any of such conditions precedent were not satisfied or that any such covenants,
agreements or obligations were not performed or that any such representations or
warranties were not true) shall not affect (or constitute a waiver by the
Lenders of) (a) any of the representations and warranties made by the Borrower
under the Loan Documents or the Lenders' reliance thereon or (b) the Lenders'
reliance upon any certifications of the Borrower, its agents or representatives
required under the Loan Documents or any other facts, information or reports
furnished to the Lenders by the Borrower, its agents or representatives.
SECTION 9.16. CONFIDENTIALITY; DISCLOSURE.
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(a) The Agent and each of the Lenders shall hold all non-public
information obtained pursuant to the requirements of this Agreement (which has
been identified as such by the Borrower) in accordance with its customary
procedures for handling confidential information of this nature and in
accordance with safe and sound banking practices and will use such information
only in connection with the transactions contemplated by this Agreement, and in
any event may make disclosure of any such information (i) to the Agent or any
Lender, (ii) to the extent required by law (including statute, rule, regulation
or judicial process), (iii) to counsel for any Lender or the Agent or to their
respective accountants, each of whom shall also be bound by the confidentiality
obligations set forth herein, (iv) to bank examiners and auditors and
appropriate government examining authorities, (v) to the extent necessary or
appropriate in connection with any litigation to which any Lender or the Agent
is a party, or (vi) to any actual or prospective participant in or assignee of
any rights and obligations of such Lender under this Agreement.
(b) Nothing in this Agreement shall require the Borrower to disclose
any information if such disclosure would violate any Federal government
prohibitions on the disclosure of classified or confidential information.
SECTION 9.17. ENTIRE AGREEMENT. This Agreement, taken together with
----------------
all of the other Loan Documents and all certificates and other documents
delivered by the Borrower to the Agent or the Lenders, embodies the entire
agreement and supersedes all prior agreements, written and oral, relating to the
subject matter hereof (other than any provisions of the commitment letter dated
February 29, 1996 from NationsBank to the Borrower, and agreed to and accepted
by the Borrower on March 1, 1996 which relate in any way to the syndication of
the Commitments and the Advances hereunder).
SECTION 9.18. WAIVER OF JURY TRIAL. EACH OF THE BORROWER, THE AGENT
--------------------
AND THE LENDERS HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY
ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR
OTHERWISE) ARISING OUT OF OR RELATING TO ANY OF THE LOAN DOCUMENTS, THE ADVANCES
OR THE ACTIONS OF THE AGENT OR ANY LENDER IN THE NEGOTIATION, ADMINISTRATION,
PERFORMANCE OR ENFORCEMENT THEREOF.
SECTION 9.19. NOTICES UNDER HLS ACQUISITION AGREEMENT. If, at any
---------------------------------------
time, the Borrower shall fail to maintain for any period of four consecutive
fiscal quarters ending on the last day of any fiscal quarter a Fixed Charge
Coverage Ratio equal to or greater than 1.50 to 1.0, then, at the request of the
Agent, the Borrower shall, and the Agent is hereby authorized to, give written
notice to
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Hughes Aircraft Company, a Delaware corporation (the "SELLER") pursuant to the
------
terms of the HLS Acquisition Agreement that a "Fixed Charge Deficiency" has
occurred and is continuing; provided that, if the Agent gives any such notice,
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the Agent shall deliver a copy thereof to the Borrower concurrently with the
delivery of such notice to the Seller (it being understood and agreed that the
failure by the Agent to so deliver such a copy to the Borrower shall not affect
the effectiveness of any such notice and shall not result in any liability on
the part of the Agent). The Borrower agrees that, unless the Agent has made a
request therefor pursuant to this Section 9.19, the Borrower will not deliver
any notice under the HLS Acquisition Agreement of the occurrence of a "Fixed
Charge Deficiency" without the prior written consent of the Agent.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers thereunto duly authorized, as of the
date first above written.
WHITTAKER CORPORATION,
a Delaware corporation
By: /S/ JOHN K. OTTO
---------------------
Title: Treasurer
NATIONSBANK OF TEXAS, N.A.,
as Agent
By: /S/ ANDREA DEFTERIOS
---------------------
Title: Vice President
L/C Bank:
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NATIONSBANK OF TEXAS, N.A.
By: /S/ ANDREA DEFTERIOS
---------------------
Title: Vice President
Initial Lender:
--------------
NATIONSBANK OF TEXAS, N.A.
By: /S/ ANDREA DEFTERIOS
---------------------
Title: Vice President
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