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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 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): May 17, 1995
THE CHERRY CORPORATION
(Exact Name of Registrant as Specified in its Charter)
DELAWARE
(State or Other Jurisdiction of Incorporation)
0-8955 36-2977756
(Commission File Number) (I.R.S. Employer Identification Number)
3600 Sunset Avenue, Waukegan, Illinois 60087
(Address of Principal Executive Offices) (Zip Code)
(708) 662-9200
(Registrant's Telephone Number, Including Area Code)
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
EXHIBITS
Number Description of Exhibit
4 Multicurrency Credit Agreement
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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.
THE CHERRY CORPORATION
By: /s/ Dan A. King
Dan A. King, Treasurer, Secretary
and Corporate Controller
Dated: May 19, 1995.
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U.S. $65,000,000
MULTICURRENCY CREDIT AGREEMENT
dated as of
May 12, 1995
among
THE CHERRY CORPORATION,
THE BANKS PARTY HERETO,
and
HARRIS TRUST AND SAVINGS BANK
as Agent
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TABLE OF CONTENTS
PAGE
SECTION 1. THE REVOLVING CREDIT
SECTION 1.1. GENERAL TERMS
SECTION 1.2. COMMITTED LOANS
SECTION 1.3. LETTERS OF CREDIT
SECTION 1.4. APPLICABLE INTEREST RATES
SECTION 1.5. MINIMUM BORROWING AMOUNT
SECTION 1.6. MANNER OF BORROWING COMMITTED LOANS
SECTION 1.7. INTEREST RATE MARGIN, LETTER OF CREDIT FEE AND COMMITMENT FEE
ADJUSTMENT.
SECTION 2. THE COMPETITIVE BID FACILITY
SECTION 2.1. THE BID LOANS
SECTION 2.2. REQUESTS FOR BID LOANS
SECTION 2.3. NOTICE OF BIDS
SECTION 2.4. ACCEPTANCE OR REJECTION OF BIDS
SECTION 2.5. NOTICE OF ACCEPTANCE OR REJECTION OF BIDS
SECTION 2.6. TELEPHONIC NOTICE
SECTION 3. GENERAL PROVISIONS APPLICABLE TO ALL LOANS
SECTION 3.1. INTEREST PERIODS
SECTION 3.2. MATURITY OF LOANS
SECTION 3.3. DEFAULT RATE
SECTION 3.4. COMMITMENT TERMINATIONS
SECTION 3.5. FUNDING INDEMNITY
SECTION 4. FEES, PAYMENTS, REDUCTIONS, APPLICATIONS, EXTENSIONS AND
CHANGE IN CIRCUMSTANCES
SECTION 4.1. FACILITY FEE
SECTION 4.2. LETTER OF CREDIT FEES
SECTION 4.3. AGENT'S FEES
SECTION 4.4. VOLUNTARY PREPAYMENTS
SECTION 4.5. MANDATORY PREPAYMENTS
SECTION 4.6. EXTENSION OF THE REVOLVING CREDIT COMMITMENTS
SECTION 4.7. DISCRETION OF BANK AS TO MANNER OF FUNDING
SECTION 4.8. PLACE AND APPLICATION OF PAYMENTS
SECTION 4.9. CHANGE OF LAW
SECTION 4.10. UNAVAILABILITY OF DEPOSITS OR INABILITY TO ASCERTAIN, OR
INADEQUACY OF, LIBOR
SECTION 4.11. INCREASED COST AND REDUCED RETURN
SECTION 4.12. LENDING OFFICES
SECTION 4.13. EXEMPTIONS FROM WITHHOLDING
SECTION 5. THE COLLATERAL AND GUARANTIES
SECTION 5.1. DESCRIPTION OF COLLATERAL
SECTION 5.2. GUARANTIES
SECTION 6. REPRESENTATIONS AND WARRANTIES
SECTION 6.1. CORPORATE ORGANIZATION AND AUTHORITY
SECTION 6.2. OUTSTANDING INDEBTEDNESS
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SECTION 6.3. FINANCIAL STATEMENTS
SECTION 6.4. RESTRICTIONS ON COMPANY AND SUBSIDIARIES
SECTION 6.5. PENDING LITIGATION
SECTION 6.6. TITLE TO PROPERTIES
SECTION 6.7. PATENTS, TRADEMARKS AND FRANCHISES
SECTION 6.8. FINANCING IS LEGAL AND AUTHORIZED
SECTION 6.9. NO DEFAULTS
SECTION 6.10. GOVERNMENTAL CONSENT
SECTION 6.11. TAXES
SECTION 6.12. NOT AN INVESTMENT COMPANY; PUBLIC UTILITY HOLDING COMPANY
SECTION 6.13. REGULATION U
SECTION 6.14. ERISA
SECTION 6.15. COMPLIANCE WITH LAW
SECTION 6.16. BURDENSOME CONTRACTS WITH AFFILIATES
SECTION 6.17. USE OF PROCEEDS
SECTION 6.18. FULL DISCLOSURE
SECTION 7. CONDITIONS PRECEDENT
SECTION 7.1. CONDITIONS TO INITIAL CREDIT EXTENSION
SECTION 7.2. CONDITIONS TO EACH EXTENSION OF CREDIT
SECTION 8. COMPANY COVENANTS
SECTION 8.1. CORPORATE EXISTENCE, ETC
SECTION 8.2. INSURANCE
SECTION 8.3. TAXES, CLAIMS FOR LABOR AND MATERIALS, COMPLIANCE WITH LAWS
SECTION 8.4. MAINTENANCE OF PROPERTIES AND BUSINESS
SECTION 8.5. NATURE OF BUSINESS
SECTION 8.6. REPORTS AND RIGHTS OF INSPECTION
SECTION 8.7. CONSOLIDATED TANGIBLE NET WORTH FOR THE COMPANY AND ITS
SUBSIDIARIES
SECTION 8.8. LEVERAGE RATIO FOR THE COMPANY AND ITS SUBSIDIARIES
SECTION 8.9. INDEBTEDNESS TO CASH FLOW RATIO FOR THE COMPANY AND ITS
SUBSIDIARIES
SECTION 8.10. COVERAGE RATIO FOR THE COMPANY AND ITS SUBSIDIARIES
SECTION 8.11. INCURRENCE OF INDEBTEDNESS
SECTION 8.12. LIMITATION ON LIENS
SECTION 8.13. INVESTMENTS, LOANS AND ADVANCES
SECTION 8.14. DIVIDENDS AND OTHER RESTRICTED PAYMENTS
SECTION 8.15. ERISA COMPLIANCE
SECTION 8.16. MERGERS, CONSOLIDATIONS AND SALES OF ASSETS
SECTION 8.17. TRANSACTIONS WITH AFFILIATES
SECTION 8.18. TERMS OF COLLATERAL DOCUMENTS NOT SUPERCEDED
SECTION 8.19. CHANGES IN FISCAL YEAR
SECTION 8.20. COMPLIANCE WITH COLLATERAL DOCUMENTS AND GUARANTY AGREEMENTS
SECTION 8.21. PLEDGE AGREEMENT
SECTION 9. EVENTS OF DEFAULT AND REMEDIES
SECTION 9.1. EVENTS OF DEFAULT
SECTION 9.2. NON-BANKRUPTCY DEFAULTS
SECTION 9.3. BANKRUPTCY DEFAULTS
SECTION 9.4. COLLATERAL FOR UNDRAWN LETTERS OF CREDIT
SECTION 10. DEFINITIONS
SECTION 10.1. DEFINITIONS
SECTION 10.2. ACCOUNTING PRINCIPLES
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SECTION 10.3. DIRECTLY OR INDIRECTLY
SECTION 11. THE AGENT
SECTION 11.1. APPOINTMENT AND AUTHORIZATION
SECTION 11.2. RIGHTS AS A BANK
SECTION 11.3. STANDARD OF CARE
SECTION 11.4. COSTS AND EXPENSES
SECTION 11.5. INDEMNITY
SECTION 12. MISCELLANEOUS
SECTION 12.1 WAIVER OF RIGHTS
SECTION 12.2. NON-BUSINESS DAY
SECTION 12.3. DOCUMENTARY TAXES
SECTION 12.4. SURVIVAL OF REPRESENTATIONS
SECTION 12.5. SURVIVAL OF INDEMNITIES
SECTION 12.6. SET-OFF SHARING
SECTION 12.7. NOTICES
SECTION 12.8. COUNTERPARTS
SECTION 12.9. SUCCESSORS AND ASSIGNS
SECTION 12.10. PARTICIPANTS
SECTION 12.11. COSTS AND EXPENSES
SECTION 12.12. CONSTRUCTION
SECTION 12.13. ASSIGNMENT AGREEMENTS
SECTION 12.14. AMENDMENTS AND WAIVERS
SECTION 12.15. CURRENCY
SECTION 12.16. GOVERNING LAW
SECTION 12.17. ENTIRE AGREEMENT
SECTION 12.18. HEADINGS
EXHIBIT A - REVOLVING CREDIT NOTE
EXHIBIT B - BID NOTE
EXHIBIT C - BID LOAN REQUEST CONFIRMATION
EXHIBIT D - INVITATION TO BID
EXHIBIT E - CONFIRMATION OF BID
EXHIBIT F - NOTICE OF ACCEPTANCE OF BID
EXHIBIT G - DESCRIPTION OF CLOSING OPINION OF COUNSEL FOR THE COMPANY
SCHEDULE 6.1 - SUBSIDIARIES AS OF FEBRUARY 28, 1995
SCHEDULE 6.2 - INDEBTEDNESS AND LIENS
SCHEDULE 6.4 -
SCHEDULE 6.5 - DISCLOSURE SCHEDULE
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CREDIT AGREEMENT
To each of the Banks
signatory hereto:
Gentlemen:
The undersigned, The Cherry Corporation, a Delaware corporation (the
"Company"), applies to you for your several commitments, subject to all the
terms and conditions hereof and on the basis of the representations and
warranties hereinafter set forth, to make available a revolving credit for
loans and letters of credit (the "Revolving Credit") and a discretionary bid
facility, as described herein. Each of you is hereinafter referred to
individually as a "Bank," all of you are hereinafter referred to collectively
as the "Banks," and Harris Trust and Savings Bank in its capacity as agent
for the Banks hereunder is hereinafter referred to as the "Agent."
Section 1. The Revolving Credit.
Section 1.1. General Terms. Subject to the terms and conditions
hereof, each Bank, by its acceptance hereof, severally agrees to make a
Revolving Credit available to the Company from time to time on a revolving
basis in the amount of its commitment set forth on the applicable signature
page hereof (its "Commitment" and cumulatively for all the Banks, the
"Commitments"), subject to any reductions thereof pursuant to Section 3.4
Hereof, through but not including the Termination Date. The Revolving Credit
may be utilized by the Company in the form of loans (collectively the
"Committed Loans" and individually a "Committed Loan") and Letters of Credit,
all as more fully hereinafter set forth. At no time shall the aggregate
principal amount of all outstanding Loans (which, in the case of Eurocurrency
Loans denominated in an Alternative Currency, means the Original Dollar
Amount thereof) and Letter of Credit Utilization exceed $65,000,000.
Section 1.2. Committed Loans. Each Borrowing of Committed Loans shall
be made ratably from the Banks in proportion to their respective Commitments.
The Company may elect that each Borrowing of Committed Loans be made
available by means of Domestic Rate Loans denominated in U.S. Dollars or
Eurocurrency Loans denominated in either German Deutschmarks, Japanese Yen,
British Pounds Sterling or other currency acceptable to the Banks and Agent,
so long as such currency is freely transferable and freely convertible into
U.S. Dollars (each an "Alternative Currency") or in U.S. Dollars, or any
combination thereof, which Loans may be repaid and the principal amount
thereof reborrowed prior to the Termination Date, subject to all reductions
in the Commitments and all other terms and conditions hereof.
Section 1.3. Letters of Credit.
(a) General Terms. Subject to all of the terms and conditions hereof,
the Revolving Credit may be availed of in the form of standby letters of
credit issued by the Agent for the account of the Company (individually, a
"Letter of Credit" and collectively, the "Letters of Credit") provided
however that the maximum Letter of Credit Utilization under the Revolving
Credit shall at no time exceed $5,000,000. The Agent shall issue the Letters
of Credit for the account of the Banks and, accordingly, each Letter of
Credit shall be deemed to utilize a pro rata share of the Commitments of each
Bank. The Agent shall give each Bank prompt notice of the issuance of each
Letter of Credit hereunder together with such information with respect
thereto as any Bank shall reasonably request.
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(b) General Characteristics. Each Letter of Credit issued hereunder
shall be payable in U.S. dollars or an Alternative Currency and shall expire
or be terminable at the option of the Agent within twelve (12) months from
the date of issuance thereof or be automatically renewable for additional
periods of twelve (12) months or less (or such longer term as may be approved
by the Required Banks) but in no event later than the Termination Date, shall
conform to the general requirements of the Agent for the issuance of letters
of credit as to form and substance and shall be a letter of credit which the
Agent may lawfully issue.
(c) Applications and Agreements. At the time the Company requests a
Letter of Credit to be issued (or prior to the first issuance of a Letter of
Credit, in the case of a continuing application), it shall execute and
deliver to the Agent an application for such Letter of Credit in the form
prescribed by the Agent (individually, an "Application" and collectively,
"Applications"). Subject to the other provisions of this subsection, the
obligation of the Company to reimburse the Agent for drawings under a Letter
of Credit shall be governed by the Application for such Letter of Credit. In
the event a drawing is paid on a Letter of Credit and the Company has not
notified the Agent by 10:30 a.m. (Chicago time) on the date when such drawing
is paid that the Company intends to repay such reimbursement obligation with
funds not borrowed under this Agreement, the Company shall be deemed to have
irrevocably requested a Borrowing of Domestic Rate Loans under the Revolving
Credit on such day in the amount of the reimbursement obligation then due,
subject to Section 7.2 hereof (other than its requirement that each Borrowing
of Domestic Rate Loans be in a certain minimum amount), which new Borrowing
of Revolving Credit Loans shall be applied to pay the reimbursement
obligation then due. Anything contained in the Applications to the contrary
notwithstanding (aa) the Company shall pay fees in connection with Letters of
Credit as set forth in section 4.2 hereof, (ab) in the event that the Agent
is not promptly reimbursed (whether out of the proceeds of a Borrowing of
Revolving Credit Loans or otherwise) for the amount of any draft drawn under
a Letter of Credit issued hereunder after notice to the Company that such
draft has been received, the obligation of the Company to reimburse the Agent
for the amount of such draft shall bear interest (which the Company hereby
promises to pay) from and after the date the draft is paid at a fluctuating
rate determined daily by adding 2% to the Domestic Rate as from time to time
in effect, (ac) prior to the occurrence of an Event of Default, the Agent
will not call for additional collateral security for the obligations of the
Company under the Applications other than the collateral security consisting
of rights in goods and commodities (or documents of title evidencing same)
the payment for which is supported by the Letters of Credit and (ad) prior to
the occurrence of an Event of Default, the Agent will not call for the
funding of a Letter of Credit prior to being presented with a draft
thereunder (or, in the event the draft is a time draft, prior to its due
date).
(d) Participations in Letters of Credit. Each Bank (including the
Agent in its individual capacity as a Bank) shall participate on a pro rata
basis in the Letters of Credit issued by the Agent, which participation shall
automatically arise upon the issuance of each such Letter of Credit (such
participations to ratably count against the Commitments of the Banks when the
Letters of Credit are issued). Each Bank unconditionally agrees that in the
event the Agent is not immediately reimbursed by the Company for the amount
paid by the Agent on any draft presented to it under a Letter of Credit, then
in that event such Bank shall pay to the Agent that portion of the amount of
each draft so paid by the Agent which is equal to the same percentage of the
amount so paid as the percentage which its Commitment bears to the aggregate
Commitments and in return such Bank shall automatically receive an equivalent
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percentage participation in the rights of the Agent to obtain reimbursement
from the Company for the amount of such draft, together with interest thereon
as provided for herein. In the event that any Bank fails to honor its
obligation to reimburse the Agent for its pro rata share of the amount of any
such draft then in that event (i) each other Bank shall pay to the Agent its
pro rata share of the payment then due the Agent from the defaulting Bank,
(ii) the defaulting Bank shall have no right to participate in any recoveries
from the Company in respect of such draft and (iii) all other amounts to
which the defaulting Bank would otherwise be entitled under the terms of this
Agreement or the Collateral Documents (whether payments of interest,
principal or fees of any kind) shall first be applied to reimbursing the
Agent for the defaulting Bank's portion of the draft, together with interest
thereon at the rate provided for in Section 1.3(c) hereof. Upon
reimbursement to the Agent (pursuant to clause (i) or (iii) above) of the
amount advanced by the Agent in respect of the defaulting Bank's share of the
draft, together with the interest thereon as provided for in Section 1.3(c)
hereof, the defaulting Bank shall thereupon be entitled to its participation
in the Agent's rights of recovery against the Company in respect of the draft
paid by the Agent. Nothing herein contained shall release any defaulting
Bank from its liability hereunder nor limit any liability it would otherwise
have to the Agent or any Bank on account of such breach.
Section 1.4. Applicable Interest Rates. (a) Domestic Rate Loans.
Each Domestic Rate Loan made by a Bank shall bear interest (computed on the
basis of a year of 360 days and actual days elapsed) on the unpaid principal
amount thereof from the date such Loan is made until maturity (whether by
acceleration or otherwise) at a rate per annum equal to the Domestic Rate
from time to time in effect, payable on the last day of the applicable
Interest Period and at maturity (whether by acceleration or otherwise).
(b) Eurocurrency Loans. (i) General. Each Eurocurrency Loan made by a
Bank shall bear interest (computed on the basis of a year of 360 days and
actual days elapsed) on the unpaid principal amount thereof from the date
such Loan is made until maturity (whether by acceleration or otherwise) at a
rate per annum equal to the sum of the Applicable Eurocurrency Margin plus
the Adjusted LIBOR, payable on the last day of the applicable Interest Period
and at maturity (whether by acceleration or otherwise), and, if the
applicable Interest Period is longer than three months, on each day occurring
every three months after the date such Loan is made.
"Adjusted LIBOR" means, for any Borrowing of Eurocurrency Loans, a rate
per annum determined in accordance with the following formula:
LIBOR
Adjusted LIBOR = --------------------------------------
100% - Eurocurrency Reserve Percentage
"LIBOR" means, with respect to an Interest Period for a Borrowing of
Eurocurrency Loans, (a) the LIBOR Index Rate for such Interest Period, if
such rate is available, and (b) if the LIBOR Index Rate cannot be determined,
the arithmetic average of the rate of interest per annum, as determined by
the Agent (rounded upwards, if necessary, to the nearest whole multiple of
1/16 of 1%), at which deposits of U.S. Dollars or the relevant Alternative
Currency in immediately available and freely transferable funds are offered
to the Agent at 11:00 a.m. (London, England time) two Business Days prior to
the commencement of such Interest Period by major banks in the interbank
market for a period equal to such Interest Period and in an amount
approximately equal to the principal amount of the Eurocurrency Loan
scheduled to be made by the Agent as part of such Borrowing.
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"LIBOR Index Rate" means, for any Interest Period, the rate per annum
(rounded upwards, if necessary, to the next higher one hundred-thousandth of
a percentage point) for deposits in U.S. Dollars or the relevant Alternative
Currency for a period equal to such Interest Period, which appears on the
Telerate Page 3750 as of 11:00 a.m. (London, England time) on the day two
Business Days before the commencement of such Interest Period.
"Telerate Page 3750" means the display designated as "Page 3750" on the
Telerate Service (or such other page as may replace Page 3750 on that service
or such other service as may be nominated by the British Bankers' Association
as the information vendor for the purpose of displaying British Bankers'
Association Interest Settlement Rates for deposits in U.S. Dollars or the
relevant Alternative Currency).
"Eurocurrency Reserve Percentage" means, for any Borrowing of
Eurocurrency Loans, the daily average for the applicable Interest Period of
the maximum rate at which reserves (including, without limitation, any
supplemental, marginal and emergency reserves) are imposed during such
Interest Period by the Board of Governors of the Federal Reserve System (or
any successor) under Regulation D on "eurocurrency liabilities", as defined
in such Board's Regulation D, (or in respect of any other category of
liabilities that includes deposits by reference to which the interest rate on
Eurocurrency Loans is determined or any category of extension of credit or
other assets that include loans by non-United States offices of any Bank to
United States residents) subject to any amendments of such reserve
requirement by such Board or its successor, taking into account any
transitional adjustments thereto. For purposes of this definition, the
Eurocurrency Loans shall be deemed to be "eurocurrency liabilities" as
defined in Regulation D without benefit or credit for any prorations,
exemptions or offsets under Regulation D.
"Eurocurrency Margin" means .375% subject to adjustment as provided in
Section 1.7 hereof.
(ii) Borrowings of Alternative Currencies. On the date the Company
requests a Borrowing of Eurocurrency Loans in an Alternative Currency, as
provided in Section 1.6(a) below, the Agent shall promptly notify each Bank
of the currency in which such Borrowing is requested. If a Bank determines
that such Alternative Currency is not available to it in sufficient amount
and for a sufficient term to enable it to make the Loan requested of it as
part of such Eurocurrency Borrowing and so notifies the Agent no later than
2:00 p.m. (Chicago time) on the same day it receives notice from the Agent of
such requested Loan, the Agent shall promptly so notify the Company. If the
Company nevertheless desires such Borrowing, it must notify the Agent by no
later than 3:00 p.m. (Chicago time) on such day. If the Agent does not
receive such notice from the Company by 3:00 p.m. (Chicago time), the Company
shall automatically be deemed to have revoked its request of the Eurocurrency
Borrowing and the Agent will promptly notify the Banks of such revocation.
If the Company does give such notice by 3:00 p.m. (Chicago time), each Bank
that did not notify the Agent by 2:00 p.m. (Chicago time) that the requested
Alternative Currency is unavailable to it to fund the requested Loan shall,
subject to Section 7 hereof, make its Loan in the Alternative Currency
requested in accordance with Section 1.6(d) hereof. Each Bank that did so
notify the Agent by 2:00 p.m. (Chicago time) that it would not be able to
make the Loan requested from it shall, subject to Section 7 hereof, make a
Eurocurrency Loan denominated in U.S. Dollars in the amount of the Original
Dollar Amount of, and with the same Interest Period as, the Eurocurrency Loan
such Bank was originally requested to make. Such Eurocurrency Loan
denominated in U.S. Dollars shall be made by the affected Bank on the same
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day as the other Banks make their Eurocurrency Loans denominated in the
applicable Alternative Currency as part of the relevant Borrowing of
Eurocurrency Loans, but shall bear interest with reference to the Adjusted
LIBOR applicable to U.S. Dollars rather than the relevant Alternative
Currency for the applicable Interest Period and shall be made available in
accordance with the procedures for disbursing U.S. Dollar Loans under Section
1.6(d) hereof. Any Loan made in an Alternative Currency shall be advanced in
such currency, and all payments of principal and interest thereon shall be
made in such Alternative Currency.
(c) Bid Loans. Each Bid Loan made by a Bank shall bear interest
(computed on the basis of a year of 360 days and actual days elapsed) on the
unpaid principal amount of each Bid Loan from the applicable Borrowing Date
until maturity (whether by acceleration or otherwise) at the rate of interest
applicable to such Bid Loan as determined pursuant to Section 2.2 hereof,
payable on the last day of the applicable Interest Period and at maturity
(whether by acceleration or otherwise) and, if the applicable Interest Period
is longer than 90 days, on each day occurring every 90 days after the
Borrowing Date.
(d) Rate Determinations. The Agent shall determine each interest rate
applicable to the Committed Loans and such determination shall be conclusive
and binding on the parties hereto except in the case of manifest error or
willful misconduct.
Section 1.5. Minimum Borrowing Amount. Each Borrowing of Committed
Loans shall be in an amount not less than (i) in the case of Eurocurrency
Loans denominated in an Alternative Currency, an amount for which the U.S.
Dollar Equivalent is not less than $1,000,000 or, solely in the case of
Refunding Borrowing for a Borrowing in an Alternative Currency, if less, the
same amount of the Alternative Currency as the maturing Borrowing, and (ii)
in the case of Loans denominated in U.S. Dollars $500,000 or any larger
amount that is an integral multiple of $100,000.
Section 1.6. Manner of Borrowing Committed Loans. (a) Notice to the
Agent. In order to borrow any Committed Loans, the Company shall give
telephonic or telecopy notice to the Agent (which notice shall be irrevocable
(except as set forth in Section 1.4(b)(ii) hereof) once given and, if by
telephone, shall be promptly confirmed in writing) by no later than 10:00
a.m. (Chicago time) (i) on the date at least three (3) Business Days prior to
the date of each requested Borrowing of Eurocurrency Loans and (ii) on the
date of any requested Borrowing of Domestic Rate Loans. Each such notice
shall specify the date of the requested Borrowing (which shall be a Business
Day), the amount of the requested Borrowing, the type of Loans to comprise
such Borrowing, if such Borrowing is to be comprised of Eurocurrency Loans,
the Interest Period applicable thereto, and, if such Borrowing is of a
Eurocurrency Loan denominated in an Alternative Currency, the Alternative
Currency in which such Committed Loan is to be denominated. The Company
agrees that the Agent may rely on any such telephonic or telecopy notice
given by any person who identifies himself or herself as being an Authorized
Representative of the Company without the necessity of independent
investigation and in the event any notice by such means conflicts with the
written confirmation, such notice shall govern if the Agent has acted in
reliance thereon.
(b) Notice to the Banks. The Agent shall give prompt telephonic, telex
or telecopy notice to each Bank of any borrowing request it receives pursuant
to Section 1.6(a) above and, if such notice requests the Banks to make a
Eurocurrency Loan, the Agent shall give notice to the Company and each of the
<PAGE>
Banks by like means of the interest rate applicable thereto (but, if such
notice is given by telephone, the Agent shall confirm such rate in writing)
promptly after the Agent has made such determination.
(c) Company's Failure to Notify. In the event the Company fails to
give notice pursuant to Section 1.6(a) above of the reborrowing of the
principal amount of any maturing Borrowing of Committed Loans denominated in
U.S. Dollars and has not notified the Agent by 10:00 a.m. (Chicago time) on
the day such Borrowing matures that it intends to repay such Borrowing, the
Company shall be deemed to have requested a Borrowing of Domestic Rate Loans
on such day in the amount of the maturing Borrowing of Committed Loans,
subject to Section 7.2 hereof. In the event the Company fails to give notice
pursuant to Section 1.6(a) above of the reborrowing of the principal amount
of any maturing Borrowing of Committed Loans denominated in an Alternative
Currency and has not notified the Agent by 10:00 a.m. (Chicago time) three
(3) Business Days before the day such Borrowing matures that it intends to
repay such Borrowing, the Company shall be deemed to have requested a
Borrowing of Eurocurrency Loans denominated in the same currency as the
maturing Borrowing on such day in the amount of the maturing Borrowing of
Committed Loans with an Interest Period of one (1) month, subject to Section
7.2 hereof.
(d) Disbursement of Committed Loans. Not later than 12:00 noon
(Chicago time) on the date of any Borrowing of Committed Loans denominated in
U.S. Dollars, subject to Section 7 hereof, each Bank shall make available its
Committed Loan in funds immediately available in Chicago, Illinois at the
principal office of the Agent, except to the extent such Borrowing is a
reborrowing, in whole or in part, of the principal amount of a maturing
Borrowing of Committed Loans (a "Refunding Borrowing"), in which case each
Bank shall record the Committed Loan made by it as a part of such Refunding
Borrowing on its books or records or on a schedule to the appropriate Note,
as provided in Section 3.6 hereof, and shall effect the repayment, in whole
or in part, as appropriate, of its maturing Committed Loan through the
proceeds of such new Committed Loan. Subject to Section 7 hereof, the Agent
shall make the proceeds of each non-Refunding Borrowing denominated in U.S.
Dollars available to the Company at the Agent's principal office in Chicago,
Illinois. If a Borrowing is to be denominated in an Alternative Currency,
subject to Sections 1.4(b)(ii) and 7 hereof, each Bank shall make available
its Committed Loan in the Alternative Currency at such office as the Agent
has previously notified to each Bank, for delivery to the Company at the
Agent's direction, in funds then customary for the settlement of
international transactions in such currency and no later than such local time
as is necessary for such funds to be received and transferred to the Company
for same day value, except to the extent such Borrowing is a Refunding
Borrowing, in which case each Bank shall record the Committed Loan made by it
as part of such Refunding Borrowing on its books and records or on a schedule
to its Revolving Credit Note, as provided in Section 3.6 hereof and shall
effect the repayment, in whole or in part, as appropriate, of its maturing
Loan through the proceeds of such new Committed Loan.
Section 1.7. Interest Rate Margin, Letter of Credit Fee and Commitment
Fee Adjustment. The applicable Eurocurrency Margin specified in Section
1.4(b) hereof, the letter of credit fee specified in Section 4.2 and the
facility fee specified in Section 4.1 hereof shall be subject to quarterly
adjustment (commencing with the fiscal quarter ending February 28, 1995) as
follows (the margins from time to time applicable to the Eurocurrency Loans
being hereinafter referred to as the "Applicable Eurocurrency Margin", the
letter of credit fee from time to time in effect being hereinafter referred
to as the "Applicable Letter of Credit Fee" and the facility fee from time to
<PAGE>
time in effect being hereinafter referred to as the "Applicable Facility
Fee") with the Leverage Ratio being computed as in effect on the last day of
each fiscal quarter:
Applicable
Eurocurrency Margin
and Applicable Applicable
If as of the last day of any fiscal Letter of Credit Facility Fee
quarter: Fee Shall Each Be: Shall Be:
LEVEL I: Leverage Ratio is less .375% .125%
than or equal to 25%
LEVEL II: Leverage Ratio is greater .50% .15%
than 25% but less than or equal to
35%
LEVEL III: Leverage Ratio is .625% .20%
greater than 35%
Not later than five Business Days after receipt by the Agent of the
financial statements and the compliance certificate called for by Section 8.6
hereof for the applicable quarter, the Agent shall determine the Leverage
Ratio for the applicable period based on the information contained in such
financial statements and compliance certificate and shall promptly notify the
Company and the Banks of such determination and of any change in the
Applicable Eurocurrency Margin, Applicable Letter of Credit Fee and
Applicable Facility Fee resulting therefrom, any such change in the
Applicable Eurocurrency Margin, Applicable Letter of Credit Fee and
Applicable Facility Fee to be effective as of the date the Agent so notifies
the Company, with such new Applicable Eurocurrency Margin, Applicable Letter
of Credit Fee and Applicable Facility Fee to continue in effect until the
effective date of the next quarterly redetermination in accordance with the
foregoing. Each determination of the Leverage Ratio, Applicable Eurocurrency
Margin, Applicable Letter of Credit Fee and Applicable Facility Fee by the
Agent in accordance with this Section shall be conclusive and binding on the
Company and the Banks absent manifest error.
Section 2. The Competitive Bid Facility.
Section 2.1. The Bid Loans. At any time before the Termination Date,
the Company may request the Banks to offer, in their sole discretion, to make
loans (each a "Bid Loan" and collectively, the "Bid Loans") to it in the
manner set forth in this Section 2 and in amounts such that the aggregate
principal amount of all Committed Loans (which in the case of Eurocurrency
Loans denominated in an Alternative Currency, means the Original Dollar
Amount thereof) plus Bid Loans plus the Letter of Credit Utilization at any
time outstanding hereunder shall not exceed the Commitments of the Banks then
in effect. The Banks may, but shall have no obligation to, make such offers
in any amount (subject to the minimum amounts set forth in Section 2.1(c)
hereof) up to the full amount requested by the Company and the Company may,
but shall have no obligation to, accept any such offers in the manner set
forth in this Section 2. Each Bank may offer to make Bid Loans in any amount
(whether greater than, equal to, or less than its Commitment), subject to the
limitation that the aggregate principal amount of all Loans (which in the
case of Eurocurrency Loans denominated in an Alternative Currency, means the
Original Dollar Amount) plus the Letter of Credit Utilization outstanding at
any time may not at any time exceed the Commitments then in effect and
subject to the other conditions of this Section 2; provided further no Bank
may have Bid Loans outstanding at any one time in an amount in excess of
three times its Commitment. All Bid Loans shall be denominated in U.S.
Dollars.
<PAGE>
Section 2.2. Requests for Bid Loans. (a) Requests and Confirmations.
In order to request a Borrowing of Bid Loans (a "Bid Loan Request"), the
Company shall give telephonic notice to the Agent no later than 2:00 p.m.
(Chicago time) one (1) Business Day before the proposed date of Borrowing
which must be a Business Day (the "Borrowing Date"), followed on the same day
by a duly completed confirmation (a "Bid Loan Request Confirmation"),
delivered by telecopier or other means of facsimile communication,
substantially in the form of Exhibit C hereto or otherwise containing the
information required by this Section 2.2, to be received by the Agent no
later than 2:30 p.m. (Chicago time) on such day. Bid Loan Request
Confirmations that do not conform substantially to the format of Exhibit C
hereto or otherwise contain the information required by this Section 2.2
shall be rejected by the Agent, and the Agent shall give telephonic notice to
the Company of such rejection promptly after it determines (which
determination shall be conclusive) that the Bid Loan Request Confirmation
does not substantially conform to the format of Exhibit C hereto or otherwise
contain the information required by this Section 2.2. Requests for Bid Loans
shall in each case refer to this Agreement and specify (i) the proposed
Borrowing Date, (ii) the aggregate principal amount thereof (which shall not
be less than $3,000,000 and shall be an integral multiple of $1,000,000) and
(iii) up to three (3) Interest Periods of 1-180 days thereafter with respect
to the entire amount specified in such Bid Loan Request (and, if so, desired
by the Company, specifying the maximum amount the Company would borrow for
any specific Interest Period).
(b) Invitation to Bid. Upon receipt by the Agent of a Bid Loan Request
Confirmation that conforms substantially to the format of Exhibit C hereto or
otherwise contains the information required by this Section 2.2, the Agent
shall, by telephone (no later than 3:30 p.m. (Chicago time) on the same day
the Agent receives a Bid Loan Request Confirmation), promptly confirmed by a
telecopy or other form of facsimile communication in the form of Exhibit D
hereto, invite each Bank to bid, on the terms and conditions of this
Agreement, to make Bid Loans pursuant to such Bid Loan Request.
(c) Bids. Each Bank may, in its sole discretion, offer to make a Bid
Loan or Loans (a "Bid") to the Company responsive to the related Bid Loan
Request. Each Bid by a Bank must be received by the Agent by telephone not
later than 9:00 a.m. (Chicago time) on the proposed Borrowing Date promptly
confirmed in writing by a duly completed confirmation (a "Confirmation of
Bid") delivered by telecopier or other means of facsimile communication
substantially in the form of Exhibit E hereto or otherwise containing the
information required by this subsection (c), to be received by the Agent on
the same day; provided, however, that any Bid made by a Bank which is the
Agent must be made by telephone to the Company by no later than 8:45 a.m.
(Chicago time) on such day. Each Bid and each Confirmation of Bid shall
refer to this Agreement and specify (i) the principal amount (which shall not
be less than $3,000,000 and shall be an integral multiple of $1,000,000) of
each Bid Loan that the Bank is willing to make to the Company, (ii) the
interest rate (which shall be computed on the basis of a 360 day year and
actual days elapsed for a period equal to the proposed Interest Period
applicable thereto) at which the relevant Bank is prepared to make each such
offered Bid Loan and (iii) the Interest Period applicable to each such
offered Bid Loan. The Agent shall reject any Bid if such Bid (i) does not
specify all of the information specified in the immediately preceding
sentence, (ii) contains any qualifying, conditional, or similar language
other than as provided for in the immediately preceding sentence, (iii)
proposes terms other than or in addition to those set forth in the Bid Loan
Request to which it responds other than as provided for in the immediately
preceding sentence, or (iv) is received by the Agent later than 9:00 a.m.
<PAGE>
(Chicago time). Any Bid submitted by a Bank pursuant to this Section 2.2
shall be irrevocable and shall be promptly confirmed by a telecopy or other
form of facsimile communication in the form of Exhibit F hereto; provided
that in all events the telephone Bid received by the Agent shall be binding
on the relevant Bank and shall not be altered, modified, or in any other
manner affected by any inconsistent terms contained in, or terms missing
from, such Bank's Confirmation of Bid. Each offer contained in a Bid to make
a Bid Loan in a certain amount, at a certain interest rate, and for a certain
Interest Period is referred to herein as an "Offer".
Section 2.3. Notice of Bids; Advice of Rate. The Agent shall give
telephonic notice to the Company no later than 9:15 a.m. (Chicago time) on
the proposed Borrowing Date of the number of Bids made, the interest rate(s)
and corresponding Interest Period(s) applicable to each Bid, the maximum
principal amount bid at each interest rate for each Interest Period, and the
identity of the Bank making such Bid. The Agent shall send a written summary
of all Bids received by it to the Company on the same day.
Section 2.4. Acceptance or Rejection of Bids. The Company may in its
sole and absolute discretion, subject only to the provisions of this Section
2.4, irrevocably accept or reject, in whole or in part, any Offer contained
in a Bid. No later than 9:45 a.m. (Chicago time) on the proposed Borrowing
Date, the Company shall give telephonic notice to the Agent of whether and to
what extent it has decided to accept or reject any or all of the Offers made
in response to a Bid Loan Request, which notice shall be promptly confirmed
by a telecopy or other form of facsimile communication to be received by the
Agent on the proposed Borrowing Date; provided, however, that in the event
any Offers contained in the Bids are accepted (i) the Company shall accept
Offers solely on the basis of ascending interest rates, (ii) if the Company
declines to effect a Borrowing of the maximum principal amount of Bid Loans
in respect of which Offers at a particular interest rate for a particular
Interest Period have been made, or is prevented from doing so by any other
condition hereof, then the Company shall accept a pro rata portion of each
such Offer, based as nearly as possible on the ratio of the maximum aggregate
principal amounts of Bid Loans for which each such Offer was made by each
Bank (provided that, if the available principal amount of Bid Loans to be so
allocated is not sufficient to enable Bid Loans to be so allocated to each
relevant Bank in integral multiples of $1,000,000, then the Company may round
allocations up or down in integral multiples not less than $500,000 as it
shall deem appropriate), (iii) the aggregate principal amount of all Offers
accepted by the Company shall not exceed the maximum amount contained in the
related Bid Loan Request Confirmation, and (iv) no Offer of a Bid Loan shall
be accepted in a principal amount less than $3,000,000; provided, further,
the Company may not accept any offer of a Bank if after giving effect to the
proposed Bid Loan such Bank will have Bid Loans outstanding in an aggregate
principal amount in excess of three times such Bank's Commitment. Any
telephonic notice given by the Company pursuant to this Section 2.4 shall be
irrevocable and shall not be altered, modified, or in any other manner
affected by any inconsistent terms contained in, or terms missing from, any
written confirmation of such notice.
Section 2.5. Notice of Acceptance or Rejection of Bids. (a) Notice to
Banks Making Bids. The Agent shall give telephonic notice to each Bank that
submits a Bid in compliance with Section 2.2(c) hereof whether any of the
Offers contained in its Bid has been accepted (and if so, in what amount, at
what interest rate and for what Interest Period) no later than 10:00 a.m.
(Chicago time) on the proposed Borrowing Date, and each successful bidder
will thereupon become bound, subject to Section 7 hereof and the other
applicable conditions hereof, to make the Bid Loan(s) in respect of which its
<PAGE>
Bid has been accepted. As soon as practicable thereafter the Agent shall
send written notice substantially in the form of Exhibit F hereto to each
such successful bidder; provided, however, that failure to give such notice
shall not affect the obligation of such successful bidder to disburse its Bid
Loans as herein required.
(b) Disbursement of Bid Loans. Not later than noon (Chicago time) on
the Borrowing Date for each Borrowing of a Bid Loan(s), each Bank bound to
make a Bid Loan(s) in accordance with Section 2.5(a) hereof shall make
available to the Agent the principal amount of each such Bid Loan in
immediately available funds at the Agent's principal office in Chicago,
Illinois. Subject to Section 7 hereof, the Agent shall promptly thereafter
make available to the Company like funds as received from each Bank, at such
office of the Agent in Chicago, Illinois.
(c) Bid Summaries to the Banks. The Agent shall promptly notify each
Bank of the aggregate amount of Bid Loans advanced pursuant to a Bid Loan
Request on such Borrowing Date, the Interest Period(s) therefor and the
lowest and highest interest rates at which Bid Loans were made for each
Interest Period.
Section 2.6. Telephonic Notice. Each Bank's telephonic notice to the
Agent of its Bid pursuant to Section 2.2(c) hereof, and the Company's
telephonic acceptance of any Offer contained in a Bid pursuant to Section 2.4
hereof, shall be irrevocable and binding on such Bank and the Company and
shall not be altered, modified, or in any other manner affected by any
inconsistent terms contained in, or missing from, any telecopy or other
confirmation of such telephonic notice. It is understood and agreed by the
parties hereto that the Agent shall be entitled to act, or to fail to act,
hereunder in reliance on its records of any telephonic notices provided for
herein and that the Agent shall not incur any liability to any Person in so
doing if its records conflict with any telecopy or other confirmation of a
telephonic notice or otherwise, provided that the Agent has acted, or failed
to act, in good faith. It is further understood and agreed by the parties
hereto that the times of day as set forth in this Section 2 are for the
convenience of all the parties for providing notices and that no party shall
incur any liability or other responsibility for any failure to provide such
notices within the specified times; provided, however, that the Agent shall
have no obligation to notify the Company of any Bid received by it later than
9:00 a.m. (Chicago time) on the proposed Borrowing Date, and no acceptance by
the Company of any Offer contained in a Bid shall be effective to bind any
Bank to make a Bid Loan, nor shall the Agent be under any obligation to
notify any Person of an acceptance, if notice of such acceptance is received
by the Agent later than 9:45 a.m. (Chicago time) on the proposed Borrowing
Date.
Section 3. General Provisions Applicable To All Loans.
Section 3.1. Interest Periods. At the time of each request for the
Borrowing of Loans hereunder the Company shall select an Interest Period
applicable to such Loans from among the available options. The term
"Interest Period" means the period commencing on the date a Borrowing of
Loans is made and ending, (a) in the case of Domestic Rate Loans, on the last
day of the calendar quarter in which such Loan is made (i.e. the first to
occur of March 31, June 30, September 30, and December 31 following the date
such Borrowing is made); (b) in the case of Eurocurrency Loans, the date, as
the Company may select, 1, 2, 3 or 6 months thereafter; and (c) in the case
of Bid Loans, as the Company may select, 1-180 days thereafter; provided,
however, that:
<PAGE>
(a) any Interest Period for a Borrowing of Domestic Rate Loans
commencing less than 90 days before the Termination Date shall end on the
Termination Date;
(b) with respect to any Borrowing of Fixed Rate Loans, the Company may
not select an Interest Period that extends beyond the Termination Date; and
(c) whenever the last day of any Interest Period would otherwise be a
day that is not a Business Day, the last day of such Interest Period shall be
extended to the next succeeding Business Day, provided that, in the case of
an Interest Period for a Borrowing of Eurocurrency Loans, if such extension
would cause the last day of such Interest Period to occur in the following
calendar month, the last day of such Interest Period shall be the immediately
preceding Business Day; and
(d) for purposes of determining the Interest Period for a Borrowing of
Eurocurrency Loans, a month means a period starting on one day in a calendar
month and ending on the numerically corresponding day in the next calendar
month; provided, however, that if there is no numerically corresponding day
in the month in which such an Interest Period is to end or if such an
Interest Period begins on the last Business Day of a calendar month, then
such Interest Period shall end on the last Business Day of the calendar month
in which such Interest Period is to end.
Section 3.2. Maturity of Loans. Each Loan shall mature and become due
and payable by the Company on the last day of the Interest Period applicable
thereto.
Section 3.3. Default Rate. If any payment of principal on any Loan is
not made when due (whether by acceleration or otherwise), such Loan shall
bear interest (computed on the basis of a year of 360 days and actual days
elapsed) from the date such payment was due until paid in full, payable on
demand, at a rate per annum equal to:
(a) with respect to any Domestic Rate Loan, the sum of two percent (2%)
plus the Domestic Rate from time to time in effect;
(b) with respect to any Fixed Rate Loan denominated in U.S. Dollars,
the sum of two percent (2%) plus the rate of interest in effect thereon at
the time of such default until the end of the Interest Period applicable
thereto and, thereafter, at a rate per annum equal to the sum of two percent
(2%) plus the Domestic Rate from time to time in effect; and
(c) with respect to any Eurocurrency Loan denominated in an Alternative
Currency, the sum of two percent (2%) plus the rate of interest in effect
thereon at the time of such default until the end of the Interest Period
applicable thereto and, thereafter, at a rate per annum equal to the sum of
the Applicable Eurocurrency Margin, plus two percent (2%) plus the rate of
interest per annum as determined by the Agent (rounded upwards, if necessary,
to the nearest whole multiple of one-sixteenth of one percent (1/16)) at
which overnight or weekend deposits of the appropriate currency for delivery
in immediately available and freely transferable funds would be offered by
the Agent to major banks in the interbank market upon request of such major
banks for the applicable period as determined above and in an amount
comparable to the unpaid principal amount of any such Eurocurrency Loan (or,
if the Agent is not placing deposits in such currency in the interbank
market, then the Agent's costs of funds in such currency for such period).
Section 3.4. Commitment Terminations. The Company shall have the
<PAGE>
right at any time and from time to time, upon five (5) Business Days' prior
written notice to the Agent to terminate without premium or penalty, in whole
or in part, the Commitments, any partial termination to be in an amount not
less than $5,000,000 or any larger amount that is an integral multiple of
$1,000,000, and to reduce ratably the respective Commitments of each Bank;
provided that, the Commitments may not be reduced to an amount less than the
aggregate principal amount of Letter of Credit Utilization and Loans then
outstanding (which, in the case of Eurocurrency Loans denominated in an
Alternative Currency, shall mean the Original Dollar Amount thereof). Any
termination of Commitments pursuant to this Section 3.4 may not be
reinstated.
Section 3.5. Funding Indemnity. In the event any Bank shall incur any
loss, cost or expense (including, without limitation, any loss of profit, and
any loss, cost or expense incurred by reason of the liquidation or
re-employment of deposits or other funds acquired by such Bank to fund or
maintain any Fixed Rate Loan or the relending or reinvesting of such deposits
or amounts paid or prepaid to such Bank) as a result of:
(a) any payment or prepayment of a Fixed Rate Loan on a date other than
the last day of its Interest Period,
(b) any failure (because of a failure to meet the conditions of Section
7 or otherwise) by the Company to borrow a Fixed Rate Loan on the date
specified in a notice given pursuant to Section 1.6 hereof (unless such
notice was revoked in accordance with Section 1.4(b)(ii) in the event a Bank
determined that the requested Alternate Currency in which such Eurocurrency
Loan was to be made was unavailable to it) or Section 2.2 hereof,
(c) any failure by the Company to make any payment of principal on any
Fixed Rate Loan when due (whether by acceleration or otherwise), or
(d) any acceleration of the maturity of a Fixed Rate Loan as a result
of the occurrence of any Event of Default hereunder,
then, upon the demand of such Bank, the Company shall pay to such Bank such
amount as will reimburse such Bank for such loss, cost or expense. If any
Bank makes such a claim for compensation, it shall provide to the Company,
with a copy to the Agent, a certificate executed by an officer of such Bank
setting forth the amount of such loss, cost or expense in reasonable detail
(including an explanation of the basis for and the computation of such loss,
cost or expense) and the amounts shown on such certificate if reasonably
calculated shall be conclusive.
Section 3.6. The Notes. (a) All Committed Loans made to the Company
by a Bank shall be evidenced by a promissory note of the Company in the form
of Exhibit A hereto (individually a "Revolving Credit Note" and collectively,
the "Revolving Credit Notes"), each such Revolving Credit Note to be dated
the date hereof, payable to the order of the applicable Bank in the principal
amount of its Commitment and otherwise in the form of Exhibit A hereto.
(b) All Bid Loans made to the Company by a Bank shall be evidenced by a
promissory note of the Company in the form of Exhibit B hereto (individually
a "Bid Note" and collectively, the "Bid Notes"), each such Bid Note to be
dated the date hereof, payable to the order of the applicable Bank and
otherwise in the form of Exhibit B hereto.
(c) Each Bank shall record on its books and records or on a schedule to
the appropriate Note the amount of each Loan made by it to the Company, the
<PAGE>
Interest Period thereof, all payments of principal and interest and the
principal balance from time to time outstanding thereon, in respect to any
Committed Loan, the types of such Loan, in respect to any Fixed Rate Loan,
the interest rate applicable thereto and, in respect of any Eurocurrency
Loan, the currency in which such Loan is made; provided that prior to the
transfer of any Note such information relating to any outstanding Loans made
by such Bank shall be recorded on the back of such Note or on a schedule to
such Note. The record thereof, whether shown on such books and records of a
Bank or on a schedule to any Note, shall be prima facie evidence as to all
such matters; provided, however, that the failure of any Bank to record any
of the foregoing or any error in any such record shall not limit or otherwise
affect the obligation of the Company to repay all Loans made to it hereunder
together with accrued interest thereon. At the request of any Bank and upon
such Bank tendering to the Company the Note to be replaced, the Company shall
furnish a new Note to such Bank to replace any outstanding Note and at such
time the first notation appearing on a schedule on the reverse side of, or
attached to, such Note shall set forth the aggregate unpaid principal amount
of all Loans, if any, then outstanding thereon.
Section 4. Fees, Payments, Reductions, Applications, Extensions and
Change in Circumstances.
Section 4.1. Facility Fee. For the period from the date hereof to and
including the Termination Date, the Company shall pay to the Agent for the
ratable account of the Banks a facility fee at the rate of .125 of 1% per
annum, subject to adjustment as provided in Section 1.7 hereof (computed on
the basis of a year of 360 days for the actual number of days elapsed) on the
average daily amount of the Commitments in effect under this Agreement from
time to time (whether or not in use), such fee to be payable in arrears on
the last day of each May, August, November and February (commencing May 31,
1995) to and including, and on, the Termination Date, unless the Commitments
are terminated in whole on an earlier date, in which event the facility fees
payable hereunder for the period to the date of such termination shall be
paid on the date of such termination.
Section 4.2. Letter of Credit Fees. (a) Standby Letters of Credit.
The Company shall pay to the Agent for the ratable account of the Banks a
letter of credit fee for each standby Letter of Credit issued hereunder
computed at a rate per annum equal to .375% (subject to adjustment as
provided in Section 1.7 hereof) on the maximum amount of each such standby
Letter of Credit such fee to be payable in advance on or before the issuance
of each Letter of Credit and on each anniversary thereof.
(b) Transaction Charges. In addition to the letter of credit fees
called for by Section 4.2(a) hereof, the Company further agree to pay to the
Agent, for its own use and benefit, such issuing, processing, amendment and
transaction fees and charges as the Agent from time to time customarily
imposes in connection with the issuance, negotiation and payment of letters
of credit and drafts drawn thereunder, together with express and other
out-of-pocket costs incurred by the Agent in connection therewith.
Section 4.3. Agent's Fees. The Company shall pay to the Agent for its
own use and benefit such fees as the Company and the Agent agree to pursuant
to that certain Agent's fee letter dated as of March 24, 1995.
Section 4.4. Voluntary Prepayments. The Company shall have the
privilege of prepaying without premium or penalty the Domestic Rate Loans in
whole or in part (but if in part then in an aggregate minimum amount for all
Banks of $500,000 or such greater amount which is an integral multiple of
<PAGE>
$100,000) at any time upon notice to the Agent (such notices, if received
subsequent to 12:00 noon (Chicago time) on a given day, to be treated as
though received at the opening of business on the next Business Day), which
shall promptly so notify the Banks, by paying to the Agent for the account of
the Banks the principal amount to be prepaid and if such prepayment prepays
the Revolving Credit Notes in full, accrued interest thereon to the date
fixed for prepayment. Fixed Rate Loans may not be voluntarily prepaid.
Section 4.5. Mandatory Prepayments. (a) Commitment Reductions or
Currency Fluctuation. In the event that the aggregate outstanding principal
amount of the Notes should at any time and for any reason (whether as a
result of reductions in the Commitments or otherwise) exceed the aggregate
amounts of the Commitments as then in effect, the Company shall immediately
and without notice or demand pay over the amount of the excess to the Agent
as and for a mandatory prepayment of the Notes.
(b) Breakage. Concurrently with each prepayment called for by this
Section 4.5, if any such prepayment would necessitate a prepayment of a
Eurocurrency Loan prior to the last day of the applicable Interest Period,
then the Company (at its option) shall either (i) pay any amount due the
Banks in respect of such prepayment under Section 3.5 hereof or (ii) deposit
the amount which would necessitate a prepayment of a Eurocurrency Loan with
the Agent to be held by it (and invested at the request of the Company in
investments of the type identified in subsections (a) through (c) of Section
8.13 hereof maturing on or before the last day of the relevant Interest
Period, with the investment earnings thereon to be released to the Company if
and so long as no Default or Event of Default has occurred and is continuing)
and applied to the payment of the relevant Eurocurrency Loan on the last day
of the Interest Period therefor. Any cash or investments (and the proceeds
thereof) held by the Agent pursuant to this Section shall be and constitute
collateral security for the obligations of the Company hereunder and under
the Collateral Documents and the Notes and are hereby pledged to the Agent
for that purpose.
Section 4.6. Extension of the Revolving Credit Commitments. No sooner
than 120 days and no later than 60 days prior to each anniversary date hereof
the Company may request in a written notice to the Agent that the scheduled
Termination Date then in effect be extended for one (1) year. The Agent will
promptly inform the Banks of such request and each Bank shall notify the
Agent in writing within 30 days of receipt of such notice whether it agrees
to such extension. In the event that any Bank shall fail to so notify the
Agent whether it agrees to such extension, such Bank shall be deemed to have
refused to grant the requested extension. Upon receipt by the Agent of the
consent of all the Banks, the Company and the Banks shall enter into such
documents as the Agent may deem necessary or appropriate to reflect such
extension and to assure that all extensions of credit hereunder as so
extended are secured by the Collateral Documents, if any. There shall be a
maximum of two (2) extensions of the Termination Date hereunder and in no
event shall the Termination Date be extended beyond May 12, 2002.
Section 4.7. Discretion of Bank as to Manner of Funding.
Notwithstanding any other provision of this Agreement, each Bank shall be
entitled to fund and maintain its funding of all or any part of its Loans in
any manner it sees fit, it being understood, however, that for the purposes
of this Agreement all determinations hereunder shall be made as if each Bank
had actually funded and maintained each Fixed Rate Loan that is a Committed
Loan through the purchase of deposits in the relevant market having a
maturity corresponding to such Loan's Interest Period and bearing an interest
rate equal to LIBOR for such Interest Period.
<PAGE>
Section 4.8. Place and Application of Payments. All payments of
principal of and interest on the Loans and all payments of facility and
closing fees and all other amounts payable under this Agreement shall be made
to the Agent by no later than 12:00 noon (Chicago time) at (a) the principal
office of the Agent in Chicago, Illinois (or such other location in the
United States of America as the Agent may designate to the Company) or (b) if
such payment is to be made in an Alternative Currency, no later than 12:00
noon local time at the place of payment to such office as the Agent has
previously notified the Company for the benefit of the Banks. All such
payments shall be made (i) in the case of obligations payable in U.S.
Dollars, in immediately available funds at the place of payment or (ii) in
the case of obligations payable in an Alternative Currency, in such
Alternative Currency in funds then customary for the settlement of
international transactions in such currency, in all cases, without setoff or
counterclaim and without reduction for, and free from, any and all present or
future taxes, levies, imposts, duties, fees, charges, deductions,
withholdings, restrictions or conditions of any nature imposed by any
government or any political subdivision or taxing authority thereof (other
than taxes on the overall income or gross receipts of such Bank or its
Lending Office). The Agent will promptly thereafter cause to be distributed
like funds relating to the payment of principal or interest (ratably in
accord with the respective amount of principal and interest owing each Bank)
or fees (ratably in accord with the amount owing each) to the Banks, and like
funds relating to the payment of any other amount payable to any Bank to such
Bank, in each case to be applied in accordance with the terms of this
Agreement. Payments under Sections 3.5 and 4.11 hereof may be made by the
Company directly to the Banks entitled to the same . Principal prepayments
on the Revolving Credit Notes shall be applied first to the Domestic Rate
Loans and then to the Eurocurrency Loans in the order of their maturity.
Anything contained herein to the contrary notwithstanding, all payments
and collections received in respect of the indebtedness evidenced by the
Notes and all proceeds of the Collateral received, in each instance, by the
Agent or any of the Banks after the occurrence of an Event of Default shall
be remitted to the Agent and distributed as follows:
(a) first, to the payment of any outstanding costs and expenses
incurred by the Agent or any security trustee in monitoring, verifying,
protecting, preserving or enforcing the liens on the Collateral or in
protecting, preserving or enforcing rights under the Credit Agreement, the
Collateral Documents or the Notes and in any event including all costs and
expenses of a character which the Company has agreed to pay under Section
12.11 hereof (such funds to be retained by the Agent for its own account
unless it has previously been reimbursed for such costs and expenses by the
Banks, in which event such amounts shall be remitted to the Banks to
reimburse them for payments theretofore made to the Agent);
(b) second, to the payment of any outstanding interest or other fees or
amounts due under the Notes, the Credit Agreement, the Applications or the
Collateral Documents other than for principal, ratably as among the Banks in
accord with the amount of such interest and other fees or amounts owing each
Bank;
(c) third, to the payment of the principal of the Notes and principal
amounts owing under the Applications, ratably as among the Banks in accord
with the amount of such principal owing each Bank;
(d) fourth, to the Banks ratably in accord with the amounts of any
other indebtedness, obligations or liabilities of the Company owing to each
<PAGE>
of them hereunder or in connection herewith and secured by the Collateral
Documents unless and until all such indebtedness, obligations and liabilities
have been fully paid and satisfied; and
(e) fifth, to the Company or whoever may be lawfully entitled thereto.
Section 4.9. Change of Law. Notwithstanding any other provisions of
this Agreement or any Note, if at any time after the date hereof any change
in applicable law or regulation or in the interpretation thereof makes it
unlawful for any Bank to make or continue to maintain Eurocurrency Loans in
the relevant currency or to give effect to its obligations as contemplated
hereby, such Bank shall promptly give notice thereof to the Company, with a
copy to the Agent, and such Bank's obligations to make or maintain
Eurocurrency Loans under this Agreement in such currency shall terminate
until it is no longer unlawful for such Bank to make or maintain such
Eurocurrency Loans. The Company shall prepay on demand the outstanding
principal amount of any such affected Eurocurrency Loans, together with all
interest accrued thereon and all other amounts then due and payable to such
Bank under this Agreement; provided, however, subject to all of the terms and
conditions of this Agreement, the Company may then elect to borrow the
principal amount of the affected Eurocurrency Loan, if denominated in U.S.
Dollars, from such Bank by means of a Domestic Rate Loan from such Bank that
shall not be made ratably by the Banks but only from such affected Bank and
payments whereon shall be made contemporaneously with payments on the
relevant Borrowing of Eurocurrency Loans.
Section 4.10. Unavailability of Deposits or Inability to Ascertain, or
Inadequacy of, LIBOR. If on or prior to the first day of any Interest Period
for any Borrowing of Eurocurrency Loans:
(a) the Agent determines that deposits in the relevant currency in the
applicable amounts are not being offered to it in the eurocurrency interbank
market for such Interest Period, or
(b) Banks having 50% or more of the aggregate amount of the Commitments
advise the Agent that LIBOR as determined by the Agent will not adequately
and fairly reflect the cost to such Banks of funding their Eurocurrency Loans
for such Interest Period,
then the Agent shall forthwith give notice thereof to the Company and the
Banks, whereupon, until the Agent notifies the Company that the circumstances
giving rise to such suspension no longer exist, the obligations of the Banks
to make Eurocurrency Loans in the affected currency shall be suspended.
Section 4.11. Increased Cost and Reduced Return. (a) If on or after
the date hereof, the Agent or any Bank shall determine that the adoption of
any applicable law, rule or regulation, or any change therein, or any change
in the interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the interpretation
or administration thereof, or compliance by the Agent, any Bank (or its
Lending Office) with any request or directive (whether or not having the
force of law if of the type generally complied with by the Agent, such Bank
in accordance with its banking practices) of any such authority, central bank
or comparable agency shall:
(i) subject any Bank (or its Lending Office) to any tax, duty or other
charge with respect to its Fixed Rate Loans, its Notes or its obligation to
make Fixed Rate Loans, or shall change the basis of taxation of payments to
any Bank (or its Lending Office) of the principal of or interest on its Fixed
<PAGE>
Rate Loans or any other amounts due under this Agreement in respect of its
Fixed Rate Loans or its obligation to make Fixed Rate Loans (except for
changes in the rate of tax on the overall net income of such Bank or its
Lending Office imposed by the jurisdiction in which such Bank's principal
executive office or Lending Office is located); or
(ii) impose, modify or deem applicable any reserve, special deposit or
similar requirements (including, without limitation, any such requirement
imposed by the Board of Governors of the Federal Reserve System, but
excluding with respect to any Eurocurrency Loans any such requirement
included in an applicable Eurocurrency Reserve Percentage) against assets of,
deposits with or for the account of, or credit extended by, any Bank (or its
Lending Office) or against any Letter of Credit or the Agent's or any Bank's
or the Company's liability with respect thereto or shall impose on any Bank
(or its Lending Office) or on the United States market for certificates of
deposit or the interbank market any other condition affecting its Fixed Rate
Loans, its Notes or its obligation to make Fixed Rate Loans or impose on the
Agent or any Bank any penalty with respect to the foregoing or any other
condition regarding this Agreement, any Application or any Letter of Credit;
and the result of any of the foregoing is to increase the cost to the Agent
or such Bank (or its Lending Office) of making or maintaining any Fixed Rate
Loan or of issuing, maintaining or participating in the Letters of Credit
hereunder, or to reduce the amount of any sum received or receivable by the
Agent or such Bank (or its Lending Office) under this Agreement or under its
Notes with respect thereto, by an amount deemed by such Bank to be material,
then after demand by the Agent or such Bank (with a copy to the Agent), the
Company shall pay to the Agent or such Bank, within ten (10) days after
demand by such Bank, such additional amount or amounts as will compensate the
Agent or such Bank for such increased cost or reduction; provided that the
Agent or such Bank shall have delivered to the Company a certificate as
required by this Section 4.11 no later than 90 days after incurring any such
increased cost or reduced return. The Agent or any Bank seeking compensation
under this Section 4.11(a) shall submit to the Company a certificate
describing in reasonable detail the basis for and amount of such claim, which
certificate shall be conclusive in establishing the amount payable if
reasonably determined. In determining such amount, the Agent and the Banks
may use any reasonable averaging and attribution methods.
(b) Capital Adequacy. If any Bank shall determine that the adoption of
any applicable law, rule or regulation regarding capital adequacy, or any
change therein, or any change in the interpretation or administration thereof
by any governmental authority, central bank or comparable agency charged with
the interpretation or administration thereof or compliance by such Bank (or
its Lending Office) with any request or directive regarding capital adequacy
(whether or not having the force of law) of any such authority, central bank
or comparable agency, has or would have the effect of reducing the rate of
return on such Bank's capital as a consequence of its Commitment or other
obligations hereunder or credit extended by it hereunder to a level below
that which such Bank could have achieved but for such adoption, change or
compliance (taking into consideration such Bank's policies with respect to
capital adequacy) by an amount deemed by such Bank to be material, then from
time to time as specified by such Bank the Company shall pay to such Bank,
within ten (10) days after demand by such Bank, such additional amount or
amounts as will compensate such Bank for such reduction. If any Bank makes
such a claim for compensation, it shall provide to the Company a certificate
executed by an officer of such Bank setting forth the additional amount or
amounts to be paid to it hereunder in reasonable detail and such certificate
shall be deemed prima facie correct. In determining such amount, such Bank
<PAGE>
may use any reasonable averaging and attribution methods.
Section 4.12. Lending Offices. Each Bank may, at its option, elect to
make its Loans hereunder at the branch, office or affiliate specified on the
appropriate signature page hereof (each a "Lending Office") for each type of
Loan available hereunder or at such other of its branches, offices or
affiliates as it may from time to time elect and designate in a notice to the
Company and the Agent, provided that each Bank will designate a different
lending or funding office if such designation will avoid the need for, or
reduce the amount of, compensation payable under Section 4.11 hereof and will
not in the judgment of such Bank, be otherwise disadvantageous (except for
administrative costs to such Bank in designating a different lending or
funding office to the extent such administrative costs are not material) to
such Bank.
Section 4.13. Exemptions from Withholding. (a) U.S. Withholding Tax
Exemptions. Each Bank that is not a United States person (as such term is
defined in Section 7701(a)(30) of the Code) shall submit to the Company and
the Agent duly completed and signed copies of either Form 1001 (relating to
such Bank and entitling it to a complete exemption from withholding on all
amounts to be received by such Bank, including fees, pursuant to this
Agreement and its Loans) or Form 4224 (in duplicate) (relating to all amounts
to be received by such Bank, including fees, pursuant to this Agreement and
its Loans) of the United States Internal Revenue Service. Thereafter and
from time to time, each such Bank shall submit such additional duly completed
and signed copies of one or the other of such forms (or such successor forms
as shall be adopted from time to time by the relevant United States taxing
authorities) and duly updated forms as the Company or Agent may notify such
Bank are required under then-current United States law or regulations to
avoid United States withholding taxes on payments in respect of all amounts
to be received by such Bank, including fees, pursuant to this Agreement or
the Loans.
(b) Inability of Bank to Submit Forms. If any Bank determines, as a
result of any change in applicable law, regulation or treaty, or in any
official application or interpretation thereof, that it is unable to submit
any form or certificate that such Bank is obligated to submit pursuant to
subsection (a) of this Section 4.13 or that such Bank is required to withdraw
or cancel any such form or certificate previously submitted or any such form
or certificate otherwise becomes ineffective or inaccurate, such Bank shall
promptly notify the Company and the Agent of such fact and such Bank shall to
that extent not be obligated to provide any such form or certificate and will
be entitled to withdraw or cancel any affected form or certificate, as
applicable. In the event any Bank so notifies the Company and the Agent,
such Bank agrees that it will at any time thereafter at the request of the
Company assign its Notes and rights and obligations hereunder to another
lender designated by the Company and approved by the Agent (which approval
will not be unreasonably withheld) under and pursuant to Section 12.13 hereof
(except that the $5,000,000 assignment minimum shall not apply) upon payment
to it of the amount of principal and accrued and unpaid interest and fees
owing it as of the date such assignment becomes effective and any amount
which would be due it hereunder had its Fixed Rate Loans been prepaid rather
than assigned.
Section 5. The Collateral and Guaranties.
Section 5.1. Description of Collateral. Subject to Section 8.21
hereof the Notes and the other obligations of the Company hereunder and under
the Applications together with all obligations of the Company to any Bank
<PAGE>
with respect to Hedging Liabilities, shall be secured by valid and perfected
first liens on not less than 65% of the capital stock of Cherry Mikroschalter
GmbH (the "Collateral") pursuant to the terms of a pledge agreement
reasonably satisfactory to the Agent and the Required Banks (the "Pledge
Agreement") and the Company agrees that it will from time to time at the
request of the Agent or the Required Banks execute and deliver such documents
and do such acts and things as the Agent or the Required Banks may reasonably
request in order to provide for or perfect such liens. The Banks acknowledge
and agree that the amount of recovery under the Pledge Agreement shall be
limited in principal amount to the U.S. Dollar Equivalent of outstanding
principal balance of loans and advances made by the Company and outstanding
to Cherry Mikroschalter GmbH at the time of enforcement plus interest and
costs and expenses of enforcement.
Section 5.2. Guaranties. Payment of the Notes and the other
obligations of the Company hereunder and under the Applications shall at all
times be guarantied by each of the Restricted Subsidiaries (other than Cherry
Systems Corporation) (whether or not existing on the date hereof) pursuant to
a guaranty from each such Restricted Subsidiary in form and substance
satisfactory to the Banks (each such guaranty as the same may, from time to
time be modified or amended being hereinafter referred to individually as a
"Guaranty Agreement" and collectively as the "Guaranty Agreements").
Section 6. Representations And Warranties.
The Company represents and warrants to each of the Banks as follows:
Section 6.1. Corporate Organization and Authority. The Company and
each Subsidiary,
(a) is a corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation;
(b) has all requisite corporate power and authority and all licenses
and permits necessary in any respect material to the Company and its
Subsidiaries taken as a whole to own and operate its properties and to carry
on its business substantially as now conducted and as presently proposed to
be conducted; and
(c) is duly licensed or qualified and is in good standing as a foreign
corporation in each jurisdiction in which the nature of the business
transacted by it or the nature of the Property owned or leased by it makes
such licensing or qualification necessary and in which the failure to be so
licensed or qualified would materially and adversely affect the business,
properties or operations of the Company and its Restricted Subsidiaries taken
as a whole.
Schedule 6.1 hereto contains a complete and correct list of all present
Subsidiaries of the Company and correctly sets forth, as to each, whether or
not it constitutes a Restricted Subsidiary and the jurisdiction of its
incorporation. All of the issued and outstanding shares of capital stock of
each Subsidiary are validly issued and outstanding and fully paid and
nonassessable and all such shares indicated in Schedule 6.1 as owned by the
Company or a Subsidiary are owned, beneficially and of record, by the Company
or such Subsidiary, free of any Lien other than Liens permitted hereby.
Section 6.2. Outstanding Indebtedness. Schedule 6.2 attached hereto
correctly describes all Indebtedness of the Company and its Restricted
Subsidiaries outstanding on the date hereof and generally identifies all
<PAGE>
Liens securing such Indebtedness.
Section 6.3. Financial Statements. (a) The consolidated balance sheet
of the Company and its Subsidiaries as at February 28, 1994, and the related
consolidated statement of income, stockholders' equity and changes in
financial position for the fiscal year ending on such date, accompanied by
reports thereon containing opinions by the Company's certified public
accountants (copies of which have been furnished to the Banks), have been
prepared in accordance with GAAP consistently applied and present fairly the
financial position of the Company and its Subsidiaries as of such dates and
the results of their operations and changes in their financial position for
such years. The unaudited consolidated balance sheet of the Company and its
Subsidiaries as at November 30, 1994, and the related unaudited consolidated
statements of income and retained earnings and changes in financial position
for the nine months ended on said date (copies of which have been furnished
to the Banks), have been prepared in accordance with GAAP consistently
applied and present fairly the financial position of the Company and its
Subsidiaries as of that date, and the results of their operations and changes
in their financial position for such period, subject to such normal year end
audit adjustments which have not yet been disclosed to the Banks in writing
and which are not expected to be material and except that such unaudited
statements do not contain all of the footnote disclosures required by GAAP.
(b) Since November 30, 1994, there has been no material adverse change
in the condition, financial or otherwise, of the Company and its Subsidiaries
taken as a whole, from that shown on the above-described balance sheet as of
such date.
Section 6.4. Restrictions on Company and Subsidiaries. (a) The
Company is not a party to or bound by any note, contract, indenture,
agreement, instrument (including, without limitation, any loan or note
agreement or indenture relating to any outstanding securities of any
Affiliate to which the Company or any Subsidiary is a party or by which the
Company or any Subsidiary may be bound), order of any court or governmental
agency, law or regulation which restricts or limits the right or ability of
the Company to incur the Indebtedness and obligations contemplated herein.
(b) Neither any Restricted Subsidiary nor Cherry Mikroschalter GmbH is
a party to or bound by any contract, indenture, agreement, instrument, order
of court or governmental agency, law or regulation, under the terms of which
such Subsidiary's right to either repay loans and advances made to it by the
Company or to pay dividends or make other distributions, on or in respect of
its capital stock is restricted, except (i) laws of general application to
business corporations, which restrict or prohibit payment of dividends or
distributions on or redemptions or purchases of capital stock under certain
circumstances and (ii) restrictions imposed by Bayerische Vereinsbank AG in
connection with its credit facility to Cherry Mikroschalter GmbH set forth on
Schedule 6.4 hereto (it being understood that financial covenants applicable
to such credit facility or any other credit facility of Cherry Mikroschalter
GmbH which are no more restrictive than those set forth on Schedule 6.4
hereto shall not be deemed a restriction on Cherry Mikroschalter GmbH's right
to repay such loans and advances or pay dividends or make other distributions
for purposes of this Section 6.4).
Section 6.5. Pending Litigation. Except as set forth in Schedule 6.5
hereto, there are no proceedings pending or, to the knowledge of the Company,
threatened against or affecting the Company or any Subsidiary in any court or
before any governmental authority or arbitration board or tribunal in which,
either individually or in the aggregate, there is a reasonable possibility of
<PAGE>
an adverse decision which could result in any material adverse change in the
properties, business, profits or condition (financial or otherwise) of the
Company and its Restricted Subsidiaries taken as a whole or could result in
the Company's obligations under this Agreement, the Applications or the Notes
or Collateral Documents being declared invalid. Neither the Company nor any
Restricted Subsidiary is in default with respect to any material order of any
court or governmental authority or arbitration board or tribunal.
Section 6.6. Title to Properties. The Company and each Subsidiary has
good and marketable title in fee simple (or its equivalent under applicable
law) to all the real property and has good title to all the other Property it
purports to own, including that reflected in the most recent balance sheet
referred to in Section 8.6 hereof, except as sold or otherwise disposed of in
the ordinary course of business, subject only to Liens permitted by Section
8.12 hereof and to survey exceptions, encumbrances, easements, reservations,
rights of others for rights-of-way, utilities and other similar purposes or
zoning or other restrictions as to use of real properties and not arising in
connection with the borrowing of money or the obtaining of advances or credit
and which do not in any event impair the use of the Property in the business
of the Company or a Restricted Subsidiary in any respect material to the
Company and its Restricted Subsidiaries taken as a whole.
Section 6.7. Patents, Trademarks and Franchises. The Company and each
Restricted Subsidiary owns or possesses all patents, trademarks, trade names,
service marks, copyrights, licenses, franchises and rights necessary in any
respect material to the Company and is Restricted Subsidiaries taken as a
whole for the present and presently planned future conduct of their
respective business, without any known conflict with the rights of others.
Section 6.8. Financing is Legal and Authorized. The execution and
delivery of the Collateral Documents, the Guaranty Agreements, the
Applications and this Agreement, Borrowings hereunder, the issuance of the
Notes in evidence thereof, the requests for issuance of Letters of Credit
hereunder, and compliance by the Company and the Restricted Subsidiaries, as
appropriate, with all of the provisions hereof and of the Notes, the
Applications and Collateral Documents:
(a) are within the corporate powers of the Company and the Restricted
Subsidiaries and have been duly authorized by proper corporate action on the
part of the Company and the Restricted Subsidiaries; and
(b) will not violate any provisions of any law or any order of any
court or governmental authority or agency and will not conflict with or
result in any breach of any of the terms, conditions or provisions of, or
constitute a default under, the Articles of Incorporation or By-laws of the
Company or any Restricted Subsidiary or any indenture or other agreement or
instrument (including, without limitation, any loan or note agreement or
indenture relating to any outstanding securities of any Affiliate to which
the Company or any Restricted Subsidiary is a party or by which the Company
or any Restricted Subsidiary may be bound) to which the Company or any
Restricted Subsidiary is a party or by which any of them may be bound or
result in the imposition of any Liens on any property of the Company or of
any Restricted Subsidiary not permitted hereby.
This Agreement, the Collateral Documents, the Guaranty Agreements and the
Applications are the legal, valid and binding obligations of the Company and
the Restricted Subsidiaries, as appropriate, and are enforceable against such
Persons in accordance with their terms.
<PAGE>
Section 6.9. No Defaults. No Default or Event of Default has occurred
and is continuing.
Section 6.10. Governmental Consent. No approval, authorization,
consent or withholding of objection on the part of any regulatory body,
state, federal or local, is necessary in connection with the execution and
delivery of this Agreement, the Applications, the Guaranty Agreements or the
Collateral Documents or the issuance of the Notes or Letters of Credit or
compliance by the Company or any Restricted Subsidiary with any of the
provisions of this Agreement, the Applications, the Collateral Documents, the
Guaranty Agreements or the Notes.
Section 6.11. Taxes. All tax returns required to be filed by the
Company or any Subsidiary in any jurisdiction have, in fact, been filed, and
all taxes, assessments, fees and other governmental charges upon the Company
or any Subsidiary or upon any of their respective properties, income or
franchises, which are shown to be due and payable in such filed returns have
been paid except as otherwise disclosed on Schedule 6.5. For all taxable
years ending on or before February 28, 1980, the Federal income tax liability
of the Company and its Subsidiaries has been satisfied and either the period
of limitations on assessment of additional Federal income tax has expired or
the Company and its Subsidiaries have entered into an agreement with the
Internal Revenue Service closing conclusively the total tax liability for the
taxable year. The Company does not know of any proposed additional tax
assessment against it for which adequate provision has not been made in its
accounts in accordance with GAAP, and no material controversy in respect of
additional Federal or state income taxes is pending or to the knowledge of
the Company threatened. The provisions for taxes on the books of the Company
and each Subsidiary are adequate in all material respects for all open years,
and for its current fiscal year.
Section 6.12. Not an Investment Company; Public Utility Holding
Company. Neither the Company nor any Subsidiary is an "investment company"
or a company "controlled" by an "investment company" within the meaning of
the Investment Company Act of 1940, as amended, or a "public utility holding
company" within the meaning of the Public Utility Holding Company Act of
1935, as amended.
Section 6.13. Regulation U. None of the proceeds of the Loans will be
used, directly or indirectly, by the Company or any Subsidiary for the
purpose, whether immediate, incidental or ultimate, of purchasing or carrying
any "margin stock", within the meaning of Regulation U of the Board of
Governors of the Federal Reserve System. The Company is not engaged
principally, or as one of its important activities, in the business of
extending credit for the purpose of purchasing or carrying any such margin
stock within the meaning of such Regulation U.
Section 6.14. ERISA. No "employee pension benefit plans", as defined
in ERISA ("Plans" and individually, a "Plan"), maintained by the Company or
any Person which is under common control with the Company within the meaning
of Section 4001(b) of ERISA, nor any trusts created thereunder, have incurred
any "accumulated funding deficiency" as defined in Section 302 of ERISA nor
does the present value of all benefits vested under all Plans exceed the
value of the assets of the Plans allocable to such vested benefits, in either
case in any respect material to the Company and its Subsidiaries taken as a
whole.
Section 6.15. Compliance with Law. (a) Except as set forth in Schedule
6.5 hereto, neither the Company nor any of its Restricted Subsidiaries is (i)
<PAGE>
in default with respect to any order, writ, injunction or decree of any court
or (ii) in default in any material respect under any law, ordinance, order,
regulation, license or demand (including ERISA, the Occupational Safety and
Health Act of 1970 and laws and regulations establishing quality criteria and
standards for air, water, land and toxic waste) of any federal, state,
municipal or other governmental agency, with respect to or under which might
have consequences which would materially and adversely affect the business or
properties of the Company and its Restricted Subsidiaries on a consolidated
basis.
(b) The Company and the Restricted Subsidiaries are in compliance with
all applicable state and federal environmental, health and safety statutes
and regulations, including, without limitation, regulations promulgated under
the Resource Conservation and Recovery Act of 1976, 42 U.S.C. section 6901 et
seq., except where failure to be in compliance would not have a material
adverse effect on the Company and its Restricted Subsidiaries taken as a
whole and, to its knowledge, have not acquired, incurred or assumed, directly
or indirectly, any material contingent liability in connection with the
release of any toxic or hazardous waste or substance into the environment.
Insofar as known to the responsible officers of the Company, except as set
forth in Schedule 6.5, neither the Company nor any Restricted Subsidiary are
the subject of any evaluation under the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended by the Specified
Amendments and Reauthorization Act of 1986, 42 U.S.C. section 9601 et seq.
Section 6.16. Burdensome Contracts with Affiliates. Neither the
Company nor any Restricted Subsidiary is a party to any contract, agreement
or business arrangement material to the Company and its Restricted
Subsidiaries taken as a whole with any Affiliate on terms and conditions more
burdensome to the Company or such Restricted Subsidiary than would be issued
and customary in similar contracts, agreements or business arrangements
between parties which are not affiliated with each other.
Section 6.17. Use of Proceeds. Unless disclosed to the Banks in
writing prior to or concurrently with the making of any Loan hereunder the
proceeds of such Loan shall be used by the Company solely for general
corporate purposes in connection with its (or any of its Restricted
Subsidiaries') business in the United States.
Section 6.18. Full Disclosure. The statements and information
furnished by the Company to the Banks in connection with the negotiation of
this Agreement, the Guaranty Agreements and the Applications and the
commitments by the Banks to provide all or part of the financing contemplated
hereby do not contain any untrue statements of a material fact or omit a
material fact necessary to make the material statements contained herein or
therein not misleading, the Banks acknowledging that as to any projections
furnished to the Banks, the Company only represents that the same were
prepared on the basis of information and estimates the Company believed to be
reasonable.
Section 7. Conditions Precedent.
The obligation of the Banks to make any Loan hereunder or of the Agent
to issue, extend the expiration date of, or increase the amount of any Letter
of Credit shall be subject to the following conditions precedent:
Section 7.1. Conditions to Initial Credit Extension. Prior to the
initial credit extension hereunder:
<PAGE>
(a) each Bank shall have received an opinion of counsel to the Company
and each Restricted Subsidiary covering the matters set forth in Exhibit G
hereto;
(b) each Bank shall have received a Revolving Credit Note in the amount
of its Commitment and a Bid Note;
(c) the Agent shall have received a duly executed and delivered
Guaranty Agreement from each Restricted Subsidiary (other than Cherry Systems
Corporation);
(d) each Bank shall have received copies (executed or certified as may
be appropriate) of all legal documents or proceedings taken in connection
with the execution and delivery of this Agreement, the Applications, the
Guaranty Agreements and the Notes to the extent the Banks or their counsel
may reasonably request;
(e) the Agent shall have received for its own account such fees as are
to be paid at the time of the initial Borrowing pursuant to the Agent's fee
letter described in Section 4.3 hereof and thereafter the Company shall pay
the Agent such agency fees the Company and the Agent shall have agreed upon
pursuant to such Agent's fee letter;
(f) legal matters incident to the execution and delivery of this
Agreement, the Applications, the Guaranty Agreements and the Notes shall be
reasonably satisfactory to the Banks and their counsel; and
(g) The Company shall have terminated the Second Amended and Restated
Credit Agreement dated as of May 9, 1994 among the Company, the banks party
thereto, and Harris Trust and Savings Bank, as Agent, and all amounts payable
thereunder shall have been paid or shall be paid with the proceeds of the
first Borrowing hereunder.
Section 7.2. Conditions to Each Extension of Credit. As of the time
of each extension of credit hereunder (including the initial extension of
credit):
(a) the Agent shall have received the notice required under Section
1.6(a) hereof or, in the case of a Bid Loan, Section 2.2 hereof;
(b) each of the representations and warranties set forth in Section 6
hereof (except for the representation and warranty appearing in Section
6.3(b) hereof) shall be and remain true and correct as of said time, except
that the representations and warranties made in the last sentence of Section
6.3(a) shall be deemed to refer to the most recent quarterly or annual
report, respectively, furnished to the Banks pursuant to Section 8.6 hereof;
(c) no Default or Event of Default shall have occurred and be
continuing or will occur as a result of such Borrowing or Loan or the
issuance, amendment or extension of such Letter of Credit;
(d) after giving effect to the proposed use of the proceeds of any such
Loan, the making of such Loan by any Bank would not violate any applicable
law, rule or regulation, including, without limitation, Regulation U of the
Board of Governors of the Federal Reserve System;
and the notice of the Company requesting that such Borrowing be made
(including any notice deemed given by the Company under Section 1.6(c)
hereof) shall be and constitute a warranty as to the matters specified in
<PAGE>
subsections (b), (c) and (d) above. In addition to the conditions set forth
above, as of the time of each Borrowing other than a Refunding Borrowing, the
representation and warranty set forth in Section 6.3(b) hereof shall be and
remain true and correct as of said time (except that such representation and
warranty shall be deemed to refer to the most recent financial statements
furnished to the Banks pursuant to Section 8.6 hereof), and the request for
such Borrowing shall be and constitute a representation and warranty as to
such matters. In addition, in the case of the issuance of each Letter of
Credit, the Agent shall have received a duly completed Application therefor
and, in the case of an amendment to, extension or increase in the amount of,
a Letter of Credit, a written request therefor, in a form reasonably
acceptable to the Agent.
Section 8. Company Covenants.
The Company agrees that, so long as any Note is outstanding hereunder or
any credit is available to or in use by the Company hereunder, except to the
extent compliance in any case or cases is waived in writing by the Required
Banks:
Section 8.1. Corporate Existence, Etc. The Company will preserve and
keep in force and effect, and will cause each Subsidiary (other than Cherry
Systems Corporation) to preserve and keep in force and effect, its corporate
existence and all material franchises, licenses and permits necessary to the
proper conduct of its business provided, however, that neither the Company
nor any Subsidiary shall be required to preserve any such franchise, license
or permit if the Company shall determine that the preservation thereof is no
longer desirable in the conduct of the business of the Company and its
Subsidiaries taken as a whole.
Section 8.2. Insurance. The Company will maintain, and will cause
each Subsidiary to maintain, insurance coverage by financially sound and
reputable insurers in such forms and amounts, with such deductibles and
against such risks, as are customary for business entities of established
reputation engaged in the same or a similar business and owning and operating
similar properties and will upon request of any Bank furnish a certificate
setting forth its insurance coverages in summary form.
Section 8.3. Taxes, Claims for Labor and Materials, Compliance with
Laws. (a) The Company will promptly pay and discharge, and will cause each
Subsidiary promptly to pay and discharge, all lawful taxes, assessments and
governmental charges or levies imposed upon it or upon or in respect of all
or any part of its property or business and all claims for work, labor or
materials which, if unpaid, might become a Lien or charge upon any of its
Property material to the Company and its Subsidiaries taken as a whole unless
permitted by Section 8.12 hereof; provided the Company or such Subsidiary
shall not be required to pay any such tax, assessment, charge, levy, account
payable or claim if (i) the validity, applicability or amount thereof is
being contested in good faith by appropriate actions or proceedings which
will prevent the forfeiture or sale of any Property of the Company or such
Subsidiary or any material interference with the use thereof by the Company
or such Subsidiary, and (ii) the Company or such Subsidiary shall set aside
on its books reserves deemed by the Company in its reasonable business
judgment to be adequate with respect thereto or such greater amount as may be
required by GAAP.
(b) The Company will comply, and will cause each Subsidiary to comply,
with all laws, ordinances or governmental rules and regulations to which it
is subject, including without limitation, the Occupational Safety and Health
<PAGE>
Act of 1970, as amended, ERISA and all laws, ordinances, governmental rules
and regulations relating to environmental protection in all applicable
jurisdictions, the violation of which would materially and adversely affect
the properties, business, profits or condition of the Company and its
Subsidiaries taken as a whole or would result in any material Lien upon any
Property of the Company or any Subsidiary which is not permitted under
Section 8.12 hereof and which is material to the Company and its Subsidiaries
taken as a whole.
Section 8.4. Maintenance of Properties and Business. The Company will
maintain, preserve and keep, and will cause each Subsidiary to maintain,
preserve and keep, its material Properties which are necessary in any respect
material to the Company and its Subsidiaries taken as a whole for the conduct
of its business (whether owned in fee or a leasehold interest) in good repair
and working order (ordinary wear and tear excepted) and from time to time
will make all necessary repairs, replacements, renewals and additions so that
at all times the efficiency thereof shall be maintained.
Section 8.5. Nature of Business. Neither the Company nor any
Subsidiary will engage in any business or activity if, as a result, the
general nature of the business, taken on a consolidated basis, which would
then be engaged in by the Company and its Subsidiaries would be substantially
changed from the general nature of the business engaged in by the Company and
its Subsidiaries on the date of this Agreement.
Section 8.6. Reports and Rights of Inspection. The Company will keep,
and will cause each Subsidiary to keep, proper books of record and account in
which full and correct entries will be made of all dealings or transactions
of or in relation to the business and affairs of the Company or such
Subsidiary in accordance with GAAP consistently applied (except as to any
Subsidiary not organized under the laws of the United States or any state
thereof, in which case such books of records and accounts need only be
maintained in accordance with GAAP to the extent applicable to such
Subsidiary), and will furnish to each Bank (in duplicate if so specified
below or otherwise requested):
(a) Quarterly Statements. As soon as available and in any event within
45 days after the end of each quarterly fiscal period of each fiscal year,
copies of:
(1) consolidated and consolidating balance sheets of the Company and
its Subsidiaries as of the close of such quarterly period, and
(2) consolidated and consolidating statements of income and changes in
financial position (or cash flows) of the Company and its Subsidiaries for
such quarterly period and for the portion of the fiscal year then ended,
in each case setting forth in comparative form the figures for the
corresponding period of the preceding fiscal year, all in reasonable detail
and certified as presenting fairly the financial condition of the Company and
its Subsidiaries as of the end of such period and the results of their
operations for such period, subject to changes resulting from normal year-end
audit adjustments (which the certificate shall indicate are not expected to
be material or, if expected to be material, the nature and scope thereof
shall be specified) and to footnote disclosures, by the chief financial
officer or treasurer of the Company;
(b) Annual Statements. As soon as available and in any event within 90
days after the close of each fiscal year of the Company, copies of:
<PAGE>
(1) consolidated balance sheet of the Company and its Subsidiaries as
of the close of such fiscal year,
(2) consolidated statements of income, retained earnings and changes in
financial position (or cash flow) of the Company and its Subsidiaries for
such fiscal year,
(3) consolidating balance sheet of the Company and its Subsidiaries as
of the close of such fiscal year; and
(4) consolidating statements of income, retained earnings and changes
in financial position (or cash flow) of the Company and its Subsidiaries for
such fiscal year,
and, with respect to clauses (1) and (2) above, setting forth in comparative
form the consolidated figures for the preceding fiscal year, all in
reasonable detail and accompanied by an opinion thereon of Arthur Andersen &
Co. or another firm of independent public accountants of recognized national
standing, selected by the Company (the "Auditors") and reasonably acceptable
to the Banks, to the effect that the consolidated financial statements have
been prepared in accordance with GAAP consistently applied (except for
changes in application in which such accountants concur) and present fairly
the consolidated financial condition of the Company and its Subsidiaries as
of the end of such fiscal year and the results of their operations for the
fiscal year then ended and that the examination of such accountants in
connection with such financial statements has been made in accordance with
generally accepted auditing standards and, accordingly, included such tests
of the accounting records and such other auditing procedures as were
considered necessary in the circumstances.
(c) SEC and Other Reports. Promptly upon their becoming available, one
copy of each financial statement, report, notice or proxy statement sent by
the Company to its stockholders generally, and of each regular or periodic
report, and any registration statement or prospectus filed by the Company or
any Subsidiary with any securities exchange or the Securities and Exchange
Commission or any successor agency, and of any order in any proceedings to
which the Company or any of its Subsidiaries is a party, issued by any
governmental agency, Federal or state, having jurisdiction over the Company
or any of its Subsidiaries which order is material to the Company and its
Restricted Subsidiaries taken as a whole;
(d) Requested Information. With reasonable promptness, such other data
and information as any Bank may reasonably request;
(e) Officers' Certificates. Within the periods provided in paragraph
(a) above, a certificate of an authorized financial officer of the Company
stating that he has reviewed the provisions of this Agreement and setting
forth: (i) the information and computations (in sufficient detail) required
in order to establish whether the Company was in compliance with the
requirements of Sections 8.7 through 8.10 hereof (both inclusive) at the end
of the period covered by the financial statements then being furnished, and
(ii) to the best of his knowledge, whether there exists on the date of the
certificate or existed at any time during the period covered by such
financial statement any Default or Event of Default and, if any such
condition or event exists on the date of the certificate or existed during
such period, specifying the nature and period of existence thereof and the
action the Company is taking, has taken or proposes to take with respect
thereto and being accompanied by a discussion of operations and financial
results for the quarter most recently completed, including comments on
<PAGE>
revenues, volumes of shipments, product prices, production volumes, margins,
and net income, for the previous quarter and the year earlier quarter, as
appropriate;
(f) Accountants' Certificates. Within the period provided in paragraph
(b) above, a certificate of the Auditors stating that they have reviewed this
Agreement and, stating further, whether in making their audit, such
accountants have become aware of any Default or Event of Default under any of
the provisions of this Agreement insofar as any such provisions pertain to or
involve accounting matters or determinations, and if any such condition or
event then exists or existed and came to their attention in making their
audit, specifying the nature and period of existence thereof;
(g) Projections. As soon as available and in any event within 75 days
after the close of each calendar year of the Company, projections prepared by
the Company containing reasonable forecasts as to future operations and
financial performance of the Company and its Subsidiaries for the next three
fiscal years; and
(h) Notices of Default. Promptly after knowledge thereof shall have
come to the attention of any responsible officer of the Company, notice of
any Default or Event of Default hereunder.
Without limiting the foregoing, the Company will permit each Bank (or such
Persons as any Bank may designate), to visit and inspect, under the Company's
guidance, any of the properties of the Company or any Subsidiary, to examine
all their books of account, records, reports and other papers, to make copies
and extracts therefrom (except with respect to confidential proprietary
information), and to discuss their respective affairs, finances and accounts
with their respective officers and employees, all at such reasonable times
and as often as may be reasonably requested.
Section 8.7. Consolidated Tangible Net Worth for the Company and its
Subsidiaries. The Company shall at all times have Consolidated Tangible Net
Worth of not less than the Minimum Required Amount. For purposes of this
Section 8.7, the "Minimum Required Amount" shall mean $122,750,000 and shall
increase as of March 1, 1996 and as of each March 1st thereafter, by an
amount equal to 85% of the cumulative positive Consolidated Net Income earned
each fiscal year commencing and completed after February 28, 1995 (but
without subtraction for any negative Consolidated Net Income for any such
fiscal year).
Section 8.8. Leverage Ratio for the Company and its Subsidiaries. At
all times the Company shall have a Leverage Ratio of not greater than 40%.
Section 8.9. Indebtedness To Cash Flow Ratio for the Company and its
Subsidiaries. As of the last day of each fiscal quarter the Company shall
have an Indebtedness to Cash Flow Ratio of not more than 2.0 to 1.0.
Section 8.10. Coverage Ratio for the Company and its Subsidiaries. As
of the last day of each fiscal quarter, the Company shall have a Coverage
Ratio for the four quarter period (taken as a single accounting period) then
ending of not less than 3.0 to 1.0.
Section 8.11. Incurrence of Indebtedness. The Company will not, and
will not permit any Subsidiary to, issue, assume, guarantee, incur or
otherwise be or become liable in respect of any Indebtedness other than:
(a) the Loans and Letters of Credit hereunder;
<PAGE>
(b) Indebtedness of any Restricted Subsidiary to the Company or to
another Restricted Subsidiary or of the Company to a Restricted Subsidiary
and for the period through December 31, 1996, indebtedness of Cherry
Semiconductor Corporation in respect of those certain Rhode Island Industrial
Facilities Corporation $1,000,000 Taxable Industrial Development Revenue
Bonds (Cherry Semiconductor Corporation Project-1994 Series) (the "RIIFC
Bonds") so long as such RIIFC Bonds are held and owned by the Company;
(c) up to Deutschmark 65,000,000 of Indebtedness of Cherry
Mikroschalter GmbH less the aggregate principal amount of all loans or
advances from the Company to Cherry Mikroschalter GmbH at any one time
outstanding;
(d) Indebtedness not otherwise permitted by this Section 8.11 which is
outstanding on the date hereof and identified on Schedule 6.2 hereto;
(e) Capitalized Lease Obligations;
(f) purchase money indebtedness secured by Liens permitted by Section
8.12(g) hereof in an aggregate amount not to exceed an amount equal to 5% of
the consolidated assets of the Company and its Subsidiaries at any one time
outstanding;
(g) Indebtedness of the Company with respect to Guaranties of
Indebtedness of its Subsidiaries so long as the principal amount of such
Indebtedness, when taken together with the amount of outstanding investments,
acquisitions, loans and advances permitted by Section 8.13(i) hereof does not
exceed $3,000,000 at any one time outstanding;
(h) Unsecured Indebtedness of the Company for borrowed money not
otherwise permitted by this Section 8.11 aggregating at any one time not more
than $65,000,000 less outstanding Loans hereunder;
(i) Indebtedness of Subsidiaries (other than Restricted Subsidiaries
and Cherry Mikroschalter GmbH) not otherwise permitted hereunder aggregating
not more than $5,000,000 (or its U.S. Dollar Equivalent) at any one time
outstanding; and
(j) Indebtedness of the Company as a result of a Debt Placement.
Section 8.12. Limitation on Liens. The Company will not, and will not
permit any Restricted Subsidiary to, create or incur, or suffer to be
incurred or to exist, any Lien of any kind on its or their Property, whether
now owned or hereafter acquired, or upon any income or profits therefrom, or
transfer any Property for the purpose of subjecting the same to the payment
of obligations in priority to the payment of its or their general creditors,
or acquire or agree to acquire, or permit any Restricted Subsidiary to
acquire or agree to acquire, any Property or assets upon conditional sales
agreements or other title retention devices, except:
(a) Liens for property taxes and assessments or governmental charges or
levies and Liens securing claims or demands of mechanics and materialmen,
provided that payment thereof is not at the time required by Section 8.3
hereof;
(b) Liens of or resulting from any judgment or award, the time for the
appeal or petition for rehearing of which shall not have expired, or in
respect of which the Company or a Restricted Subsidiary shall at any time in
good faith be prosecuting an appeal or proceeding for review and in respect
<PAGE>
of which a stay of execution pending such appeal or proceeding for review
shall have been secured;
(c) Liens and priority claims incidental to the conduct of business or
the ownership of Properties (including warehousemen's and attorneys' Liens
and statutory landlords' Liens) and deposits, pledges or Liens to secure the
performance of bids, tenders or trade contracts, or to secure statutory
obligations, or other Liens of like general nature incurred in the ordinary
course of business and not in connection with the borrowing of money or the
obtaining of advances or credit, provided in each case the obligation secured
is not overdue or, if overdue, is being contested in good faith by
appropriate actions or proceedings which prevent enforcement of the matters
under the contest;
(d) Liens securing Indebtedness of a Restricted Subsidiary to the
Company or to a Restricted Subsidiary;
(e) Liens of the Collateral Documents;
(f) Liens securing Indebtedness permitted under Section 8.11(e) and
liens currently securing Indebtedness as disclosed on Schedule 6.2 hereto;
and
(g) Purchase money Liens by the vendor in respect of equipment now
owned or hereafter acquired by the Company or any Restricted Subsidiary (not
extending to any other Property), or Liens on equipment so acquired (not
extending to any other Property) existing at the time of acquisition thereof,
or renewals, extensions and refundings of any such Liens (not extending to
any other Property), provided that (i) the principal amount of Indebtedness
secured by any such Lien shall not exceed 80% of the cost or fair market
value, whichever is less, of the Property covered by such Lien at the time of
the creation thereof or the acquisition of such Property and (ii) the sum of
the aggregate principal amount at any one time remaining unpaid on the
Indebtedness so secured, when taken together with the aggregate outstanding
liability of the Company and its Restricted Subsidiaries in respect of
Capitalized Lease Obligations permitted by Section 8.11(e) hereof, does not
exceed an amount equal to 5% of the consolidated assets of the Company and
its Subsidiaries.
Section 8.13. Investments, Loans and Advances. The Company will not
and will not permit any Restricted Subsidiary to, directly or indirectly,
make, retain or have outstanding any investments (whether through purchase of
stock or obligations or otherwise) in, or loans or advances to, any other
Person or acquire all or any substantial part of the assets or business of
any Person or subordinate any claim or demand it may have to the claim or
demand of any other person, firm or corporation; provided, however, that the
foregoing provisions shall not apply to nor operate to prevent:
(a) investments by the Company in direct obligations of the United
States of America or of any agency or instrumentality thereof whose
obligations constitute full faith and credit obligations of the United States
of America provided that any such obligations shall mature within one year
from the date the same are acquired by the Company;
(b) investments by the Company in commercial paper rated P-l by Moody's
Investors Services, Inc. and A-l by Standard & Poors Corporation maturing
within one year of the date of issuance thereof;
(c) investments by the Company in certificates of deposit issued by any
<PAGE>
Bank or any other United States commercial bank having capital and surplus of
not less than $100,000,000;
(d) the present investments, loans and advances by the Company in its
Subsidiaries as disclosed on Schedule 6.1 hereto and the investment by the
Company in the RIIFC Bonds through December 31, 1996;
(e) additional loans and advances by the Company to Cherry
Mikroschalter GmbH, in addition to those permitted by clause (d) above not
exceeding $25,000,000 (or its U.S. Dollar Equivalent) at any one time
outstanding;
(f) additional investments by the Company in, and loans and advances by
the Company to, Subsidiaries organized under the laws of a jurisdiction other
than the United States or any State thereof, other than Cherry Mikroschalter,
in addition to those permitted by clause (d) above not exceeding $3,000,000
(or its U.S. Dollar Equivalent) at any one time outstanding and additional
investments by the Company in Restricted Subsidiaries which have executed and
delivered Guaranties pursuant to Section 5.2 hereof;
(g) the present investment by the Company in Hirose Cherry Precision
Company, Limited;
(h) Acquisitions of substantially all the assets of corporations or
acquisitions of Restricted Subsidiaries, in each case which are engaged in
similar lines of business as the Company and its existing Subsidiaries by the
Company or a Restricted Subsidiary from and after May 12, 1995 so long as the
aggregate amount of consideration payable in connection with such
Acquisitions does not exceed $20,000,000; provided that any acquisition of a
Restricted Subsidiary shall have been approved by the board of directors of
such Person prior to such acquisition; and
(i) investments, acquisitions, loans and advances not otherwise
permitted by this Section 8.13, when taken together with the aggregate
outstanding liability of the Company with respect to Guaranties permitted by
Section 8.11(g) hereof aggregating not more than $3,000,000 at any one time
outstanding.
In determining the amount of investments, loans and advances permitted under
this Section 8.13, investments shall always be taken at the original cost
thereof, regardless of any subsequent appreciation or depreciation therein
and loans and advances shall be taken at the principal amount thereof then
remaining unpaid.
Section 8.14. Dividends and Other Restricted Payments. The Company
will not declare or pay any dividends on or make any other distributions in
respect of any class of its capital stock (other than dividends payable
solely in its capital stock) or directly or indirectly purchase, redeem or
otherwise acquire or retire any of its capital stock, except out of the
proceeds of, or in exchange for, a substantially concurrent issue and sale of
capital stock of the Company (the foregoing nonexcepted declarations,
payments, purchases, redemptions, retirements and acquisitions being
hereinafter referred to as "Restricted Payments"); provided however, that the
Company may make or pay Restricted Payments if at the time such Restricted
Payment is made and after giving effect thereto, no Default or Event of
Default occurs or is continuing hereunder.
Section 8.15. ERISA Compliance. (a) Relationship of Vested Benefits to
Pension Plan Assets. The Company will and will cause each Subsidiary to at
<PAGE>
all times maintain the qualified status of its Plans. The Company will not
and will not permit any Subsidiary to, at any time terminate any Plan unless
on the date of such termination the present value of all employee benefits
vested under such Plan does not exceed the present value of the assets
allocable to such vested benefits.
(b) Valuations. All assumptions and methods used to determine the
present value of vested employee benefits under Plans at any time maintained
by any one or more of the Company and its Subsidiaries and the present value
of assets of such Plans shall be reasonable in the good faith judgment of the
Company and shall comply with all requirements of law in all material
respects.
(c) Prohibited Actions. Neither the Company nor any Subsidiary nor any
Plan at any time maintained by the Company or any of its Subsidiaries will
(1) engage in any "prohibited transaction" (as such term is defined in
Section 406 or Section 2003(a) of ERISA) which either by itself or because of
any excise tax or other penalty which may be imposed as a result thereof
would materially and adversely affect the properties, business, profits or
condition of the Company and its Restricted Subsidiaries taken as a whole;
(2) incur any "accumulated funding deficiency" (as such term is defined
in Section 302 of ERISA) whether or not waived; or
(3) terminate any such Plan in a manner which could result in the
imposition of a Lien on the Property of the Company or any Subsidiary
pursuant to Section 4068 of ERISA.
Section 8.16. Mergers, Consolidations and Sales of Assets. (a) The
Company will not, and will not permit any Subsidiary to (i) consolidate with
or be a party to a merger with any other Person, (ii) sell, lease or
otherwise dispose of any substantial part of the Properties of the Company
and its Subsidiaries, (iii) sell or discount any of its notes or accounts
receivable (other than any discount of receivables granted in the ordinary
course of business to enhance collection) or (iv) lease any Property
(constituting a substantial part of the Properties of the Company and its
Subsidiaries) theretofore owned by the Company or any Subsidiary; provided,
however, that: (aa) any Restricted Subsidiary may merge or consolidate with
or into or sell, lease or otherwise dispose of any of its Properties to the
Company or any Restricted Subsidiary, provided that in any such merger or
consolidation involving the Company, the Company shall be the surviving or
continuing corporation and that the survivors of such a merger or
consolidation or the lessee or purchaser of such assets shall take such
actions as the Agent may require to assure that its Liens on the Collateral
are unimpaired by the transaction in question.
(b) The Company will not sell, transfer or otherwise dispose of any
shares of stock in any Subsidiary or any Indebtedness of any Restricted
Subsidiary and will not permit any Subsidiary to sell, transfer or otherwise
dispose of (except to the Company or a Restricted Subsidiary) any shares of
stock or any Indebtedness of any other Subsidiaries; and
(c) The Company will not permit any Restricted Subsidiary to issue any
additional shares of its capital stock of any class unless, after giving
effect thereto, such Restricted Subsidiary will remain a Restricted
Subsidiary.
For the purposes hereof, a sale or lease of 5% or more of the
<PAGE>
consolidated assets of the Company and its Restricted Subsidiaries shall be
deemed a sale or lease of a substantial part of the Properties of the Company
and its Subsidiaries.
Section 8.17. Transactions with Affiliates. The Company will not, and
will not permit any Restricted Subsidiary to, enter into or be a party to any
transaction or arrangement with any Affiliate (including without limitation,
the purchase from, sale to or exchange of Property with, or the rendering of
any service by or for, any Affiliate), except pursuant to the reasonable
requirements of the Company's or such Restricted Subsidiary's existing or
proposed business and upon fair and reasonable terms no less favorable to the
Company or such Restricted Subsidiary than would obtain in a comparable
arm's-length transaction with a Person other than an Affiliate.
Section 8.18. Terms of Collateral Documents Not Superceded. Nothing
contained herein shall be deemed or construed to permit any act or omission
which is prohibited by the terms of any Collateral Document, the covenants
and agreements contained herein being in addition to and not in substitution
for the covenants and agreements contained in the Collateral Documents.
Section 8.19. Changes in Fiscal Year. The Company will not change its
fiscal year.
Section 8.20. Compliance with Collateral Documents and Guaranty
Agreements. The Company covenants and agrees, and shall cause each
Restricted Subsidiary to covenant and agree, that it will comply with all
terms and conditions of each of the Guaranty Agreements and Collateral
Documents applicable to it and that each will, at any time and from time to
time as reasonably requested by the Agent, execute and deliver such further
instruments and perform such other acts as the Agent may deem reasonably
necessary to provide for or protect or perfect the Lien of the Agent in the
Collateral granted pursuant to the Collateral Documents, in each case for the
ratable benefit of the Banks.
Section 8.21. Pledge Agreement. The Company covenants and agrees that
if at any time it shall make loans, or otherwise advance funds, to Cherry
Mikroschalter GmbH in excess of $15,000,000 (or its U.S. Dollar Equivalent)
it shall execute and deliver to the Agent for the benefit of the Banks the
Pledge Agreement.
Section 9. Events Of Default And Remedies.
Section 9.l. Events of Default. Any one or more of the following
shall constitute an Event of Default hereunder:
(a) default in the payment when due of any part of the principal of any
Note or of any reimbursement obligation, whether at the stated maturity
thereof or at any other time provided for in this Agreement (other than
Section 4.5 hereof) or in the Applications, or default for 1 (one) Business
Day in the payment of any part of the principal of the Notes when due arising
out of a mandatory prepayment under Section 4.5 hereof;
(b) default in the payment of any part of the interest on any Note when
due, whether at the stated maturity thereof or at any time provided for in
this Agreement, or default in the payment when due of any fee, commission,
charge or other amount payable by the Company hereunder or under the
Collateral Documents in each case which is not remedied within five (5)
Business Days after receipt of notice thereof by the Company from the Agent
or any holder or holders of a Note;
<PAGE>
(c) default in the observance or performance of any covenant set forth
in Sections 8.7 through 8.10 hereof or Sections 8.14, 8.16 or 8.21 hereof or
of any covenant hereof or of any Collateral Document dealing with the use,
disposition or remittance of the proceeds of Collateral or the maintenance of
insurance thereon;
(d) default in the observance or performance of any other provision
hereof or of any of the Collateral Documents which is not remedied within 30
days after notice thereof to the Company by the Agent or by the holder or
holders of a Note;
(e) default shall occur in the payment when due (subject to any
applicable grace period) of any Indebtedness aggregating greater than
$2,000,000 which was incurred, assumed or guaranteed by the Company or any
Subsidiary or default shall occur under any indenture, agreement or
instrument under which the same may be issued, and such default shall
continue for a period of time sufficient to permit the acceleration of the
maturity of any such Indebtedness (whether or not such maturity is in fact
accelerated);
(f) any representation or warranty made herein or in any of the
Collateral Documents or pursuant hereto or thereto or in connection with any
transaction contemplated hereby proves untrue in any material respect as of
the date of the issuance or making thereof;
(g) any judgment or judgments, writ or writs or warrant or warrants of
attachment, or any similar process or processes in an aggregate amount in
excess of $250,000 and which is not fully covered by insurance shall be
entered or filed against the Company or any Restricted Subsidiary against any
of their property or assets and remains undischarged, unvacated, unbonded or
unstayed for a period of 45 days;
(h) more than 49% of the Voting Stock of the Company is at any time and
for any reason owned by any Person or group of Persons acting in concert
other than Walter Cherry, Peter Cherry and their wives and/or lineal
descendants or trusts for the benefit of their wives and/or lineal
descendants;
(i) any of the Collateral Documents (unless released in accordance with
the terms hereof) or the Guaranty Agreements shall, for any reason, not be or
shall cease to be in full force in effect or is declared to be null and void
or any Restricted Subsidiary shall repudiate or disavow its obligations
thereunder or any of the Collateral Documents (unless released in accordance
with the terms hereof) shall not give or shall cease to give the Agent the
Lien, rights, powers and privileges purported to be created thereby
(including, without limitation, a first priority perfected security interest
in, and Lien on, all of the Collateral subject thereto), in favor of the
Agent, superior to and prior to the rights of all third Persons and subject
to no other Liens, other than because such Collateral Document is not then
yet required to be executed and delivered hereunder, or an event occurs which
is specified as an event of default in any of the Collateral Documents;
(j) bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings or other proceedings for relief under any bankruptcy law or
similar law for the relief of debtors are instituted against the Company or
any Subsidiary and are not dismissed within 60 days after such institution or
a decree or order of a court having jurisdiction in the premises for the
appointment of a trustee, custodian or receiver for the Company or any
Subsidiary or for the major part of any of their property is entered and the
<PAGE>
trustee, custodian or receiver appointed pursuant to such decree or order is
not discharged within 60 days after such appointment; or
(k) the Company or any Subsidiary shall institute bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings or other
proceedings for relief under any bankruptcy law or laws for the relief of
debtors or shall consent to the institution of such proceedings against it by
others or to the entry of any decree or order adjudging it bankrupt or
insolvent or approving as filed any petition seeking reorganization under any
bankruptcy or similar law or shall apply for or shall consent to the
appointment of a receiver, custodian or trustee for any of them or for the
major part of any of their property or shall make an assignment for the
benefit of creditors or shall take any corporate action authorizing any of
the foregoing.
Section 9.2. Non-Bankruptcy Defaults. When any Event of Default
described in subsections 9.1(a) to 9.1(i), both inclusive, has occurred and
is continuing, the Agent shall, upon request of the Required Banks, by notice
to the Company, take any or all of the following actions:
(a) terminate the obligation of the Banks to extend any further credit
hereunder on the date (which may be the date thereof) stated in such notice;
(b) declare the principal of and the accrued interest on the Notes to
be forthwith due and payable and thereupon the Notes, including both
principal and interest, and all fees, charges and commissions payable
hereunder, shall be and become immediately due and payable without further
demand, presentment, protest or notice of any kind; and/or
(c) enforce any and all rights and remedies available under the
Collateral Documents.
Section 9.3. Bankruptcy Defaults. When any Event of Default described
in subsection 9.1(j) or 9.1(k) has occurred and is continuing, then the then
unpaid balance of the Notes, including both principal and interest, and all
fees, charges and commissions payable hereunder, shall immediately become due
and payable without presentment, demand, protest or notice of any kind, the
obligation of the Banks to extend further credit pursuant to any of the terms
hereof shall immediately terminate and the Agent may enforce any and all
rights and remedies available under the Collateral Documents.
Section 9.4. Collateral for Undrawn Letters of Credit. When any Event
of Default, other than an Event of Default described in subsection (j) or (k)
of Section 9.1, has occurred and is continuing, the Company shall, upon
demand of the Agent (which demand shall be made upon the request of the
Required Banks), and when any Event of Default described in subsection (j) or
(k) of Section 9.1 has occurred the Company shall, without notice or demand
from the Agent, immediately pay to the Agent the full amount of each Letter
of Credit then outstanding, the Company agreeing to immediately make such
payment and acknowledging and agreeing that the Banks would not have an
adequate remedy at law for failure of the Company to honor any such demand
and that the Agent and the Banks shall have the right to require the Company
to specifically perform such undertaking whether or not any draws have been
made under any such Letters of Credit.
Section 10. Definitions; Interpretation Of Agreement.
Section 10.1. Definitions. The following terms when used herein shall
have the following meanings, such terms to be equally applicable to both the
<PAGE>
singular and the plural of the terms defined:
"Acquisition" shall mean any transaction, or any series of related
transactions, consummated after the date of this Agreement, by which the
Company or any of the Restricted Subsidiaries (i) acquires any going business
or all or substantially all of the assets of any Person or division thereof,
whether through purchase of assets, merger or otherwise, or (ii) directly or
indirectly acquires (in one transaction or as the most recent transaction in
a series of transactions) at least a majority (in number of votes) of the
Voting Stock of a corporation or other firm.
"Adjusted LIBOR" is defined in Section 1.4(b) hereof.
"Affiliate" means any Person directly or indirectly controlling or
controlled by, or under direct or indirect common control with, another
Person. A Person shall be deemed to control another Person for the purposes
of this definition if such Person possesses, directly or indirectly, the
power to direct or cause the direction of, the management and policies of the
other Person, whether through the ownership of voting securities, common
directors, trustees or officers, by contract or otherwise.
"Agent" shall mean Harris Trust and Savings Bank and its successors as
agent hereunder.
"Alternative Currency" is defined in Section 1.2 hereof.
"Application" is defined in Section 1.3(c) hereof.
"Applicable Facility Fee" is defined in Section 1.7 hereof.
"Applicable Eurocurrency Margin" is defined in Section 1.7 hereof.
"Applicable Letter of Credit Fee" is defined in Section 1.7 hereof.
"Assignment Agreements" is defined in Section 12.13 hereof.
"Auditors" is defined in Section 8.6(b) hereof.
"Authorized Representative" shall mean any one of the Chief Executive
Officer, Chief Financial Officer or Treasurer or such other persons as may
from time to time be designated as such in a writing from the Company to the
Agent.
"Banks" shall mean Harris Trust and Savings Bank, Bank of America
Illinois, Societe Generale, Bayerische Vereinsbank AG and all other lenders
becoming parties hereto pursuant to Section 12.13 hereof.
"Bid" has the meaning specified in Section 2.2(c) hereof.
"Bid Loan" has the meaning specified in Section 2.1 hereof.
"Bid Loan Request" has the meaning specified in Section 2.2(a) hereof.
"Bid Loan Request Confirmation" has the meaning specified in Section
2.2(a) hereof.
"Bid Note" has the meaning specified in Section 3.6(b) hereof.
"Borrowing" shall mean the total of Loans of a single type made by the
<PAGE>
Banks on a single date and, if such Loans are Eurocurrency Loans, for a
single Interest Period and denominated in the same currency. Borrowings of
Committed Loans are made from each of the Banks according to their
Commitments. Borrowings of a Bid Loan or Bid Loans are made from a Bank or
Banks in accordance with the procedures of Section 2 hereof.
"Business Day" means any day other than a Saturday or Sunday on which
banks are not authorized or required to close in Chicago, Illinois and, if
the applicable Business Day relates to the borrowing or payment of a
Eurocurrency Loan, on which banks are dealing in United States Dollar
deposits or the relevant Alternative Currency in the interbank market in
London, England and Nassau, Bahamas and, if the applicable Business Day
relates to the borrowing or payment of a Eurocurrency Loan denominated in an
Alternative Currency, on which banks and foreign exchange markets are open
for business in the city where disbursements of or payments on such Loans are
to be made.
"Capitalized Lease" shall mean any lease the obligation for Rentals with
respect to which is required to be capitalized on a balance sheet of the
lessee in accordance with GAAP.
"Capitalized Lease Obligations" shall mean as of the date of any
determination the amount at which the aggregate Rentals due and to become due
under all Capitalized Leases under which the Company or any Subsidiary is a
lessee would be reflected as a liability on a consolidated balance sheet of
the Company and its Subsidiaries prepared in accordance with GAAP.
"Collateral" shall have the meaning set forth in Section 5 hereof.
"Collateral Documents" shall mean all security agreements, financing
statements and other documents as shall from time to time secure the Notes or
otherwise establish priorities with respect to the Collateral.
"Commitments" shall mean, as defined in Section 1.1 hereof, the
commitments of the Banks to extend credit hereunder in the amount set forth
opposite their signatures hereto, as such amounts may be reduced pursuant to
Section 3.4 hereof.
"Committed Loan" has the meaning specified in Section 1.1 hereof.
"Confirmation of Bid" has the meaning specified in Section 2.2(c)
hereof.
"Consolidated Equity" shall mean as of the date of any determination
thereof, Consolidated Tangible Net Worth of the Company and its Subsidiaries
plus gains or losses, if any, of such Person resulting from cumulative
foreign exchange translations all as computed on a consolidated basis for the
Company and its Subsidiaries in accordance with GAAP.
"Consolidated Net Income" for any period shall mean the gross revenues
from any source of the Company and its Subsidiaries for such period less all
expenses and other proper charges (including taxes on income), determined on
a consolidated basis in accordance with GAAP consistently applied and after
eliminating earnings or losses attributable to outstanding Minority
Interests, but excluding in any event:
(a) any gains or losses on the sale or other disposition of investments
or fixed or capital assets, and any taxes on such excluded gains and any tax
deductions or credits on account of any such excluded losses;
<PAGE>
(b) net earnings of any business entity (other than a Restricted
Subsidiary) in which the Company or any Subsidiary has an ownership interest
unless such net earnings shall have actually been received by the Company or
such Subsidiary in the form of cash distributions or distributions in the
form of property of readily determinable objective value;
(c) any portion of the undistributed net earnings of any Restricted
Subsidiary which for any reason is unavailable by reason of contract or law
for payment of dividends to the Company or any other Subsidiary as a
shareholder of such Restricted Subsidiary;
(d) earnings resulting from any reappraisal, revaluation or write-up of
assets;
(e) any deferred or other credit representing any excess of the equity
in any Subsidiary at the date of acquisition thereof over the amount invested
in such Subsidiary; and
(f) any gain arising from the acquisition of any equity securities of
the Company or any Subsidiary.
"Consolidated Tangible Net Worth" shall mean, as of the date of any
determination thereof, the sum of the capital stock (including capital in
excess of par and any other capital surplus) accounts (net of treasury
shares) plus (or minus in the case of a deficit) the retained earnings
determined on a consolidated basis for the Company and its Subsidiaries in
accordance with GAAP, including the making of appropriate deductions for
Minority Interests, if any, in Subsidiaries minus Intangible Assets and
computed before giving effect to cumulative foreign exchange translation
gains or losses.
"Coverage Ratio" shall mean for any period for which the same is to be
determined, the ratio of (i) the sum of Earnings Before Interest and Taxes,
plus Rentals to (ii) the sum of Interest Expense plus Rentals for the Company
and its Subsidiaries all as determined on a consolidated basis in accordance
with GAAP.
"Debt Placement" shall mean the issuance and sale by the Company for
consideration of debt securities (including debt securities convertible into
equity securities) issued by the Company provided (i) no amount paid or
prepaid on any such security may be reborrowed, (ii) such securities have
maturities of no less than five years and (iii) such securities contain
financial covenants no more restrictive than those contained herein.
"Default" shall mean any event or condition the occurrence of which
would, with the lapse of time or the giving of notice, or both, constitute an
Event of Default.
"Domestic Cash and Cash Equivalents" shall mean as of the date of any
determination thereof, the sum of (i) all U.S. Dollars of the Company or any
of its Subsidiaries held in accounts of such Person in the United States and
(ii) all investments of the Company and its Subsidiaries of a type described
in Sections 8.13(a), (b) or (c) hereof maturing within 60 days from the date
of determination thereof, all as determined on a consolidated basis in
accordance with GAAP.
"Domestic Rate" shall mean for any day the greater of:
(i) the rate of interest announced by Harris Trust and Savings Bank
<PAGE>
from time to time as its prime commercial rate (it being understood that such
rate may not be such Bank's best or lowest rate), with any change in the
Domestic Rate resulting from a change in said prime commercial rate to be
effective as of the date of the relevant change in said prime commercial
rate; and
(ii) the sum of (x) the rate for that day set forth opposite the caption
"Federal Fund (Effective)" in the daily statistical release designated as
"Composite 3:30 P.M. Quotations for U.S. Government Securities", or any
successor publication, published by the Federal Reserve Bank of New York or,
if such publication shall be suspended or terminated, the rates quoted to the
Agent as the prevailing rates per annum (rounded upward, if necessary, to the
next higher 1/100 of 1%) bid at approximately 11:00 a.m. (New York time) (or
as soon thereafter as is practicable) on such day by two or more New York or
Chicago Federal funds dealers of recognized standing selected by the Agent
for the purchase at face value of Federal funds in the secondary market in an
amount comparable to the principal amount owed to the Agent for which such
rate is being determined, plus (y) 1/2 of 1%.
"Domestic Rate Loan" shall mean a Committed Loan bearing interest as
specified in Section 1.4(a) hereof.
"Earnings Before Interest and Taxes" shall mean, with reference to any
period, Consolidated Net Income for such period plus all amounts deducted in
computing the same for Interest Expense and federal, state and local income
taxes all as computed on a consolidated basis for the Company and its
Subsidiaries in accordance with GAAP.
"Earnings Before Interest, Taxes, Depreciation and Amortization" shall
mean, with reference to any period, Earnings Before Interest and Taxes for
such period plus all amounts deducted in computing the same for depreciation
of fixed assets and amortization of intangibles all as computed on a
consolidated basis for the Company and its Subsidiaries in accordance with
GAAP.
"Equity Placement" means the issuance or sale for consideration by the
Company of shares of its capital stock.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974
as amended.
"Eurocurrency Loan" shall mean a Loan bearing interest as specified in
Section 1.4(b) hereof.
"Eurocurrency Rate Margin" shall have the meaning specified in Section
1.4(b) hereof.
"Eurocurrency Reserve Percentage" shall have the meaning specified in
Section 1.4(b) hereof.
"Event of Default" shall mean any of the events specified in Section 9.1
hereof.
"Exchange Rate" shall mean, when converting an Alternative Currency into
U.S. dollars, the rate quoted by the Agent at the opening of business on the
date any determination thereof is to be made, for the spot rate at which such
Alternative Currency is offered for sale by the Agent against delivery in
U.S. Dollars.
<PAGE>
"Fixed Rate Loan" means Eurocurrency Loans and Bid Loans.
"Funded Indebtedness" shall mean all obligations of the Company or its
Subsidiaries for borrowed money as computed on a consolidated basis in
accordance with GAAP.
"GAAP" shall mean generally accepted accounting principles as in effect
from time to time and applied in a manner consistent with the audit report
referred to in Section 6.3 hereof.
"Guaranties" shall mean all obligations (other than endorsements in the
ordinary course of business of negotiable instruments for deposit or
collection) of the Company or any of its Subsidiaries guaranteeing or in
effect guaranteeing any Indebtedness, dividend or other obligation, of any
other Person (the "primary obligor") in any manner, whether directly or
indirectly, including, without limitation, all obligations incurred through
an agreement, contingent or otherwise, by such Person: (i) to purchase on
default such Indebtedness or obligation or any Property constituting security
therefor, (ii) to advance or supply funds (x) for the purchase or payment of
such Indebtedness or obligation, (y) to maintain working capital or other
balance sheet condition or otherwise to advance or make available funds for
the purchase or payment of such Indebtedness or obligation, or (iii) to lease
property or to purchase securities or other property or services primarily
for the purpose of assuring the owner of such Indebtedness or obligation of
the ability of the primary obligor to make payment of the Indebtedness or
obligation, or (iv) to otherwise assure the owner of the Indebtedness or
obligation of the primary obligor against loss in respect thereof resulting
from the primary obligor's failure to pay or perform. For the purposes of
all computations made under this Agreement, a Guaranty in respect of any
Indebtedness shall be deemed to be Indebtedness equal to the principal amount
of the Indebtedness which has been guaranteed.
"Guaranty Agreement" is defined in Section 5.2 hereof.
"Hedging Liabilities" shall mean the liability of the Company with
respect to one or more interest rate exchange, cap, collar, floor or other
interest rate hedging agreements or forward foreign exchange contracts or
spot foreign exchange transactions with any Bank for the purpose of hedging
or otherwise protecting the Company against changes in interest rates on the
Notes or changes in the exchange rate of certain foreign currencies to U.S.
Dollars.
"Indebtedness" shall mean and include all (i) obligations of the Company
or any of its Subsidiaries for borrowed money or which have been incurred in
connection with the acquisition of Property or assets (other than trade
accounts payable arising in the ordinary course of business), (ii)
obligations secured by any Lien upon Property owned by the Company or any of
its Subsidiaries, even though such Person has not assumed or become liable
for the payment of such obligations, (iii) noncontingent obligations created
or arising under any conditional sale or other title retention agreement with
respect to Property acquired by the Company or any of its Subsidiaries,
notwithstanding the fact that the rights and remedies of the seller, lender
or lessor under such agreement in the event of default are limited to
repossession or sale of Property, (iv) obligations (other than obligations
under any lease which is not a Capitalized Lease and obligations in an amount
equal to the demand component of any contract providing for usual and
customary utility services, including gas, water, electricity and wastewater
treatment services) of the Company or any of its Subsidiaries to purchase any
Property or to obtain the services of another Person if the contract requires
<PAGE>
that payment for such Property or services be made regardless of whether such
Property is delivered or such services are performed, except that no
obligation shall constitute Indebtedness solely because the contract provides
for liquidated damages or reimbursement of expenses following cancellation,
(v) all Guaranties by the Company or any of its Subsidiaries, (vi)
Capitalized Lease Obligations and (vii) obligations in respect of letters of
credit but only to the extent that the letter of credit does not support an
obligation of such Person already included in Indebtedness, provided that the
term "Indebtedness" shall not include Hedging Liabilities.
"Indebtedness To Cash Flow Ratio" shall mean the ratio of Funded
Indebtedness less Domestic Cash and Cash Equivalents for the Company and its
Subsidiaries on a consolidated basis in accordance with GAAP as of any date
of determination to Earnings Before Interest, Taxes, Depreciation and
Amortization for the four quarter period (taken as a single accounting
period) ending as of any date of determination.
"Intangible Assets" shall mean all assets of the Company or any of its
Subsidiaries which are not Tangible Assets.
"Interest Expense" shall mean with reference to any period all interest
charges (including amortization of debt discount and expense) accrued for
such period on a consolidated basis for the Company and its Subsidiaries in
accordance with GAAP, whether or not paid and in any event including imputed
interest on Capitalized Leases.
"Interest Period" shall have the meaning specified in Section 3.1
hereof.
"Lending Office" shall have the meaning specified in Section 4.12
hereof.
"Letter of Credit" is defined in Section 1.3(a) hereof.
"Letter of Credit Utilization" means, as at any date of determination,
the sum of (i) the maximum aggregate amount which is or at any time
thereafter may become available for drawings under all Letters of Credit then
outstanding plus (ii) the aggregate amount of all drawings under Letters of
Credit honored by the Agent and not theretofore reimbursed by the Company
(whether out of the proceeds of a Borrowing of Loans or otherwise).
"Leverage Ratio" shall mean as of any date the same is to be determined
the ratio (computed as a percentage) of (i) Funded Indebtedness less Domestic
Cash and Cash Equivalents to (ii) the Funded Indebtedness plus Consolidated
Equity less Domestic Cash and Cash Equivalents all as computed on a
consolidated basis in accordance with GAAP.
"LIBOR" shall have the meaning specified in Section 1.4(b) hereof.
"Lien" shall mean any interest in Property securing an obligation owed
to, or a claim by, a Person other than the owner of the Property, whether
such interest is based on the common law, statute or contract, including,
without limitation, the security interest or lien arising from a mortgage,
encumbrance, pledge, conditional sale or trust receipt or a lease,
consignment or bailment for security purposes and including any Capitalized
Lease. For the purpose of this Agreement, the Company or a Subsidiary shall
be deemed to be the owner of any Property which it has acquired or holds
subject to a conditional sale agreement or other arrangement pursuant to
which title to the Property has been retained by or vested in another Person
<PAGE>
for security purposes.
"Loans" means and includes the Committed Loans and Bid Loans unless the
context in which such term is used shall otherwise require.
"Minority Interests" shall mean any shares of stock of any class of a
Restricted Subsidiary (other than directors' qualifying shares as required by
law) that are not owned by the Company and/or one or more of its wholly-owned
Subsidiaries. Minority Interests shall be valued by valuing Minority
Interests constituting preferred stock at the voluntary or involuntary
liquidation value of such preferred stock, whichever is greater, and by
valuing Minority Interests constituting common stock at the book value of
capital, paid-in-capital and retained earnings applicable thereto adjusted,
if necessary, to reflect any changes from the book value of such common stock
required by the foregoing method of valuing Minority Interests in preferred
stock.
"Note" means and includes the Revolving Credit Notes and Bid Notes
unless the context in which such term is used shall otherwise require.
"Offer" shall have the meaning set forth in Section 2.2(c) hereof.
"Original Dollar Amount" means in relation to any Loan denominated in an
Alternative Currency, the U.S. Dollar Equivalent of such Loan on the day it
is made.
"Person" shall mean an individual, partnership, corporation, trust or
unincorporated organization, and a government or agency or political
subdivision thereof.
"Plan" shall have the meaning set forth in Section 6.14 hereof.
"Pledge Agreement" shall have the meaning specified in Section 5.1.
"Property" shall mean any interest of any kind in property or assets,
whether real, personal or mixed, and whether tangible or intangible.
"Refunding Borrowing" is defined in Section 1.6(d) hereof.
"Rentals" shall mean and include all fixed rents (including as such all
payments which the lessee is obligated to make to the lessor on termination
of the lease or surrender of the Property) payable by the Company or a
Subsidiary, as lessee or sublessee, under a lease of real or personal
property, but shall be exclusive of any amounts required to be paid by the
Company or a Subsidiary (whether or not designated as rents or additional
rents) on account of maintenance, repairs, insurance, taxes and similar
charges and imputed interest on Capitalized Leases.
"Required Banks" shall mean Banks granting 66 2/3% or more of the
Commitments, or if the Commitments have terminated, Banks holding 66 2/3% or
more of the outstanding principal amount of the Loans (which, in the case of
Eurocurrency Loans denominated in an Alternative Currency, means the Original
Dollar Amount thereof) or credit risk incident to the Letters of Credit.
"Restricted Payments" shall have the meaning as set forth in Section
8.14 hereof.
"Restricted Subsidiary" shall mean any Subsidiary (a) which is organized
under the laws of the United States or any State thereof; (b) which conducts
<PAGE>
substantially all of its business and has substantially all of its assets
within the United States; and (c) of which 100% (by number of votes) of the
voting stock is at all times owned by the Company and/or one or more
Restricted Subsidiaries.
"Revolving Credit Note" shall have the meaning as set forth in Section
3.6(a) hereof.
"RIIFC Bonds" is defined in Section 8.11(b) hereof.
"Subsidiary" shall mean, as to any particular parent corporation, any
corporation of which more than 50% (by number of votes) of the voting stock
shall be owned by such parent corporation and/or one or more corporations
which are themselves wholly-owned Subsidiaries of such parent corporation.
"Tangible Assets" shall mean, as of the date of any determination
thereof, the total amount of all assets of the Company or its Subsidiaries
(less depreciation, depletion and other properly deductible valuation
reserves) after deducting the following: goodwill, patents, trade names,
trade marks, copyrights, franchises, experimental expense, organization
expense, unamortized debt discount and expense, the excess of cost of shares
acquired over book value of related assets, any write up in the book value of
any asset resulting from a revaluation thereof subsequent to February 28,
1990 (other than a revaluation of foreign currency) and such other assets as
are properly classified as "intangible assets" in accordance with GAAP all as
computed on a consolidated basis in accordance with GAAP.
"Termination Date" shall mean May 12, 2000 or such later date as may be
agreed upon pursuant to Section 4.6 hereof.
"U.S. Dollars" means the lawful currency of the United States of
America.
"U.S. Dollar Equivalent" means the amount of U.S. Dollars which would be
realized by converting an Alternative Currency into U.S. Dollars in the spot
market at the exchange rate quoted by the Agent at approximately 11:00 a.m.
(London, England time) two Business Days prior to the date on which a
computation thereof is required to be made, to major banks in the interbank
exchange market for the purchase of U.S. Dollars for such Alternative
Currency.
"Voting Stock" of any Person means capital stock of any class or classes
(however designated) having ordinary voting power for the election of
directors of such Person, other than stock having such power only by reason
of the happening of a contingency.
Section 10.2. Accounting Principles. Where the character or amount of
any asset or liability or item of income or expense is required to be
determined or any consolidation or other accounting computation is required
to be made for the purposes of this Agreement, the same shall be done in
accordance with GAAP, to the extent applicable, applied consistently (except
for changes in application with respect to which the Auditors concur) with
the principles used in preparation of the February 28, 1994 financial
statements of the Company and its Subsidiaries heretofore delivered to the
Banks, except where such principles are inconsistent with the specific
provisions of this Agreement.
Section 10.3. Directly or Indirectly. Where any provision in this
Agreement refers to action to be taken by any Person, or which such Person is
<PAGE>
prohibited from taking, such provision shall be applicable whether the action
in question is taken directly or indirectly by such Person.
Section 11. The Agent.
Section 11.1. Appointment and Authorization. Each Bank hereby appoints
and authorizes the Agent to take such action as agent on its behalf and to
exercise such powers hereunder and under the Collateral Documents as are
designated to the Agent by the terms hereof and thereof together with such
powers as are reasonably incidental thereto. The Agent may resign at any
time by sending twenty (20) days prior written notice to the Company and the
Banks and may be removed by the Required Banks upon twenty (20) days prior
written notice to the Company and the Banks. In the event of any such
resignation or removal the Required Banks may appoint a new agent reasonably
acceptable to the Company, which shall succeed to all the rights, powers and
duties of the Agent hereunder and under the Collateral Documents and the
Guaranty Agreements. Any resigning or removed Agent shall be entitled to the
benefit of all the protective provisions hereof with respect to its acts as
an agent hereunder, but no successor Agent shall in any event be liable or
responsible for any actions of its predecessor. If the Agent resigns or is
removed and no successor is appointed, the rights and obligations of such
Agent shall be automatically assumed by the Required Banks and (i) the
Company shall be directed to make all payments due each Bank hereunder
directly to such Bank and (ii) the Agent's rights in the Collateral Documents
and Guaranty Agreements shall be assigned without representation, recourse or
warranty to the Banks as their interests may appear.
Section 11.2. Rights as a Bank. The Agent has and reserves all of the
rights, powers and duties hereunder and under its Note, the Collateral
Documents and the Guaranty Agreements as any Bank may have and may exercise
the same as though it were not the Agent and the terms "Bank" or "Banks" as
used herein and in all of such documents shall, unless the context otherwise
expressly indicates, include the Agent in its individual capacity as a Bank.
The Agent reserves the right to engage in other business transactions with
the Company and its affiliates.
Section 11.3. Standard of Care. The Banks acknowledge that they have
received and approved copies of the Collateral Documents, Applications and
the Guaranty Agreements, and such other information and documents concerning
the transactions contemplated and financed hereby as they have requested to
receive and/or review. The Agent makes no representations or warranties of
any kind or character to the Banks with respect to the validity,
enforceability, genuineness, perfection, value, worth or collectibility
hereof or of the Notes, the Guaranty Agreements, the Applications or
Collateral Documents or of the liens provided for thereby or of any other
documents called for hereby or thereby or of the Collateral. The Agent need
not verify the worth or existence of the Collateral. Neither the Agent nor
any director, officer, employee, agent or representative thereof (including
any security trustee therefor) shall in any event be liable for any clerical
errors or errors in judgment, inadvertence or oversight, or for action taken
or omitted to be taken by it or them hereunder or under the Collateral
Documents or under the Guaranty Agreements or under the Applications or in
connection herewith or therewith except for its or their own gross negligence
or willful misconduct. The Agent shall incur no liability under or in
respect of this Agreement or the Collateral Documents or the Applications or
the Guaranty Agreements by acting upon any notice, certificate, warranty,
instruction or statement (oral or written) of anyone (including anyone in
good faith believed by it to be authorized to act on behalf of the Company),
unless it has actual knowledge of the untruthfulness of same. The Agent
<PAGE>
agrees to use the same care in protecting the interests of the Banks in the
Loans and Letters of Credit as it uses for similar loans and letters of
credit held by it solely for its own account. The Agent shall be entitled to
advice of counsel concerning all matters pertaining to the agencies hereby
created and its duties hereunder, and shall incur no liability to anyone and
be fully protected in acting upon the advice of such counsel. The Agent
shall be entitled to assume that no Default or Event of Default exists,
absent actual knowledge thereof, unless notified to the contrary by a Bank.
The Agent shall in all events be fully protected in acting or failing to act
in accord with the instructions of the Required Banks. Upon the occurrence
of an Event of Default hereunder, the Agent shall take such action with
respect to the enforcement of the Guaranty Agreements and the enforcement of
its liens on the Collateral and the preservation and protection thereof as it
shall be directed to take by the Required Banks (and shall consult with the
Banks as to actions to be taken) but unless and until the Required Banks have
given such direction the Agent shall take or refrain from taking such actions
as it deems appropriate and in the best of interest of all Banks. The Agent
shall in all cases be fully justified in failing or refusing to act hereunder
unless indemnified to its reasonable satisfaction by the Banks against any
and all liability and expense which may be incurred by it by reason of taking
or continuing to take any such action. The Agent may treat the owner of any
Note as the holder thereof until written notice of transfer shall have been
filed with it signed by such owner in form satisfactory to the Agent. Each
Bank acknowledges that it has independently and without reliance on the Agent
or any other Bank and based upon such information, investigations and
inquiries as it deems appropriate made its own credit analysis and decision
to extend credit to the Company. It shall be the responsibility of each Bank
to keep itself informed as to the creditworthiness of the Company and its
Subsidiaries and the Agent shall have no liability to any Bank with respect
thereto.
Section 11.4. Costs and Expenses. Each Bank agrees to reimburse the
Agent for all out-of-pocket costs and expenses suffered or incurred by the
Agent or any security trustee in performing its duties hereunder and under
the Collateral Documents and under the Guaranty Agreements and under the
Applications or in the exercise of any right or power imposed or conferred
upon the Agent hereby or thereby, to the extent that the Agent is not
promptly reimbursed for same by the Company or out of the Collateral, all
such costs and expenses to be borne by the Banks ratably in accordance with
the amounts of their respective Commitments, or if the Commitments have been
terminated, ratably in accordance with the amounts of the outstanding
principal balance of Loans held by the Banks.
Section 11.5. Indemnity. The Banks shall ratably indemnify and hold
the Agent and its directors, officers, employees, agents or representatives
(including as such any security trustee therefor) harmless from and against
any liabilities, losses, costs or expenses suffered or incurred by them
hereunder or under the Collateral Documents or under the Guaranty Agreements
or under the Applications or in connection with the transactions contemplated
hereby or thereby, regardless of when asserted or arising, except to the
extent they are promptly reimbursed for the same by the Company or out of the
Collateral and except to the extent that any event giving rise to a claim was
caused by the gross negligence or willful misconduct of the party seeking to
be indemnified.
Section 12. Miscellaneous.
Section 12.1 Waiver of Rights. No delay or failure on the part of the
Company, any Bank or the holder or holders of any Note in the exercise of any
<PAGE>
power or right shall operate as a waiver thereof, nor as an acquiescence in
any default, nor shall any single or partial exercise thereof, or the
exercise of any other power or right, preclude any other right or the further
exercise of any other rights, and the rights and remedies hereunder of the
Company, the Banks and of the holder or holders of any Note are cumulative
to, and not exclusive of, any rights or remedies which any of them would
otherwise have.
Section 12.2. Non-Business Day. (a) If any payment of principal or
interest on any Domestic Rate Loan shall fall due on a day which is not a
Business Day, interest at the rate such Loan bears for the period prior to
maturity shall continue to accrue on such principal from the stated due date
thereof to and including the next succeeding Business Day on which the same
is payable.
(b) If any payment of principal or interest on any Eurocurrency Loan
shall fall due on a day which is not a Business Day, the payment date
therefor shall be extended to the next date which is a Business Day and the
Interest Period for such Eurocurrency Loan shall be accordingly extended,
unless as a result thereof any payment date would fall in the next calendar
month, in which case such payment date shall be the immediately preceding
Business Day and the relevant Interest Period shall be correspondingly
abbreviated. In either case the next Interest Period shall be measured from
the payment date so adjusted.
Section 12.3. Documentary Taxes. The Company agrees to pay any
documentary, stamp or similar taxes payable in respect to this Agreement or
any Note, Letter of Credit, Application, Guaranty Agreement or Collateral
Document, including interest and penalties, in the event any such taxes are
assessed irrespective of when such assessment is made and whether or not any
credit is then in use or available hereunder.
Section 12.4. Survival of Representations. All representations and
warranties made herein or in certificates given pursuant hereto shall survive
the execution and delivery of this Agreement and of the Notes and
Applications, and shall continue in full force and effect with respect to the
date as of which they were made as long as any credit is in use or available
hereunder.
Section 12.5. Survival of Indemnities. All indemnities and all other
provisions relative to reimbursement to the Banks of amounts sufficient to
protect the yield of the Banks hereunder, including, but not limited to,
Sections 3.5, 4.11, 12.3, 12.11 and 12.15 hereof, shall survive the
termination of this Agreement and the payment of the Notes.
Section 12.6. Set-off Sharing. Each Bank agrees with each other Bank
that in the event that such Bank receives and retains any payment, whether by
setoff or application of deposit balances or otherwise, on or in respect of
any Note outstanding under this Agreement in excess of the amount it would
have received had such payment been made to the Agent and distributed in
accord with Section 4.8 hereof then such Bank shall purchase for cash at face
value, but without recourse, ratably from each of the other Banks such
amounts of the Notes, held by each such other Bank as shall be necessary to
cause such Bank to share such excess payment in the manner called for by
Section 4.8 hereof, provided however that if any such purchase is made by any
Bank and if such excess payment or part thereof is thereafter recovered from
such purchasing Bank, the related purchases from the other Banks shall be
rescinded ratably and the purchase price restored as to the portion of such
excess payment so recovered, but without interest.
<PAGE>
Section 12.7. Notices. All communications provided for herein shall be
in writing or by telex or by telegraph, except as otherwise specifically
provided for hereinabove, addressed, if to the Company at 3600 Sunset Avenue,
Waukegan, Illinois 60087 Attention: Chief Financial Officer or if to the
Agent or Banks at their respective addresses set forth opposite their
respective signatures hereto, or at such other address as shall be designated
by any party hereto in a written notice to each other party pursuant to this
Section 12.7. Any notice in writing shall be deemed to have been given or
made when served personally or when received if sent by United States mail,
and any notice given by telex or telegraphic means shall be deemed given when
transmitted (answerback confirmed); provided that any notice to the Agent or
any Bank under Sections 2 and 3 hereof shall only be effective upon receipt.
Section 12.8. Counterparts. This Agreement may be executed in any
number of counterparts, and by the different parties on different
counterparts, each of which when executed shall be deemed an original, but
all such counterparts taken together shall constitute one and the same
instrument.
Section 12.9. Successors and Assigns. This Agreement shall be binding
upon the Company and its successors and assigns, and shall be binding upon
and inure to the benefit of the Banks and their respective successors and
permitted assigns, including any subsequent holder of any Note. The Company
may not assign its rights or obligations hereunder without the prior written
consent of the Banks.
Section 12.10. Participants. Each Bank shall have the right at its own
cost to grant participations (to be evidenced by one or more agreements or
certificates of participation) in the Loans made, and/or Commitments held, by
such Bank at any time and from time to time to one or more other financial
institutions, provided that no such participant shall have any rights under
this Agreement or any Note (the participant's rights against the Bank
granting its participation to be those set forth in the participation
agreement between the participant and such Bank) and no such Bank shall agree
with any such participant to refrain from agreeing to waivers, amendments,
modifications or releases hereunder or under the Notes or under the
Applications or Collateral Documents or Guaranty Agreements without the
consent of such participant except for waivers, amendments and modifications
which pursuant to the terms of Section 12.14 hereof require the consent of
all Banks and except for consents to releases of Collateral or Guaranty
Agreements. Each such Bank shall be entitled to the benefits of Sections 3.5
and 4.11 hereof to the extent such Bank would have been so entitled had no
such participation been sold.
Section 12.11. Costs and Expenses. The Company agrees to pay on demand
all reasonable out-of-pocket costs and expenses of the Agent in connection
with the negotiation, preparation, execution, delivery, recording and/or
filing and/or release of this Agreement, the Guaranty Agreements, the Notes,
the Applications and the Collateral Documents and the other instruments and
documents to be delivered hereunder or thereunder or in connection with the
transactions contemplated hereby or thereby or in connection with any
consents hereunder or thereunder or waivers or amendments hereto or thereto,
including the fees and out-of-pocket expenses of counsel for the Agent with
respect to all of the foregoing, and all recording, filing, title insurance
or other fees, costs and taxes incident to perfecting a lien upon the
collateral security for the Notes, Applications and other obligations of the
Company (the fees of appraisers) or releasing any such lien, and all
reasonable costs and expenses (including reasonable attorneys' fees),
incurred by the Agent, any security trustee for the Banks, the Banks or any
<PAGE>
other holders of a Note in connection with a Default or the enforcement of
this Agreement, the Notes, the Applications, the Guaranty Agreements or the
Collateral Documents and the other instruments and documents to be delivered
hereunder or thereunder and all costs, fees and taxes of the types enumerated
above incurred in supplementing (and recording or filing supplements to) the
Collateral Documents in connection with assignments contemplated by Section
12.13 hereof if counsel to the Agent believes such supplements to be
appropriate or desirable. The Company shall pay the Agent for field audits
of the Collateral, provided that the Company shall not be required to pay for
more than two such field audits per annum unless a Default or an Event of
Default has occurred and is continuing, in which case the Company shall pay
for all such field audits. The Company agrees to indemnify and save the
Banks, the Agent and any security trustee for the Banks harmless from any and
all liabilities, losses, costs and expenses incurred by the Banks or the
Agent in connection with any action, suit or proceeding brought against the
Agent, any security trustee, or any Bank by any Person which arises out of
the transactions contemplated or financed hereby or by the Notes or
Collateral Documents or out of any action or inaction by the Agent, any
security trustee, or any Bank hereunder or thereunder (except for such
thereof as is caused by the gross negligence or willful misconduct of the
party indemnified) and against any claims of brokers or finders in connection
with the transactions contemplated or financed hereby. The provisions of
this Section 12.11 shall survive payment of the Notes.
Section 12.12. Construction. The parties hereto acknowledge and agree
that this Agreement shall not be construed more favorably in favor of one
than the other based upon which party drafted the same, it being acknowledged
that all parties hereto contributed substantially to the negotiation and
preparation of this Agreement.
Section 12.13. Assignment Agreements. Each Bank may, from time to time,
with the consent of the Company and the Agent, assign to other financial
institutions part of the indebtedness evidenced by the Notes then owned by it
together with an equivalent proportion of its obligation to make Loans and
participate in Letters of Credit hereunder pursuant to written agreements
executed by the assignor, the assignee and the Company, which agreements
shall specify in each instance the portion of the indebtedness evidenced by
the Notes which is to be assigned to each such assignee and the portion of
the Commitment of the assignor to be assumed by such assignee (the
"Assignment Agreements"), provided that the Company and/or the Agent may in
their sole discretion withhold their consent to any assignment by a Bank of
less than all of its Commitment if as a result thereof either the assignor or
the assignee will have a Commitment hereunder of less than $5,000,000. Upon
the execution of each Assignment Agreement by the assignor, the assignee and
the Company (i) such assignee shall thereupon become a "Bank" for all
purposes of this Agreement with a Commitment in the amount set forth in such
Assignment Agreement and with all the rights, powers and obligations afforded
a Bank hereunder, (ii) the assignor shall have no further liability for
funding the portion of its Commitment assumed by such other Bank and (iii)
the address for notices to such Bank shall be as specified in the Assignment
Agreement executed by it. Concurrently with the execution and delivery of
such Assignment Agreement, the Company shall execute and deliver a new Note
to the assignee Bank in the amount of its Commitment and a new Note to the
assignor Bank in the amount of its Commitment after giving effect to the
reduction occasioned by such assignment, all such notes to constitute "Notes"
for all purposes of this Agreement. The Company also agrees to, at its
expense, execute and deliver such documents and do and provide such other
acts and things as the Agent may reasonably require to assure that the
Company's obligations to the assignee Bank are secured with the Collateral.
<PAGE>
Upon each such assignment, the Bank granting such assignment shall pay to the
Agent for the Agent's sole account a fee of $2,500.
Section 12.14. Amendments and Waivers. No provision of this Agreement
or of the Collateral Documents may be amended or waived except in writing
signed by the Company and the Required Banks and, if the rights or duties of
the Agent are affected thereby, by the Agent and no Collateral may be
released except as provided for herein or in the Collateral Documents without
the consent of the Required Banks; provided that no such amendment or waiver
shall, unless signed by all Banks, (i) increase or extend the Commitment of
any Bank or subject any Bank to any additional obligation, (ii) reduce the
principal of or rate of interest on any Loan from any Bank or any fees due
such Bank hereunder, (iii) change the stated time or manner of any payment of
principal of or interest on any Loan from such Bank or any fees due such Bank
hereunder, (iv) change the percentage of the Commitments or of the aggregate
unpaid principal amount of the Notes, or the number of Banks required for the
Banks or any of them to take any action under this Section 12.14 or any other
provisions of this Agreement or (v) release any Collateral or any Guaranty
Agreement.
Section 12.15. Currency. Each reference in this Agreement to U.S.
Dollars or to an Alternative Currency (the "relevant currency") is of the
essence. To the fullest extent permitted by law, the obligation of the
Company in respect of any amount due in the relevant currency under this
Agreement shall, notwithstanding any payment in any other currency (whether
pursuant to a judgment or otherwise), be discharged only to the extent of the
amount in the relevant currency that the Bank entitled to receive such
payment may, in accordance with normal banking procedures, purchase with the
sum paid in such other currency (after any premium and costs of exchange) on
the Business Day immediately following the day on which such party receives
such payment. If the amount of the specified currency so purchased is less
than the sum originally due to such Bank or the Agent in the specified
currency, the Company agrees, as a separate obligation and notwithstanding
any such judgment, to indemnify such Bank and the Agent against such loss,
and if the amount of the specified currency so purchased exceeds the sum of
(a) the amount originally due to the applicable Bank or the Agent in the
specified currency plus (b) any amounts shared with other Banks as a result
of allocations of such excess as a disproportionate payment to such Bank
under Section 12.6 hereof, such Bank or the Agent, as the case may be, agrees
to remit such excess to the Company.
Section 12.16. Governing Law. This Agreement and the Notes, and the
rights and duties of the parties hereto, shall be construed and determined in
accordance with and governed by the internal laws of the State of Illinois
without regard to principles of conflicts of law.
Section 12.17. Entire Agreement. This Agreement constitutes the entire
understanding of the parties with respect to the subject matter hereof and
any prior agreements, whether written or oral, with respect thereto are
superseded hereby.
Section 12.18. Headings. Section headings used in this Agreement are
for reference only and shall not affect the construction of this Agreement.
Upon your acceptance hereof in the manner hereinafter set forth, this
Agreement shall be a contract between us for the purposes hereinabove set
forth.
Executed and delivered at Chicago, Illinois as of this 12th day of
May, 1995.
<PAGE>
THE CHERRY CORPORATION
(Corporate Seal)
By____________________________
Its_________________________
Attest:
_________________________________
Secretary
Accepted and agreed to as of the day and year last above written.
Address and Amount of Commitments:
111 West Monroe Street Harris Trust And Savings Bank,
Chicago, Illinois 60690 individually and as Agent
Attn: Mr. John Smart, Vice President
Telephone: (312) 461-6022
Telecopier: (312) 461-2591 By_____________________________
Its Vice President
Revolving Credit Commitment: Lending Office:
$30,000,000 Harris Trust and Savings Bank
111 West Monroe Street
Chicago, Illinois 60690
2850 West Golf Road BANK OF AMERICA ILLINOIS
Rolling Meadows, Illinois 60008
Attn: Mr. Edmund H. Lester, Vice
President By____________________________
Telephone: (708) 952-1110 Its_________________________
Telecopier: (708) 952-1136
Revolving Credit Commitment: Lending Office:
$21,000,000 Bank of America Illinois
231 South LaSalle Street
Chicago, Illinois 60697
181 West Madison Street SOCIETE GENERALE
Chicago, Illinois 60602
Attn: Mr. Joe Philbin
Telephone: (312) 578-5000 By___________________________
Telecopier: (312) 578-5099 Its________________________
Revolving Credit Commitment: Lending Office:
$7,000,000 181 West Madison Street
Chicago, Illinois 60602
333 West Wacker Drive BAYERISCHE VEREINSBANK AG
Chicago, Illinois 60606
Attn: Mr. Marty O'Malley
<PAGE>
Telephone: (312) 368-3300 By___________________________
Telecopier: (312) 368-8615 Its________________________
Revolving Credit Commitment:
$7,000,000 By___________________________
Its________________________
Lending Office:
333 West Wacker Drive
Chicago, Illinois 60606
<PAGE>
EXHIBIT A
THE CHERRY CORPORATION
REVOLVING CREDIT NOTE
May 12, 1995
Chicago, Illinois
FOR VALUE RECEIVED, the undersigned, The Cherry Corporation, a
Delaware corporation (the "Company") promises to pay to the order of
_________________________ (the "Bank") on the Termination Date of the
hereinafter defined Credit Agreement at the office of Harris Trust and
Savings Bank at 111 West Monroe Street, Chicago, Illinois (or, in the case of
Eurocurrency Loans denominated in an Alternative Currency, at such office as
the Agent has previously notified the Company) in immediately available funds
in the currency in which Committed Loan was made, the aggregate unpaid
principal amount of all Committed Loans made by the Bank to the Company under
its Revolving Credit Commitment provided for under the Credit Agreement
hereinafter mentioned and with each Loan to mature and become payable on the
last day of the Interest Period applicable thereto, but in no event later
than the Termination Date, together with interest on the principal amount of
each Loan from time to time outstanding hereunder at the rates, and payable
in the manner and on the dates specified in said Credit Agreement.
The Bank shall record on its books or records or on a schedule to this
Note which is a part hereof the principal amount and type of each Committed
Loan, all payments of principal and interest and the principal balances from
time to time outstanding, whether the Committed Loan is Eurocurrency Loan or
Domestic Rate Loan and, in the case of any Eurocurrency Loan, the currency
thereof and the interest rate and Interest Period applicable thereto;
provided that prior to the transfer of this Note all such amounts shall be
recorded on a schedule attached to this Note. The record thereof, whether
shown on such books or records or on a schedule to this Note, shall be prima
facie evidence as to all such amounts; provided, however, that the failure of
the Bank to record any of the foregoing or any error in such record shall not
limit or otherwise affect the obligation of the Company to repay all
Committed Loans, together with accrued interest thereon.
This Note is one of the Notes referred to in and issued under that
certain Credit Agreement dated as of May 12, 1995, among the Company, Harris
Trust and Savings Bank, as Agent, and the Banks party thereto (the "Credit
Agreement") and may be secured, inter alia by certain pledge agreements and
other instruments and documents from the Company's Restricted Subsidiaries
and this Note and the holder hereof are entitled to all of the benefits
provided for thereby or referred to therein, to which Credit Agreement and
collateral documents reference is hereby made for a statement thereof. All
defined terms used in this Note, except terms otherwise defined herein, shall
have the same meaning as such terms have in said Credit Agreement.
Prepayments may and are required to be made on the Loans evidenced
hereby and this Note (and the Loans evidenced hereby) may be declared due
prior to the expressed maturity thereof, all in the events, on the terms and
in the manner as provided for in said Credit Agreement. This Note shall be
construed in accordance with and governed by the internal laws of Illinois.
The Company hereby waives demand, presentment, protest or notice of
<PAGE>
any kind hereunder.
THE CHERRY CORPORATION
By____________________________
Its:________________________
<PAGE>
EXHIBIT B
BID NOTE
May 12, 1995
Chicago, Illinois
FOR VALUE RECEIVED, the undersigned, The Cherry Corporation (the
"Company") promises to pay to the order of ____________________________ (the
"Bank") at the office of Harris Trust and Savings Bank in Chicago, Illinois,
the aggregate unpaid principal amount of all Bid Loans made by the Bank to
the Company under the Credit Agreement hereinafter mentioned and with each
Bid Loan to mature and become payable on its maturity date as established
pursuant to such Credit Agreement, together with interest on the principal
amount of each Bid Loan from time to time outstanding hereunder at the rates,
and payable in the manner and on the dates, specified in said Credit
Agreement.
The Bank shall record on its books or records or on a schedule to this
Note which is a part hereof the principal amount, interest rate and maturity
date of each Bid Loan and all payments of principal and interest thereon;
provided that prior to the transfer of this Note all such amounts shall be
recorded on a schedule attached to this Note. The record thereof, whether
shown on such books or records or on a schedule to this Note, shall be prima
facie evidence as to all such amounts; provided, however, that the failure of
the Bank to record any of the foregoing or any error therein shall not limit
or otherwise affect the obligations of the Company hereunder or under the
Credit Agreement.
This Note is one of the Notes referred to in and issued under that
certain Credit Agreement dated as of May 12, 1995, between the Company,
Harris Trust and Savings Bank, as Agent, and the Banks party thereto, as
amended from time to time (the "Credit Agreement"), and this Note and the
holder hereof are entitled to all of the benefits provided for thereby or
referred to therein, to which Credit Agreement reference is hereby made for a
statement thereof. All defined terms used in this Note, except terms
otherwise defined herein, shall have the same meaning as such terms have in
the Credit Agreement.
This Note (and the Bid Loans evidenced hereby) may be declared or may
become due prior to the expressed maturity thereof, all in the events, on the
terms and in the manner as provided for in the Credit Agreement. This Note
shall be construed in accordance with and governed by the internal laws of
the State of Illinois.
THE CHERRY CORPORATION
By_____________________________
Its__________________________
<PAGE>
EXHIBIT C
BID LOAN REQUEST CONFIRMATION
[Date]
Harris Trust and Savings Bank
as Agent for the Banks
party to the Credit Agreement
referred to below
Attention:
The undersigned refers to the Credit Agreement dated as of May 12,
1995, as amended from time to time (the "Credit Agreement"), among The Cherry
Corporation, the Banks named therein and Harris Trust and Savings Bank as
Agent for the Banks. Capitalized terms used and not defined herein have the
meanings assigned to them in the Credit Agreement. The Borrower hereby
confirms that it has, on the date hereof, given you notice pursuant to
Section 2.2 of the Credit Agreement that it requests a Bid Loan Borrowing
under the Credit Agreement, and in that connection sets forth below the terms
on which such Bid Loan Borrowing is requested to be made:
(A) Date of Bid Loan Borrowing<F1> ____________
(B) Aggregate Principal Amount of
Bid Loan Borrowing<F2> ____________
(C) Interest Period(s) and maximum ____________ __________
amount, if different from (B), ____________ __________
for each Interest Period ____________ __________
Upon acceptance of any or all of the Bids offered by Banks in response to
this request, the Borrower shall be deemed to affirm as of such date of
acceptance that each of the conditions to Borrowing set forth in subsections
(b), (c) and (d) of Section 6 of the Credit Agreement is satisfied.
Very truly yours,
THE CHERRY CORPORATION
By_____________________________
Its__________________________
____________________
<F1> The Bid Loan Request Confirmation must be received on a Business Day by
the Agent not later than 2:30 p.m. (Chicago time) one (1) Business Day
before the proposed Borrowing Date.
<F2> Not less than $3,000,000 and in integral multiples of $1,000,000.
<PAGE>
EXHIBIT D
INVITATION TO BID
[Name of Bank] [Date]
[Address]
Attention:
Reference is made to the Credit Agreement, dated as of May 12, 1995, as
amended from time to time (the "Credit Agreement") among The Cherry
Corporation, the Banks named therein and Harris Trust and Savings Bank as
Agent for the Banks. Capitalized terms used and not defined herein have the
meanings assigned to them in the Credit Agreement. A Bid Loan Request was
made on ______________, _____ pursuant to Section 2.2 of the Credit
Agreement, and in that connection you are invited to submit a Bid by
[Date].<F1> Your Bid must comply with Section 2.2 Of the Credit Agreement and
the terms set forth below on which such Bid Loan Request was made.
(A) Date of Proposed Bid Loan Borrowing ____________
(B) Aggregate Principal Amount of
Bid Loan ____________
(C) Interest Period(s) and maximum ____________ ____________
amount, if different from (B), ____________ ____________
for any Interest Period ____________ ____________
Very truly yours,
HARRIS TRUST AND SAVINGS BANK,
as Agent for the Banks
By_____________________________
Its__________________________
____________________
<F1> The Bid must be received by the Agent not later than 9:00 a.m. (Chicago
time) on the proposed Borrowing Date.
<PAGE>
EXHIBIT E
CONFIRMATION OF BID
[date]
Harris Trust and Savings Bank,
as Agent for the Banks party to the
Credit Agreement referred to below
Attention:
The undersigned refers to the Credit Agreement dated as of May 12, 1995,
as amended from time to time (the "Credit Agreement") among The Cherry
Corporation, the Banks named therein and Harris Trust and Savings Bank as
Agent for the Banks. Capitalized terms used and not defined herein have the
meanings assigned to them in the Credit Agreement. The undersigned hereby
confirms that on the date hereof it has made a Bid pursuant to Section 2.2 of
the Credit Agreement, in response to the Bid Loan Request made on
_____________, 19______, and in that connection sets forth below the terms on
which such Bid is made:
Date of proposed Bid Loan Borrowing: ________________________.<F1>
Principal Interest Interest
Amount<F2> Period<F3> Rate<F4>
Vvery truly yours,
[NAME OF BANK]
By_____________________________
Its__________________________
____________________
<F1> As specified in the related Invitation to Bid.
<F2> Principal amount bid for each Interest Period may not exceed the principal
amount requested by the Borrower or the maximum amount requested for that
Interest Period, if less. Bids must be made in a minimum amount of
$3,000,000 and in integral multiples of $1,000,000.
<F3> Up to 180 days and not less than 1 day, as specified in the related
Invitation to Bid.
<F4> Specify rate of interest per annum computed on the basis of a year of 360
days and actual days elapsed.
<PAGE>
EXHIBIT F
NOTICE OF ACCEPTANCE OF BID
[Name of Bank] [Date]
[Address]
Attention:
Reference is made to the Credit Agreement, dated as of May 12, 1995, as
amended from time to time (the "Credit Agreement") among The Cherry
Corporation, the Banks named therein and Harris Trust and Savings Bank as
Agent for the Banks. Capitalized terms used and not defined herein have the
meanings assigned to them in the Credit Agreement. A Bid Loan Request was
made on _____________, _______ pursuant to Section 2.2 of the Credit
Agreement, and in that connection you have submitted a Bid. Your Bid has
been accepted as set forth below.
(A) Date of Bid Loan Borrowing __________
Principal Interest Interest
Amount Period Rate
(B) Aggregate principal amount of _________ _________ _________
each Bid Loan and its Interest _________ _________ _________
Period and interest rate _________ _________ _________
Very truly yours,
HARRIS TRUST AND SAVINGS BANK,
as Agent for the Banks
By_______________________________
Its____________________________
<PAGE>
EXHIBIT G
Description of Closing Opinion
of Counsel for the Company
The closing opinion of Messrs. McDermott, Will & Emery, counsel for the
Company, called for by the Credit Agreement, shall be addressed to the Banks,
and shall be to the effect that:
Unless otherwise defined therein, capitalized terms used therein shall have
the meanings assigned to such terms in that certain Credit Agreement dated
May 12, 1995 (the "Credit Agreement").
Such counsel is familiar with the corporate proceedings taken by the
Company and the Restricted Subsidiaries in connection with the Credit
Agreement, Guaranty Agreements and Notes and the transactions contemplated
thereby. In addition, such counsel has examined and relied upon executed
copies of such Credit Agreement, Guaranty Agreements and Notes, the Articles
of Incorporation and the Bylaws of the Company and the Restricted
Subsidiaries as in effect on the date hereof, certified supporting
resolutions adopted by the Board of Directors of the Company and the
Restricted Subsidiaries in connection with the Credit Agreement, Guaranty
Agreements and the transactions contemplated thereby, a Certificate of
corporate status issued by the Secretary of State of Delaware with respect to
the Company, [certificates of corporate status issued by the Secretary's of
State of - list jurisdictions - Restricted Subsidiaries] and other
certificates executed by officers of the Company addressing facts material to
such counsel's opinions as such counsel considers necessary or appropriate
for the basis of the opinions expressed.
In making the examination of such agreements and instruments in connection
with the opinions expressed therein, such counsel has assumed the genuineness
of all signatures (other than those of the Company and its Restricted
Subsidiaries) and the authenticity of all documents submitted to such counsel
as originals and the conformity with the originals of all documents submitted
to such counsel as copies and has further assumed that each of the Banks has
the corporate power to enter into and perform its obligations under the
Credit Agreement and has assumed with respect to each of them due
authorization by all requisite corporate action, due execution and delivery
and the valid and binding effect of such documents and agreements on the
Banks, and compliance by the Banks with applicable law.
Based upon the foregoing and such other assumptions as are set forth
therein, such counsel shall opine that:
(1) The Company is a corporation legally existing and in good
standing under the laws of the State of Delaware, has corporate power and
authority and is duly authorized to enter into and perform the Credit
Agreement and to issue the Notes and incur the indebtedness to be evidenced
thereby.
(2) The execution, delivery and performance by the Company of the
Credit Agreement and the issuance by the Company of the Notes thereunder
and execution, delivery and performance by the Company and its Restricted
Subsidiaries of the Collateral Documents and Guaranty Agreements do not
conflict with or result in any breach of any of the provisions of or
constitute a default under or result in the creation or imposition of any
Lien upon any of the Property of the Company or any Restricted Subsidiary
pursuant to the provisions of the Certificate of Incorporation or By-laws
<PAGE>
of the Company and the Restricted Subsidiaries, nor to the best of the
knowledge and belief of such counsel, under any material agreement or other
instrument to which the Company or any Restricted Subsidiary is bound.
(3) The Credit Agreement, Collateral Documents, Guaranty Agreements
and Notes have each been duly authorized, executed and delivered by the
Company and Restricted Subsidiaries (as appropriate) and each constitutes
the legal, valid and binding contract and agreement of the Company and the
Restricted Subsidiaries enforceable in accordance with its terms, except as
such terms may be limited by bankruptcy, insolvency or similar laws, and
legal and equitable principles, affecting or limiting the enforcement of
creditors' rights generally.
(4) To the best knowledge of such counsel, there are no proceedings
pending or threatened, against or affecting the Company or any Restricted
Subsidiary in any court or before any governmental authority or arbitration
board or tribunal, not heretofore disclosed to the Banks in Schedule 6.5 to
the Credit Agreement which involve the reasonable possibility of materially
and adversely affecting the properties, business, prospects, profits or
condition (financial or otherwise) of the Company or its Restricted
Subsidiaries.
(5) No approval, consent or withholding of objection of or on the
part of, or filing, registration or qualification with, any governmental
body, is necessary in connection with the execution and delivery of the
Collateral Documents, the Guaranty Agreements or Credit Agreement or the
issuance and delivery of the Notes thereunder.
With respect to matters of fact on which such opinion is based, said
counsel may reasonably rely on appropriate certificates of public officials
and officers of the Company.
Such opinion shall be delivered to the from time to time Banks under the
Credit Agreement for their use and the use of their respective counsel. Such
opinion may contain other assumptions and qualifications approved by the
Agent and its counsel.
<PAGE>
SCHEDULE 6.1
SUBSIDIARIES AS OF FEBRUARY 28, 1995
The Company's Subsidiaries, each of which has only a single class of stock
outstanding, are as follows:
A. RESTRICTED SUBSIDIARIES
PERCENTAGE
JURISDICTION OF VOTING
NAME OF OF STOCK OWNED BY 2/28/95 2/28/95
SUBSIDIARY INCORPORATION THE COMPANY LOANS INVESTMENT
Cherry Semiconductor Rhode Island 100% $20,720,000 $3,369,000
Corporation
Cherry Systems Texas 100% $11,149,000 $1,065,000
Corporation (f.k.a.
Cherry Display
Products Corporation)
B. SUBSIDIARIES (OTHER THAN RESTRICTED SUBSIDIARIES)
PERCENTAGE
JURISDICTION OF VOTING
NAME OF OF STOCK OWNED BY 2/28/95 2/28/95
SUBSIDIARY INCORPORATION THE COMPANY LOANS INVESTMENT
Cherry Mikroschalter Federal Republic 100% -0- $6,693,000
GmbH of Germany
Cherry Electrical United Kingdom 100% -0- $2,774,000
Products Ltd.
Cherry Sarl France 100% -0- $66,000
Cherasia Limited Hong Kong 100% -0- $13,000
Cherry Australia Australia 100% $7,000 ($43,000)
Pty. Ltd.
<PAGE>
SCHEDULE 6.2
INDEBTEDNESS AND LIENS
1. Obligations secured by property, plant and equipment located in
Germany, entered into by Cherry Mikroschalter GmbH or subsidiaries
with the following banks for the following amounts: (US dollars based
upon February 28, 1995 DM/US Dollar exchange rate)
Indebtedness Liens
Bayerische Vereinsbank 7,764,000 14,555,000
IKB Bank 4,252,000 10,803,000
Hypobank 4,000,000
Deutsche Bank 4,000,000
Commerzbank 4,000,000
---------- ----------
Total 12,016,000 37,358,000
2. Various capitalized leases with an approximate net present value of
$2,200,000
3. Short-term uncommitted borrowings of Cherry Mikroschalter of
$18,464,000 (same exchange rate as above)
4. Short-term uncommitted borrowings of the Company with Harris Trust
and Savings Bank (up to $10,000,000), Societe Generale (up to
$25,000,000) and Comerica Bank (up to $10,000,000).
<PAGE>
SCHEDULE 6.5
DISCLOSURE SCHEDULE
None
