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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
CONTINENTAL CIRCUITS CORP.
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(NAME OF ISSUER)
COMMON STOCK, $.01 PAR VALUE
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(TITLE OF CLASS OF SECURITIES)
989852-10-8
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(CUSIP NUMBER)
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ANDREW E. LIETZ
CHIEF EXECUTIVE OFFICER
HADCO CORPORATION
12A MANOR PARKWAY
SALEM, NEW HAMPSHIRE 03079
(603) 898-8000
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(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED TO RECEIVE
NOTICES AND COMMUNICATIONS)
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COPIES TO:
STEPHEN A. HURWITZ, ESQ.
TESTA, HURWITZ & THIBEAULT, LLP
HIGH STREET TOWER
125 HIGH STREET
BOSTON, MA 02110
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FEBRUARY 16, 1998
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(Date of Event Which Requires Filing of This Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ].
Check the following box if a fee is being paid with the statement [ ]. (A fee
is not required only if the reporting person: (1) has a previous statement on
file reporting beneficial ownership of more than five percent of the class of
securities described in Item 1: and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7.)
NOTE: Six copies of this statement, including all exhibits, should be filed
withe the Commission. See Rule 13d-1(a) for other parties to whom copies are to
be sent.
*The remained of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter the
disclosures provided in a prior cover page.
The information required in the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
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CUSIP No. 989852-10-8 SCHEDULE 14D-1 AND 13D Page 2 of 5 Pages
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1. NAME OF REPORTING PERSONS
Hadco Acquisition Corp. II
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS
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2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [ ]
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3. SEC USE ONLY
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4. SOURCE OF FUNDS*
AF
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5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(e) or 2(f) [ ]
N/A
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6. CITIZENSHIP OR PLACE OF ORGANIZATION
State of Delaware
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7. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
580,000
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8. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN SHARES*
[ ]
N/A
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9. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
7.0%
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10. TYPE OF REPORTING PERSON*
CO
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*SEE INSTRUCTIONS BEFORE FILLING OUT!
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CUSIP No. 989852-10-8 SCHEDULE 14D-1 AND 13D Page 3 of 5 Pages
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1. NAME OF REPORTING PERSONS
Hadco Corporation
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS
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2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [ ]
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3. SEC USE ONLY
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4. SOURCE OF FUNDS*
BK
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5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(e) or 2(f) [ ]
N/A
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6. CITIZENSHIP OR PLACE OF ORGANIZATION
The Commonwealth of Massachusetts
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7. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
580,000*
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8. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN SHARES*
[ ]
N/A
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9. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
7.0%*
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10. TYPE OF REPORTING PERSON*
CO
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*SEE INSTRUCTIONS BEFORE FILLING OUT!
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ITEM 1. SECURITY AND ISSUER
This statement on Schedule 13D relates to the Common Shares, $.01 par
value per share (the "Common Shares") of Continental Circuits Corp., a
Delaware corporation (the "Company"). The address of the Company's principal's
executive offices is 3502 East Roeser Road, Phoenix, Arizona 85040.
ITEM 2. IDENTITY AND BACKGROUND
(a)-(c) Hadco Corporation, a Massachusetts corporation ("Hadco"), and
its wholly-owned subsidiary and Hadco Acquisition Corp. II, a Delaware
corporation, ("Hadco Acquisition") both have their principal executive offices
at 12A Manor Parkway, Salem, New Hampshire 03079. Hadco is manufacturer of
advanced electronic interconnect products, its principal products include
complex multilayer rigid printed circuits and backplance assemblies. Hadco
Acquisition is a subsidiary of Hadco Corporation formed for the purpose of
acquiring another entity. Hadco and Hadco Acquisition have also filed a Tender
Offer Statement on Schedule 14D-1 relating to the offer by Hadco Acquisition to
purchase all outstanding shares of Common Stock of the Company, at $23.90 per
Share, net to the seller in cash, on the terms and subject to the conditions set
forth in the Offer to Purchase, dated February 20, 1998 (the "Offer to
Purchase"), and in the related Letter of Transmittal and any amendments or
supplements thereto (which collectively constitute the "Offer").
(d)-(e) During the last five years, neither Hadco nor Hadco Acquisition
nor, to their knowledge any of the Directors or Executive Officers (i) has been
convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors) or (ii) has been a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of such proceeding
was or is subject to a judgement, decree or final order enjoining future
violations of, or prohibiting activities subject to, federal or state securities
laws or finding any violation of such laws.
4
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ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
Hadco Acquisition estimates that the total amount of funds required to
purchase all outstanding Common Shares (including those beneficially owned by
the Selling Stockholders) and to consumate the related merger, to pay related
fees and expenses and to assume outstanding indebtedness of the Company which
may become due as a result of the Offer and the merger is approximately $222
million. Hadco Acquisition expects to obtain these funds in the form of capital
contributions and/or loans from Hadco. Hadco expects to use approximately $222
million of borrowings pursuant to an existing $400 million senior revolving
credit loan facility with BankBoston, N.A.
ITEM 4. PURPOSE OF TRANSACTION
(a)-(c), (e)-(g)
On February 16, 1998, Hadco and Hadco Acquisition entered into a
Stockholders Agreement (the "Stockholders Agreement") with certain stockholders
of the Company (the "Selling Stockholders") and the Company, pursuant to which
the Selling Stockholders agreed to tender to Hadco Acquisition an aggregate of
580,000 Common Shares beneficially owned by them (representing approximately
7.0% of the outstanding common stock calculated on a fully-diluted basis). Also
on February 16, 1998 Hadco, Hadco Acquisition and the Company entered into an
Agreement and Plan of Merger ("Merger Agreement"), whereby upon completion of
the Offer, and subject to all of the conditions of the Merger Agreement, Hadco
Acquisition will be merged with and into the Company with the Company as
survivor, as a wholly-owned subsidiary of Hadco. Pursuant to the Stockholders
Agreement, the Selling Stockholders have agreed to validly tender all of the
outstanding common stock which are owned of record or beneficially by them and
to vote such shares in favor of the Merger.
(d) Upon the closing of the transactions described above and pursuant to
the terms of the Merger Agreement, the board of directors and management of the
Company shall resign.
(h) Upon the closing of the transactions described above, the Company's
securities shall be delisted from a national securities exchange or cease to be
authorized to be quoted in an inter-dealer quotation system of a registered
national securities association, and shall become eligible for termination of
registration pursuant to Section 12(g)(4) of the Act.
ITEM 5. INTEREST IN SECURITIES OF ISSUER
(a)-(b) Amount Beneficially Owned:
As a result of the Stockholders Agreement, Hadco and Hadco Acquisition
have the right to acquire an aggregate of 580,000 Common Shares, and such shares
constitute approximately 7.0% of the Common Shares outstanding. As a result of
the Stockholders Agreement, Hadco and Hadco Acquisition have sole or shared
dispositive power over none of the Common Shares.
(c) Except as set forth in Item 4 herein, neither Hadco, Hadco
Acquisition, nor, to the best knowledge of Hadco and Hadco Acquisition, any
executive officer or director of Hadco or Hadco Acquisition has effected any
transaction in the Common Shares during the past 60 days.
(d) Not Applicable.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDING OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER
The information contained in Item 4 is incorporated herein by reference.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
(1) Amended and Restated Revolving Credit Agreement dated as of December
9, 1997 between Hadco and BankBoston, N.A.
(2) Agreement and Plan of Merger dated February 16, 1998 among Hadco,
Hadco Acquisition and the issuer.
(3) Stockholders Agreement dated February 16, 1998 by and between Hadco,
Hadco Acquisition, the issuer and certain stockholders of the issuer.
(4) Amendment No. 1 dated as of March 13, 1998 to the Agreement and Plan
of Merger.
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SIGNATURES
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: March 13, 1998 HADCO ACQUISITION CORP. II
By: /s/ TIMOTHY P. LOSIK
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Name: Timothy P. Losik
Title: Vice President
HADCO CORPORATION
By: /s/ TIMOTHY P. LOSIK
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Name: Timothy P. Losik
Title: Senior Vice President
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EXHIBIT 1
AMENDED AND RESTATED
REVOLVING CREDIT AGREEMENT
DATED as of December 8, 1997
among
HADCO CORPORATION
and
BANKBOSTON, N.A.,
Individually and as Agent,
and
THE OTHER LENDING INSTITUTIONS
LISTED ON SCHEDULE 1 HERETO
with
BANCBOSTON SECURITIES INC.,
as Arranger
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TABLE OF CONTENTS
<TABLE>
<S> <C>
1. DEFINITIONS AND RULES OF INTERPRETATION.......................................1
1.1. Definitions...........................................................1
1.2. Rules of Interpretation...............................................13
2. THE REVOLVING CREDIT FACILITY. ..............................................14
2.1. Commitment to Lend....................................................14
2.2. Commitment Fee........................................................14
2.3. Reduction of Total Commitment.........................................15
2.4. The Notes.............................................................15
2.5. Interest on Loans.....................................................16
2.6. Requests for Loans....................................................16
2.7. Conversion Options....................................................16
2.1.1. Conversion to Different Type of Loan.........................17
2.7.2. Continuation of Type of Loan.................................17
2.7.3. Eurodollar Rate Loans........................................17
2.8. Funds for Loans.......................................................18
2.8.1. Funding Procedures...........................................18
2.8.2. Advances by Agent............................................18
3. REPAYMENT OF THE REVOLVING CREDIT LOANS.......................................19
3.1. Maturity..............................................................19
3.2. Mandatory Repayments of Loans.........................................19
3.3. Optional Repayments of Loans..........................................19
4. LETTERS OF CREDIT.............................................................20
4.1. Letter of Credit Commitments..........................................20
4.1.1. Commitment to Issue Letters of Credit........................20
4.1.2. Letter of Credit Applications................................20
4.1.3. Terms of Letters of Credit...................................20
4.1.4. Reimbursement Obligations of Banks...........................21
4.1.5. Participations of Banks......................................21
4.2. Reimbursement Obligation of the Borrower..............................21
4.3. Letter of Credit Payments.............................................22
4.4. Obligations Absolute..................................................22
4.5. Reliance by Issuer....................................................23
4.6. Letter of Credit Fee..................................................23
5. CERTAIN GENERAL PROVISIONS....................................................24
5.1. Fees..................................................................24
5.2. Funds for Payments....................................................24
5.2.1. Payments to Agent............................................24
5.2.2. No Offset, etc...............................................24
5.3. Computations..........................................................25
5.4. Inability to Determine Eurodollar Rate................................25
5.5. Illegality............................................................25
5.6. Additional Costs, etc.................................................26
</TABLE>
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<TABLE>
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5.7. Capital Adequacy.....................................................27
5.8. Certificate..........................................................27
5.9. Indemnity............................................................27
5.10. Interest After Default...............................................28
5.10.1. Overdue Amounts.............................................28
5.10.2. Amounts Not Overdue.........................................28
6. GUARANTIES....................................................................28
7. REPRESENTATIONS AND WARRANTIES................................................28
7.1. Corporate Authority..................................................28
7.1.1. Incorporation; Good Standing................................28
7.1.2. Authorization...............................................29
7.1.3. Enforceability..............................................29
7.2. Governmental Approvals...............................................29
7.3. Title to Properties; Leases. .......................................29
7.4. Financial Statements, Projections and Solvency.......................30
7.4.1. Financial Statements........................................30
7.4.2. Projections.................................................30
7.4.3. Solvency....................................................30
7.5. No Material Changes, etc.............................................31
7.6. Franchises, Patents, Copyrights, etc.................................31
7.7. Litigation...........................................................31
7.8. No Materially Adverse Contracts, etc.................................31
7.9. Compliance with Other Instruments, Laws, etc.........................32
7.10. Tax Status...........................................................32
7.11. No Event of Default..................................................32
7.12. Holding Company and Investment Company Acts..........................32
7.13. Absence of Financing Statements. ...................................32
7.14. Certain Transactions.................................................32
7.15. Employee Benefit Plans...............................................33
7.15.1. In General..................................................33
7.15.2. Terminability of Welfare Plans..............................33
7.15.3. Guaranteed Pension Plans....................................33
7.15.4. Multiemployer Plans.........................................34
7.16. Use of Proceeds......................................................34
7.17. Environmental Compliance.............................................34
7.18. Subsidiaries, etc. ..................................................36
7.19. Disclosure. ........................................................36
8. AFFIRMATIVE COVENANTS OF THE BORROWER.........................................36
8.1. Punctual Payment.....................................................36
8.2. Maintenance of Office................................................37
8.3. Records and Accounts.................................................37
8.4. Financial Statements, Certificates and Information...................37
8.5. Notices..............................................................38
8.5.1. Defaults....................................................38
8.5.2. Environmental Events........................................39
</TABLE>
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<TABLE>
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8.5.3. Notice of Litigation and Judgments..........................39
8.6. Corporate Existence; Maintenance of Properties.......................39
8.7. Insurance............................................................40
8.8. Taxes................................................................40
8.9. Inspection of Properties and Books, etc..............................40
8.9.1. General.....................................................40
8.9.2. Communications with Accountants.............................41
8.10. Compliance with Laws, Contracts, Licenses, and Permits...............41
8.11. Employee Benefit Plans...............................................41
8.12. Use of Proceeds......................................................41
8.12.1. General.....................................................41
8.12.2. Regulations U and X.........................................42
8.12.3. Ineligible Securities. ....................................42
8.13. Interest Rate Protection Agreements..................................42
8.14. Further Assurances...................................................42
9. CERTAIN NEGATIVE COVENANTS OF THE BORROWER....................................43
9.1. Restrictions on Indebtedness.........................................43
9.2. Restrictions on Liens................................................46
9.3. Restrictions on Investments..........................................47
9.4. Distributions........................................................48
9.5. Mergers and Consolidations, Acquisitions and Disposition of Assets...48
9.5.1. Mergers and Consolidations..................................48
9.5.2. Acquisitions................................................48
9.5.3. Disposition of Assets.......................................50
9.6. Sale and Leaseback...................................................50
9.7. Compliance with Environmental Laws...................................50
9.8. Employee Benefit Plans...............................................50
9.9. Capitalization.......................................................51
9.10. Agreements Regarding Hadco FSC and New Zycon.........................51
10. FINANCIAL COVENANTS OF THE BORROWER...........................................52
10.1. Funded Debt to EBITDA................................................52
10.2. Debt Service.........................................................52
10.3. Consolidated Net Worth...............................................52
10.4. Fixed Charge Coverage Ratio..........................................52
11. CLOSING CONDITIONS............................................................53
11.1. Loan Documents.......................................................53
11.2. Certified Copies of Charter Documents................................53
11.3. Corporate Action.....................................................53
11.4. Incumbency Certificate...............................................53
11.5. UCC Search Results...................................................53
11.6. Certificates of Insurance............................................53
11.7. Solvency Certificate.................................................54
11.8. Opinion of Counsel...................................................54
11.9. Payment of Fees......................................................54
</TABLE>
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<TABLE>
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11.10. Pay-Off Letters, Etc.................................................54
12. CONDITIONS TO ALL BORROWINGS. ...............................................54
12.1. Representations True; No Event of Default............................54
12.2. No Legal Impediment..................................................55
12.3. Governmental Regulation..............................................55
12.4. Proceedings and Documents............................................55
13. EVENTS OF DEFAULT; ACCELERATION; ETC..........................................55
13.1. Events of Default and Acceleration...................................55
13.2. Termination of Commitments...........................................58
13.3. Remedies.............................................................59
14. SETOFF........................................................................59
15. THE AGENT.....................................................................60
15.1. Authorization........................................................60
15.2. Employees and Agents.................................................60
15.3. No Liability.........................................................61
15.4. No Representations...................................................61
15.5. Payments.............................................................61
15.5.1. Payments to Agent...........................................61
15.5.2. Distribution by Agent.......................................61
15.5.3. Delinquent Banks............................................62
15.6. Holders of Notes.....................................................62
15.7. Indemnity............................................................62
15.8. Agent as Bank........................................................63
15.9. Resignation..........................................................63
16. EXPENSES......................................................................63
17. INDEMNIFICATION...............................................................64
18. SURVIVAL OF COVENANTS, ETC....................................................65
19. ASSIGNMENT AND PARTICIPATION..................................................65
19.1. Conditions to Assignment by Banks....................................65
19.2. Certain Representations and Warranties; Limitations; Covenants.......66
19.3. Register.............................................................67
19.4. New Notes............................................................67
19.5. Participations.......................................................68
19.6. Disclosure...........................................................68
19.7. Assignee or Participant Affiliated with the Borrower.................68
19.8. Miscellaneous Assignment Provisions..................................69
19.9. Assignment by Borrower...............................................69
20. NOTICES, ETC..................................................................69
21. GOVERNING LAW.................................................................70
22. HEADINGS......................................................................70
23. COUNTERPARTS..................................................................70
24. ENTIRE AGREEMENT, ETC.........................................................71
25. WAIVER OF JURY TRIAL..........................................................71
26. CONSENTS, AMENDMENTS, WAIVERS, ETC............................................71
</TABLE>
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<TABLE>
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27. SEVERABILITY..................................................................72
28. TREATMENT OF CERTAIN CONFIDENTIAL INFORMATION.................................72
28.1. Sharing of Information with Section 20 Subsidiary....................72
28.2. Confidentiality......................................................72
28.3. Prior Notification...................................................73
28.4. Other................................................................73
29. TRANSITIONAL ARRANGEMENTS.....................................................74
29.1. Prior Credit Agreement Superseded....................................74
29.2. Return and Cancellation of Notes.....................................74
29.3. Fees Under Superseded Agreement......................................74
</TABLE>
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EXHIBITS
EXHIBIT A - Note
EXHIBIT B - Loan Request
EXHIBIT C - Compliance Certificate
EXHIBIT D - Assignment and Acceptance
EXHIBIT E - Guaranty
SCHEDULES
SCHEDULE 1 - Banks; Commitments
SCHEDULE 7.3 - Title to Properties; Leases
SCHEDULE 7.5 - Contracts
SCHEDULE 7.7 - Litigation
SCHEDULE 7.10 - Tax Status
SCHEDULE 7.17 - Environmental Matters
SCHEDULE 7.18 - Subsidiaries
SCHEDULE 9.1 - Indebtedness
SCHEDULE 9.2 - Liens
SCHEDULE 9.3 - Investments
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AMENDED AND RESTATED
REVOLVING CREDIT AGREEMENT
This AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT is made as of
December 8, 1997 by and among HADCO CORPORATION (the "Borrower"), a
Massachusetts corporation having its principal place of business at 12A Manor
Parkway, Salem, New Hampshire 03709, and BANKBOSTON, N.A., formerly known as THE
FIRST NATIONAL BANK OF BOSTON, a national banking association and the other
lending institutions listed on SCHEDULE 1 hereto, and BANKBOSTON, N.A., formerly
known as THE FIRST NATIONAL BANK OF BOSTON, as agent for itself and such other
lending institutions.
The Borrower, the Agent and certain of the Banks are parties to a
Revolving Credit Agreement dated as of January 8, 1997, as amended by the First
Amendment and Modification Agreement dated as of February 21, 1997 (as so
amended, the "Original Credit Agreement"). The Borrower, the Agent and the Banks
desire further to amend in various respects and restate the Original Credit
Agreement in order among other things, to increase the size of the Total
Commitment and add certain additional lending institutions as "Banks" for
purposes hereof. Accordingly, the parties hereto hereby agree to amend and
restate the Original Revolving Credit Agreement as follows:
1. DEFINITIONS AND RULES OF INTERPRETATION.
1.1. DEFINITIONS. The following terms shall have the meanings set forth
in this ss.1 or elsewhere in the provisions of this Credit Agreement referred to
below:
AFFILIATE. Any Person that would be considered to be an affiliate of
the Borrower under Rule 144(a) of the Rules and Regulations of the Securities
and Exchange Commission, as in effect on the date hereof, if the Borrower were
issuing securities.
AGENT. BankBoston, N.A., acting as agent for the Banks.
AGENT'S HEAD OFFICE. The Agent's head office located at 100 Federal
Street, Boston, Massachusetts 02110, or at such other location as the Agent may
designate from time to time.
AGENT'S SIDE LETTER. See ss.5.1.
AGENT'S SPECIAL COUNSEL. Bingham Dana LLP or such other counsel as may
be approved by the Agent.
APPLICABLE COMMITMENT FEE PERCENTAGE. For any fiscal quarter or portion
thereof, three-eighths of one percent (0.375%) per annum; PROVIDED, HOWEVER,
that in the event that the ratio of Funded Debt (calculated as of the last day
of such fiscal quarter or portion thereof) to EBITDA (calculated for the four
consecutive fiscal quarters ending on the last day of such fiscal quarter or
portion thereof) meets the requirements set forth in the chart below, the
Applicable Commitment Fee Percentage shall, commencing with the date which is
ten (10) days after any date on which the Borrower delivers to the Banks the
financial statements referred to in ss.8.4(a) or (b) for such fiscal quarter or
portion thereof and ending with the date nine (9) days after the next date on
which the Borrower delivers to each of the
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Banks the financial statements referred to in ss.8.4(a) or (b), be the
percentage set forth opposite the applicable ratio of Funded Debt to EBITDA in
the table below:
<TABLE>
<CAPTION>
Ratio of Funded Debt
to EBITDA Applicable Commitment Fee Percentage
-------------------- ------------------------------------
<S> <C>
Greater than or equal to 2.5:1.0 0.375%
Greater than or equal to 2.0:1.0 0.275%
but less than 2.5:1.0
Greater than or equal to 1.5:1.0 0.225%
but less than 2.0:1.0
Less than 1.5:1.0 0.200%
</TABLE>
APPLICABLE EURODOLLAR RATE MARGIN. For any fiscal quarter or portion
thereof within any Interest Period with respect to any Eurodollar Rate Loan, one
and three-eighths percent (1.375%) per annum; PROVIDED, HOWEVER, that in the
event that the ratio of Funded Debt (calculated as of the last day of such
fiscal quarter or portion thereof) to EBITDA (calculated for the four
consecutive fiscal quarters ending on the last day of such fiscal quarter or
portion thereof) meets the requirements set forth in the chart below, the
Applicable Eurodollar Rate Margin shall, commencing with (but not before) the
date which is ten (10) days after the date on which the Borrower delivers to the
Banks the financial statements referred to in ss.8.4(a) or (b) for such fiscal
quarter or portion thereof and ending with the date which is nine (9) days after
the next date on which the Borrower delivers to each of the Banks the financial
statements referred to in ss.8.4(a) or (b), be the percentage set forth opposite
the applicable ratio of Funded Debt to EBITDA in the table below:
<TABLE>
<CAPTION>
Ratio of Funded Debt Applicable Eurodollar
to EBITDA Rate Margin
-------------------- ---------------------
<S> <C>
Greater than or equal to 3.0:1.0 1.375%
Greater than or equal to 2.5:1.0 1.125%
but less than 3.0:1.0
Greater than or equal to 2.0:1.0 0.875%
but less than 2.5:1.0
Greater than or equal to 1.5:1.0 0.625%
but less than 2.0:1.0
Less than 1.5:1.0 0.500%
</TABLE>
ASSIGNMENT AND ACCEPTANCE. See ss.19.1.
BALANCE SHEET DATE. October 26, 1996.
BANK BUMIPUTRA LOAN AGREEMENT. The Loan Agreement dated as of
February 9, 1996 among Hadco Malaysia, formerly known as Zycon Corporation SDN
BHD, Bank Bumiputra and certain other lenders, as in effect on January 8, 1997.
BANKS. BKB and the other lending institutions listed on SCHEDULE 1
hereto and any other Person who becomes an assignee of any rights and
obligations of a Bank pursuant to ss.19.
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BASE RATE. The higher of (i) the annual rate of interest announced from
time to time by BKB at its head office in Boston, Massachusetts, as its "base
rate" and (ii) one-half of one percent (1/2%) above the Federal Funds Effective
Rate. For the purposes of this definition, "Federal Funds Effective Rate" shall
mean for any day, the rate per annum equal to the weighted average of the rates
on overnight federal funds transactions with members of the Federal Reserve
System arranged by federal funds brokers, as published for such day (or, if such
day is not a Business Day, for the next preceding Business Day) by the Federal
Reserve Bank of New York, or, if such rate is not so published for any day that
is a Business Day, the average of the quotations for such day on such
transactions received by the Agent from three funds brokers of recognized
standing selected by the Agent.
BASE RATE LOANS. Loans bearing interest calculated by reference to the
Base Rate.
BKB. BankBoston, N.A., a national banking association, in its
individual capacity.
BORROWER. As defined in the preamble hereto.
BUSINESS DAY. Any day on which banking institutions in Boston,
Massachusetts, are open for the transaction of banking business and, in the case
of Eurodollar Rate Loans, also a day which is a Eurodollar Business Day.
CAPITAL ASSETS. Fixed assets, both tangible (such as land, buildings,
fixtures, machinery and equipment) and intangible (such as patents, copyrights,
trademarks, franchises and good will); PROVIDED that Capital Assets shall not
include any item customarily charged directly to expense or depreciated over a
useful life of twelve (12) months or less in accordance with generally accepted
accounting principles.
CAPITAL EXPENDITURES. Amounts paid or indebtedness incurred by any of
the Transaction Parties in connection with the purchase or lease by any of the
Transaction Parties of Capital Assets that would be required to be capitalized
and shown on the balance sheet of such Person in accordance with generally
accepted accounting principles.
CAPITALIZED LEASES. Leases under which any of the Transaction Parties
is the lessee or obligor, the discounted future rental payment obligations under
which are required to be capitalized on the balance sheet of the lessee or
obligor in accordance with generally accepted accounting principles.
CERCLA. See ss.7.17.
CLOSING DATE. The first date on which the conditions set forth in ss.11
have been satisfied and any Loans are to be made or any Letter of Credit is to
be issued hereunder.
CODE. The Internal Revenue Code of 1986, as amended and in effect from
time to time.
COMMITMENT. With respect to each Bank, the amount set forth on SCHEDULE
1 hereto as the amount of such Bank's commitment to make Loans to, and to
participate in the issuance, extension and renewal of Letters of Credit for the
account of, the Borrower, as the same may be reduced from time to time; or if
such commitment is terminated pursuant to the provisions hereof, zero.
<PAGE> 11
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COMMITMENT PERCENTAGE. With respect to each Bank, the percentage set
forth on SCHEDULE 1 hereto as such Bank's percentage of the aggregate
Commitments of all of the Banks.
CONSOLIDATED OR CONSOLIDATED. With reference to any term defined
herein, shall mean that term as applied to the accounts of the Transaction
Parties, consolidated in accordance with generally accepted accounting
principles.
CONSOLIDATED FUNDED DEBT. At any time of determination, the sum of (i)
the amount of the Loans outstanding (after giving account to any amounts
requested) PLUS accrued but unpaid interest thereon; PLUS (ii) the Maximum
Drawing Amount and all Unpaid Reimbursement Obligations PLUS accrued but unpaid
interest (if any) thereon; PLUS (iii) the outstanding amount of any other
Indebtedness for borrowed money, in respect of Capitalized Leases or which is
otherwise subject to the payment of interest PLUS accrued but unpaid interest on
such Indebtedness, whether such interest was or is required to be reflected as
an item of expense or capitalized, including payments consisting of interest in
respect of Capitalized Leases and including commitment fees, agency fees,
facility fees, balance deficiency fees and similar fees or expenses in
connection with the borrowing of money.
CONSOLIDATED NET INCOME (OR DEFICIT). The consolidated net income (or
deficit) of the Transaction Parties, after deduction of all expenses, taxes, and
other proper charges, determined in accordance with generally accepted
accounting principles, after eliminating therefrom all extraordinary
nonrecurring items of income, the Zycon Acquisition Related Write-Off and
Non-Cash Acquisition Expenses.
CONSOLIDATED NET WORTH. The excess of Consolidated Total Assets over
Consolidated Total Liabilities.
CONSOLIDATED TANGIBLE NET WORTH. The excess of Consolidated Total
Assets over Consolidated Total Liabilities, and less the sum of:
(a) the total book value of all assets of the Transaction
Parties properly classified as intangible assets under generally
accepted accounting principles, including such items as good will, the
purchase price of acquired assets in excess of the fair market value
thereof, trademarks, trade names, service marks, brand names,
copyrights, patents and licenses, and rights with respect to the
foregoing; PLUS
(b) all amounts representing any write-up in the book value of
any assets of the Transaction Parties resulting from a revaluation
thereof subsequent to the Balance Sheet Date, excluding adjustments to
translate foreign assets and liabilities for changes in foreign
exchange rates made in accordance with Financial Accounting Standards
Board Statement No. 52; PLUS
(c) to the extent otherwise includable in the computation of
Consolidated Tangible Net Worth, any subscriptions receivable.
CONSOLIDATED TOTAL ASSETS. All assets of the Transaction Parties
determined on a consolidated basis in accordance with generally accepted
accounting principles.
<PAGE> 12
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CONSOLIDATED TOTAL INTEREST EXPENSE. For any period, the aggregate
amount of interest required to be paid or accrued by the Transaction Parties
during such period on all Indebtedness of the Transaction Parties outstanding
during all or any part of such period, whether such interest was or is required
to be reflected as an item of expense or capitalized, including payments
consisting of interest in respect of Capitalized Leases and including commitment
fees, agency fees, facility fees, balance deficiency fees and similar fees or
expenses in connection with the borrowing of money.
CONSOLIDATED TOTAL LIABILITIES. All liabilities of the Transaction
Parties determined on a consolidated basis in accordance with generally accepted
accounting principles and all Indebtedness of the Transaction Parties, whether
or not so classified.
CONVERSION REQUEST. A notice given by the Borrower to the Agent of the
Borrower's election to convert or continue a Loan in accordance with ss.2.7.
CREDIT AGREEMENT. This Amended and Restated Revolving Credit Agreement,
including the Schedules and Exhibits hereto.
DEFAULT. See ss.13.1.
DISTRIBUTION. The declaration or payment of any dividend on or in
respect of any shares of any class of capital stock of the Borrower, other than
dividends payable solely in shares of common stock of the Borrower; the
purchase, redemption, or other retirement of any shares of any class of capital
stock, or any rights or options convertible into shares of any class of capital
stock (and including any purchase, redemption, prepayment or other retirement,
in whole or in part, of any subordinated indebtedness permitted by ss.9.1(k)),
of the Borrower, directly or indirectly through a Subsidiary of the Borrower, or
otherwise; the return of capital by the Borrower to its shareholders as such; or
any other distribution on or in respect of any shares of any class of capital
stock of the Borrower.
DOLLARS or $. Dollars in lawful currency of the United States of
America.
DOMESTIC LENDING OFFICE. Initially, the office of each Bank designated
as such in SCHEDULE 1 hereto; thereafter, such other office of such Bank, if
any, located within the United States that will be making or maintaining Base
Rate Loans.
DRAWDOWN DATE. The date on which any Loan is made or is to be made, and
the date on which any Loan is converted or continued in accordance with ss.2.7.
EARNINGS BEFORE INTEREST AND TAXES or EBIT. The consolidated earnings
(or loss) from the operations of the Transaction Parties for any period, after
all expenses and other proper charges but before payment or provision for any
income taxes or interest expense, for such period, determined in accordance with
generally accepted accounting principles, after eliminating therefrom all
extraordinary nonrecurring items of income or loss, earnings from discontinued
businesses, any non-cash gains used in determining income, the Zycon Acquisition
Related Write-Off, and any Non-Cash Acquisition Expenses.
EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION or
EBITDA. The consolidated earnings (or loss) from the operations of the
Transaction Parties for any
<PAGE> 13
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period, after all expenses and other proper charges but before payment or
provision for any income taxes, interest expense, depreciation or amortization
for such period, determined in accordance with generally accepted accounting
principles, after eliminating therefrom all extraordinary nonrecurring items of
income or loss, earnings from discontinued businesses, any non-cash gains used
in determining income, the Zycon Acquisition Related Write-Off, and any Non-Cash
Acquisition Expenses.
ELIGIBLE ASSIGNEE. Any of (i) a commercial bank or finance company
organized under the laws of the United States, or any State thereof or the
District of Columbia, and having total assets in excess of $1,000,000,000; (ii)
a savings and loan association or savings bank organized under the laws of the
United States, or any State thereof or the District of Columbia, and having a
net worth of at least $100,000,000, calculated in accordance with generally
accepted accounting principles; (iii) a commercial bank organized under the laws
of any other country which is a member of the Organization for Economic
Cooperation and Development (the "OECD"), or a political subdivision of any such
country, and having total assets in excess of $1,000,000,000, PROVIDED that such
bank is acting through a branch or agency located in the country in which it is
organized or another country which is also a member of the OECD; (iv) the
central bank of any country which is a member of the OECD; and (v) if, but only
if, any Event of Default has occurred and is continuing, any other bank,
insurance company, commercial finance company or other financial institution or
other Person approved by the Agent, such approval not to be unreasonably
withheld.
EMPLOYEE BENEFIT PLAN. Any employee benefit plan within the meaning of
ss.3(3) of ERISA maintained or contributed to by the Borrower, other than a
Guaranteed Pension Plan or a Multiemployer Plan.
ENVIRONMENTAL LAWS. See ss.7.17(a).
ERISA. The Employee Retirement Income Security Act of 1974, as amended
and in effect from time to time.
ERISA AFFILIATE. Any Person which is treated as a single employer with
the Borrower under ss.414 of the Code.
ERISA REPORTABLE EVENT. A reportable event with respect to a Guaranteed
Pension Plan within the meaning of ss.4043 of ERISA and the regulations
promulgated thereunder.
EUROCURRENCY RESERVE RATE. For any day with respect to a Eurodollar
Rate Loan, the maximum rate (expressed as a decimal) at which any lender subject
thereto would be required to maintain reserves under Regulation D of the Board
of Governors of the Federal Reserve System (or any successor or similar
regulations relating to such reserve requirements) against "Eurocurrency
Liabilities" (as that term is used in Regulation D), if such liabilities were
outstanding. The Eurocurrency Reserve Rate shall be adjusted automatically on
and as of the effective date of any change in the Eurocurrency Reserve Rate.
EURODOLLAR BUSINESS DAY. Any day on which commercial banks are open for
international business (including dealings in Dollar deposits) in London or such
other
<PAGE> 14
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eurodollar interbank market as may be selected by the Agent in its sole
discretion acting in good faith.
EURODOLLAR LENDING OFFICE. Initially, the office of each Bank
designated as such in SCHEDULE 1 hereto; thereafter, such other office of such
Bank, if any, that shall be making or maintaining Eurodollar Rate Loans.
EURODOLLAR RATE. For any Interest Period with respect to a Eurodollar
Rate Loan, the rate of interest equal to (i) the arithmetic average of the rates
per annum (rounded upwards to the nearest 1/16 of one percent) of the rate at
which BKB's Eurodollar Lending Office is offered Dollar deposits two Eurodollar
Business Days prior to the beginning of such Interest Period in the interbank
eurodollar market where the eurodollar and foreign currency and exchange
operations of such Eurodollar Lending Office are customarily conducted, for
delivery on the first day of such Interest Period for the number of days
comprised therein and in an amount comparable to the amount of the Eurodollar
Rate Loan of BKB to which such Interest Period applies, divided by (ii) a number
equal to 1.00 minus the Eurocurrency Reserve Rate, if applicable.
EURODOLLAR RATE LOANS. Loans bearing interest calculated by reference
to the Eurodollar Rate.
EVENT OF DEFAULT. See ss.13.1.
EXITING BANKS. Each of the Banks (as defined in the Original Credit
Agreement) which are not continuing as Banks under and for purposes of this
Credit Agreement and the other Loan Documents.
GENERALLY ACCEPTED ACCOUNTING PRINCIPLES. (i) When used in ss.10,
whether directly or indirectly through reference to a capitalized term used
therein, means (A) principles that are consistent with the principles
promulgated or adopted by the Financial Accounting Standards Board and its
predecessors, in effect for the fiscal year ended on the Balance Sheet Date, and
(B) to the extent consistent with such principles, the accounting practice of
the Borrower reflected in its financial statements for the year ended on the
Balance Sheet Date, and (ii) when used in general, other than as provided above,
means principles that are (A) consistent with the principles promulgated or
adopted by the Financial Accounting Standards Board and its predecessors, as in
effect from time to time, and (B) consistently applied with past financial
statements of the Borrower adopting the same principles, provided that in each
case referred to in this definition of "generally accepted accounting
principles" a certified public accountant would, insofar as the use of such
accounting principles is pertinent, be in a position to deliver an unqualified
opinion (other than a qualification regarding changes in generally accepted
accounting principles) as to financial statements in which such principles have
been properly applied.
GUARANTEED PENSION PLAN. Any employee pension benefit plan within the
meaning of ss.3(2) of ERISA maintained or contributed to by the Borrower or any
ERISA Affiliate the benefits of which are guaranteed on termination in full or
in part by the PBGC pursuant to Title IV of ERISA, other than a Multiemployer
Plan.
<PAGE> 15
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GUARANTIES. The separate Guaranties, each in the form of EXHIBIT E,
dated or to be dated on, prior to or, in the case of any Subsidiary which
becomes a Guarantor pursuant to ss.9.5.2, after the Closing Date, made by each
Guarantor in favor of the Banks and the Agent pursuant to which such Guarantor
guaranties to the Banks and the Agent, to the extent provided therein, the
payment and performance of the Obligations.
GUARANTORS. (i) Hadco Santa Clara; and (ii) any other direct or
indirect Subsidiary of the Borrower (other than Hadco FSC, New Zycon or Hadco
Malaysia).
HADCO ACQUISITION. Hadco Acquisition, a Delaware corporation and
one-time wholly-owned Subsidiary of the Borrower, which entity has previously
been merged into Zycon.
HADCO FSC. Hadco Foreign Sales Corporation, a U.S. Virgin Islands
corporation.
HADCO MALAYSIA. Hadco Corporation (Malaysia) SDN BHD, a Malaysian
Corporation, formerly known as Zycon Corporation SDN BHD.
HADCO SANTA CLARA. Hadco Santa Clara, Inc., a Delaware corporation,
formerly known as Zycon Corporation, the successor of the merger of Zycon and
Hadco Acquisition.
HAZARDOUS SUBSTANCES. See ss.7.17(b).
INDEBTEDNESS. All obligations, contingent and otherwise, that in
accordance with generally accepted accounting principles should be classified
upon the obligor's balance sheet as liabilities, or to which reference should be
made by footnotes thereto, including in any event and whether or not so
classified: (i) all debt and similar monetary obligations, whether direct or
indirect; (ii) all liabilities secured by any mortgage, pledge, security
interest, lien, charge or other encumbrance existing on property owned or
acquired subject thereto, whether or not the liability secured thereby shall
have been assumed; and (iii) all guarantees, endorsements and other contingent
obligations whether direct or indirect in respect of indebtedness of others,
including any obligation to supply funds to or in any manner to invest in,
directly or indirectly, the debtor, to purchase indebtedness, or to assure the
owner of indebtedness against loss, through an agreement to purchase goods,
supplies, or services for the purpose of enabling the debtor to make payment of
the indebtedness held by such owner or otherwise, and the obligations to
reimburse the issuer in respect of any letters of credit.
INELIGIBLE SECURITIES. Securities which may not be underwritten or
dealt in by member banks of the Federal Reserve System under Section 16 of the
Banking Act of 1993 (12 U.S.C. ss.24, Seventh), as amended.
INTEREST PAYMENT DATE. (i) As to any Base Rate Loan, the last day of
the calendar quarter which includes the Drawdown Date thereof; and (ii) as to
any Eurodollar Rate Loan in respect of which the Interest Period is (A) 3 months
or less, the last day of such Interest Period and (B) more than 3 months, the
date that is 3 months from the first day of such Interest Period and, in
addition, the last day of such Interest Period.
<PAGE> 16
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INTEREST PERIOD. With respect to each Loan, (i) initially, the period
commencing on the Drawdown Date of such Loan and ending on the last day of one
of the periods set forth below, as selected by the Borrower in a Loan Request
(A) for any Base Rate Loan, the last day of the calendar quarter; and (B) for
any Eurodollar Rate Loan, 1, 2, 3 or 6 months; and (ii) thereafter, each period
commencing on the last day of the next preceding Interest Period applicable to
such Loan and ending on the last day of one of the periods set forth above, as
selected by the Borrower in a Conversion Request; PROVIDED that all of the
foregoing provisions relating to Interest Periods are subject to the following:
(a) if any Interest Period with respect to a Eurodollar Rate
Loan would otherwise end on a day that is not a Eurodollar Business
Day, that Interest Period shall be extended to the next succeeding
Eurodollar Business Day unless the result of such extension would be to
carry such Interest Period into another calendar month, in which event
such Interest Period shall end on the immediately preceding Eurodollar
Business Day;
(b) if any Interest Period with respect to a Base Rate Loan
would end on a day that is not a Business Day, that Interest Period
shall end on the next succeeding Business Day;
(c) if the Borrower shall fail to give notice as provided in
ss.2.7, the Borrower shall be deemed to have requested a conversion of
the affected Eurodollar Rate Loan to a Base Rate Loan and the
continuance of all Base Rate Loans as Base Rate Loans on the last day
of the then current Interest Period with respect thereto;
(d) any Interest Period relating to any Eurodollar Rate Loan
that begins on the last Eurodollar Business Day of a calendar month (or
on a day for which there is no numerically corresponding day in the
calendar month at the end of such Interest Period) shall end on the
last Eurodollar Business Day of a calendar month; and
(e) any Interest Period relating to any Eurodollar Rate Loan
that would otherwise extend beyond the Revolving Credit Loan Maturity
Date shall end on the Revolving Credit Loan Maturity Date.
INVESTMENTS. All expenditures made and all liabilities incurred
(contingently or otherwise) for the acquisition of stock or Indebtedness of, or
for loans, advances, capital contributions or transfers of property to, or in
respect of any guaranties (or other commitments as described under
Indebtedness), or obligations of, any Person. In determining the aggregate
amount of Investments outstanding at any particular time: (i) the amount of any
Investment represented by a guaranty shall be taken at not less than the
principal amount of the obligations guaranteed and still outstanding; (ii) there
shall be included as an Investment all interest accrued with respect to
Indebtedness constituting an Investment unless and until such interest is paid;
(iii) there shall be deducted in respect of each such Investment any amount
received as a return of capital (but only by repurchase, redemption, retirement,
repayment, liquidating dividend or liquidating distribution); (iv) there shall
not be deducted in respect of any Investment any amounts received as earnings on
such Investment, whether as dividends, interest or otherwise, except that
accrued interest included as provided in the foregoing clause (ii) may be
deducted when paid; and (v) there
<PAGE> 17
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shall not be deducted from the aggregate amount of Investments any decrease in
the value thereof.
LETTER OF CREDIT. See ss.4.1.1.
LETTER OF CREDIT APPLICATION. See ss.4.1.1.
LETTER OF CREDIT PARTICIPATION. See ss.4.1.4.
LOAN DOCUMENTS. This Credit Agreement, the Notes, the Letter of Credit
Applications, the Letters of Credit, the Guaranties, the Agent's Side Letter,
the Post-Closing Letter, any interest rate protection agreements entered into
with any of the Banks in connection herewith and any other instruments,
documents and agreements executed from time to time in connection herewith.
LOAN REQUEST. See ss.2.6.
LOANS. Revolving credit loans made or to be made by the Banks to the
Borrower pursuant to ss.2.
MAJORITY BANKS. As of any date, the Banks holding at least fifty-one
percent (51%) of the outstanding principal amount of the Notes on such date; and
if no such principal is outstanding, the Banks whose aggregate Commitments
constitutes at least fifty-one percent (51%) of the Total Commitment.
MARGIN STOCK. "Margin stock" or "margin securities", as such terms are
used in Regulations U and X of the Board of Governors of the Federal Reserve
System, 12 C.F.R. Parts 221 and 224.
MAXIMUM DRAWING AMOUNT. The maximum aggregate amount that the
beneficiaries may at any time draw under outstanding Letters of Credit, as such
aggregate amount may be reduced from time to time pursuant to the terms of the
Letters of Credit.
MULTIEMPLOYER PLAN. Any multiemployer plan within the meaning of
ss.3(37) of ERISA maintained or contributed to by the Borrower or any ERISA
Affiliate.
NEW ZYCON. Zycon Corporation, a Delaware corporation, and wholly owned
Subsidiary of the Borrower.
NON-CASH ACQUISITION EXPENSES. Non-cash expenses arising from the
write-off of goodwill, in-process research and development costs, and inventory
and fixed asset charges, in each case associated with Permitted Acquisitions
made following the Closing Date in an aggregate amount for all such Permitted
Acquisitions not to exceed $100,000,000.
NOTES. See ss.2.4.
OBLIGATIONS. All indebtedness, obligations and liabilities of any of
the Transaction Parties to any of the Banks and the Agent, individually or
collectively, existing on the date of this Credit Agreement or arising
thereafter, direct or indirect, joint or several, absolute or contingent,
matured or unmatured, liquidated or unliquidated, secured or unsecured, arising
<PAGE> 18
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by contract, operation of law or otherwise, arising or incurred under this
Credit Agreement or any of the other Loan Documents or in respect of any of the
Loans made or Reimbursement Obligations incurred or any of the Notes, Letter of
Credit Application, Letter of Credit or other instruments at any time evidencing
any thereof.
ORIGINAL CREDIT AGREEMENT. As defined in the preamble hereto.
OUTSTANDING. With respect to the Loans, the aggregate unpaid principal
thereof as of any date of determination.
PBGC. The Pension Benefit Guaranty Corporation created by ss.4002 of
ERISA and any successor entity or entities having similar responsibilities.
PERMITTED ACQUISITIONS. Acquisitions of stock or assets permitted by
ss.9.5.2.
PERMITTED LIENS. Liens, security interests and other encumbrances
permitted by ss.9.2.
PERSON. Any individual, corporation, partnership, trust, unincorporated
association, business, or other legal entity, and any government or any
governmental agency or political subdivision thereof.
POST-CLOSING LETTER. The side letter dated as of December 8, 1997
between the Agent and the Borrower regarding certain post-closing items.
REAL ESTATE. All real property at any time owned or leased (as lessee
or sublessee) by any of the Transaction Parties.
REIMBURSEMENT OBLIGATION. The Borrower's obligation to reimburse the
Agent and the Banks on account of any drawing under any Letter of Credit as
provided in ss.4.2.
REVOLVING CREDIT LOAN MATURITY DATE. January 8, 2002.
SECTION 20 SUBSIDIARY. A Subsidiary of the bank holding company
controlling any Bank, which Subsidiary has been granted authority by the Federal
Reserve Board to underwrite and deal in certain Ineligible Securities.
SUBSIDIARY. Any corporation, association, trust, or other business
entity of which the designated parent shall at any time own directly or
indirectly through a Subsidiary or Subsidiaries at least a majority (by number
of votes) of the outstanding Voting Stock.
TARGET. As defined in ss.9.5.2(b).
TOTAL COMMITMENT. The sum of the Commitments of the Banks, as in effect
from time to time.
TRANSACTION PARTIES. Collectively, the Borrower and its Subsidiaries.
TYPE. As to any Loan, its nature as a Base Rate Loan or a Eurodollar
Rate Loan.
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UNIFORM CUSTOMS. With respect to any Letter of Credit, the Uniform
Customs and Practice for Documentary Credits (1993 Revision), International
Chamber of Commerce Publication No. 500 or any successor version thereto adopted
by the Agent in the ordinary course of its business as a letter of credit issuer
and in effect at the time of issuance of such Letter of Credit.
UNPAID REIMBURSEMENT OBLIGATION. Any Reimbursement Obligation for which
the Borrower does not reimburse the Agent and the Banks on the date specified
in, and in accordance with, ss.4.2.
VOTING STOCK. Stock or similar interests, of any class or classes
(however designated), the holders of which are at the time entitled, as such
holders, to vote for the election of a majority of the directors (or persons
performing similar functions) of the corporation, association, trust or other
business entity involved, whether or not the right so to vote exists by reason
of the happening of a contingency.
ZYCON. Zycon Corporation, a Delaware corporation, the company into
which Hadco Acquisition has previously been merged, and which is now known as
Hadco Santa Clara.
ZYCON BALANCE SHEET DATE. November 30, 1996.
ZYCON EMPLOYEE DISTRIBUTION. The Distribution made in January, 1997 in
an aggregate amount not exceeding $6,000,000, in order to pay employees of Zycon
the difference between the exercise price of the stock options owned by such
employees and the price per share offered and paid by Hadco Acquisition for
shares of the capital stock of Zycon.
ZYCON ACQUISITION RELATED WRITE-OFF. Up to $80,000,000 in non-cash
expenses associated with goodwill resulting from the purchase of Zycon and with
in-process research and development costs of Zycon.
1.2. RULES OF INTERPRETATION.
(a) A reference to any document or agreement shall include
such document or agreement as amended, modified or supplemented from
time to time in accordance with its terms and the terms of this Credit
Agreement.
(b) The singular includes the plural and the plural includes the
singular.
(c) A reference to any law includes any amendment or
modification to such law.
(d) A reference to any Person includes its permitted successors
and permitted assigns.
(e) Accounting terms not otherwise defined herein have the
meanings assigned to them by generally accepted accounting principles
applied on a consistent basis by the accounting entity to which they
refer.
(f) The words "include", "includes" and "including" are not
limiting.
<PAGE> 20
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(g) All terms not specifically defined herein or by generally
accepted accounting principles, which terms are defined in the Uniform
Commercial Code as in effect in the Commonwealth of Massachusetts, have
the meanings assigned to them therein, with the term "instrument" being
that defined under Article 9 of the Uniform Commercial Code.
(h) Reference to a particular "ss." refers to that section of
this Credit Agreement unless otherwise indicated.
(i) The words "herein", "hereof", "hereunder" and words of
like import shall refer to this Credit Agreement as a whole and not to
any particular section or subdivision of this Credit Agreement.
2. THE REVOLVING CREDIT FACILITY.
2.1. COMMITMENT TO LEND. Subject to the terms and conditions set forth
in this Credit Agreement, each of the Banks severally agrees to lend to the
Borrower and the Borrower may borrow, repay, and reborrow from time to time
between the Closing Date and the Revolving Credit Loan Maturity Date upon notice
by the Borrower to the Agent given in accordance with ss.2.6, such sums as are
requested by the Borrower up to a maximum aggregate amount outstanding (after
giving effect to all amounts requested) at any one time equal to such Bank's
Commitment MINUS such Bank's Commitment Percentage of the sum of the Maximum
Drawing Amount and all Unpaid Reimbursement Obligations, PROVIDED that the sum
of the outstanding amount of the Loans (after giving effect to all amounts
requested) PLUS the Maximum Drawing Amount and all Unpaid Reimbursement
Obligations shall not at any time exceed the Total Commitment. The Loans shall
be made PRO RATA in accordance with each Bank's Commitment Percentage. Each
request for a Loan hereunder shall constitute a representation and warranty by
the Borrower that the conditions set forth in ss.11 and ss.12, in the case of
the initial Loans to be made on the Closing Date, and ss.12, in the case of all
other Loans, have been satisfied on the date of such request.
2.2. COMMITMENT FEE. The Borrower agrees to pay to the Agent for the
accounts of the Banks in accordance with their respective Commitment Percentages
a commitment fee calculated at a rate per annum equal to the Applicable
Commitment Fee Percentage on the average daily amount during each calendar
quarter or portion thereof from Closing Date to the Revolving Credit Loan
Maturity Date by which the Total Commitment MINUS the sum of the Maximum Drawing
Amount and all Unpaid Reimbursement Obligations exceeds the outstanding amount
of Loans during such calendar quarter. The commitment fee shall be payable
quarterly in arrears on the first day of each calendar quarter for the
immediately preceding calendar quarter commencing on the first such date
following the date hereof, with a final payment on the Revolving Credit Loan
Maturity Date or any earlier date on which the Commitments shall terminate.
2.3. REDUCTION OF TOTAL COMMITMENT. Upon the Borrower's incurrence of
any Indebtedness permitted by ss.9.1(k), the Borrower shall, at the request of
the Majority Banks, reduce the Total Commitment by an amount equal to the net
proceeds of all such Indebtedness incurred following the Closing Date, up to a
maximum of $50,000,000 in connection with any such Indebtedness described in
ss.9.1(k)(i) and up to a cumulative maximum of $100,000,000 in connection with
any such Indebtedness described in
<PAGE> 21
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ss.9.1(k)(ii). The Borrower shall have the right, without penalty (other than
breakage fees relating to Eurodollar Rate Loans for which the Borrower is
otherwise responsible under ss.5.9 and as otherwise provided in this ss.2.3), at
any time and from time to time upon seven (7) Business Days prior written notice
to the Agent to reduce by $10,000,000 or an integral multiple of $5,000,000 in
excess thereof or terminate entirely the Total Commitment; PROVIDED, HOWEVER,
that the Total Commitment shall not be reduced below $50,000,000 unless it is
terminated in full; and PROVIDED FURTHER that if, on or before January 8, 1998,
the Borrower incurs Indebtedness permitted by ss.9.1(k) or sells equity
securities of the Borrower, or warrants or subscription rights for equity
securities of the Borrower, the sale or issuance of any of which does not create
or result in a Default or Event of Default, in an aggregate amount for all such
Indebtedness and net proceeds of the sale of such equity securities, or warrants
or subscription rights for equity securities, in excess of $75,000,000, and the
Borrower, at its option, reduces the Total Commitment by more than $75,000,000,
the Borrower shall, at the time of such reduction of the Total Commitment, pay
to the Agent, for the PRO RATA benefit of the Banks, a fee equal to one fifth of
one percent (.20%) on the amount by which such reduction in the Total Commitment
exceeds $75,000,000. Upon any such reduction of the Total Commitment as set
forth in either of the two immediately preceding sentences, the Commitments of
the Banks shall be reduced PRO RATA in accordance with their respective
Commitment Percentages of the amount specified in such notice or, as the case
may be, terminated. Promptly after receiving any notice of the Borrower
delivered pursuant to this ss.2.3, the Agent will notify the Banks of the
substance thereof. Upon the effective date of any such reduction or termination,
the Borrower shall pay to the Agent for the respective accounts of the Banks the
full amount of any commitment fee then accrued on the amount of the reduction.
No reduction or termination of the Commitments may be reinstated.
2.4. THE NOTES. The Loans shall be evidenced by separate promissory
notes of the Borrower in substantially the form of EXHIBIT A hereto (each a
"Note"), dated as of the Closing Date and completed with appropriate insertions.
One Note shall be payable to the order of each Bank in a principal amount equal
to such Bank's Commitment or, if less, the outstanding amount of all Loans made
by such Bank, plus interest accrued thereon, as set forth below. The Borrower
irrevocably authorizes each Bank to make or cause to be made, at or about the
time of the Drawdown Date of any Loan or at the time of receipt of any payment
of principal on such Bank's Note, an appropriate computer entry or other record
reflecting the making of such Loan or (as the case may be) the receipt of such
payment. The outstanding amount of the Loans set forth in such computer entries
or other records shall be PRIMA FACIE evidence of the principal amount thereof
owing and unpaid to such Bank, but the failure to record, or any error in so
recording, any such amount in such computer entries or other records shall not
limit or otherwise affect the obligations of the Borrower hereunder or under any
Note to make payments of principal of or interest on any Note when due.
2.5. INTEREST ON LOANS. Except as otherwise provided in ss.5.10,
(a) Each Base Rate Loan shall bear interest for the period
commencing with the Drawdown Date thereof and ending on the last day of
the Interest Period with respect thereto at a rate per annum equal to
the Base Rate.
<PAGE> 22
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(b) Each Eurodollar Rate Loan shall bear interest for the
period commencing with the Drawdown Date thereof and ending on the last
day of the Interest Period with respect thereto at a rate per annum
equal to the Applicable Eurodollar Rate Margin PLUS the Eurodollar Rate
determined for such Interest Period.
(c) The Borrower promises to pay interest on each Loan in
arrears on each Interest Payment Date with respect thereto.
2.6. REQUESTS FOR LOANS. The Borrower shall give to the Agent written
notice in the form of EXHIBIT B hereto (or telephonic notice confirmed in a
writing in the form of EXHIBIT B hereto) of each Loan requested hereunder (a
"Loan Request") no less than (i) one (1) Business Day prior to the proposed
Drawdown Date of any Base Rate Loan and (ii) three (3) Eurodollar Business Days
prior to the proposed Drawdown Date of any Eurodollar Rate Loan. Each such
notice shall specify (A) the principal amount of the Loan requested, (B) the
proposed Drawdown Date of such Loan, (C) the Interest Period for such Revolving
Credit Loan and (D) the Type of such Loan. Promptly upon receipt of any such
notice, the Agent shall notify each of the Banks thereof. Each Loan Request
shall be irrevocable and binding on the Borrower and shall obligate the Borrower
to accept the Loan requested from the Banks on the proposed Drawdown Date. Each
Loan Request shall be in a minimum aggregate amount of $5,000,000 or an integral
multiple thereof.
2.7. CONVERSION OPTIONS.
2.7.1. CONVERSION TO DIFFERENT TYPE OF LOAN. The Borrower may
elect from time to time to convert any outstanding Loan to a
Loan of another Type, PROVIDED that (i) with respect to any such
conversion of a Loan to a Base Rate Loan, the Borrower shall
give the Agent at least one (1) Business Day prior written
notice of such election; (ii) with respect to any such
conversion of a Base Rate Loan to a Eurodollar Rate Loan, the
Borrower shall give the Agent at least three (3) Eurodollar
Business Days prior written notice of such election; (iii) with
respect to any such conversion of a Eurodollar Rate Loan into a
Loan of another Type, such conversion shall only be made on the
last day of the Interest Period with respect thereto; and (iv)
no Loan may be converted into a Eurodollar Rate Loan when any
Default or Event of Default has occurred and is continuing. On
the date on which such conversion is being made, each Bank shall
take such action as is necessary to transfer its Commitment
Percentage of such Loans to its Domestic Lending Office or its
Eurodollar Lending Office, as the case may be. All or any part
of outstanding Loans of any Type may be converted into a Loan of
another Type as provided herein, PROVIDED that any partial
conversion shall be in an aggregate principal amount of
$5,000,000 or a whole multiple thereof. Each Conversion Request
relating to the conversion of a Loan to a Eurodollar Rate Loan
shall be irrevocable by the Borrower.
2.7.2. CONTINUATION OF TYPE OF LOAN. Any Loan of any Type may be
continued as a Loan of the same Type upon the expiration of an
Interest Period with respect thereto by compliance by the
Borrower with the notice provisions contained in ss.2.7.1;
PROVIDED that no Eurodollar Rate Loan may
<PAGE> 23
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be continued as such when any Default or Event of Default has
occurred and is continuing, but shall be automatically converted
to a Base Rate Loan on the last day of the first Interest Period
relating thereto ending during the continuance of any Default or
Event of Default of which officers of the Agent active upon the
Borrower's account have actual knowledge. In the event that the
Borrower fails to provide any such notice with respect to the
continuation of any Eurodollar Rate Loan as such, then such
Eurodollar Rate Loan shall be automatically converted to a Base
Rate Loan on the last day of the first Interest Period relating
thereto. The Agent shall notify the Banks promptly when any such
automatic conversion contemplated by this ss.2.7 is scheduled to
occur.
2.7.3. EURODOLLAR RATE LOANS. Any conversion to or from
Eurodollar Rate Loans shall be in such amounts and be made
pursuant to such elections so that, after giving effect thereto,
the aggregate principal amount of all Eurodollar Rate Loans
having the same Interest Period shall not be less than
$20,000,000 or a whole multiple of $5,000,000 in excess thereof.
At no time shall there be more than five (5) Eurodollar Rate
Loans outstanding.
2.8. FUNDS FOR LOANS.
2.8.1. FUNDING PROCEDURES. Not later than 11:00 a.m. (Boston
time) on the proposed Drawdown Date of any Loans, each of the
Banks will make available to the Agent, at its Head Office, in
immediately available funds, the amount of such Bank's
Commitment Percentage of the amount of the requested Loans. Upon
receipt from each Bank of such amount, and upon receipt of the
documents required by ss.ss.11 and 12 and the satisfactIon of
the other conditions set forth therein, to the extent
applicable, the Agent will make available to the Borrower the
aggregate amount of such Loans made available to the Agent by
the Banks. The failure or refusal of any Bank to make available
to the Agent at the aforesaid time and place on any Drawdown
Date the amount of its Commitment Percentage of the requested
Loans shall not relieve any other Bank from its several
obligation hereunder to make available to the Agent the amount
of such other Bank's Commitment Percentage of any requested
Loans.
2.8.2. ADVANCES BY AGENT. The Agent may, unless notified to the
contrary by any Bank prior to a Drawdown Date, assume that such
Bank has made available to the Agent on such Drawdown Date the
amount of such Bank's Commitment Percentage of the Loans to be
made on such Drawdown Date, and the Agent may (but it shall not
be required to), in reliance upon such assumption, make
available to the Borrower a corresponding amount. If any Bank
makes available to the Agent such amount on a date after such
Drawdown Date, such Bank shall pay to the Agent on demand an
amount equal to the product of (i) the average computed for the
period referred to in clause (iii) below, of the weighted
average interest rate paid by the Agent for federal funds
acquired by the Agent during each day included in such period,
TIMES (ii) the amount of such Bank's Commitment Percentage of
such Loans, TIMES (iii) a fraction, the numerator of which is
the number of days that
<PAGE> 24
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elapse from and including such Drawdown Date to the date on
which the amount of such Bank's Commitment Percentage of such
Loans shall become immediately available to the Agent, and the
denominator of which is 360. A statement of the Agent submitted
to such Bank with respect to any amounts owing under this
paragraph shall be PRIMA FACIE evidence of the amount due and
owing to the Agent by such Bank. If the amount of such Bank's
Commitment Percentage of such Loans is not made available to the
Agent by such Bank within three (3) Business Days following such
Drawdown Date, the Agent shall be entitled to recover such
amount from the Borrower on demand, with interest thereon at the
rate per annum applicable to the Loans made on such Drawdown
Date.
3. REPAYMENT OF THE REVOLVING CREDIT LOANS.
3.1. MATURITY. The Borrower promises to pay on the Revolving Credit
Loan Maturity Date, and there shall become absolutely due and payable on the
Revolving Credit Loan Maturity Date, all of the Loans outstanding on such date,
together with any and all accrued and unpaid interest thereon.
3.2. MANDATORY REPAYMENTS OF LOANS. If at any time the Borrower shall
incur Indebtedness permitted by ss.9.1(k), the Borrower shall, at the request of
the Majority Banks, immediately pay to the Agent for the respective accounts of
the Banks an amount equal to the net proceeds of all such Indebtedness incurred
following the Closing Date, up to a maximum of $50,000,000 in connection with
any such Indebtedness described in ss.9.1(k)(i) and up to a cumulative maximum
of $100,000,000 in connectioN with any such Indebtedness described in
ss.9.1(k)(ii). If at any time the sum of the outstanding amounT of the Loans,
the Maximum Drawing Amount and all Unpaid Reimbursement Obligations exceeds the
Total Commitment, then the Borrower shall immediately pay the amount of such
excess to the Agent for the respective accounts of the Banks. Any amounts repaid
in accordance with either of the immediately preceding two sentences shall be
applied: first, to any Unpaid Reimbursement Obligations; second, to the Loans;
and third, to provide to the Agent cash collateral for Reimbursement Obligations
as contemplated by ss.4.2(b) and (c). Each payment of any Unpaid Reimbursement
Obligations or prepayment of Loans shall be allocated among the Banks, in
proportion, as nearly as practicable, to each Reimbursement Obligation or (as
the case may be) the respective unpaid principal amount of each Bank's Note,
with adjustments to the extent practicable to equalize any prior payments or
repayments not exactly in proportion.
3.3. OPTIONAL REPAYMENTS OF LOANS. The Borrower shall have the right,
at its election, to repay the outstanding amount of the Loans, as a whole or in
part, at any time without penalty or premium, PROVIDED that any full or partial
prepayment of the outstanding amount of any Eurodollar Rate Loans pursuant to
this ss.3.3 may be made only on the last day of the Interest Period relating
thereto. The Borrower shall give the Agent, no later than 10:00 a.m., Boston
time, at least one (1) Business Day prior written notice of any proposed
prepayment pursuant to this ss.3.3 of Base Rate Loans, and three (3) Eurodollar
Business Days notice of any proposed prepayment pursuant to this ss.3.3 of
Eurodollar Rate Loans, in each case specifying the proposed date of prepayment
of Loans and the principal amount to be prepaid. Each such partial prepayment of
the Loans shall be in an integral multiple of $5,000,000 and shall be applied,
in the absence of instruction by the Borrower, first to the
<PAGE> 25
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principal of Base Rate Loans and then to the principal of Eurodollar Rate Loans.
Accrued interest on the principal prepaid in connection with each such partial
prepayment shall be due and payable on the next Interest Payment Date, but
accrued interest on the principal paid in connection with any full prepayment at
a time when the Total Commitment is terminated shall be paid on the date of
prepayment. Each prepayment shall be allocated among the Banks, in proportion,
as nearly as practicable, to the respective unpaid principal amount of each
Bank's Note, with adjustments to the extent practicable to equalize any prior
repayments not exactly in proportion.
4. LETTERS OF CREDIT.
4.1. LETTER OF CREDIT COMMITMENTS.
4.1.1. COMMITMENT TO ISSUE LETTERS OF CREDIT. Subject to the
terms and conditions hereof and the execution and delivery by
the Borrower of a letter of credit application on the Agent's
customary form (a "Letter of Credit Application"), the Agent on
behalf of the Banks and in reliance upon the agreement of the
Banks set forth in ss.4.1.4 and upon the representations and
warranties of the Borrower contained herein, agrees, in its
individual capacity, to issue, extend and renew for the account
of the Borrower one or more standby or documentary letters of
credit (individually, a "Letter of Credit"), in such form as may
be requested from time to time by the Borrower and agreed to by
the Agent; PROVIDED, HOWEVER, that, after giving effect to such
request, (a) the sum of the aggregate Maximum Drawing Amount and
all Unpaid Reimbursement Obligations shall not exceed
$15,000,000 at any one time and (b) the sum of (i) the Maximum
Drawing Amount on all Letters of Credit, (ii) all Unpaid
Reimbursement Obligations, and (iii) the amount of all Loans
outstanding (after giving effect to all amounts requested) shall
not exceed the Total Commitment. As of the Closing Date, the
Letter of Credit initially issued in the amount of $1,000,000 to
New York State Urban Development Corporation for the account of
the Borrower shall become a Letter of Credit under this Credit
Agreement for all purposes, shall be issued for the account of
the Borrower and shall cease to be a Letter of Credit under and
as defined in the Original Credit Agreement, and the Exiting
Lenders shall cease to have any further obligations with respect
thereto.
4.1.2. LETTER OF CREDIT APPLICATIONS. Each Letter of Credit
Application shall be completed to the satisfaction of the Agent.
In the event that any provision of any Letter of Credit
Application shall be inconsistent with any provision of this
Credit Agreement, then the provisions of this Credit Agreement
shall, to the extent of any such inconsistency, govern.
4.1.3. TERMS OF LETTERS OF CREDIT. Each Letter of Credit issued,
extended or renewed hereunder shall, among other things, (i)
provide for the payment of sight drafts for honor thereunder
when presented in accordance with the terms thereof and when
accompanied by the documents described therein, (ii) have an
expiry date (which may be extended annually by the Agent, at its
option upon the request of the Borrower) no more than one year
<PAGE> 26
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following its date of issue and (iii) have an expiry date no
later than the date which is fourteen (14) days (or, if the
Letter of Credit is confirmed by a confirmer or otherwise
provides for one or more nominated persons, forty-five (45)
days) prior to the Revolving Credit Loan Maturity Date. Each
Letter of Credit so issued, extended or renewed shall be subject
to the Uniform Customs.
4.1.4. REIMBURSEMENT OBLIGATIONS OF BANKS. Each Bank severally
agrees that it shall be absolutely liable, without regard to the
occurrence of any Default or Event of Default or any other
condition precedent whatsoever, to the extent of such Bank's
Commitment Percentage, to reimburse the Agent on demand for the
amount of each draft paid by the Agent under each Letter of
Credit to the extent that such amount is not reimbursed by the
Borrower pursuant to ss.4.2 (such agreement for a Bank being
called herein the "Letter of Credit Participation" of such
Bank).
4.1.5. PARTICIPATIONS OF BANKS. Each such payment made by a Bank
shall be treated as the purchase by such Bank of a participating
interest in the Borrower's Reimbursement Obligation under ss.4.2
in an amount equal to such payment. Each Bank shall share in
accordance with its participating interest in any interest which
accrues pursuant to ss.4.2.
4.2. REIMBURSEMENT OBLIGATION OF THE BORROWER. In order to induce the
Agent to issue, extend and renew each Letter of Credit and the Banks to
participate therein, the Borrower hereby agrees to reimburse or pay to the
Agent, for the account of the Agent or (as the case may be) the Banks, with
respect to each Letter of Credit issued, extended or renewed by the Agent
hereunder,
(a) except as otherwise expressly provided in ss.4.2(b) and
(c), on each date that any draft presented under such Letter of Credit
is honored by the Agent, or the Agent otherwise makes a payment with
respect thereto, (i) the amount paid by the Agent under or with respect
to such Letter of Credit, and (ii) the amount of any taxes, fees,
charges or other reasonable costs and expenses whatsoever incurred by
the Agent or any Bank in connection with any payment made by the Agent
or any Bank under, or with respect to, such Letter of Credit,
(b) upon the reduction (but not termination) of the Total
Commitment to an amount less than the Maximum Drawing Amount, an amount
equal to such difference, which amount shall be held by the Agent for
the benefit of the Banks and the Agent in an interest bearing account
selected by the Agent as cash collateral for all Reimbursement
Obligations, and
(c) upon the termination of the Total Commitment, or the
acceleration of the Reimbursement Obligations with respect to all
Letters of Credit in accordance with ss.13, an amount equal to the then
Maximum Drawing Amount on all Letters of Credit, which amount shall be
held by the Agent for the benefit of the Banks and the Agent in an
interest bearing account selected by the Agent as cash collateral for
all Reimbursement Obligations.
<PAGE> 27
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Each such payment shall be made to the Agent at the Agent's Head Office in
immediately available funds. Interest on any and all amounts remaining unpaid by
the Borrower under this ss.4.2 at any time from the date such amounts become due
and payable (whether as stated in this ss.4.2, by acceleration or otherwise)
until payment in full (whether before or after judgment) shall be payable to the
Agent on demand at the rate specified in ss.5.10 for overdue principal on the
Loans. So long as no Default or Event of Default has occurred and is continuing,
the Agent shall return amounts held as cash collateral pursuant to ss.4.2(b) or
as a result of the Borrower's termination of the Total Commitment pursuant to
ss.4.2(c) within a reasonable time following the expiration or cancellation of
any Letter of Credit, with the amount being so returned equal to the Maximum
Drawing Amount of such expired or cancelled Letter of Credit.
4.3. LETTER OF CREDIT PAYMENTS. If any draft shall be presented or
other demand for payment shall be made under any Letter of Credit, the Agent
shall notify the Borrower of the date and amount of the draft presented or
demand for payment and of the date and time when it expects to pay such draft or
honor such demand for payment. If the Borrower fails to reimburse the Agent as
provided in ss.4.2 on or before the date that such draft is paid or other
payment is made by the Agent, the Agent may at any time thereafter notify the
Banks of the amount of any such Unpaid Reimbursement Obligation. No later than
3:00 p.m. (Boston time) on the Business Day next following the receipt of such
notice, each Bank shall make available to the Agent, at its Head Office, in
immediately available funds, such Bank's Commitment Percentage of such Unpaid
Reimbursement Obligation, together with an amount equal to the product of (i)
the average, computed for the period referred to in clause (iii) below, of the
weighted average interest rate paid by the Agent for federal funds acquired by
the Agent during each day included in such period, TIMES (ii) the amount equal
to such Bank's Commitment Percentage of such Unpaid Reimbursement Obligation,
TIMES (iii) a fraction, the numerator of which is the number of days that elapse
from and including the date the Agent paid the draft presented for honor or
otherwise made payment to the date on which such Bank's Commitment Percentage of
such Unpaid Reimbursement obligation shall become immediately available to the
Agent, and the denominator of which is 360. The responsibility of the Agent to
the Borrower and the Banks shall be only to determine that the documents
(including each draft) delivered under each Letter of Credit in connection with
such presentment shall be in conformity in all material respects with such
Letter of Credit, and upon such determination, the Agent shall honor a demand
for payment under such Letter of Credit.
4.4. OBLIGATIONS ABSOLUTE. The Borrower's obligations under this ss.4
shall be absolute and unconditional under any and all circumstances and
irrespective, so long as the Agent has honored any appropriate demand for
payment with respect to any Letter of Credit, of the occurrence of any Default
or Event of Default or any condition precedent whatsoever or any setoff,
counterclaim or defense to payment which the Borrower may have or have had
against the Agent, any Bank or any beneficiary of a Letter of Credit. The
Borrower further agrees with the Agent and the Banks that the Agent and the
Banks shall not be responsible for, and the Borrower's Reimbursement Obligations
under ss.4.2 shall not be affected by, among other things, the validity or
genuineness of documents or of any endorsements thereon, even if such documents
should in fact prove to be in any or all respects invalid, fraudulent or forged,
or any dispute between or among the Borrower, the beneficiary of any Letter of
Credit or any financing institution or other party to which any Letter of Credit
may be transferred or any claims or defenses whatsoever of the Borrower
<PAGE> 28
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against the beneficiary of any Letter of Credit or any such transferee. The
Agent and the Banks shall not be liable for any error, omission, interruption or
delay in transmission, dispatch or delivery of any message or advice, however
transmitted, in connection with any Letter of Credit. The Borrower agrees that
any action taken or omitted by the Agent or any Bank under or in connection with
each Letter of Credit and the related drafts and documents, if done in good
faith and with commercial reasonableness, shall be binding upon the Borrower and
shall not result in any liability on the part of the Agent or any Bank to the
Borrower.
4.5. RELIANCE BY ISSUER. To the extent not inconsistent with ss.4.4,
the Agent shall be entitled to rely, and shall be fully protected in relying
upon, any Letter of Credit, draft, writing, resolution, notice, consent,
certificate, affidavit, letter, cablegram, telegram, telecopy, telex or teletype
message, statement, order or other document believed by it to be genuine and
correct and to have been signed, sent or made by the proper Person or Persons
and upon advice and statements of legal counsel, independent accountants and
other experts selected by the Agent. The Agent shall be fully justified in
failing or refusing to take any action under this Agreement unless it shall
first have received such advice or concurrence of the Majority Banks as it
reasonably deems appropriate or it shall first be 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 shall in all cases be fully protected in acting, or in refraining from
acting, under this Agreement in accordance with a request of the Majority Banks,
and such request and any action taken or failure to act pursuant thereto shall
be binding upon the Banks and all future holders of the Notes or of a Letter of
Credit Participation.
4.6. LETTER OF CREDIT FEE. The Borrower shall, on the date of issuance
or any extension or renewal of any Letter of Credit and at such other time or
times as such charges are customarily made by the Agent, pay a fee (in each
case, a "Letter of Credit Fee") to the Agent (i) in respect of each standby
Letter of Credit equal to (A) the Applicable Eurodollar Rate Margin in effect on
such date MULTIPLIED BY the face amount of such standby Letter of Credit PLUS
(B) the Agent's customary issuance fee PLUS (C) a fronting fee (for the account
of the Agent) equal to one-eighth of one percent (0.125)% per annum of the face
amount of such standby Letter of Credit, and (ii) in respect of each documentary
Letter of Credit equal to (A) the Agent's customary administrative fees PLUS (B)
the Applicable Eurodollar Rate Margin in effect on such date MULTIPLIED BY the
face amount of such documentary Letter of Credit, PLUS (C) a fronting fee to the
Agent equal to one-eighth of one percent (0.125%) per annum of the face amount
of such documentary Letter of Credit, such Letter of Credit Fee (but not such
issuance, administrative or fronting fees) to be for the accounts of the Banks
in accordance with their respective Commitment Percentages.
<PAGE> 29
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5. CERTAIN GENERAL PROVISIONS.
5.1. FEES. The Borrower agrees to pay to the Agent the fees described
in the letter dated as of the date hereof between the Agent and the Borrower
(the "Agent's Side Letter") in accordance with the terms and conditions thereof.
5.2. FUNDS FOR PAYMENTS.
5.2.1. PAYMENTS TO AGENT. All payments of principal, interest,
Reimbursement Obligations, commitment fees, Letter of Credit
Fees and any other amounts due hereunder or under any of the
other Loan Documents shall be made to the Agent, for the
respective accounts of the Banks and the Agent, at the Agent's
Head Office or at such other location in the Boston,
Massachusetts, area that the Agent may from time to time
designate, in each case in immediately available funds.
5.2.2. NO OFFSET, ETC. All payments by the Borrower hereunder
and under any of the other Loan Documents shall be made without
setoff or counterclaim and free and clear of and without
deduction for any taxes, levies, imposts, duties, charges, fees,
deductions, withholdings, compulsory loans, restrictions or
conditions of any nature now or hereafter imposed or levied by
any jurisdiction or any political subdivision thereof or taxing
or other authority therein unless the Borrower is compelled by
law to make such deduction or withholding. If any such
obligation is imposed upon the Borrower with respect to any
amount payable by it hereunder or under any of the other Loan
Documents, the Borrower will pay to the Agent, for the account
of the Banks or (as the case may be) the Agent, on the date on
which such amount is due and payable hereunder or under such
other Loan Document, such additional amount in Dollars as shall
be necessary to enable the Banks or the Agent to receive the
same net amount which the Banks or the Agent would have received
on such due date had no such obligation been imposed upon the
Borrower. The Borrower will deliver promptly to the Agent
certificates or other valid vouchers for all taxes or other
charges deducted from or paid with respect to payments made by
the Borrower hereunder or under such other Loan Document.
5.3. COMPUTATIONS. All computations of interest on the Loans and of
commitment fees, Letter of Credit Fees or other fees shall, unless otherwise
expressly provided herein, be based on a 360-day year and paid for the actual
number of days elapsed; PROVIDED, HOWEVER, that computations of interest on Base
Rate Loans shall be based on a 365 or, as the case may be, 366-day year and paid
for the actual number of days elapsed. Except as otherwise provided in the
definition of the term "Interest Period" with respect to Eurodollar Rate Loans,
whenever a payment hereunder or under any of the other Loan Documents becomes
due on a day that is not a Business Day, the due date for such payment shall be
extended to the next succeeding Business Day, and interest shall accrue during
such extension. The outstanding amount of the Loans as reflected on the records
of each Bank and the Agent from time to time shall be considered correct and
binding on the Borrower unless within five (5) Business Days after receipt of
any notice from the Agent or any of the Banks of such outstanding amount, the
Borrower shall notify the Agent or such Bank to the contrary.
5.4. INABILITY TO DETERMINE EURODOLLAR RATE. In the event, prior to the
commencement of any Interest Period relating to any Eurodollar Rate Loan, the
Agent shall determine or be notified by the Majority Banks that adequate and
reasonable methods do not exist for ascertaining the Eurodollar Rate that would
otherwise determine the rate of interest to be applicable to any Eurodollar Rate
Loan during any Interest Period, the Agent shall forthwith give notice of such
determination (which shall be conclusive and binding on
<PAGE> 30
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the Borrower and the Banks) to the Borrower and the Banks. In such event (i) any
Loan Request or Conversion Request with respect to Eurodollar Rate Loans shall
be automatically withdrawn and shall be deemed a request for Base Rate Loans,
(ii) each Eurodollar Rate Loan will automatically, on the last day of the then
current Interest Period relating thereto, become a Base Rate Loan, and (iii) the
obligations of the Banks to make Eurodollar Rate Loans shall be suspended until
the Agent determines that the circumstances giving rise to such suspension no
longer exist, whereupon the Agent shall so notify the Borrower and the Banks.
5.5. ILLEGALITY. Notwithstanding any other provisions herein, if any
present or future law, regulation, treaty or directive or in the interpretation
or application thereof shall make it unlawful for any Bank to make or maintain
Eurodollar Rate Loans, such Bank shall forthwith give notice of such
circumstances to the Borrower and the other Banks and thereupon (i) the
commitment of such Bank to make Eurodollar Rate Loans or convert Loans of
another Type to Eurodollar Rate Loans shall forthwith be suspended and (ii) such
Bank's Loans then outstanding as Eurodollar Rate Loans, if any, shall be
converted automatically to Base Rate Loans on the last day of each Interest
Period applicable to such Eurodollar Rate Loans or within such earlier period as
may be required by law. The Borrower hereby agrees promptly to pay the Agent for
the account of such Bank, upon demand by such Bank, any additional amounts
necessary to compensate such Bank for any costs incurred by such Bank in making
any conversion in accordance with this ss.5.5, including any interest or fees
payable by such Bank to lenders of funds obtained by it in order to make or
maintain its Eurodollar Rate Loans hereunder.
5.6. ADDITIONAL COSTS, ETC. If any present or future applicable law,
which expression, as used herein, includes statutes, rules and regulations
thereunder and interpretations thereof by any competent court or by any
governmental or other regulatory body or official charged with the
administration or the interpretation thereof and requests, directives,
instructions and notices at any time or from time to time hereafter made upon or
otherwise issued to any Bank or the Agent by any central bank or other fiscal,
monetary or other authority (whether or not having the force of law), shall:
(a) subject any Bank or the Agent to any tax, levy, impost, duty,
charge, fee, deduction or withholding of any nature with respect to
this Credit Agreement, the other Loan Documents, any Letters of Credit,
such Bank's Commitment or the Loans (other than taxes based upon or
measured by the income or profits of such Bank or the Agent), or
(b) materially change the basis of taxation (except for changes in
taxes on income or profits) of payments to any Bank of the principal of
or the interest on any Loans or any other amounts payable to any Bank
or the Agent under this Credit Agreement or any of the other Loan
Documents, or
(c) impose or increase or render applicable (other than to the
extent specifically provided for elsewhere in this Credit Agreement)
any special deposit, reserve, assessment, liquidity, capital adequacy
or other similar requirements (whether or not having the force of law)
against assets held by, or deposits in or for the account of, or loans
by, or letters of credit issued by, or commitments of an office of any
Bank, or
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(d) impose on any Bank or the Agent any other conditions or
requirements with respect to this Credit Agreement, the other Loan
Documents, any Letters of Credit, the Loans, such Bank's Commitment, or
any class of loans, letters of credit or commitments of which any of
the Loans or such Bank's Commitment forms a part, and the result of any
of the foregoing is
(i) to increase the cost to any Bank of making, funding,
issuing, renewing, extending or maintaining any of the Loans or
such Bank's Commitment or any Letter of Credit, or
(ii) to reduce the amount of principal, interest,
Reimbursement Obligation or other amount payable to such Bank or
the Agent hereunder on account of such Bank's Commitment, any
Letter of Credit or any of the Loans, or
(iii) to require such Bank or the Agent to make any payment
or to forego any interest or Reimbursement Obligation or other sum
payable hereunder, the amount of which payment or foregone
interest or Reimbursement Obligation or other sum is calculated by
reference to the gross amount of any sum receivable or deemed
received by such Bank or the Agent from the Borrower hereunder,
then, and in each such case, the Borrower will, upon demand made by such Bank or
(as the case may be) the Agent at any time and from time to time and as often as
the occasion therefor may arise, pay to such Bank or the Agent such additional
amounts as will be sufficient to compensate such Bank or the Agent for such
additional cost, reduction, payment or foregone interest or Reimbursement
Obligation or other sum.
5.7. CAPITAL ADEQUACY. If after the date hereof any Bank or the Agent
determines that (i) the adoption of or change in any law, governmental rule,
regulation, policy, guideline or directive (whether or not having the force of
law) regarding capital requirements for banks or bank holding companies or any
change in the interpretation or application thereof by a court or governmental
authority with appropriate jurisdiction, or (ii) compliance by such Bank or the
Agent or any corporation controlling such Bank or the Agent with any law,
governmental rule, regulation, policy, guideline or directive (whether or not
having the force of law) of any such entity regarding capital adequacy, has the
effect of reducing the return on such Bank's or the Agent's commitment with
respect to any Loans to a level below that which such Bank or the Agent could
have achieved but for such adoption, change or compliance (taking into
consideration such Bank's or the Agent's then existing policies with respect to
capital adequacy and assuming full utilization of such entity's capital) by any
amount deemed by such Bank or (as the case may be) the Agent to be material,
then such Bank or the Agent may notify the Borrower of such fact. To the extent
that the amount of such reduction in the return on capital is not reflected in
the Base Rate, the Borrower agrees to pay such Bank or (as the case may be) the
Agent for the amount of such reduction in the return on capital as and when such
reduction is determined upon presentation by such Bank or (as the case may be)
the Agent of a certificate in accordance with ss.5.8 hereof. Each Bank shall
allocate such cost increases among its customers in good faith and on an
equitable basis.
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5.8. CERTIFICATE. A certificate setting forth any additional amounts
payable pursuant to secs. 5.6 or 5.7 and a brief explanation of such amounts
which are due, submitted by any Bank or the Agent to the Borrower, shall be
conclusive, absent manifest error, that such amounts are due and owing. The
Agent or any Bank which becomes aware that such amounts are due and owing shall
provide such Certificate to the Borrower within a reasonable period after
becoming so aware.
5.9. INDEMNITY. The Borrower agrees to indemnify each Bank and to hold
each Bank harmless from and against any loss, cost or expense (including loss of
anticipated profits) that such Bank may sustain or incur as a consequence of (i)
default by the Borrower in payment of the principal amount of or any interest on
any Eurodollar Rate Loans as and when due and payable, including any such loss
or expense arising from interest or fees payable by such Bank to lenders of
funds obtained by it in order to maintain its Eurodollar Rate Loans, (ii)
default by the Borrower in making a borrowing or conversion after the Borrower
has given (or is deemed to have given) a Loan Request or a Conversion Request
relating thereto in accordance with ss.2.6 or ss.2.7 or (iii) the making of any
payment of a Eurodollar Rate Loan or the making of any conversion of any such
Loan to a Base Rate Loan on a day that is not the last day of the applicable
Interest Period with respect thereto, including interest or fees payable by such
Bank to lenders of funds obtained by it in order to maintain any such Loans.
5.10. INTEREST AFTER DEFAULT.
5.10.1. OVERDUE AMOUNTS. Overdue principal and (to the extent
permitted by applicable law) interest on the Loans and all other
overdue amounts payable hereunder or under any of the other Loan
Documents shall bear interest compounded monthly and payable on
demand at a rate per annum equal to two percent (2%) above the
Base Rate until such amount shall be paid in full (after as well
as before judgment).
5.10.2. AMOUNTS NOT OVERDUE. During the continuance of a Default
or an Event of Default the principal of the Loans not overdue
shall, until such Default or Event of Default has been cured or
remedied or such Default or Event of Default has been waived by
the Majority Banks pursuant to ss.26, bear interest at a rate
per annum equal to the greater of (i) two percent (2%) above the
rate of interest otherwise applicable to such Loans pursuant to
ss.2.5 and (ii) the rate of interest applicable to overdue
principal pursuant to ss.5.10.1.
6. GUARANTIES.
The Obligations shall be guaranteed by each Guarantor pursuant to the
terms of the Guaranties.
7. REPRESENTATIONS AND WARRANTIES.
The Borrower represents and warrants to the Banks and the Agent as
follows:
7.1. CORPORATE AUTHORITY.
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7.1.1. INCORPORATION; GOOD STANDING. Each of the Transaction
Parties (i) is a corporation duly organized, validly existing
and in good standing under the laws of its state of
incorporation, (ii) has all requisite corporate power to own its
property and conduct its business as now conducted, and (iii) is
in good standing as a foreign corporation and is duly authorized
to do business in each jurisdiction where such qualification is
necessary except where a failure to be so qualified would not
have a materially adverse effect on the business, assets or
financial condition of such Transaction Parties.
7.1.2. AUTHORIZATION. The execution, delivery and performance of
this Credit Agreement and the other Loan Documents to which any
of the Transaction Parties is or is to become a party and the
transactions contemplated hereby and thereby (a) are within the
corporate authority of such Person, (b) have been duly
authorized by all necessary corporate proceedings, including,
without limitation, any consents or approvals of shareholders of
the Borrower, (c) do not conflict with or result in any breach
or contravention of any provision of law, statute, rule or
regulation to which any of the Transaction Parties is subject
(including, without limitation, Regulations G, T, U or X of the
Board of Governors of the Federal Reserve System) or any
judgment, order, writ, injunction, license or permit applicable
to any of the Transaction Parties and (d) do not conflict with
any provision of the corporate charter or bylaws of, or any
agreement or other instrument binding upon, any of the
Transaction Parties.
7.1.3. ENFORCEABILITY. The execution and delivery of this Credit
Agreement and the other Loan Documents to which any of the
Transaction Parties is or is to become a party will result in
valid and legally binding obligations of such Person enforceable
against it in accordance with the respective terms and
provisions hereof and thereof, except as enforceability is
limited by bankruptcy, insolvency, reorganization, moratorium or
other laws relating to or affecting generally the enforcement of
creditors' rights and except to the extent that availability of
the remedy of specific performance or injunctive relief is
subject to the discretion of the court before which any
proceeding therefor may be brought.
7.2. GOVERNMENTAL APPROVALS. The execution, delivery and performance by
any of the Transaction Parties of this Credit Agreement and the other Loan
Documents to which any of the Transaction Parties is or is to become a party and
the transactions contemplated hereby and thereby do not require the approval or
consent of, or filing with, any governmental agency or authority other than
those already obtained or to be obtained in accordance with the requirements of
the Loan Documents.
7.3. TITLE TO PROPERTIES; LEASES. Except as indicated on SCHEDULE 7.3
hereto, the Borrower and its Subsidiaries own all of the assets reflected in the
consolidated balance sheet of the Borrower and its Subsidiaries or, as the case
may be, Zycon and its Subsidiaries, as at the Balance Sheet Date, or, as the
case may be, the Zycon Balance Sheet Date, or acquired since that date (except
property and assets sold or otherwise disposed of in the ordinary course of
business since that date), subject to no rights of others, including
<PAGE> 34
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any mortgages, leases, conditional sales agreements, title retention agreements,
liens or other encumbrances except Permitted Liens.
7.4. FINANCIAL STATEMENTS, PROJECTIONS AND SOLVENCY.
7.4.1. FINANCIAL STATEMENTS. There has been furnished to each of
the Banks (a) a consolidated balance sheet of the Borrower and
its Subsidiaries as at the Balance Sheet Date, and a
consolidated statement of income of the Borrower and its
Subsidiaries for the fiscal year then ended, certified by Arthur
Andersen LLP, (b) a consolidated balance sheet of Zycon and its
Subsidiaries as at the Zycon Balance Sheet Date, and a
consolidated statement of income of Zycon and its Subsidiaries
for the portion of the fiscal year then ended, certified by
Arthur Andersen LLP, and (c) a consolidated balance sheet of the
Borrower and its Subsidiaries as at July 26, 1997, and a
Consolidated statement of income of the Borrower and its
Subsidiaries for the fiscal quarter then ended, prepared by the
Borrower. Such balance sheets and statements of income have been
prepared in accordance with generally accepted accounting
principles and fairly present the financial condition of the
Borrower or Zycon, as the case may be, as at the close of
business on the date thereof and the results of operations for
the fiscal year or fiscal quarter then ended. There are no
contingent liabilities of the Borrower or any of its
Subsidiaries as of the Balance Sheet Date, or of Zycon and its
Subsidiaries as of the Zycon Balance Sheet Date, involving
material amounts, known to the officers of the Borrower, which
were not disclosed in such balance sheets and the notes related
thereto.
7.4.2. PROJECTIONS. The projections of the annual operating
budgets of the Borrower and its Subsidiaries on a consolidated
basis, balance sheets and cash flow statements for the October,
1998 to October, 2002 fiscal years, copies of which have been
delivered to each Bank, disclose all assumptions made with
respect to general economic, financial and market conditions
used in formulating such projections. To the knowledge of the
Borrower or any of its Subsidiaries, no facts exist that
(individually or in the aggregate) would result in any material
change in any of such projections. The projections are based
upon reasonable estimates and assumptions, have been prepared on
the basis of the assumptions stated therein and reflect the
reasonable estimates of the Borrower and its Subsidiaries of the
results of operations and other information projected therein.
7.4.3. SOLVENCY. Each of the Transaction Parties, both before
and after giving effect to the transactions contemplated hereby,
is solvent (within the meaning contemplated by Section 548 of
Title 11 of the United States Code and any similar state statute
which may be applicable), has and will have assets having a fair
value in excess of the amount required to pay its probable
liabilities on its existing debts as they become absolute and
matured and has, and will have, access to adequate capital for
the conduct of its business and the ability to pay its debts
from time to time incurred in connection therewith as such debts
mature.
<PAGE> 35
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7.5. NO MATERIAL CHANGES, ETC. Except as set forth on SCHEDULE 7.5
hereto, since the Balance Sheet Date, there has occurred no materially adverse
change in the financial condition or business of the Borrower and its
Subsidiaries, as shown on or reflected in the consolidated balance sheet of the
Borrower and its Subsidiaries as at the Balance Sheet Date, or, as the case may
be, of Zycon and its Subsidiaries as at the Zycon Balance Sheet Date, for the
year then ended, or the consolidated statements of income for the fiscal year of
the Borrower or, as the case may be, Zycon then ended, other than changes in the
ordinary course of business that have not had any materially adverse effect,
either individually or in the aggregate, on the business or financial condition
of the Borrower and its Subsidiaries, considered as a whole. Since the Balance
Sheet Date, neither the Borrower nor any of its Subsidiaries has made any
Distribution other than the Zycon Employee Distribution.
7.6. FRANCHISES, PATENTS, COPYRIGHTS, ETC. Each of the Transaction
Parties possesses all franchises, patents, copyrights, trademarks, trade names,
licenses and permits, and rights in respect of the foregoing, adequate for the
conduct of its business substantially as now conducted without known conflict
with any rights of others.
7.7. LITIGATION. Except as set forth in SCHEDULE 7.7 hereto, there are
no actions, suits, proceedings or investigations of any kind pending or
threatened against any of the Transaction Parties, before any court, tribunal or
administrative agency or board that, if adversely determined, might, either in
any case or in the aggregate, materially adversely affect the properties,
assets, financial condition or business of the Transaction Parties, considered
as a whole, or materially impair the right of the Transaction Parties,
considered as a whole, to carry on business substantially as now conducted by
them, or result in any substantial liability not adequately covered by
insurance, or for which adequate reserves are not maintained on the consolidated
balance sheet of the Borrower and its Subsidiaries, or which question the
validity of this Credit Agreement or any of the other Loan Documents, or any
action taken or to be taken pursuant hereto or thereto.
7.8. NO MATERIALLY ADVERSE CONTRACTS, ETC. None of the Transaction
Parties is subject to any charter, corporate or other legal restriction, or any
judgment, decree, order, rule or regulation that has or is expected in the
future to have a materially adverse effect on the business, assets or financial
condition of such Transaction Party or on such Transaction Party's ability to
perform its obligations under the Loan Documents to which it is a party. Except
as set forth on SCHEDULE 7.5 hereto, none of the Transaction Parties is a party
to any contract or agreement that has or is expected, in the judgment of the
Borrower's officers, to have any materially adverse effect on the business of
such Transaction Party.
7.9. COMPLIANCE WITH OTHER INSTRUMENTS, LAWS, ETC. None of the
Transaction Parties is in violation of any provision of its charter documents,
bylaws, or any agreement or instrument to which it may be subject or by which it
or any of its properties may be bound or any decree, order, judgment, statute,
license, rule or regulation, in any of the foregoing cases in a manner that
could, except as otherwise set forth on SCHEDULE 7.17, result in the imposition
of substantial penalties or materially and adversely affect the financial
condition, properties or business of such Transaction Party.
7.10. TAX STATUS. The Transaction Parties (a) except as set forth in
SCHEDULE 7.10 hereto, have made or filed all federal and state income and all
other tax returns, reports and declarations required by any jurisdiction to
which any of them is subject, (b) have paid all
<PAGE> 36
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taxes and other governmental assessments and charges shown or determined to be
due on such returns, reports and declarations, except those being contested in
good faith and by appropriate proceedings and (c) have set aside on their books
provisions reasonably adequate for the payment of all taxes for periods
subsequent to the periods to which such returns, reports or declarations apply.
There are no unpaid taxes in any material amount claimed to be due by the taxing
authority of any jurisdiction, and the officers of the Borrower know of no basis
for any such claim. None of the Transaction Parties has consented or will
consent to be treated as a "consenting corporation" as defined in Section 341 of
the Code.
7.11. NO EVENT OF DEFAULT. No Default or Event of Default has occurred
and is continuing.
7.12. HOLDING COMPANY AND INVESTMENT COMPANY ACTS. None of the
Transaction Parties is a "holding company", or a "subsidiary company" of a
"holding company", or an "affiliate" of a "holding company", as such terms are
defined in the Public Utility Holding Company Act of 1935; nor is it an
"investment company", or an "affiliated company" or a "principal underwriter" of
an "investment company", as such terms are defined in the Investment Company Act
of 1940.
7.13. ABSENCE OF FINANCING STATEMENTS. Except with respect to Permitted
Liens, there is no financing statement, security agreement, chattel mortgage,
real estate mortgage or other document filed or recorded with any filing
records, registry or other public office, that purports to cover, affect or give
notice of any present or possible future lien on, or security interest in, any
assets or property of any of the Transaction Parties or any rights relating
thereto.
7.14. CERTAIN TRANSACTIONS. Except for arm's length transactions
pursuant to which any of the Transaction Parties makes payments in the ordinary
course of business upon terms no less favorable than any of the Transaction
Parties could obtain from third parties, none of the officers, directors, or
employees of any of the Transaction Parties is presently a party to any
transaction with any of the Transaction Parties (other than for services as
employees, officers and directors), including any contract, agreement or other
arrangement providing for the furnishing of services to or by, providing for
rental of real or personal property to or from, or otherwise requiring payments
to or from any officer, director or such employee or, to the knowledge of the
Borrower, any corporation, partnership, trust or other entity in which any
officer, director, or any such employee has a substantial interest or is an
officer, director, trustee or partner.
7.15. EMPLOYEE BENEFIT PLANS.
7.15.1. IN GENERAL. Each Employee Benefit Plan and each
Guaranteed Pension Plan has been maintained and operated in
compliance in all material respects with the provisions of ERISA
and, to the extent applicable, the Code, including but not
limited to the provisions thereunder respecting prohibited
transactions and the bonding of fiduciaries and other persons
handling plan funds as required by ss.412 of ERISA. The Borrower
has heretofore delivered to the Agent the most recently
completed annual report, Form 5500, with all required
attachments, and actuarial statement required
<PAGE> 37
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to be submitted under ss.103(d) of ERISA, with respect to each
Guaranteed Pension Plan.
7.15.2. TERMINABILITY OF WELFARE PLANS. No Employee Benefit Plan
which is an employee welfare benefit plan within the meaning of
ss.3(1) or ss.3(2)(B) of ERISA provides benefit coverage
subsequent to termination of employment except as required by
Title I, Part 6 of ERISA or applicable state insurance laws. The
Borrower may terminate each such Plan at any time (or at any
time subsequent to the expiration of any applicable bargaining
agreement) in the discretion of the Borrower without liability
to any Person other than for claims arising prior to
termination.
7.15.3. GUARANTEED PENSION PLANS. Each contribution required to
be made to a Guaranteed Pension Plan, whether required to be
made to avoid the incurrence of an accumulated funding
deficiency, the notice or lien provisions of ss.302(f) of ERISA,
or otherwise, has been timely made. No waiver of an accumulated
funding deficiency or extension of amortization periods has been
received with respect to any Guaranteed Pension Plan, and
neither the Borrower nor any ERISA Affiliate is obligated to or
has posted security in connection with an amendment of a
Guaranteed Pension Plan pursuant to ss.307 of ERISA or
ss.401(a)(29) of the Code. No liability to the PBGC (other than
required insurance premiums, all of which have been paid) has
been incurred by the Borrower or any ERISA Affiliate with
respect to any Guaranteed Pension Plan and there has not been
any ERISA Reportable Event, or any other event or condition
which presents a material risk of termination of any Guaranteed
Pension Plan by the PBGC. Based on the latest valuation of each
Guaranteed Pension Plan (which in each case occurred within
twelve months of the date of this representation), and on the
actuarial methods and assumptions employed for that valuation,
the aggregate benefit liabilities of all such Guaranteed Pension
Plans within the meaning of ss.4001 of ERISA did not exceed the
aggregate value of the assets of all such Guaranteed Pension
Plans, disregarding for this purpose the benefit liabilities and
assets of any Guaranteed Pension Plan with assets in excess of
benefit liabilities.
7.15.4. MULTIEMPLOYER PLANS. Neither the Borrower nor any ERISA
Affiliate has incurred any material liability (including
secondary liability) to any Multiemployer Plan as a result of a
complete or partial withdrawal from such Multiemployer Plan
under ss.4201 of ERISA or as a result of a sale of assets
described in ss.4204 of ERISA. Neither the Borrower nor any
ERISA Affiliate has been notified that any Multiemployer Plan is
in reorganization or insolvent under and within the meaning of
ss.4241 or ss.4245 of ERISA or is at risk of entering
reorganization or becoming insolvent, or that any Multiemployer
Plan intends to terminate or has been terminated under ss.4041A
of ERISA.
7.16. USE OF PROCEEDS. The proceeds of the Loans shall be used for
refinancing of existing indebtedness of the Borrower under the Original Credit
Agreement to BKB and the other lenders party thereto, for acquisitions permitted
by the terms hereof and for working
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capital and general corporate purposes. The Borrower will obtain Letters of
Credit solely for general corporate purposes. No portion of any Loan is to be
used, and no portion of any Letter of Credit is to be obtained, for the purpose
of purchasing or carrying any Margin Stock, except in compliance with
Regulations U and X of the Board of Governors of the Federal Reserve System, 12
C.F.R. Parts 221 and 224.
7.17. ENVIRONMENTAL COMPLIANCE. The Borrower has taken all reasonable
steps to investigate the past and present condition and usage of the Real Estate
and the operations conducted thereon and, except as set forth in SCHEDULE 7.17
attached hereto, has determined that:
(a) none of the Transaction Parties or any operator of the Real
Estate or any operations thereon is in violation, or alleged violation,
of any judgment, decree, order, law, license, rule or regulation
pertaining to environmental matters, including without limitation,
those arising under the Resource Conservation and Recovery Act
("RCRA"), the Comprehensive Environmental Response, Compensation and
Liability Act of 1980 as amended ("CERCLA"), the Superfund Amendments
and Reauthorization Act of 1986 ("SARA"), the Federal Clean Water Act,
the Federal Clean Air Act, the Toxic Substances Control Act, or any
state or local statute, regulation, ordinance, order or decree relating
to health, safety or the environment (hereinafter "Environmental
Laws"), which violation would have a material adverse effect on the
business, assets or financial condition of the Transaction Parties,
considered as a whole;
(b) none of the Transaction Parties has received notice from any
third party including, without limitation, any federal, state or local
governmental authority, (i) that any one of them has been identified by
the United States Environmental Protection Agency ("EPA") as a
potentially responsible party under CERCLA with respect to a site
listed on the National Priorities List, 40 C.F.R. Part 300 Appendix B;
(ii) that any hazardous waste, as defined by 42 U.S.C. ss.6903(5), any
hazardous substances as defined by 42 U.S.C. ss.9601(14), any pollutant
or contaminant as defined by 42 U.S.C. ss.9601(33) and any toxic
substances, oil or hazardous materials or other chemicals or substances
regulated by any Environmental Laws ("Hazardous Substances") which any
one of them has generated, transported or disposed of has been found at
any site at which a federal, state or local agency or other third party
has conducted or has ordered that the Transaction Parties conduct a
remedial investigation, removal or other response action pursuant to
any Environmental Law; or (iii) that it is or shall be a named party to
any claim, action, cause of action, complaint, or legal or
administrative proceeding (in each case, contingent or otherwise)
arising out of any third party's incurrence of costs, expenses, losses
or damages of any kind whatsoever in connection with the release of
Hazardous Substances;
(c) except to the extent that any of the following would not
have a material adverse effect on the value of the Real Estate or the
business, assets or financial condition of the Transaction Parties,
considered as a whole: (i) no portion of the Real Estate has been used
for the handling, processing, storage or disposal of Hazardous
Substances except in accordance with applicable Environmental Laws; and
no underground tank or other underground storage receptacle for
Hazardous
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Substances is located on any portion of the Real Estate; (ii) in the
course of any activities conducted by and of the Transaction Parties or
operators of its or their properties, no Hazardous Substances have been
generated or are being used on the Real Estate except in accordance
with applicable Environmental Laws; (iii) there have been no releases
(i.e. any past or present releasing, spilling, leaking, pumping,
pouring, emitting, emptying, discharging, injecting, escaping,
disposing or dumping) or threatened releases of Hazardous Substances
on, upon, into or from the properties of the Transaction Parties; (iv)
to the best of the Borrower's knowledge, there have been no releases
on, upon, from or into any real property in the vicinity of any of the
Real Estate which, through soil or groundwater contamination, may have
come to be located on the Real Estate; and (v) in addition, any
Hazardous Substances that have been generated on any of the Real Estate
have been transported offsite only by carriers having an identification
number issued by the EPA or by carriers not required by law to have
such identification numbers, treated or disposed of only by treatment,
recycling or disposal facilities maintaining valid permits as required
under applicable Environmental Laws, which transporters and facilities
have been and are, to the best of the Borrower's knowledge, operating
in compliance with such permits and applicable Environmental Laws; and
(d) Except with respect to matters that would not have a
material adverse effect on the value of the Real Estate or the
business, assets or financial condition of the Transaction Parties,
considered as a whole, none of the Transaction Parties or any of the
Real Estate is subject to any applicable environmental law requiring
the performance of Hazardous Substances site assessments, or the
removal or remediation of Hazardous Substances, or the giving of notice
to any governmental agency or the recording or delivery to other
Persons of an environmental disclosure document or statement by virtue
of the transactions set forth herein and contemplated hereby, or as a
condition to the effectiveness of any of the transactions contemplated
hereby or the other Loan Documents.
7.18. SUBSIDIARIES, ETC. Hadco Santa Clara, New Zycon and Hadco FSC are
the only direct Subsidiaries of the Borrower. Hadco Malaysia is the only
Subsidiary of Hadco Santa Clara. Neither New Zycon nor Hadco FSC has any
Subsidiaries. Except as set forth on SCHEDULE 7.18 hereto, none of the
Transaction Parties is engaged in any joint venture or partnership with any
other Person.
7.19. DISCLOSURE. The representations and warranties made by the
Transaction Parties in this Credit Agreement or in any agreement, instrument,
document, certificate, statement or letter furnished to the Banks on behalf of
any of the Transaction Parties in connection with the transactions contemplated
by the Loan Documents do not, taken as a whole, together with all other
information provided by the Borrower in connection with the transactions
contemplated by the Loan Documents, contain any untrue statement of a material
fact or omit to state a material fact necessary in order to make the statements
contained herein or therein not misleading. There is no fact known to the
Borrower which materially adversely affects, or which is likely in the future to
materially adversely affect, the business, assets or financial condition of the
Transaction Parties, taken as a whole.
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8. AFFIRMATIVE COVENANTS OF THE BORROWER.
The Borrower covenants and agrees that, so long as any Loan, Unpaid
Reimbursement Obligation, Letter of Credit or Note is outstanding or any Bank
has any obligation to make any Loans or the Agent has any obligation to issue,
extend or renew any Letters of Credit:
8.1. PUNCTUAL PAYMENT. The Borrower will duly and punctually pay or
cause to be paid the principal and interest on the Loans, all Reimbursement
Obligations, the Letter of Credit Fees, the commitment fees, the Agent's fee and
all other amounts provided for in this Credit Agreement and the other Loan
Documents to which any of the Transaction Parties is a party, all in accordance
with the terms of this Credit Agreement and such other Loan Documents.
8.2. MAINTENANCE OF OFFICE. The Borrower will maintain its chief
executive office in Salem, New Hampshire, or at such other place in the United
States of America as the Borrower shall designate upon written notice to the
Agent, where notices, presentations and demands to or upon the Borrower in
respect of the Loan Documents to which the Borrower is a party may be given or
made.
8.3. RECORDS AND ACCOUNTS. The Borrower will (i) keep, and cause each
of the other Transaction Parties to keep, true and accurate records and books of
account in which full, true and correct entries will be made in accordance with
generally accepted accounting principles, (ii) maintain adequate accounts and
reserves for all taxes (including income taxes), depreciation, depletion,
obsolescence and amortization of its properties and the properties of the other
Transaction Parties, contingencies, and other reserves, and (iii) will at all
times have engaged Arthur Andersen LLP or other independent certified public
accountants satisfactory to the Agent as its accountants, with no more than
thirty (30) days elapsing between the termination of any such accountants as the
Borrower's accountants and the engagement of successor accountants satisfactory
to the Agent.
8.4. FINANCIAL STATEMENTS, CERTIFICATES AND INFORMATION. The Borrower
will deliver to each of the Banks:
(a) as soon as practicable, but in any event not later than
ninety (90) days after the end of each fiscal year of the Borrower, the
consolidated balance sheet of the Borrower and its Subsidiaries and the
consolidating balance sheet of the Borrower and its Subsidiaries, each
as at the end of such year, and the related consolidated statement of
income and consolidated statement of cash flow and consolidating
statement of income and consolidating statement of cash flow for such
year, each setting forth in comparative form the figures for the
previous fiscal year and all such consolidated and consolidating
statements to be in reasonable detail, prepared in accordance with
generally accepted accounting principles, and certified without
qualification by Arthur Andersen LLP or by other independent certified
public accountants satisfactory to the Agent, together with a written
statement from such accountants to the effect that they have read a
copy of this Credit Agreement, and that, in making the examination
necessary to said certification, they have obtained no knowledge of any
Default or Event of Default, or, if such accountants shall have
obtained knowledge of any then existing Default or Event of Default
they
<PAGE> 41
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shall disclose in such statement any such Default or Event of Default;
PROVIDED that such accountants shall not be liable to the Banks for
failure to obtain knowledge of any Default or Event of Default;
(b) as soon as practicable, but in any event not later than
forty-five (45) days after the end of each of the fiscal quarters of
the Borrower, copies of the unaudited consolidated balance sheet of the
Borrower and its Subsidiaries and the unaudited consolidating balance
sheet of the Borrower and its Subsidiaries, each as at the end of such
quarter, and the related consolidated statement of income and
consolidated statement of cash flow and consolidating statement of
income and consolidating statement of cash flow for the portion of the
Borrower's fiscal year then elapsed, all in reasonable detail and
prepared in accordance with generally accepted accounting principles,
together with a certification by the principal financial or accounting
officer of the Borrower that the information contained in such
financial statements fairly presents the financial position of the
Borrower and its Subsidiaries on the date thereof (subject to year-end
adjustments);
(c) simultaneously with the delivery of the financial statements
referred to in subsections (a) and (b) above, a statement certified by
the principal financial or accounting officer of the Borrower in
substantially the form of EXHIBIT C hereto and setting forth in
reasonable detail computations evidencing compliance with the covenants
contained in ss.10 and (if applicable) reconciliations to reflect
changes in generally accepted accounting principles since the Balance
Sheet Date;
(d) contemporaneously with the filing or mailing thereof, copies
of all material of a financial nature, all reports, proxy statements
and notices filed by any of the Transaction Parties with the Securities
and Exchange Commission or sent to the stockholders of the Borrower;
(e) from time to time upon request of the Agent, projections of
the Borrower and its Subsidiaries updating those projections delivered
to the Banks and referred to in ss.7.4.2 or, if applicable, updating
any later such projections delivered in response to a request pursuant
to this ss.8.4(e); and
(f) from time to time such other financial data and information
(including accountants management letters) regarding the financial and
other affairs of the Borrower and its Subsidiaries as the Agent or any
Bank may reasonably request.
8.5. NOTICES.
8.5.1. DEFAULTS. The Borrower will promptly notify the Agent and
each of the Banks in writing of the occurrence of any Default or
Event of Default. If any Person shall give any notice or take
any other action in respect of a claimed default (whether or not
constituting an Event of Default) under this Credit Agreement or
any other note, evidence of indebtedness, indenture or other
obligation to which or with respect to which the Borrower or any
of the other Transaction Parties is a party or obligor, whether
as principal, guarantor, surety or otherwise, the Borrower shall
forthwith give written
<PAGE> 42
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notice thereof to the Agent and each of the Banks, describing
the notice or action and the nature of the claimed default.
8.5.2. ENVIRONMENTAL EVENTS. The Borrower will promptly give
notice to the Agent and each of the Banks (i) of any violation
of any Environmental Law that the Borrower or any of the other
Transaction Parties reports in writing or is reportable by such
Person in writing (or for which any written report supplemental
to any oral report is made) to any federal, state or local
environmental agency and (ii) upon becoming aware thereof, of
any inquiry, proceeding, investigation, or other action,
including a notice from any agency of potential environmental
liability, of any federal, state or local environmental agency
or board, that has the potential to materially affect the
assets, liabilities, financial condition or operations of the
Borrower and any of the other Transaction Parties, considered as
a whole.
8.5.3. NOTICE OF LITIGATION AND JUDGMENTS. The Borrower will,
and will cause each of the other Transaction Parties to, give
notice to the Agent and each of the Banks in writing within
fifteen (15) days of becoming aware of any litigation or
proceedings threatened in writing or any pending litigation and
proceedings affecting the Borrower or any of the other
Transaction Parties or to which the Borrower or any of the other
Transaction Parties is or becomes a party (including, without
limitation, any shareholder derivative suit) that could
reasonably be expected to have a material adverse effect upon
the consummation of the transactions contemplated hereby or
involving an uninsured claim against the Borrower or any of the
other Transaction Parties that could reasonably be expected to
have a materially adverse effect on the Borrower or any of the
other Transaction Parties and stating the nature and status of
such litigation or proceedings. The Borrower will, and will
cause each of the other Transaction Parties to, give notice to
the Agent and each of the Banks, in writing, in form and detail
satisfactory to the Agent, within ten (10) days of any judgment
not covered by insurance, final or otherwise, against the
Borrower or any of the other Transaction Parties in an amount in
excess of $5,000,000.
8.6. CORPORATE EXISTENCE; MAINTENANCE OF PROPERTIES. The Borrower will
do or cause to be done all things necessary to preserve and keep in full force
and effect its corporate existence, rights and franchises and those of the other
Transaction Parties and will not, and will not cause or permit any of the other
Transaction Parties to, convert to a limited liability company or limited
liability partnership. The Borrower (i) will cause all of its properties and
those of the other Transaction Parties used or useful in the conduct of its
business or the business of the other Transaction Parties to be maintained and
kept in good condition, repair and working order and supplied with all necessary
equipment, (ii) will cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in the judgment of
the Borrower may be necessary so that the business carried on in connection
therewith may be properly and advantageously conducted at all times, and (iii)
will, and will cause each of the other Transaction Parties to, continue to
engage primarily in the businesses now conducted by them and in related
businesses; PROVIDED that nothing in this ss.8.6 shall prevent the Borrower from
discontinuing the operation and maintenance of any of its properties or any of
those of the other Transaction
<PAGE> 43
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Parties if such discontinuance is, in the judgment of the Borrower, desirable in
the conduct of its or their business and that do not in the aggregate materially
adversely affect the business of the Borrower and the other Transaction Parties,
considered as a whole.
8.7. INSURANCE. The Borrower will, and will cause each of the other
Transaction Parties to, maintain with financially sound and reputable insurers
insurance with respect to its properties and business against such casualties
and contingencies as shall be in accordance with the general practices of
businesses engaged in similar activities in similar geographic areas and in
amounts, containing such terms, in such forms and for such periods as may be
reasonable and prudent and in accordance with the terms hereof.
8.8. TAXES. The Borrower will, and will cause each of the other
Transaction Parties to, duly pay and discharge, or cause to be paid and
discharged, before the same shall become overdue, all taxes, assessments and
other governmental charges imposed upon it and its real properties, sales and
activities, or any part thereof, or upon the income or profits therefrom, as
well as all claims for labor, materials, or supplies that if unpaid might by law
become a lien or charge upon any of its property; PROVIDED that any such tax,
assessment, charge, levy or claim need not be paid if the validity or amount
thereof shall currently be contested in good faith by appropriate proceedings
and if the Borrower or such other Transaction Party shall have set aside on its
books adequate reserves with respect thereto; and PROVIDED FURTHER that the
Borrower and each other Transaction Party will pay all such taxes, assessments,
charges, levies or claims forthwith upon the commencement of proceedings to
foreclose any lien that may have attached as security therefor.
8.9. INSPECTION OF PROPERTIES AND BOOKS, ETC.
8.9.1. GENERAL. The Borrower shall permit the Banks, through the
Agent or any of the Banks' other designated representatives, to
visit and inspect any of the properties of the Borrower or any
of the other Transaction Parties, to conduct commercial finance
examinations of the Borrower and the other Transaction Parties,
to examine the books of account of the Borrower and the other
Transaction Parties (and to make copies thereof and extracts
therefrom), and to discuss the affairs, finances and accounts of
the Borrower and the other Transaction Parties with, and to be
advised as to the same by, its and their officers, all at such
reasonable times and intervals as the Agent or any Bank may
reasonably request.
8.9.2. COMMUNICATIONS WITH ACCOUNTANTS. The Borrower authorizes
the Agent and, if accompanied by the Agent, the Banks to
communicate directly with the Borrower's independent certified
public accountants and authorizes such accountants to disclose
to the Agent and the Banks any and all financial statements and
other supporting financial documents and schedules including
copies of any management letter with respect to the business,
financial condition and other affairs of the Borrower or any of
the other Transaction Parties. At the request of the Agent, the
Borrower shall deliver a letter addressed to such accountants
instructing them to comply with the provisions of this ss.8.9.2.
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8.10. COMPLIANCE WITH LAWS, CONTRACTS, LICENSES, AND PERMITS. The
Borrower will, and will cause each of the other Transaction Parties to, comply
with (i) in all material respects, the applicable laws and regulations wherever
its business is conducted, including all Environmental Laws, (ii) the provisions
of its charter documents and by-laws, (iii) all agreements and instruments by
which it or any of its properties may be bound and (iv) all applicable decrees,
orders, and judgments. If any authorization, consent, approval, permit or
license from any officer, agency or instrumentality of any government shall
become necessary or required in order that the Borrower or any of the other
Transaction Parties may fulfill any of its obligations hereunder or any of the
other Loan Documents to which the Borrower or such other Transaction Party is a
party, the Borrower will, or (as the case may be) will cause such other
Transaction Party to, immediately take or cause to be taken all reasonable steps
within the power of the Borrower or such other Transaction Party to obtain such
authorization, consent, approval, permit or license and furnish the Agent and
the Banks with evidence thereof.
8.11. EMPLOYEE BENEFIT PLANS. The Borrower will (i) promptly upon
request of the Agent, furnish to the Agent a copy of the most recent actuarial
statement required to be submitted under ss.103(d) of ERISA and Annual Report,
Form 5500, with all required attachments, in respect of eacH Guaranteed Pension
Plan and (ii) promptly upon receipt or dispatch, furnish to the Agent any
notice, report or demand sent or received in respect of a Guaranteed Pension
Plan under ss.ss.302, 4041, 4042, 4043, 4063, 4065, 4066 and 4068 of ERISA, or
in respect of a Multiemployer Plan, under ss.ss.4041A, 4202, 4219, 4242, or 4245
of ERISA.
8.12. USE OF PROCEEDS.
8.12.1. GENERAL. The Borrower will use the proceeds of the Loans
solely for refinancing of existing indebtedness of the Borrower under
the Original Credit Agreement to BKB and the other lenders party
thereto, for acquisitions permitted by the terms hereof and for working
capital and general corporate purposes. The Borrower will obtain
Letters of Credit solely for general corporate purposes.
8.12.2. REGULATIONS U AND X. No portion of any Loan is to be
used, and no portion of any Letter of Credit is to be obtained, for the
purpose of purchasing or carrying any Margin Stock in violation of
Regulations U and X of the Board of Governors of the Federal Reserve
System, 12 C.F.R. Parts 221 and 224.
8.12.3. INELIGIBLE SECURITIES. No portion of the proceeds of any
Loan is to be used, and no portion of any Letter of Credit is to be
obtained, for the purpose of (a) knowingly purchasing, or providing
credit support for the purchase of, Ineligible Securities from a
Section 20 Subsidiary during any period in which such Section 20
Subsidiary makes a market in such Ineligible Securities, (b) knowingly
purchasing, or providing credit support for the purchase of, during the
underwriting or placement period, any Ineligible Securities being
underwritten or privately placed by a Section 20 Subsidiary, or (c)
making, or providing credit support for the making of, payments of
principal or interest on Ineligible Securities underwritten or
privately placed by a Section 20 Subsidiary and issued by or for the
benefit of the Borrower or the Guarantor or other Affiliate of the
Borrower.
<PAGE> 45
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8.13. INTEREST RATE PROTECTION AGREEMENTS. The Borrower shall (a) until
January 8, 1998, maintain, upon terms and conditions satisfactory in form and
substance to the Agent, interest rate protection agreements with a minimum
notional amount of $75,000,000, and (b) at any time when the amount of Loans
outstanding (after giving effect to all amounts requested) PLUS the Maximum
Drawing Amount and all Unpaid Reimbursement Obligations exceeds $150,000,000,
enter into and maintain, upon terms and conditions satisfactory in form and
substance to the Agent, interest rate protection agreements with a minimum
notional amount (the "Additional Notional Amount") equal to at least thirty
percent (30%) of the amount of Loans outstanding PLUS the Maximum Drawing Amount
and all Unpaid Reimbursement Obligations at such time; PROVIDED, HOWEVER, that,
in the event that the Borrower incurs Indebtedness permitted by ss.9.1(k), which
Indebtedness bears interest at a fixed, rather than a floating, rate, the
Borrower shalL maintain such interest rate protection arrangements with respect
to a minimum notional amount equal to the difference of (x)(i) until January 8,
1998, $75,000,000 PLUS (ii) the Additional Notional Amount MINUS (y) the amount
of such permitted fixed rate Indebtedness.
8.14. FURTHER ASSURANCES. The Borrower will, and will cause each of the
other Transaction Parties to, cooperate with the Banks and the Agent and execute
such further instruments and documents as the Banks or the Agent shall
reasonably request to carry out to their satisfaction the transactions
contemplated by this Credit Agreement and the other Loan Documents.
9. CERTAIN NEGATIVE COVENANTS OF THE BORROWER.
The Borrower covenants and agrees that, so long as any Loan, Unpaid
Reimbursement Obligation, Letter of Credit or Note is outstanding or any Bank
has any obligation to make any Loans or the Agent has any obligations to issue,
extend or renew any Letters of Credit:
9.1. RESTRICTIONS ON INDEBTEDNESS. The Borrower will not, and will not
permit any of the other Transaction Parties to, create, incur, assume, guarantee
or be or remain liable, contingently or otherwise, with respect to any
Indebtedness other than:
(a) Indebtedness to the Banks and the Agent arising under any of
the Loan Documents;
(b) current liabilities of the Borrower or the other Transaction
Parties incurred in the ordinary course of business not incurred
through (i) the borrowing of money, or (ii) the obtaining of credit
except for credit on an open account basis customarily extended and in
fact extended in connection with normal purchases of goods and
services;
(c) Indebtedness in respect of taxes, assessments, governmental
charges or levies and claims for labor, materials and supplies to the
extent that payment therefor shall not at the time be required to be
made in accordance with the provisions of ss.8.8;
(d) Indebtedness in respect of judgments or awards that have
been in force for less than the applicable period for taking an appeal
so long as execution is not
<PAGE> 46
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levied thereunder or in respect of which the Borrower or such other
Transaction Party shall at the time in good faith be prosecuting an
appeal or proceedings for review and in respect of which a stay of
execution shall have been obtained pending such appeal or review;
(e) endorsements for collection, deposit or negotiation and
warranties of products or services, in each case incurred in the
ordinary course of business;
(f) obligations under Capitalized Leases which, when combined
with amounts outstanding under ss.9.1(g), do not exceed $50,000,000 in
aggregate amount at any time outstanding;
(g) Indebtedness incurred in connection with the acquisition
after the date hereof of any real or personal property by the Borrower
or such other Transaction Party, PROVIDED that the aggregate principal
amount of such Indebtedness of the Borrower and the other Transaction
Parties shall, when combined with amounts outstanding under ss.9.1(f)
not exceed the aggregate amount of $50,000,000 at any one time;
(h) Indebtedness of the Borrower and the other Transaction
Parties existing on the date hereof and listed and described on
SCHEDULE 9.1 hereto;
(i) Indebtedness of (i) a Guarantor, following its execution and
delivery of its Guaranty to the Agent, to the Borrower; (ii) Hadco FSC
to the Borrower in an aggregate amount not to exceed $2,000,000; (iii)
Hadco Malaysia to the Borrower in an aggregate amount not to exceed
$55,000,000, no more than $25,000,000 of which may be incurred in any
one fiscal year of the Borrower; PROVIDED, HOWEVER, that if during any
fiscal year the amount of such Indebtedness permitted for that fiscal
year is not so utilized, such unutilized amount may be utilized in the
next succeeding fiscal year; and (iv) New Zycon to the Borrower in an
aggregate amount not to exceed $50,000;
(j) Indebtedness consisting of contingent obligations arising in
connection with any Transaction Party's compliance with applicable
Environmental Laws in an amount not to exceed in the aggregate
$20,000,000;
(k) so long as no Default or Event of Default shall have
occurred and be continuing or would occur as a result of the incurrence
of any thereof, unsecured Indebtedness of the Borrower or any of the
Guarantors up to an aggregate amount (the "ADDITIONAL AMOUNT") equal to
the amount of $175,000,000, consisting of: (i) up to an amount equal to
$150,000,000 (but not to exceed, when combined with amounts of
Indebtedness incurred pursuant to clause (ii) of this ss.9.1(k), the
Additional Amount) of Indebtedness which is expressly subordinated and
made junior to the payment and performance in full of the Obligations;
and (ii) up to $150,000,000 (but not to exceed, when combined with
amounts of Indebtedness incurred pursuant to clause (i) of this
ss.9.1(k), the Additional Amount) of Indebtedness which may rank PARI
PASSU with the Obligations; PROVIDED, HOWEVER, that the terms of
Indebtedness permitted pursuant to this ss.9.1(k) shalL include the
following:
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(A) the maturity date of any such Indebtedness occurs at
least one hundred twenty (120) days following the Revolving
Credit Loan Maturity Date;
(B) with respect to subordinated Indebtedness described in
clause (i) of this ss.9.1(k), no principal, interest, fees or
other amounts with respect thereto are due and payable upon the
occurrence and during the continuance of a Default or Event of
Default;
(C) with respect to subordinated Indebtedness described in
clause (i) of this ss.9.1(k), no principal or sinking fund
payments are due prior to at least one hundred twenty (120) days
following the Revolving Credit Loan Maturity Date;
(D) the rate of interest and other fees applicable to such
Indebtedness are, in the reasonable judgment of the Agent and
the Majority Banks, a market rate for companies with the same or
a similar financial profile as the Borrower;
(E) the covenants, including affirmative, negative and
financial covenants, included therein are, in the reasonable
judgment of the Agent and the Majority Banks, less restrictive
than the covenants set forth in ss.ss.8, 9 and 10 hereof and do
Not contain a negative pledge on assets of the Borrower and the
other Transaction Parties (but may, with respect to PARI PASSU
Indebtedness described in clause (ii) of this ss.9.1(k), contain
an "equal and ratable clause" with respect to any collateral
obtained by the Agent and the Banks);
(F) the terms and conditions of which may not be amended
without the prior written consent of the Agent and the Majority
Banks;
(G) default provisions with respect to which do not
cross-default to the Credit Agreement and the other Loan
Documents, except that, with respect to PARI PASSU Indebtedness
described in clause (ii) of this ss.9.1(k), such default
provisions may cross-default to a Default or Event of Default
under ss.13.1(a) or (b), to the extent that any such Default or
Event of Default is not cured or waived within thirty (30) days
after the occurrence thereof;
(H) subordinated Indebtedness described in clause (i) of
this ss.9.1(k) shall be expressly subordinated and made junior
to the payment and performance in full of the Obligations owed
by the Borrower or, as the case may be, the Guarantor issuing
such subordinated Indebtedness, as evidenced as subordinate by a
Subordination and Intercreditor Agreement or other written
instrument containing subordination provisions in form and
substance satisfactory to (in their sole and absolute
discretion) and approved by the Agent and the Majority Banks in
writing; and
(I) such other terms and conditions as the Agent and the
Majority Banks may reasonably require;
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PROVIDED, FURTHER, that prior to the incurrence of any such
Indebtedness, the Borrower shall provide to the Agent and each of the
Banks PRO FORMA financial statements and compliance certificates in the
form of EXHIBIT C indicating that for the period from the date of the
incurrence of such Indebtedness until the Revolving Credit Loan
Maturity Date, no Default or Event of Default would result from the
incurrence of such Indebtedness; and
(l) Indebtedness not otherwise set forth in clauses (a) - (k) of
this ss.9.1 in an amount not to exceed $2,000,000 in the aggregate.
9.2. RESTRICTIONS ON LIENS. The Borrower will not, and will not permit
any of the other Transaction Parties to, (i) create or incur or suffer to be
created or incurred or to exist any lien, encumbrance, mortgage, pledge, charge,
restriction or other security interest of any kind upon any of its property or
assets of any character whether now owned or hereafter acquired, or upon the
income or profits therefrom; (ii) transfer any of such property or assets or the
income or profits therefrom for the purpose of subjecting the same to the
payment of Indebtedness or performance of any other obligation in priority to
payment of its general creditors; (iii) acquire, or agree or have an option to
acquire, any property or assets upon conditional sale or other title retention
or purchase money security agreement, device or arrangement; (iv) suffer to
exist for a period of more than sixty (60) days after the same shall have been
incurred any Indebtedness or claim or demand against it that if unpaid might by
law or upon bankruptcy or insolvency, or otherwise, be given any priority
whatsoever over its general creditors; or (v) sell, assign, pledge or otherwise
transfer any accounts, contract rights, general intangibles, chattel paper or
instruments, with or without recourse; PROVIDED that the Borrower and any of the
other Transaction Parties may create or incur or suffer to be created or
incurred or to exist:
(a) liens in favor of the Borrower on all or part of the assets
of any of the other Transaction Parties securing Indebtedness permitted
by ss.9.1 and owing by such other Transaction Parties to the Borrower;
(b) liens to secure taxes, assessments and other government
charges in respect of obligations not overdue or liens on properties to
secure claims for labor, material or supplies in respect of obligations
not overdue;
(c) deposits or pledges made in connection with, or to secure
payment of, workmen's compensation, unemployment insurance, old age
pensions or other social security obligations;
(d) liens on properties in respect of judgments or awards, the
Indebtedness with respect to which is permitted by ss.9.1(d);
(e) liens of carriers, warehousemen, mechanics and materialmen,
and other like liens on properties in existence less than 120 days from
the date of creation thereof in respect of obligations not overdue;
(f) encumbrances on Real Estate consisting of easements, rights
of way, zoning restrictions, restrictions on the use of real property
and defects and irregularities in the title thereto, landlord's or
lessor's liens under leases to which the
<PAGE> 49
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Borrower or any of the other Transaction Parties is a party, and other
minor liens or encumbrances none of which in the opinion of the
Borrower interferes materially with the use of the property affected in
the ordinary conduct of the business of the Borrower and the other
Transaction Parties, which defects do not individually or in the
aggregate have a materially adverse effect on the business of the
Borrower individually or of the Borrower and the other Transaction
Parties on a consolidated basis;
(g) liens existing on the date hereof and listed on SCHEDULE 9.2
hereto;
(h) purchase money security interests in or purchase money
mortgages on real or personal property acquired after the date hereof
to secure purchase money Indebtedness of the type and amount permitted
by ss.9.1(g), incurred in connection with the acquisition of such
property, which security interests or mortgages cover only the real or
personal property so acquired; and
(i) liens on any Margin Stock held by the Borrower or the other
Transaction Parties.
9.3. RESTRICTIONS ON INVESTMENTS. The Borrower will not, and will not
permit any of the other Transaction Parties to, make or permit to exist or to
remain outstanding any Investment except for Investments in:
(a) marketable direct or guaranteed obligations of the United
States of America that mature within one (1) year from the date of
purchase by the Borrower;
(b) demand deposits, certificates of deposit, bankers
acceptances, money market deposits and time deposits of any of the
Banks (including branches of any of the Banks) or other United States
banks having total assets in excess of $1,000,000,000;
(c) securities commonly known as "commercial paper" issued by a
corporation organized and existing under the laws of the United States
of America or any state thereof that at the time of purchase have been
rated and the ratings for which are not less than "P 1" if rated by
Moody's Investors Services, Inc., and not less than "A 1" if rated by
Standard and Poor's;
(d) mutual funds which invest solely in the types of Investments
described in ss.9.3(a), (b) and (c);
(e) Investments existing on the date hereof and listed on
SCHEDULE 9.3 hereto;
(f) Investments consisting of the Guaranties or Investments by
the Borrower in (i) any of the Guarantors, (ii) Hadco FSC in an
aggregate amount not to exceed $2,000,000; or (iii) New Zycon in an
aggregate amount not to exceed $50,000;
(g) Investments with respect to Indebtedness permitted by
ss.9.1(i)(iii);
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(h) Investments consisting of promissory notes received as
proceeds of asset dispositions permitted by ss.9.5.3 and Investments
otherwise permitted by ss.9.5.2;
(i) Investments consisting of loans and advances to employees
for moving, entertainment, travel and other similar expenses in the
ordinary course of business not to exceed $10,000,000 in the aggregate
at any time outstanding;
(j) marketable direct or guaranteed obligations of United States
municipalities that are rated by Standard and Poor's and Moody's
Investors Services, Inc. as investment grade and that mature within
five (5) years from the date of purchase by the Borrower, in an amount
not to exceed $2,000,000 from any one issuing municipality and in an
aggregate amount not to exceed the lesser of $5,000,000 and fifty
percent (50%) of all Investments made by the Borrower or any of the
other Transaction Parties under ss.9.3(a), (b), (c), (d) and (k); and
(k) mutual funds investing in marketable direct or guaranteed
obligations of United States municipalities that are rated by Standard
and Poor's and Moody's Investors Services, Inc. as investment grade and
that mature within five (5) years from the date of purchase by the
Borrower, in an amount not to exceed $2,000,000 from any mutual fund
and in an aggregate amount not to exceed $5,000,000.
9.4. DISTRIBUTIONS. The Borrower will not make any Distributions.
9.5. MERGERS AND CONSOLIDATIONS, ACQUISITIONS AND DISPOSITION OF
ASSETS.
9.5.1. MERGERS AND CONSOLIDATIONS. The Borrower will not, and
will not permit any of the other Transaction Parties to, become
a party to any merger or consolidation, except (a) the merger or
consolidation of one or more Subsidiaries of the Borrower with
and into the Borrower, (b) the merger or consolidation of two or
more Subsidiaries of the Borrower and (c) the merger or
consolidation of a Target of a Permitted Acquisition with and
into the Borrower or one of its Subsidiaries.
9.5.2. ACQUISITIONS. The Borrower will not, and will not permit
any of the other Transaction Parties to agree to or effect any
asset acquisition or stock acquisition (other than the
acquisition of assets in the ordinary course of business
consistent with past practices); PROVIDED, HOWEVER, that:
(a) so long as no Default or Event of Default has occurred
and is continuing or would result therefrom, the Borrower may
make one or more asset or stock acquisitions in an amount not to
exceed $25,000,000 in any individual case or $50,000,000 in the
aggregate; PROVIDED, HOWEVER, that any such stock acquisition
shall not result in the Borrower, individually or collectively
with any one or more of its Affiliates, owning, either legally
or beneficially, more than fifty percent (50.00%) of the Voting
Stock of any entity which is the subject of such acquisition;
and
(b) subject to the requirements of this ss.9.5.2(b), the
Borrower may effecT asset or stock acquisitions in addition to
those otherwise permitted by
<PAGE> 51
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this ss.9.5.2 to the extent that (i) the business to be acquired
(the "Target") is in the same or similar lines of business as
the Borrower and the other Transaction Parties, (ii) each of the
annual financial statements of the Target for each of the
immediately preceding three (3) fiscal years of the Target and
each of its Subsidiaries, show a positive net income prior to
adjustments, (iii) following the completion of such Permitted
Acquisition, the Borrower or one of its wholly owned
Subsidiaries shall own one hundred percent (100%) of the stock
and assets of the Target and each of its Subsidiaries, (iv) as
of the date of such Permitted Acquisition, no Default or Event
of Default shall have occurred and be continuing or shall occur
after giving effect thereto; (v) after giving effect to such
Permitted Acquisition, the ratio of Consolidated Funded Debt as
at the most recent fiscal quarter end of the Borrower to EBITDA
for the four consecutive fiscal quarters of the Borrower ending
with such quarter end (as shown on a PRO FORMA basis based upon
(A) the most recently delivered financial statements of the
Borrower and its Subsidiaries delivered in accordance with
ss.8.4 and (B) audited financial statements for such Target as
at the most recent fiscaL quarter end of the Borrower which are
accompanied by an unqualified audited opinion letter from Arthur
Anderson LLP or another nationally recognized accounting firm
satisfactory to the Agent and the Majority Banks or which are
otherwise satisfactory to the Agent and the Majority Banks)
would not exceed 3.0:1.0; and (vi) contemporaneously with the
closing of such Permitted Acquisition, the Borrower shall
provide to the Agent and the Banks a compliance certificate in
the form of EXHIBIT C, duly certified by the principal financial
or accounting officer of the Borrower, indicating the Borrower's
compliance with (x) the financial covenants contained in ss.10
immediately prior to and, on a PRO FORMA basis, immediately
following such Permitted Acquisition and (y) on a PRO FORMA
basis, the requirement set forth in ss.9.5.2(b)(v); and PROVIDED
FURTHER that, contemporaneously with the closing of such
Permitted Acquisition, any newly acquired Subsidiary shall,
pursuant to documentation in form and substance satisfactory to
the Agent and the Agent's Special Counsel, become a party to and
Guarantor under, and be bound by all of the terms and conditions
of, a Guaranty in the form of EXHIBIT E hereto and shall provide
to the Agent, in addition to such Guaranty, such evidence of
corporate authorization, legal opinions and other documentation
as the Agent may request. To the extent that any such Permitted
Acquisition alters the accuracy or completeness of any of the
Schedules hereto, the Borrower shall deliver to the Agent,
contemporaneously with the delivery of the loan documentation
referred to above, revised schedules reflecting changes
resulting from such Permitted Acquisition; PROVIDED that the
Agent shall only be required to accept such revised schedules,
and such revised schedules shall only become part of this Credit
Agreement, in the event that the Borrower shall have taken any
and all action necessary to bring such newly acquired Subsidiary
into compliance with each representation and warranty set forth
herein, including in ss.7 hereof; and PROVIDED FURTHER that no
change resulting from any Permitted Acquisition would have a
material adverse effect on the Borrower and the other
Transaction Parties, taken as a whole.
<PAGE> 52
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9.5.3. DISPOSITION OF ASSETS. The Borrower will not, and will
not permit any of the other Transaction Parties to, become a
party to or agree to or effect any disposition of assets, other
than the disposition of assets in the ordinary course of
business, consistent with past practices, and dispositions of
Margin Stock for fair market value in cash.
9.6. SALE AND LEASEBACK. Except for arrangements described on SCHEDULE
9.6 and arrangements with respect to which the property being sold or
transferred has an aggregate fair market value not to exceed $10,000,000 for all
such arrangements, the Borrower will not, and will not permit any of the other
Transaction Parties to, enter into any arrangement, directly or indirectly,
whereby the Borrower or any of the other Transaction Parties shall sell or
transfer any property owned by it in order then or thereafter to lease such
property or lease other property that the Borrower or any of the other
Transaction Parties intends to use for substantially the same purpose as the
property being sold or transferred.
9.7. COMPLIANCE WITH ENVIRONMENTAL LAWS. Except to the extent that any
of the following would not have a material adverse effect on the business,
assets or financial condition of the Transaction Parties, considered as a whole,
the Borrower will not, and will not permit any of the other Transaction Parties
to, (i) use any of the Real Estate or any portion thereof for the handling,
processing, storage or disposal of Hazardous Substances, (ii) cause or permit to
be located on any of the Real Estate any underground tank or other underground
storage receptacle for Hazardous Substances, (iii) generate any Hazardous
Substances on any of the Real Estate, (iv) conduct any activity at any Real
Estate or use any Real Estate in any manner so as to cause a release (i.e.
releasing, spilling, leaking, pumping, pouring, emitting, emptying, discharging,
injecting, escaping, leaching, disposing or dumping) or threatened release of
Hazardous Substances on, upon or into the Real Estate or (v) otherwise conduct
any activity at any Real Estate or use any Real Estate in any manner that would
violate any Environmental Law or bring such Real Estate in violation of any
Environmental Law.
9.8. EMPLOYEE BENEFIT PLANS. Neither the Borrower nor any ERISA
Affiliate will
(a) engage in any "prohibited transaction" within the meaning of
ss.406 of ERISA or ss.4975 of the Code which could result in a material
liability for the Borrower or any of the other Transaction Parties; or
(b) permit any Guaranteed Pension Plan to incur an "accumulated
funding deficiency", as such term is defined in ss.302 of ERISA,
whether or not such deficiency is or may be waived; or
(c) fail to contribute to any Guaranteed Pension Plan to an
extent which, or terminate any Guaranteed Pension Plan in a manner
which, could result in the imposition of a lien or encumbrance on the
assets of the Borrower or any of the other Transaction Parties pursuant
to ss.302(f) or ss.4068 of ERISA; or
(d) amend any Guaranteed Pension Plan in circumstances requiring
the posting of security pursuant to ss.307 of ERISA or ss.401(a)(29) of
the Code; or
<PAGE> 53
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(e) permit or take any action which would result in the
aggregate benefit liabilities (with the meaning of ss.4001 of ERISA) of
all Guaranteed Pension Plans exceeding the value of thE aggregate
assets of such Plans, disregarding for this purpose the benefit
liabilities and assets of any such Plan with assets in excess of
benefit liabilities.
9.9. CAPITALIZATION. The Borrower will not and will not permit any of
the other Transaction Parties to designate, establish or create any new or
additional series of capital stock or effect or permit any change in or
amendment to its charter documents (other than a change to increase the amount
of authorized common stock of such Person) or any other document or instrument
pertaining to the terms of the capital stock of such Person. Neither the
Borrower nor any of the other Transaction Parties will enter into or permit to
exist any contractual or other obligation to redeem, retire or repurchase any of
its capital stock.
9.10. AGREEMENTS REGARDING HADCO FSC AND NEW ZYCON. Neither the
Borrower nor any of the other Transaction Parties shall permit Hadco FSC (a) to
engage in any activities other than those directly related to its purpose as a
foreign sales corporation pursuant to ss.ss.921-927 of the Code or (b) at Any
time to own, hold or have an interest in property or assets, whether tangible or
intangible and including cash and cash equivalents, with a fair market value in
excess of $2,000,000. Neither the Borrower nor any of the other Transaction
Parties shall permit New Zycon (x) to engage in any activities other than
holding the name "Zycon Corporation" for the benefit of the Borrower and its
Subsidiaries or (y) at any time to own, hold or have an interest in property or
assets, whether tangible or intangible and including cash and cash equivalents,
with a fair market value in excess of $50,000.
10. FINANCIAL COVENANTS OF THE BORROWER.
The Borrower covenants and agrees that, so long as any Loan, Unpaid
Reimbursement Obligation, Letter of Credit or Note is outstanding or any Bank
has any obligation to make any Loans or the Agent has any obligation to issue,
extend or renew any Letters of Credit:
10.1. FUNDED DEBT TO EBITDA. The Borrower will not, as at the end of
any four consecutive fiscal quarters of the Borrower, permit the ratio of (a)
Consolidated Funded Debt as at such quarter end to (b) EBITDA for such four
consecutive fiscal quarters then ended to be greater than 3.25:1.00.
10.2. DEBT SERVICE. The Borrower will not, as at the end of any four
consecutive fiscal quarters of the Borrower, permit the ratio of (a) EBIT for
such fiscal quarters to (b) Consolidated Total Interest Expense for such fiscal
quarters, to be less than 3.5:1.0.
10.3. CONSOLIDATED NET WORTH. The Borrower will not permit Consolidated
Net Worth at any time to be less than the sum of (a) $60,000,000 PLUS (b) on a
cumulative basis, fifty percent (50%) of positive Consolidated Net Income (not
to be reduced for losses) for each fiscal quarter beginning with the fiscal
quarter ended January 25, 1997, PLUS (c) one hundred percent (100%) of the net
proceeds of any sale by the Borrower since January 8, 1997 of (i) equity
securities issued by the Borrower or (ii) warrants or subscription rights for
equity securities issued by the Borrower MINUS (d) without duplication (and in
the event
<PAGE> 54
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not included in the calculation of positive Consolidated Net Income in clause
(b) above), Non-Cash Acquisition Expenses.
10.4. FIXED CHARGE COVERAGE RATIO. The Borrower will not at any time
permit the ratio of (a)(i) EBITDA for any four consecutive fiscal quarters of
the Borrower MINUS (ii) Capital Expenditures made by the Borrower or any of its
Subsidiaries during such period MINUS (iii) cash taxes paid by the Borrower or
any of its Subsidiaries during such period to (b)(i) principal payments on
Indebtedness for borrowed money made by the Borrower or any of its Subsidiaries
during such period PLUS (ii) Consolidated Total Interest Expense of the Borrower
and its Subsidiaries for such period to be less than 1.10:1.00. The calculation
of such ratio shall include, on a PRO FORMA basis and if and to the extent
approved by the Majority Banks (which approval shall require, INTER ALIA, the
Agent's and the Banks' receipt of audited financial statements for any Target
acquired in accordance with ss.9.5.2(b), together with aN unqualified audited
opinion letter from Arthur Andersen LLP or another nationally recognized
accounting firm satisfactory to the Agent and the Majority Banks, or which
financial statements or opinion letter shall otherwise be satisfactory to the
Agent and the Majority Banks), EBITDA for such period of any Target acquired in
compliance with ss.9.5.2(b).
11. CLOSING CONDITIONS.
The obligations of the Banks to make the initial Loans and of the Agent
to issue any initial Letters of Credit shall be subject to the satisfaction of
the following conditions precedent on or prior to December 15, 1997:
11.1. LOAN DOCUMENTS. Each of the Loan Documents shall have been duly
executed and delivered by the respective parties thereto, shall be in full force
and effect and shall be in form and substance satisfactory to each of the Banks.
Each Bank shall have received a fully executed copy of each such document. The
conditions, actions and items set forth in the Post-Closing Letter shall not be
deemed waived by virtue of the fact that they are not completed as of the
Closing Date.
11.2. CERTIFIED COPIES OF CHARTER DOCUMENTS. Each of the Banks shall
have received from each of the Borrower and Hadco Santa Clara, a copy, certified
by a duly authorized officer of such Person to be true and complete on the
Closing Date, of each of (i) its charter or other incorporation documents as in
effect on such date of certification, and (ii) its by-laws as in effect on such
date.
11.3. CORPORATE ACTION. All corporate action necessary for the valid
execution, delivery and performance by the Borrower and each of the other
Transaction Parties of this Credit Agreement and the other Loan Documents to
which it is or is to become a party shall have been duly and effectively taken,
and evidence thereof satisfactory to the Banks shall have been provided to each
of the Banks.
11.4. INCUMBENCY CERTIFICATE. Each of the Banks shall have received
from each Transaction Party an incumbency certificate, dated as of the Closing
Date, signed by a duly authorized officer of such Transaction Party, and giving
the name and bearing a specimen signature of each individual who shall be
authorized: (i) to sign, in the name and on behalf of each such Transaction
Party, each of the Loan Documents to which such Transaction
<PAGE> 55
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Party is or is to become a party; (ii) in the case of the Borrower, to make Loan
Requests and Conversion Requests and to apply for Letters of Credit; and (iii)
to give notices and to take other action on its behalf under the Loan Documents
to which it is a party.
11.5. UCC SEARCH RESULTS. The Agent shall have received from each of
the Borrower and the other Transaction Parties the results of UCC searches in
jurisdictions certified by the Borrower as constituting the locations of all
offices and locations, including the chief executive office, of the Borrower and
each of the other Transaction Parties and in such other jurisdictions as the
Agent may request, indicating no liens other than Permitted Liens and otherwise
in form and substance satisfactory to the Agent.
11.6. CERTIFICATES OF INSURANCE. The Agent shall have received (i) a
certificate of insurance from an independent insurance broker dated as of the
Closing Date, identifying insurers, types of insurance, insurance limits, and
policy terms, and otherwise describing the insurance obtained in accordance with
the provisions of this Credit Agreement and (ii) certified copies of all
policies evidencing such insurance (or certificates therefore signed by the
insurer or an agent authorized to bind the insurer).
11.7. SOLVENCY CERTIFICATE. Each of the Banks shall have received an
officer's certificate of the Borrower dated as of the Closing Date as to the
solvency of the Borrower and the other Transaction Parties following the
consummation of the transactions contemplated herein and in the other Loan
Documents and in form and substance satisfactory to the Banks.
11.8. OPINION OF COUNSEL. Each of the Banks and the Agent shall have
received a favorable legal opinion addressed to the Banks and the Agent, dated
as of the Closing Date, in form and substance satisfactory to the Banks and the
Agent, from Berlin, Hamilton & Dahmen, counsel to the Borrower and its
Subsidiaries.
11.9. PAYMENT OF FEES. The Borrower shall have paid to the Banks or the
Agent, as appropriate, any Letter of Credit fees and the fees payable pursuant
to ss.5.1 and the Agent's Side Letter.
11.10. PAY-OFF LETTERS, ETC. The Agent shall have received separate
pay-off letters, each satisfactory in form and substance to the Agent, from each
of the Exiting Banks, indicating all loan obligations of the Borrower and its
Subsidiaries to such Exiting Bank under the Original Credit Agreement to be
discharged on the Closing Date and setting forth an agreement by each such
Exiting Bank that, upon receipt of such funds, all loan obligations shall be
paid and discharged in full and instructing the Agent to use a portion of the
proceeds of the initial Loans to make such repayments.
12. CONDITIONS TO ALL BORROWINGS.
The obligations of the Banks to make any Loan, and of the Agent to
issue, extend or renew any Letter of Credit, in each case whether on or after
the Closing Date, shall also be subject to the satisfaction of the following
conditions precedent:
12.1. REPRESENTATIONS TRUE; NO EVENT OF DEFAULT. Each of the
representations and warranties of any of the Borrower and the Guarantors
contained in this Credit
<PAGE> 56
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Agreement, the other Loan Documents or in any document or instrument delivered
pursuant to or in connection with this Credit Agreement shall be true as of the
date as of which they were made and shall also be true at and as of the time of
the making of such Loan or the issuance, extension or renewal of such Letter of
Credit, with the same effect as if made at and as of that time (except to the
extent of changes resulting from transactions contemplated or permitted by this
Credit Agreement and the other Loan Documents and changes occurring in the
ordinary course of business that singly or in the aggregate are not materially
adverse, and to the extent that such representations and warranties relate
expressly to an earlier date) and no Default or Event of Default shall have
occurred and be continuing. The Agent shall have received a certificate of the
Borrower signed by an authorized officer of the Borrower to such effect.
12.2. NO LEGAL IMPEDIMENT. No change shall have occurred in any law or
regulations thereunder or interpretations thereof that in the reasonable opinion
of any Bank would make it illegal for such Bank to make such Loan or to
participate in the issuance, extension or renewal of such Letter of Credit or in
the reasonable opinion of the Agent would make it illegal for the Agent to
issue, extend or renew such Letter of Credit.
12.3. GOVERNMENTAL REGULATION. Each Bank shall have received such
statements in substance and form reasonably satisfactory to such Bank as such
Bank shall require for the purpose of compliance with any applicable regulations
of the Comptroller of the Currency or the Board of Governors of the Federal
Reserve System.
12.4. PROCEEDINGS AND DOCUMENTS. All proceedings in connection with the
transactions contemplated by this Credit Agreement, the other Loan Documents and
all other documents incident thereto shall be satisfactory in substance and in
form to the Banks and to the Agent and the Agent's Special Counsel, and the
Banks, the Agent and such counsel shall have received all information and such
counterpart originals or certified or other copies of such documents as the
Agent may reasonably request.
13. EVENTS OF DEFAULT; ACCELERATION; ETC.
13.1. EVENTS OF DEFAULT AND ACCELERATION. If any of the following
events ("Events of Default" or, if the giving of notice or the lapse of time or
both is required, then, prior to such notice or lapse of time, "Defaults") shall
occur:
(a) the Borrower shall fail to pay any principal of the Loans or
any Reimbursement Obligation when the same shall become due and
payable, whether at the stated date of maturity or any accelerated date
of maturity or at any other date fixed for payment;
(b) the Borrower or any of the other Transaction Parties shall
fail to pay any interest on the Loans, the commitment fee, any Letter
of Credit Fee, the Agent's fee, or other sums due hereunder or under
any of the other Loan Documents, within two (2) Business Days after the
day on which the same shall become due and payable, whether at the
stated date of maturity or any accelerated date of maturity or at any
other date fixed for payment;
<PAGE> 57
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(c) the Borrower shall fail to comply with any of its covenants
contained in ss.8, 9 or 10;
(d) the Borrower or any of the other Transaction Parties shall
fail to perform any term, covenant or agreement contained herein or in
any of the other Loan Documents (other than those specified elsewhere
in this ss.13.1) for twenty (20) days after written notice of sucH
failure has been given to the Borrower by the Agent;
(e) any representation or warranty of the Borrower or any of the
other Transaction Parties in this Credit Agreement or any of the other
Loan Documents or in any other document or instrument delivered
pursuant to or in connection with this Credit Agreement shall prove to
have been false in any material respect upon the date when made or
deemed to have been made or repeated;
(f) the Borrower or any of the other Transaction Parties shall
fail to pay at maturity, or within any applicable period of grace, any
obligations for borrowed money or credit received or in respect of any
Capitalized Leases, which obligations exceed $5,000,000 in the
aggregate, or fail to observe or perform any material term, covenant or
agreement contained in any agreement by which it is bound (excluding,
however, any such term, covenant or agreement relating to the pledge or
disposition of Margin Stock), evidencing or securing borrowed money or
credit received or in respect of any Capitalized Leases exceeding
$5,000,000 in the aggregate, for such period of time as would permit
(assuming the giving of appropriate notice if required) the holder or
holders thereof or of any obligations issued thereunder to accelerate
the maturity thereof;
(g) the Borrower or any of the other Transaction Parties shall
make an assignment for the benefit of creditors, or admit in writing
its inability to pay or generally fail to pay its debts as they mature
or become due, or shall petition or apply for the appointment of a
trustee or other custodian, liquidator or receiver of the Borrower or
any of the other Transaction Parties or of any substantial part of the
assets of the Borrower or any of the other Transaction Parties or shall
commence any case or other proceeding relating to the Borrower or any
of the other Transaction Parties under any bankruptcy, reorganization,
arrangement, insolvency, readjustment of debt, dissolution or
liquidation or similar law of any jurisdiction, now or hereafter in
effect, or shall take any action to authorize or in furtherance of any
of the foregoing, or if any such petition or application shall be filed
or any such case or other proceeding shall be commenced against the
Borrower or any of the other Transaction Parties and the Borrower or
any of the other Transaction Parties shall indicate its approval
thereof, consent thereto or acquiescence therein or such petition or
application shall not have been dismissed within forty-five (45) days
following the filing thereof;
(h) a decree or order is entered appointing any such trustee,
custodian, liquidator or receiver or adjudicating the Borrower or any
of the other Transaction Parties bankrupt or insolvent, or approving a
petition in any such case or other proceeding, or a decree or order for
relief is entered in respect of the Borrower or
<PAGE> 58
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any of the other Transaction Parties in an involuntary case under
federal bankruptcy laws as now or hereafter constituted;
(i) there shall remain in force, undischarged, unsatisfied and
unstayed, for more than thirty (30) days, any final judgment against
the Borrower or any of the other Transaction Parties that, with other
outstanding final judgments, undischarged, against the Borrower or any
of the other Transaction Parties exceeds in the aggregate $5,000,000;
(j) if any of the Loan Documents shall be cancelled, terminated,
revoked or rescinded, in each case otherwise than with the express
prior written agreement, consent or approval of the Banks, or any
action at law, suit or in equity or other legal proceeding to cancel,
revoke or rescind any of the Loan Documents shall be commenced by or on
behalf of the Borrower or any of the other Transaction Parties party
thereto or any of their respective stockholders, or any court or any
other governmental or regulatory authority or agency of competent
jurisdiction shall make a determination that, or issue a judgment,
order, decree or ruling to the effect that, any one or more of the Loan
Documents is illegal, invalid or unenforceable in accordance with the
terms thereof;
(k) the Borrower or any ERISA Affiliate incurs any liability to
the PBGC or a Guaranteed Pension Plan pursuant to Title IV of ERISA in
an aggregate amount exceeding $2,000,000; the Borrower or any ERISA
Affiliate is assessed withdrawal liability pursuant to Title IV of
ERISA by a Multiemployer Plan requiring aggregate annual payments
exceeding $2,000,000, or any of the following occurs with respect to a
Guaranteed Pension Plan: (i) an ERISA Reportable Event, or a failure to
make a required installment or other payment (within the meaning of
ss.302(f)(1) of ERISA), provided the Agent determines in its reasonable
discretioN that such event (A) could be expected to result in liability
of the Borrower to the PBGC or the Plan in an aggregate amount
exceeding $2,000,000 and (B) could constitute grounds for the
termination of such Plan by the PBGC, for the appointment by the
appropriate United States District Court of a trustee to administer
such Plan or for the imposition of a lien in favor of the Guaranteed
Pension Plan; (ii) the appointment by a United States District court of
a trustee to administer such Plan; or (iii) the institution by the PBGC
of proceedings to terminate such Plan;
(l) the Borrower or any of the other Transaction Parties shall
be enjoined, restrained or in any way prevented by the order of any
court or any administrative or regulatory agency from conducting any
material part of its business and such order shall continue in effect
for more than thirty (30) days;
(m) there shall occur any strike, lockout, labor dispute,
embargo, condemnation, act of God or public enemy, or other casualty,
which in any such case causes, for more than fifteen (15) consecutive
days, the cessation or substantial curtailment of revenue producing
activities at any facility of the Borrower or any of the other
Transaction Parties if such event or circumstance is not covered by
business interruption insurance and would have a material adverse
effect on the business or financial condition of the Borrower and the
other Transaction Parties, considered as a whole;
<PAGE> 59
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(n) there shall occur the loss, suspension or revocation of, or
failure to renew, any license or permit now held or hereafter acquired
by the Borrower or any of the other Transaction Parties if such loss,
suspension, revocation or failure to renew would have a material
adverse effect on the business or financial condition of the Borrower
and the other Transaction Parties, considered as a whole;
(o) the Borrower or any of the other Transaction Parties shall
be indicted for a state or federal crime, or any civil or criminal
action shall otherwise have been brought or threatened against the
Borrower or any the other Transaction Parties, a punishment for which
in any such case could include the forfeiture of any assets of the
Borrower or such other Transaction Party having a fair market value in
excess of $1,000,000; or
(p) any person or group of persons (within the meaning of
Section 13 or 14 of the Securities Exchange Act of 1934, as amended)
shall have acquired beneficial ownership (within the meaning of Rule
13d-3 promulgated by the Securities and Exchange Commission under said
Act) of thirty percent (30%) or more of the outstanding shares of
common stock of the Borrower; or, during any period of twelve
consecutive calendar months, individuals who were directors of the
Borrower on the first day of such period shall cease to constitute a
majority of the board of directors of the Borrower or the Borrower
shall, at any time, legally or beneficially own less than one hundred
percent (100%) of the shares of the capital stock of Hadco Santa Clara
(on a fully diluted basis);
then, and in any such event, so long as the same may be continuing, the Agent
may, and upon the request of the Majority Banks shall, by notice in writing to
the Borrower declare all amounts owing with respect to this Credit Agreement,
the Notes and the other Loan Documents and all Reimbursement Obligations to be,
and they shall thereupon forthwith become, immediately due and payable without
presentment, demand, protest or other notice of any kind, all of which are
hereby expressly waived by the Borrower; PROVIDED that in the event of any Event
of Default specified in ss.ss.13.1(g) or 13.1(h), all such amounts shall become
immediately due and payable automatically and without any requirement of notice
from the Agent or any Bank.
13.2. TERMINATION OF COMMITMENTS. If any one or more of the Events of
Default specified in ss.13.1(g) or ss.13.1(h) shall occur and be continuing, any
unused portion of the credit hereunder shall forthwith terminate and each of the
Banks shall be relieved of all further obligations to make Loans to the Borrower
and the Agent shall be relieved of all further obligations to issue, extend or
renew Letters of Credit. If any other Event of Default shall have occurred and
be continuing, the Agent may and, upon the request of the Majority Banks, shall,
by notice to the Borrower, terminate the unused portion of the credit hereunder,
and upon such notice being given such unused portion of the credit hereunder
shall terminate immediately and each of the Banks shall be relieved of all
further obligations to make Loans and the Agent shall be relieved of all further
obligations to issue, extend or renew Letters of Credit. No termination of the
credit hereunder shall relieve the Borrower or any of the other Transaction
Parties of any of the Obligations.
13.3. REMEDIES. In case any one or more of the Events of Default shall
have occurred and be continuing, and whether or not the Banks shall have
accelerated the
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maturity of the Loans pursuant to ss.13.1, each Bank, if owed any amount with
respect to the Loans or the Reimbursement Obligations, may, with the consent of
the Majority Banks but not otherwise, proceed to protect and enforce its rights
by suit in equity, action at law or other appropriate proceeding, whether for
the specific performance of any covenant or agreement contained in this Credit
Agreement and the other Loan Documents or any instrument pursuant to which the
Obligations to such Bank are evidenced, including as permitted by applicable law
the obtaining of the EX PARTE appointment of a receiver, and, if such amount
shall have become due, by declaration or otherwise, proceed to enforce the
payment thereof or any other legal or equitable right of such Bank. No remedy
herein conferred upon any Bank or the Agent or the holder of any Note or
purchaser of any Letter of Credit Participation is intended to be exclusive of
any other remedy and each and every remedy shall be cumulative and shall be in
addition to every other remedy given hereunder or now or hereafter existing at
law or in equity or by statute or any other provision of law.
14. SETOFF.
Regardless of the adequacy of any collateral, during the continuance of
any Event of Default, any deposits or other sums credited by or due from any of
the Banks to the Borrower and any securities or other property of the Borrower
in the possession of such Bank may be applied to or set off by such Bank against
the payment of Obligations and any and all other liabilities, direct, or
indirect, absolute or contingent, due or to become due, now existing or
hereafter arising, of the Borrower to such Bank. Each of the Banks agrees with
each other Bank that (i) if an amount to be set off is to be applied to
Indebtedness of the Borrower to such Bank, other than Indebtedness evidenced by
the Notes held by such Bank or constituting Reimbursement Obligations owed to
such Bank, such amount shall be applied ratably to such other Indebtedness and
to the Indebtedness evidenced by all such Notes held by such Bank or
constituting Reimbursement Obligations owed to such Bank, and (ii) if such Bank
shall receive from the Borrower, whether by voluntary payment, exercise of the
right of setoff, counterclaim, cross action, enforcement of the claim evidenced
by the Notes held by, or constituting Reimbursement Obligations owed to, such
Bank by proceedings against the Borrower at law or in equity or by proof thereof
in bankruptcy, reorganization, liquidation, receivership or similar proceedings,
or otherwise, and shall retain and apply to the payment of the Note or Notes
held by, or Reimbursement Obligations owed to, such Bank any amount in excess of
its ratable portion of the payments received by all of the Banks with respect to
the Notes held by, and Reimbursement Obligations owed to, all of the Banks, such
Bank will notify the Agent thereof and make such disposition and arrangements
with the other Banks with respect to such excess, either by way of distribution,
PRO TANTO assignment of claims, subrogation or otherwise as shall result in each
Bank receiving in respect of the Notes held by it or Reimbursement Obligations
owed it, its proportionate payment as contemplated by this Credit Agreement;
PROVIDED that if all or any part of such excess payment is thereafter recovered
from such Bank, such disposition and arrangements shall be rescinded and the
amount restored to the extent of such recovery, but without interest.
15. THE AGENT.
15.1. AUTHORIZATION.
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(a) The Agent is authorized to take such action on behalf of
each of the Banks and to exercise all such powers as are hereunder and
under any of the other Loan Documents and any related documents
delegated to the Agent, together with such powers as are reasonably
incident thereto; PROVIDED that no duties or responsibilities not
expressly assumed herein or therein shall be implied to have been
assumed by the Agent.
(b) The relationship between the Agent and each of the Banks is
that of an independent contractor. The use of the term "Agent" is for
convenience only and is used to describe, as a form of convention, the
independent contractual relationship between the Agent and each of the
Banks. Nothing contained in this Credit Agreement nor the other Loan
Documents shall be construed to create an agency, trust or other
fiduciary relationship between the Agent and any of the Banks.
(c) As an independent contractor empowered by the Banks to
exercise certain rights and perform certain duties and responsibilities
hereunder and under the other Loan Documents, the Agent is nevertheless
a "representative" of the Banks, as that term is defined in Article 1
of the Uniform Commercial Code, for purposes of actions for the benefit
of the Banks and the Agent with respect to all collateral security and
guaranties contemplated by the Loan Documents.
15.2. EMPLOYEES AND AGENTS. The Agent may exercise its powers and
execute its duties by or through employees or agents and shall be entitled to
take, and to rely on, advice of counsel concerning all matters pertaining to its
rights and duties under this Credit Agreement and the other Loan Documents. The
Agent may utilize the services of such Persons as the Agent in its sole
discretion may reasonably determine, and all reasonable fees and expenses of any
such Persons shall be paid by the Borrower.
15.3. NO LIABILITY. Neither the Agent nor any of its shareholders,
directors, officers or employees nor any other Person assisting them in their
duties nor any agent or employee thereof, shall be liable for any waiver,
consent or approval given or any action taken, or omitted to be taken, in good
faith by it or them hereunder or under any of the other Loan Documents, or in
connection herewith or therewith, or be responsible for the consequences of any
oversight or error of judgment whatsoever, except that the Agent or such other
Person, as the case may be, may be liable for losses due to its willful
misconduct or gross negligence.
15.4. NO REPRESENTATIONS. The Agent shall not be responsible for the
execution or validity or enforceability of this Credit Agreement, the Notes, the
Letters of Credit, any of the other Loan Documents or any instrument at any time
constituting, or intended to constitute, collateral security for the Notes, or
for the value of any such collateral security or for the validity,
enforceability or collectability of any such amounts owing with respect to the
Notes, or for any recitals or statements, warranties or representations made
herein or in any of the other Loan Documents or in any certificate or instrument
hereafter furnished to it by or on behalf of the Borrower or any of the other
Transaction Parties, or be bound to ascertain or inquire as to the performance
or observance of any of the terms, conditions, covenants or agreements herein or
in any instrument at any time constituting, or intended to constitute,
collateral security for the Notes or to inspect any of the properties, books or
records of the Borrower or any of the Transaction Parties. The Agent shall not
be bound to
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ascertain whether any notice, consent, waiver or request delivered to it by the
Borrower or any holder of any of the Notes shall have been duly authorized or is
true, accurate and complete. The Agent has not made nor does it now make any
representations or warranties, express or implied, nor does it assume any
liability to the Banks, with respect to the credit worthiness or financial
conditions of the Borrower or any of the Transaction Parties. Each Bank
acknowledges that it has, independently and without reliance upon the Agent or
any other Bank, and based upon such information and documents as it has deemed
appropriate, made its own credit analysis and decision to enter into this Credit
Agreement.
15.5. PAYMENTS.
15.5.1. PAYMENTS TO AGENT. A payment by the Borrower to the
Agent hereunder or any of the other Loan Documents for the
account of any Bank shall constitute a payment to such Bank. The
Agent agrees promptly to distribute to each Bank such Bank's PRO
RATA share of payments received by the Agent for the account of
the Banks except as otherwise expressly provided herein or in
any of the other Loan Documents.
15.5.2. DISTRIBUTION BY AGENT. If, in the opinion of the Agent,
the distribution of any amount received by it in such capacity
hereunder, under the Notes or under any of the other Loan
Documents might involve it in liability, it may refrain from
making distribution until its right to make distribution shall
have been adjudicated by a court of competent jurisdiction. If a
court of competent jurisdiction shall adjudge that any amount
received and distributed by the Agent is to be repaid, each
Person to whom any such distribution shall have been made shall
either repay to the Agent its proportionate share of the amount
so adjudged to be repaid or shall pay over the same in such
manner and to such Persons as shall be determined by such court.
15.5.3. DELINQUENT BANKS. Notwithstanding anything to the
contrary contained in this Credit Agreement or any of the other
Loan Documents, any Bank that fails (i) to make available to the
Agent its PRO RATA share of any Loan or to purchase any Letter
of Credit Participation or (ii) to comply with the provisions of
ss.14 with respect to making dispositions and arrangements with
the other Banks, where such Bank's share of any payment
received, whether by setoff or otherwise, is in excess of its
PRO RATA share of such payments due and payable to all of the
Banks, in each case as, when and to the full extent required by
the provisions of this Credit Agreement, shall be deemed
delinquent (a "Delinquent Bank") and shall be deemed a
Delinquent Bank until such time as such delinquency is
satisfied. A Delinquent Bank shall be deemed to have assigned
any and all payments due to it from the Borrower, whether on
account of outstanding Loans, Unpaid Reimbursement Obligations,
interest, fees or otherwise, to the remaining nondelinquent
Banks for application to, and reduction of, their respective PRO
RATA shares of all outstanding Loans and Unpaid Reimbursement
Obligations. The Delinquent Bank hereby authorizes the Agent to
distribute such payments to the nondelinquent Banks in
proportion to their respective PRO RATA shares of all
outstanding Loans and Unpaid Reimbursement Obligations. A
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Delinquent Bank shall be deemed to have satisfied in full a
delinquency when and if, as a result of application of the
assigned payments to all outstanding Loans and Unpaid
Reimbursement Obligations of the nondelinquent Banks, the Banks'
respective PRO RATA shares of all outstanding Loans and Unpaid
Reimbursement Obligations have returned to those in effect
immediately prior to such delinquency and without giving effect
to the nonpayment causing such delinquency.
15.6. HOLDERS OF NOTES. The Agent may deem and treat the payee of any
Note or the purchaser of any Letter of Credit Participation as the absolute
owner or purchaser thereof for all purposes hereof until it shall have been
furnished in writing with a different name by such payee or by a subsequent
holder, assignee or transferee.
15.7. INDEMNITY. The Banks ratably agree hereby to indemnify and hold
harmless the Agent from and against any and all claims, actions and suits
(whether groundless or otherwise), losses, damages, costs, expenses (including
any expenses for which the Agent has not been reimbursed by the Borrower as
required by ss.16), and liabilities of every nature and character arising out of
or related to this CrediT Agreement, the Notes, or any of the other Loan
Documents or the transactions contemplated or evidenced hereby or thereby, or
the Agent's actions taken hereunder or thereunder, except to the extent that any
of the same shall be directly caused by the Agent's willful misconduct or gross
negligence.
15.8. AGENT AS BANK. In its individual capacity, BKB shall have the
same obligations and the same rights, powers and privileges in respect to its
Commitment and the Loans made by it, and as the holder of any of the Notes and
as the purchaser of any Letter of Credit Participations, as it would have were
it not also the Agent.
15.9. RESIGNATION. The Agent may resign at any time by giving sixty
(60) days prior written notice thereof to the Banks and the Borrower. Upon any
such resignation, the Majority Banks shall have the right to appoint a successor
Agent. Unless a Default or Event of Default shall have occurred and be
continuing, such successor Agent shall be reasonably acceptable to the Borrower.
If no successor Agent shall have been so appointed by the Majority Banks and
shall have accepted such appointment within thirty (30) days after the retiring
Agent's giving of notice of resignation, then the retiring Agent may, on behalf
of the Banks, appoint a successor Agent, which shall be a financial institution
having a rating of not less than A or its equivalent by Standard & Poor's
Corporation. Upon the appointment of and acceptance by a successor Agent and so
long as no Default or Event of Default has occurred and is continuing, the
resigning Agent will pay to the successor Agent a PRO RATA portion of the annual
Agent's fee described in the Agent's Side Letter, calculated by multiplying the
annual amount of such fee by a fraction, the numerator of which is 365 MINUS the
number of days which have elapsed since the Borrower's most recent payment of
such fee and the denominator of which is 365. Upon the acceptance of any
appointment as Agent hereunder by a successor Agent, such successor Agent shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring Agent, and the retiring Agent shall be discharged
from its duties and obligations hereunder. After any retiring Agent's
resignation, the provisions of this Credit Agreement and the other Loan
Documents shall continue in effect for its benefit in respect of any actions
taken or omitted to be taken by it while it was acting as Agent.
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16. EXPENSES.
The Borrower agrees to pay (a) the reasonable costs of producing and
reproducing this Credit Agreement, the other Loan Documents and the other
agreements and instruments mentioned herein, (b) any taxes (including any
interest and penalties in respect thereto) payable by the Agent or any of the
Banks (other than taxes based upon the Agent's or any Bank's net income) on or
with respect to the transactions contemplated by this Credit Agreement (the
Borrower hereby agreeing to indemnify the Agent and each Bank with respect
thereto), (c) the reasonable fees, expenses and disbursements of the Agent's
Special Counsel or any local counsel to the Agent incurred in connection with
the preparation, administration or interpretation of the Loan Documents and
other instruments mentioned herein, each closing hereunder, and amendments,
modifications, approvals, consents or waivers hereto or hereunder, (d) the
reasonable fees, expenses and disbursements of the Agent incurred by the Agent
in connection with the evaluation of the Borrower and the other Transaction
Parties and with the preparation, administration or interpretation of the Loan
Documents and other instruments mentioned herein, including, without limitation,
commercial finance examination expenses, (e) all reasonable out-of-pocket
expenses (including without limitation reasonable attorneys' fees and costs,
which attorneys may be employees of any Bank or the Agent, and reasonable
consulting, accounting, appraisal, investment banking and similar professional
fees and charges) incurred by any Bank or the Agent in connection with (i) the
enforcement of or preservation of rights under any of the Loan Documents against
the Borrower or any of the other Transaction Parties or the administration
thereof after the occurrence of a Default or Event of Default and (ii) any
litigation, proceeding or dispute whether arising hereunder or otherwise, in any
way related to any Bank's or the Agent's relationship with the Borrower or any
of the other Transaction Parties (but excluding disputes solely between or among
the Banks), and (f) all reasonable fees, expenses and disbursements of any Bank
or the Agent incurred in connection with UCC searches. The covenants of this
ss.16 shall survive payment or satisfaction of all other Obligations.
17. INDEMNIFICATION.
The Borrower agrees to indemnify and hold harmless the Agent and the
Banks from and against any and all claims, actions and suits whether groundless
or otherwise, and from and against any and all liabilities, losses, damages and
expenses of every nature and character arising out of this Credit Agreement or
any of the other Loan Documents or the transactions contemplated hereby
including, without limitation, (a) any actual or proposed use by the Borrower or
any of the other Transaction Parties of the proceeds of any of the Loans or
Letters of Credit, (b) the Borrower or any of the other Transaction Parties
entering into or performing this Credit Agreement or any of the other Loan
Documents or (c) with respect to the Borrower and the other Transaction Parties
and their respective properties and assets, the violation of any Environmental
Law, the presence, disposal, escape, seepage, leakage, spillage, discharge,
emission, release or threatened release of any Hazardous Substances or any
action, suit, proceeding or investigation brought or threatened with respect to
any Hazardous Substances (including, but not limited to, claims with respect to
wrongful death, personal injury or damage to property), in each case including,
without limitation, the reasonable fees and disbursements of counsel and
allocated costs of internal counsel incurred in connection with any such
investigation, litigation or other proceeding; PROVIDED, HOWEVER, that such
indemnity shall not apply to the portion, if any, of any such
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losses, claims, damages, liabilities or related expenses of any Person seeking
indemnification that is determined by a court of competent jurisdiction by final
and nonappealable judgment to have resulted from the willful misconduct or gross
negligence of such Person seeking indemnification. In litigation, or the
preparation therefor, the Banks and the Agent shall be entitled to select their
own counsel and, in addition to the foregoing indemnity, the Borrower agrees to
pay promptly the reasonable fees and expenses of such counsel. If, and to the
extent that the obligations of the Borrower under this ss.17 are unenforceable
for any reason, the Borrower hereby agrees to make the maximum contribution to
the payment in satisfaction of such obligations which is permissible under
applicable law. The covenants contained in this ss.17 shall survive payment or
satisfaction in full of all other Obligations.
18. SURVIVAL OF COVENANTS, ETC.
All covenants, agreements, representations and warranties made herein,
in the Notes, in any of the other Loan Documents or in any documents or other
papers delivered by or on behalf of the Borrower or any of the other Transaction
Parties pursuant hereto shall be deemed to have been relied upon by the Banks
and the Agent, notwithstanding any investigation heretofore or hereafter made by
any of them, and shall survive the making by the Banks of any of the Loans and
the issuance, extension or renewal of any Letters of Credit, as herein
contemplated, and shall continue in full force and effect so long as any Letter
of Credit or any amount due under this Credit Agreement or the Notes or any of
the other Loan Documents remains outstanding or any Bank has any obligation to
make any Loans or the Agent has any obligation to issue, extend or renew any
Letter of Credit, and for such further time as may be otherwise expressly
specified in this Credit Agreement. All statements contained in any certificate
or other paper delivered to any Bank or the Agent at any time by or on behalf of
the Borrower or any of the other Transaction Parties pursuant hereto or in
connection with the transactions contemplated hereby shall constitute
representations and warranties by the Borrower or such other Transaction Party
hereunder.
19. ASSIGNMENT AND PARTICIPATION.
19.1. CONDITIONS TO ASSIGNMENT BY BANKS. Except as provided herein,
each Bank may assign to one or more Eligible Assignees all or a portion of its
interests, rights and obligations under this Credit Agreement (including all or
a portion of its Commitment Percentage and Commitment and the same portion of
the Loans at the time owing to it, the Notes held by it and its participating
interest in the risk relating to any Letters of Credit); PROVIDED that (i) each
of the Agent and, unless a Default or Event of Default shall have occurred and
be continuing, the Borrower shall have given its prior written consent to such
assignment, which consents will not be unreasonably withheld, (ii) each such
assignment shall be of a constant, and not a varying, percentage of all the
assigning Bank's rights and obligations under this Credit Agreement, (iii) each
assignment shall be in an amount that is a whole multiple of $5,000,000, (iv)
each Bank which is a Bank on the date hereof shall retain, free of any such
assignment, an amount of its Commitment of not less than $10,000,000 and (v) the
parties to such assignment shall execute and deliver to the Agent, for recording
in the Register (as hereinafter defined), an Assignment and Acceptance,
substantially in the form of EXHIBIT D hereto (an "Assignment and Acceptance"),
together with any Notes subject to such assignment. Upon such execution,
delivery, acceptance and recording, from and after the effective date specified
in each Assignment and Acceptance,
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which effective date shall be at least five (5) Business Days after the
execution thereof, (i) the assignee thereunder shall be a party hereto and, to
the extent provided in such Assignment and Acceptance, have the rights and
obligations of a Bank hereunder, and (ii) the assigning Bank shall, to the
extent provided in such assignment and upon payment to the Agent of the
registration fee referred to in ss.19.3, be released from its obligations under
this Credit Agreement.
19.2. CERTAIN REPRESENTATIONS AND WARRANTIES; LIMITATIONS; COVENANTS.
By executing and delivering an Assignment and Acceptance, the parties to the
assignment thereunder confirm to and agree with each other and the other parties
hereto as follows:
(a) other than the representation and warranty that it is the
legal and beneficial owner of the interest being assigned thereby free
and clear of any adverse claim, the assigning Bank makes no
representation or warranty, express or implied, and assumes no
responsibility with respect to any statements, warranties or
representations made in or in connection with this Credit Agreement or
the execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Credit Agreement, the other Loan Documents
or any other instrument or document furnished pursuant hereto or the
attachment, perfection or priority of any security interest or
mortgage,
(b) the assigning Bank makes no representation or warranty and
assumes no responsibility with respect to the financial condition of
the Borrower and the other Transaction Parties or any other Person
primarily or secondarily liable in respect of any of the Obligations,
or the performance or observance by the Borrower and the other
Transaction Parties or any other Person primarily or secondarily liable
in respect of any of the Obligations of any of their obligations under
this Credit Agreement or any of the other Loan Documents or any other
instrument or document furnished pursuant hereto or thereto;
(c) such assignee confirms that it has received a copy of this
Credit Agreement, together with copies of the most recent financial
statements referred to in ss.7.4 and ss.8.4 And such other documents
and information as it has deemed appropriate to make its own credit
analysis and decision to enter into such Assignment and Acceptance;
(d) such assignee will, independently and without reliance upon
the assigning Bank, the Agent or any other Bank and based on such
documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking
action under this Credit Agreement;
(e) such assignee represents and warrants that it is an Eligible
Assignee;
(f) such assignee appoints and authorizes the Agent to take such
action as agent on its behalf and to exercise such powers under this
Credit Agreement and the other Loan Documents as are delegated to the
Agent by the terms hereof or thereof, together with such powers as are
reasonably incidental thereto;
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(g) such assignee agrees that it will perform in accordance with
their terms all of the obligations that by the terms of this Credit
Agreement are required to be performed by it as a Bank;
(h) such assignee represents and warrants that it is legally
authorized to enter into such Assignment and Acceptance; and
(i) such assignee acknowledges that it has made arrangements
with the assigning Bank satisfactory to such assignee with respect to
its PRO RATA share of Letter of Credit Fees in respect of outstanding
Letters of Credit.
19.3. REGISTER. The Agent shall maintain a copy of each Assignment and
Acceptance delivered to it and a register or similar list (the "Register") for
the recordation of the names and addresses of the Banks and the Commitment
Percentage of, and principal amount of the Loans owing to and Letter of Credit
Participations purchased by, the Banks from time to time. The entries in the
Register shall be conclusive, in the absence of manifest error, and the
Borrower, the Agent and the Banks may treat each Person whose name is recorded
in the Register as a Bank hereunder for all purposes of this Credit Agreement.
The Register shall be available for inspection by the Borrower and the Banks at
any reasonable time and from time to time upon reasonable prior notice. Upon
each recordation of an assignment under this ss.19, the assigning or assignee
Bank agrees to pay to the Agent a registration fee in the sum of $3,500.
19.4. NEW NOTES. Upon its receipt of an Assignment and Acceptance
executed by the parties to such assignment, together with each Note subject to
such assignment, the Agent shall (i) record the information contained therein in
the Register, and (ii) give prompt notice thereof to the Borrower and the Banks
(other than the assigning Bank). Within five (5) Business Days after receipt of
such notice, the Borrower, at its own expense, shall execute and deliver to the
Agent, in exchange for each surrendered Note, a new Note to the order of such
Eligible Assignee in an amount equal to the amount assumed by such Eligible
Assignee pursuant to such Assignment and Acceptance and, if the assigning Bank
has retained some portion of its obligations hereunder, a new Note to the order
of the assigning Bank in an amount equal to the amount retained by it hereunder.
Such new Notes shall provide that they are replacements for the surrendered
Notes, shall be in an aggregate principal amount equal to the aggregate
principal amount of the surrendered Notes, shall be dated the effective date of
such in Assignment and Acceptance and shall otherwise be substantially the form
of the assigned Notes. Within five (5) days of issuance of any new Notes
pursuant to this ss.19.4, the Borrower shall deliver an opinion of counsel,
addressed to the Banks and the Agent, relating to the due authorization,
execution and delivery of such new Notes and the legality, validity and binding
effect thereof, in form and substance satisfactory to the Banks. The surrendered
Notes shall be cancelled and returned to the Borrower within a reasonable time
following the issuance of any new Note.
19.5. PARTICIPATIONS. Each Bank may sell Participations to one or more
banks or other entities in all or a portion of such Bank's rights and
obligations under this Credit Agreement and the other Loan Documents; PROVIDED
that (i) each such participation shall be in an amount of not less than
$5,000,000, (ii) any such sale or participation shall not affect the rights and
duties of the selling Bank hereunder to the Borrower and (iii) the only rights
granted to the participant pursuant to such participation arrangements with
respect to
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waivers, amendments or modifications of the Loan Documents shall be the rights
to approve waivers, amendments or modifications that would reduce the principal
of or the interest rate on any Loans, extend the term or increase the amount of
the Commitment of such Bank as it relates to such participant, reduce the amount
of any commitment fees or Letter of Credit Fees to which such participant is
entitled or extend any regularly scheduled payment date for principal or
interest.
19.6. DISCLOSURE. The Borrower agrees that, in addition to disclosures
made in accordance with standard and customary banking practices and in
accordance with the requirements of ss.28 hereof, any Bank may disclose
information obtained by such Bank pursuant to this Credit Agreement to assignees
or participants and potential assignees or participants hereunder; PROVIDED that
such assignees or participants or potential assignees or participants shall
agree (i) to treat in confidence such information unless such information
otherwise becomes public knowledge, (ii) not to disclose such information to a
third party, except as required by law or legal process and (iii) not to make
use of such information for purposes of transactions unrelated to such
contemplated assignment or participation.
19.7. ASSIGNEE OR PARTICIPANT AFFILIATED WITH THE BORROWER. If any
assignee Bank is an Affiliate of the Borrower, then any such assignee Bank shall
have no right to vote as a Bank hereunder or under any of the other Loan
Documents for purposes of granting consents or waivers or for purposes of
agreeing to amendments or other modifications to any of the Loan Documents or
for purposes of making requests to the Agent pursuant to ss.13.1 or ss.13.2, and
the determination of the Majority Banks shall For all purposes of this Agreement
and the other Loan Documents be made without regard to such assignee Bank's
interest in any of the Loans. If any Bank sells a participating interest in any
of the Loans or Reimbursement Obligations to a participant, and such participant
is the Borrower or an Affiliate of the Borrower, then such transferor Bank shall
promptly notify the Agent of the sale of such participation. A transferor Bank
shall have no right to vote as a Bank hereunder or under any of the other Loan
Documents for purposes of granting consents or waivers or for purposes of
agreeing to amendments or modifications to any of the Loan Documents or for
purposes of making requests to the Agent pursuant to ss.13.1 or ss.13.2 to the
extent that such participation is beneficially owned by the Borrower or Any
Affiliate of the Borrower, and the determination of the Majority Banks shall for
all purposes of this Agreement and the other Loan Documents be made without
regard to the interest of such transferor Bank in the Loans to the extent of
such participation.
19.8. MISCELLANEOUS ASSIGNMENT PROVISIONS. Any assigning Bank shall
retain its rights to be indemnified pursuant to ss.16 and ss.17 with respect to
any claims or actions arising prior to the date of such assignment. If any
assignee Bank is not incorporated under the laws of the United States of America
or any state thereof, it shall, prior to the date on which any interest or fees
are payable hereunder or under any of the other Loan Documents for its account,
deliver to the Borrower and the Agent certification as to its exemption from
deduction or withholding of any United States federal income taxes. Anything
contained in this ss.19 to the contrary notwithstanding, any Bank may at any
time pledge all or any portion of its interest and rights under this Credit
Agreement (including all or any portion of its Notes) to any of the twelve
Federal Reserve Banks organized under ss.4 of the Federal Reserve Act, 12 U.S.C.
ss.341. No such pledge or the enforcement thereof shall release such pledgor
Bank from its obligations hereunder or under any of the other Loan Documents.
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19.9. ASSIGNMENT BY BORROWER. The Borrower shall not assign or transfer
any of its rights or obligations under any of the Loan Documents without the
prior written consent of each of the Banks.
20. NOTICES, ETC.
Except as otherwise expressly provided in this Credit Agreement, all
notices and other communications made or required to be given pursuant to this
Credit Agreement or the Notes or any Letter of Credit Applications shall be in
writing and shall be delivered in hand, mailed by United States registered or
certified first class mail, postage prepaid, sent by overnight courier, or sent
by telegraph, telecopy, facsimile or telex and confirmed by delivery via courier
or postal service, addressed as follows:
(a) if to the Borrower, at 12A Manor Parkway, Salem, New
Hampshire 03709, Attention: Timothy P. Losik, or at such other address
for notice as the Borrower shall last have furnished in writing to the
Person giving the notice;
(b) if to the Agent, at 100 Federal Street, Boston,
Massachusetts 02110, USA, Attention: Jeffrey G. Millman, Vice
President, or Division Executive, or such other address for notice as
the Agent shall last have furnished in writing to the Person giving the
notice; and
(c) if to any Bank, at such Bank's address set forth on SCHEDULE
1 hereto, or such other address for notice as such Bank shall have last
furnished in writing to the Person giving the notice.
Any such notice or demand shall be deemed to have been duly given or
made and to have become effective (i) if delivered by hand, overnight courier or
facsimile to a responsible officer of the party to which it is directed, at the
time of the receipt thereof by such officer or the sending of such facsimile and
(ii) if sent by registered or certified first-class mail, postage prepaid, on
the third Business Day following the mailing thereof.
21. GOVERNING LAW.
THIS CREDIT AGREEMENT AND, EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED
THEREIN, EACH OF THE OTHER LOAN DOCUMENTS ARE CONTRACTS UNDER THE LAWS OF THE
COMMONWEALTH OF MASSACHUSETTS AND SHALL FOR ALL PURPOSES BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF SAID COMMONWEALTH OF MASSACHUSETTS
(EXCLUDING THE LAWS APPLICABLE TO CONFLICTS OR CHOICE OF LAW). THE BORROWER
AGREES THAT ANY SUIT FOR THE ENFORCEMENT OF THIS CREDIT AGREEMENT OR ANY OF THE
OTHER LOAN DOCUMENTS MAY BE BROUGHT IN THE COURTS OF THE COMMONWEALTH OF
MASSACHUSETTS OR ANY FEDERAL COURT SITTING THEREIN AND CONSENTS TO THE
NONEXCLUSIVE JURISDICTION OF SUCH COURT AND SERVICE OF PROCESS IN ANY SUCH SUIT
BEING MADE UPON THE BORROWER BY MAIL AT THE ADDRESS SPECIFIED IN SS.21. THE
BORROWER HEREBY WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE
VENUE OF
<PAGE> 70
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ANY SUCH SUIT OR ANY SUCH COURT OR THAT SUCH SUIT IS BROUGHT IN AN INCONVENIENT
COURT.
22. HEADINGS.
The captions in this Credit Agreement are for convenience of reference
only and shall not define or limit the provisions hereof.
23. COUNTERPARTS.
This Credit Agreement and any amendment hereof may be executed in
several counterparts and by each party on a separate counterpart, each of which
when executed and delivered shall be an original, and all of which together
shall constitute one instrument. In proving this Credit Agreement it shall not
be necessary to produce or account for more than one such counterpart signed by
the party against whom enforcement is sought.
24. ENTIRE AGREEMENT, ETC.
The Loan Documents and any other documents executed in connection
herewith or therewith express the entire understanding of the parties with
respect to the transactions contemplated hereby. Neither this Credit Agreement
nor any term hereof may be changed, waived, discharged or terminated, except as
provided in ss.26.
25. WAIVER OF JURY TRIAL.
THE BORROWER HEREBY WAIVES ITS RIGHT TO A JURY TRIAL WITH RESPECT TO
ANY ACTION OR CLAIM ARISING OUT OF ANY DISPUTE IN CONNECTION WITH THIS CREDIT
AGREEMENT, THE NOTES OR ANY OF THE OTHER LOAN DOCUMENTS, ANY RIGHTS OR
OBLIGATIONS HEREUNDER OR THEREUNDER OR THE PERFORMANCE OF SUCH RIGHTS AND
OBLIGATIONS. EXCEPT AS PROHIBITED BY LAW, THE BORROWER HEREBY WAIVES ANY RIGHT
IT MAY HAVE TO CLAIM OR RECOVER IN ANY LITIGATION REFERRED TO IN THE PRECEDING
SENTENCE ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES OR ANY
DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES. THE BORROWER (I)
CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY BANK OR THE AGENT HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH BANK OR THE AGENT WOULD NOT, IN
THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS AND (II)
ACKNOWLEDGES THAT THE AGENT AND THE BANKS HAVE BEEN INDUCED TO ENTER INTO THIS
CREDIT AGREEMENT AND THE OTHER LOAN DOCUMENTS TO WHICH IT IS A PARTY BY, AMONG
OTHER THINGS, THE WAIVERS AND CERTIFICATIONS CONTAINED HEREIN.
26. CONSENTS, AMENDMENTS, WAIVERS, ETC.
Any consent or approval required or permitted by this Credit Agreement
to be given by all of the Banks may be given, and any term of this Credit
Agreement, the other Loan Documents or any other instrument related hereto or
mentioned herein may be amended, and the performance or observance by the
Borrower or any of the other Transaction Parties of any terms of this Credit
Agreement, the other Loan Documents or such other instrument
<PAGE> 71
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or the continuance of any Default or Event of Default may be waived (either
generally or in a particular instance and either retroactively or prospectively)
with, but only with, the written consent of the Borrower and the written consent
of the Majority Banks. Notwithstanding the foregoing, the rate of interest on
the Notes (other than interest accruing pursuant to ss.5.10.2 following the
effective date of any waiver by the Majority Banks of the Default or Event oF
Default relating thereto), the term of the Notes, the amount of the Commitments
of the Banks, and the amount of commitment fee or Letter of Credit Fees
hereunder may not be changed, and no scheduled date for the payment of
principal, interest or fees may be postponed or extended without the written
consent of the Borrower and the written consent of each Bank affected thereby;
the definition of Majority Banks and the terms of this Section 26 may not be
amended and no collateral or guaranty may be released without the written
consent of all of the Banks; and the amount of the Agent's Fee or any Letter of
Credit Fees payable for the Agent's account and ss.15 may not be amended without
the written consent of the Agent. No waiver shall extend to or affect any
obligation not expressly waived or impair any right consequent thereon. No
course of dealing or delay or omission on the part of the Agent or any Bank in
exercising any right shall operate as a waiver thereof or otherwise be
prejudicial thereto. No notice to or demand upon the Borrower shall entitle the
Borrower to other or further notice or demand in similar or other circumstances.
27. SEVERABILITY.
The provisions of this Credit Agreement are severable and if any one
clause or provision hereof shall be held invalid or unenforceable in whole or in
part in any jurisdiction, then such invalidity or unenforceability shall affect
only such clause or provision, or part thereof, in such jurisdiction, and shall
not in any manner affect such clause or provision in any other jurisdiction, or
any other clause or provision of this Credit Agreement in any jurisdiction.
28. TREATMENT OF CERTAIN CONFIDENTIAL INFORMATION.
28.1. SHARING OF INFORMATION WITH SECTION 20 SUBSIDIARY. The Borrower
acknowledges that from time to time financial advisory, investment banking and
other services may be offered or provided to the Borrower in connection with
this Credit Agreement or otherwise, by a Section 20 Subsidiary. The Borrower
hereby authorizes (a) such Section 20 Subsidiary to share with the Agent and
each Bank any information delivered to such Section 20 Subsidiary by the
Borrower, and (b) the Agent and each Bank to share with such Section 20
Subsidiary any information delivered to the Agent or such Bank by the Borrower
pursuant to this Credit Agreement, or in connection with the decision of such
Bank to enter into this Credit Agreement; it being understood, in each case,
that any such Section 20 Subsidiary receiving such information shall be bound by
the confidentiality provisions of this Credit Agreement. Such authorization
shall survive the payment and satisfaction in full of all of the Obligations.
28.2. CONFIDENTIALITY. Each of the Agent and the Banks agree to keep
any information delivered or made available to it by or on behalf of the
Borrower or any of the other Transaction Parties confidential from anyone other
than its employees, officers, attorneys and other advisors or any Section 20
Subsidiary, PROVIDED that nothing herein shall prevent the Agent or such Bank
from disclosing such information upon the order or
<PAGE> 72
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request of any court or administrative agency or authority, upon the request or
demand of any regulatory agency or authority, to the extent that such
information has been publicly disclosed other than as a result of a disclosure
by the Agent or such Bank, otherwise as required by law or to any actual or
potential assignee or participant hereof pursuant to ss.19.6. The Borrower
agrees that it will, and will cause each of the other Transaction Parties to,
keep any information delivered or made available to it by or on behalf of the
Agent or any of the Banks (including, without limitation, the amount of any fees
payable to the Agent pursuant to ss.5.1 and the Agent's Side Letter)
confidential from anyone other that its employees, officers, attorneys and other
advisors, PROVIDED that nothing herein shall prevent the Borrower from
disclosing such information upon the order or request of any court or
administrative agency or authority, upon the request or demand of any regulatory
agency or authority, to the extent that such information has been publicly
disclosed other than as a result of disclosure by the Borrower or any of the
other Transaction Parties, or otherwise as required by law.
28.3. PRIOR NOTIFICATION. Unless specifically prohibited by applicable
law or court order, each of the Banks and the Agent shall, prior to disclosure
thereof, notify the Borrower of any request for disclosure of any such
non-public information by any governmental agency or representative thereof
(other than any such request in connection with an examination of the financial
condition of such Bank or the Agent by such governmental agency) or pursuant to
legal process.
28.4. OTHER. In no event shall any Bank or the Agent be obligated or
required to return any materials furnished to it or any Section 20 Subsidiary by
the Borrower. The obligations of each Bank under this ss.28 shall supersede and
replace the obligations of such Bank under any confidentiality letter in respect
of this financing signed and delivered by such Bank to the Borrower prior to the
date hereof and shall be binding upon any assignee of, or purchaser of any
participation in, any interest in any of the Loans or Reimbursement Obligations
from any Bank.
29. TRANSITIONAL ARRANGEMENTS
29.1. PRIOR CREDIT AGREEMENT SUPERSEDED. This Agreement shall supersede
the Original Credit Agreement in its entirety, except as provided in this ss.29.
On the Closing Date, the rights and obligations of the parties (other than the
Exiting Banks) under the Original Credit Agreement and the "Notes" (as defined
in the Original Credit Agreement) issued in favor of the Banks (as defined in
the Original Credit Agreement) under the Original Credit Agreement (other than
any rights available to the Agent and the Banks (as defined in the Original
Credit Agreement) under ss.16 and ss.17 of the Original Credit Agreement), shall
be subsumed within and be governed by this Credit Agreement and the other Loan
Documents, PROVIDED, HOWEVER, that each of the "Loans" (as defined in the
Original Credit Agreement) outstanding under the Original Credit Agreement on
the Closing Date shall, for purposes of this Credit Agreement, be Loans, and
shall continue to bear interest or be subject to fees at the respective rates in
effect immediately prior to the Closing Date, with the Borrower being
responsible for, and hereby confirming its obligation to pay, any breakage costs
associated with the payment of Eurodollar Rate Loans under the Original Credit
Agreement on a date which is not the last day of the applicable Interest Period
(as defined in the Original Credit Agreement) with respect thereto; and PROVIDED
FURTHER that the rights and obligations of the Exiting Banks under the Original
Credit
<PAGE> 73
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Agreement and the related Loan Documents (as defined in the Original Credit
Agreement) shall be terminated in accordance with the terms of, and upon the
Exiting Banks' receipt of the payment specified in the separate pay-off letters
dated as of the date hereof among each Exiting Bank, the Company and the Agent.
29.2. RETURN AND CANCELLATION OF NOTES. Upon its receipt of its Note or
Notes hereunder on the Closing Date, each Bank will promptly return to the
Company, marked "Canceled", any notes of the Company held by such Bank pursuant
to the Original Credit Agreement.
29.3. FEES UNDER SUPERSEDED AGREEMENT. All commitment, Agent's and
other fees and expenses owing or accruing under or in respect of the Original
Credit Agreement through the Closing Date shall be calculated as of the Closing
Date (prorated in the case of any fractional periods), and shall be paid in
accordance with the method, and on the dates, specified in the Original Credit
Agreement, as if the Original Credit Agreement were still in effect.
[Remainder of page intentionally left blank]
<PAGE> 74
IN WITNESS WHEREOF, the undersigned have duly executed this Credit
Agreement as a sealed instrument as of the date first set forth above.
HADCO CORPORATION
By: /s/ Timothy P. Losik
-----------------------------------------
Name: Timothy P. Losik
Title: Chief Financial Officer
BANKBOSTON, N.A., individually and as Agent
By: /s/ Jeffrey G. Millman
-----------------------------------------
Name: Jeffrey G. Millman
Title: Vice President
ABN AMRO BANK N.V.
By: /s/Brian M. Horgan
-----------------------------------------
Name: Brian M. Horgan
Title: Vice President
THE BANK OF TOKYO - MITSUBISHI TRUST COMPANY
By: /s/ Michael J. Cronin
-----------------------------------------
Name: Michael J. Cronin
Title: Vice President
THE FIRST NATIONAL BANK OF CHICAGO
By: /s/ Stephen E. McDonald
-----------------------------------------
Name: Stephen E. McDonald
Title: First Vice President
<PAGE> 75
KEYBANK NATIONAL ASSOCIATION.
By: /s/ Michael J. Landim
-----------------------------------------
Name: Michael J. Landim
Title: Vice President
BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION
By: /s/ Roger J. Fleischmann, Jr.
-----------------------------------------
Name: Roger J. Fleischmann, Jr.
Title: Vice President
THE BANK OF NOVA SCOTIA
By: /s/ [unreadable]
-----------------------------------------
Name:
Title: Authorized Signatory
THE FUJI BANK, LIMITED
By: /s/ Kazuyuki Nishimura
-----------------------------------------
Name: Kazuyuki Nishimura
Title: Sr. Vice President & Group Head
SUNTRUST BANK, ATLANTA
By: /s/ W. David Wisdom
-----------------------------------------
Name: W. David Wisdon
Title: Group Vice President
By: /s/ Laura G. Harrison
-----------------------------------------
Name: Laura G. Harrison
Title: Assistant Vice President
THE INDUSTRIAL BANK OF JAPAN, LIMITED
By: /s/ J. Kenneth Biegen
-----------------------------------------
Name: J. Kenneth Biegen
Title: Senior Vice President
<PAGE> 76
CORESTATES BANK, N.A.
By: /s/ Matthew T. Panarese
-----------------------------------------
Name: Matthew T. Panarese
Title: Vice President
STATE STREET BANK AND TRUST COMPANY
By: /s/ Bruce S. Daniels
-----------------------------------------
Name: Bruce S. Daniels
Title: Vice President
MELLON BANK, N.A.
By: /s/ R. Jane Wisdrieck
-----------------------------------------
Name:
Title:
THE SANWA BANK, LIMITED
By: /s/ Takayoshi Futae
-----------------------------------------
Name: Takayoshi Futae
Title: Deputy General Manager
THE SUMITOMO BANK, LIMITED
By: /s/ Daniel G. Eastman
-----------------------------------------
Name: Daniel G. Eastman
Title: Vice President & Manager
By: /s/ Alfred DeGennis
-----------------------------------------
Name: Alfred DeGennis
Title: Vice President
<PAGE> 1
EXHIBIT 2
AGREEMENT AND PLAN OF MERGER
AMONG
HADCO CORPORATION
HADCO ACQUISITION CORP. II
AND
CONTINENTAL CIRCUITS CORP.
DATED FEBRUARY 16, 1998
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<S> <C>
ARTICLE I
THE OFFER..............................................................................................1
1.1 The Offer.............................................................................1
1.2 Offer Documents.......................................................................3
1.3 Company Actions.......................................................................4
1.4 Directors.............................................................................5
ARTICLE II
THE MERGER..............................................................................................6
2.1 The Merger ...........................................................................6
2.2 Closing...............................................................................6
2.3 Effective Time of the Merger..........................................................6
2.4 Effects of the Merger.................................................................6
ARTICLE III
EFFECT OF THE MERGER ON THE CAPITAL STOCK OF
THE CONSTITUENT CORPORATIONS; EXCHANGE OF CERTIFICATES..................................................7
3.1 Effect on Capital Stock...............................................................7
(a) Capital Stock of Sub.................................................7
(b) Cancellation of Treasury Stock and
Parent-Owned Stock...................................................7
3.2 Conversion of Securities..............................................................7
3.3 Payment for Shares....................................................................8
(a) Paying Agent.........................................................8
(b) Payment Procedures...................................................8
(c) Termination of Payment Fund; Interest................................9
(d) No Liability.........................................................9
(e) Withholding Rights ..................................................9
3.4 Stock Transfer Books..................................................................10
3.5 Stock Options.........................................................................10
3.6 Dissenting Shares.....................................................................10
ARTICLE IV
REPRESENTATIONS AND WARRANTIES..........................................................................11
4.1 Representations and Warranties of the Company.........................................11
(a) Organization, Standing and Power.....................................11
(b) Capital Structure....................................................11
(c) Authority; No Violations; Consents and Approvals.....................12
(d) SEC Documents........................................................14
</TABLE>
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<TABLE>
<S> <C>
(e) Information Supplied.................................................14
(f) Compliance with Applicable Laws......................................15
(g) Litigation...........................................................15
(h) Taxes................................................................15
(i) Pension And Benefit Plans; ERISA.....................................17
(j) Absence of Certain Changes or Events.................................19
(k) No Undisclosed Material Liabilities..................................19
(l) Vote Required........................................................19
(m) Labor Matters........................................................20
(n) Intangible Property..................................................20
(o) Environmental Matters................................................21
(p) Real Property........................................................23
(q) Insurance............................................................24
(r) Board Recommendation.................................................24
(s) Material Contracts...................................................25
(t) Related Party Transactions...........................................25
(u) Indebtedness.........................................................26
(v) Liens................................................................26
(w) Opinion of Financial Advisor.........................................26
4.2 Representations, Warranties, and Covenants of Parent and Sub..........................26
(a) Organization, Standing and Power.....................................26
(b) Authority; No Violations; Consents and Approvals.....................26
(c) Information Supplied.................................................27
(d) Board Recommendation.................................................28
(e) Financing............................................................28
(f) Interim Operations of Sub............................................28
ARTICLE V
COVENANTS RELATING TO CONDUCT OF BUSINESS...............................................................28
5.1 Covenants of the Company..............................................................28
(a) Ordinary Course......................................................28
(b) Dividends; Changes in Stock..........................................28
(c) Issuance of Securities...............................................28
(d) Governing Documents..................................................29
(e) No Solicitation......................................................29
(f) No Acquisitions......................................................30
(g) No Dispositions......................................................30
(h) SEC Filings..........................................................31
(i) No Dissolution, Etc..................................................31
(j) Other Actions........................................................31
(k) Certain Employee Matters.............................................31
(l) Indebtedness; Agreements.............................................31
(m) Accounting...........................................................32
</TABLE>
ii
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<TABLE>
<S> <C>
(n) Capital Expenditures.................................................32
ARTICLE VI
ADDITIONAL AGREEMENTS...................................................................................32
6.1 Preparation of the Proxy Statement; Company Stockholders
Meeting; Merger without a Company Stockholders Meeting................................32
6.2 Access to Information.................................................................33
6.3 Legal Conditions to Merger............................................................33
6.4 Fees and Expenses.....................................................................33
6.5 Brokers or Finders....................................................................34
6.6 Indemnification; Directors' and Officers' Insurance...................................34
6.7 Reasonable Efforts....................................................................36
6.8 Conduct of Business of Sub............................................................36
6.9 Publicity.............................................................................36
ARTICLE VII
CONDITIONS PRECEDENT....................................................................................36
7.1 Conditions to Each Party's Obligation to Effect the Merger............................36
(a) Stockholder Approval.................................................36
(b) HSR Act..............................................................36
(c) No Injunctions or Restraints.........................................37
7.2 Conditions of Obligations of Parent and Sub...........................................37
(a) Payment for Shares...................................................37
(b) Representations and Warranties.......................................37
(c) Performance of Obligations of the Company............................37
(d) Consents, etc........................................................37
(e) No Material Adverse Change...........................................37
ARTICLE VIII
TERMINATION AND AMENDMENT...............................................................................38
8.1 Termination...........................................................................38
8.2 Effect of Termination.................................................................39
8.3 Amendment.............................................................................39
8.4 Extension; Waiver.....................................................................39
ARTICLE IX
GENERAL PROVISIONS......................................................................................39
9.1 Nonsurvival of Representations, Warranties and Agreements.............................39
9.2 Notices...............................................................................39
9.3 Interpretation........................................................................41
9.4 Counterparts..........................................................................41
9.5 Entire Agreement; No Third Party Beneficiaries; Rights of
Ownership.............................................................................41
9.6 Governing Law.........................................................................41
9.7 No Remedy in Certain Circumstances....................................................41
</TABLE>
iii
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<TABLE>
<S> <C>
9.8 Assignment............................................................................42
9.9 Obligations of Sub....................................................................42
</TABLE>
iv
<PAGE> 6
Glossary of Defined Terms
Defined Terms Defined in Section
90% Tender Condition 1.1(c)
Acquisition Proposal 5.1(e)(ii)
Additional SEC Contracts 4.1(s)
Agreement preamble
Benefit Plans 4.1(i)(i)(A)
Board Percentage 1.4(a)
Cash Merger 1.1(c)
CERCLA 4.1(o)(i)(B)
Certificate of Merger 2.3
Certificates 3.3(b)
Closing 2.2
Closing Date 2.2
Code 3.3(e)
Company preamble
Company Common Stock preamble
Company Intangible Property 4.1(n)(i)
Company Intangible Property Licenses 4.1(n)(iii)
Company Litigation 4.1(g)
Company Order 4.1(g)
Company Permits 4.1(f)
Company SEC Documents 4.1(d)
Company Stockholder Approval 4.1(c)(iv)
Company Voting Debt 4.1(b)
Confidentiality Agreement 6.2
Constituent Corporations 2.1
Continuing Director 1.4(b)
Control 3.2(a)
Designated Person 6.4(c)
DGCL 2.1
Dissenting Shares 3.6
Effective Time 2.3
Employee Arrangements 4.1(i)(i)(B)
Environmental Costs and Liabilities 4.1(o)(i)(A)
Environmental Law 4.1(o)(i)(B)
Exchange Act 1.1(a)
Fairness Opinion 4.1(w)
GAAP 4.1(d)
Governmental Entity 4.1(c)(iv)
v
<PAGE> 7
Hazardous Material 4.1(o)(i)(C)
HSR Act 4.1(c)(iv)
Indebtedness 4.1(u)
Indemnified Parties 6.6
Indemnified Liabilities 6.6
Injunction 7.1(c)
Laws 4.1(c)(iii)
Majority Tender Condition 1.1(c)
Material Adverse Effect 4.1(a)
Material Contracts 4.1(s)
Material Employment Contracts 4.1(s)
Merger 2.1
Merger Consideration 3.2(a)
OSHA 4.1(o)(i)(B)
Offer 1.1(a)
Offer Consideration 1.1(a)
Offer Documents 1.2
Option Consideration 3.5(a)
Options 3.5(a)
Parent preamble
Paying Agent 3.3(a)
Payment Fund 3.3(a)
Preferred Stock 4.1(b)
Permitted Investments 3.3(a)
Proxy Statement 4.1(c)(iv)
Proxy Trigger Date 6.1(a)
Real Property 4.1(p)(i)
Real Property Leases 4.1(p)(ii)
Release 4.1(o)(i)(D)
Remedial Action 4.1(o)(i)(E)
Representatives 5.1(e)
SEC 1.1(b)
SEC Contracts 4.1(s)
Schedule 14D-1 1.2
Schedule 14D-9 1.3
Securities Act 4.1(d)
Shares preamble
Stock Option Plans 3.5(a)
Stock Purchase Plan 3.5(b)
Stockholders Agreement preamble
Sub preamble
Subsidiary 3.2(a)
Superior Proposal 5.1(e)(i)
Surviving Corporation 2.1
Termination Fee 6.4(b)
vi
<PAGE> 8
Trigger Event 6.4(b)
Violation 4.1(c)(iii)
WARN 4.1(m)(v)
vii
<PAGE> 9
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF Merger, dated as of February 16, 1998 (this
"Agreement"), is made and entered into by Hadco Corporation, a Massachusetts
corporation ("Parent"), Hadco Acquisition Corp. II, a Delaware corporation and a
direct wholly-owned subsidiary of Parent ("Sub"), and Continental Circuits
Corp., a Delaware corporation (the "Company").
WHEREAS, the respective Boards of Directors of Parent, Sub and the
Company have unanimously approved the acquisition of the Company by Parent, by
means of the merger of Sub with and into the Company, upon the terms and subject
to the conditions set forth in the Agreement;
WHEREAS, to effectuate the acquisition, Parent and the Company each
desire that Sub commence a cash tender offer to purchase all of the outstanding
shares of common stock, par value $.01 per share, of the Company ("Shares" or
"Company Common Stock"), upon the terms and subject to the conditions set forth
in this Agreement and the Offer Documents (as defined in Section 1.2), and the
Board of Directors of the Company has unanimously approved such tender offer and
agreed to recommend to its stockholders that they accept the tender offer and
tender their Company Common Stock pursuant thereto;
WHEREAS, as an inducement to Parent and Sub entering into this
Agreement (i) certain beneficial and record holders of the Company Common Stock
are entering into an agreement (the "Stockholders Agreement") providing for the
tender of their Shares pursuant to the Offer (as defined in Section 1.1) and
certain other matters with respect to their Shares and (ii) the Company has
approved the execution and delivery of the Stockholders Agreement by the parties
thereto; and
WHEREAS, Parent, Sub and the Company desire to make certain
representations, warranties, covenants and agreements in connection with the
Offer and the Merger (as defined in Section 2.1) and also to prescribe various
conditions to consummation thereof.
NOW, THEREFORE, in consideration of the foregoing and the
representations, warranties, covenants and agreements herein contained, the
parties hereto, intending to be legally bound, hereby agree as follows:
ARTICLE I
THE OFFER
1.1 The Offer.
(a) Provided that none of the events set forth in Exhibit A
hereto shall have occurred and be continuing, as promptly as practicable (but in
any event not later than five
1
<PAGE> 10
business days after the public announcement of the execution and delivery of
this Agreement), Sub shall commence (within the meaning of Rule 14d-2 under the
Securities Exchange Act of 1934, as amended (the "Exchange Act")), an offer to
purchase (the "Offer") all outstanding shares of the Company Common Stock at a
price of $23.90 per share, net to the seller in cash (the "Offer
Consideration"). The obligations of Parent and Sub to commence the Offer,
consummate the Offer, accept for payment and pay for shares of Company Common
Stock validly tendered in the Offer and not withdrawn shall be subject only to
those conditions set forth on Exhibit A hereto.
(b) Parent and Sub expressly reserve the right to amend or
modify the terms of the Offer, except that, without the prior written consent of
the Company, Sub shall not (and Parent shall not cause Sub to) (i) decrease the
Offer Consideration or change the form of consideration therefor or decrease the
number of Shares sought pursuant to the Offer, (ii) change, in any material
respect, the conditions to the Offer, (iii) impose additional material
conditions to the Offer, (iv) waive the condition (sometimes called the "90%
Tender Condition") that there shall be validly tendered and not withdrawn prior
to the time the Offer expires a number of shares of Company Common Stock which
constitutes at least 90% of the Shares outstanding on a fully-diluted basis on
the date of purchase ("on a fully-diluted basis" having the following meaning,
as of any date: the number of shares of Company Common Stock outstanding,
together with Shares which the Company may be required to issue pursuant to
obligations outstanding at that date under stock option, stock purchase or
similar benefit plans, or otherwise); provided that Sub shall have the right, at
its option and without the Company's consent, to modify such condition to reduce
the minimum number of shares of Company Common Stock being sought to a number of
Shares that constitutes at least a majority of the Shares outstanding on a
fully-diluted basis on the date of purchase (the condition as so modified,
sometimes called the "Majority Tender Condition"), (v) extend the expiration
date of the Offer (except that Sub may extend the expiration date of the Offer
(a) as required by law, (b) for up to ten (10) business days after the initial
expiration date or for longer periods (not to exceed 90 calendar days from the
date of commencement of the Offer) in the event that any condition to the Offer
is not satisfied, or (c) for one or more times for an aggregate period of up to
15 days (not to exceed 90 calendar days from the date of commencement for any
reason other than those specified in the immediately preceding clause (a) or
clause (b))), or (vi) amend any term of the Offer in any manner materially
adverse to holders of shares of Company Common Stock; provided, however, that,
except as set forth above, Sub may waive any other condition to the Offer in its
sole discretion and, provided further, that the Offer may be extended in
connection with an increase in the consideration to be paid pursuant to the
Offer so as to comply with applicable rules and regulations of the United States
Securities and Exchange Commission (the "SEC"). Assuming the prior satisfaction
or waiver of the conditions to the Offer, Sub shall accept for payment, and pay
for, in accordance with the terms of the Offer, all shares of Company Common
Stock validly tendered and not withdrawn pursuant to the Offer as soon as
practicable after the expiration date thereof. The initial expiration date of
the Offer shall be twenty business days from the commencement; further provided,
however, that Sub shall extend the expiration date of the Offer for up to 30
additional days in the event and to the extent that the events in both clauses
(i) and (ii) below have occurred: (i) the conditions to the Offer are not
satisfied solely because the applicable waiting periods under the HSR Act have
not expired or been terminated;
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and (ii) the Company has made the required filing described in Section
4.1(c)(iv)(A) within 10 days of the date hereof.
(c) Parent, Sub and the Company agree that if the Majority
Tender Condition and all of the conditions to the Offer other than the 90%
Tender Condition shall have been satisfied as of the expiration date of the
Offer (as such expiration date may have been extended in accordance with Section
1.1(b)), then Parent and Sub shall either (i) waive the 90% Tender Condition and
substitute the Majority Tender Condition or (ii) terminate the Offer and require
the Company to solicit the approval of its stockholders for a cash merger (the
"Cash Merger") of the Company with Sub in accordance with Article II hereof, and
a Cash Merger shall be governed by the other provisions of this Agreement
relating to a Merger, Effective Time, Proxy Statement, Merger Consideration,
Closing Date and like terms, all of which shall apply to a Cash Merger, and in
such case each issued and outstanding share of the Company Common Stock, options
to acquire shares of Company Common Stock and shares of the capital stock of Sub
will be treated in accordance with Article III hereof. If pursuant to the
provisions of clause (ii) of the preceding sentence Parent and Sub elect to
terminate the Offer and pursue the Cash Merger, the Company and Parent shall
promptly undertake the actions contemplated by Section 6.1 hereof as if Sub had
accepted for payment and paid for Shares in the Offer, the obligations of Parent
and Sub to effect the Cash Merger shall be subject to Section 8 and to the
satisfaction of the conditions set forth on Exhibit A hereto and the Company and
its Subsidiaries shall continue to have the obligations in Section 5 and 6 and
to be subject to the conditions set forth in Sections 7.1 and 7.2 in respect of
the Cash Merger.
1.2 Offer Documents. As soon as practicable on the date of
commencement of the Offer, Parent and Sub shall file or cause to be filed with
the SEC a Tender Offer Statement on Schedule 14D-1 (the "Schedule 14D-1") with
respect to the Offer which shall contain the offer to purchase and related
letter of transmittal and other ancillary Offer documents and instruments
pursuant to which the Offer will be made (collectively with any supplements or
amendments thereto, the "Offer Documents") and shall contain (or shall be
amended in a timely manner to contain) all information which is required to be
included therein in accordance with the Exchange Act and the rules and
regulations thereunder and any other applicable law, and shall conform in all
material respects with the requirements of the Exchange Act and any other
applicable law; provided, however, that no agreement or representation hereby is
made or shall be made by Parent or Sub with respect to information supplied by
the Company expressly for inclusion in, or with respect to Company information
derived from the Company's public SEC filings that is included or incorporated
by reference in, the Offer Documents. Parent, Sub and the Company each agree
promptly to correct any information provided by them for use in the Offer
Documents if and to the extent that it shall have become false or misleading in
any material respect and Sub further agrees to take all lawful action necessary
to cause the Offer Documents as so corrected to be filed promptly with the SEC
and to be disseminated to holders of Company Common Stock, in each case as and
to the extent required by applicable law. In conducting the Offer, Parent and
Sub shall comply in all material respects with the provisions of the Exchange
Act and any other applicable law. The Company and its counsel shall be given a
reasonable opportunity to review and comment on the Offer Documents and any
amendments thereto prior to the filing thereof with the SEC.
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1.3 Company Actions. The Company hereby consents to the Offer and
represents that (a) its Board of Directors (at a meeting duly called and held)
has unanimously (i) determined that each of this Agreement, the Offer and the
Merger are fair to and in the best interests of the stockholders of the Company,
(ii) approved the execution, delivery and performance of this Agreement and the
Stockholders Agreement and the consummation of the transactions contemplated
hereby and thereby, including the Offer and the Merger, and a majority of the
members of the Board of Directors of the Company voting for such approval were
and are Continuing Directors (as defined in and for purposes of Section 11(b) of
the Company's Restated Certificate of Incorporation), and (iii) after
considering its fiduciary duties under applicable law upon the advice of
counsel, resolved to recommend acceptance of the Offer, approval and adoption of
this Agreement and approval of the Merger by the holders of Company Common
Stock, and (b) A.G. Edwards & Sons, Inc. ("Edwards") has delivered to the Board
of Directors of the Company its written opinion that the Offer Consideration to
be received by the holders of Company Common Stock in the Offer and in the
Merger is fair, from a financial point of view, to such holders. The Board of
Directors of the Company shall not withdraw, modify or amend its approval or
recommendation of the Offer, this Agreement, the Stockholders Agreement or the
Merger unless the Board of Directors of the Company shall conclude in good faith
upon the advice of counsel that such action is required under applicable law for
the discharge of such Board's fiduciary duties. The Company hereby consents to
the inclusion in the Offer Documents of the recommendation referred to in this
Section 1.3. The Company hereby agrees to file with the SEC simultaneously with
the filing by Parent and Sub of the Schedule 14D-1, a
Solicitation/Recommendation Statement on Schedule 14D-9 (together with all
amendments and supplements thereto, the "Schedule 14D-9") containing such
recommendations of the Board of Directors of the Company in favor of the Offer
and the Merger and otherwise complying with Rule 14d-9 under the Exchange Act.
The Schedule 14D-9 shall comply in all material respects with the Exchange Act
and any other applicable law and shall contain (or shall be amended in a timely
manner to contain) all information which is required to be included therein in
accordance with the Exchange Act and the rules and regulations thereunder and
any other applicable law. The Company, Parent and Sub each agree promptly to
correct any information provided by them for use in the Schedule 14D-9 if and to
the extent that it shall have become false or misleading in any material respect
and the Company further agrees to take all lawful action necessary to cause the
Schedule 14D-9 as so corrected to be filed promptly with the SEC and
disseminated to the holders of Company Common Stock, in each case as and to the
extent required by applicable law. Parent, Sub and their counsel shall be given
a reasonable opportunity to review and comment on the Schedule 14D-9 and any
amendments thereto prior to the filing thereof with the SEC. In connection with
the Offer, the Company shall promptly furnish, or cause its transfer agent to
furnish, Parent with mailing labels, security position listings and all
available listings or computer files containing the names and addresses of the
record holders of the Company Common Stock as of the latest practicable date and
shall furnish, or cause its transfer agent to furnish, Parent with such
information and assistance (including updated lists of stockholders, mailing
labels and lists of security positions) as Parent or its agents may reasonably
request in communicating the Offer to the record and beneficial holders of
Company Common Stock. Subject to the requirements of applicable law, and except
for such actions as are necessary to disseminate the Offer Documents and any
other documents necessary to consummate the Offer
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<PAGE> 13
and the Merger, Parent and Sub and each of their affiliates, associates,
partners, employees, agents and advisors shall hold in confidence the
information contained in such labels and lists, shall use such information only
in connection with the Offer and the Merger, and, if this Agreement is
terminated, in accordance with its terms, shall deliver promptly to the Company
all copies of such information then in their possession or under their control.
1.4 Directors.
(a) Promptly upon the purchase pursuant to the Offer by
Parent or any of its subsidiaries of such number of shares of Company Common
Stock as represents at least 50.1% of the outstanding shares of Company Common
Stock (on a fully diluted basis), and from time to time thereafter, Parent shall
be entitled to designate such number of directors, rounded up to the next whole
number as will give Parent, subject to compliance with Section 14(f) of the
Exchange Act, representation on the Board of Directors of the Company equal to
the product of (x) the number of directors on the Board of Directors of the
Company (giving effect to any increase in the number of directors pursuant to
this Section 1.4) and (y) the percentage that such number of Shares so purchased
bears to the aggregate number of Shares outstanding (but not more than 75%)
(such number being, the "Board Percentage"), and the Company shall, upon request
by Parent, promptly use its best efforts to satisfy the Board Percentage by (i)
increasing the size of the Board of Directors of the Company or (ii) using its
best efforts to secure the resignations of such number of directors as is
necessary to enable Parent's designees to be elected to the Board of Directors
of the Company and shall cause Parent's designees promptly to be so elected;
provided that, in no event prior to the Effective Time shall the number of
Continuing Directors, as defined in Section 1.4(b) below, on the Board of
Directors be less than one. At the request of Parent, the Company shall take, at
the Company's expense, all lawful action necessary to effect any such election,
including, without limitation, mailing to its stockholders the information
required by Section 14(f) of the Exchange Act and Rule 14f-1 promulgated
thereunder, unless such information has previously been provided to the
Company's stockholders in the Schedule 14D-9.
(b) Following the election or appointment of Parent's
designees pursuant to this Section 1.4 and prior to the Effective Time (as
defined in Section 2.3) of the Merger, any (i) amendment or termination of this
Agreement, (ii) extension for the performance or waiver of the obligations or
other acts of Parent or Sub, (iii) action which might affect the accuracy of the
representations and warranties under Article IV, or (iv) waiver of the Company's
rights hereunder shall require the concurrence of a majority of directors of the
Company then in office who are "Continuing Directors". The term "Continuing
Director" shall mean (i) each member of the Board of Directors of the Company on
the date hereof who is a "disinterested director," as such term is used in
Arizona Revised statutes Section 10-2741 and (ii) any successor to any
Continuing Director that was recommended to succeed such Continuing Director by
a majority of the Continuing Directors then on the Board of Directors, but shall
not mean any designee of Parent pursuant to this Section 1.4 or any successor to
such designee.
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ARTICLE II
THE MERGER
2.1 The Merger. Upon the terms and subject to the conditions set
forth in this Agreement, and in accordance with the Delaware General Corporate
Law, as amended (the "DGCL"), Sub shall be merged (the "Merger") with and into
the Company at the Effective Time. At the Effective Time, the separate corporate
existence of Sub shall cease, and the Company shall continue as the surviving
corporation and a direct wholly owned subsidiary of Parent (Sub and the Company
are sometimes hereinafter referred to as "Constituent Corporations" and, as the
context requires, the Company is sometimes hereinafter referred to as the
"Surviving Corporation"), and shall continue under the name Hadco Phoenix, Inc.
2.2 Closing. Unless this Agreement shall have been terminated and
the transactions herein contemplated shall have been abandoned pursuant to
Section 8.1, the closing of the Merger (the "Closing") shall take place at 10:00
a.m., New York time, as soon as practicable following satisfaction or waiver of
the conditions set forth in Article VII (the "Closing Date"), at the offices of
Testa, Hurwitz & Thibeault, LLP, 125 High Street, Boston, MA 02110, unless
another date, time or place is agreed to in writing by the parties hereto.
2.3 Effective Time of the Merger. Subject to the provisions of
this Agreement, the parties hereto shall cause the Merger to be consummated by
filing a certificate of merger (the "Certificate of Merger") with the Secretary
of State of the State of Delaware, as provided in the DGCL, as soon as
practicable on or after the Closing Date. The Merger shall become effective upon
such filing or at such time thereafter as is provided in the Certificate of
Merger (the "Effective Time").
2.4 Effects of the Merger.
(a) The Merger shall have the effects as set forth in the
applicable provisions of the DGCL.
(b) The directors of Sub and the officers of the Company
immediately prior to the Effective Time shall, from and after the Effective
Time, be the initial directors and officers of the Surviving Corporation until
their successors have been duly elected or appointed and qualified, or until
their earlier death, resignation or removal in accordance with the Surviving
Corporation's Certificate of Incorporation and Bylaws.
(c) The Certificate of Incorporation of Sub in the form
attached hereto as Exhibit B shall be the Certificate of Incorporation of the
Surviving Corporation until amended in accordance with the DGCL, except that the
name shall be changed to Hadco Phoenix, Inc.
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(d) The Bylaws of Sub in the form attached hereto as
Exhibit C shall be the Bylaws of the Surviving Corporation until thereafter
amended as provided by applicable law, the Certificate of Incorporation or the
Bylaws.
ARTICLE III
EFFECT OF THE MERGER ON THE CAPITAL STOCK OF
THE CONSTITUENT CORPORATIONS; EXCHANGE OF CERTIFICATES
3.1 Effect on Capital Stock. At the Effective Time, by virtue of
the Merger and without any action on the part of the holder of any shares of
Company Common Stock or the holder of any capital stock of Sub:
(a) Capital Stock of Sub. Each share of the capital stock
of Sub issued and outstanding immediately prior to the Effective Time shall be
converted into and become one fully paid and nonassessable share of Common
Stock, par value $.01 per share, of the Surviving Corporation.
(b) Cancellation of Treasury Stock and Parent-Owned Stock.
Each share of Company Common Stock and all other shares of capital stock of the
Company that are owned by the Company and all shares of Company Common Stock and
other shares of capital stock of the Company owned by Parent or Sub shall be
canceled and retired and shall cease to exist and no consideration shall be
delivered or deliverable in exchange therefor.
3.2 Conversion of Securities. At the Effective Time, by virtue of
the Merger and without any action on the part of Sub, the Company or the holders
of any of the shares thereof:
(a) subject to the other provisions of this Section 3.2,
each share of Company Common Stock issued and outstanding immediately prior to
the Effective Time (excluding shares owned, directly or indirectly, by the
Company or any Subsidiary (as defined below) of the Company or by Parent, Sub or
any other Subsidiary of Parent and Dissenting Shares (as defined in Section
3.6)) shall be converted into the right to receive the Offer Consideration,
payable to the holder thereof, without any interest thereon, less any required
withholding taxes (the "Merger Consideration"), upon surrender and exchange of
the Certificates (as defined in Section 3.3). As used in this Agreement the word
"Subsidiary", with respect to any party, means any corporation, partnership,
joint venture or other organization, whether incorporated or unincorporated
which is, directly or indirectly, controlled by such party. For the purposes of
this definition, "control" means the possession of the power to direct or cause
the direction of management and policies of such corporation, partnership, joint
venture or other organization, whether through the ownership of voting
securities, by contract or otherwise.
(b) All such shares of Company Common Stock, when
converted as provided in Section 3.2(a), no longer shall be outstanding and
shall automatically be canceled and retired and
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<PAGE> 16
shall cease to exist, and each Certificate previously evidencing Shares shall
thereafter represent only the right to receive the Merger Consideration. The
holders of Certificates previously evidencing Shares outstanding immediately
prior to the Effective Time shall cease to have any rights with respect to the
Company Common Stock except as otherwise provided herein or by law and, upon the
surrender of Certificates in accordance with the provisions of Section 3.3,
shall only represent the right to receive for their Shares, the Merger
Consideration, without any interest thereon.
3.3 Payment for Shares.
(a) Paying Agent. Prior to the Effective Time, Sub shall
appoint a United States bank or trust company reasonably acceptable to the
Company to act as paying agent (the "Paying Agent") for the payment of the
Merger Consideration, and Sub shall deposit or shall cause to be deposited with
the Paying Agent in a separate fund established for the benefit of the holders
of shares of Company Common Stock, for payment in accordance with this Article
III, through the Paying Agent (the "Payment Fund"), immediately available funds
in amounts necessary to make the payments pursuant to Section 3.2(a) and this
Section 3.3 to such holders (other than the Company or any Subsidiary of the
Company or Parent, Sub or any other Subsidiary of Parent, or holders of
Dissenting Shares). The Paying Agent shall, pursuant to irrevocable
instructions, pay the Merger Consideration out of the Payment Fund.
The Paying Agent shall invest portions of the Payment Fund as
Parent directs in obligations of or guaranteed by the United States of America,
in commercial paper obligations receiving the highest investment grade rating
from both Moody's Investors Services, Inc. and Standard & Poor's Ratings
Service, or in certificates of deposit, bank repurchase agreements or banker's
acceptances of commercial banks with capital exceeding $1,000,000,000
(collectively, "Permitted Investments"); provided, however, that the maturities
of Permitted Investments shall be such as to permit the Paying Agent to make
prompt payment to former holders of Company Common Stock entitled thereto as
contemplated by this Section. Parent and the Surviving Corporation shall cause
the Payment Fund to be promptly replenished to the extent of any losses incurred
as a result of Permitted Investments. All earnings on Permitted Investments
shall be paid to the Surviving Corporation. If for any reason (including losses)
the Payment Fund is inadequate to pay the amounts to which holders of shares of
Company Common Stock shall be entitled under this Section 3.3, Parent and the
Surviving Corporation shall in any event be liable for payment thereof. The
Payment Fund shall not be used for any purpose except as expressly provided in
this Agreement.
(b) Payment Procedures. As soon as reasonably practicable
after the Effective Time, the Surviving Corporation shall instruct the Paying
Agent to mail to each holder of record (other than the Company or any Subsidiary
of the Company or Parent, Sub or any other Subsidiary of Parent) of a
Certificate or Certificates which, immediately prior to the Effective Time,
evidenced outstanding shares of Company Common Stock (the "Certificates"), (i) a
form of letter of transmittal (which shall specify that delivery shall be
effected, and risk of loss and title to the
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<PAGE> 17
Certificates shall pass, only upon proper delivery of the Certificates to the
Paying Agent, and shall be in such form and have such other provisions,
including all required information regarding dissenters' rights, as the
Surviving Corporation reasonably may specify) and (ii) instructions for use in
effecting the surrender of the Certificates in exchange for payment therefor.
Upon surrender of a Certificate for cancellation to the Paying Agent together
with such letter of transmittal, duly executed, and such other customary
documents as may be required pursuant to such instructions, the holder of such
Certificate shall be paid in cash an amount equal to the product of (x) the
number of shares of Company Common Stock represented by such Certificate and (y)
the Merger Consideration, and the Certificate so surrendered shall forthwith be
canceled. Absolutely no interest shall be paid or accrued on the Merger
Consideration payable upon the surrender of any Certificate. If payment is to be
made to a person other than the person in whose name the surrendered Certificate
is registered, it shall be a condition of payment that the Certificate so
surrendered shall be properly endorsed or otherwise in proper form for transfer
and that the person requesting such payment shall pay any transfer or other
taxes required by reason of the payment to a person other than the registered
holder of the surrendered Certificate or established to the satisfaction of the
Surviving Corporation that such tax has been paid or is not applicable. Until
surrendered in accordance with the provisions of this Section 3.3(b), each
Certificate (other than Certificates representing Shares owned by Parent or any
subsidiary of Parent or held in the treasury of the Company) shall represent for
all purposes only the right to receive the Merger Consideration.
(c) Termination of Payment Fund; Interest. Any portion of
the Payment Fund which remains undistributed to the holders of Company Common
Stock for 180 days after the Effective Time shall be delivered to the Surviving
Corporation, upon demand, and any holders of Company Common Stock who have not
theretofore complied with this Article III and the instructions set forth in the
letter of transmittal mailed to such holder after the Effective Time shall
thereafter look only to the Surviving Corporation for payment of the Merger
Consideration to which they are entitled. All interest accrued in respect of the
Payment Fund shall inure to the benefit of and be paid to the Surviving
Corporation.
(d) No Liability. Neither Parent nor the Surviving
Corporation shall be liable to any holder of shares of Company Common Stock for
any cash from the Payment Fund delivered to a public official pursuant to any
applicable abandoned property, escheat or similar law.
(e) Withholding Rights. The Surviving Corporation shall be
entitled to deduct and withhold from the consideration otherwise payable
pursuant to this Agreement to any holder of shares of Company Common Stock such
amounts as the Surviving Corporation is required to deduct and withhold with
respect to the making of such payment under the Internal Revenue Code of 1986,
as amended (the "Code"), or any provision of state, local or foreign tax law. To
the extent that amounts are so withheld by the Surviving Corporation, such
withheld amounts shall be treated for all purposes of this Agreement as having
been paid to the holder of the shares of Company Common Stock in respect of
which such deduction and withholding was made by the Surviving Corporation.
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<PAGE> 18
3.4 Stock Transfer Books. At the Effective Time, the stock
transfer books of the Company shall be closed and there shall be no further
registration of transfers of shares of Company Common Stock thereafter on the
records of the Company. On or after the Effective Time, any certificates
presented to the Paying Agent or Parent for any reason shall be converted into
the Merger Consideration.
3.5 Stock Options. (a) At the earlier of (i) the Effective Time or
(ii) immediately prior to the expiration of the Offer (provided that the
settlement of the options below, when taken together with Shares tendered
immediately prior to such expiration, meets the 90% Tender Condition), each
holder of a then outstanding option to purchase Shares under the Company's 1987
Stock Option Plan and 1996 Stock Option Plan (collectively, the "Stock Option
Plans"), whether or not then exercisable (the "Options"), shall, in settlement
thereof, receive for each Share subject to such Option an amount (subject to any
applicable withholding tax) in cash equal to the difference between the Offer
Consideration and the per Share exercise price of such Option to the extent such
difference is a positive number (such amount being hereinafter referred to as,
the "Option Consideration"); provided, however, that with respect to any person
subject to Section 16(a) of the Exchange Act, any such amount shall be paid as
soon as practicable after the first date payment can be made without liability
to such person under Section 16(b) of the Exchange Act. Upon receipt of the
Option Consideration, the Option shall be canceled. The surrender of an Option
to the Company in exchange for the Option Consideration shall be deemed a
release of any and all rights the holder had or may have had in respect of such
Option. Prior to the expiration of the Offer, the Company shall obtain all
necessary written consents or releases from holders of Options under the Stock
Option Plans and take all such other lawful action as may be necessary to give
effect to the transactions contemplated by this Section 3.5. To the extent that
Parent is satisfied in its sole good faith discretion that the settlement of
Options will result in satisfaction of the 90% Tender Condition on the
expiration of the Offer and that all other conditions to the Offer have been
met, Parent will loan up to $13,000,000 for that purpose.
(b) The Company shall terminate the Company Employee Stock
Purchase Plan (the "Stock Purchase Plan") as of the Effective Time pursuant to
Article IX thereof and shall refund all payroll deductions for the current
Quarterly Investment Period (as defined in the Stock Purchase Plan). All Stock
Option Plans shall also terminate as of the Effective Time and the provisions in
any other plan, program or arrangement providing for the issuance or grant of
any other interest in respect of the capital stock of the Company or any
Subsidiary thereof shall be canceled as of the Effective Time. The Company shall
take all action necessary to ensure that following the Effective Time no
participant in the Stock Purchase Plan, any Stock Option Plan or other plans,
programs or arrangements shall have any right thereunder to acquire equity
securities of the Company, the Surviving Corporation or any Subsidiary thereof
and to terminate all such plans.
3.6 Dissenting Shares. Notwithstanding any other provisions of
this Agreement to the contrary, shares of Company Common Stock that are
outstanding immediately prior to the
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Effective Time and which are held by stockholders who shall have not voted in
favor of the Merger or consented thereto in writing and who shall have demanded
properly in writing appraisal for such shares in accordance with Section 262 of
the DGCL (collectively, the "Dissenting Shares") shall not be converted into or
represent the right to receive the Merger Consideration. Such stockholders
instead shall be entitled to receive payment of the appraised value of such
shares of Company Common Stock held by them in accordance with the provisions of
such Section 262, except that all Dissenting Shares held by stockholders who
shall have failed to perfect or who effectively shall have withdrawn or lost
their rights to appraisal of such shares of Company Common Stock under such
Section 262 shall thereupon be deemed to have been converted into and to have
become exchangeable, as of the Effective Time, for the right to receive, without
any interest thereon, the Merger Consideration upon surrender in the manner
provided in Section 3.3, of the Certificate or Certificates that, immediately
prior to the Effective Time, evidenced such shares of Company Common Stock.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
4.1 Representations and Warranties of the Company. The Company
represents and warrants to Parent and Sub that, except as set forth in the
schedules described in this Article IV (it being understood that any disclosed
matter, the import of which is fairly described on one schedule, shall be deemed
to be effective disclosure on all schedules for which its application is
reasonably apparent from such description).
(a) Organization, Standing and Power. Each of the Company
and its Subsidiaries is a corporation duly organized, validly existing and in
good standing under the laws of its respective jurisdiction of incorporation,
has all requisite power and authority to own, lease and operate its properties
and to carry on its business as now being conducted, and is duly qualified and
in good standing to conduct business in each jurisdiction in which the business
it is conducting, or the operation, ownership or leasing of its properties,
makes such qualification necessary, other than in such jurisdictions where the
failure so to qualify could not reasonably be expected, individually or in the
aggregate, to have a Material Adverse Effect (as defined below) with respect to
the Company. The Company has heretofore made available to Parent complete and
correct copies of its and its Subsidiaries' respective Certificates of
Incorporation and Bylaws. All Subsidiaries of the Company and their respective
jurisdictions of incorporation or organization are identified on Schedule
4.1(a). As used in this Agreement: a "Material Adverse Effect" shall mean, with
respect to any party, the result of one or more events, changes or effects
which, individually or in the aggregate, would have a material adverse effect on
the business, operations, assets, condition (financial or otherwise) or
prospects of such party and its Subsidiaries, taken as a whole.
(b) Capital Structure. As of the date hereof, the
authorized capital stock of the Company consists of 20,000,000 Shares and
1,000,000 shares of Preferred Stock, $.01 par value ("Preferred Stock"). At the
close of business on the date of this Agreement: (i) 7,290,343 Shares
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were issued and outstanding; (ii) no shares of Preferred Stock were issued and
outstanding; (iii) 1,750,000 Shares were reserved for issuance pursuant to the
Stock Option Plans of which 989,200 Shares are subject to outstanding Options;
(iv) 200,000 Shares were reserved for issuance pursuant to the Stock Purchase
Plan; (v) except as set forth on Schedule 4.1(b) and except for the issuance of
Shares pursuant to the exercise of the Options, there are no employment,
executive termination or similar agreements providing for the issuance of
Shares; (vi) no Shares were held by the Company; and (vii) no bonds, debentures,
notes or other instruments or evidence of indebtedness having the right to vote
(or convertible into, or exercisable or exchangeable for, securities having the
right to vote) on any matters on which the Company stockholders may vote
("Company Voting Debt") were issued or outstanding. All outstanding Shares are
validly issued, fully paid and nonassessable and are not subject to preemptive
or other similar rights. No Shares are owned by any Subsidiary of the Company.
Except as set forth on Schedule 4.1(b), all outstanding shares of capital stock
of the Subsidiaries of the Company are owned by the Company or a direct or
indirect Subsidiary (other than shares of Subsidiaries held by nominees for
which the Company maintains beneficial ownership) of the Company, free and clear
of all liens, charges, encumbrances, claims and options of any nature. Except as
set forth in this Section 4.1(b) and except for changes resulting from the
exercise of Options or as contemplated by this Agreement, from and after the
date hereof there will be outstanding: (i) no shares of capital stock, Company
Voting Debt or other voting securities of the Company; (ii) no securities of the
Company or any Subsidiary of the Company convertible into, or exchangeable or
exercisable for, shares of capital stock, Company Voting Debt or other voting
securities of the Company or any Subsidiary of the Company; and (iii) no
options, warrants, calls, rights (including preemptive rights), commitments or
agreements to which the Company or any Subsidiary of the Company is a party or
by which it is bound, in any case obligating the Company or any Subsidiary of
the Company to issue, deliver, sell, purchase, redeem or acquire, or cause to be
issued, delivered, sold, purchased, redeemed or acquired, additional shares of
capital stock or any Company Voting Debt or other voting securities of the
Company or of any Subsidiary of the Company, or obligating the Company or any
Subsidiary of the Company to grant, extend or enter into any such option,
warrant, call, right, commitment or agreement. Set forth on Schedule 4.1(b) is a
list of all outstanding options, warrants and rights to purchase shares of
Company Common Stock and the exercise prices relating thereto. Except for the
Stockholders Agreement, there are not as of the date hereof and there will not
be at the Effective Time any stockholder agreements, voting trusts or other
agreements or understandings to which the Company is a party or by which it is
bound relating to the voting of any shares of the capital stock of the Company
which will limit in any way the solicitation of proxies by or on behalf of the
Company from, or the casting of votes by, the stockholders of the Company with
respect to the Merger. There are no restrictions on the Company to vote the
stock of any of its Subsidiaries.
(c) Authority; No Violations; Consents and Approvals
(i) The restrictions of Section 203(a) of the
DGCL do not and will not apply to the Company or the transactions contemplated
in or by this Agreement or the Stockholders Agreement.
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<PAGE> 21
(ii) The Company has all requisite corporate
power and authority to enter into this Agreement and, subject to the Company
Stockholder Approval (as defined in Section 4.1(c)(iv)), to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby have been (A) duly
authorized by all necessary corporate action on the part of the Company,
subject, if required with respect to consummation of the Merger, to the Company
Stockholder Approval and (B) approved by a committee of "disinterested
directors" within the meaning of Section 10-2741 of the Arizona Revised
Statutes. A majority of the members of the Board of Directors of the Company
voting for the approval of this Agreement, the Merger and the transactions
contemplated hereby were and are Continuing Directors (as defined in and for
purposes of Section 11(b) of the Company's Restated Certificate of
Incorporation). This Agreement has been duly executed and delivered by the
Company and, subject, if required with respect to consummation of the Merger, to
the Company Stockholder Approval, and assuming that this Agreement constitutes
the valid and binding agreement of Parent and Sub, constitutes a valid and
binding obligation of the Company enforceable in accordance with its terms
except that the enforcement hereof may be limited by (a) bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
relating to creditors' rights generally and (b) general principles of equity
(regardless of whether enforceability is considered in a proceeding at law or in
equity).
(iii) The execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby by the Company will
not conflict with, or result in any violation of, or default (with or without
notice or lapse of time, or both) under, or give rise to a right of termination,
cancellation or acceleration (including pursuant to any put right) of any
obligation or the loss of a material benefit under, or the creation of a lien,
pledge, security interest or other encumbrance on assets or property, or right
of first refusal with respect to any asset or property (any such conflict,
violation, default, right of termination, cancellation or acceleration, loss,
creation or right of first refusal, a "Violation"), pursuant to any provision of
the Certificate of Incorporation or Bylaws of the Company or any of its
Subsidiaries or, except as to which requisite waivers or consents have been
obtained and, except as set forth on Schedule 4.1(c)(iii) hereto and assuming
the consents, approvals, authorizations or permits and filings or notifications
referred to in paragraph (iv) of this Section 4.1(c) are duly and timely
obtained or made and, if required, the Company Stockholder Approval has been
obtained, result in any Violation except for Violations that, individually or in
the aggregate, could not reasonably be expected to have a Material Adverse
Effect on the Company of (A) any loan or credit agreement, note, mortgage, deed
of trust, indenture, lease, Benefit Plan (as defined in Section 4.1(i)(i)),
Company Permit (as defined in Section 4.1(f)), or any other material agreement,
obligation, instrument, concession, franchise, or license, or (B) any judgment,
order, decree, statute, law, ordinance, rule or regulation applicable to the
Company or any of its Subsidiaries or their respective properties or assets
(collectively, "Laws").
(iv) No consent, approval, order or authorization
of, or registration, declaration or filing with, notice to, or permit from any
court, administrative agency or commission or other governmental authority or
instrumentality, domestic or foreign (a "Governmental Entity"),
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<PAGE> 22
is required by or with respect to the Company or any of its Subsidiaries in
connection with the execution and delivery of this Agreement by the Company or
the consummation by the Company of the transactions contemplated hereby, except
for: (A) the filing of a premerger notification and report form by the Company
under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the
"HSR Act"), and the expiration or termination of the applicable waiting period
thereunder; (B) the filing with the SEC of (x) a proxy statement (if required by
applicable law) in definitive form relating to a meeting of the holders of
Company Common Stock to approve the Merger (such proxy statement as amended or
supplemented from time to time being hereinafter referred to as the "Proxy
Statement"), (y) the Schedule 14D-9 in connection with the Offer, and (z) such
reports under and such other compliance with the Exchange Act and the rules and
regulations thereunder as may be required in connection with this Agreement and
the transactions contemplated hereby; (C) the filing of the Certificate of
Merger with the Secretary of State of the State of Delaware; (D) such filings
and approvals as may be required by any applicable state securities, "blue sky"
or takeover laws; and (E) the approval of this Agreement and the Merger by the
holders of a majority of the outstanding Shares ("Company Stockholder
Approval").
(d) SEC Documents. The Company has made available to
Parent a true and complete copy of each report, schedule, registration statement
and definitive proxy statement filed by the Company with the SEC prior to the
date of this Agreement (the "Company SEC Documents"), which are all the
documents (other than preliminary material) that the Company was required to
file with the SEC since such date. As of their respective dates, the Company SEC
Documents complied in all material respects with the requirements of the
Securities Act of 1933, as amended (the "Securities Act"), or the Exchange Act,
as the case may be, and the rules and regulations of the SEC thereunder
applicable to such Company SEC Documents, and none of the Company SEC Documents
contained, as of their respective dates, any untrue statement of a material fact
or omitted to state a material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under which they
were made, not misleading. The financial statements of the Company included in
the Company SEC Documents complied as to form in all material respects with the
published rules and regulations of the SEC with respect thereto, were prepared
in accordance with generally accepted accounting principles ("GAAP") applied on
a consistent basis during the periods involved (except as may be indicated in
the notes thereto or, in the case of the unaudited statements, as permitted by
Rule 10-01 of Regulation S-X of the SEC) and fairly present in accordance with
applicable requirements of GAAP (subject, in the case of the unaudited
statements, to normal, recurring adjustments, which will not be material, either
individually or in the aggregate) the consolidated financial position of the
Company and its consolidated Subsidiaries as of their respective dates and the
consolidated results of operations and the consolidated cash flows of the
Company and its consolidated Subsidiaries for the periods presented therein.
(e) Information Supplied. None of the information
supplied or to be supplied by the Company for inclusion or incorporation by
reference in (i) any of the Offer Documents will, at the time the Offer
Documents are first published, sent or given to holders of Company Common Stock,
and at any time they are amended or supplemented, contain any untrue statement
of a
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<PAGE> 23
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances under
which they are made, not misleading, and (ii) the Proxy Statement will, on the
date it is first mailed to the holders of the Company Common Stock or at the
time of the Company Stockholder Approval, not contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they are made, not misleading. If at any time prior to
the expiration date of the Offer or the Effective Time any event with respect to
the Company or any of its Subsidiaries, or with respect to other information
supplied by the Company for inclusion in the Offer Documents or the Proxy
Statement, shall occur which is required to be described in an amendment of, or
a supplement to, the Offer Documents or the Proxy Statement, as the case may be,
such event shall be so described, and such amendment or supplement shall be
promptly filed with the SEC and, as required by law, disseminated to the
stockholders of the Company. The Proxy Statement, insofar as it relates to the
Company or its Subsidiaries or other information supplied by the Company for
inclusion therein will comply as to form, in all material respects, with the
provisions of the Exchange Act or the rules and regulations thereunder.
(f) Compliance with Applicable Laws. The Company and its
Subsidiaries hold all material permits, licenses, variances, exemptions, orders,
franchises and approvals of all Governmental Entities necessary to enable them
to conduct their respective businesses (the "Company Permits"), and the Company
and its Subsidiaries are in material compliance with the terms of the Company
Permits. Except as disclosed in the Company SEC Documents, the businesses of the
Company and its Subsidiaries are not being conducted in material violation of
any law, ordinance or regulation of any Governmental Entity. As of the date of
this Agreement, no investigation or review by any Governmental Entity with
respect to the Company or any of its Subsidiaries is pending or, to the
knowledge of the Company, threatened.
(g) Litigation. Except as disclosed in the Company SEC
Documents and on Schedule 4.1(g) attached hereto (i) there is no suit, action or
proceeding pending or, to the knowledge of the Company, threatened against or
affecting the Company or any Subsidiary of the Company ("Company Litigation"),
and (ii) the Company and its Subsidiaries have no knowledge of any facts which
are reasonably likely to give rise to any Company Litigation which in the case
of (i) or (ii) is reasonably likely to have a Material Adverse Effect with
respect to the Company, nor is there any material judgment, decree, injunction,
rule or order of any Governmental Entity or arbitrator outstanding against the
Company or any Subsidiary of the Company ("Company Order").
(h) Taxes.
(i) All Tax Returns required to be filed by or
with respect to the Company and each of its Subsidiaries have been duly and
timely filed, and all such Tax Returns are true, correct and complete in all
material respects. The Company and each of its Subsidiaries has duly and timely
paid (or there has been paid on its behalf) all Taxes that are due, or claimed
or
15
<PAGE> 24
asserted by any taxing authority to be due, from or with respect to it. With
respect to any period for which Taxes are not yet due with respect to the
Company or any Subsidiary, the Company and each of its Subsidiaries has made due
and sufficient current accruals for such Taxes in accordance with GAAP in the
most recent financial statements contained in the Company SEC Documents. The
Company and each of its Subsidiaries has made (or there has been made on its
behalf) all required estimated Tax payments sufficient to avoid any underpayment
penalties. The Company and each of its Subsidiaries has withheld and paid all
Taxes required by all applicable laws to be withheld or paid in connection with
any amounts paid or owing to any employee, creditor, independent contractor or
other third party.
(ii) There are no outstanding agreements,
waivers, or arrangements extending the statutory period of limitation applicable
to any claim for, or the period for the collection or assessment of, Taxes due
from or with respect to the Company or any of its Subsidiaries for any taxable
period. No audit or other proceeding by any court, governmental or regulatory
authority, or similar person is pending or threatened in regard to any Taxes due
from or with respect to the Company or any of the Subsidiaries or any Tax Return
filed by or with respect to the Company or any Subsidiary. No assessment of
Taxes is proposed against the Company or any of its Subsidiaries or any of their
assets.
(iii) No election under Section 338 of the Code
has been made or filed by or with respect to the Company or any of its
Subsidiaries. No consent to the application of Section 341(f)(2) of the Code (or
any predecessor provision) has been made or filed by or with respect to the
Company or any of its Subsidiaries or any of their assets. None of the Company
or any of its Subsidiaries has agreed to make any adjustment pursuant to Section
481(a) of the Code (or any predecessor provision) by reason of any change in any
accounting method, and there is no application pending with any taxing authority
requesting permission for any changes in any accounting method of the Company or
any of its Subsidiaries. None of the assets of the Company or any of its
Subsidiaries is or will be required to be treated as being owned by any person
(other than the Company or its Subsidiaries) pursuant to the provisions of
Section 168(f)(8) of the Internal Revenue Code of 1954, as amended and in effect
immediately before the enactment of the Tax Reform Act of 1986.
(iv) None of the Company or any of its
Subsidiaries is a party to, is bound by, or has any obligation under, any Tax
sharing agreement, Tax allocation agreement or similar contract.
(v) There is no contract, agreement, plan or
arrangement covering any person that, individually or collectively, could give
rise to the payment of any amount that would not be deductible by the Company or
any of its Subsidiaries by reason of Section 162(m) or 280G of the Code.
(vi) Schedule 4.1(h) accurately sets forth (i)
the amount of all deferred intercompany gains for purposes of Treasury
Regulation section 1.1502-13 (including any
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<PAGE> 25
predecessor regulation) with respect to the Company and its Subsidiaries; and
(ii) the amount of any excess loss account with respect to the stock of each of
the Subsidiaries for purposes of Treasury Regulation section 1.1502-19
(including any predecessor regulation).
(vii) "Code" shall mean the Internal Revenue Code
of 1986, as amended. "Taxes" shall mean all taxes, charges, fees, levies, or
other similar assessments or liabilities, including without limitation (a)
income, gross receipts, ad valorem, premium, excise, real property, personal
property, sales, use, transfer, withholding, employment, payroll, and franchise
taxes imposed by the United States of America, or by any state, local, or
foreign government, or any subdivision, agency, or other similar person of the
United States or any such government; and (b) any interest, fines, penalties,
assessments, or additions to taxes resulting from, attributable to, or incurred
in connection with any Tax or any contest, dispute, or refund thereof. "Tax
Returns" shall mean any report, return, or statement required to be supplied to
a taxing authority in connection with Taxes.
(i) Pension And Benefit Plans; ERISA.
(i) Schedule 4.1(i)(i) sets forth a complete and
correct list of:
(A) all "employee benefit plans", as
defined in Section 3(3) of ERISA, which the Company or any of its Subsidiaries
maintains or has any obligation or liability, contingent or otherwise ("Benefit
Plans"); and
(B) all employment or consulting
agreements, bonus or other incentive compensation, deferred compensation, salary
continuation during any absence from active employment for disability or other
reasons, severance, sick days, stock award, stock option, stock purchase,
tuition assistance, club membership, employee discount, employee loan, or
vacation pay agreements, policies or arrangements which the Company or any of
its Subsidiaries maintains or has any obligation or liability (contingent or
otherwise) with respect to any current or former officer, director or employee
of the Company or any of its Subsidiaries (the "Employee Arrangements").
(ii) With respect to each Benefit Plan and
Employee Arrangement, a complete and correct copy of each of the following
documents (if applicable) has been provided to Parent: (A) the most recent plan
and related trust documents, and all amendments thereto; (B) the most recent
summary plan description, and all related summaries of material modifications
thereto; (C) the most recent Form 5500 (including schedules and attachments);
(D) the most recent Internal Revenue Service determination letter; (E) the most
recent actuarial reports (including for purposes of Financial Accounting
Standards Board report no. 87, 106 and 112) and (F) each written employment,
consulting or individual severance or other compensation agreement, and all
amendments thereto.
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(iii) The Company and its Subsidiaries have not
during the preceding six years had any obligation or liability (contingent or
otherwise) with respect to a Benefit Plan which is described in Section 3(37),
4(b)(4), 4063 or 4064 of ERISA. The Company and its Subsidiaries have not
incurred nor reasonably expect to incur any liability under Title IV of ERISA
arising in connection with the termination of any plan covered or previously
covered by Title IV of ERISA.
(iv) The Benefit Plans and their related trusts
intended to qualify under Sections 401 and 501(a) of the Code, respectively, so
qualify. Any voluntary employee benefit association which provides benefits to
current or former employees of the Company and its Subsidiaries, or their
beneficiaries, is and has been qualified under Section 501(c)(9) of the Code.
(v) All contributions or other payments required
to have been made by the Company and its Subsidiaries to or under any Benefit
Plan or Employee Arrangement by applicable law or the terms of such Benefit Plan
or Employee Arrangement (or any agreement relating thereto) have been timely and
properly made. There has been no amendment to, written interpretation of or
announcement (whether or not written) by the Company or any of its Subsidiaries
relating to, or change in employee participation or coverage under, any Benefit
Plan or Employee Arrangement that would increase materially the expense of
maintaining such Benefit Plan or Employee Arrangement above the level of the
expense incurred in respect thereof for the fiscal year ended prior to the date
hereof.
(vi) The Benefit Plans and Employee Arrangements
have been maintained and administered in all material respects in accordance
with their terms and applicable laws.
(vii) There are no pending or, to the knowledge of
the Company and its Subsidiaries, threatened actions, claims or proceedings
against or relating to any Benefit Plan or Employee Arrangement other than
routine benefit claims by persons entitled to benefits thereunder.
(viii) The Company and its Subsidiaries do not
maintain or have an obligation to contribute to retiree life or retiree health
plans which provide for continuing benefits or coverage for current or former
officers, directors or employees of the Company or any of its Subsidiaries
except (A) as may be required under Part 6 of Title I of ERISA) and at the sole
expense of the participant or the participant's beneficiary or (B) a medical
expense reimbursement account plan pursuant to Section 125 of the Code. No tax
under Section 4980B or Section 4980D of the Code has been incurred in respect of
any Benefit Plan that is a group health plan, as defined in Section 5000(b)(1)
of the Code.
(ix) None of the assets of any Benefit Plan is
stock of the Company or any of its affiliates, or property leased to or jointly
owned by the Company or any of its affiliates.
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(x) Except as disclosed in Schedule 4.1(i)(x),
neither the execution and delivery of this Agreement nor the consummation of the
transactions contemplated hereby will (A) result in any payment becoming due to
any employee (current, former or retired) of the Company and its Subsidiaries,
(B) increase any benefits under any Benefit Plan or Employee Arrangement or (C)
result in the acceleration of the time of payment of, vesting of or other rights
with respect to any such benefits.
(xi) The Company and its Subsidiaries have no
liability (contingent or otherwise) under Section 4069 of ERISA by reason of a
transfer of an underfunded pension plan.
(j) Absence of Certain Changes or Events. Except as
disclosed in the Company SEC Documents filed after November 1, 1997 or on
Schedule 4.1(j) hereto, since November 1, 1997 the business of the Company and
its Subsidiaries has been carried on only in the ordinary and usual course and
as of the date of this Agreement there has not been any material adverse change
(either individually or in the aggregate) in the business, operations, assets or
condition (financial or otherwise) of the Company.
(k) No Undisclosed Material Liabilities. To the Company's
knowledge, except as specifically and individually set forth on Schedule 4.1(k)
or the other schedules hereto (specific reference to which has been made on
Schedule 4.1(k)), there are no liabilities of the Company or any Subsidiary of
any kind whatsoever, whether accrued, contingent, absolute, determined,
determinable or otherwise, that are material to the Company and its Subsidiaries
considered as a whole other than: (i) liabilities reflected on the Condensed
Consolidated Balance Sheets contained in the Quarterly Report on Form 10-Q for
the quarter ended November 1, 1997 (the "November 1 Balance Sheet"); and (ii)
liabilities under this Agreement.
(l) Vote Required. In the event that Section 253 of the
DGCL is inapplicable and unavailable to effectuate the Merger, the affirmative
vote of the holders of a majority of the outstanding shares of Company Common
Stock is the only vote of the holders of any class or series of the Company's
capital stock necessary (under Delaware law and the Company's Restated
Certificate of Incorporation or Bylaws) to approve the Merger and this Agreement
and the transactions contemplated hereby.
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(m) Labor Matters.
(i) Neither the Company nor any of its
Subsidiaries is a party to any labor or collective bargaining agreement, and no
employees of the Company or any of its Subsidiaries are represented by any labor
organization. Within the preceding three years, there have been no
representation or certification proceedings, or petitions seeking a
representation proceeding, pending or, to the knowledge of the Company,
threatened in writing to be brought or filed with the National Labor Relations
Board or any other labor relations tribunal or authority. Within the preceding
three years, to the knowledge of the Company, there have been no organizing
activities involving the Company and its Subsidiaries with respect to any group
of employees of the Company or any of its Subsidiaries.
(ii) There are no strikes, work stoppages,
slowdowns, lockouts, material arbitrations or material grievances or other
material labor disputes pending or threatened in writing against or involving
the Company or any of its Subsidiaries. There are no unfair labor practice
charges, grievances or complaints pending or, to the knowledge of the Company,
threatened in writing by or on behalf of any employee or group of employees of
the Company or any of its Subsidiaries.
(iii) Except as set forth on Schedule 4.1(m)(iii),
there are no material complaints, charges or claims against the Company or any
of its Subsidiaries pending or, to the knowledge of the Company, threatened to
be brought or filed with any governmental authority, arbitrator or court based
on, arising out of, in connection with, or otherwise relating to the employment
or termination of employment of any individual by the Company or any of its
Subsidiaries.
(iv) Each of the Company and its Subsidiaries is
in material compliance with all laws, regulations and orders relating to the
employment of labor, including all such laws, regulations and orders relating to
wages, hours, WARN (as defined below), collective bargaining, discrimination,
civil rights, safety and health, workers' compensation and the collection and
payment of withholding and/or social security taxes and any similar tax.
(v) There has been no "mass layoff" or "plant
closing" as defined by the Worker Adjustment Retraining and Notification Act, as
amended ("WARN"), with respect to the Company and its Subsidiaries within the
six (6) months prior to Closing.
(n) Intangible Property.
(i) Schedule 4.1(n) sets forth a list of each
material trademark, trade name, patent, service mark, brand mark, brand name,
computer program (other than standard off-the-shelf programs), database
purchased, licensed or acquired from third parties and copyright owned or used
in connection with the operation of the businesses of each of the Company and
its Subsidiaries as well as a list of all registrations thereof and pending
applications therefor, and each
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license or other contract relating thereto (collectively, the "Company
Intangible Property"). Except as set forth on Schedule 4.1(n), all of the
Company Intangible Property is in good standing and is owned by the Company or
its Subsidiaries free and clear of any and all liens, claims or encumbrances.
Except as set forth on Schedule 4.1(n), to the knowledge of the Company, the use
of the Company Intangible Property by the Company or its Subsidiaries does not,
in any material respect, conflict with, infringe upon, violate or interfere with
or constitute an appropriation of any right, title, interest or goodwill,
including, without limitation, any intellectual property right, trademark, trade
name, patent, service mark, brand mark, brand name, computer program, database,
industrial design, maskworks, copyright or any pending application therefor of
any other person and there have been no claims made and neither the Company nor
any of its Subsidiaries has received any notice of any claim or otherwise knows
that any of the Company Intangible Property is invalid or conflicts with the
asserted rights of any other person or has not been used or enforced or has
failed to be used or enforced in a manner that would result in the abandonment,
cancellation or unenforceability of any of the Company Intangible Property.
(ii) Each of the Company and its Subsidiaries
owns or has a right to use all material Company Intangible Property necessary
for the operation of its respective business and has not forfeited or otherwise
relinquished any material Company Intangible Property.
(iii) Each of the material licenses or other
contracts relating to the Company Intangible Property (collectively, the
"Company Intangible Property Licenses") is in full force and effect and is valid
and enforceable in accordance with its terms, and there is no material default
under any Company Intangible Property License either by the Company or any of
its Subsidiaries or, to the knowledge of the Company, by any other party
thereto.
(o) Environmental Matters.
(i) For purposes of this Agreement:
(A) "Environmental Costs and
Liabilities" means any and all losses, liabilities, obligations, damages, fines,
penalties, judgments, actions, claims, costs and expenses (including, without
limitation, fees, disbursements and expenses of legal counsel, experts,
engineers and consultants, the costs of investigation and feasibility studies
and costs to clean up, remove, treat, or in any other way address any Hazardous
Materials) arising from or under any Environmental Law.
(B) "Environmental Law" means any
applicable law relating to the use of natural resources, or regulating or
prohibiting Releases into any part of the natural environment, or pertaining to
the protection of natural resources, the environment and public and employee
health and safety including, without limitation, the Comprehensive Environmental
Response, Compensation, and Liability Act ("CERCLA") (42 U.S.C. Section 9601 et
seq.), the Hazardous Materials Transportation Act (49 U.S.C. Section 1801 et
seq.), the Resource Conservation and Recovery Act (42 U.S.C. Section 6901 et
seq.), the Clean Water Act (33 U.S.C. Section 1251 et seq.), the
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Clean Air Act (33 U.S.C. Section 7401 et seq.), the Toxic Substances Control Act
(15 U.S.C. Section 7401 et seq.), the Federal Insecticide, Fungicide, and
Rodenticide Act (7 U.S.C. Section 136 et seq.), and the Occupational Safety and
Health Act (29 U.S.C. Section 651 et seq.) ("OSHA"), as well as the regulations
promulgated pursuant to any of the foregoing, and any such applicable state or
local laws, as such laws have been and may be amended or supplemented through
the Closing Date;
(C) "Hazardous Material" means any
substance, material or waste which is regulated by any public or governmental
authority in the jurisdictions in which the applicable party or its Subsidiaries
conducts business, or the United States, including, without limitation, any
material or substance which is defined as a "hazardous waste," "hazardous
material," "hazardous substance," "extremely hazardous waste" or "restricted
hazardous waste," "pollutant," "contaminant," "toxic waste" or "toxic substance"
under any provision of Environmental Law and shall also include, without
limitation, petroleum, petroleum products, asbestos, polychlorinated biphenyls
and radioactive materials;
(D) "Release" means any release, spill,
effluent, emission, leaking, pumping, injection, deposit, disposal, discharge,
dispersal, leaching, or migration into the indoor or outdoor environment, or
into or out of any property; and
(E) "Remedial Action" means all actions,
including, without limitation, any capital expenditures, required by a
governmental entity or required under any Environmental Law, or voluntarily
undertaken to (I) clean up, remove, treat, or in any other way ameliorate or
address any Hazardous Materials or other substance in the indoor or outdoor
environment; (II) prevent the Release or threat of Release, or minimize the
further Release of any Hazardous Material so it does not endanger or threaten to
endanger the public health or welfare or the indoor or outdoor environment;
(III) perform pre-remedial studies and investigations or post-remedial
monitoring and care pertaining or relating to a Release; or (IV) bring the
applicable party into compliance with any Environmental Law.
Except as set forth in the SEC Documents or in Schedule 4.1(o):
(ii) The operations of the Company and its
Subsidiaries have been and, as of the Closing Date, will be, in compliance in
all material respects with all Environmental Laws;
(iii) The Company and its Subsidiaries have
obtained and will, as of the Closing Date, maintain all permits required under
applicable Environmental Laws for the continued operations of their respective
businesses, except such permits the lack of which would not materially impair
the ability of the Company and its Subsidiaries to continue operations;
(iv) The Company and its Subsidiaries are not
subject to any outstanding written orders or material contracts with any
Governmental Entity or other person respecting (A) Environmental Laws, (B)
Remedial Action or (C) any Release or threatened Release of a Hazardous
Material;
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(v) The Company and its Subsidiaries have not
received any written communication alleging, with respect to any such party, the
material violation of or material liability under any Environmental Law, which
violation or liability is outstanding;
(vi) Neither the Company nor any of its
Subsidiaries has any contingent liability in connection with the Release of any
Hazardous Material into the indoor or outdoor environment (whether on-site or
off-site) which would be reasonably likely to result in the Company and its
Subsidiaries incurring Environmental Costs and Liabilities in excess of
$500,000;
(vii) There is not now, nor to the knowledge of
the Company has there been in the past, on or in any property of the Company or
its Subsidiaries any of the following: (A) any underground storage tanks or
surface impoundments, (B) any asbestos-containing materials, or (C) any
polychlorinated biphenyls;
(viii) No judicial or administrative proceedings
are pending or, to the knowledge of the Company, threatened against the Company
and its Subsidiaries alleging the violation of or seeking to impose liability
pursuant to any Environmental Law and there are no investigations pending in
respect of which the Company has received notice or has knowledge and, to the
knowledge of the Company, there are no investigations threatened against the
Company or any of its Subsidiaries under Environmental Laws;
(ix) None of the exceptions set forth on Schedule
4.1(o) are reasonably likely to result in the Company and its Subsidiaries
incurring Environmental Costs and Liabilities in excess of $500,000 individually
or $1,000,000 in the aggregate; and
(x) The Company and its Subsidiaries have
provided Parent with copies of all environmentally related audits, assessments,
studies, reports, analyses, and results of investigations prepared within the
past five years by any third party or any similar material internally generated
report prepared within the past five years concerning any real property
currently or formerly owned, operated or leased by the Company or its
Subsidiaries.
(p) Real Property.
(i) Schedule 4.1(p)(i) sets forth all real
property owned by the Company ("Real Property"). The Subsidiaries own no real
property. All improvements located on the Real Property are owned by the
Company. The Company has heretofore delivered to Parent, true, correct and
complete copies of (i) all Real Property deeds, or other evidences of ownership
(including all modifications, amendments and supplements hereto) and (ii) all
title insurance policies in effect with respect to the Real Property. Except as
set forth on Schedule 4.1(p)(i), the Company has good and clear, record and
marketable fee simple title to the Real Property free and clear of all
mortgages, pledges, liens, easements, covenants, restrictions, claims, leases,
encumbrances and security interests. There are no condemnation, environmental,
zoning or land use regulation proceedings, either instituted or, to the best of
the Company's knowledge, planned to
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be instituted, which would adversely affect the use or operation of the
Company's Real Property and the improvements thereto for their respective
intended uses and purposes, or the value of such properties, and the Company has
not received notice of any special assessment proceedings which would affect
such properties and assets.
(ii) Schedule 4.1(p)(ii) sets forth all leases,
subleases and other agreements (the "Real Property Leases") under which the
Company or any of its Subsidiaries uses or occupies or has the right to use or
occupy, now or in the future, any real property. The Company has heretofore
delivered to Parent true, correct and complete copies of all Real Property
Leases (including all modifications, amendments and supplements hereto). Each
Real Property Lease is valid, binding and in full force and effect, all rent and
other sums and charges payable by the Company and its Subsidiaries as tenants
thereunder are current, no termination event or condition or uncured default of
a material nature on the part of the Company or any such Subsidiary or, to the
Company's knowledge, the landlord, exists under any Real Property Lease, and,
except as set forth on Schedule 4.1(p)(ii), no event has occurred and is
continuing which, with due notice or lapse of time or both, would constitute a
default or event of default by the Company or any of its Subsidiaries or, to the
best of the Company's knowledge, by any other party thereto. Each of the Company
and its Subsidiaries has a good and valid leasehold interest in each parcel of
real property leased by it free and clear of all mortgages, pledges, liens,
easements, covenants, restrictions, claims, encumbrances and security interests,
except (i) those reflected or reserved against in the November 1 Balance Sheet;
(ii) taxes and general and special assessments not yet due and payable without
penalty and interest; (iii) superior rights of lessors' lenders as permitted by
such leases; and (iv) as set forth on Schedule 4.1(p)(ii). No other party holds
an option to purchase or lease any portion of the Real Property, and none of the
Real Property Leases may be terminated by any party except as provided in
accordance with their terms.
(q) Insurance. Set forth on Schedule 4.1(q) is a list and
description of insurance policies (including information on the premiums payable
in connection therewith and the scope and amount of the coverage and deductibles
provided thereunder) maintained by the Company or any of its Subsidiaries, which
policies have been issued by reputable and financially sound insurers and
provide adequate coverage for the operations conducted by the Company and its
Subsidiaries in accordance with customary industry practice.
(r) Board Recommendation. The Board of Directors of the
Company, at a meeting duly called and held, has by the vote of those directors
present (who constituted 100% of the directors then in office and of which a
majority of those voting were and are Continuing Directors (as defined in and
for purposes of Section 11(b) of the Company's Restated Certificated of
Incorporation) (i) determined that this Agreement and the transactions
contemplated hereby, including the Offer and the Merger, and the execution and
delivery of the Stockholders Agreement and the transactions contemplated
thereby, taken together, are fair to and in the best interests of the
stockholders of the Company and has approved the same, and (ii) resolved to
recommend that the holders of the shares of Company Common Stock approve this
Agreement and the transactions
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contemplated herein, including the Merger, and accept the Offer and tender their
shares of Company Common Stock pursuant thereto.
(s) Material Contracts. Each contract, agreement or other
document or instrument (collectively "SEC Contracts") to which the Company or
any of its Subsidiaries is a party that was required to be filed as an exhibit
to the Company's annual report on Form 10-K for the year ended July 31, 1997 was
so filed and, neither the Company nor any of its Subsidiaries (A) has entered
into, from and after July 31, 1997, any contract, agreement or other document or
instrument (other than this Agreement) that is required to be filed with the SEC
that has not been so filed on or before the date of this Agreement or any
amendment, modification or waiver under any contract, agreement or other
document or instrument that was previously so filed, which amendment,
modification or waiver is required to be so filed (collectively "Additional SEC
Contracts") or (B) except as listed on Schedule 4.1(s), is a party to any oral
or written agreement, plan or arrangement with any officer, director or employee
of the Company or of any Subsidiary of the Company (collectively "Material
Employment Contracts" and together with the SEC Contracts and Additional SEC
Contracts, the "Material Contracts") (1) the benefits of which are contingent,
or the terms of which are materially altered, upon the occurrence of a
transaction involving the Company of the nature of any of the transactions
contemplated by this Agreement, (2) providing severance benefits or other
benefits after the termination of employment regardless of the reason for such
termination of employment, (3) under which any person may receive payments
subject to the tax imposed by Section 4999 of the Code, or (4) any of the
benefits of which will be increased, or the vesting of benefits of which will be
accelerated, by the occurrence of any of the transactions contemplated by this
Agreement or the value of any of the benefits of which will be calculated on the
basis of any of the transactions contemplated by this Agreement. Except as set
forth on Schedule 4.1(s), each Material Contract is a valid and binding
obligation of the Company and, to the Company's knowledge, each other party
thereto and is in full force and effect without amendment. Except as set forth
on Schedule 4.1(s), the Company and, to the Company's knowledge, each other
party thereto has performed all obligations required to be performed by it
through the date hereof under the Material Contracts and is not (with or without
lapse of time or giving notice, or both) in breach or default in any respect
thereunder.
(t) Related Party Transactions. Except as set forth on
Schedule 4.1(t) hereto, no director, officer, partner, employee, "affiliate" or
"associate" (as such terms are defined in Rule 12b-2 under the Exchange Act) of
the Company or any of its Subsidiaries (i) has outstanding any indebtedness or
other similar obligations to the Company or any of its Subsidiaries; (ii) to the
knowledge of the Company, owns any direct or indirect interest of any kind in,
or is a director, officer, employee, partner, affiliate or associate of, or
consultant or lender to, or borrower from, or has the right to participate in
the management, operations or profits of, any person or entity which is (1) a
competitor, supplier, customer, distributor, lessor, tenant, creditor or debtor
of the Company or any of its Subsidiaries, (2) engaged in a business related to
the business of the Company or any of its Subsidiaries or (3) participating in
any transaction to which the Company or any of its Subsidiaries is a party or
(iii) is otherwise a party to any contract, arrangement or understanding with
the Company or any of its Subsidiaries.
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(u) Indebtedness. Except as set forth on Schedule 4.1(u),
or reflected in the SEC Documents or the Company's financial statements provided
to Parent, neither the Company nor any of its Subsidiaries has any outstanding
indebtedness for borrowed money or representing the deferred purchase price of
property or services or similar liabilities or obligations, including any
guarantee in respect thereof ("Indebtedness"), or is a party to any agreement,
arrangement or understanding providing for the creation, incurrence or
assumption thereof.
(v) Liens. Except as set forth on Schedule 4.1(v) or
reflected in the SEC Documents or in the Company's financial statements provided
to Parent, neither the Company nor any of its Subsidiaries has granted, created
or suffered to exist with respect to any of its assets, any mortgage, pledge,
charge, hypothecation, collateral assignment, lien (statutory or otherwise),
encumbrance or security agreement of any kind or nature whatsoever.
(w) Opinion of Financial Advisor. The Company has received
the opinion (the "Fairness Opinion") of Edwards to the effect that, as of the
date hereof, the Offer Consideration to be received by the holders of Company
Common Stock in the Offer and the Merger Consideration to be received by the
holders of Company Common Stock in the Merger is fair from a financial point of
view to such holders, a signed, true and complete copy of which opinion has been
delivered to Parent.
4.2 Representations, Warranties, and Covenants of Parent and Sub.
Parent and Sub represent and warrant to the Company as follows:
(a) Organization, Standing and Power. Each of Parent and
Sub is a corporation duly organized, validly existing and in good standing under
the laws of its state of incorporation or organization, has all requisite power
and authority to own, lease and operate its properties and to carry on its
business as now being conducted, and is duly qualified and in good standing to
conduct business in each jurisdiction in which the business it is conducting, or
the operation, ownership or leasing of its properties, makes such qualification
necessary, other than in such jurisdictions where the failure so to qualify
would not have a Material Adverse Effect with respect to Parent. Parent and Sub
have heretofore made available to the Company complete and correct copies of
their respective Articles of Organization, Certificate of Incorporation and
Bylaws.
(b) Authority; No Violations; Consents and Approvals.
(i) Each of Parent and Sub has all requisite
corporate power and authority to enter into this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby have been duly
authorized by all necessary corporate action on the part of Parent and Sub. This
Agreement has been duly executed and delivered by each of Parent and Sub and
assuming this Agreement constitutes the valid and binding agreement of the
Company, constitutes a valid and binding obligation of Parent and Sub
enforceable in accordance with its
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terms except that the enforcement hereof may be limited by (a) bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or hereafter in
effect relating to creditors' rights generally and (b) general principles of
equity (regardless of whether enforceability is considered in a proceeding at
law or in equity).
(ii) The execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby by each of Parent
and Sub will not result in any Violation (as defined in Section 4.1(c)(iii))
pursuant to any provision of the respective Articles of Organization or
Certificate of Incorporation or Bylaws of Parent or Sub or, except as to which
requisite waivers or consents have been obtained and assuming the consents,
approvals, authorizations or permits and filings or notifications referred to in
paragraph (iii) of this Section 4.2(b) are duly and timely obtained or made and,
if required, the Company Stockholder Approval has been obtained, result in any
Violation of any loan or credit agreement, note, mortgage, indenture, lease, or
other agreement, obligation, instrument, concession, franchise, license,
judgment, order, decree, statute, law, ordinance, rule or regulation applicable
to Parent or Sub or their respective properties or assets, which would have a
Material Adverse Effect on Parent.
(iii) No consent, approval, order or authorization
of, or registration, declaration or filing with, notice to, or permit from any
Governmental Entity, is required by or with respect to Parent or Sub in
connection with the execution and delivery of this Agreement by each of Parent
and Sub or the consummation by each of Parent or Sub of the transactions
contemplated hereby, except for: (A) filings under the HSR Act; (B) the filing
with the SEC of (x) the Schedule 14D-1 in connection with the commencement and
consummation of the Offer and (y) such reports under and such other compliance
with the Exchange Act and the rules and regulations thereunder, as may be
required in connection with this Agreement and the transactions contemplated
hereby; (C) the filing of the Certificate of Merger with the Secretary of State
of the State of Delaware; and (D) such filings and approvals as may be required
by any applicable state securities, "blue sky" or takeover laws.
(c) Information Supplied. None of the information supplied
or to be supplied by Parent or Sub for inclusion or incorporation by reference
in (i) the Schedule 14D-9 will, at the time the Schedule 14D-9 is filed with the
SEC, and at any time it is amended or supplemented, contain any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they are made, not misleading, and (ii) the Proxy
Statement will, at the date it is first mailed to the Company's stockholders or
at the time of the Company Stockholder Approval, contain any untrue statement of
a material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they are made, not misleading. If at any time prior to
the Effective Time any event with respect to Parent or Sub, or with respect to
information supplied by Parent or Sub for inclusion in the Schedule 14D-9 or the
Proxy Statement, shall occur which is required to be described in an amendment
of, or a supplement to, such documents, such event shall be so described to the
Company.
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(d) Board Recommendation. The Boards of Directors of the
Parent and Sub at meetings duly called and held, have by the unanimous vote of
their directors determined that each of the Offer and the Merger is fair to and
in the best interests of Parent and Sub and have approved the same.
(e) Financing. Parent has sufficient available credit
under existing bank facilities, and will cause Sub to have sufficient financial
resources, to consummate the Offer and the Merger and the respective
transactions contemplated thereby.
(f) Interim Operations of Sub. Sub was formed solely for
the purpose of engaging in the transactions contemplated hereby and has not
engaged in any business activities or conducted any operations other than in
connection with the transactions contemplated hereby. Sub is a wholly-owned
subsidiary of Parent.
ARTICLE V
COVENANTS RELATING TO CONDUCT OF BUSINESS
5.1 Covenants of the Company. During the period from the date of
this Agreement and continuing until the Effective Time, the Company agrees as to
the Company and its Subsidiaries that (except as expressly contemplated or
permitted by this Agreement, or to the extent that Parent shall otherwise
consent in writing):
(a) Ordinary Course. Each of the Company and its
Subsidiaries shall carry on its businesses in the usual, regular and ordinary
course in substantially the same manner as heretofore conducted and shall use
all reasonable efforts to preserve intact its present business organizations,
keep available the services of its current officers and employees and preserve
its relationships with customers, suppliers and others having business dealings
with it to the end that its goodwill and ongoing business shall not be impaired
in any material respect at the Effective Time.
(b) Dividends; Changes in Stock. The Company shall not,
nor shall it permit any of its Subsidiaries to: (i) declare or pay any dividends
on or make other distributions in respect of any of its capital stock; (ii)
split, combine or reclassify any of its capital stock or issue or authorize or
propose the issuance of any other securities in respect of, in lieu of or in
substitution for shares of its capital stock; or (iii) repurchase or otherwise
acquire, or permit any Subsidiary to purchase or otherwise acquire, any shares
of its capital stock, except as required by the terms of its securities
outstanding on the date hereof, as contemplated by this Agreement or as
contemplated by employee benefit and dividend reinvestment plans as in effect on
the date hereof.
(c) Issuance of Securities. The Company shall not, nor
shall it permit any of its Subsidiaries to, (i) grant any options, warrants or
rights, to purchase shares of Company Common
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Stock, (ii) amend or reprice any Option, any Stock Option Plan or the Stock
Purchase Plan, or (iii) issue, deliver or sell, or authorize or propose to
issue, deliver or sell, any shares of its capital stock of any class or series,
any Company Voting Debt or any securities convertible into, or any rights,
warrants or options to acquire, any such shares, Company Voting Debt or
convertible securities, other than: (A) the issuance of Shares upon the exercise
of Options granted under Stock Option Plans which are outstanding on the date
hereof, or in satisfaction of stock grants or stock based awards made prior to
the date hereof pursuant to Stock Option Plans required by any individual
agreements such as employment agreements or executive termination agreements (in
each such case, as in effect on the date hereof); and (B) issuances by a
wholly-owned Subsidiary of its capital stock to its parent.
(d) Governing Documents. The Company shall not amend or
propose to amend its Certificate of Incorporation or Bylaws.
(e) No Solicitation. From and after the date hereof until
the termination of this Agreement, neither the Company nor any of its
Subsidiaries, nor any of their respective officers, directors, employees,
representatives, agents or affiliates (including, without limitation, any
investment banker, attorney or accountant retained by the Company or any of its
Subsidiaries) (such officers, directors, employees, representatives, agents,
affiliates, investment bankers, attorneys and accountants being referred to
herein, collectively, as "Representatives"), will, directly or indirectly,
initiate, solicit or encourage (including by way of furnishing information or
assistance to any person making, or as a result thereof may reasonably be
expected to lead to, any Acquisition Proposal (as defined below)), or take any
other action to facilitate, any inquiries or the making of any proposal that
constitutes, or may reasonably be expected to lead to, any Acquisition Proposal,
or enter into or maintain or continue discussions or negotiate with any person
or entity in furtherance of such inquiries or to obtain an Acquisition Proposal
or agree to or endorse any Acquisition Proposal, and neither the Company nor any
of its Subsidiaries will authorize or permit any of its Representatives to take
any such action, and the Company shall as soon as possible notify Parent orally
and in writing of all of the relevant details relating to, and all material
aspects of, all inquiries and proposals which it or any of its Subsidiaries or
any of their respective Representatives may receive relating to any of such
matters and, if such inquiry or proposal is in writing, the Company shall as
soon as possible deliver to Parent a copy of such inquiry or proposal; provided,
however, that nothing contained in this Section 5.1(e) shall prohibit the Board
of Directors of the Company from:
(i) furnishing information to, or entering into
discussions or negotiations with, any person or entity that makes an unsolicited
written, bona fide Acquisition Proposal and, in respect of which, in the case of
an Acquisition Proposal involving the payment of cash, such person or entity
has, in the reasonable and good faith opinion of the Board of Directors or its
Representatives, the necessary funds or written commitments therefor if, and
only to the extent that, (A) the Board of Directors of the Company determines in
good faith (after consultation with and based upon the advice of its financial
advisor) that such Acquisition Proposal may reasonably be expected, if
consummated, to result in a transaction more favorable to the
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Company's stockholders from a financial point of view than the transaction
contemplated by this Agreement and the Board of Directors determines in good
faith, after consultation with and based upon the advice of independent legal
counsel (who may be the Company's regularly engaged independent legal counsel),
that such action is necessary for the Board of Directors of the Company to
comply with its fiduciary duties to stockholders under applicable law, (B) prior
to taking such action, the Company (x) provides reasonable notice to Parent to
the effect that it is taking any such action, describes to Parent in reasonable
detail the identity of the offeror and the terms and conditions of such
Acquisition Proposal, and furnishes Parent a copy of any written material
submitted by the offeror and (y) receives from such person or entity an executed
confidentiality agreement in customary form, and (C) the Company shall as
promptly and continuously as possible advise Parent as to all of the relevant
details relating to, and all material aspects, of any such discussions or
negotiations, or
(ii) failing to make or withdrawing or modifying
its recommendation referred to in Section 1.3 if there exists an Acquisition
Proposal and the Board of Directors of the Company, after consultation with and
based upon the advice of independent legal counsel (who may be the Company's
regularly engaged independent legal counsel), determines in good faith that such
action is necessary for the Board of Directors of the Company to comply with its
fiduciary duties to stockholders under applicable law.
For purposes of this Agreement, "Acquisition Proposal" shall mean any
proposal to do any of the following (other than the transactions between the
Company, Parent and Sub contemplated hereunder) involving the Company or any of
its Subsidiaries: (i) any merger, consolidation, share exchange,
recapitalization, business combination, or other similar transaction; (ii) any
sale, lease, exchange, mortgage, pledge, transfer or other disposition of 25% or
more of the assets of the Company and its Subsidiaries, taken as a whole, in a
single transaction or series of transactions; (iii) any tender offer or exchange
offer for 25% or more of the outstanding shares of capital stock of the Company
or the filing of a registration statement under the Securities Act in connection
therewith; or (iv) any public announcement of a proposal, plan or intention to
do any of the foregoing or any agreement to engage in any of the foregoing.
(f) No Acquisitions. The Company shall not, nor shall it
permit any of its Subsidiaries to, acquire or agree to acquire by merging or
consolidating with, or by purchasing a substantial equity interest in or a
substantial portion of the assets of, or by any other manner, any business or
any corporation, partnership, association or other business organization or
division thereof.
(g) No Dispositions. Other than dispositions in the
ordinary course of business consistent with past practice which are not
material, individually or in the aggregate, to such party and its Subsidiaries
taken as a whole, the Company shall not, nor shall it permit any of its
Subsidiaries to, sell, lease, encumber or otherwise dispose of, or agree to
sell, lease (whether such lease is an operating or capital lease), encumber or
otherwise dispose of, any of its assets.
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(h) SEC Filings. The Company shall promptly provide Parent
(or its counsel) with copies of all filings made by the Company with the SEC or
any other state or federal Governmental Entity in connection with this Agreement
and the transactions contemplated hereby.
(i) No Dissolution, Etc. Except as otherwise permitted or
contemplated by this Agreement, the Company shall not, nor shall it permit any
of its Subsidiaries to, authorize, recommend, propose or announce an intention
to adopt a plan of complete or partial liquidation or dissolution of the Company
or any of its Subsidiaries.
(j) Other Actions. Except as contemplated by this
Agreement, the Company will not nor will it permit any of its Subsidiaries to
take or agree or commit to take any action that is reasonably likely to result
in any of the Company's representations or warranties hereunder being untrue in
any material respect or in any of the Company's covenants hereunder or any of
the conditions to the Merger not being satisfied in all material respects.
(k) Certain Employee Matters. The Company and its
Subsidiaries shall not (without the prior written consent of Parent): (i) grant
any increases in the compensation of any of its directors, officers or key
employees; (ii) pay or agree to pay any pension, retirement allowance or other
employee benefit not required or contemplated by any of the existing Benefit
Plans or Employee Arrangements as in effect on the date hereof to any such
director, officer or key employee, whether past or present; (iii) enter into any
new, or materially amend any existing, employment or severance or termination
agreement with any such director, officer or key employee; or (iv) except as may
be required to comply with applicable law, become obligated under any new
Benefit Plan or Employee Arrangement, which was not in existence on the date
hereof, or amend any such plan or arrangement in existence on the date hereof if
such amendment would have the effect of materially enhancing any benefits
thereunder.
(l) Indebtedness; Agreements. (i) Except as set forth on
Schedule 5.1(l)(i), the Company shall not, nor shall the Company permit any of
its Subsidiaries to, assume or incur (which shall be deemed to include both
entering into credit agreements, lines of credit or similar arrangements and any
borrowings under existing credit agreements, lines of credit or similar
arrangements) any indebtedness for borrowed money or guarantee any such
indebtedness or issue or sell any debt securities or warrants or rights to
acquire any debt securities of such party or any of its Subsidiaries or
guarantee any debt securities of others or enter into any lease (whether such
lease is an operating or capital lease) or create any mortgages, liens, security
interests or other encumbrances on the property of the Company or any of its
Subsidiaries in connection with any indebtedness thereof, or enter into any
"keep well" or other agreement or arrangement to maintain the financial
condition of another person.
(ii) The Company shall not, nor shall the Company
permit any of its Subsidiaries to, enter into, modify, rescind, terminate,
waive, release or otherwise amend in any material respect any of the terms or
provisions of any Material Contract.
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(m) Accounting. The Company shall not take any action,
other than in the ordinary course of business, consistent with past practice or
as required by the SEC or by law, with respect to accounting policies,
procedures and practices.
(n) Capital Expenditures. Except for the capital
expenditures set forth on Schedule 5.1(n), the Company and its Subsidiaries
shall not incur any capital expenditures that, in the aggregate, are in excess
of $1,000,000.
ARTICLE VI
ADDITIONAL AGREEMENTS
6.1 Preparation of the Proxy Statement; Company Stockholders
Meeting; Merger without a Company Stockholders Meeting.
(a) As soon as practicable following the acceptance for
payment of and payment for shares of Company Common Stock by Sub in the Offer,
the Company and Parent shall prepare and file with the SEC the Proxy Statement.
The Company shall use its best efforts to respond to all SEC comments with
respect to the Proxy Statement and to cause the Proxy Statement to be mailed to
the Company's stockholders at the earliest practicable date. The Company, Parent
and Sub, shall take all reasonable actions necessary or advisable to cause the
Merger to be approved by shareholders and to effect the Merger.
(b) The Company will, as soon as practicable following the
Proxy Trigger Date, duly call, give notice of, convene and hold the Company
Stockholders Meeting for the purpose of approving this Agreement and the
transactions contemplated hereby. At the Company Stockholders Meeting, Parent
shall cause all of the shares of Company Common Stock then owned by Parent and
Sub and any of their Subsidiaries or affiliates to be voted in favor of the
Merger.
(c) Notwithstanding the foregoing clauses (a) and (b), in
the event that Parent or any other Subsidiary of Parent shall acquire at least
90% of the outstanding shares of Company Common Stock in the Offer, the parties
hereto agree, at the request of Sub, to take all necessary and appropriate
action to cause the Merger to become effective, as soon as practicable after the
expiration of the Offer, without a meeting of stockholders of the Company, in
accordance with Section 253 of the DGCL.
(d) Parent shall (i) cause Sub promptly to submit this
Agreement and the transactions contemplated hereby for approval and adoption by
its parent by written consent of sole stockholder; (ii) cause the shares of
capital stock of Sub to be voted for adoption and approval of this Agreement and
the transactions contemplated hereby; and (iii) cause to be taken all additional
actions necessary for Sub to adopt and approve this Agreement and the
transactions contemplated hereby.
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6.2 Access to Information. Upon reasonable notice, the Company
shall (and shall cause each of its Subsidiaries to) afford to the officers,
employees, accountants, counsel and other Representatives of Parent (including
potential financing sources and their employees, accountants, counsel and other
representatives), continuing access, during normal business hours during the
period prior to the Effective Time, to all its properties, books, contracts,
commitments and records and, during such period, the Company shall (and shall
cause each of its Subsidiaries to) furnish promptly to Parent, (a) a copy of
each report, schedule, registration statement and other document filed or
received by it during such period pursuant to SEC requirements and (b) all other
information concerning its business, properties and personnel as Parent may
reasonably request. The Confidentiality Agreement between Parent and the Company
(the "Confidentiality Agreement") shall apply with respect to information
furnished thereunder or hereunder and any other activities contemplated thereby.
6.3 Legal Conditions to Merger. Each of the Company, Parent and
Sub will take all reasonable actions necessary to comply promptly with all legal
requirements which may be imposed on such party with respect to the Offer, the
Merger and the transactions contemplated by the Stockholders Agreement
(including furnishing all information required under the HSR Act and in
connection with approvals of or filings with any other Governmental Entity) and
will promptly cooperate with and furnish information to each other in connection
with any such requirements imposed upon any of them or any of their Subsidiaries
in connection with the Offer, the Merger and the transactions contemplated by
the Stockholders Agreement; provided, however, that Parent need not so comply if
required by the Department of Justice or any other Governmental Entity to hold
separate, sell or otherwise dispose of any Subsidiary of Parent or the Company
or assets or properties of any of the foregoing. Each of the Company, Parent and
Sub will, and will cause its Subsidiaries to, take all reasonable actions
necessary to obtain (and will cooperate with each other in obtaining) any
consent, authorization, order or approval of, or any exemption by, any
Governmental Entity or other public or private third party, required to be
obtained or made by the Company, Parent or any of their Subsidiaries in
connection with the Offer, the Merger, the Stockholders Agreement or the taking
of any action contemplated hereby or thereby.
6.4 Fees and Expenses.
(a) Except as otherwise provided in this Section 6.4 and
except with respect to claims for damages incurred as a result of the breach of
this Agreement, all costs and expenses incurred in connection with this
Agreement and the transactions contemplated hereby shall be paid by the party
incurring such expense.
(b) The Company agrees to pay, by delivery of a certified
or cashier's check, or, if requested by Parent, by wire transfer to an account
designated by Parent, Parent a fee in immediately available funds equal to
$6,000,000 (the "Termination Fee") prior to the termination of this Agreement
under Section 8.1(g), if any of the events set forth below occurs (each, a
"Trigger Event"):
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(i) the Board of Directors of the Company shall
have withdrawn or adversely modified, or taken a public position materially
inconsistent with, its approval or recommendation of the Offer, the Merger, this
Agreement or the Stockholders Agreement; or
(ii) An Acquisition Proposal has been recommended
or accepted by the Company or the Company shall have entered into an agreement
(other than a confidentiality agreement as contemplated by Section 5.1(e)) with
respect to an Acquisition Proposal.
(c) Any amounts due under this Section 6.4 that are not
paid when due shall bear interest at the rate of 9% per annum from the date due
through and including the date paid.
6.5 Brokers or Finders.
(a) The Company represents, as to itself, its Subsidiaries
and its affiliates, that no agent, broker, investment banker, financial advisor
or other firm or person is or will be entitled to any broker's or finders fee or
any other commission or similar fee in connection with any of the transactions
contemplated by this Agreement, except Edwards, whose fees and expenses will be
paid by the Company in accordance with the Company's agreements with such firm
(copies of which have been delivered by the Company to Parent prior to the date
of this Agreement).
(b) Parent represents, as to itself, its Subsidiaries and
its affiliates, that no agent, broker, investment banker, financial advisor or
other firm or person is or will be entitled to any broker's or finders fee or
any other commission or similar fee in connection with any of the transactions
contemplated by this Agreement, except BancAmerica Robertson Stephens, whose
fees and expenses will be paid by Parent in accordance with Parent's agreements
with such firm.
6.6 Indemnification; Directors' and Officers' Insurance.
(a) The Company shall, and from and after the Effective
Time, the Parent and Surviving Corporation shall, indemnify, defend and hold
harmless each person who is now, or has been at any time prior to the date
hereof or who becomes prior to the Effective Time, an officer, director,
employee or agent of the Company or any of its Subsidiaries (the "Indemnified
Parties") against all losses, claims, damages, costs, expenses (including
reasonable attorneys' fees and expenses), liabilities or judgments or amounts
that are paid in settlement with the approval of the indemnifying party of or in
connection with any threatened or actual claim, action, suit, proceeding or
investigation based in whole or in part on or arising in whole or in part out of
the fact that such person is or was a director, officer, employee or agent of
the Company or any of its Subsidiaries whether pertaining to any matter existing
or occurring at or prior to the Effective Time and whether asserted or claimed
prior to, or at or after, the Effective Time ("Indemnified Liabilities"),
including all Indemnified Liabilities based in whole or in part on, or arising
in whole or in part out of, or pertaining to this Agreement or the transactions
contemplated hereby, in each case to the full extent a corporation is permitted
under the DGCL to indemnify its own directors or officers as the case may be
(and Parent and the Surviving Corporation, as the case may be, will pay expenses
in
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advance of the final disposition of any such action or proceeding to each
Indemnified Party to the full extent permitted by law). Without limiting the
foregoing, in the event any such claim, action, suit, proceeding or
investigation is brought against any Indemnified Parties (whether arising before
or after the Effective Time), (i) the Indemnified Parties may retain counsel
satisfactory to them and the Company (or them and the Surviving Corporation
after the Effective Time) and the Company (or after the Effective Time, the
Surviving Corporation) shall pay all fees and expenses of such counsel for the
Indemnified Parties promptly as statements therefor are received; and (ii) the
Company (or after the Effective Time, the Surviving Corporation) will use all
reasonable efforts to assist in the vigorous defense of any such matter,
provided that neither the Company nor the Surviving Corporation shall be liable
for any settlement effected without its prior written consent. Any Indemnified
Party wishing to claim indemnification under this Section 6.6, upon learning of
any such claim, action, suit, proceeding or investigation, shall notify the
Company (or after the Effective Time, the Surviving Corporation) (but the
failure so to notify shall not relieve a party from any liability which it may
have under this Section 6.6 except to the extent such failure prejudices such
party), and shall to the extent required by the DGCL deliver to the Company (or
after the Effective Time, the Surviving Corporation) the undertaking
contemplated by Section 145(e) of the DGCL. The Indemnified Parties as a group
may retain only one law firm to represent them with respect to each such matter
unless there is, under applicable standards of professional conduct, a conflict
on any significant issue between the positions of any two or more Indemnified
Parties. The Company, Parent and Sub agree that all rights to indemnification,
including provisions relating to advances of expenses incurred in defense of any
action or suit, existing in favor of the Indemnified Parties with respect to
matters occurring through the Effective Time, shall survive the Merger and shall
continue in full force and effect for a period of not less than six years from
the Effective Time; provided, however, that all rights to indemnification in
respect of any Indemnified Liabilities asserted or made within such period shall
continue until the disposition of such Indemnified Liabilities.
(b) Prior to the Effective Time, the Company shall
purchase a policy of directors' and officers' liability insurance to be in
effect for not less than six years after the Effective Time, providing for
claims made type coverage substantially equivalent in scope and content to the
coverage provided in the Company's current policies of directors' and officers'
liability insurance, and the premiums therefor shall be prepaid in full with
respect to matters arising before the Effective Time; provided that the Company
shall not pay an annual premium for such insurance in excess of 150% of the last
annual premium therefor paid by the Company prior to the date hereof; and
provided further, that the Company shall consult with Parent prior to the
purchase of such insurance or the purchase or renewal of any directors' and
officers' liability insurance and offer Parent the opportunity to elect to
purchase such insurance on behalf of the Company.
(c) The provisions of this Section 6.6 are intended to be
for the benefit of, and shall be enforceable by, each Indemnified Party, his
heirs and his personal representatives and shall be binding on all successors
and assigns of Sub, the Company and the Surviving Corporation.
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6.7 Reasonable Efforts. Subject to the terms and conditions of this
Agreement, each of the parties hereto agrees to use all reasonable efforts to
take, or cause to be taken, all action and to do, or cause to be done, all
things necessary, proper or advisable under applicable laws and regulations to
consummate and make effective the transactions contemplated by this Agreement
and the Stockholders Agreement, subject, as applicable, to the Company
Stockholder Approval, including cooperating fully with the other party, and
including by provision of information and making of all necessary filings in
connection with, among other things, approvals under the HSR Act. In case at any
time after the Effective Time, any further action is necessary or desirable to
carry out the purposes of this Agreement or to vest the Surviving Corporation
with full title to all properties, assets, rights, approvals, immunities and
franchises of either of the Constituent Corporations, the proper officers and
directors of each party to this Agreement shall take all such necessary action.
6.8 Conduct of Business of Sub. During the period of time from the date
of this Agreement to the Effective Time, Sub shall not engage in any activities
of any nature except as provided in or contemplated by this Agreement.
6.9 Publicity. The parties will consult with each other and will
mutually agree upon any press release or public announcement pertaining to the
Offer and the Merger and shall not issue any such press release or make any such
public announcement prior to such consultation and agreement, except as may be
required by applicable law or by obligations arising under the Company's listing
agreement with NASDAQ, in which case the party proposing to issue such press
release or make such public announcement shall use reasonable efforts to consult
in good faith with the other party before issuing any such press release or
making any such public announcement.
ARTICLE VII
CONDITIONS PRECEDENT
7.1 Conditions to Each Party's Obligation to Effect the Merger. The
respective obligation of each party to effect the Merger shall be subject to the
satisfaction prior to the Closing Date of the following conditions:
(a) Stockholder Approval. This Agreement and the Merger shall
have been approved and adopted by the affirmative vote of the holders of a
majority of the Shares entitled to vote thereon if such vote is required by
applicable law; provided that the Parent and Sub shall vote all Shares purchased
pursuant to the Offer or the Stockholders Agreement in favor of the Merger.
(b) HSR Act. The waiting period (and any extension thereof)
applicable to the Merger under the HSR Act shall have been terminated or shall
have expired.
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(c) No Injunctions or Restraints. No temporary restraining
order, preliminary or permanent injunction or other order issued by any court of
competent jurisdiction or other legal restraint or prohibition (an "Injunction")
preventing the consummation of the Merger shall be in effect; provided, however,
that prior to invoking this condition, each party shall use all commercially
reasonable efforts to have any such decree, ruling, injunction or order vacated.
7.2 Conditions of Obligations of Parent and Sub. The obligations of
Parent and Sub to effect the Merger are subject to the satisfaction of the
following conditions, any or all of which may be waived in whole or in part by
Parent and Sub:
(a) Payment for Shares. Sub shall have (i) accepted for
payment and become obligated to pay for a number of shares of Company Common
Stock tendered in the Offer such that, after such acceptance and payment, Parent
and its affiliates shall own the outstanding shares of the Company Common Stock
satisfying the 90% Tender Condition or (ii) elected under 1.1(c)(i) or (ii) to
do a Cash Merger or waived the 90% Tender Condition in favor of the Majority
Tender Condition.
(b) Representations and Warranties. The representations and
warranties of the Company set forth in this Agreement shall be true and correct
in all material respects as of the date of this Agreement and (except to the
extent such representations and warranties speak as of an earlier date) as of
the Closing Date as though made on and as of the Closing Date, except as
otherwise contemplated by this Agreement, and Parent shall have received a
certificate signed on behalf of the Company by the chief executive officer and
by the chief financial officer of the Company to such effect.
(c) Performance of Obligations of the Company. The Company
shall have performed in all material respects all obligations required to be
performed by it under this Agreement at or prior to the Closing Date, and Parent
shall have received a certificate signed on behalf of the Company by the chief
executive officer and by the chief financial officer of the Company to such
effect.
(d) Consents, etc. All licenses, permits, consents, approvals,
authorizations, qualifications and orders of governmental authorities and all
material licenses, permits, consents, approvals, authorizations, qualifications
and orders of other third parties as are necessary in connection with the
transactions contemplated hereby shall have been obtained.
(e) No Material Adverse Change. There shall not have occurred
any material adverse change in the business, operations, assets or condition
(financial or otherwise) of the Company.
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ARTICLE VIII
TERMINATION AND AMENDMENT
8.1 Termination. This Agreement may be terminated and the Merger may be
abandoned at any time prior to the Effective Time, whether before or after
approval of the matters presented in connection with the Merger by the
stockholders of the Company or Parent:
(a) by mutual written consent of the Company and Parent, or
by mutual action of their respective Boards of Directors;
(b) by either the Company or Parent prior to the consummation
of the Offer (i) if there has been a material breach (for purpose of this
clause, a material breach by the Company shall mean a breach or series of
breaches the result of which impairs the value of the Company or could
reasonably be expected to impair the value of the Company by more than
$3,000,000 in the aggregate) of any representation, warranty, covenant or
agreement on the part of the other set forth in this Agreement which breach has
not been cured within 10 business days following receipt by the breaching party
of notice of such breach, or (ii) if any permanent injunction or other order of
a court or other competent authority preventing the consummation of the Merger
shall have become final and non-appealable;
(c) by either the Company or Parent if the Merger shall not
have been consummated on or before July 31, 1998; provided, that the right to
terminate this Agreement under this Section 8.1(c) shall not be available to any
party whose failure to fulfill any obligation under this Agreement has been the
cause of or resulted in the failure of the Merger to occur on or before such
date;
(d) by Parent in the event an Acquisition Proposal has been
made to the Company and the Company shall fail to reaffirm its approval or
recommendation of the Offer, the Merger, this Agreement and the Stockholders
Agreement on or before the fifth business day following the date on which such
Acquisition Proposal shall have been made;
(e) subject to the provisions of Section 1.1(c), by Parent or
Company, if the Offer terminates, is withdrawn, abandoned or expires by reason
of the failure to satisfy any condition set forth in Exhibit A hereto, except
solely by reason of the failure to satisfy the 90% Tender Condition when the
Majority Tender Condition is satisfied;
(f) except if Section 1.1(c) is applicable and Parent and Sub
shall have elected to terminate the Offer and pursue the Cash Merger, by the
Company, if the Offer shall have expired or have been withdrawn, abandoned or
terminated without any shares of Company Common Stock being purchased by Sub
thereunder on or prior to the 90th day after the date of commencement of the
Offer pursuant to section 1.2 hereof, or;
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(g) by Parent or the Company in the event that a Trigger Event
has occurred under Section 6.4(b), but the parties acknowledge that the Company
may not terminate this Agreement under this Section 8.1(g) until it has paid the
Termination Fee as contemplated by Section 6.4(b).
8.2 Effect of Termination. In the event of termination of this
Agreement by either the Company or Parent as provided in Section 8.1, this
Agreement shall forthwith become void and there shall be no liability or
obligation on the part of Parent, Sub or the Company or their respective
affiliates, officers, directors or shareholders except (i) with respect to this
Section 8.2, the second sentence of Section 6.2, and Section 6.4, and (ii) for
any breach by a party hereto of any of its representations or warranties, or of
any of its covenants or agreements as set forth in this Agreement except as
provided in Section 9.7.
8.3 Amendment. Subject to applicable law and Section 1.4(b) hereof,
this Agreement may be amended, modified or supplemented only by written
agreement of Parent, Sub and the Company at any time prior to the Effective Date
with respect to any of the terms contained herein; provided, however, that,
after this Agreement is approved by the Company's stockholders, no such
amendment or modification shall reduce the amount or change the form of
consideration to be delivered to the stockholders of the Company or the manner
in which it will be paid.
8.4 Extension; Waiver. At any time prior to the Effective Time, the
parties hereto, by action taken or authorized by their respective Boards of
Directors, may, to the extent legally allowed and subject to Section 1.4(b)
hereof: (i) extend the time for the performance of any of the obligations or
other acts of the other parties hereto; (ii) waive any inaccuracies in the
representations and warranties contained herein or in any document delivered
pursuant hereto; and (iii) waive compliance with any of the agreements or
conditions contained herein. Any agreement on the part of a party hereto to any
such extension or waiver shall be valid only if set forth in a written
instrument signed on behalf of such party. The failure of any party hereto to
assert any of its rights hereunder shall not constitute a waiver of such rights.
ARTICLE IX
GENERAL PROVISIONS
9.1 Nonsurvival of Representations, Warranties and Agreements. None of
the representations, warranties and agreements in this Agreement or in any
instrument delivered pursuant to this Agreement shall survive the Effective
Time, except for the agreements contained in Article III, and Section 6.6
hereof. The Confidentiality Agreement shall survive the execution and delivery
of this Agreement, and the provisions of the Confidentiality Agreement shall
apply to all information and material delivered by any party hereunder.
9.2 Notices. Any notice or communication required or permitted
hereunder shall be in writing and either delivered personally, telegraphed or
telecopied or sent by certified or registered mail, postage prepaid, and shall
be deemed to be given, dated and received when so delivered
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personally, telegraphed or telecopied or, if mailed, five business days after
the date of mailing to the following address or telecopy number, or to such
other address or addresses as such person may subsequently designate by notice
given hereunder:
(a) if to Parent or Sub, to:
Hadco Corporation
12A Manor Parkway
Salem, NH 03079
Attn: Timothy P. Losik
Telephone: (603) 898-8000
Telecopy: (603) 893-0025
with a copy to:
Testa, Hurwitz & Thibeault, LLP
125 High Street
Boston, MA 02110
Attention: Stephen A. Hurwitz
George W. Lloyd
Telephone: (617) 248-7000
Telecopy: (617) 248-7100
(b) if to the Company, to:
Continental Circuits Corp.
3502 E. Roeser Road
Phoenix, AZ 85040
Attn: Chief Executive Officer
Telephone: (602) 268-3461
Telecopy: (602) 232-9157
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with copies to:
Quarles & Brady
One East Camelback
Suite 400
Phoenix, AZ 85012
Attention: P. Robert Moya
Telephone: (602) 230-5500
Telecopy: (602) 230-5598
9.3 Interpretation. When a reference is made in this Agreement to
Sections, such reference shall be to a Section of this Agreement unless
otherwise indicated. The table of contents, glossary of defined terms and
headings contained in this Agreement are for reference purposes only and shall
not affect in any way the meaning or interpretation of this Agreement. Whenever
the word "include", "includes" or "including" are used in this Agreement, they
shall be deemed to be followed by the words "without limitation". The phrase
"made available" in this Agreement shall mean that the information referred to
has been made available if requested by the party to whom such information is to
be made available.
9.4 Counterparts. This Agreement may be executed in two or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when two or more counterparts have been signed by each of
the parties and delivered to the other parties, it being understood that all
parties need not sign the same counterpart.
9.5 Entire Agreement; No Third Party Beneficiaries; Rights of
Ownership. This Agreement (together with the Confidentiality Agreement, the
Stockholders Agreement and any other documents and instruments referred to
herein) constitutes the entire agreement and supersedes all prior agreements and
understandings, both written and oral, among the parties with respect to the
subject matter hereof and, except as provided in Section 6.6, is not intended to
confer upon any person other than the parties hereto any rights or remedies
hereunder.
9.6 Governing Law. This Agreement shall be governed and
construed in accordance with the laws of the State of Delaware, without giving
effect to the principles of conflicts of law thereof.
9.7 No Remedy in Certain Circumstances. Each party agrees that, should
any court or other competent authority hold any provision of this Agreement or
part hereof to be null, void or unenforceable, or order any party to take any
action inconsistent herewith or not to take an action consistent herewith or
required hereby, the validity, legality and enforceability of the remaining
provisions and obligations contained or set forth herein shall not in any way be
affected or impaired thereby, unless the foregoing inconsistent action or the
failure to take an action constitutes a material breach of this Agreement or
makes the Agreement impossible to perform in which case this Agreement shall
terminate pursuant to Article VIII hereof. Except as otherwise
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contemplated by this Agreement, to the extent that a party hereto took an action
inconsistent herewith or failed to take action consistent herewith or required
hereby pursuant to an order or judgment of a court or other competent authority,
such party shall incur no liability or obligation unless such party did not in
good faith seek to resist or object to the imposition or entering of such order
or judgment.
9.8 Assignment. Neither this Agreement nor any of the rights, interests
or obligations hereunder shall be assigned by any of the parties hereto (whether
by operation of law or otherwise) without the prior written consent of the other
parties, except that Sub may assign, in its sole discretion, any or all of its
rights, interests and obligations hereunder to any newly-formed direct
wholly-owned Subsidiary of Parent. Subject to the preceding sentence, this
Agreement will be binding upon, inure to the benefit of and be enforceable by
the parties and their respective successors and assigns.
9.9 Obligations of Sub. Parent shall cause Sub or any assignee of Sub
to, and Parent hereby unconditionally guarantees that Sub or any such assignee
shall, duly and timely perform each and every obligation of Sub or any such
assignee hereunder.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed by their respective officers thereunto duly authorized, all as of the
date first written above.
HADCO CORPORATION
By: /s/ Andrew E. Lietz
-----------------------------------------
Name: Andrew E. Lietz
---------------------------------------
Title: Chief Executive Officer
--------------------------------------
HADCO ACQUISITION CORP. II
By: /s/ Andrew E. Lietz
-----------------------------------------
Name: Andrew E. Lietz
---------------------------------------
Title: Chief Executive Officer
--------------------------------------
CONTINENTAL CIRCUITS CORP.
By: /s/ Frederick G. McNamee, III
-----------------------------------------
Name: Frederick G. McNamee, III
---------------------------------------
Title: President and Chief Executive Officer
--------------------------------------
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EXHIBIT A
The capitalized terms used in this Exhibit A shall have the respective
meanings given to such terms in the Agreement and Plan of Merger, dated as of
February 16, 1998, among Hadco Corporation, Hadco Acquisition Corp. II and
Continental Circuits Corp. (the "Merger Agreement") to which this Exhibit A is
attached.
CONDITIONS TO THE OFFER
Notwithstanding any other provision of the Offer, Sub shall not be
required to accept for payment or, subject to any applicable rules and
regulations of the SEC, including Rule 14e-1(c) under the Exchange Act (relating
to Sub's obligation to pay for or return tendered Shares promptly after
expiration or termination of the Offer), to pay for any Shares tendered, and may
postpone the acceptance for payment or, subject to the restriction referred to
above, payment for any Shares tendered, and may amend (subject to Section 1.1(b)
of the Merger Agreement) or terminate the Offer (whether or not any Shares have
theretofore been purchased or paid for) if, (i) there has not been validly
tendered and not withdrawn prior to the time the Offer shall otherwise expire a
number of Shares which constitutes at least 90% of the Shares outstanding on a
fully-diluted basis on the date of purchase ("on a fully-diluted basis" having
the following meaning, as of any date: the number of Shares outstanding,
together with Shares the Company may be then required to issue pursuant to
obligations outstanding at that date under stock option, stock purchase or other
benefit plans or otherwise); (ii) all material regulatory and related approvals
have not been obtained or made on terms reasonably satisfactory to Sub; (iii)
any applicable waiting periods under the HSR Act shall not have expired or been
terminated prior to the expiration of the Offer; or (iv) at any time on or after
the date of the Merger Agreement and before acceptance for payment of, or
payment for, such Shares any of the following events shall occur:
(A) There shall have been threatened, instituted or pending any action,
proceeding, application or counterclaim by or before any court or governmental,
regulatory or administrative agency, authority or tribunal, domestic, foreign or
supranational (other than actions, proceedings, applications or counterclaims
filed or initiated by Sub), which (i) seeks to challenge the acquisition by Sub
of the Shares, restrain, prohibit or delay the making or consummation of the
Offer or the Merger or any other merger or business combination involving Sub or
any of its affiliates and the Company or any of its subsidiaries, prohibit the
performance of any of the contracts or other agreements entered into by Sub or
any of its affiliates in connection with the acquisition of the Company or the
Shares, or obtain any material damages in connection with any of the foregoing,
(ii) seeks to make the purchase of or payment for, some or all of the Shares
pursuant to the Offer, the Merger or otherwise, illegal, (iii) seeks to impose
limitations on the ability of Sub or the Company or any of their respective
affiliates or subsidiaries effectively to acquire or hold, or requiring Sub, the
Company or any of their respective affiliates or subsidiaries to dispose of or
hold separate, any portion of the assets or the business of Sub or its
affiliates or the Company or its
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subsidiaries, or impose limitations on the ability of Sub, the Company or any of
their respective affiliates or subsidiaries to continue to conduct, own or
operate all or any portion of their businesses and assets as heretofore
conducted, owned or operated, (iv) seeks to impose or may result in material
limitations on the ability of Sub or any of its affiliates to exercise full
rights of ownership of the Shares purchased by them, including, without
limitation, the right to vote the Shares purchased by them on all matters
properly presented to the stockholders of the Company, or the right to vote any
shares of capital stock of any subsidiary directly or indirectly owned by the
Company, (v) is reasonably likely to result in a material diminution in the
benefits expected to be derived by Sub as a result of the transactions
contemplated by the Offer, including the Merger, (vi) seeks to impose voting,
procedural, price or other requirements in addition to those under Delaware Law
and federal securities laws (each as in effect on the date of the Offer to
Purchase) or any material condition to the Offer in any such case which is
unacceptable (in its reasonable judgment) to Sub or (vii) challenges or
adversely and materially affects the financing of the Offer;
(B) There shall have been formally proposed, sought, promulgated,
enacted, entered or made applicable to the Offer or the Merger or enforced by
any domestic, foreign or supranational government or any governmental,
administrative or regulatory authority or agency or by any court or tribunal,
domestic, foreign or supranational, any statute, rule, regulation, judgment,
decree, order or injunction that might result in any of the consequences
referred to in clauses (i) through (vii) of paragraph (A) above;
(C) There shall have occurred any of the following which, in the good
faith judgment of the Parent and Sub, make it inadvisable to proceed with the
Offer and acceptance for payment of, and payment for, the Shares (1) any general
suspension of trading in, or limitation on prices for, securities on any
national securities exchange or in the over-the-counter market in the United
States, (2) the declaration of a banking moratorium or any suspension of
payments in respect of banks in the United States, (3) the commencement of a
war, armed hostilities or other international or national calamity, directly or
indirectly involving the United States, (4) any limitations (whether or not
mandatory) imposed by any governmental authority on, or any event which might
have material adverse significance with respect to, the nature or extension of
credit or further extension of credit by banks or other lending institutions,
(5) any significant adverse change in the equity or debt markets in the United
States which shall be continuing as of the expiration of the Offer, or (6) in
the case of any of the foregoing, a material acceleration or worsening thereof;
(D) The representations and warranties of the Company contained in the
Merger Agreement (without giving effect to any "Material Adverse Effect",
"materiality" or similar qualifications contained therein) shall not be true and
correct in all material respects (for purpose of this clause, a failure of the
representations and warranties to be true and correct in all material respects
shall mean a failure or series of failures the result of which impairs the value
of the Company or could reasonably be expected to impair the value of the
Company by more than $3,000,000 as of the date of the consummation of the Offer
as though made on and as of such date except (1) for changes specifically
permitted by the Merger Agreement and (2) that those representations and
warranties which address matters only as of a particular date shall remain true
and correct as of such date;
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(E) The obligations of the Company contained in the Merger Agreement
(without giving effect to any "Material Adverse Effect", "materiality" or
similar qualifications contained therein) shall not have been performed or
complied with in all material respects by the Company;
(F) The Merger Agreement shall have been terminated in accordance with
its terms;
(G) Prior to the purchase of Shares pursuant to the Offer, an
Acquisition Proposal for the Company exists and the Board shall have withdrawn
or materially modified or changed (including by amendment of the Schedule 14D-9)
in a manner adverse to Sub its recommendation of the Offer, the Merger Agreement
or the Merger;
(H) Any person or group (other than Parent and Sub) shall have entered
into a definitive agreement or agreement in principle with the Company with
respect to a merger, consolidation or other business combination with the
Company; or
(I) The Company shall have suffered a material adverse change in its
business, operations, assets or condition (financial or otherwise).
The foregoing conditions are for the sole benefit of Sub and its
affiliates and may be asserted by Sub regardless of the circumstances (other
than any action or inaction by Parent, Sub or any of their affiliates) giving
rise to any such condition or may be waived by Sub, in whole or in part, from
time to time in its sole discretion, except as otherwise provided in the
Agreement. The failure by Sub at any time to exercise any of the foregoing
rights shall not be deemed a waiver of any such right and each such right shall
be deemed an ongoing right and may be asserted at any time and from time to
time. Any reasonable determination by Sub concerning any of the events described
herein shall be final and binding.
A-3
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EXHIBIT C
AMENDED AND RESTATED
BY-LAWS OF
SURVIVING CORPORATION
*****************
A DELAWARE CORPORATION
Dated: February __, 1998
<PAGE> 56
<TABLE>
<S> <C>
ARTICLE I MEETINGS OF STOCKHOLDERS..............................................................................1
SECTION 1. PLACE OF MEETINGS......................................................................................1
SECTION 2. ANNUAL MEETING.........................................................................................1
SECTION 3. SPECIAL MEETINGS.......................................................................................1
SECTION 4. NOTICE OF MEETINGS.....................................................................................1
SECTION 5. VOTING LIST............................................................................................2
SECTION 6. QUORUM.................................................................................................2
SECTION 7. ADJOURNMENTS...........................................................................................2
SECTION 8. ACTION AT MEETINGS.....................................................................................2
SECTION 9. VOTING AND PROXIES.....................................................................................3
SECTION 10. ACTION WITHOUT MEETING................................................................................3
ARTICLE II DIRECTORS............................................................................................3
SECTION 1. NUMBER, ELECTION, TENURE AND QUALIFICATION.............................................................3
SECTION 2. ENLARGEMENT............................................................................................3
SECTION 3. VACANCIES..............................................................................................4
SECTION 4. RESIGNATION AND REMOVAL................................................................................4
SECTION 5. GENERAL POWERS.........................................................................................4
SECTION 6. CHAIRMAN OF THE BOARD..................................................................................4
SECTION 7. PLACE OF MEETINGS......................................................................................4
SECTION 8. REGULAR MEETINGS.......................................................................................4
SECTION 9. SPECIAL MEETINGS.......................................................................................4
SECTION 10. QUORUM, ACTION AT MEETING, ADJOURNMENTS...............................................................5
SECTION 11. ACTION BY CONSENT.....................................................................................5
SECTION 12. TELEPHONIC MEETINGS...................................................................................5
SECTION 13. COMMITTEES............................................................................................5
SECTION 14. COMPENSATION..........................................................................................6
ARTICLE III OFFICERS............................................................................................6
SECTION 1. ENUMERATION............................................................................................6
SECTION 2. ELECTION...............................................................................................6
SECTION 3. TENURE.................................................................................................6
SECTION 4. PRESIDENT..............................................................................................7
SECTION 5. VICE-PRESIDENTS........................................................................................7
SECTION 6. SECRETARY..............................................................................................7
SECTION 7. ASSISTANT SECRETARIES..................................................................................8
SECTION 8. TREASURER..............................................................................................8
SECTION 9. ASSISTANT TREASURERS...................................................................................8
SECTION 10. BOND..................................................................................................8
ARTICLE IV NOTICES..............................................................................................9
SECTION 1. DELIVERY...............................................................................................9
SECTION 2. WAIVER OF NOTICE.......................................................................................9
ARTICLE V INDEMNIFICATION.......................................................................................9
i
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<TABLE>
<S> <C>
SECTION 1. ACTIONS OTHER THAN BY OR IN THE RIGHT OF THE CORPORATION...............................................9
SECTION 2. ACTIONS BY OR IN THE RIGHT OF THE CORPORATION.........................................................10
SECTION 3. SUCCESS ON THE MERITS.................................................................................10
SECTION 4. SPECIFIC AUTHORIZATION................................................................................10
SECTION 5. ADVANCE PAYMENT.......................................................................................10
SECTION 6. NON-EXCLUSIVITY.......................................................................................11
SECTION 7. INSURANCE.............................................................................................11
SECTION 8. CONTINUATION OF INDEMNIFICATION AND ADVANCEMENT OF EXPENSES...........................................11
SECTION 9. SEVERABILITY..........................................................................................11
SECTION 10. INTENT OF ARTICLE....................................................................................11
ARTICLE VI CAPITAL STOCK.......................................................................................11
SECTION 1. CERTIFICATES OF STOCK.................................................................................11
SECTION 2. LOST CERTIFICATES.....................................................................................12
SECTION 3. TRANSFER OF STOCK.....................................................................................12
SECTION 4. RECORD DATE...........................................................................................12
SECTION 5. REGISTERED STOCKHOLDERS...............................................................................13
ARTICLE VII CERTAIN TRANSACTIONS...............................................................................13
SECTION 1. TRANSACTIONS WITH INTERESTED PARTIES..................................................................13
SECTION 2. QUORUM................................................................................................14
ARTICLE VIII GENERAL PROVISIONS................................................................................14
SECTION 1. DIVIDENDS.............................................................................................14
SECTION 2. RESERVES..............................................................................................14
SECTION 3. CHECKS................................................................................................14
SECTION 4. FISCAL YEAR...........................................................................................14
SECTION 5. SEAL..................................................................................................14
ARTICLE IX AMENDMENTS..........................................................................................15
Addendum
Register of Amendments to the By-Laws
ii
</TABLE>
<PAGE> 58
SURVIVING CORPORATION
* * * * *
AMENDED AND RESTATED
BY-LAWS
* * * * *
ARTICLE I
MEETINGS OF STOCKHOLDERS
Section 1. Place of Meetings. All meetings of the stockholders shall be
held at such place within or without the State of Delaware as may be fixed from
time to time by the board of directors or the chief executive officer, or if not
so designated, at the registered office of the corporation.
Section 2. Annual Meeting. Annual meetings of stockholders shall be
held on the second Tuesday of March in each year if not a legal holiday, and if
a legal holiday, then on the next secular day following, at 10:00 a.m., or at
such other date and time as shall be designated from time to time by the board
of directors or the chief executive officer, at which meeting the stockholders
shall elect by a plurality vote a board of directors and shall transact such
other business as may properly be brought before the meeting. If no annual
meeting is held in accordance with the foregoing provisions, the board of
directors shall cause the meeting to be held as soon thereafter as convenient,
which meeting shall be designated a special meeting in lieu of annual meeting.
Section 3. Special Meetings. Special meetings of the stockholders, for
any purpose or purposes, may, unless otherwise prescribed by statute or by the
certificate of incorporation, be called by the board of directors or the chief
executive officer and shall be called by the chief executive officer or
secretary at the request in writing of a majority of the board of directors, or
at the request in writing of stockholders owning a majority in amount of the
entire capital stock of the corporation issued and outstanding and entitled to
vote. Such request shall state the purpose or purposes of the proposed meeting.
Business transacted at any special meeting shall be limited to matters relating
to the purpose or purposes stated in the notice of meeting.
Section 4. Notice of Meetings. Except as otherwise provided by law,
written notice of each meeting of stockholders, annual or special, stating the
place, date and hour of the meeting and, in the case of a special meeting, the
purpose or purposes for which the meeting is called, shall be given not less
than ten or more than sixty days before the date of the meeting, to each
stockholder entitled to vote at such meeting.
Section 5. Voting List. The officer who has charge of the stock ledger
of the corporation shall prepare and make, at least ten days before every
meeting of
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stockholders, a complete list of the stockholders entitled to vote at the
meeting, arranged in alphabetical order, and showing the address of each
stockholder and the number of shares registered in the name of each stockholder.
Such list shall be open to the examination of any stockholder, for any purpose
germane to the meeting, during ordinary business hours, for a period of at least
ten days prior to the meeting, either at a place within the city or town where
the meeting is to be held, which place shall be specified in the notice of the
meeting, or, if not so specified, at the place where the meeting is to be held.
The list shall also be produced and kept at the time and place of the meeting
during the whole time thereof, and may be inspected by any stockholder who is
present.
Section 6. Quorum. The holders of a majority of the stock issued and
outstanding and entitled to vote thereat, present in person or represented by
proxy, shall constitute a quorum at all meetings of the stockholders for the
transaction of business, except as otherwise provided by statute, the
certificate of incorporation or these by-laws. Where a separate vote by a class
or classes is required, a majority of the outstanding shares of such class or
classes, present in person or represented by proxy, shall constitute a quorum
entitled to take action with respect to that vote on that matter. If no quorum
shall be present or represented at any meeting of stockholders, such meeting may
be adjourned in accordance with Section 7 hereof, until a quorum shall be
present or represented.
Section 7. Adjournments. Any meeting of stockholders may be adjourned
from time to time to any other time and to any other place at which a meeting of
stockholders may be held under these by-laws, which time and place shall be
announced at the meeting, by a majority of the stockholders present in person or
represented by proxy at the meeting and entitled to vote (whether or not a
quorum is present), or, if no stockholder is present or represented by proxy, by
any officer entitled to preside at or to act as secretary of such meeting,
without notice other than announcement at the meeting. At such adjourned
meeting, any business may be transacted which might have been transacted at the
original meeting, provided that a quorum either was present at the original
meeting or is present at the adjourned meeting. If the adjournment is for more
than thirty days, or if after the adjournment a new record date is fixed for the
adjourned meeting, a notice of the adjourned meeting shall be given to each
stockholder of record entitled to vote at the meeting.
Section 8. Action at Meetings. When a quorum is present at any meeting,
the affirmative vote of the holders of a majority of the stock present in person
or represented by proxy, entitled to vote and voting on the matter (or where a
separate vote by a class or classes is required, the affirmative vote of the
majority of shares of such class or classes present in person or represented by
proxy at the meeting) shall decide any matter (other than the election of
directors) brought before such meeting, unless the matter is one upon which by
express provision of law, the certificate of incorporation or these by-laws, a
different vote is required, in which case such express provision shall govern
and control the decision of such matter. The stock of holders who abstain from
voting on any matter shall be deemed not to have been voted on such matter.
Directors shall be elected by a
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plurality of the votes of the shares present in person or represented by proxy
at the meeting, entitled to vote and voting on the election of directors.
Section 9. Voting and Proxies. Unless otherwise provided in the
certificate of incorporation, each stockholder shall at every meeting of the
stockholders be entitled to one vote for each share of capital stock having
voting power held of record by such stockholder. Each stockholder entitled to
vote at a meeting of stockholders, or to express consent or dissent to corporate
action in writing without a meeting, may authorize another person or persons to
act for him by proxy, but no such proxy shall be voted or acted upon after three
years from its date, unless the proxy provides for a longer period.
Section 10. Action Without Meeting. Any action required to be taken at
any annual or special meeting of stockholders, or any action which may be taken
at any annual or special meeting of such stockholders, may be taken without a
meeting, without prior notice and without a vote, if a consent or consents in
writing, setting forth the action so taken, shall be (1) signed and dated by the
holders of outstanding stock having not less than the minimum number of votes
that would be necessary to authorize or take such action at a meeting at which
all shares entitled to vote thereon were present and voted and (2) delivered to
the corporation within sixty days of the earliest dated consent by delivery to
its registered office in the State of Delaware (in which case delivery shall be
by hand or by certified or registered mail, return receipt requested), its
principal place of business, or an officer or agent of the corporation having
custody of the book in which proceedings of meetings of stockholders are
recorded. Prompt notice of the taking of the corporate action without a meeting
by less than unanimous written consent shall be given to those stockholders who
have not consented in writing.
ARTICLE II
DIRECTORS
Section 1. Number, Election, Tenure and Qualification. The number of
directors which shall constitute the whole board shall be not less than one.
Within such limit, the number of directors shall be determined by resolution of
the board of directors or by the stockholders at the annual meeting or at any
special meeting of stockholders. The directors shall be elected at the annual
meeting or at any special meeting of the stockholders, except as provided in
Section 3 of this Article, and each director elected shall hold office until his
successor is elected and qualified, unless sooner displaced. Directors need not
be stockholders.
Section 2. Enlargement. The number of the board of directors may be
increased at any time by vote of a majority of the directors then in office.
Section 3. Vacancies. Vacancies and newly created directorships
resulting from any increase in the authorized number of directors may be filled
by a majority of the directors then in office, though less than a quorum, or by
a sole remaining director, and
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the directors so chosen shall hold office until the next annual election and
until their successors are duly elected and shall qualify, unless sooner
displaced. If there are no directors in office, then an election of directors
may be held in the manner provided by statute. In the event of a vacancy in the
board of directors, the remaining directors, except as otherwise provided by law
or these by-laws, may exercise the powers of the full board until the vacancy is
filled.
Section 4. Resignation and Removal. Any director may resign at any time
upon written notice to the corporation at its principal place of business or to
the chief executive officer or secretary. Such resignation shall be effective
upon receipt unless it is specified to be effective at some other time or upon
the happening of some other event. Any director or the entire board of directors
may be removed, with or without cause, by the holders of a majority of the
shares then entitled to vote at an election of directors, unless otherwise
specified by law or the certificate of incorporation.
Section 5. General Powers. The business and affairs of the corporation
shall be managed by its board of directors, which may exercise all powers of the
corporation and do all such lawful acts and things as are not by statute or by
the certificate of incorporation or by these by-laws directed or required to be
exercised or done by the stockholders.
Section 6. Chairman of the Board. If the board of directors appoints a
chairman of the board, he shall, when present, preside at all meetings of the
stockholders and the board of directors. He shall perform such duties and
possess such powers as are customarily vested in the office of the chairman of
the board or as may be vested in him by the board of directors.
Section 7. Place of Meetings. The board of directors may hold meetings,
both regular and special, either within or without the State of Delaware.
Section 8. Regular Meetings. Regular meetings of the board of directors
may be held without notice at such time and at such place as shall from time to
time be determined by the board; provided that any director who is absent when
such a determination is made shall be given prompt notice of such determination.
A regular meeting of the board of directors may be held without notice
immediately after and at the same place as the annual meeting of stockholders.
Section 9. Special Meetings. Special meetings of the board may be
called by the chief executive officer, secretary, or on the written request of
two or more directors, or by one director in the event that there is only one
director in office. Two days' notice to each director, either personally or by
telegram, cable, telecopy, commercial delivery service, telex or similar means
sent to his business or home address, or three days' notice by written notice
deposited in the mail, shall be given to each director by the secretary or by
the officer or one of the directors calling the meeting. A notice or waiver of
notice of a meeting of the board of directors need not specify the purposes of
the meeting.
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Section 10. Quorum, Action at Meeting, Adjournments. At all meetings of
the board a majority of directors then in office, but in no event less than one
third of the entire board, shall constitute a quorum for the transaction of
business and the act of a majority of the directors present at any meeting at
which there is a quorum shall be the act of the board of directors, except as
may be otherwise specifically provided by law or by the certificate of
incorporation. For purposes of this section, the term "entire board" shall mean
the number of directors last fixed by the stockholders or directors, as the case
may be, in accordance with law and these by-laws; provided, however, that if
less than all the number so fixed of directors were elected, the "entire board"
shall mean the greatest number of directors so elected to hold office at any one
time pursuant to such authorization. If a quorum shall not be present at any
meeting of the board of directors, a majority of the directors present thereat
may adjourn the meeting from time to time, without notice other than
announcement at the meeting, until a quorum shall be present.
Section 11. Action by Consent. Unless otherwise restricted by the
certificate of incorporation or these by-laws, any action required or permitted
to be taken at any meeting of the board of directors or of any committee thereof
may be taken without a meeting, if all members of the board or committee, as the
case may be, consent thereto in writing, and the writing or writings are filed
with the minutes of proceedings of the board or committee.
Section 12. Telephonic Meetings. Unless otherwise restricted by the
certificate of incorporation or these by-laws, members of the board of directors
or of any committee thereof may participate in a meeting of the board of
directors or of any committee, as the case may be, by means of conference
telephone or similar communications equipment by means of which all persons
participating in the meeting can hear each other, and such participation in a
meeting shall constitute presence in person at the meeting.
Section 13. Committees. The board of directors may, by resolution
passed by a majority of the whole board, designate one or more committees, each
committee to consist of one or more of the directors of the corporation. The
board may designate one or more directors as alternate members of any committee,
who may replace any absent or disqualified member at any meeting of the
committee. Any such committee, to the extent provided in the resolution of the
board of directors, shall have and may exercise all the powers and authority of
the board of directors in the management of the business and affairs of the
corporation, and may authorize the seal of the corporation to be affixed to all
papers which may require it; but no such committee shall have the power or
authority in reference to amending the certificate of incorporation, adopting an
agreement of merger or consolidation, recommending to the stockholders the sale,
lease or exchange of all or substantially all of the corporation's property and
assets, recommending to the stockholders a dissolution of the corporation or a
revocation of a dissolution, or amending the by-laws of the corporation; and,
unless the resolution designating such committee or the certificate of
incorporation expressly so provide, no such committee shall have the power or
authority to declare a dividend or to authorize the issuance of stock. Such
committee or committees shall have such name or names as may be determined from
time to time by resolution adopted by the board of directors. Each committee
shall keep
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regular minutes of its meetings and make such reports to the board of directors
as the board of directors may request. Except as the board of directors may
otherwise determine, any committee may make rules for the conduct of its
business, but unless otherwise provided by the directors or in such rules, its
business shall be conducted as nearly as possible in the same manner as is
provided in these by-laws for the conduct of its business by the board of
directors.
Section 14. Compensation. Unless otherwise restricted by the
certificate of incorporation or these by-laws, the board of directors shall have
the authority to fix from time to time the compensation of directors. The
directors may be paid their expenses, if any, of attendance at each meeting of
the board of directors and the performance of their responsibilities as
directors and may be paid a fixed sum for attendance at each meeting of the
board of directors and/or a stated salary as director. No such payment shall
preclude any director from serving the corporation or its parent or subsidiary
corporations in any other capacity and receiving compensation therefor. The
board of directors may also allow compensation for members of special or
standing committees for service on such committees.
ARTICLE III
OFFICERS
Section 1. Enumeration. The officers of the corporation shall be chosen
by the board of directors and shall be a president, a secretary and a treasurer
and such other officers with such titles, terms of office and duties as the
board of directors may from time to time determine, including a chairman of the
board, one or more vice-presidents, and one or more assistant secretaries and
assistant treasurers. If authorized by resolution of the board of directors, the
chief executive officer may be empowered to appoint from time to time assistant
secretaries and assistant treasurers. Any number of offices may be held by the
same person, unless the certificate of incorporation or these by-laws otherwise
provide.
Section 2. Election. The board of directors at its first meeting after
each annual meeting of stockholders shall choose a president, a secretary and a
treasurer. Other officers may be appointed by the board of directors at such
meeting, at any other meeting, or by written consent.
Section 3. Tenure. The officers of the corporation shall hold office
until their successors are chosen and qualify, unless a different term is
specified in the vote choosing or appointing him, or until his earlier death,
resignation or removal. Any officer elected or appointed by the board of
directors or by the chief executive officer may be removed at any time, with or
without cause, by the affirmative vote of a majority of the board of directors
or a committee duly authorized to do so, except that any officer appointed by
the chief executive officer may also be removed at any time, with or without
cause, by the chief executive officer. Any vacancy occurring in any office of
the
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corporation may be filled by the board of directors, at its discretion. Any
officer may resign by delivering his written resignation to the corporation at
its principal place of business or to the chief executive officer or the
secretary. Such resignation shall be effective upon receipt unless it is
specified to be effective at some other time or upon the happening of some other
event.
Section 4. President. The president shall be the chief operating
officer of the corporation. He shall also be the chief executive officer unless
the board of directors otherwise provides. If no chief executive officer shall
have been appointed by the board of directors, all references herein to the
"chief executive officer" shall be to the president. The president shall, unless
the board of directors provides otherwise in a specific instance or generally,
preside at all meetings of the stockholders and the board of directors, have
general and active management of the business of the corporation and see that
all orders and resolutions of the board of directors are carried into effect.
The president shall execute bonds, mortgages, and other contracts requiring a
seal, under the seal of the corporation, except where required or permitted by
law to be otherwise signed and executed and except where the signing and
execution thereof shall be expressly delegated by the board of directors to some
other officer or agent of the corporation.
Section 5. Vice-Presidents. In the absence of the president or in the
event of his or her inability or refusal to act, the vice-president, or if there
be more than one vice-president, the vice-presidents in the order designated by
the board of directors or the chief executive officer (or in the absence of any
designation, then in the order determined by their tenure in office) shall
perform the duties of the president, and when so acting, shall have all the
powers of and be subject to all the restrictions upon the president. The
vice-presidents shall perform such other duties and have such other powers as
the board of directors or the chief executive officer may from time to time
prescribe.
Section 6. Secretary. The secretary shall have such powers and perform
such duties as are incident to the office of secretary. The secretary shall
maintain a stock ledger and prepare lists of stockholders and their addresses as
required and shall be the custodian of corporate records. The secretary shall
attend all meetings of the board of directors and all meetings of the
stockholders and record all the proceedings of the meetings of the corporation
and of the board of directors in a book to be kept for that purpose and shall
perform like duties for the standing committees when required. The secretary
shall give, or cause to be given, notice of all meetings of the stockholders and
special meetings of the board of directors, and shall perform such other duties
as may be from time to time prescribed by the board of directors or chief
executive officer, under whose supervision the secretary shall be. The secretary
shall have custody of the corporate seal of the corporation and the secretary,
or an assistant secretary, shall have authority to affix the same to any
instrument requiring it and when so affixed, it may be attested by his or her
signature or by the signature of such assistant secretary. The board of
directors may give general authority to any other officer to affix the seal of
the corporation and to attest the affixing by his or her signature.
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Section 7. Assistant Secretaries. The assistant secretary, or if there
be more than one, the assistant secretaries in the order determined by the board
of directors, the chief executive officer or the secretary (or if there be no
such determination, then in the order determined by their tenure in office),
shall, in the absence of the secretary or in the event of his or her inability
or refusal to act, perform the duties and exercise the powers of the secretary
and shall perform such other duties and have such other powers as the board of
directors, the chief executive officer or the secretary may from time to time
prescribe. In the absence of the secretary or any assistant secretary at any
meeting of stockholders or directors, the person presiding at the meeting shall
designate a temporary or acting secretary to keep a record of the meeting.
Section 8. Treasurer. The treasurer shall perform such duties and shall
have such powers as may be assigned to him or her by the board of directors or
the chief executive officer. In addition, the treasurer shall perform such
duties and have such powers as are incident to the office of treasurer. The
treasurer shall have the custody of the corporate funds and securities and shall
keep full and accurate accounts of receipts and disbursements in books belonging
to the corporation and shall deposit all moneys and other valuable effects in
the name and to the credit of the corporation in such depositories as may be
designated by the board of directors. He shall disburse the funds of the
corporation as may be ordered by the board of directors, taking proper vouchers
for such disbursements, and shall render to the chief executive officer and the
board of directors, when the chief executive officer or board of directors so
requires, an account of all his or her transactions as treasurer and of the
financial condition of the corporation.
Section 9. Assistant Treasurers. The assistant treasurer, or if there
shall be more than one, the assistant treasurers in the order determined by the
board of directors, the chief executive officer or the treasurer (or if there be
no such determination, then in the order determined by their tenure in office),
shall, in the absence of the treasurer or in the event of his or her inability
or refusal to act, perform the duties and exercise the powers of the treasurer
and shall perform such other duties and have such other powers as the board of
directors, the chief executive officer or the treasurer may from time to time
prescribe.
Section 10. Bond. If required by the board of directors, any officer
shall give the corporation a bond in such sum and with such surety or sureties
and upon such terms and conditions as shall be satisfactory to the board of
directors, including without limitation a bond for the faithful performance of
the duties of his office and for the restoration to the corporation of all
books, papers, vouchers, money and other property of whatever kind in his
possession or under his control and belonging to the corporation.
ARTICLE IV
NOTICES
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Section 1. Delivery. Whenever, under the provisions of law, or of the
certificate of incorporation or these by-laws, written notice is required to be
given to any director or stockholder, such notice may be given by mail,
addressed to such director or stockholder, at his address as it appears on the
records of the corporation, with postage thereon prepaid, and such notice shall
be deemed to be given at the time when the same shall be deposited in the United
States mail. Unless written notice by mail is required by law, written notice
may also be given by telegram, cable, telecopy, commercial delivery service,
telex or similar means, addressed to such director or stockholder at his address
as it appears on the records of the corporation, in which case such notice shall
be deemed to be given when delivered into the control of the persons charged
with effecting such transmission, the transmission charge to be paid by the
corporation or the person sending such notice and not by the addressee. Oral
notice or other in-hand delivery (in person or by telephone) shall be deemed
given at the time it is actually given.
Section 2. Waiver of Notice. Whenever any notice is required to be
given under the provisions of law or of the certificate of incorporation or of
these by-laws, a waiver thereof in writing, signed by the person or persons
entitled to said notice, whether before or after the time stated therein, shall
be deemed equivalent thereto.
ARTICLE V
INDEMNIFICATION
Section 1. Actions other than by or in the Right of the Corporation.
The corporation shall indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the corporation) by reason of the
fact that he is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if he acted
in good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the corporation, and, with respect to any criminal action
or proceedings, had no reasonable cause to believe his conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent, shall not, of
itself, create a presumption that the person did not act in good faith and in a
manner which he reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or
proceeding, had reasonable cause to believe that his conduct was unlawful.
Section 2. Actions by or in the Right of the Corporation. The
corporation shall indemnify any person who was or is a party or is threatened to
be made a party to any threatened, pending or completed action or suit by or in
the right of the corporation to
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procure a judgment in its favor by reason of the fact that he or she is or was a
director, officer, employee or agent of the corporation, or is or was serving at
the request of the corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise
against expenses (including attorneys' fees) actually and reasonably incurred by
such person in connection with the defense or settlement of such action or suit
if such person acted in good faith and in a manner he or she reasonably believed
to be in or not opposed to the best interests of the corporation and except that
no indemnification shall be made in respect of any claim, issue or matter as to
which such person shall have been adjudged to be liable unless and only to the
extent that the Court of Chancery of the State of Delaware or the court in which
such action or suit was brought shall determine upon application that, despite
the adjudication of liability but in view of all the circumstances of the case,
such person is fairly and reasonably entitled to indemnity for such expenses
which the Court of Chancery of the State of Delaware or such other court shall
deem proper.
Section 3. Success on the Merits. To the extent that any person
described in Section 1 or 2 of this Article V has been successful on the merits
or otherwise in defense of any action, suit or proceeding referred to in said
Sections, or in defense of any claim, issue or matter therein, he shall be
indemnified against expenses (including attorneys' fees) actually and reasonably
incurred by him in connection therewith.
Section 4. Specific Authorization. Any indemnification under Section 1
or 2 of this Article V (unless ordered by a court) shall be made by the
corporation only as authorized in the specific case upon a determination that
indemnification of any person described in said Sections is proper in the
circumstances because he has met the applicable standard of conduct set forth in
said Sections. Such determination shall be made (1) by the board of directors by
a majority vote of directors who were not parties to such action, suit or
proceeding (even though less than a quorum), or (2) if there are no
disinterested directors or if a majority of disinterested directors so directs,
by independent legal counsel (who may be regular legal counsel to the
corporation) in a written opinion, or (3) by the stockholders of the
corporation.
Section 5. Advance Payment. Expenses incurred in defending a pending or
threatened civil or criminal action, suit or proceeding may be paid by the
corporation in advance of the final disposition of such action, suit or
proceeding upon receipt of an undertaking by or on behalf of any person
described in said Section to repay such amount if it shall ultimately be
determined that he or she is not entitled to indemnification by the corporation
as authorized in this Article V.
Section 6. Non-Exclusivity. The indemnification and advancement of
expenses provided by, or granted pursuant to, the other Sections of this Article
V shall not be deemed exclusive of any other rights to which those provided
indemnification or advancement of expenses may be entitled under any by-law,
agreement, vote of stockholders or disinterested directors or otherwise, both as
to action in his official capacity and as to action in another capacity while
holding such office.
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Section 7. Insurance. The board of directors may authorize, by a vote
of the majority of the full board, the corporation to purchase and maintain
insurance on behalf of any person who is or was a director, officer, employee or
agent of the corporation, or is or was serving at the request of the corporation
as a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise against any liability asserted against
him and incurred by him in any such capacity, or arising out of his status as
such, whether or not the corporation would have the power to indemnify him
against such liability under the provisions of this Article V.
Section 8. Continuation of Indemnification and Advancement of Expenses.
The indemnification and advancement of expenses provided by, or granted pursuant
to, this Article V shall continue as to a person who has ceased to be a
director, officer, employee or agent and shall inure to the benefit of the
heirs, executors and administrators of such a person.
Section 9. Severability. If any word, clause or provision of this
Article V or any award made hereunder shall for any reason be determined to be
invalid, the provisions hereof shall not otherwise be affected thereby but shall
remain in full force and effect.
Section 10. Intent of Article. The intent of this Article V is to
provide for indemnification and advancement of expenses to the fullest extent
permitted by Section 145 of the General Corporation Law of Delaware. To the
extent that such Section or any successor section may be amended or supplemented
from time to time, this Article V shall be amended automatically and construed
so as to permit indemnification and advancement of expenses to the fullest
extent from time to time permitted by law.
ARTICLE VI
CAPITAL STOCK
Section 1. Certificates of Stock. Every holder of stock in the
corporation shall be entitled to have a certificate, signed by, or in the name
of the corporation by, the chairman or vice-chairman of the board of directors,
or the president or a vice-president and the treasurer or an assistant
treasurer, or the secretary or an assistant secretary of the corporation,
certifying the number of shares owned by such holder in the corporation. Any or
all of the signatures on the certificate may be a facsimile. In case any
officer, transfer agent or registrar who has signed or whose facsimile signature
has been placed upon a certificate shall have ceased to be such officer,
transfer agent or registrar before such certificate is issued, it may be issued
by the corporation with the same effect as if he were such officer, transfer
agent or registrar at the date of issue. Certificates may be issued for partly
paid shares and in such case upon the face or back of the certificates issued to
represent any such partly paid shares, the total amount of the consideration to
be paid therefor, and the amount paid thereon shall be specified.
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Section 2. Lost Certificates. The board of directors may direct a new
certificate or certificates to be issued in place of any certificate or
certificates theretofore issued by the corporation alleged to have been lost,
stolen or destroyed. When authorizing such issue of a new certificate or
certificates, the board of directors may, in its discretion and as a condition
precedent to the issuance thereof, require the owner of such lost, stolen or
destroyed certificate or certificates, or his legal representative, to give
reasonable evidence of such loss, theft or destruction, to advertise the same in
such manner as it shall require and/or to give the corporation a bond in such
sum as it may direct as indemnity against any claim that may be made against the
corporation with respect to the certificate alleged to have been lost, stolen or
destroyed or the issuance of such new certificate.
Section 3. Transfer of Stock. Upon surrender to the corporation or the
transfer agent of the corporation of a certificate for shares, duly endorsed or
accompanied by proper evidence of succession, assignment or authority to
transfer, and proper evidence of compliance with other conditions to rightful
transfer, it shall be the duty of the corporation to issue a new certificate to
the person entitled thereto, cancel the old certificate and record the
transaction upon its books.
Section 4. Record Date. In order that the corporation may determine the
stockholders entitled to notice of or to vote at any meeting of stockholders or
any adjournment thereof, the board of directors may fix a record date, which
shall not precede the date upon which the resolution fixing the record date is
adopted by the board of directors, and which shall not be more than sixty days
nor less then ten days before the date of such meeting. A determination of
stockholders of record entitled to notice of or to vote at a meeting of
stockholders shall apply to any adjournment of the meeting; provided, however,
that the board of directors may fix a new record date for the adjourned meeting.
If no record date is fixed, the record date for determining stockholders
entitled to notice of or to vote at a meeting of stockholders shall be at the
close of business on the day before the day on which notice is given, or, if
notice is waived, at the close of business on the day before the day on which
the meeting is held. In order that the corporation may determine the
stockholders entitled to consent to corporate action in writing without a
meeting, the board of directors may fix a record date, which shall not precede
the date upon which the resolution fixing the record date is adopted by the
board of directors, and which shall not be more than ten days after the date
upon which the resolution fixing the record date is adopted by the board of
directors. If no record date is fixed, the record date for determining
stockholders entitled to consent to corporate action in writing without a
meeting, when no prior action by the board of directors is required by statute,
shall be the first date on which a signed written consent setting forth the
action taken or proposed to be taken is delivered to the corporation as provided
in Section 10 of Article I. If no record date is fixed and prior action by the
board of directors is required, the record date for determining stockholders
entitled to consent to corporate action in writing without a meeting shall be at
the close of business on the date on which the board of directors adopts the
resolution taking such prior action. In order that the corporation may determine
the stockholders entitled to receive payment
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of any dividend or other distribution or allotment of any rights or the
stockholders entitled to exercise any rights in respect of any change,
conversion or exchange of stock, or for the purpose of any other lawful action,
the board of directors may fix a record date, which shall not precede the date
upon which the resolution fixing the record date is adopted, and which shall be
not more than sixty days prior to such action. If no record date is fixed, the
record date for determining stockholders for any such purpose shall be at the
close of business on the day on which the board of directors adopts the
resolution relating to such purpose.
Section 5. Registered Stockholders. The corporation shall be entitled
to recognize the exclusive right of a person registered on its books as the
owner of shares to receive dividends, and to vote as such owner, and to hold
liable for calls and assessments a person registered on its books as the owner
of shares, and shall not be bound to recognize any equitable or other claim to
or interest in such share or shares on the part of any other person, whether or
not it shall have express or other notice thereof, except as otherwise provided
by the laws of Delaware.
ARTICLE VII
CERTAIN TRANSACTIONS
Section 1. Transactions with Interested Parties. No contract or
transaction between the corporation and one or more of its directors or
officers, or between the corporation and any other corporation, partnership,
association, or other organization in which one or more of its directors or
officers are directors or officers, or have a financial interest, shall be void
or voidable solely for this reason, or solely because the director or officer is
present at or participates in the meeting of the board or committee thereof
which authorizes the contract or transaction or solely because his or their
votes are counted for such purpose, if:
(a) The material facts as to his relationship or interest and as to the
contract or transaction are disclosed or are known to the board of
directors or the committee, and the board or committee in good faith
authorizes the contract or transaction by the affirmative votes of a
majority of the disinterested directors, even though the disinterested
directors be less than a quorum; or
(b) The material facts as to his relationship or interest and as to the
contract or transaction are disclosed or are known to the stockholders
entitled to vote thereon, and the contract or transaction is specifically
approved in good faith by vote of the stockholders; or
(c) The contract or transaction is fair as to the corporation as of the
time it is authorized, approved or ratified, by the board of directors, a
committee thereof, or the stockholders.
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Section 2. Quorum. Common or interested directors may be counted in
determining the presence of a quorum at a meeting of the board of directors or
of a committee which authorizes the contract or transaction.
ARTICLE VIII
GENERAL PROVISIONS
Section 1. Dividends. Dividends upon the capital stock of the
corporation, if any, may be declared by the board of directors at any regular or
special meeting or by written consent, pursuant to law. Dividends may be paid in
cash, in property, or in shares of the capital stock, subject to the provisions
of the certificate of incorporation.
Section 2. Reserves. The directors may set apart out of any funds of
the corporation available for dividends a reserve or reserves for any proper
purpose and may abolish any such reserve.
Section 3. Checks. All checks or demands for money and notes of the
corporation shall be signed by such officer or officers or such other person or
persons as the board of directors may from time to time designate.
Section 4. Fiscal Year. The fiscal year of the corporation shall be
fixed by resolution of the board of directors.
Section 5. Seal. The board of directors may, by resolution, adopt a
corporate seal. The corporate seal shall have inscribed thereon the name of the
corporation, the year of its organization and the word "Delaware." The seal may
be used by causing it or a facsimile thereof to be impressed or affixed or
reproduced or otherwise. The seal may be altered from time to time by the board
of directors.
ARTICLE IX
AMENDMENTS
These by-laws may be altered, amended or repealed or new by-laws may be
adopted by the stockholders or by the board of directors, when such power is
conferred upon the board of directors by the certificate of incorporation, at
any regular meeting of the stockholders or of the board of directors or at any
special meeting of the stockholders or of the board of directors provided,
however, that in the case of a regular or special meeting of stockholders,
notice of such alteration, amendment, repeal or adoption of new by-laws be
contained in the notice of such meeting.
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Register of Amendments to the By-laws
Date Section Affected Change
- --------------------------------------------------------------------------------
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EXHIBIT B
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
SURVIVING CORPORATION,
a Delaware Corporation
* * * * * *
FIRST. The name of the corporation is Continental Circuits Corp. (the
"Corporation").
SECOND. The address of the registered office of the Corporation in the
State of Delaware is 1209 Orange Street, Wilmington, Delaware. The name of its
registered agent at such address is CT Corporation System.
THIRD. The nature of the business or purposes to be conducted or
promoted by the Corporation is to engage in any lawful act or activity for
which corporations may be organized under the General Corporation Law of the
State of Delaware.
FOURTH. The total number of shares of stock which the Corporation shall
have authority to issue is 3,000 shares of Common Stock with a par value of One
Cent ($.01) per share.
FIFTH. The Corporation is to have perpetual existence.
SIXTH. In furtherance and not in limitation of the powers conferred by
the laws of the State of Delaware:
A. The Board of Directors of the Corporation is expressly authorized to
adopt, amend or repeal the By-Laws of the Corporation.
B. Elections of directors need not be by written ballot unless the
By-Laws of the Corporation shall so provide.
C. The books of the Corporation may be kept at such place within or
without the State of Delaware as the By-Laws of the Corporation may
provide or as may be designated from time to time by the Board of
Directors of the Corporation.
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-2-
SEVENTH. The Corporation eliminates the personal liability of each
member of its Board of Directors to the Corporation or its stockholders for
monetary damages for breach of fiduciary duty as a director, provided, however,
that, to the extent provided by applicable law, the foregoing shall not
eliminate the liability of a director (i) for any breach of such director's duty
of loyalty to the Corporation or its stockholders, (ii) for acts or omissions
not in good faith or which involve intentional misconduct or a knowing violation
of law, (iii) under Section 174 of Title 8 of the Delaware Code or (iv) for any
transaction from which such director derived an improper personal benefit. No
amendment to or repeal of this provision shall apply to or have any effect on
the liability or alleged liability of any director for or with respect to any
acts or omissions of such director occurring prior to such amendment or repeal.
EIGHTH. The Corporation reserves the right to amend or repeal any
provision contained in this Certificate of Incorporation, in the manner now or
hereafter prescribed by statute, and all rights conferred upon a stockholder
herein are granted subject to this reservation.
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EXHIBIT 3
STOCKHOLDERS AGREEMENT
THIS STOCKHOLDERS AGREEMENT dated as of February 16, 1998 among HADCO
CORPORATION, a Massachusetts corporation ("Parent"), HADCO ACQUISITION CORP. II,
a Delaware corporation and a direct wholly-owned subsidiary of Parent ("Sub"),
and the other parties signatory hereto (each a "Stockholder", and collectively,
the "Stockholders").
W I T N E S S E T H:
WHEREAS, concurrently with the execution and delivery of this
Agreement, Parent, Sub and CONTINENTAL CIRCUITS CORP., a Delaware corporation
(the "Company"), are entering into an Agreement and Plan of Merger (as such
agreement may hereafter be amended from time to time, the "Merger Agreement";
capitalized terms used and not defined herein have the respective meanings
ascribed to them in the Merger Agreement), pursuant to which Sub will be merged
with and into the Company (the "Merger");
WHEREAS, in furtherance of the Merger, Parent and the Company desire
that, as soon as practicable (and not later than five business days) after the
public announcement of the execution and delivery of the Merger Agreement, Sub
commence a cash tender offer to purchase all outstanding shares of Company
Common Stock (as defined in Section 1), including all of the Shares (as defined
in Section 2) owned beneficially by the Stockholders; and
WHEREAS, as an inducement and a condition to entering into the Merger
Agreement, Parent has required that the Stockholders agree, and the Stockholders
have agreed, to enter into this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the mutual
promises, representations, warranties, covenants and agreements contained
herein, the parties hereto, intending to be legally bound, hereby agree as
follows:
1. Definitions. For purposes of this Agreement:
(a) "Beneficially Own" or "Beneficial Ownership" with respect
to any securities shall mean having "beneficial ownership" of such securities
(as determined pursuant to Rule 13d-3 under the Securities Exchange Act of 1934,
as amended (the "Exchange Act")), including pursuant to any agreement,
arrangement or understanding, whether or not in writing. Without duplicative
counting of the same securities by the same holder, securities Beneficially
Owned by a Person shall include securities Beneficially Owned by all other
Persons with whom such Person would constitute a "group" within the meaning of
Section 13(d)(3) of the Exchange Act.
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(b) "Company Common Stock" shall mean at any time the common
stock, $.01 par value, of the Company.
(c) "Person" shall mean an individual, corporation,
partnership, joint venture, association, trust, unincorporated organization or
other entity.
2. Tender of Shares.
(a) Each Stockholder hereby agrees to validly tender pursuant
to and in accordance with the terms of the Offer, not later than the fifth
business day after commencement of the Offer pursuant to Section 1.1 of the
Merger Agreement and Rule 14d-2 under the Exchange Act, (i) the number of shares
of Company Common Stock set forth opposite such Stockholder's name on Schedule I
hereto (the "Existing Shares"), and (ii) any additional shares of Company Common
Stock acquired by such Stockholder after the date hereof and prior to the
termination of this Agreement whether upon the exercise of options, warrants or
rights, the conversion or exchange of convertible or exchangeable securities, or
by means of purchase, dividend, distribution or otherwise Beneficially Owned by
him or it (the "Additional Shares" and, together with the Existing Shares, the
"Shares"). Each Stockholder hereby acknowledges and agrees that the Sub's
obligation to accept for payment and pay for Shares in the Offer, including the
Shares Beneficially Owned by such Stockholder, is subject to the terms and
conditions of the Offer.
(b) Each Stockholder hereby agrees to permit Parent and Sub to
publish and disclose in the Offer Documents and, if Company Stockholder Approval
is required under applicable law, the Proxy Statement (including all documents
and schedules filed with the SEC) his or its identity and ownership of Company
Common Stock and the nature of his or its commitments, arrangements and
understandings under this Agreement.
3. Provisions Concerning Company Common Stock.
(a) Each Stockholder hereby agrees that during the period
commencing on the date hereof and continuing until the first to occur of the
Effective Time or termination of the Merger Agreement in accordance with its
terms, at any meeting of the holders of Company Common Stock, however called, or
in connection with any written consent of the holders of Company Common Stock,
such Stockholder shall vote (or cause to be voted) the Shares held of record or
Beneficially Owned by such Stockholder, whether issued, heretofore owned or
hereafter acquired, (i) in favor of the Merger, the execution and delivery by
the Company of the Merger Agreement and the approval of the terms thereof and
each of the other actions contemplated by the Merger Agreement and this
Agreement and any actions required in furtherance thereof and hereof; (ii)
against any action or agreement that would result in a breach in any respect of
any covenant, representation or warranty or any other obligation or agreement of
the Company under the Merger Agreement or this Agreement; and (iii) except as
otherwise agreed to in writing in advance by Parent, against the following
actions (other than the Merger and the transactions contemplated by the Merger
Agreement): (A) any extraordinary corporate transaction, such as a merger,
consolidation or other business combination involving the Company or its
Subsidiaries; (B) a sale, lease or transfer of a material amount of assets of
the Company or its Subsidiaries, or a
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reorganization, recapitalization, dissolution or liquidation of the Company or
its Subsidiaries; (C) (1) any change in a majority of the persons who constitute
the board of directors of the Company; (2) any change in the present
capitalization of the Company or any amendment of the Company's Certificate of
Incorporation or Bylaws; (3) any other material change in the Company's
corporate structure or business; or (4) any other action which, in the case of
each of the matters referred to in clauses (C) (1), (2), (3) or (4), is
intended, or could reasonably be expected, to impede, interfere with, delay,
postpone, or materially adversely affect the Merger and the transactions
contemplated by this Agreement and the Merger Agreement. Such Stockholder shall
not enter into any agreement or understanding with any person or entity the
effect of which would be inconsistent or violative of the provisions and
agreements contained in this Section 3.
(b) Each Stockholder hereby grants to Parent a proxy to vote
the Shares of such Stockholder as indicated in Section 3(a). Each Stockholder
intends such proxy to be irrevocable and coupled with an interest and will take
such further action or execute such other instruments as may be necessary to
effectuate the intent of this proxy and hereby revokes any proxy previously
granted by Stockholder with respect to such Shares.
4. Other Covenants, Representations and Warranties. Each
Stockholder hereby represents and warrants to Parent as follows:
(a) Ownership of Shares. Such Stockholder is either (i) the
record and Beneficial Owner of, or (ii) the Beneficial Owner but not the record
holder of, the number of Shares set forth opposite such Stockholder's name on
Schedule I hereto. On the date hereof, the Existing Shares set forth opposite
such Stockholder's name on Schedule I hereto constitute all of the Shares owned
of record or Beneficially Owned by such Stockholder. Such Stockholder has sole
voting power and sole power to issue instructions with respect to the matters
set forth in Sections 2 and 3 hereof, sole power of disposition, sole power of
conversion, sole power to demand appraisal rights and sole power to agree to all
of the matters set forth in this Agreement, in each case with respect to all of
the Existing Shares set forth opposite such Stockholder's name on Schedule I
hereto, with no limitations, qualifications or restrictions on such rights,
subject to applicable securities laws and the terms of this Agreement.
(b) Power; Binding Agreement. Such Stockholder has the legal
capacity, power and authority to enter into and perform all of such
Stockholder's obligations under this Agreement. The execution, delivery and
performance of this Agreement by such Stockholder will not violate any other
agreement to which such Stockholder is a party including, without limitation,
any other voting agreement, stockholders agreement or voting trust. This
Agreement has been duly and validly executed and delivered by such Stockholder
and constitutes a valid and binding agreement of such Stockholder, enforceable
against such Stockholder in accordance with its terms. There is no beneficiary
or holder of a voting trust certificate or other interest of any trust of which
such Stockholder is trustee whose consent is required for the execution and
delivery of this Agreement or the consummation by such stockholder of the
transactions contemplated hereby. If such Stockholder is married and such
Stockholder's Shares constitute community property, this Agreement has been duly
authorized, executed and delivered by, and
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constitutes a valid and binding agreement of, such Stockholder's spouse,
enforceable against such person in accordance with its terms.
(c) No Conflicts. (A) No filing with, and no permit,
authorization, consent or approval of, any state or federal public body or
authority is necessary for the execution of this Agreement by such Stockholder
and the consummation by such Stockholder of the transactions contemplated hereby
and (B) none of the execution and delivery of this Agreement by such
Stockholder, the consummation by such Stockholder of the transactions
contemplated hereby or compliance by such Stockholder with any of the provisions
hereof shall (1) result in a violation or breach of, or constitute (with or
without notice or lapse of time or both) a default (or give rise to any third
party right of termination, cancellation, material modification or acceleration)
under any of the terms, conditions or provisions of any note, bond, mortgage,
indenture, license, contract, commitment, arrangement, understanding, agreement
or other instrument or obligation of any kind to which such Stockholder is a
party or by which such Stockholder or any of such Stockholder's properties or
assets may be bound or (2) violate any order, writ, injunction, decree,
judgment, order, statute, rule or regulation applicable to such Stockholder or
any of such Stockholder's properties or assets.
(d) No Encumbrances. Except as applicable in connection with
the transactions contemplated by Sections 2 and 3 hereof, such Stockholder's
Shares and the certificates representing such Shares are now, and at all times
during the term hereof will be, held by such Stockholder, or by a nominee or
custodian for the benefit of such Stockholder, free and clear of all liens,
claims, security interests, proxies, voting trusts or agreements, understandings
or arrangements or any other encumbrances whatsoever, except for any such
encumbrances or proxies arising hereunder.
(e) No Finder's Fees. No broker, investment banker, financial
adviser or other person is entitled to any broker's, finder's, financial
adviser's or other similar fee or commission in connection with the transactions
contemplated hereby based upon arrangements made by or on behalf of such
Stockholder.
(f) No Solicitation. No Stockholder shall, in his or its
capacity as such, directly or indirectly, solicit (including by way of
furnishing information) or respond to any inquiries or the making of any
proposal by any person or entity (other than Parent or any affiliate of Parent)
with respect to the Company that constitutes an Acquisition Proposal. If any
Stockholder receives any such inquiry or proposal, then such Stockholder shall
immediately inform Parent of the terms and conditions, if any, of such inquiry
or proposal and the identity of the person making such proposal. Each
Stockholder will immediately cease and cause to be terminated any existing
activities, discussions or negotiations with any parties conducted heretofore
with respect to any of the foregoing.
(g) Restriction on Transfer, Proxies and Non-Interference.
Except as applicable in connection with the transactions contemplated by
Sections 2 and 3 hereof, no Stockholder shall, directly or indirectly: (i) offer
for sale, sell, transfer, tender, pledge, encumber, assign or otherwise dispose
of, or enter into any contract, option or other arrangement or
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understanding with respect to or consent to the offer for sale, sale, transfer,
tender, pledge, encumbrance, assignment or other disposition of, any or all of
such Stockholder's Shares or any interest therein; (ii) grant any proxies or
powers of attorney, deposit any Shares into a voting trust or enter into a
voting agreement with respect to any Shares; or (iii) take any action that would
make any representation or warranty of such Stockholder contained herein untrue
or incorrect or have the effect of preventing or disabling such Stockholder from
performing such Stockholder's obligations under this Agreement.
(h) Waiver of Appraisal Rights. Each Stockholder hereby
waives any rights of appraisal or rights to dissent from the Merger that such
Stockholder may have.
(i) Reliance by Parent. Such Stockholder understands and
acknowledges that Parent and Sub are entering into the Merger Agreement in
reliance upon such Stockholder's execution and delivery of this Agreement.
(j) Further Assurances. From time to time, at the other
party's request and without further consideration, each party hereto shall
execute and deliver such additional documents and take all such further lawful
action as may be necessary or desirable to consummate and make effective, in the
most expeditious manner practicable, the transactions contemplated by this
Agreement.
5. Stop Transfer. Each Stockholder agrees with, and covenants to,
Parent that such Stockholder shall not request that the Company and, the Company
agrees that it will not, register the transfer (book-entry or otherwise) of any
certificate or uncertificated interest representing any of such Stockholder's
Shares, unless such transfer is made in compliance with this Agreement
(including the provisions of Section 2 hereof). In the event of a stock dividend
or distribution, or any change in the Company Common Stock by reason of any
stock dividend, split-up, recapitalization, combination, exchange of shares or
the like, the term "Shares" shall be deemed to refer to and include the Shares
as well as all such stock dividends and distributions and any shares into which
or for which any or all of the Shares may be changed or exchanged.
6. Termination. This Agreement shall terminate upon the
termination of the Merger Agreement in accordance with its terms by Parent.
7. Stockholder Capacity. No person executing this Agreement who is or
becomes during the term hereof a director of the Company makes any agreement or
understanding herein in his or her capacity as such director. Each Stockholder
signs solely in his or her capacity as the record and Beneficial Owner of, or
the trustee of a trust whose beneficiaries are the Beneficial Owners of, such
Stockholder's Shares.
8. Confidentiality. The Stockholders recognize that the successful
consummation of the transactions contemplated by this Agreement may be dependent
upon confidentiality with respect to the matters referred to herein. In this
connection, pending public disclosure thereof, each Stockholder hereby agrees
not to disclose or discuss such matters with anyone not a party to
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this Agreement (other than such Stockholder's counsel and advisors, if any)
without the prior written consent of Parent, except for filings required
pursuant to the Exchange Act and the rules and regulations thereunder or
disclosures such Stockholder's counsel advises are necessary in order to fulfill
such Stockholder's obligations imposed by law, in which event such Stockholder
shall give prior notice of such proposed disclosure to Parent as promptly as
practicable so as to enable Parent to seek a protective order from a court of
competent jurisdiction with respect thereto.
9. Miscellaneous.
(a) Entire Agreement. This Agreement and the Merger Agreement
constitute the entire agreement between the parties with respect to the subject
matter hereof and supersede all other prior agreements and understandings, both
written and oral, between the parties with respect to the subject matter hereof.
(b) Certain Events. Each Stockholder agrees that this
Agreement and the obligations hereunder shall attach to such Stockholder's
Shares and shall be binding upon any person or entity to which legal or
beneficial ownership of such Shares shall pass, whether by operation of law or
otherwise, including, without limitation, such Stockholder's heirs, guardians,
administrators or successors. Notwithstanding any transfer of Shares, the
transferor shall remain liable for the performance of all obligations under this
Agreement of the transferor.
(c) Assignment. This Agreement shall not be assigned by
operation of law or otherwise without the prior written consent of the other
party, provided that Parent may assign, in its sole discretion, its rights and
obligations hereunder to any direct or indirect wholly owned subsidiary of
Parent, but no such assignment shall relieve Parent of its obligations hereunder
if such assignee does not perform such obligations.
(d) Amendments, Waivers, Etc. This Agreement may not be
amended, changed, supplemented, waived or otherwise modified or terminated, with
respect to any one or more Stockholders, except upon the execution and delivery
of a written agreement executed by the relevant parties hereto; provided that
Schedule I hereto may be supplemented by Parent by adding the name and other
relevant information concerning any stockholder of the Company who agrees to be
bound by the terms of this Agreement without the agreement of any other party
hereto, and thereafter such added stockholder shall be treated as a
"Stockholder" for all purposes of this Agreement.
(e) Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly received if so given) by hand delivery or telecopy, or
by mail (registered or certified mail, postage prepaid, return receipt
requested) or by any courier service, such as Federal Express, providing proof
of delivery. All communications hereunder shall be delivered to the respective
parties at the following addresses:
If to Stockholder: At the addresses set forth on Schedule I
hereto with
6
<PAGE> 7
copies to: Quarles & Brady
One East Camelback Road
Suite 400
Phoenix, Arizona 85012-1649
Attention: P. Robert Moya
Telephone: (602) 230-5500
Telecopy: (602) 230-5598
If to Parent: Hadco Corporation
12A Manor Parkway
Salem, N.H. 03079
Attention: Timothy P. Losik
Telephone: (603) 898-8000
Telecopy: (603) 893-0025
copy to: Testa, Hurwitz & Thibeault, LLP
125 High Street
Boston, MA 02110
Attention: Stephen A. Hurwitz
George W. Lloyd
Telephone: (617) 248-7000
Telecopy: (617) 248-7100
or to such other address as the person to whom notice is given may have
previously furnished to the others in writing in the manner set forth above.
(f) Severability. Whenever possible, each provision or portion
of any provision of this Agreement will be interpreted in such manner as to be
effective and valid under applicable law but if any provision or portion of any
provision of this Agreement is held to be invalid, illegal or unenforceable in
any respect under any applicable law or rule in any jurisdiction, such
invalidity, illegality or unenforceability will not affect any other provision
or portion of any provision in such jurisdiction, and this Agreement will be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision or portion of any provision had never been
contained herein.
(g) Specific Performance. Each of the parties hereto
recognizes and acknowledges that a breach by it of any covenants or agreements
contained in this Agreement will cause the other party to sustain damages for
which it would not have an adequate remedy at law for money damages, and
therefore each of the parties hereto agrees that in the event of any such breach
the aggrieved party shall be entitled to the remedy of specific performance of
such covenants and agreements and injunctive and other equitable relief in
addition to any other remedy to which it may be entitled, at law or in equity.
7
<PAGE> 8
(h) Remedies Cumulative. All rights, powers and remedies
provided under this Agreement or otherwise available in respect hereof at law or
in equity shall be cumulative and not alternative, and the exercise of any
thereof by any party shall not preclude the simultaneous or later exercise of
any other such right, power or remedy by such party.
(i) No Waiver. The failure of any party hereto to exercise any
right, power or remedy provided under this Agreement or otherwise available in
respect hereof at law or in equity, or to insist upon compliance by any other
party hereto with its obligations hereunder, and any custom or practice of the
parties at variance with the terms hereof, shall not constitute a waiver by such
party of its right to exercise any such or other right, power or remedy or to
demand such compliance.
(j) No Third Party Beneficiaries. This Agreement is not
intended to be for the benefit of, and shall not be enforceable by, any person
or entity who or which is not a party hereto.
(k) Governing Law. This Agreement shall be governed
and construed in accordance with the laws of the State of Delaware, without
giving effect to the principles of conflicts of law thereof.
(l) Jurisdiction. Each party hereby irrevocably submits to the
exclusive jurisdiction of the Court of Chancery in the State of Delaware in any
action, suit or proceeding arising in connection with this Agreement, and agrees
that any such action, suit or proceeding shall be brought only in such court
(and waives any objection based on forum non conveniens or any other objection
to venue therein); provided, however, that such consent to jurisdiction is
solely for the purpose referred to in this paragraph (l) and shall not be deemed
to be a general submission to the jurisdiction of said court or in the State of
Delaware other than for such purposes. Each party hereto hereby waives any right
to a trial by jury in connection with any such action, suit or proceeding.
(m) Descriptive Headings. The descriptive headings used
herein are inserted for convenience of reference only and are not intended to be
part of or to affect the meaning or interpretation of this Agreement.
(n) Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed to be an original, but all of which,
taken together, shall constitute one and the same Agreement.
8
<PAGE> 9
IN WITNESS WHEREOF, Parent, Sub and each Stockholder have caused this
Agreement to be duly executed as of the day and year first above written.
HADCO CORPORATION
By: /s/ Andrew E. Lietz
------------------------------
Name: Andrew E. Lietz
----------------------------
Title: Chief Executive Officer
---------------------------
HADCO ACQUISITION CORP. II
By: /s/ Andrew E. Lietz
------------------------------
Name: Andrew E. Lietz
----------------------------
Title: Chief Executive Officer
---------------------------
/s/ Frederick G. McNamee, III
---------------------------------
Frederick G. McNamee, III
/s/ Steven N. Lach
---------------------------------
Steven N. Lach
/s/ James Buchanan
---------------------------------
James Buchanan
/s/ Jerome Wilson
---------------------------------
Jerome Wilson
9
<PAGE> 10
AGREED TO AND ACKNOWLEDGED
(with respect to Section 5):
CONTINENTAL CIRCUITS CORP.
By: /s/ Frederick G. McNamee, III
-------------------------------
Frederick G. McNamee, III
President and Chief Executive Officer
10
<PAGE> 11
SCHEDULE I
<TABLE>
<CAPTION>
STOCKHOLDER SHARES OPTIONS
- ----------- ------ -------
<S> <C> <C>
Frederick G. McNamee, III 0 400,000
c/o Continental Circuits Corp.
5020 S. 36th Street
Phoenix, Arizona 85040
Steven N. Lach 0 50,000
c/o Continental Circuits Corp.
5020 S. 36th Street
Phoenix, Arizona 85040
James Buchanan 0 100,000
c/o Continental Circuits Corp.
5020 S. 36th Street
Phoenix, Arizona 85040
Jerome Wilson 0 30,000
c/o Continental Circuits Corp.
5020 S. 36th Street
Phoenix, Arizona 85040
</TABLE>
11
<PAGE> 1
EXHIBIT 4
---------
AMENDMENT NO. 1 DATED AS OF MARCH 13, 1998 TO
AGREEMENT AND PLAN OF MERGER
WHEREAS, Hadco Corporation, a Massachusetts corporation ("Parent"), Hadco
Acquisition Corp. II, a Delaware corporation and a direct wholly-owned
subsidiary of Parent ("Sub"), and Continental Circuits Corp., a Delaware
corporation (the "Company") have entered into an Agreement and Plan of Merger,
dated as of February 16, 1998 (the "Agreement");
WHEREAS, the parties to the Agreement desire to amend and supplement the
agreement in certain respects as set forth herein;
NOW, THEREFORE, in consideration of the foregoing and the representations,
warranties, covenants and agreements herein contained, the parties hereto,
intending to be legally bound, hereby agree as follows:
SECTION 1. DEFINITIONS. Capitalized terms used herein and not defined shall
have the respective meanings set forth in the Agreement.
SECTION 2. AMENDMENT. EXHIBIT A of the Agreement shall be amended to read
in its entirety as follows:
Exhibit A
The capitalized terms used in this EXHIBIT A shall have the respective
meanings given to such terms in the Agreement and Plan of Merger, dated as of
February 16, 1998, among Hadco Corporation, Hadco Acquisition Corp. II and
Continental Circuits Corp. (the "Merger Agreement") to which this EXHIBIT A is
attached.
CONDITIONS TO THE OFFER
Notwithstanding any other provision of the Offer, Sub shall not be required
to accept for payment or, subject to any applicable rules and regulations of the
SEC, including Rule 14e-1(c) under the Exchange Act (relating to Sub's
obligation to pay for or return tendered Shares promptly after expiration or
termination of the Offer), to pay for any Shares tendered, and may postpone the
acceptance for payment or, subject to the restriction referred to above, payment
for any Shares tendered, and may amend (subject to Section 1.1(b) of the Merger
Agreement) or terminate the Offer (whether or not any Shares have theretofore
been purchased or paid for) if, (i) there has not been validly tendered and not
withdrawn prior to the time the Offer shall otherwise expire a number of Shares
which constitutes at least 90% of the Shares outstanding on a fully-diluted
basis on the date of purchase ("on a fully-diluted basis" having the following
meaning, as of any date: the number of Shares outstanding, together with Shares
the Company may be then
A-1
<PAGE> 2
required to issue pursuant to obligations outstanding at that date under stock
option, stock purchase or other benefit plans or otherwise); (ii) all material
regulatory and related approvals have not been obtained prior to the expiration
of the Offer or made on terms reasonably satisfactory to Sub; (iii) any
applicable waiting periods under the HSR Act shall not have expired or been
terminated prior to the expiration of the Offer; or (iv) at any time on or after
the date of the Merger Agreement and before the expiration of the Offer, such
Shares any of the following events shall occur:
(A) There shall have been threatened, instituted or pending any action,
proceeding, application or counterclaim by or before any court or governmental,
regulatory or administrative agency, authority or tribunal, domestic, foreign or
supranational (other than actions, proceedings, applications or counterclaims
filed or initiated by Sub), which (i) seeks to challenge the acquisition by Sub
of the Shares, restrain, prohibit or delay the making or consummation of the
Offer or the Merger or any other merger or business combination involving Sub or
any of its affiliates and the Company or any of its subsidiaries, prohibit the
performance of any of the contracts or other agreements entered into by Sub or
any of its affiliates in connection with the acquisition of the Company or the
Shares, or obtain any material damages in connection with any of the foregoing,
(ii) seeks to make the purchase of or payment for, some or all of the Shares
pursuant to the Offer, the Merger or otherwise, illegal, (iii) seeks to impose
limitations on the ability of Sub or the Company or any of their respective
affiliates or subsidiaries effectively to acquire or hold, or requiring Sub, the
Company or any of their respective affiliates or subsidiaries to dispose of or
hold separate, any portion of the assets or the business of Sub or its
affiliates or the Company or its subsidiaries, or impose limitations on the
ability of Sub, the Company or any of their respective affiliates or
subsidiaries to continue to conduct, own or operate all or any portion of their
businesses and assets as heretofore conducted, owned or operated, (iv) seeks to
impose or may result in material limitations on the ability of Sub or any of its
affiliates to exercise full rights of ownership of the Shares purchased by them,
including, without limitation, the right to vote the Shares purchased by them on
all matters properly presented to the stockholders of the Company, or the right
to vote any shares of capital stock of any subsidiary directly or indirectly
owned by the Company, (v) is reasonably likely to result in a material
diminution in the benefits expected to be derived by Sub as a result of the
transactions contemplated by the Offer, including the Merger, (vi) seeks to
impose voting, procedural, price or other requirements in addition to those
under Delaware Law and federal securities laws (each as in effect on the date of
the Offer to Purchase) or any material condition to the Offer in any such case
which is unacceptable (in its reasonable judgment) to Sub or (vii) challenges or
adversely and materially affects the financing of the Offer;
(B) There shall have been formally proposed, sought, promulgated, enacted,
entered or made applicable to the Offer or the Merger or enforced by any
domestic, foreign or supranational government or any governmental,
administrative or regulatory authority or agency or by any court or tribunal,
domestic, foreign or supranational, any statute, rule, regulation, judgment,
decree, order or injunction that might result in any of the consequences
referred to in clauses (i) through (vii) of paragraph (A) above;
A-2
<PAGE> 3
(C) There shall have occurred any of the following which, in the good faith
judgment of the Parent and Sub, make it inadvisable to proceed with the Offer
and acceptance for payment of, and payment for, the Shares (1) any general
suspension of trading in, or limitation on prices for, securities on any
national securities exchange or in the over-the-counter market in the United
States, (2) the declaration of a banking moratorium or any suspension of
payments in respect of banks in the United States, (3) the commencement of a
war, armed hostilities or other international or national calamity, directly or
indirectly involving the United States, (4) any limitations (whether or not
mandatory) imposed by any governmental authority on, or any event which might
have material adverse significance with respect to, the nature or extension of
credit or further extension of credit by banks or other lending institutions,
(5) any significant adverse change in the equity or debt markets in the United
States which shall be continuing as of the expiration of the Offer, or (6) in
the case of any of the foregoing, a material acceleration or worsening thereof;
(D) The representations and warranties of the Company contained in the
Merger Agreement (without giving effect to any "Material Adverse Effect",
"materiality" or similar qualifications contained therein) shall not be true and
correct in all material respects (for purpose of this clause, a failure of the
representations and warranties to be true and correct in all material respects
shall mean a failure or series of failures the result of which impairs the value
of the Company or could reasonably be expected to impair the value of the
Company by more than $3,000,000 as of the date of the consummation of the Offer
as though made on and as of such date except (1) for changes specifically
permitted by the Merger Agreement and (2) that those representations and
warranties which address matters only as of a particular date shall remain true
and correct as of such date;
(E) The obligations of the Company contained in the Merger Agreement
(without giving effect to any "Material Adverse Effect", "materiality" or
similar qualifications contained therein) shall not have been performed or
complied with in all material respects by the Company;
(F) The Merger Agreement shall have been terminated in accordance with its
terms;
(G) Prior to the purchase of Shares pursuant to the Offer, an Acquisition
Proposal for the Company exists and the Board shall have withdrawn or materially
modified or changed (including by amendment of the Schedule 14D-9) in a manner
adverse to Sub its recommendation of the Offer, the Merger Agreement or the
Merger;
(H) Any person or group (other than Parent and Sub) shall have entered into
a definitive agreement or agreement in principle with the Company with respect
to a merger, consolidation or other business combination with the Company; or
(I) The Company shall have suffered a material adverse change in its
business, operations, assets or condition (financial or otherwise).
The foregoing conditions are for the sole benefit of Sub and its affiliates
and may be asserted by Sub regardless of the circumstances (other than any
action or inaction by Parent, Sub
A-3
<PAGE> 4
or any of their affiliates) giving rise to any such condition or may be waived
by Sub, in whole or in part, from time to time in its sole discretion, except as
otherwise provided in the Agreement. The failure by Sub at any time to exercise
any of the foregoing rights shall not be deemed a waiver of any such right and
each such right shall be deemed an ongoing right and may be asserted at any time
and from time to time. Any reasonable determination by Sub concerning any of the
events described herein shall be final and binding.
A-4
<PAGE> 5
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
signed by their respective officers thereunto duly authorized, all as of the
date first written above.
HADCO CORPORATION
By: /s/ Timothy P. Losik
---------------------------------
Name: Timothy P. Losik
--------------------------------
Title: Senior Vice President
-------------------------------
HADCO ACQUISITION CORP. II
By: /s/ Timothy P. Losik
---------------------------------
Name: Timothy P. Losik
--------------------------------
Title: Senior Vice President
-------------------------------
CONTINENTAL CIRCUITS CORP.
By: /s/ Joseph Anderson
---------------------------------
Name: Joseph Anderson
--------------------------------
Title: Chief Financial Officer
-------------------------------
A-5
