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EXHIBIT 10.27
EXECUTION VERSION
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CREDIT AGREEMENT
AMONG
FLEXTRONICS INTERNATIONAL USA, INC.,
AND
THE DII GROUP
AND
THE LENDERS NAMED HEREIN
AND
ABN AMRO BANK N.V.,
AS AGENT FOR LENDERS
AND
FLEET NATIONAL BANK
AS DOCUMENTATION AGENT
AND
BANK OF AMERICA, NATIONAL ASSOCIATION
AND
CITICORP USA, INC.
AS MANAGING AGENTS
AND
THE BANK OF NOVA SCOTIA
AS CO-AGENT
APRIL 3, 2000
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TABLE OF CONTENTS
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SECTION I. INTERPRETATION......................................... 1
1.01. Definitions............................................... 1
1.02. GAAP...................................................... 16
1.03. Headings.................................................. 16
1.04. Plural Terms.............................................. 16
1.05. Governing Law............................................. 16
1.06. English Language.......................................... 16
1.07. Construction.............................................. 16
1.08. Entire Agreement.......................................... 16
1.09. Calculation of Interest and Fees.......................... 16
1.10. References................................................ 16
1.11. Other Interpretive Provisions............................. 17
SECTION II. CREDIT FACILITIES...................................... 17
2.01. Loans..................................................... 17
2.02. Notice of Borrowing....................................... 18
2.03. Interest.................................................. 20
2.04. Purpose................................................... 21
2.05. Amount Limitations, Commitment Reductions, Etc............ 21
2.06. Fees...................................................... 22
2.07. Prepayments............................................... 22
2.08. Other Payment Terms....................................... 23
2.09. Loan Accounts; Notes...................................... 25
2.10. Loan Funding.............................................. 25
2.11. Pro Rata Treatment........................................ 26
2.12. Change of Circumstances................................... 27
2.13. Taxes on Payments......................................... 28
2.14. Funding Loss Indemnification.............................. 29
2.15. Security.................................................. 30
2.16. Replacement of Lenders.................................... 31
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SECTION III. CONDITIONS PRECEDENT...................................... 31
3.01. Initial Conditions Precedent................................. 31
3.02. Conditions Precedent to Term Loan Borrowing.................. 31
3.03. Conditions Precedent to Each Credit Event.................... 32
3.04. Covenant to Deliver.......................................... 32
SECTION IV. REPRESENTATIONS AND WARRANTIES............................ 32
4.01. Borrowers' Representations and Warranties.................... 32
4.02. Reaffirmation................................................ 36
SECTION V. COVENANTS................................................. 36
5.01. Affirmative Covenants........................................ 36
5.02. Negative Covenants........................................... 39
SECTION VI. DEFAULT................................................... 43
6.01. Events of Default............................................ 43
6.02. Remedies..................................................... 45
6.03. Lender Rate Contract Remedies................................ 45
SECTION VII. THE AGENT AND RELATIONS AMONG LENDERS..................... 45
7.01. Appointment, Powers and Immunities........................... 45
7.02. Reliance by Agent............................................ 45
7.03. Defaults..................................................... 46
7.04. Indemnification.............................................. 46
7.05. Non-Reliance................................................. 46
7.06. Resignation or Removal of Agent.............................. 46
7.07. Agent in its Individual Capacity............................. 47
7.08. Documentation Agent, Managing Agents and Co-Agent............ 47
SECTION VIII. MISCELLANEOUS............................................. 47
8.01. Notices...................................................... 47
8.02. Expenses..................................................... 48
8.03. Indemnification.............................................. 48
8.04. Waivers; Amendments.......................................... 48
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8.05. Successors and Assigns..................................................... 49
8.06. Setoff; Security Interest.................................................. 51
8.07. No Third Party Rights...................................................... 52
8.08. Partial Invalidity......................................................... 52
8.09. Jury Trial................................................................. 52
8.10. Counterparts............................................................... 52
8.11. Borrowers' Liabilities..................................................... 52
8.12. Confidentiality............................................................ 52
8.13. Consent to Jurisdiction.................................................... 53
8.14. Usury...................................................................... 53
8.15. Effect..................................................................... 53
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SCHEDULES
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I Lenders
II Pricing Grid
3.01 Initial Conditions Precedent
4.01(o) Subsidiaries
5.02(a) Existing Secured Indebtedness
5.02(e) Existing Investments
EXHIBITS
A Notice of Revolving Loan Borrowing (2.02(a))
B Notice of Term Loan Borrowing (2.02(b))
C(1) Revolving Loan Note (2.09(b))
C(2) Term Loan Note (2.09(b))
D Guaranty (2.15(a))
E Pledge Agreement (2.15(a))
F Assignment Agreement (8.05(c))
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CREDIT AGREEMENT
THIS CREDIT AGREEMENT, dated as of April 3, 2000, is entered into by and
among:
(1) FLEXTRONICS INTERNATIONAL USA, INC., a California corporation
("FIUI") and THE DII GROUP, INC., a Delaware corporation ("DII" and
together with FIUI, each a "Borrower" and collectively, the
"Borrowers");
(2) Each of the financial institutions from time to time listed
in Schedule I hereto, as amended from time to time (such financial
institutions to be referred to herein collectively as "Lenders");
(3) ABN AMRO BANK N.V., as agent for Lenders (in such capacity,
"Agent");
(4) Fleet National Bank, as documentation agent for Lenders (in
such capacity, "Documentation Agent");
(5) Bank of America, National Association and Citicorp USA, Inc.,
as managing agents (collectively, in such capacity, the "Managing
Agents"); and
(6) The Bank of Nova Scotia, as co-agent (in such capacity, the
"Co-Agent").
RECITALS
A. Borrowers have requested Lenders to provide certain credit facilities
to Borrowers.
B. Lenders are willing to provide such credit facilities upon the terms
and subject to the conditions set forth herein.
AGREEMENT
NOW, THEREFORE, in consideration of the above Recitals and the mutual
covenants herein contained, the parties hereto hereby agree as follows:
SECTION I. INTERPRETATION.
1.01. Definitions. Unless otherwise indicated in this Agreement or any
other Credit Document, each term set forth below, when used in this Agreement or
any other Credit Document, shall have the respective meaning given to that term
below or in the provision of this Agreement or other document, instrument or
agreement referenced below.
"ABN AMRO" shall mean ABN AMRO Bank N.V.
"Affiliate" shall mean, with respect to any Person, each other
Person that (a) directly or indirectly, owns or controls, whether
beneficially or as a trustee, guardian or other fiduciary, ten percent
(10%) or more of any class of Equity Securities of such Person or (b)
that controls, is controlled by or is under common control with such
Person or any Affiliate of such Person; provided, however, that in no
case shall Agent or any Lender be deemed to be an Affiliate of either
Borrower or any of its Subsidiaries for purposes of this Agreement. For
the purpose of this definition, "control" of a Person shall mean the
possession, directly or indirectly, of the power to direct or cause the
direction of its management or policies, whether through the ownership
of voting securities, by contract or otherwise.
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"Agent" shall have the meaning given to that term in clause (3)
of the introductory paragraph hereof.
"Agent's Fee Letter" shall mean the letter agreement dated as of
February 28, 2000 between FIL and Agent.
"Agreement" shall mean this Credit Agreement.
"Applicable Lending Office" shall mean, with respect to any
Lender and any Borrowing, (i) in the case of any Base Rate Loan or Base
Rate Portion, such Lender's Domestic Lending Office, and (ii) in the
case of any LIBOR Loan or LIBOR Portion, such Lender's Euro-Dollar
Lending Office.
"Applicable Margin" shall mean, with respect to any Borrowing or
Borrowing Portion at any time, the per annum margin which is determined
pursuant to the Pricing Grid and added to the Base Rate or LIBO Rate, as
the case may be, for such Borrowing or Portion; provided, however, that
each Applicable Margin determined pursuant to the Pricing Grid shall be
increased by two percent (2.00%) per annum on the date an Event of
Default occurs and shall continue at such increased rate unless and
until such Event of Default is cured or waived in accordance with this
Agreement. The Applicable Margins shall be determined as provided in the
Pricing Grid (subject to the proviso in the preceding sentence) and may
change for each Pricing Period.
"Applicable Payment Office" shall mean Borrowers' offices located
at 2090 Fortune Drive, San Jose, California.
"Applicable Rate Page" shall mean the applicable Telerate Page on
which appears the London Interbank Offered Rate for deposits in Dollars
at such time or, if no such page is then available, the applicable
Reuters Screen Page on which such information then appears.
"Assignee Lender" shall have the meaning given to that term in
Subparagraph 8.05(c).
"Assignment" shall have the meaning given to that term in
Subparagraph 8.05(c).
"Assignment Agreement" shall have the meaning given to that term
in Subparagraph 8.05(c).
"Assignment Effective Date" shall have, with respect to each
Assignment Agreement, the meaning set forth therein.
"Assignor Lender" shall have the meaning given to that term in
Subparagraph 8.05(c).
"Base Rate" shall mean, on any day, the greater of (a) the Prime
Rate in effect on such date and (b) the Federal Funds Rate for such day
plus one-half percent (0.50%).
"Base Rate Borrowing" shall mean any Revolving Loan Borrowing
consisting of Base Rate Loans.
"Base Rate Loan" shall mean any Revolving Loan bearing interest
based upon the Base Rate.
"Base Rate Portion" shall mean a portion of a Term Loan Borrowing
or a Term Loan bearing interest based upon the Base Rate.
"Borrowers" shall have the meaning given to that term in clause
(1) of the introductory paragraph hereof.
"Borrowing" shall mean any Facility A Revolving Loan Borrowing,
any Facility B Revolving Loan Borrowing or any Term Loan Borrowing.
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"Business Day" shall mean any day on which commercial banks are
not authorized or required to close in San Francisco, California, New
York, New York or Chicago, Illinois, other than Saturday or Sunday, and
if such Business Day is related to a Revolving Loan Borrowing consisting
of LIBOR Loans or a LIBOR Portion of the Term Loan Borrowing, dealings
in Dollar deposits are carried out in the London interbank market and
commercial banks are open for business in London.
"Capital Adequacy Requirement" shall have the meaning given to
that term in Subparagraph 2.12(d).
"Capital Leases" shall mean any and all lease obligations that,
in accordance with GAAP, are required to be capitalized on the books of
a lessee.
"Change of Control" shall mean, with respect to FIL (i) the
acquisition after the date hereof by any person or group of persons
(within the meaning of Section 13 or 14 of the Securities Exchange Act
of 1934 (as amended, the "Exchange Act")) of (A) beneficial ownership
(within the meaning of Rule 13d-3 promulgated by the Securities and
Exchange Commission under the Exchange Act) of fifty percent (50%) or
more of the outstanding Equity Securities of FIL entitled to vote for
members of the board of directors, or (B) all or substantially all of
the assets of FIL; (ii) during any period of twelve (12) consecutive
calendar months, individuals who are directors of FIL on the first day
of such period ("Initial Directors") and any directors of FIL who are
specifically approved by two-thirds of the Initial Directors and
previously-approved Directors shall cease to constitute a majority of
the Board of Directors of FIL before the end of such period; or (iii)
any other event or condition constituting a "Change of Control" (or
similar defined term) under the Subordinated Indenture shall occur or
exist.
"Change of Law" shall have the meaning given to that term in
Subparagraph 2.12(b).
"Closing Date" shall mean April 3, 2000.
"Co-Agent" shall have the meaning given to that term in clause
(6) of the introductory paragraph hereof.
"Collateral" shall mean all property in which Agent or any Lender
has a Lien to secure the Obligations.
"Commitment Fee Percentage" shall mean the per annum percentage
which is used to calculate the Commitment Fees. The Commitment Fee
Percentage shall be determined as provided in the Pricing Grid and may
change for each Pricing Period.
"Commitment Fees" shall mean, collectively, the Facility A
Commitment Fees and the Facility B Commitment Fees.
"Commitments" shall mean, collectively, the Facility A
Commitments and the Facility B Commitments.
"Compliance Certificate" shall have the meaning given to that
term in Subparagraph 5.01(a).
"Contingent Obligation" shall mean, with respect to any Person,
(a) any Guaranty Obligation of that Person; and (b) any direct or
indirect obligation or liability, contingent or otherwise, of that
Person (i) in respect of any Surety Instrument issued for the account of
that Person or as to which that Person is otherwise liable for
reimbursement of drawings or payments or (ii) in respect to any Rate
Contract that is not entered into in connection with a bona fide hedging
operation that provides offsetting benefits to such Person. The amount
of any Contingent Obligation shall (subject, in the case of Guaranty
Obligations, to the last sentence of the definition of "Guaranty
Obligation") be deemed equal to the maximum reasonably anticipated
liability in respect thereof, and shall, with respect to item (b)(ii) of
this definition be marked to market on a current basis.
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"Contractual Obligation" of any Person shall mean, any indenture,
note, lease, loan agreement, security, deed of trust, mortgage, security
agreement, guaranty, instrument, contract, agreement or other form of
contractual obligation or undertaking to which such Person is a party or
by which such Person or any of its property is bound.
"Credit Documents" shall mean and include this Agreement, the
Notes, the Security Documents, Lender Rate Contracts and the Agent's Fee
Letter, the FIL Credit Documents, all other documents, instruments and
agreements delivered to Agent or any Lender pursuant to Section III; and
all other documents, instruments and agreements delivered by either
Borrower or any of its Guarantors or Subsidiaries to Agent or any Lender
in connection with this Agreement on or after the date of this
Agreement.
"Credit Event" shall mean (a) the making of any Loan, (b) the
conversion of any Portion of a Term Loan Borrowing into a LIBOR Portion,
(c) the selection of a new Interest Period exceeding one (1) month for
any LIBOR Portion of a Term Loan Borrowing, or (d) the selection of a
new Interest Period exceeding one (1) month for any LIBOR Borrowing.
"Debt/EBITDA Ratio" shall mean, with respect to FIL for any
period, the ratio, determined on a consolidated basis in accordance with
GAAP, of:
(a) The total Indebtedness of FIL and its Subsidiaries on
the last day of such period; provided, however, that in computing
the foregoing sum, there shall be excluded therefrom any
Indebtedness to the extent the proceeds of which are (i) legally
segregated from FIL's or such Subsidiaries' other assets and (ii)
either (A) only held in the form of cash or cash equivalents or
(B) used by FIL or its Subsidiaries for any such purpose as may
be approved in advance from time to time by the Required Lenders;
to
(b) The EBITDA of FIL and its Subsidiaries for such
period.
"Default" shall mean an Event of Default or any event or
circumstance not yet constituting an Event of Default which, with the
giving of any notice or the lapse of any period of time or both, would
become an Event of Default.
"Defaulting Lender" shall mean a Lender which has failed to fund
its portion of any Borrowing which it is required to fund under this
Agreement and has continued in such failure for three (3) Business Days
after written notice from Agent.
"DII" shall mean The DII Group, Inc., a Delaware corporation.
"DII Acquisition" shall mean the merger of DII with a
wholly-owned Subsidiary of Borrower as a result of which the outstanding
capital stock of DII shall be converted into the right to receive
ordinary shares in Borrower.
"Documentation Agent" shall have the meaning given to that term
in clause (4) of the introductory paragraph hereof.
"Dollars" and "$" shall mean, unless otherwise indicated, the
lawful currency of the United States of America and, in relation to any
payment under this Agreement, same day or immediately available funds.
"Domestic Lending Office" shall mean, with respect to any Lender
and its Base Rate Loans and Base Rate Portion, (a) initially, its office
designated as such in Part B of Schedule I (or, in the case of any
Lender which becomes a Lender by an assignment pursuant to Subparagraph
8.05(c), its office designated
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as such in the applicable Assignment Agreement) and (b) subsequently,
such other office or offices as such Lender may designate to Agent as
the office at which such Lender's Base Rate Loans and Base Rate Portion
will thereafter be maintained and for the account of which all payments
of principal of, and interest on, such Lender's Base Rate Loans and Base
Rate Portion will thereafter be made.
"EBITDA" shall mean, with respect to FIL for any period, the sum,
determined on a consolidated basis in accordance with GAAP, of the
following:
(a) The net income or net loss of FIL and its Subsidiaries
for such period before provision for income taxes;
plus
(b) The sum (to the extent deducted in calculating net
income or loss in clause (a) above) of (i) all Interest Expenses
of FIL and its Subsidiaries accruing during such period, (ii) all
depreciation and amortization expenses of FIL and its
Subsidiaries accruing during such period and (iii) other noncash
charges for such period.
"Eligible Assignee" shall mean (a) a commercial bank, (b) a
subsidiary, affiliate or branch of a Lender, or (c) any other financial
institution that makes or purchases commercial loans in the ordinary
course of business, in each case having a combined capital and surplus
of at least $100,000,000.
"Eligible Material Subsidiary" shall mean, at any time, any
Material Subsidiary that is not then an Ineligible Material Subsidiary.
"Employee Benefit Plan" shall mean any employee benefit plan
within the meaning of section 3(3) of ERISA maintained or contributed to
by either Borrower, any Material Subsidiary or any ERISA Affiliate,
other than a Multiemployer Plan.
"Environmental Laws" shall mean all the Governmental Rules
relating to the protection of human health and the environment,
including all Governmental Rules pertaining to the reporting, licensing,
permitting, transportation, storage, disposal, investigation or
remediation of emissions, discharges, releases, or threatened releases
of Hazardous Materials into the air, surface water, groundwater, or
land, or relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transportation or handling of Hazardous
Materials.
"Equity Securities" of any Person shall mean (a) all common
stock, preferred stock, participations, shares, partnership interests or
other equity interests in and of such Person (regardless of how
designated and whether or not voting or non-voting) and (b) all
warrants, options and other rights to acquire any of the foregoing.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as the same may from time to time be amended or supplemented,
including any rules or regulations issued in connection therewith.
"ERISA Affiliate" shall mean any Person which is treated as a
single employer with either Borrower or any Material Subsidiary under
Section 414 of the IRC.
"Euro-Dollar Lending Office" shall mean, with respect to any
Lender and LIBOR Loans and LIBOR Portions, (a) initially, such Lender's
office designated as such in Part B of Schedule I (or, in the case of
any Lender which becomes a Lender by an assignment pursuant to
Subparagraph 8.05(c), its office designated as such in the applicable
Assignment Agreement) and (b) subsequently, such other office or offices
as such Lender may designate to Agent as the office at which such
Lender's LIBOR Loans and LIBOR Portions will thereafter be maintained
and for the account of which all payments of principal of, and interest
on, such Lender's LIBOR Loans and LIBOR Portions will thereafter be
made.
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"Event of Default" shall have the meaning given to that term in
Paragraph 6.01.
"Existing Secured Indebtedness" shall mean the secured
Indebtedness existing on the Closing Date specified on Schedule 5.02(a).
"Excluded Taxes" shall mean all Taxes measured by or imposed upon
the overall net income of any Lender or one of its Applicable Lending
Offices and all franchise taxes imposed upon any Lender, in each case
imposed (i) by the jurisdiction under the laws of which such Lender or
one of its Applicable Lending Offices is organized or is located, or in
which its principal executive office is located, or any nation within
which such jurisdiction is located or any political subdivision thereof
or (ii) by reason of any connection between the jurisdiction imposing
such tax and such Lender or one of its Applicable Lending Offices other
than a connection arising solely from such Lender having executed,
delivered or performed its obligations under, or received payment under
or enforced, this Agreement or any of the other Credit Documents.
"Existing FIUI Credit Agreement" shall mean the Credit Agreement
dated as of October 27, 1999, among FIUI, ABN AMRO and other lending
institutions, and ABN AMRO, as agent for itself and such other lending
institutions.
"Existing FIUI Credit Documents" shall mean the "Credit
Documents" as defined in the Existing FIUI Credit Agreement.
"Facility" shall mean Facility A or Facility B.
"Facility A" shall mean the revolving credit facility provided to
Borrowers pursuant to Subparagraph 2.01(a).
"Facility A Commitment" shall mean, with respect to each Lender,
the Dollar amount set forth under the caption "Facility A Commitment"
opposite such Lender's name on Part A of Schedule I, or, if changed,
such Dollar amount as may be set forth for such Lender in the Register.
"Facility A Commitment Fees" shall have the meaning given to that
term in clause (i) of Subparagraph 2.06(b).
"Facility A Lender" shall mean, at any time, any Lender then
having a Facility A Commitment or a Facility A Revolving Loan
outstanding.
"Facility A Maturity Date" shall mean April 3, 2003.
"Facility A Proportionate Share" shall mean:
(a) With respect to any Facility A Lender at any time
prior to the termination of the Facility A Commitments, the ratio
(expressed as a percentage rounded to the eighth digit to the
right of the decimal point) of (i) such Lender's Facility A
Commitment at such time to (ii) the Total Facility A Commitment
at such time; and
(b) With respect to any Facility A Lender at any time
after the termination of the Facility A Commitments, the ratio
(expressed as a percentage rounded to the eighth digit to the
right of the decimal point) of (i) the aggregate principal amount
of such Lender's Facility A Revolving Loans outstanding at such
time to (ii) the sum of the aggregate principal amount of all
Facility A Revolving Loans outstanding at such time.
"Facility A Revolving Loan" shall have the meaning given to that
term in clause (i) of Subparagraph 2.01(a).
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"Facility A Revolving Loan Borrowing" shall mean a borrowing
consisting of all the Facility A Revolving Loans of the same Type (and
same Interest Period if LIBOR Loans) made by Facility A Lenders on the
same date pursuant to the same Notice of Revolving Loan Borrowing. Any
reference to a Facility A Revolving Loan Borrowing shall include all of
the Facility A Revolving Loans constituting such Facility A Revolving
Loan Borrowing.
"Facility B" shall mean the revolving credit facility and term
loan credit facility provided to Borrowers pursuant to Subparagraph
2.01(b) and Subparagraph 2.01(c).
"Facility B Commitment" shall mean, with respect to each Lender,
the Dollar amount set forth under the caption "Facility B Commitment"
opposite such Lender's name on Part A of Schedule I, or, if changed,
such Dollar amount as may be set forth for such Lender in the Register.
"Facility B Commitment Fees" shall have the meaning given to that
term in clause (ii) of Subparagraph 2.06(b).
"Facility B Lender" shall mean, at any time, any Lender then
having a Facility B Commitment or a Facility B Loan outstanding.
"Facility B Loan" shall mean a Facility B Revolving Loan or a
Term Loan.
"Facility B Proportionate Share" shall mean:
(a) With respect to any Facility B Lender at any time
prior to the termination of the Facility B Commitments, the ratio
(expressed as a percentage rounded to the eighth digit to the
right of the decimal point) of (i) such Lender's Facility B
Commitment at such time to (ii) the Total Facility B Commitment
at such time; and
(b) With respect to any Facility B Lender at any time
after the termination of the Facility B Commitments, the ratio
(expressed as a percentage rounded to the eighth digit to the
right of the decimal point) of (i) the aggregate principal amount
of such Lender's Facility B Loans outstanding at such time to
(ii) the sum of the aggregate principal amount of all Facility B
Loans outstanding at such time.
"Facility B Revolving Loan" shall have the meaning given to that
term in clause (i) of Subparagraph 2.01(b).
"Facility B Revolving Loan Borrowing" shall mean a borrowing
consisting of all the Facility B Revolving Loans of the same Type (and
same Interest Period if LIBOR Loans) made by Facility B Lenders on the
same date pursuant to the same Notice of Revolving Loan Borrowing. Any
reference to a Facility B Revolving Loan Borrowing shall include all of
the Facility B Revolving Loans constituting such Facility B Revolving
Loan Borrowing.
"Facility B Revolving Loan Maturity Date" shall mean the date 364
days after the date of this Agreement.
"Federal Funds Rate" shall mean, for any day, the rate per annum
set forth in the weekly statistical release designated as H.15(519), or
any successor publication, published by the Federal Reserve Board
(including any such successor publication, "H.15 (519)") for such day
opposite the caption "Federal Funds (Effective)". If on any relevant
day, such rate is not yet published in H.15 (519), the rate for such day
shall be the rate set forth in the daily statistical release designated
as the Composite 3:30 p.m. Quotations for U.S. Government Securities, or
any successor publication, published by the Federal Reserve Bank of New
York (including any such successor publication, the "Composite 3:30 p.m.
Quotations") for such day under the caption "Federal Funds Effective
Rate". If on any relevant day, such rate is not yet published in either
H.15 (519) or the Composite 3:30 p.m. Quotations, the rate for such day
shall be the arithmetic means, as
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determined by Agent, of the rates quoted to Agent for such day by three
(3) Federal funds brokers of recognized standing selected by Agent for
overnight federal funds transactions.
"Federal Reserve Board" shall mean the Board of Governors of the
Federal Reserve System.
"FIL" shall mean Flextronics International Ltd., a Singapore
corporation.
"FIL Credit Agreement" shall mean the Credit Agreement dated the
date hereof among FIL, the designated borrowers from time to time party
thereto, each of the financial institutions from time to time party
thereto, ABN AMRO Bank N.V., as agent, Fleet National Bank, as
documentation agent, Bank of America, National Association and Citicorp
USA, Inc., as managing agents, and The Bank of Nova Scotia, as co-agent,
as amended or restated from time to time.
"FIL Credit Documents" shall mean the FIL Credit Agreement and
all agreements, documents and instruments delivered to the agent or any
Lender under the FIL Credit Agreement.
"FIUI" shall have the meaning given to that term in clause (1) of
the introductory paragraph hereof.
"Financial Statements" shall mean, with respect to any accounting
period for any Person, statements of income, shareholders' equity and
cash flows of such Person for such period, and a balance sheet of such
Person as of the end of such period, setting forth in each case in
comparative form figures for the corresponding period in the preceding
fiscal year if such period is less than a full fiscal year or, if such
period is a full fiscal year, corresponding figures from the preceding
annual audit, all prepared in reasonable detail and in accordance with
GAAP.
"Foreign Plan" shall mean any employee benefit plan maintained by
either Borrower or any of its Subsidiaries which is mandated or governed
by any Governmental Rule of any Governmental Authority other than the
United States.
"Foreign Subsidiary" shall mean any Subsidiary of FIL that is
organized under the laws of a jurisdiction other than the United States
or a state thereof.
"GAAP" shall mean generally accepted accounting principles and
practices as in effect in the United States of America from time to
time, consistently applied, subject to Paragraph 1.02 hereof.
"Governmental Authority" shall mean any domestic or foreign
national, state or local government, any political subdivision thereof,
any department, agency, authority or bureau of any of the foregoing, or
any other entity exercising executive, legislative, judicial, regulatory
or administrative functions of or pertaining to government, including,
without limitation, the Federal Deposit Insurance Corporation, the
Federal Reserve Board, the Comptroller of the Currency, any central bank
or any comparable authority.
"Governmental Charges" shall mean, with respect to any Person,
all levies, assessments, fees, claims or other charges imposed by any
Governmental Authority upon such Person or any of its property or
otherwise payable by such Person.
"Governmental Rule" shall mean any law, rule, regulation,
ordinance, order, code interpretation, judgment, decree, directive,
guidelines, policy or similar form of decision of any Governmental
Authority.
"Guarantor" shall mean each of the Borrowers and Material
Subsidiaries that has executed the Guaranty or otherwise become a party
thereto.
"Guaranty" shall have the meaning given to that term in
Subparagraph 2.15(a).
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<PAGE> 13
"Guaranty Obligation" shall mean, with respect to any Person, any
direct or indirect liability of that Person with respect to any
indebtedness, lease, dividend, letter of credit or other obligation (the
"primary obligations") of another Person (the "primary obligor"),
including any obligation of that Person, whether or not contingent, (a)
to purchase, repurchase or otherwise acquire such primary obligations or
any property constituting direct or indirect security therefor, or (b)
to advance or provide funds (i) for the payment or discharge of any such
primary obligation, or (ii) to maintain working capital or equity
capital of the primary obligor or otherwise to maintain the net worth or
solvency or any balance sheet item, level of income or financial
condition of the primary obligor, or (c) to purchase property,
securities or services primarily for the purpose of assuring the owner
of any such primary obligation of the ability of the primary obligor to
make payment of such primary obligation, or (d) otherwise to assure or
hold harmless the holder of any such primary obligation against loss in
respect thereof. The amount of any Guaranty Obligation shall be deemed
equal to the stated or determinable amount of the primary obligation in
respect of which such Guaranty Obligation is made or, if not stated or
if indeterminable, the maximum reasonably anticipated liability in
respect thereof.
"Hazardous Materials" shall mean all pollutants, contaminants and
other materials, substances and wastes which are hazardous, toxic,
caustic, harmful or dangerous to human health or the environment,
including petroleum and petroleum and petroleum products and byproducts,
radioactive materials, asbestos and polychlorinated biphenyls.
"Indebtedness" of any Person shall mean, without duplication, the
following (each, unless otherwise noted, calculated in accordance with
GAAP):
(a) All obligations of such Person evidenced by notes,
bonds, debentures or other similar instruments and all other
obligations of such Person for borrowed money (including
obligations to repurchase receivables and other assets sold with
recourse);
(b) All obligations of such Person for the deferred
purchase price of property or services (including obligations
under letters of credit and other credit facilities which secure
or finance such purchase price, and the capitalized amount
reported for income tax purposes with respect to obligations
under "synthetic" leases);
(c) All obligations of such Person under conditional sale
or other title retention agreements with respect to property
acquired by such Person (to the extent of the value of such
property if the rights and remedies of the seller or lender under
such agreement in the event of default are limited solely to
repossession or sale of such property);
(d) All obligations of such Person as lessee under or with
respect to Capital Leases;
(e) All Contingent Obligations of such Person; and
(f) All obligations of other Persons of the types
described in clauses (a) - (f) above to the extent secured by (or
for which any holder of such obligations has an existing right,
contingent or otherwise, to be secured by) any Lien in any
property (including accounts and contract rights) of such Person,
even though such Person has not assumed or become liable for the
payment of such obligations.
"Ineligible Material Subsidiary" shall mean, at any time, any
Material Subsidiary (a) that is then prohibited by any applicable
Governmental Rule from acting as a Guarantor under the Guaranty, (b)
that then would incur, or would cause FIL or either Borrower to incur, a
significant increase in its tax liabilities or similar liabilities or
obligations as a result of acting as a Guarantor under the Guaranty or
(c) that is a Foreign Subsidiary as to which the representations and
warranties set forth in Paragraph 4.01(r) would not be true and correct
were it to execute the Guaranty.
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<PAGE> 14
"Interest Expenses" shall mean, with respect to any Person for
any period, the sum, determined on a consolidated basis in accordance
with GAAP, of (a) all interest expenses of such Person during such
period (including interest attributable to Capital Leases) plus (b) all
fees in respect of outstanding letters of credit paid, accrued or
scheduled for payment by such Person during such period.
"Interest Period" shall mean, with respect to any LIBOR Borrowing
or any LIBOR Portion of the Term Loan Borrowing, the time period
selected by the applicable Borrower pursuant to Subparagraph 2.02(a) or
Subparagraph 2.02(b) which commences on the date of such Borrowing, or
the effective date of any conversion of a Base Rate Portion to a LIBOR
Portion, and ends on the last day of such time period, and thereafter,
each subsequent time period selected by the applicable Borrower pursuant
to clause (ii) of Subparagraph 2.03(b) which commences on the last day
of the immediately preceding time period and ends on the last day of
that time period.
"Investment" of any Person shall mean any loan or advance of
funds by such Person to any other Person (other than advances to
employees of such Person for moving and travel expenses, drawing
accounts and similar expenditures in the ordinary course of business),
any purchase or other acquisition of any Equity Securities or
Indebtedness of any other Person, any capital contribution by such
Person to or any other investment by such Person in any other Person
(including any Guaranty Obligations of such Person and any indebtedness
of such Person of the type described in clause (h) of the definition of
"Indebtedness" on behalf of any other Person); provided, however, that
Investments shall not include (a) accounts receivable or other
indebtedness owed by customers of such Person which are current assets
and arose from sales of inventory in the ordinary course of such
Person's business or (b) prepaid expenses of such Person incurred and
prepaid in the ordinary course of business.
"IRC" shall mean the Internal Revenue Code of 1986, as amended
from time to time.
"Lenders" shall have the meaning given to that term in clause (2)
of the introductory paragraph hereof.
"Lender Rate Contract" shall mean any Rate Contract entered into
by either Borrower or its Subsidiaries with a Lender or its Affiliates
as permitted by this Agreement.
"LIBO Rate" shall mean, with respect to any Interest Period for
any LIBOR Borrowing or any LIBOR Portion of the Term Loan Borrowing, a
rate per annum equal to the quotient (rounded upward if necessary to the
nearest 1/100 of one percent) of (a) the arithmetic mean (rounded upward
if necessary to the nearest 1/16 of one percent) of the rates per annum
appearing on the Applicable Rate Page for Dollars on the second Business
Day prior to the first day of such Interest Period at or about 11:00
A.M. (London time) (for delivery of Dollars on the first day of such
Interest Period) for a term comparable to such Interest Period, divided
by (b) one minus any applicable Reserve Requirement in effect from time
to time. If for any reason rates are not available as provided in clause
(a) of the preceding sentence, the rate to be used in clause (a) shall
be, at the Agent's discretion, (i) the rate per annum at which deposits
in Dollars are offered to Agent in the London interbank market or (ii)
the rate at which deposits in Dollars are offered to Agent in, or by
Agent to major banks in, any offshore interbank market selected by
Agent, in each case on the second Business Day prior to the commencement
of such Interest Period at or about 10:00 A.M. (New York time) (for
delivery on the first day of such Interest Period) for a term comparable
to such Interest Period and in an amount approximately equal to the
amount of the Loan to be made or funded by Agent as part of such
Borrowing or the Portion to be made or funded by Agent as part of the
Term Loan Borrowing, as the case may be. The LIBO Rate shall be adjusted
automatically as to all LIBOR Loans and LIBOR Portions outstanding as of
the effective date of any change in the Reserve Requirement.
"LIBOR Borrowing" shall mean any Revolving Loan Borrowing
consisting of LIBOR Loans.
"LIBOR Loan" shall mean any Revolving Loan or Term Loan bearing
interest based upon the LIBO Rate.
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"LIBOR Portion" shall mean a portion of the Term Loan Borrowing
bearing interest based upon the LIBO Rate.
"Lien" shall mean, with respect to any property, any security
interest, mortgage, pledge, lien, charge or other encumbrance in, of, or
on such property or the income therefrom, including, without limitation,
the interest of a vendor or lessor under a conditional sale agreement,
Capital Lease or other title retention agreement, or any agreement to
provide any of the foregoing.
"Loan" shall mean a Revolving Loan or Term Loan.
"Loan Account" shall have the meaning given to that term in
Subparagraph 2.09(a).
"Managing Agents" shall have the meaning given to that term in
clause (5) of the introductory paragraph hereof.
"Margin Stock" shall have the meaning given to that term in
Regulation U issued by the Federal Reserve Board.
"Material Adverse Effect" shall mean a material adverse effect on
(a) the business, assets, operations or financial condition of FIL and
its Subsidiaries, taken as a whole, or either Borrower and its
Subsidiaries, taken as a whole; (b) the ability of either Borrower to
pay or perform its Obligations in accordance with the terms of this
Agreement and the other Credit Documents or the ability of FIL to pay or
perform its obligations in accordance with the terms of the FIL Credit
Documents; (c) the ability of the Guarantors (taken as a whole) to pay
or perform the Obligations in accordance with the terms of this
Agreement and the other Credit Documents; (d) the rights and remedies of
Agent or any Lender under this Agreement, the other Credit Documents or
any related document, instrument or agreement; or (e) the value of the
Collateral, Agent's or any Lender's security interest in the Collateral
or the perfection or priority of such security interests.
"Material Subsidiary" shall mean, at any time during any fiscal
year of FIL, any Subsidiary of FIL that (i) (A) had revenues during the
immediately preceding fiscal year equal to or greater than five percent
(5.0%) of the consolidated total revenues of FIL and all of its
Subsidiaries during such preceding year or (B) held assets, excluding
investments in Subsidiaries, on the last day of the immediately
preceding fiscal year equal to or greater than ten percent (10%) of the
consolidated total assets of FIL and all of its Subsidiaries on such
date, in each case as set forth or reflected in the audited Financial
Statements provided pursuant to clause (i) of Subparagraph 5.01(a)
hereof or (ii) with respect to any Subsidiary added or created during
such year, (A) had revenues, determined on a pro forma basis as of the
most recent twelve months for which financial statements are available,
greater than five percent (5%) of the consolidated total revenues of FIL
and all of its Subsidiaries during such preceding year or (B) held
assets, excluding investments in Subsidiaries, on the last day of the
immediately preceding month equal to or greater than ten percent (10%)
of the consolidated total assets of FIL and all of its Subsidiaries on
such date of the consolidated total revenues of FIL and its Subsidiaries
(including such added or created Subsidiary or Subsidiaries) determined
on a pro forma basis during such year.
"maturity" shall mean, with respect to any Loan, interest, fee or
other amount payable by either Borrower under this Agreement or the
other Credit Documents, the date such Loan, interest, fee or other
amount becomes due, whether upon the stated maturity or due date, upon
acceleration or otherwise.
"Moody's" shall mean Moody's Investors Service, Inc. and any
successor thereto that is a nationally recognized rating agency.
"Multiemployer Plan" shall mean any multiemployer plan within the
meaning of section 3(37) of ERISA maintained or contributed to by FIL,
either Borrower, any Material Subsidiary or any ERISA Affiliate.
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<PAGE> 16
"Non-Excluded Taxes" shall mean all Taxes other than Excluded
Taxes.
"Note" shall mean a Revolving Loan Note or Term Loan Note.
"Notice of Borrowing" shall mean a Notice of Revolving Loan
Borrowing or the Notice of Term Loan Borrowing.
"Notice of Interest Period Selection" shall have the meaning
given to that term in clause (ii) of Subparagraph 2.03(b).
"Notice of Revolving Loan Borrowing" shall have the meaning given
to that term in Subparagraph 2.02(a).
"Notice of Term Loan Borrowing" shall have the meaning given to
that term in Subparagraph 2.02(b).
"Notice of Term Loan Conversion" shall have the meaning given to
that term in clause (iii) of Subparagraph 2.03(b).
"Obligations" shall mean and include all loans, advances, debts,
liabilities, and obligations, howsoever arising, owed by either Borrower
individually or both of the Borrowers jointly and severally to Agent or
any Lender of every kind and description (whether or not evidenced by
any note or instrument and whether or not for the payment of money),
direct or indirect, absolute or contingent, due or to become due, now
existing or hereafter arising pursuant to the terms of this Agreement or
any of the other Credit Documents, including all interest, fees,
charges, expenses, attorneys' fees and accountants' fees chargeable to
Borrowers or payable by Borrowers thereunder.
"Participant" shall have the meaning given to that term in
Subparagraph 8.05(b).
"PBGC" shall mean the Pension Benefit Guaranty Corporation, or
any successor thereto.
"Permitted Indebtedness" shall have the meaning given to that
term in Subparagraph 5.02(a).
"Permitted Liens" shall have the meaning given to that term in
Subparagraph 5.02(b).
"Person" shall mean and include an individual, a partnership, a
corporation (including a business trust), a joint stock company, an
unincorporated association, a limited liability company, a joint
venture, a trust or other entity or a Governmental Authority.
"Pledge Agreement" shall have the meaning given to that term in
Subparagraph 2.15(a).
"Portion" shall mean a portion of the principal amount of the
Term Loan Borrowing or any Term Loan. The Term Loan Borrowing shall
consist of one or more Portions, and each Term Loan comprising the Term
Loan Borrowing shall consist of the same number of Portions, with each
such Loan Portion corresponding pro rata to a Borrowing Portion. Any
reference to a Portion of the Term Loan Borrowing shall include the
corresponding Portion of each Term Loan comprising the Term Loan
Borrowing.
"Pricing Grid" shall mean Schedule II.
"Pricing Period" shall mean (a) the period commencing on the date
of this Agreement and ending 45 days after the quarter ended June 30,
2000 and (b) thereafter each period commencing 45 days after the last
day of the immediately preceding calendar quarter and ending 45 days
after the last day of the next applicable calendar quarter, as explained
in the Pricing Grid.
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"Pricing Period Level" shall mean either a Level 1 Period, Level
2 Period, Level 3 Period, Level 4 Period, Level 5 Period or Level 6
Period, which shall be determined based upon FIL's corresponding
Debt/EBITDA Ratio for the consecutive four-quarter period ending on the
last day of the immediately preceding quarter as set forth in the
Pricing Grid; provided that, Level 2 Period pricing, as set forth in the
Pricing Grid, will apply during any Pricing Period (other than FIL's
first Pricing Period) in which FIL's senior unsecured long-term debt
rating from S&P or Moody's is equal to or better than either BBB- or
Baa3. Such pricing adjustment (if any) occurring as a result of such
debt rating will take place when FIL notifies Agent that such debt
rating has been achieved, and will continue until such debt rating drops
below BBB- or Baa3 in which case the pricing will be calculated as set
forth in the Pricing Grid.
"Prime Rate" shall mean the per annum rate publicly announced by
ABN AMRO from time to time at its Chicago office as its "prime rate."
The Prime Rate is determined by ABN AMRO from time to time as a means of
pricing credit extensions to some customers and is neither directly tied
to any external rate of interest or index nor necessarily the lowest
rate of interest charged by ABN AMRO at any given time for any
particular class of customers or credit extensions. Any change in the
Base Rate resulting from a change in the Prime Rate shall become
effective on the Business Day on which each change in the Prime Rate
occurs.
"Proportionate Share" shall mean:
(a) With respect to any Lender and Facility A at any time,
such Lender's Facility A Proportionate Share at such time;
(b) With respect to any Lender and Facility B at any time,
such Lender's Facility B Proportionate Share at such time;
(c) With respect to any Lender without reference to either
Facility:
(i) At any time prior to the termination of the
Facility B Commitments, the ratio (expressed as a
percentage rounded to the eighth digit to the right of the
decimal point) of (i) the sum of such Lender's Facility A
Commitment and Facility B Commitment at such time to (ii)
the sum of the Total Facility A Commitment and Total
Facility B Commitment at such time;
(ii) With respect to any Lender at any time after
the termination of the Facility B Commitments and prior to
the termination of the Facility A Commitments, the ratio
(expressed as a percentage rounded to the eighth digit to
the right of the decimal point) of (i) the sum of such
Lender's Facility A Commitment and the principal amount of
such Lender's Term Loan outstanding at such time to (ii)
the sum of the Total Facility A Commitment and the
aggregate principal amount of all Term Loans outstanding
at such time; and
(iii) With respect to any Lender at any time after
the termination of both the Facility A Commitments and the
Facility B Commitments, the ratio (expressed as a
percentage rounded to the eighth digit to the right of the
decimal point) of (i) the aggregate principal amount of
all of such Lender's Loans outstanding at such time to
(ii) the aggregate principal amount of all Lenders' Loans
outstanding at such time.
"Rate Contracts" shall mean swap agreements (as that term is
defined in Section 101 of the Federal Bankruptcy Reform Act of 1978, as
amended) and any other agreements or arrangements designed to provide
protection against fluctuations in interest rates, currency exchange
rates or commodity prices.
"Register" shall have the meaning given to that term in
Subparagraph 8.05(d).
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"Reportable Event" shall have the meaning given to that term in
ERISA and applicable regulations thereunder.
"Required Lenders" shall mean, at any time, Lenders whose
Proportionate Shares equal or exceed fifty-one percent (51%) at such
time, except at any time any Lender is a Defaulting Lender. (For the
purposes of determining "Required Lenders" at any time any Lender is a
Defaulting Lender, the "Proportionate Shares" of non-defaulting Lenders
shall be determined excluding from the Total Facility A Commitment, the
Total Facility B Commitment and the aggregate principal amount of all
Term Loans the aggregate amounts of the Defaulting Lenders' Facility A
Commitments, Facility B Commitments and Term Loans; and "Required
Lenders" shall mean non-defaulting Lenders whose Proportionate Shares as
so determined then equal or exceed fifty-one percent (51%).)
"Requirement of Law" applicable to any Person shall mean (a) the
Articles or Certificate of Incorporation and By-laws, Partnership
Agreement or other organizational or governing documents of such Person,
(b) any Governmental Rule applicable to such Person, (c) any license,
permit, approval or other authorization granted by any Governmental
Authority to or for the benefit of such Person or (d) any judgment,
decision or determination of any Governmental Authority or arbitrator,
in each case applicable to or binding upon such Person or any of its
property or to which such Person or any of its property is subject.
"Reserve Requirement" shall mean, with respect to any day in an
Interest Period for any Revolving Loan Borrowing consisting of LIBOR
Loans or any LIBOR Portion of the Term Loan Borrowing, the aggregate of
the reserve requirement rates (expressed as a decimal) in effect on such
day for eurodollar funding (currently referred to as "Eurocurrency
liabilities" in Regulation D of the Federal Reserve Board) maintained by
a member bank of the Federal Reserve System. As used herein, the term
"reserve requirement" shall include, without limitation, any basic,
supplemental or emergency reserve requirements imposed on any Lender by
any Governmental Authority.
"Revolving Loan" shall mean a Facility A Revolving Loan or a
Facility B Revolving Loan.
"Revolving Loan Borrowing" shall mean a Facility A Revolving Loan
Borrowing or a Facility B Revolving Loan Borrowing.
"Revolving Loan Note" shall have the meaning given to that term
in Subparagraph 2.09(b).
"S&P" shall mean Standard & Poor's Rating Services, and any
successor thereto that is a nationally recognized rating agency.
"Security Documents" shall mean and include the Guaranty, the
Pledge Agreements and all other instruments, agreements, certificates,
opinions and documents (including Uniform Commercial Code financing
statements) delivered to Agent or any Lender in connection with any
Collateral or to secure the Obligations.
"Solvent" shall mean, with respect to any Person on any date,
that on such date (a) the fair value of the property of such Person is
greater than the fair value of the liabilities (including contingent,
subordinated, matured and unliquidated liabilities) of such Person, (b)
the present fair saleable value of the assets of such Person is greater
than the amount that will be required to pay the probable liability of
such Person on its debts as they become absolute and matured, (c) such
Person does not intend to, and does not believe that it will, incur
debts or liabilities beyond such Person's ability to pay as such debts
and liabilities mature and (d) such Person is not engaged in or about to
engage in business or transactions for which such Person's property
would constitute an unreasonably small capital.
"Subordinated Indenture" shall mean the Indenture dated as of
October 15, 1997 by and between FIL and State Street Bank and Trust
Company of California, N.A., as trustee, and any other document,
instrument or agreement evidencing the subordinating indebtedness
thereunder.
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"Subsidiary" of any Person shall mean (a) any corporation of
which more than 50% of the issued and outstanding Equity Securities
having ordinary voting power to elect a majority of the Board of
Directors of such corporation (irrespective of whether at the time
capital stock of any other class or classes of such corporation shall or
might have voting power upon the occurrence of any contingency) is at
the time directly or indirectly owned or controlled by such Person, by
such Person and one or more of its other Subsidiaries or by one or more
of such Person's other Subsidiaries, (b) any partnership, joint venture,
limited liability company or other association of which more than 50% of
the equity interest having the power to vote, direct or control the
management of such partnership, joint venture or other association is at
the time owned and controlled by such Person, by such Person and one or
more of the other Subsidiaries or by one or more of such Person's other
Subsidiaries or (c) any other Person included in the Financial
Statements of such Person on a consolidated basis.
"Surety Instruments" shall mean all letters of credit (including
standby and commercial), banker's acceptances, bank guaranties, shipside
bonds, surety bonds and similar instruments.
"Taxes" shall mean all present and future income, stamp,
documentary and other taxes and duties, and all other levies, imposts,
charges, fees, deductions and withholdings, now or hereafter imposed,
levied, collected, withheld or assessed by any Governmental Authority.
"Term Loan" shall have the meaning given to that term in clause
(ii) of Subparagraph 2.01(c).
"Term Loan Borrowing" shall mean a borrowing consisting of all
the Term Loans of the same Type (and same Interest Period if LIBOR
Loans) made by Facility B Lenders on the Facility B Revolving Loan
Maturity Date pursuant to the Notice of Term Loan Borrowing. Any
reference to a Term Loan Borrowing shall include all the Term Loans
constituting such Term Loan Borrowing. (One or more Term Loan Borrowings
may be made on the Facility B Revolving Loan Maturity Date.)
"Term Loan Maturity Date" shall mean the date that is one (1)
year after the Facility B Revolving Loan Maturity Date.
"Term Loan Note" shall have the meaning given to that term in
Subparagraph 2.09(b).
"Total Facility A Commitment" shall mean, at any time, the sum at
such time of Facility A Lenders' Facility A Commitments. The Total
Facility A Commitment on the date of this Agreement is One Hundred
Seventy Five Million Dollars ($175,000,000).
"Total Facility B Commitment" shall mean, at any time, the sum at
such time of Facility B Lenders' Facility B Commitments. The Total
Facility B Commitment on the date of this Agreement is One Hundred
Seventy Five Million Dollars ($175,000,000).
"Type" shall mean, with respect to any Revolving Loan, any
Revolving Loan Borrowing or any Portion of any Term Loan or the Term
Loan Borrowing at any time, the classification of such Loan, Borrowing
or Portion by the type of interest rate it then bears, whether an
interest rate based upon the Base Rate or LIBO Rate.
"Unused" shall mean
(a) With respect to the Facility A Commitment at any time,
the remainder of (i) the Total Facility A Commitment at such time
minus (ii) the aggregate principal amount of all Facility A
Revolving Loans outstanding at such time; and
(b) With respect to the Facility B Commitment at any time,
the remainder of (i) the Total Facility B Commitment at such time
minus (ii) the aggregate principal amount of all Facility B
Revolving Loans outstanding at such time.
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1.02. GAAP. Unless otherwise indicated in this Agreement or any other
Credit Document, all accounting terms used in this Agreement or any other Credit
Document shall be construed, and all accounting and financial computations
hereunder or thereunder shall be computed, in accordance with GAAP. If GAAP
changes during the term of this Agreement such that any covenants contained
herein would then be calculated in a different manner or with different
components, Borrowers, Lenders and Agent agree to negotiate in good faith to
amend this Agreement in such respects as are necessary to conform those
covenants as criteria for evaluating FIL's financial condition to substantially
the same criteria as were effective prior to such change in GAAP; provided,
however, that, until Borrowers, Lenders and Agent so amend this Agreement, all
such covenants shall be calculated in accordance with GAAP as in effect
immediately prior to such change. Any calculations performed under this Credit
Agreement that are based on the total assets or total revenues of FIL and its
Subsidiaries and which contemplate the completion of the DII Acquisition shall
be determined based on the March 31 fiscal year end consolidated pro forma
financial statements of FIL giving effect to the DII Acquisition for such
purposes; except with respect to the definition of "Material Subsidiary" herein,
which shall be calculated based on a nine (9) month pro forma basis.
1.03. Headings. Headings in this Agreement and each of the other Credit
Documents are for convenience of reference only and are not part of the
substance hereof or thereof.
1.04. Plural Terms. All terms defined in this Agreement or any other
Credit Document in the singular form shall have comparable meanings when used in
the plural form and vice versa.
1.05. Governing Law. Unless otherwise expressly provided in any Credit
Document, this Agreement and each of the other Credit Documents shall be
governed by and construed in accordance with the laws of the State of California
without reference to conflicts of law rules.
1.06. English Language. This Agreement and the other Credit Documents
are executed and shall be construed in the English language. All instruments,
agreements, certificates, opinions and other documents to be furnished or
communications to be given or made under this Agreement or any other Credit
Document shall be in the English language.
1.07. Construction. This Agreement is the result of negotiations among,
and has been reviewed by, Borrowers, each Lender, Agent and their respective
counsel. Accordingly, this Agreement shall be deemed to be the product of all
parties hereto, and no ambiguity shall be construed in favor of or against
either Borrower, any Lender or Agent.
1.08. Entire Agreement. This Agreement and each of the other Credit
Documents, taken together, constitute and contain the entire agreement of
Borrowers, Lenders and Agent and supersede any and all prior agreements,
negotiations, correspondence, understandings and communications among the
parties, whether written or oral, respecting the subject matter hereof
(excluding the Agent's Fee Letter but including the commitment letter dated as
of February 28, 2000 between FIL and ABN AMRO).
1.09. Calculation of Interest and Fees. All calculations of interest and
fees under this Agreement and the other Credit Documents for any period (a)
shall include the first day of such period and exclude the last day of such
period and (b) shall be calculated on the basis of a year of 360 days for actual
days elapsed, except that during any period any Loan or Portion bears interest
based upon the Prime Rate, such interest shall be calculated on the basis of a
year of 365 or 366 days, as appropriate, for actual days elapsed.
1.10. References.
(a) References in this Agreement to "Recitals," "Sections,"
"Paragraphs," "Subparagraphs," "Exhibits" and "Schedules" are to
recitals, sections, paragraphs, subparagraphs, exhibits and schedules
therein and thereto unless otherwise indicated.
(b) References in this Agreement or any other Credit Document to
any document, instrument or agreement (i) shall include all exhibits,
schedules and other attachments thereto, (ii) shall include all
documents, instruments or agreements issued or executed in replacement
thereof if such replacement is
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permitted hereby, and (iii) shall mean such document, instrument or
agreement, or replacement or predecessor thereto, as amended, modified
and supplemented from time to time and in effect at any given time if
such amendment, modification or supplement is permitted hereby.
(c) References in this Agreement or any other Credit Document to
any Governmental Rule (i) shall include any successor Governmental Rule,
(ii) shall include all rules and regulations promulgated under such
Governmental Rule (or any successor Governmental Rule), and (iii) shall
mean such Governmental Rule (or successor Governmental Rule) and such
rules and regulations, as amended, modified, codified or reenacted from
time to time and in effect at any given time.
(d) References in this Agreement or any other Credit Document to
any Person in a particular capacity (i) shall include any permitted
successors to and assigns of such Person in that capacity and (ii) shall
exclude such Person individually or in any other capacity.
1.11. Other Interpretive Provisions. The words "hereof," "herein" and
"hereunder" and words of similar import when used in this Agreement or any other
Credit Document shall refer to this Agreement or such other Credit Document, as
the case may be, as a whole and not to any particular provision of this
Agreement or such other Credit Document, as the case may be. The words "include"
and "including" and words of similar import when used in this Agreement or any
other Credit Document shall not be construed to be limiting or exclusive. In the
event of any inconsistency between the terms of this Agreement and the terms of
any other Credit Document, the terms of this Agreement shall govern.
SECTION II. CREDIT FACILITIES.
2.01. Loans.
(a) Facility A Revolving Loans.
(i) Availability. Subject to the terms and conditions of
this Agreement (including the amount limitations set forth in
Paragraph 2.05), each Facility A Lender severally agrees to
advance to Borrowers from time to time during the period
beginning on the Closing Date and ending on the Facility A
Revolving Loan Maturity Date its pro rata share of such revolving
loans in Dollars as Borrowers may request under Facility A
(individually, a "Facility A Revolving Loan"); provided, however,
that no Lender shall have any obligation to make a requested
Facility A Revolving Loan if, after giving effect to such Loan,
the aggregate principal amount of all such Lender's Facility A
Revolving Loans then outstanding would exceed such Lender's
Facility A Commitment at such time. All Facility A Revolving
Loans shall be made on a pro rata basis by Facility A Lenders in
accordance with their respective Facility A Proportionate Shares,
with each Facility A Revolving Loan Borrowing to be comprised of
a Facility A Revolving Loan made by each Facility A Lender equal
to such Facility A Lender's Proportionate Share of such Facility
A Revolving Loan Borrowing. Except as otherwise provided herein,
Borrowers may borrow, repay and reborrow Facility A Revolving
Loans until the Facility A Revolving Loan Maturity Date.
(ii) Scheduled Payments. Borrowers shall repay the
principal amount of the Facility A Revolving Loans in full on the
Facility A Revolving Loan Maturity Date. Borrowers shall pay
accrued interest on the unpaid principal amount of each Facility
A Revolving Loan in arrears (A) in the case of a Base Rate Loan,
on the last day of the month of each March, June, September and
December, (B) in the case of a LIBOR Loan, on the last day of
each Interest Period therefor (and, if any such Interest Period
is longer than three (3) months, every three (3) months); and (C)
in the case of all Facility A Revolving Loans, upon prepayment
(to the extent thereof) and at maturity.
(b) Facility B Revolving Loans.
(i) Availability. Subject to the terms and conditions of this
Agreement (including the amount limitations set forth in Paragraph
2.05), each Facility B Lender severally agrees to
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advance to Borrowers from time to time during the period
beginning on the Closing Date and ending on the Facility B
Revolving Loan Maturity Date its pro rata share of such revolving
loans in Dollars as Borrowers may request under Facility B
(individually, a "Facility B Revolving Loan"); provided, however,
that no Facility B Lender shall have any obligation to make a
requested Facility B Revolving Loan if, after giving effect to
such Loan, the aggregate principal amount of all such Lender's
Facility B Revolving Loans then outstanding would exceed such
Lender's Facility B Commitment at such time. All Facility B
Revolving Loans shall be made on a pro rata basis by Facility B
Lenders in accordance with their respective Facility B
Proportionate Shares, with each Facility B Revolving Loan
Borrowing to be comprised of a Facility B Revolving Loan made by
each Facility B Lender equal to such Facility B Lender's
Proportionate Share of such Facility B Revolving Loan Borrowing.
Except as otherwise provided herein, Borrowers may borrow, repay
and reborrow Facility B Revolving Loans until the Facility B
Revolving Loan Maturity Date.
(ii) Scheduled Payments. Borrowers shall repay the
principal amount of the Facility B Revolving Loans in full on the
Facility B Revolving Loan Maturity Date. Such repayment may be
effected with the proceeds of the Term Loan Borrowing pursuant to
Subparagraph 2.02(b). Borrowers shall pay accrued interest on the
unpaid principal amount of each Facility B Revolving Loan in
arrears (A) in the case of a Base Rate Loan, on the last day of
the month of each March, June, September and December, (B) in the
case of a LIBOR Loan, on the last day of each Interest Period
therefor (and, if any such Interest Period is longer than three
(3) months, every three (3) months); and (C) in the case of all
Facility B Revolving Loans, upon prepayment (to the extent
thereof) and at maturity.
(c) Term Loan.
(i) Availability. Subject to the terms and conditions of
this Agreement (including the amount limitations set forth in
Paragraph 2.05), each Facility B Lender severally agrees to
advance, upon the request of Borrowers pursuant to Subparagraph
2.02(b), to Borrowers on the Facility B Revolving Loan Maturity
Date its pro rata share of such term loans in Dollars as
Borrowers shall request under Facility B (individually, a "Term
Loan"); provided, however, that no Lender shall have any
obligation to make requested Term Loans if the aggregate
principal amount thereof would exceed such Lender's Facility B
Commitment on the Facility B Revolving Loan Maturity Date. The
Term Loans shall be made on a pro rata basis by Facility B
Lenders in accordance with their respective Facility B
Proportionate Shares, with each Term Loan Borrowing to be
comprised of a Term Loan by each Facility B Lender equal to such
Facility B Lender's Facility B Proportionate Share of such Term
Loan Borrowing. Borrowers may not reborrow the principal amount
of a Term Loan after repayment or prepayment thereof.
(ii) Scheduled Payments. Borrowers shall repay the
principal amount of the Term Loans in full in a single
installment on the Term Loan Maturity Date. Borrowers shall pay
accrued interest on the unpaid principal amount of each Term Loan
in arrears (A) in the case of a Base Rate Portion, on the last
day of the month of each March, June, September and December, (B)
in the case of a LIBOR Portion, on the last day of each Interest
Period (and if any such Interest Period is equal to or longer
than three (3) months, every three (3) months); and (C) in the
case of all Term Loans, upon prepayment (to the extent thereof)
and at maturity.
2.02. Notice of Borrowing.
(a) Notice of Revolving Loan Borrowing. Borrowers shall request
each Revolving Loan Borrowing by delivering to Agent an irrevocable
written notice in the form of Exhibit A, appropriately completed (a
"Notice of Revolving Loan Borrowing"), which specifies, among other
things:
(i) Whether such Revolving Loan Borrowing is a
Borrowing under Facility A or Facility B;
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(ii) The principal amount of such Revolving Loan
Borrowing, which shall be in the minimum amount of $5,000,000 or
an integral multiple of $1,000,000 in excess thereof;
(iii) Whether such requested Revolving Loan Borrowing is
to consist of Base Rate Loans or LIBOR Loans;
(iv) If such Revolving Loan Borrowing is to consist of
LIBOR Loans, the initial Interest Period selected by the
applicable Borrower for such Revolving Loan Borrowing in
accordance with Subparagraph 2.03(b)(i);
(v) The date of such Borrowing, which shall be a Business
Day; and
(vi) The applicable Borrower for such Revolving Loan
Borrowing.
Borrowers shall give each Notice of Revolving Loan Borrowing to Agent at
least three (3) Business Days before the date of the requested Revolving
Loan Borrowing in the case of a Revolving Loan Borrowing consisting of
LIBOR Loans and at least one (1) Business Day before the date of the
requested Revolving Loan Borrowing in the case of a Revolving Loan
Borrowing consisting of Base Rate Loans. Each Notice of Revolving Loan
Borrowing shall be signed by the applicable Borrower and delivered by
first-class mail or facsimile to Agent at the office or facsimile number
and during the hours specified in Paragraph 8.01; provided, however,
that Borrowers shall promptly deliver to Agent the original of any
Notice of Revolving Loan Borrowing initially delivered by facsimile.
Agent shall promptly notify each Lender of the contents of each Notice
of Revolving Loan Borrowing.
(b) Notice of Term Loan Borrowing. Borrowers shall request each
Term Loan Borrowing by delivering to Agent an irrevocable written notice
in the form of Exhibit B, appropriately completed (a "Notice of Term
Loan Borrowing"), which specifies, among other things:
(i) The principal amount of each Term Loan Borrowing,
which shall be in the minimum amount of $5,000,000 or an integral
multiple of approximately $1,000,000 in excess thereof;
(ii) (A) The principal portion of such Term Loan Borrowing
which is to be a Base Rate Portion and (2) the principal
portion(s) of such Term Loan Borrowing which is (are) to be a
LIBOR Portion(s);
(iii) If any Portion of such Term Loan Borrowing is
initially to be a LIBOR Portion, the initial Interest Period
selected by the applicable Borrower for each such Portion in
accordance with Subparagraph 2.03(b)(i) ; and
(iv) The applicable Borrower for each Term Loan Borrowing.
Borrowers shall give the Notice of Term Loan Borrowing to Agent at least
three (3) Business Days before the Facility B Revolving Loan Maturity
Date in the case of a Term Loan Borrowing if any Portion of the Term
Loan Borrowing is initially to be a LIBOR Portion and at least one (1)
Business Day before the Facility B Revolving Loan Maturity Date in the
case of a Term Loan Borrowing if the only Portion of the Term Loan
Borrowing is initially to be a Base Rate Portion. The Notice of Term
Loan Borrowing shall be signed by the applicable Borrower(s) and
delivered by first-class mail or facsimile to Agent at the office or
facsimile number and during the hours specified in Paragraph 8.01;
provided, however, that Borrowers shall promptly deliver to Agent the
original of the Notice of Term Loan Borrowing if initially delivered by
facsimile. Agent shall promptly notify each Lender of the contents of
the Notice of Term Loan Borrowing.
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2.03. Interest.
(a) Interest Rates. Borrowers shall pay interest on the unpaid
principal amount of each Loan from the date of such Loan until the
maturity thereof, at one of the following rates per annum:
(i) During such periods as any Revolving Loan is a Base
Rate Loan or any Portion of such Term Loan is a Base Rate
Portion, at a rate per annum on such Loan or Portion equal to the
Base Rate plus the Applicable Margin therefor, such rate to
change from time to time as the Applicable Margin or Base Rate
shall change; and
(ii) During such periods as any Revolving Loan is a LIBOR
Loan or any Portion of such Term Loan is a LIBOR Portion, at a
rate per annum on such Loan or Portion equal at all times during
each Interest Period for such Loan or Portion to the LIBO Rate
for such Interest Period plus the Applicable Margin therefor,
such rate to change from time to time as the Applicable Margin
shall change.
All Revolving Loans in each Revolving Loan Borrowing shall, at any given
time prior to maturity, bear interest at one, and only one, of the above
rates. Each LIBOR Loan Borrowing or LIBOR Portion of the Term Loan
Borrowing shall be in a minimum amount of $5,000,000 or an integral
multiple of $1,000,000 in excess thereof.
(b) Terms.
(i) LIBOR Loan and LIBOR Portion Interest Periods. The
initial and each subsequent Interest Period selected by a
Borrower for any Revolving Loan Borrowing consisting of LIBOR
Loans or any LIBOR Portion of the Term Loan Borrowing shall be
one (1), two (2), three (3) or six (6) months; provided, however,
that (A) any Interest Period which would otherwise end on a day
which is not a Business Day shall be extended to the next
succeeding Business Day unless such next Business Day falls in
another calendar month, in which case such Interest Period shall
end on the immediately preceding Business Day; (B) any Interest
Period which begins on the last 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 Business Day of a calendar month; (C) no Interest
Period for a Facility A Revolving Loan Borrowing shall end after
the Facility A Revolving Loan Maturity Date; (D) no Interest
Period of a Facility B Revolving Loan Borrowing shall end after
the Facility B Revolving Loan Maturity Date, and (E) no Interest
Period for a LIBOR Portion of a Term Loan Borrowing shall end
after the Term Loan Maturity Date.
(ii) Notice of Interest Period Selection. The applicable
Borrower shall notify Agent by an irrevocable written notice in a
form acceptable to Agent, appropriately completed (a "Notice of
Interest Period Selection"), at least three (3) Business Days
prior to the last day of each Interest Period for a Revolving
Loan Borrowing consisting of LIBOR Loans or any LIBOR Portion of
a Term Loan Borrowing of the Interest Period selected by such
Borrower for the next succeeding Interest Period for such
Borrowing or Portion. Each Notice of Interest Period Selection
shall be given by first-class mail or facsimile to the office or
the facsimile number and during the hours specified in Paragraph
8.01; provided, however, that the applicable Borrower shall
promptly deliver to Agent the original of any Notice of Interest
Period Selection initially delivered by facsimile. If either
Borrower fails to notify Agent of the next Interest Period for a
Borrowing in accordance with this Subparagraph 2.03(b)(ii), the
next Interest Period for such Borrowing shall be one (1) month.
Agent shall promptly notify each Lender of the contents of each
Notice of Interest Period Selection.
(iii) Conversion of Term Loan Portions. Either Borrower
may convert any Portion of the Term Loan Borrowing from one Type
of Portion to another Type; provided, however, that any
conversion of a LIBOR Portion into a Base Rate Portion shall be
made on, and only on, the last day of an Interest Period for such
LIBOR Portion. Borrowers shall request such a conversion
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by an irrevocable written notice to Agent in a form acceptable
to Agent, appropriately completed (a "Notice of Term Loan
Conversion"), which specifies, among other things:
(A) The Portion of the Term Loan Borrowing which is
to be converted;
(B) The amount and Type of each Portion of the Term
Loan Borrowing into which it is to be converted;
(C) If any Portion of the Term Loan Borrowing is to
be converted into a LIBOR Portion, the initial Interest
Period selected by the applicable Borrower for such
Portion in accordance with Subparagraph 2.03(b)(i); and
(D) The date of the requested conversion, which
shall be a Business Day.
Borrowers shall give each Notice of Term Loan Conversion to Agent
at least three (3) Business Days before the date of the requested
conversion. Each Notice of Term Loan Conversion shall be
delivered by first-class mail or facsimile to Agent at the office
or to the facsimile number and during the hours specified in
Paragraph 8.01; provided, however, that such Borrower shall
promptly deliver to Agent the original of any Notice of Term Loan
Conversion initially delivered by facsimile. Agent shall promptly
notify each Lender of the contents of each Notice of Term Loan
Conversion.
2.04. Purpose.
(a) Revolving Loans. Borrowers shall use the proceeds of the
initial Revolving Loan to repay on the Closing Date all indebtedness
outstanding under the Existing FIUI Credit Agreement and to fund the DII
Acquisition (including debt refinancing), and thereafter Borrowers shall
use the proceeds of the Revolving Loans and for their respective working
capital and general corporate needs.
(b) Term Loans. Borrowers shall use the proceeds of the Term
Loans first to repay all outstanding Facility B Revolving Loans and then
for their respective working capital and general corporate needs. Any
Facility B Revolving Loans outstanding at the time of the funding of any
Term Loan shall be deemed to be converted into Term Loans.
2.05. Amount Limitations, Commitment Reductions, Etc.
(a) Commitment Limitations. The aggregate principal amount of all
Facility A Revolving Loans outstanding at any time shall not exceed the
Total Facility A Commitment at such time. The aggregate principal amount
of all Facility B Revolving Loans outstanding at any time shall not
exceed the Total Facility B Commitment at such time. The aggregate
principal amount of all Term Loans outstanding at any time shall not
exceed the Total Facility B Commitment at such time.
(b) Reduction or Cancellation of Commitments. Upon four (4)
Business Days prior written notice to Agent, Borrowers may permanently
reduce the Total Facility A Commitment and/or the Total Facility B
Commitment by the amount of Five Million Dollars ($5,000,000) or
integral multiples in excess thereof or cancel the Total Facility A
Commitment and/or the Total Facility B Commitment in its entirety;
provided, however, that:
(i) Borrowers may not reduce the Total Facility A
Commitment prior to the Facility A Revolving Loan Maturity
Date, if, after giving effect to such reduction, the
aggregate principal amount of all Facility A Revolving
Loans then outstanding would exceed the Total Facility A
Commitment;
(ii) Borrowers may not reduce the Total Facility B
Commitment prior to the Facility B Revolving Loan Maturity
Date if, after giving effect to such reduction, the
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aggregate principal amount of all Facility B Revolving
Loans then outstanding would exceed the Total Facility B
Commitment;
(iii) Borrowers may not cancel the Total Facility A
Commitment prior to the Facility A Revolving Loan Maturity
Date, if, after giving effect to such cancellation, any
Facility A Revolving Loan would then remain outstanding;
and
(iv) Borrowers may not cancel the Total Facility B
Commitment prior to the Facility B Revolving Loan Maturity
Date, if, after giving effect to such cancellation, any
Facility B Revolving Loan would then remain outstanding.
Unless sooner terminated pursuant to this Agreement, the Facility
A Commitments shall terminate on the Facility A Revolving Loan
Maturity Date and the Facility B Commitments shall terminate on
the Facility B Revolving Loan Maturity Date.
(c) Effect of Commitment Reductions. From the effective date of
any reduction of the Total Facility A Commitment or the Total Facility B
Commitment, the Commitment Fees payable pursuant to Subparagraph 2.06(b)
shall be computed on the basis of the Total Facility A Commitment and/or
the Total Facility B Commitment as so reduced. Once reduced or
cancelled, the Total Facility A Commitment or the Total Facility B
Commitment may not be increased or reinstated without the prior written
consent of all Facility A Lenders or Facility B Lenders, as applicable.
Any reduction of the Total Facility A Commitment pursuant to
Subparagraph 2.05(b) shall be applied ratably to reduce each Facility A
Lender's Facility A Commitment in accordance with clause (i) of
Subparagraph 2.09(a). Any reduction of the Total Facility B Commitment
pursuant to Subparagraph 2.05(b) shall be applied ratably to reduce each
Facility B Lender's Facility B Commitment in accordance with clause (ii)
of Subparagraph 2.11(a).
2.06. Fees.
(a) Agent's Fee. Borrowers shall pay to Agent, for its own
account, agent's fees and other compensation in the amounts and at the
times set forth in the Agent's Fee Letter.
(b) Commitment Fees. Borrowers shall pay to Agent:
(i) For the ratable benefit of Facility A Lenders as
provided in clause (v) of Subparagraph 2.11(a), commitment fees
in Dollars (the "Facility A Commitment Fees") equal to the
Commitment Fee Percentage of the daily average Unused amount of
the Total Facility A Commitment for the period beginning on the
date of this Agreement and ending on the Facility A Revolving
Loan Maturity Date; and
(ii) For the ratable benefit of Facility B Lenders as
provided in clause (vi) of Subparagraph 2.11(a), commitment fees
in Dollars (the "Facility B Commitment Fees") equal to the
Commitment Fee Percentage of the daily average Unused amount of
the Total Facility B Commitment for the period beginning on the
date of this Agreement and ending on the Facility B Revolving
Loan Maturity Date.
Borrowers shall pay the Commitment Fees in arrears on the last day of
each March, June, September and December (commencing June 30, 2000) and
on the Facility A Revolving Loan Maturity Date and the Facility B
Revolving Loan Maturity Date, as the case may be (or if the Total
Facility A Commitment or Total Facility B Commitment is cancelled on a
date prior to the Facility A Revolving Loan Maturity Date or the
Facility B Revolving Loan Maturity Date, as the case may be, on such
prior date).
2.07. Prepayments.
(a) Terms of all Prepayments. Upon the prepayment of any Loan
(whether such prepayment is an optional prepayment under Subparagraph
2.07(b), a mandatory prepayment required by Subparagraph
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2.07(c) or a mandatory prepayment required by any other provision of
this Agreement or the other Credit Documents, including a prepayment
upon acceleration), the applicable Borrower shall pay to the Lender that
made such Loan (i) all accrued interest to the date of such prepayment
on the amount prepaid and (ii) if such prepayment is the prepayment of a
LIBOR Loan or of a LIBOR Portion on a day other than the last day of an
Interest Period for such LIBOR Loan or such LIBOR Portion, all amounts
payable to such Lender pursuant to Paragraph 2.14.
(b) Optional Prepayments. At its option, either Borrower may
prepay, in whole or in part, any Borrowing made to it, provided that:
(i) Such Borrower delivers to Agent prior written notice
of such prepayment, which notice shall be delivered (A) not less
than three (3) Business Days prior to the prepayment of any
Revolving Loan Borrowing consisting of LIBOR Loans or any LIBOR
Portion or a Term Loan Borrowing; and (B) not less than one (1)
Business Day prior to any prepayment of a Base Rate Borrowing or
Base Rate Portion; and
(ii) Any prepayment in part shall be in a minimum
aggregate principal amount equal to $5,000,000 or an integral
multiple of $1,000,000 in excess thereof.
(c) Mandatory Prepayments.
(i) If, at any time, the aggregate principal amount of all
Facility A Revolving Loans then outstanding exceeds any
limitations set forth in Subparagraph 2.05(c), the applicable
Borrower(s) shall immediately prepay such Facility A Revolving
Loans in such amounts as Agent shall determine are necessary to
eliminate such excess.
(ii) If, at any time, the aggregate principal amount of
all Facility B Revolving Loans then outstanding exceeds any
limitations set forth in Subparagraph 2.05(c), the applicable
Borrower(s) shall immediately prepay such Facility B Revolving
Loans in such amounts as Agent shall determine are necessary to
eliminate such excess.
(d) Application of Prepayments. All prepayments of Borrowings
shall, to the extent possible, be applied to prepay the Base Rate
Borrowings, Base Rate Portions, LIBOR Borrowings or LIBOR Portions
designated by either Borrower.
2.08. Other Payment Terms.
(a) Place and Manner.
(i) Borrowers shall make all payments due to each Lender
or Agent hereunder by payments to Agent at Agent's New York
office located at the address specified in Paragraph 8.01, with
each such payment due to a Lender to be for the account of such
Lender and such Lender's Lending Office.
(ii) Borrowers shall make all payments hereunder in same
day or immediately available funds and without deduction or
offset not later than 11:00 a.m. (California time) and on the
date due. Agent shall promptly disburse to each Lender each
payment received by Agent for the account of such Lender.
(b) Date. Whenever any payment due hereunder shall fall due on a
day other than a Business Day, such payment shall be made on the next
succeeding Business Day, and such extension of time shall be included in
the computation of interest or fees, as the case may be.
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(c) Currency of Payment.
(i) Borrowers shall pay principal of, interest on and all
other amounts related to each Borrowing in Dollars. Borrowers
shall pay Commitment Fees and all other amounts payable under
this Agreement and the other Credit Documents in Dollars.
(ii) If any amounts required to be paid by Borrowers under
this Agreement, any other Credit Document or any order, judgment
or award given or rendered in relation hereto or thereto has to
be converted from the currency (the "first currency") in which
the same is payable hereunder or thereunder into another currency
(the "second currency") for the purpose of (A) making or filing a
claim or proof against Borrowers with any Governmental Authority,
(B) obtaining an order or judgment in any court or other tribunal
or (C) enforcing any order or judgment given or made in relation
hereto, Borrowers shall, to the fullest extent permitted by law,
indemnify and hold harmless each of the Persons to whom such
amounts are payable from and against any loss suffered as a
result of any discrepancy between (1) the rate of exchange used
for such purpose to convert the amounts in question from the
first currency into the second currency and (2) the rate or rates
of exchange at which such Person may, using reasonable efforts in
the ordinary course of business, purchase the first currency with
the second currency upon receipt of a sum paid to it in
satisfaction, in whole or in part, of any such order, judgment,
claim or proof. The foregoing indemnity shall constitute a
separate obligation of Borrowers distinct from their other
obligations hereunder and shall survive the giving or making of
any judgment or order in relation to all or any of such
obligations. The obligations of Borrowers under this Subparagraph
2.08(c) shall survive the payment and performance of the
Obligations and the termination of this Agreement.
(d) Late Payments. If any amount required to be paid by either
Borrower under this Agreement or the other Credit Documents (including,
without limitation, principal or interest payable on any Loan, any fees
or any other amount) remains unpaid after such amount is due, such
Borrower shall pay interest on the aggregate, outstanding balance of
such amount from the date due until such amount is paid in full at a per
annum rate equal to the Base Rate plus two percent (2.00%), such rate to
change from time to time as the Base Rate shall change.
(e) Application of Payments. All payments hereunder shall be
applied first to unpaid fees, costs and expenses then due and payable
under this Agreement or the other Credit Documents, second to accrued
interest then due and payable under this Agreement or the other Credit
Documents and finally to reduce the principal amount of outstanding
Loans.
(f) Failure to Pay Agent. Unless Agent shall have received notice
from a Borrower at least one (1) Business Day prior to the date on which
any payment is due to Lenders hereunder that such Borrower will not make
such payment in full, Agent shall be entitled to assume that such
Borrower has made or will make such payment in full to Agent on such
date and Agent may, in reliance upon such assumption, cause to be paid
to the applicable Lenders on such due date an amount equal to the amount
then due such Lenders. If and to the extent such Borrower shall not have
so made such payment in full to Agent, each such Lender shall repay to
Agent forthwith on demand such amount distributed to such Lender
together with interest thereon, for each day from the date such amount
is distributed to such Lender until the date such Lender repays such
amount to Agent, at a per annum rate equal to the Federal Funds Rate for
the first three (3) days and the Base Rate thereafter for any amount in
Dollars. A certificate of Agent submitted to any Lender with respect to
any amount owing by such Lender under this Subparagraph 2.08(f) shall
constitute prima facie evidence of such amount.
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2.09. Loan Accounts; Notes.
(a) Loan Accounts. The obligation of each Borrower to repay the
Loans made to it by each Lender and to pay interest thereon at the rates
provided herein shall be evidenced by an account or accounts maintained
by such Lender on its books (individually, a "Loan Account"), except
that any Lender may request that its Loans be evidenced by a note or
notes pursuant to Subparagraph 2.09(b). Each Lender shall record in its
Loan Accounts (i) the date, amount and currency of each Loan made by
such Lender, (ii) the interest rates applicable to each such Loan and
each Portion thereof and the effective dates of all changes thereto,
(iii) the Interest Period for each LIBOR Loan and LIBOR Portion, (iv)
the date and amount of each principal and interest payment on each Loan
and Portion and (v) such other information as such Lender may determine
is necessary for the computation of principal and interest payable to it
by each Borrower hereunder; provided, however, that any failure by a
Lender to make, or any error by any Lender in making, any such notation
shall not affect Borrowers' Obligations hereunder. The Loan Accounts
shall constitute prima facie evidence of the matters noted therein.
(b) Notes. If any Lender so requests, (i) such Lender's Revolving
Loans shall be evidenced by promissory notes in the form of Exhibit C(1)
(individually, a "Revolving Loan Note") and (ii) such Lender's Term
Loans shall be evidenced by promissory notes in the form of Exhibit C(2)
(individually, a "Term Loan Note"), each of which shall be (A) payable
to the order of such Lender, (B) dated the Closing Date, and (C)
otherwise appropriately completed.
2.10. Loan Funding.
(a) Lender Funding and Disbursements to Borrowers. Each Lender
shall, before 11:00 a.m. (New York time) on the date of each Borrowing,
make available to Agent at Agent's New York office specified in
Paragraph 8.01, in immediately available funds, such Lender's applicable
Proportionate Share of such Borrowing. After Agent's receipt of such
funds and upon satisfaction of the applicable conditions set forth in
Section III, Agent shall promptly disburse such funds to the applicable
Borrower no later than 1:00 p.m. (California time) in immediately
available funds. Agent shall disburse the proceeds of each Borrowing as
directed by the applicable Borrower in the applicable Notice of
Borrowing.
(b) Lender Failure to Fund. Unless Agent shall have received
notice from a Lender prior to the date of a Borrowing that such Lender
will not make available to Agent such Lender's applicable Proportionate
Share of such Borrowing, Agent shall be entitled to assume that such
Lender has made or will make such amount available to Agent on the date
of such Borrowing in accordance with Subparagraph 2.08(a), and Agent may
on such date, in reliance upon such assumption, disburse or otherwise
credit to the applicable Borrower a corresponding amount. If any Lender
does not make the amount of its applicable Proportionate Share of a
Borrowing available to Agent on or prior to the date of such Borrowing,
such Lender shall pay to Agent, on demand, interest which shall accrue
on such amount from the date of such Borrowing until such amount is paid
to Agent at rates equal to the Federal Funds Rate for the first three
(3) days and the Base Rate thereafter. A certificate of Agent submitted
to any Lender with respect to any amount owing by such Lender under this
Subparagraph 2.08(b) shall constitute prima facie evidence of such
amount. If the amount of any Lender's applicable Proportionate Share of
any Borrowing is not paid to Agent by such Lender within three (3)
Business Days after the date of such Borrowing, the applicable Borrower
shall repay such amount to Agent, on demand, together with interest
thereon, for each day from the date such amount was disbursed to such
Borrower until the date such amount is repaid to Agent, at the interest
rate applicable at the time to the Loans comprising such Borrowing.
(c) Lenders' Obligations Several. The failure of any Lender to
make the Loan to be made by it as part of any Borrowing shall not
relieve any other Lender of its obligation hereunder to make its Loan as
part of such Borrowing, but no Lender shall be obligated in any way to
make any Loan which another Lender has failed or refused to make or
otherwise be in any way responsible for the failure or refusal of any
other Lender to make any Loan required to be made by such other Lender.
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2.11. Pro Rata Treatment.
(a) Borrowings, Commitment Reductions, Etc. Except as otherwise
provided herein:
(i) Each Borrowing under Facility A and reduction of the
Total Facility A Commitment shall be made or shared among
Facility A Lenders pro rata according to their respective
Facility A Proportionate Shares;
(ii) Each Borrowing under Facility B and reduction of the
Total Facility B Commitments shall be made or shared among
Facility B Lenders pro rata according to their respective
Facility B Proportionate Shares;
(iii) Each payment of principal on Loans in any Borrowing
shall be shared among Lenders which made or funded the Loans in
such Borrowing pro rata according to the respective unpaid
principal amounts of such Loans then owed to such Lenders;
(iv) Each payment of interest on Loans in any Borrowing
shall be shared among Lenders which made or funded the Loans in
such Borrowing pro rata according to (A) the respective unpaid
principal amounts of such Loans then owed to such Lenders so made
or funded by such Lenders and (B) the dates on which such Lenders
so made or funded such Loans;
(v) Each payment of Facility A Commitment Fees shall be
shared among Facility A Lenders (except for Defaulting Lenders)
pro rata according to (A) their respective Facility A
Proportionate Shares and (B) in the case of each Facility A
Lender which becomes a Facility A Lender hereunder after the date
hereof and before the Facility A Revolving Loan Maturity Date,
the date upon which such Facility A Lender so became a Facility A
Lender;
(vi) Each payment of Facility B Commitment Fees shall be
shared among Facility B Lenders (except for Defaulting Lenders)
pro rata according to (A) their respective Facility B
Proportionate Shares and (B) in the case of each Facility B
Lender which becomes a Facility B Lender hereunder after the date
hereof and before the Facility B Revolving Loan Maturity Date,
the date upon which such Facility B Lender so became a Facility B
Lender;
(vii) Each payment of interest (other than interest on
Loans) shall be shared among Lenders and Agent owed the amount
upon which such interest accrues pro rata according to (A) the
respective amounts so owed such Lenders and Agent and (B) the
dates on which such amounts became owing to such Lenders and
Agent; and
(v) All other payments under this Agreement and the other
Credit Documents shall be for the benefit of the Person or
Persons specified.
(b) Sharing of Payments, Etc. If any Lender shall obtain any
payment (whether voluntary, involuntary, through the exercise of any
right of setoff, or otherwise) on account of the Loan owed to it as part
of any Borrowing in excess of its ratable share of payments on account
of all Loans in such Borrowing obtained by all applicable Lenders
entitled to such payments, such Lender shall forthwith purchase from
such other Lenders such participations in their Loans as shall be
necessary to cause such purchasing Lender to share the excess payment
ratably with each of them; provided, however, that if all or any portion
of such excess payment is thereafter recovered from such purchasing
Lender, such purchase shall be rescinded and each other applicable
Lender shall repay to the purchasing Lender the purchase price to the
extent of such recovery together with an amount equal to such other
Lender's ratable share (according to the proportion of (i) the amount of
such other Lender's required repayment to (ii) the total amount so
recovered from the purchasing Lender) of any interest or other amount
paid or payable by the purchasing Lender in respect of the total amount
so recovered. Each Borrower agrees that any Lender so purchasing a
participation from another Lender pursuant to this Subparagraph 2.11 (b)
may, to the fullest extent permitted by law, exercise
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all its rights of payment (including the right of setoff) with respect
to such participation as fully as if such Lender were the direct
creditor of such Borrower in the amount of such participation.
2.12. Change of Circumstances.
(a) Inability to Obtain Funds, Determine Rates, Etc. If, on or
before the first day of any Interest Period for any LIBOR Borrowing or
LIBOR Portion, Agent shall determine (which determination shall be
conclusive and binding upon Borrowers absent manifest error) that (i)
the LIBO Rate for such Interest Period cannot be adequately and
reasonably determined due to other circumstances affecting the London
interbank market, or (ii) the rate of interest for such Borrowing or
Portion does not adequately and fairly reflect the cost to Lenders of
making or maintaining such Borrowing or Portion, Agent shall immediately
give notice of such condition to the applicable Borrowers and the
applicable Lenders. After the giving of any such notice and until Agent
shall otherwise notify the applicable Borrowers that the circumstances
giving rise to such condition no longer exist, such Borrowers' right to
obtain, continue or convert to Borrowings or Portions shall be
suspended. Any LIBOR Borrowings or LIBOR Portions outstanding at the
commencement of any such suspension shall be repaid at the end of the
then current Interest Period for such Borrowings or Portions unless such
suspension has then ended.
(b) Illegality. If, after the date of this Agreement, the
adoption of any Governmental Rule, any change in any Governmental Rule
or the application or requirements thereof (whether such change occurs
in accordance with the terms of such Governmental Rule as enacted, as a
result of amendment or otherwise), any change in the interpretation or
administration of any Governmental Rule by any Governmental Authority,
or compliance by any Lender with any request or directive (whether or
not having the force of law) of any Governmental Authority (a "Change of
Law") shall make it unlawful or impossible for any Lender to make or
maintain any LIBOR Loan or LIBOR Portion in Dollars, such Lender shall
immediately notify Agent and the applicable Borrower of such Change of
Law. Upon receipt of such notice, (i) such Borrower's right to obtain,
continue or convert to LIBOR Loans or LIBOR Portions in the affected
currency shall be suspended until such time as Agent shall notify such
Borrower and the applicable Lenders that the circumstances giving rise
to such suspension no longer exist, and (ii) such Borrower shall, if so
requested by such Lender, immediately repay such LIBOR Loans or LIBOR
Portions if such Lender shall notify such Borrower that such Lender may
not lawfully continue to fund and maintain such LIBOR Loans or LIBOR
Portions. Any prepayment of LIBOR Loans or LIBOR Portions made pursuant
to the preceding sentence prior to the last day of an Interest Period
for such LIBOR Loans or LIBOR Portions shall be deemed a prepayment
thereof for purposes of Paragraph 2.14.
(c) Increased Costs. If, after the date of this Agreement, any
Change of Law:
(i) Shall subject any Lender to any tax, duty or other
charge with respect to any LIBOR Loan or LIBOR Portion, or shall
change the basis of taxation of payments by either Borrower to
any such Lender on such a LIBOR Loan or LIBOR Portion, or in
respect to such a LIBOR Loan or LIBOR Portion, under this
Agreement (except for changes in the rate of taxation on the
overall net income of such Lender imposed by its jurisdiction of
incorporation or the jurisdiction of its Applicable Lending
Office); or
(ii) Shall impose, modify or hold applicable any reserve
(excluding any Reserve Requirement or other reserve to the extent
included in the calculation of the LIBO Rate for any Loans or
Portions), special deposit or similar requirement against assets
held by, deposits or other liabilities in or for the account of,
advances or loans by, or any other acquisition of funds by any
Lender for any LIBOR Loan or LIBOR Portion; or
(iii) Shall impose on any Lender any other condition
related to any LIBOR Loan or LIBOR Portion or such Lender's
Commitments;
And the effect of any of the foregoing is to increase the cost to such
Lender of making, continuing or maintaining any such LIBOR Loan or LIBOR
Portion or its Commitments or to reduce any amount receivable by such
Lender hereunder; then Borrowers shall from time to time, within ten
(10) Business
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Days after demand by such Lender, pay to such Lender additional amounts
sufficient to reimburse such Lender for such increased costs or to
compensate such Lender for such reduced amounts; provided, however, that
Borrowers shall have no obligation to make any payment to any demanding
party under this Subparagraph 2.10(c) on account of any such increased
costs or reduced amounts unless Borrowers receive notice of such
increased costs or reduced amounts from the demanding party within
twelve (12) months after they are incurred or realized. A certificate
executed by an officer of the applicable Lender setting forth in
reasonable detail the amount of such increased costs or reduced amounts,
submitted by such Lender to Borrowers shall constitute prima facie
evidence of such costs or amounts. The obligations of Borrowers under
this Subparagraph 2.12(c) shall survive the payment and performance of
the Obligations and the termination of this Agreement.
(d) Capital Requirements. If, after the date of this Agreement,
any Lender determines that (i) any Change of Law affects the amount of
capital required or expected to be maintained by such Lender or any
Person controlling such Lender (a "Capital Adequacy Requirement") and
(ii) the amount of capital maintained by such Lender or such Person
which is attributable to or based upon the Loans, the Commitments or
this Agreement must be increased as a result of such Capital Adequacy
Requirement (taking into account such Lender's or such Person's policies
with respect to capital adequacy), Borrowers shall pay to such Lender or
such Person, within ten (10) Business Days after demand of such Lender,
such amounts as such Lender or such Person shall determine are necessary
to compensate such Lender or such Person for the increased costs to such
Lender or such Person of such increased capital; provided, however, that
Borrowers shall have no obligation to make any payment to any demanding
party under this Subparagraph 2.12(d) on account of any such increased
costs unless Borrowers receive notice of such increased costs from the
demanding party within twelve (12) months after they are incurred or
realized. A certificate executed by an officer of the applicable Lender
setting forth in reasonable detail the amount of such increased costs,
submitted by any Lender to Borrowers shall constitute prima facie
evidence of such costs. The obligations of Borrowers under this
Subparagraph 2.12(d) shall survive the payment and performance of the
Obligations and the termination of this Agreement.
(e) Mitigation. Any Lender which becomes aware of (i) any Change
of Law which will make it unlawful or impossible for such Lender to make
or maintain any LIBOR Loan or LIBOR Portion or (ii) any Change of Law or
other event or condition which will obligate Borrowers to pay any amount
pursuant to Subparagraph 2.12(c) or Subparagraph 2.12(d) shall notify
Borrowers and Agent thereof as promptly as practical. If any Lender has
given notice of any such Change of Law or other event or condition and
thereafter becomes aware that such Change of Law or other event or
condition has ceased to exist, such Lender shall notify Borrowers and
Agent thereof as promptly as practical. Each Lender affected by any
Change of Law which makes it unlawful or impossible for such Lender to
make or maintain any LIBOR Loan or LIBOR Portion or to which Borrowers
are obligated to pay any amount pursuant to Subparagraph 2.12(c) or
Subparagraph 2.12(d) shall use reasonable commercial efforts (including
changing the jurisdiction of its Applicable Lending Offices) to avoid
the effect of such Change of Law or to avoid or materially reduce any
amounts which Borrowers are obligated to pay pursuant to Subparagraph
2.12(c) or Subparagraph 2.12(d) if, in the reasonable opinion of such
Lender, such efforts would not be disadvantageous to such Lender or
contrary to such Lender's normal banking practices.
2.13. Taxes on Payments.
(a) Payments Free of Taxes. All payments made by Borrowers under
this Agreement and the other Credit Documents shall be made free and
clear of, and, except as provided herein, without deduction or
withholding for or on account of, Non-Excluded Taxes. If any
Non-Excluded Taxes are required to be withheld from any amounts payable
to Agent or any Lender hereunder or under the other Credit Documents,
the amounts so payable to Agent or such Lender shall be increased to the
extent necessary to yield to Agent or such Lender (after payment of all
Non-Excluded Taxes) interest or any such other amounts payable hereunder
at the rates or in the amounts specified in this Agreement and the other
Credit Documents. Whenever any Taxes are payable by Borrowers, as
promptly as possible thereafter, Borrowers shall send to Agent for its
own account or for the account of such Lender, as the case may be, a
certified copy of an original official receipt received by Borrowers
showing payment thereof. If Borrowers fail to pay any Non-Excluded Taxes
when due to the appropriate taxing authority or fails to remit to Agent
the
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required receipts or other required documentary evidence, Borrowers
shall indemnify Agent and Lenders for any taxes (including interest or
penalties) that may become payable by Agent or any Lender as a result of
any such failure. The obligations of Borrowers under this Subparagraph
2.13(a) shall survive the payment and performance of the Obligations and
the termination of this Agreement.
(b) Withholding Exemption Certificates. Each Lender which is not
organized under the laws of the United States of America or a state
thereof shall, on or prior to the Closing Date in the case of any such
Lender that is a Lender hereunder on the date hereof and on or prior to
the date any other Lender becomes a Lender hereunder, deliver to
Borrowers and Agent two duly completed copies of United States Internal
Revenue Service Form 1001 or 4224 (or successor applicable form), as the
case may be, certifying in each case that such Lender is entitled to
receive payments on its Loans under this Agreement from Borrower's
Applicable Payment Office for the account of such Lender's Domestic
Lending Office or Euro-Dollar Lending Office without deduction or
withholding of any United States federal income taxes. Each such Lender
further agrees (A) promptly to notify the applicable Borrowers and Agent
of any change of circumstances (including any change in any treaty, law
or regulation) which would prevent such Lender from receiving such
payments hereunder without any deduction or withholding of such taxes
and (B) if such Lender is still legally entitled to do so, then on or
before the date that any certificate or other form delivered by such
Lender under this Subparagraph 2.13(b) expires, to deliver to such
Borrowers and Agent a new certificate or form, certifying that such
Lender is entitled to receive such payments under this Agreement without
deduction or such taxes.
(c) Mitigation. If Agent or any Lender claims any additional
amounts to be payable to it pursuant to this Paragraph 2.13, such Person
shall use reasonable commercial efforts to file any certificate or
document requested in writing by the applicable Borrower reflecting a
reduced rate of withholding or to change the jurisdiction of an
Applicable Lending Office if the making of such a filing or such change
in the jurisdiction of an Applicable Lending Office would avoid the need
for or materially reduce the amount of any such additional amounts which
may thereafter accrue and if, in the reasonable opinion of such Person,
in the case of a change in the jurisdiction of an Applicable Lending
Office, such change would not be disadvantageous to such Person or
contrary to such Person's normal banking practices.
(d) Tax Returns. Nothing contained in this Paragraph 2.13 shall
require Agent or any Lender to make available any of its tax returns (or
any other information relating to its taxes which it deems to be
confidential).
(e) Lender Rate Contracts. Nothing contained in this Paragraph
2.13 shall override or supercede any term or provision of any Lender
Rate Contract regarding withholding taxes relating to Rate Contracts.
2.14. Funding Loss Indemnification. If either Borrower shall (a) repay,
prepay or convert any LIBOR Loan or LIBOR Portion on any day other than the last
day of an Interest Period therefor (whether a scheduled payment, an optional
prepayment or conversion, a mandatory prepayment or conversion, a payment upon
acceleration or otherwise), (b) fail to borrow any LIBOR Loan or LIBOR Portion
after delivering the Notice of Borrowing therefor to Agent (whether as a result
of the failure to satisfy any applicable conditions or otherwise), (c) fail to
convert any Portion of a Term Loan Borrowing into a LIBOR Portion in accordance
with a Notice of Term Loan Conversion delivered to Agent (whether as a result of
the failure to satisfy any applicable conditions or otherwise), or (d) fail to
pay when due any principal or interest on any LIBOR Loan or LIBOR Portion, such
Borrower shall, within ten (10) Business Days after demand of such Lender,
reimburse such Lender for and hold such Lender harmless from all reasonable
costs and losses incurred by such Lender as a result of such repayment,
prepayment, conversion or failure; provided, however, that Borrowers shall have
no obligation to make any payment to any demanding party under this Paragraph
2.14 on account of any such costs or losses unless Borrowers receive notice of
such costs or losses from the demanding party within twelve (12) months after
they are incurred or realized. Borrowers understand that such costs and losses
may include, without limitation, losses incurred by a Lender as a result of
funding and other contracts entered into by such Lender to fund a LIBOR Loan or
LIBOR Portion. Each Lender demanding payment under this Paragraph 2.14 shall
deliver to Borrowers, with a copy to Agent, a certificate setting forth the
amount of costs and losses for which demand is made, which certificate shall set
forth in reasonable detail the calculation of the amount demanded. Such a
certificate so delivered to Borrowers shall
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constitute prima facie evidence of such costs and losses. The obligations of
Borrowers under this Paragraph 2.14 shall survive the payment and performance of
the Obligations and the termination of this Agreement.
2.15. Security.
(a) Guaranties, Etc. The Obligations shall be secured by the
following:
(i) A Guaranty in the form of Exhibit D (the "Guaranty"),
duly executed by FIL and all Eligible Material Subsidiaries, with
such changes thereto as may be appropriate based on the law of
the applicable jurisdictions; and
(ii) A Pledge Agreement or Pledge Agreements, each in the
form of Exhibit E (individually a "Pledge Agreement"), duly
executed by FIL and any Subsidiary that directly owns the stock
of any Ineligible Material Subsidiaries, together with the
Guaranty executed by any such Subsidiary, with such changes
thereto as may be appropriate based on the law of the applicable
jurisdictions;
provided, however, that (1) in lieu of providing a pledge of
stock of Flextronics Industrial (Shenzhen) Co. Ltd. by
Flextronics Singapore Pte Ltd., Borrowers shall provide a pledge
of the stock of Flextronics Singapore Pte Ltd. and Flextronics
Singapore Pte Ltd. shall execute the Guaranty, (2) in lieu of
providing a pledge of the stock of Flextronics International
Sweden AB by F.L. Tronics Holdings AB and a pledge of the stock
of Flextronics International Finland Oy by Flextronics Holding
Finland OY, Flextronics Holdings UK Limited shall execute the
Guaranty and pledge of the stock of F.L. Tronics Holdings AB and
(3) in lieu of providing a pledge of the stock of Flextronics
International Kft, FIL shall pledge the stock of Flextronics
International GmbH; (4) with respect to Flextronics Singapore Pte
Ltd., on or prior to the date such Subsidiary is dissolved and
the stock of Flextronics International (Shenzhen) Co. Ltd. is
thereafter held by Flextronics International Singapore Pte Ltd.,
FIL shall promptly provide a pledge of the stock of Flextronics
International Singapore Pte Ltd. and Flextronics International
Singapore Pte Ltd. shall promptly execute the Guaranty which
shall replace the guaranty of Flextronics Singapore Pte Ltd.; (5)
if FIL does not dissolve Flextronics International Fremont, Inc.
on or before May 31, 2000, Flextronics International Fremont,
Inc. shall also promptly execute the Guaranty; and (6) on or
prior to April 14, 2000, Dovatron Malaysia Sdn. Bhd. shall
execute the Guaranty, in connection with the DII Acquisition.
(b) Changes in Material Subsidiaries.
(i) If, at any time after the date of this Agreement, any
Subsidiary of FIL that is not a Guarantor under the Guaranty
shall become an Eligible Material Subsidiary, Borrowers promptly
shall deliver, or cause to be delivered, to Agent, within sixty
(60) days of any such event, (A) a Subsidiary Joinder in the form
of Attachment 1 to the Guaranty, appropriately completed and duly
executed by such Subsidiary, and (B) such other instruments,
agreements, certificates, opinions and documents as Agent may
reasonably request to secure, maintain, protect and evidence the
obligations of such Subsidiary under the Guaranty.
(ii) If, at any time after the date of this Agreement, any
Subsidiary of FIL that is a Guarantor under the Guaranty shall
cease to be an Eligible Material Subsidiary, Agent promptly shall
release such Subsidiary from its obligations under the Guaranty,
subject to the completion by Borrowers (and, if the Equity
Securities of such Subsidiary are owned directly by another
Subsidiary of FIL, by such other parent Subsidiary) of such
actions as may be necessary to grant to Agent, to the extent
provided in clause (iii) below, a perfected security interest in
the Equity Securities of such Subsidiary.
(iii) If, at any time after the date of this Agreement,
any Subsidiary of FIL shall become an Ineligible Material
Subsidiary, Borrowers shall deliver, or cause to be delivered, to
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Agent, within sixty (60) days of any such event, such
instruments, agreements, certificates, opinions and documents
(including Uniform Commercial Code financing statements) as Agent
may reasonably request to grant, perfect, maintain, protect and
evidence security interests in favor of Agent, for the benefit of
Agent and Lenders as security for the Obligations, in any and all
Equity Securities of such Subsidiary, to the extent such security
interests are not prohibited by any applicable Governmental Rule
and would not significantly increase the tax liability of FIL and
its Subsidiaries.
(iv) If, at any time after the date of this Agreement, any
Ineligible Material Subsidiary becomes an Eligible Material
Subsidiary, upon Borrowers' compliance with clause (i) of
Subparagraph 2.15(b) above, Agent shall release the Equity
Securities of such Subsidiary from any Pledge Agreement
previously delivered with respect to such Subsidiary.
(c) Further Assurances. Borrowers shall deliver, and shall cause
their Guarantors and their Subsidiaries to deliver, to Agent such other
pledge agreements, guaranties, guaranty supplements and other
instruments, agreements, certificates, opinions and documents (including
Uniform Commercial Code financing statements) as Agent may reasonably
request to implement the provisions of Subparagraph 2.15(a) and
otherwise to establish, maintain, protect and evidence the rights
provided to Agent, for the benefit of Agents and Lenders, pursuant to
the Security Documents. Borrowers shall fully cooperate with Agent and
Lenders and perform all additional acts reasonably requested by Agent or
any Lender to effect the purposes of this Paragraph 2.15. Without
limiting the generality of the foregoing, Borrowers covenant and agree
that they will ensure that the aggregate revenues of the Material
Subsidiaries that have executed and delivered the Guaranty and/or Pledge
Agreements pursuant to this Agreement and the FIL Credit Agreement for
each year will equal or exceed 75% of the consolidated total revenues of
FIL and all of its Subsidiaries as reflected for such year in FIL's
annual audited Financial Statements.
2.16. Replacement of Lenders. If any Lender shall (a) become a
Defaulting Lender more than one (1) time in a period of twelve (12) consecutive
months, (b) continue as a Defaulting Lender for more than three (3) Business
Days at any time, (c) suspend its obligation to make or maintain LIBOR Loans or
LIBOR Portions pursuant to Subparagraph 2.12(b) for a reason which is not
applicable to any other Lender or (d) demand any payment under Subparagraph
2.12(a), 2.12(c) or 2.12(d) for a reason which is not applicable to any other
Lender, then Agent may (or upon the written request of Borrowers, shall) replace
such Lender (the "affected Lender"), or cause such affected Lender to be
replaced, with another lender (the "replacement Lender") satisfying the
requirements of an Assignee Lender under Subparagraph 8.05(c), by having the
affected Lender sell and assign all of its rights and obligations under this
Agreement and the other Credit Documents to the replacement Lender pursuant to
Subparagraph 8.05(c); provided, however, that if Borrowers seek to exercise such
right, they must do so within sixty (60) days after either Borrower first knows
or should have known of the occurrence of the event or events giving rise to
such right, and neither Agent nor any Lender shall have any obligation to
identify or locate a replacement Lender for Borrowers; and provided, further,
that no Lender shall be replaced under this Agreement unless such Lender is also
replaced under the FIL Credit Agreement. Upon receipt by any affected Lender of
a written notice from Agent stating that Agent is exercising the replacement
right set forth in this Paragraph 2.16, such affected Lender shall sell and
assign all of its rights and obligations under this Agreement and the other
Credit Documents to the replacement Lender pursuant to an Assignment Agreement
and Subparagraph 8.05(c) for a purchase price equal to the sum of the principal
amount of the affected Lender's Loans so sold and assigned, all accrued and
unpaid interest thereon and its ratable share of all fees to which it is
entitled.
SECTION III. CONDITIONS PRECEDENT.
3.01. Initial Conditions Precedent. The obligations of the applicable
Lenders to make the Loans comprising the initial Borrowing are subject to
receipt by Agent, on or prior to the Closing Date, of each item listed in
Schedule 3.01, each in form and substance satisfactory to Agent and each Lender,
and with sufficient copies for, Agent and each Lender.
3.02. Conditions Precedent to Term Loan Borrowing . The obligations of
Facility B Lenders to make the Term Loans comprising the Term Loan Borrowing
also are subject to receipt by Agent, on or prior to the Facility
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B Revolving Loan Maturity Date, of a Term Loan Note for each Facility B Lender
so requesting such a note, duly executed by the applicable Borrower.
3.03. Conditions Precedent to Each Credit Event. The occurrence of each
Credit Event (including the initial Borrowing) is subject to the further
conditions that:
(a) Borrowers shall have delivered to Agent the Notice of
Borrowing, Notice of Term Loan Conversion or Notice of Interest Period
Selection, as the case may be, for such Credit Event in accordance with
this Agreement; and
(b) On the date such Credit Event is to occur and after giving
effect to such Credit Event, the following shall be true and correct:
(i) The representations and warranties of Borrowers and
their Subsidiaries set forth in Paragraph 4.01 and in the other
Credit Documents are true and correct in all material respects as
if made on such date (except for representations and warranties
expressly made as of a specified date, which shall be true as of
such date); and
(ii) No Default has occurred and is continuing or will
result from such Credit Event.
The submission by either Borrower to Agent of each Notice of Borrowing, each
Notice of Term Loan Conversion (other than a notice for a conversion to a Base
Rate Portion) and each Notice of Interest Period Selection (other than a notice
selecting an Interest Period of one (1) month) shall be deemed to be a
representation and warranty by such Borrower that each of the statements set
forth above in this Subparagraph 3.03(b) is true and correct as of the date of
such notice.
3.04. Covenant to Deliver. Borrowers agree (not as a condition but as a
covenant) to deliver to Agent each item required to be delivered to Agent as a
condition to the occurrence of any Credit Event if such Credit Event occurs.
Borrowers expressly agree that the occurrence of any such Credit Event prior to
the receipt by Agent of any such item shall not constitute a waiver by Agent or
any Lender of Borrowers' obligation to deliver such item.
SECTION IV. REPRESENTATIONS AND WARRANTIES.
4.01. Borrowers' Representations and Warranties. In order to induce
Agent and Lenders to enter into this Agreement, Borrowers hereby represent and
warrant to Agent and Lenders as follows:
(a) Due Incorporation, Qualification, etc. Each of Borrowers and
their Subsidiaries (i) is a corporation duly organized, validly existing
and, in any jurisdiction in which such legal concept is applicable, in
good standing under the laws of its jurisdiction of organization; (ii)
has the power and authority to own, lease and operate its properties and
carry on its business as now conducted; and (iii) is duly qualified and
licensed to do business as a foreign corporation or branch in each
jurisdiction where the failure to be so qualified or licensed is
reasonably and substantially likely to have a Material Adverse Effect.
(b) Authority. The execution, delivery and performance by each of
the Borrowers, the Guarantors and their Subsidiaries of each Credit
Document executed, or to be executed, by such Person and the
consummation of the transactions contemplated thereby (i) are within the
power of such Person and (ii) have been duly authorized by all necessary
actions on the part of such Person.
(c) Enforceability. Each Credit Document executed, or to be
executed, by each of the Borrowers, the Guarantors and their
Subsidiaries has been, or will be, duly executed and delivered by such
Person and constitutes, or will constitute, a legal, valid and binding
obligation of such Person, enforceable against such Person in accordance
with its terms, except as limited by bankruptcy, insolvency or other
laws
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of general application relating to or affecting the enforcement of
creditors' rights generally and general principles of equity.
(d) Non-Contravention. The execution and delivery by each of the
Borrowers, the Guarantors and their Subsidiaries of the Credit Documents
executed by such Person and the performance and consummation of the
transactions contemplated thereby do not (i) violate any Requirement of
Law applicable to such Person; (ii) violate any provision of, or result
in the breach or the acceleration of, or entitle any other Person to
accelerate (whether after the giving of notice or lapse of time or
both), any Contractual Obligation of such Person; or (iii) result in the
creation or imposition of any Lien (or the obligation to create or
impose any Lien) upon any property, asset or revenue of such Person
(except such Liens as may be created in favor of Agent pursuant to this
Agreement or the other Credit Documents).
(e) Approvals. No consent, approval, order or authorization of,
or registration, declaration or filing with, any Governmental Authority
or other Person (including the shareholders of any Person) is required
in connection with the execution and delivery of the Credit Documents
executed by each of the Borrowers, the Guarantors and their Subsidiaries
the performance or consummation of the transactions contemplated
thereby.
(f) No Violation or Default. None of Borrowers, the Guarantors
and their Subsidiaries is in violation of or in default with respect to
(i) any Requirement of Law applicable to such Person or (ii) any
Contractual Obligation of such Person (nor is there any waiver in effect
which, if not in effect, would result in such a violation or default),
where, in each case, such violation or default is reasonably and
substantially likely to have a Material Adverse Effect. Without limiting
the generality of the foregoing, none of the Borrowers, the Guarantors
and their Subsidiaries (A) has violated any Environmental Laws, (B) has
any liability under any Environmental Laws or (C) has received notice or
other communication of an investigation or, to the knowledge of either
Borrower, the Guarantors or their Subsidiaries, is under investigation
by any Governmental Authority having authority to enforce Environmental
Laws, where such violation, liability or investigation is reasonably and
substantially likely to have a Material Adverse Effect. No Default has
occurred and is continuing.
(g) Litigation. No actions (including derivative actions), suits,
proceedings or investigations are pending or, to the knowledge of either
Borrower, threatened against either Borrower, the Guarantors or any of
their Subsidiaries at law or in equity in any court or before any other
Governmental Authority which (i) is reasonably and substantially likely
(alone or in the aggregate) to have a Material Adverse Effect or (ii)
seeks to enjoin, either directly or indirectly, the execution, delivery
or performance by either Borrower, the Guarantors or any of their
Subsidiaries of the Credit Documents or the transactions contemplated
thereby.
(h) Title; Possession Under Leases. Each Borrower and its
Subsidiaries own and have good and marketable title, or a valid
leasehold interest in, all their respective material properties and
assets as reflected in the most recent Financial Statements delivered to
Agent (except those assets and properties disposed of in the ordinary
course of business or otherwise in compliance with this Agreement since
the date of such Financial Statements) and all respective material
assets and properties acquired by such Borrower and its Subsidiaries
since such date (except those disposed of in the ordinary course of
business or otherwise in compliance with this Agreement). Such assets
and properties are subject to no Lien, except for Permitted Liens.
(i) Financial Statements. The Financial Statements of FIL and its
Subsidiaries which have been delivered to Agent, (i) are in accordance
with the books and records of FIL and its Subsidiaries, which have been
maintained in accordance with good business practice; (ii) have been
prepared in conformity with GAAP; and (iii) fairly present in all
material respects the financial conditions and results of operations of
FIL and its Subsidiaries as of the date thereof and for the period
covered thereby. Neither FIL nor any of its Subsidiaries has any
Contingent Obligations, liability for taxes or other outstanding
obligations which are material in the aggregate, except as disclosed or
reflected in the Financial Statements of FIL dated December 31, 1999,
furnished by Borrowers to Agent prior to the date hereof, or in the
Financial Statements delivered to Agent pursuant to clause (i) or (ii)
of Subparagraph 5.01(a), or except as permitted under Section 5 of this
Agreement.
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(j) Employee Benefit Plans.
(i) Based on the latest valuation of each Employee Benefit
Plan that either Borrower or any ERISA Affiliate maintains or
contributes to, or has any obligation under (which occurred
within twelve months of the date of this representation), the
aggregate benefit liabilities of such plan within the meaning of
Section 4001 of ERISA did not exceed the aggregate value of the
assets of such plan. No Borrower nor any ERISA Affiliate has any
liability with respect to any post-retirement benefit under any
Employee Benefit Plan which is a welfare plan (as defined in
section 3(1) of ERISA), other than liability for health plan
continuation coverage described in Part 6 of Title I(B) of ERISA,
which liability for health plan contribution coverage is not
reasonably and substantially likely to have a Material Adverse
Effect.
(ii) Each Employee Benefit Plan complies, in both form and
operation, in all material respects, with its terms, ERISA and
the IRC, and no condition exists or event has occurred with
respect to any such plan which would result in the incurrence by
either Borrower or any ERISA Affiliate of any material liability,
fine or penalty. Each Employee Benefit Plan, related trust
agreement, arrangement and commitment of either Borrower or any
ERISA Affiliate is legally valid and binding and in full force
and effect. No Employee Benefit Plan is being audited or
investigated by any government agency or is subject to any
pending or threatened claim or suit. No Borrower nor any ERISA
Affiliate nor any fiduciary of any Employee Benefit Plan has
engaged in a prohibited transaction under section 406 of ERISA or
section 4975 of the IRC.
(iii) No Borrower nor any ERISA Affiliate contributes to
or has any material contingent obligations to any Multiemployer
Plan. No 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 Section 4201 of
ERISA or as a result of a sale of assets described in Section
4204 of ERISA. No Borrower nor any ERISA Affiliate has been
notified that any Multiemployer Plan is in reorganization or
insolvent under and within the meaning of Section 4241 or Section
4245 of ERISA or that any Multiemployer Plan intends to terminate
or has been terminated under Section 4041A of ERISA.
(iv) All employer and employee contributions required by
any applicable Governmental Rule in connection with all Foreign
Plans have been made, or, if applicable, accrued, in accordance
with the country-specific accounting practices. The fair market
value of the assets of each funded Foreign Plan, the liability of
each insurer for any Foreign Plan funded through insurance or the
book reserve established for any Foreign Plan, together with any
accrued contributions, is sufficient to procure or provide for
the accrued benefit obligations, as of the date hereof, with
respect to all current and former participants in such Foreign
Plan according to the actuarial assumptions and valuations most
recently used to determine employer contributions to such Foreign
Plan, which actuarial assumptions are commercially reasonable.
Each Foreign Plan required to be registered has been registered
and has been maintained in good standing with applicable
Governmental Authorities. Each Foreign Plan reasonably complies
in all material respects with all applicable Governmental Rules.
(k) Other Regulations. No Borrower, Guarantor or any Material
Subsidiary is subject to regulation under the Investment Company Act of
1940, the Public Utility Holding Company Act of 1935, the Federal Power
Act, the Interstate Commerce Act, any state public utilities code or any
other Governmental Rule that limits its ability to incur Indebtedness.
(l) Patent and Other Rights. Each Borrower and its Subsidiaries
own, license or otherwise have the full right to use, under validly
existing agreements, without known conflict with any rights of others,
all material patents, licenses, trademarks, trade names, trade secrets,
service marks, copyrights and all rights with respect thereto, which are
required to conduct their businesses as now conducted.
(m) Governmental Charges. Each Borrower and its Subsidiaries have
filed or caused to be filed all tax returns, reports and declarations
which are required to be filed by them. Each Borrower and its
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Subsidiaries have paid, or made provision for the payment of, all taxes
and other Governmental Charges which have or may have become due
pursuant to said returns or otherwise and all other indebtedness, except
such Governmental Charges or indebtedness, if any, which are being
contested in good faith and as to which adequate reserves (determined in
accordance with GAAP) have been provided or which are not reasonably and
substantially likely to have a Material Adverse Effect if unpaid.
(n) Margin Stock. No Borrower owns any Margin Stock which, in the
aggregate, would constitute a substantial part of the assets of such
Borrower, and no proceeds of any Loan will be used to purchase or carry,
directly or indirectly, any Margin Stock or to extend credit, directly
or indirectly, to any Person for the purpose of purchasing or carrying
any Margin Stock.
(o) Subsidiaries, Etc. Schedule 4.01(o) (as updated on a
quarterly basis by Borrowers in a written notice to Agent no later than
the date financial statements are required to be delivered pursuant to
Subparagraph 5.01(a)) sets forth each of FIL's Subsidiaries (other than
Subsidiaries with less than $100,000 in annual revenues or consolidated
assets), its jurisdiction of organization, the classes of its Equity
Securities, the number of shares of each such class issued and
outstanding, the percentages of shares of each such class owned directly
or indirectly by FIL and whether FIL owns such shares directly or, if
not, the Subsidiary of FIL that owns such shares. The only Material
Subsidiaries on the date of this Agreement are Flextronics International
USA, Inc., Flex International Marketing (L) Ltd., Flextronics
International Latin America (L) Ltd., Flextronics Manufacturing Mexico,
S.A. de C.V., Flextronics International Finland Oy, Flextronics
Industrial (Shenzhen) Co. Ltd., Flextronics International GmbH,
Flextronics International Sweden AB and Flextronics International Kft.
Each Borrower and each of the other Material Subsidiaries is a
Subsidiary of FIL.
(p) Solvency, Etc. Each of the Borrowers, the Guarantors and
their Material Subsidiaries is Solvent and, after the execution and
delivery of the Credit Documents and the consummation of the
transactions contemplated thereby, will be Solvent.
(q) No Withholding, Etc. No Borrower or Guarantor is required by
any Governmental Rule to make any deduction or withholding of any nature
whatsoever from any payment required to be made by either Borrower or
any or Guarantor hereunder or under any other Credit Document. Neither
this Agreement nor any of the other Credit Documents is subject to any
registration or stamp tax or any other similar or like taxes payable in
any jurisdiction.
(r) Foreign Guarantors.
(i) No Immunities, etc. Each Guarantor is subject to civil
and commercial law with respect to its obligations under this
Agreement and the other Credit Documents, and the execution,
delivery and performance by each such Guarantor of any Credit
Documents constitute and will constitute private and commercial
acts and not public or governmental acts. Neither such Guarantor
nor any of its property, whether or not held for its own account,
has any immunity (sovereign or other similar immunity) from any
suit or proceeding, from jurisdiction of any court or from
set-off or any legal process (whether service or notice,
attachment prior to judgment, attachment in aid of execution of
judgment, execution of judgment or other similar immunity) under
laws of the jurisdiction in which such Guarantor is organized and
existing in respect of its obligations under this Agreement and
the other Credit Documents. Each such Guarantor has waived every
immunity (sovereign or otherwise) to which it or any of its
properties would otherwise be entitled from any legal action,
suit or proceeding, from jurisdiction of any court and from
set-off or any legal process (whether service or notice,
attachment prior to judgment, attachment in aid of execution of
judgment, execution of judgment or otherwise) under the laws of
the jurisdiction in which such Guarantor is organized and
existing in respect of its obligations under this Agreement and
the other Credit Documents. The waiver by each such Guarantor
described in the immediately preceding sentence is the legal,
valid and binding obligation of such Guarantor.
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(ii) No Recordation Necessary. This Agreement and each of
the other Credit Documents executed by a Guarantor is in proper
legal form under the law of the jurisdiction in which such
Guarantor is organized and existing for the enforcement hereof or
thereof against such Guarantor under the law of such
jurisdiction, and to ensure the legality, validity,
enforceability, priority or admissibility in evidence of this
Agreement and such other Credit Documents. It is not necessary to
ensure the legality, validity, enforceability, priority or
admissibility in evidence of this Agreement or any other Credit
Document executed by a Guarantor that this Agreement, any other
Credit Document or any other document be filed, registered or
recorded with, or executed or notarized before, any court or
other authority in the jurisdiction in which such Guarantor is
organized and existing or that any registration charge or stamp
or similar tax be paid on or in respect of this Agreement, any
other Credit Document or any other document, except for any such
filing, registration or recording, or execution or notarization,
as has been made or is not required to be made until this
Agreement, any other Credit Document or any other document is
sought to be enforced and for any charge or tax as has been
timely paid.
(iii) Exchange Controls. The execution, delivery and
performance by a Guarantor of each of the Credit Documents
executed by a Guarantor is, under applicable foreign exchange
control regulations of the jurisdiction in which each Guarantor
is organized and existing, not subject to any notification or
authorization except (A) such as have been made or obtained or
(B) such as cannot be made or obtained until a later date
(provided any notification or authorization described in
immediately preceding clause (B) shall be made or obtained as
soon as is reasonably practicable).
(s) No Material Adverse Effect. No event has occurred and no
condition exists which is reasonably and substantially likely to have a
Material Adverse Effect.
(t) Accuracy of Information Furnished. The Credit Documents and
the other certificates, statements and information (excluding
projections) furnished to Agent or any Lender by or on behalf of
Borrowers and their Subsidiaries in connection with the Credit Documents
and the transactions contemplated thereby, taken as a whole, do not
contain and will not contain any untrue statement of a material fact and
do not omit and will not omit to state a material fact necessary to make
the statements therein, in light of the circumstances under which they
were made, not misleading. All projections have been based upon
reasonable assumptions and represent, as of their respective dates of
presentations, Borrowers' best estimates of the future performance of
Borrowers and their Subsidiaries.
4.02. Reaffirmation. Each Borrower shall be deemed to have reaffirmed,
for the benefit of Lenders and Agent, each representation and warranty contained
in Paragraph 4.01 on and as of the date of each Credit Event (except for
representations and warranties expressly made as of a specified date, which
shall be true as of such date).
SECTION V. COVENANTS.
5.01. Affirmative Covenants. Until the termination of this Agreement and
the satisfaction in full by Borrowers of all Obligations, Borrowers will comply,
and will cause compliance, with the following affirmative covenants, unless
Required Lenders shall otherwise consent in writing:
(a) Financial Statements, Reports, etc. Each Borrower shall
furnish to Agent the following, each in such form and such detail as
Agent or the Required Lenders shall reasonably request:
(i) As soon as available and in no event later than
forty-five (45) days after the last day of each fiscal quarter of
FIL, a copy of the Financial Statements of FIL and its
Subsidiaries (prepared on a consolidated basis) for such quarter
and for the fiscal year to date, certified by the chief financial
officer, treasurer or controller of FIL to present fairly in all
material respects the financial condition, results of operations
and other information reflected therein and to have been prepared
in accordance with GAAP (subject to normal year-end audit
adjustments);
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(ii) As soon as available and in no event later than
ninety (90) days after the close of each fiscal year of FIL, (A)
copies of the audited Financial Statements of FIL and its
Subsidiaries (prepared on a consolidated and consolidating basis)
for such year, audited by independent certified public
accountants of recognized national standing reasonably acceptable
to Agent, (B) copies of the unqualified opinions (or qualified
opinions reasonably acceptable to Agent) and (C) if available
from such accountants, certificates of such accountants to Agent
stating that in making the examination necessary for their
opinion they have reviewed this Agreement and have obtained no
knowledge of any Default which has occurred and is continuing, or
if, in the opinion of such accountants, a Default has occurred
and is continuing, a statement as to the nature thereof;
(iii) Contemporaneously with the quarterly and year-end
Financial Statements required by the foregoing clauses (i) and
(ii), a compliance certificate of the chief financial officer,
treasurer or controller of FIL and each Borrower (a "Compliance
Certificate") which (A) states that no Default has occurred and
is continuing, or, if any such Default has occurred and is
continuing, a statement as to the nature thereof and what action
Borrowers propose to take with respect thereto; and (B) sets
forth, for the quarter or year covered by such Financial
Statements or as of the last day of such quarter or year (as the
case may be), the calculation of the financial ratios and tests
provided in the FIL Credit Agreement;
(iv) As soon as possible and in no event later than five
(5) Business Days after any officer of such Borrower knows of the
occurrence or existence of (A) any Reportable Event under any
Employee Benefit Plan or Multiemployer Plan; (B) any actual or
threatened litigation, suits, claims or disputes against either
Borrower or any of its Subsidiaries involving potential monetary
damages payable by either Borrower or its Subsidiaries of
$10,000,000 or more (alone or in the aggregate); (C) any other
event or condition which is reasonably and substantially likely
to have a Material Adverse Effect; or (D) any Default; the
statement of the chief financial officer, treasurer or controller
of such Borrower setting forth details of such event, condition
or Default and the action which such Borrower proposes to take
with respect thereto;
(v) As soon as available and in no event later than five
(5) Business Days after they are sent, made available or filed,
copies of (A) all registration statements and reports filed by
either Borrower or any of their Affiliates with the United States
Securities and Exchange Commission (including, without
limitation, all 10-Q, 10-K and 8-K reports); and (B) all reports,
proxy statements and financial statements sent or made available
by either Borrower or any of their Affiliates to its security
holders;
(vi) As soon as possible and in no event later than (A)
forty-five (45) days after the last day of each fiscal quarter
(or ninety (90) days in the case of the last fiscal quarter of
each fiscal year), written notice of any new Subsidiary acquired
or established directly or indirectly by FIL during such quarter,
any new Equity Securities of any existing Subsidiary acquired
directly or indirectly by FIL during such quarter or any other
change in the information set forth in Schedule 4.01(o) during
such quarter; and (B) ten (10) days after the date that any
entity becomes a Material Subsidiary, written notice setting
forth each Subsidiary of FIL that has become a Material
Subsidiary and indicating for each such new Material Subsidiary
whether such Material Subsidiary is an Eligible Material
Subsidiary or Ineligible Material Subsidiary;
(vii) As soon as available and in no event later than five
(5) Business Days after either Borrower changes its legal name or
the address of its chief executive office, written notice setting
forth such Borrower's new legal name and/or new address; and
(viii) Such other instruments, agreements, certificates,
opinions, statements, documents and information relating to the
operations or condition (financial or otherwise) of FIL, such
Borrower or their Subsidiaries, and compliance by such Borrower
with the terms of this Agreement and the other Credit Documents
as Agent may from time to time reasonably request.
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In lieu of furnishing to Agent hard copies of the quarterly Financial
Statements described in clause (i) above and the annual Financial
Statements and auditor's report described in clauses (ii)(A) and (ii)(B)
above and the other documents referred to in clause (v) above, Borrowers
may make such documents available to Lenders at FIL's website located at
www.flextronics.com and through the United States Securities and
Exchange Commission's EDGAR system ("EDGAR") or by transmitting such
documents electronically to Lenders. The Agent shall provide to any
Lender hard copies of such documents upon request if such Lender does
not have access to FIL's website or EDGAR.
(b) Books and Records. Each Borrower and their Subsidiaries shall
at all times keep proper books of record and account which shall be
complete and correct in all material respects in accordance with GAAP.
(c) Inspections. Each Borrower and their Subsidiaries shall
permit Agent and each Lender, or any agent or representative thereof,
upon reasonable notice and during normal business hours, to visit and
inspect any of the properties and offices of such Borrower and its
Subsidiaries, to examine the books and records of such Borrower and its
Subsidiaries and make copies thereof and to discuss the affairs,
finances and business of such Borrower and its Subsidiaries with, and to
be advised as to the same by, their officers, auditors and accountants,
all at such times and intervals as Agent or any Lender may reasonably
request (which visits and inspections shall be at the expense of Agent
or such Lender unless a Default has occurred and is continuing).
(d) Insurance. Each Borrower and their Subsidiaries shall (i)
carry and maintain insurance of the types and in the amounts customarily
carried from time to time during the term of this Agreement by others
engaged in substantially the same business as such Person and operating
in the same geographic area as such Person, including fire, public
liability, property damage and worker's compensation, (ii) carry and
maintain each policy for such insurance with financially sound insurers
and (iii) deliver to Agent from time to time, as Agent may request,
schedules setting forth all insurance then in effect.
(e) Governmental Charges and Other Indebtedness. Each Borrower
and their Subsidiaries shall promptly pay and discharge when due (i) all
taxes and other Governmental Charges prior to the date upon which
penalties accrue thereon, (ii) all indebtedness which, if unpaid, could
become a Lien upon the property of such Borrower or its Subsidiaries and
(iii) subject to any subordination provisions applicable thereto, all
other Indebtedness, which in each case, if unpaid, is reasonably and
substantially likely to have a Material Adverse Effect, except such
Indebtedness as may in good faith be contested or disputed, or for which
arrangements for deferred payment have been made, provided that in each
such case appropriate reserves are maintained in accordance with GAAP.
(f) Use of Proceeds. Each Borrower shall use the proceeds of the
Loans only for the respective purposes set forth in Section II. No
Borrower shall use any part of the proceeds of any Loan, directly or
indirectly, for the purpose of purchasing or carrying any Margin Stock
or for the purpose of purchasing or carrying or trading in any
securities under such circumstances as to involve such Borrower, any
Lender or Agent in a violation of Regulations T, U or X issued by the
Federal Reserve Board.
(g) General Business Operations. Each of the Borrowers and their
Subsidiaries shall (i) preserve and maintain its corporate existence and
all of its rights, privileges and franchises reasonably necessary to the
conduct of its business, (ii) conduct its business activities in
compliance with all Requirements of Law and Contractual Obligations
applicable to such Person and (iii) keep all property useful and
necessary in its business in good working order and condition, ordinary
wear and tear excepted, except, in each case, where any failure is not
reasonably and substantially likely to have a Material Adverse Effect.
(h) Pari Passu Ranking. Each Borrower shall take, or cause to be
taken, all actions necessary to ensure that the Obligations of such
Borrower are and continue to rank at least pari passu in right of
payment with all other unsecured and unsubordinated Indebtedness of such
Borrower.
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5.02. Negative Covenants. Until the termination of this Agreement and
the satisfaction in full by Borrowers of all Obligations, Borrowers will comply,
and will cause compliance, with the following negative covenants, unless
Required Lenders shall otherwise consent in writing:
(a) Indebtedness. Neither Borrower nor any of their Subsidiaries
shall create, incur, assume or permit to exist any Indebtedness except
for the following ("Permitted Indebtedness"):
(i) Indebtedness that is not secured by a Lien in any
asset or property of either Borrower or any of their
Subsidiaries;
(ii) (A) Indebtedness under Capital Leases or under
purchase money loans incurred by Borrower or any of its
Subsidiaries to finance the acquisition, construction,
development or improvement by such Person of real property,
fixtures or equipment provided that in each case (1) such
Indebtedness is incurred by such Person at the time of, or not
later than ninety (90) days after, the acquisition by such Person
of the property so financed and (2) such Indebtedness does not
exceed the purchase price of the property (or the cost of
constructing, developing or improving the same) so financed, and
(B) Indebtedness under initial or successive refinancings of any
such Capital Leases or purchase money loans provided that the
principal amount of any such refinancing does not exceed the
principal amount of the Indebtedness being refinanced;
(iii) Existing Secured Indebtedness;
(iv) Indebtedness of any Borrower to any other Borrower or
any Eligible Material Subsidiary or Indebtedness of any Eligible
Material Subsidiary to any Borrower or any other Eligible
Material Subsidiary, in each case to the extent otherwise
permitted pursuant to Subparagraph 5.02(e) and Subparagraph
5.02(i); and
(v) Other Indebtedness that is secured by a Lien on any
assets or property of any of the Borrowers or any of their
Subsidiaries, provided that the aggregate principal amount of all
secured Indebtedness of FIL and its Subsidiaries (other than
Existing Secured Indebtedness or Indebtedness secured by cash or
cash equivalents to the extent such cash or cash equivalents are
proceeds of such Indebtedness), outstanding during any fiscal
quarter of FIL does not exceed ten percent (10%) of the
consolidated assets of FIL and its Subsidiaries on the last day
of the immediately preceding fiscal quarter.
(b) Liens. Neither Borrower nor any of their Subsidiaries shall
create, incur, assume or permit to exist any Lien on or with respect to
any of their assets or property of any character, whether now owned or
hereafter acquired, except for the following Liens ("Permitted Liens"):
(i) Liens that secure only Indebtedness which constitutes
Permitted Indebtedness under clause (ii), (iii) or (iv) of
Subparagraph 5.02(a);
(ii) Liens in favor of either Borrower or any Eligible
Material Subsidiary on all or part of the assets of Subsidiaries
of either Borrower or Eligible Material Subsidiary securing
Indebtedness owing by Subsidiaries of either Borrower or Eligible
Material Subsidiary, as the case may be, to either Borrower or to
such other Eligible Material Subsidiary;
(iii) 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, or which are being contested
in good faith by appropriate proceedings diligently conducted and
with respect to which adequate reserves are being maintained in
accordance with generally accepted accounting principles so long
as such Liens are not being foreclosed;
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(iv) 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
and good faith deposits in connection with tenders, contracts or
leases to which either Borrower or any of its Subsidiaries is a
party or deposits or pledges to secure, or in lieu of, surety,
penalty or appeal bonds, performance bonds or other similar
obligations;
(v) Liens of carriers, warehousemen, mechanics and
materialmen, and other like Liens on properties which would not
have a Material Adverse Effect and are in respect of obligations
not overdue, or which are being contested in good faith by
appropriate proceedings diligently conducted and with respect to
which adequate reserves are being maintained in accordance with
generally accepted accounting principles so long as such Liens
are not being foreclosed;
(vi) encumbrances on real property 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 or lessee's Liens under
leases to which either Borrower or any of its Subsidiaries is a
party, and other minor Liens or encumbrances none of which
interferes materially with the use of the property, which defects
do not individually or in the aggregate have a Material Adverse
Effect;
(vii) Liens in favor of the Agent for the benefit of the
Lenders and the Agent under the Credit Documents;
(viii) Liens in favor of the agent for the benefit of the
lenders and the agent under the FIL Credit Documents;
(ix) Liens in favor of Ericsson Business Networks AB under
the Pledge Agreement dated March 27, 1997 between Ericsson and
Flextronics Holdings AB;
(x) Liens securing Indebtedness or other obligations on
cash or cash equivalents to the extent such cash or cash
equivalents represent proceeds from such Indebtedness or other
obligations; and
(xi) rights of third parties in equipment or inventory
consigned to, or otherwise owned by such third party and which is
being stored on property owned or leased by, either Borrower or a
Subsidiary.
Provided, however, that the foregoing exceptions shall not permit any
Lien in any of the Collateral or in any other Equity Securities issued
by any Subsidiary of either Borrower and owned by such Borrower or any
of its other Subsidiaries, except for Liens in favor of Agent securing
the Obligations or pursuant to the FIL Credit Documents.
(c) Asset Dispositions. Neither Borrower nor any of their
Subsidiaries shall sell, lease, transfer or otherwise dispose of any of
their assets or property, whether now owned or hereafter acquired,
except for (i) assets or property sold, leased, transferred or otherwise
disposed of in the ordinary course of business for fair market value;
(ii) sales of accounts receivable in financing transactions, provided
that the aggregate principal amount of any accounts receivable sold in
any fiscal quarter of FIL shall not exceed thirty percent (30%) of the
aggregate principal amount of accounts receivable originated by FIL and
its Subsidiaries during such fiscal quarter; (iii) sales of duplicative
or excess assets existing as a result of transactions otherwise
permitted pursuant to Subparagraph 5.02(d), provided that the aggregate
principal amount of any such duplicative assets sold in any fiscal year
does not exceed five percent (5%) of all fixed assets of FIL and its
Subsidiaries net of depreciation held by FIL and its Subsidiaries as of
the end of the immediately preceding fiscal quarter; and (iv) sales or
transfers of assets or property to either Borrower or any Material
Subsidiary for a purchase price that is less than fair market value;
provided, however, that the foregoing exception shall not permit any
sale, lease, transfer or other disposition of any Collateral or of any
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other Equity Securities issued by any Subsidiary of either Borrower and
owned by either Borrower or any of their other Subsidiaries, except for
Liens in favor of Agent securing the Obligations or pursuant to the FIL
Credit Documents; and (v) assets sold and leased back by FIL or its
Subsidiaries in the ordinary course of business.
(d) Mergers, Acquisitions, Etc. Neither Borrower nor any of their
Subsidiaries shall consolidate with or merge into any other Person or
permit any other Person to merge into them, acquire any Person as a new
Subsidiary or acquire all or substantially all of the assets of any
other Person, except for the following:
(i) Borrowers and their Subsidiaries may merge with each
other, provided that (A) in any such merger involving either
Borrower, such Borrower is the surviving corporation and (B) no
Default has occurred and is continuing on the date of, or will
result after giving effect to, any such merger; and
(ii) Borrowers and their Subsidiaries may acquire any
Person as a new Subsidiary or of all or substantially all of the
assets of any Person, provided that:
(A) No Default has occurred and is continuing on
the date of, or will result after giving effect to, any
such acquisition;
(B) Such Person is not primarily engaged in any
business substantially different from (1) the present
business of the acquiring Borrower or Subsidiary or (2)
any business reasonably related thereto; and
(C) Borrowers or their Subsidiaries possess the
power to direct or cause the direction of the management
and policies of such Person.
(e) Investments. Neither Borrower nor any of their Subsidiaries
shall make any Investment except for the following:
(i) Investments permitted by the investment policy of FIL
set forth in Schedule 5.02(e) or, if any changes to the
investment policy of FIL are hereafter duly approved by the Board
of Directors of FIL, in any subsequent investment policy which is
the most recent investment policy delivered by FIL to Agent with
a certificate of FIL's chief financial officer to the effect that
such investment policy has been duly approved by FIL's Board of
Directors and is then in effect;
(ii) Investments listed in Schedule 5.02(e) existing on
the date of this Agreement;
(iii) Investments received by Borrowers and their
Subsidiaries in connection with the bankruptcy or reorganization
of customers and suppliers and in settlement of delinquent
obligations of, and other disputes with, customers and suppliers
arising in the ordinary course of business;
(iv) Investments by Borrowers and the Material
Subsidiaries and the Guarantors in each other;
(v) Investments consisting of loans to employees and
officers for travel, housing, relocation and other similar
expenses incurred in the ordinary course of business;
(vi) Investments of Borrowers and their Subsidiaries in
interest rate protection, currency swap and foreign exchange
arrangements, provided that all such arrangements are entered
into in connection with bona fide hedging operations and not for
speculation;
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(vii) Deposit accounts;
(viii) Investments permitted by Subparagraph 5.02(d);
(ix) Investment by FIL or its Subsidiaries of up to
$125,000,000 in Chatham Technologies, Inc.; and
(x) Other Investments, provided that:
(A) No Default has occurred and is continuing on
the date of, or will result after giving effect to, any
such Investment; and
(B) The aggregate consideration paid by FIL and its
Subsidiaries for all such Investments in any fiscal year
does not exceed five percent (5%) of the total assets of
FIL and its Subsidiaries at the end of the immediately
preceding fiscal quarter.
(f) Dividends, Redemptions, Etc. Neither Borrower nor any of
their Subsidiaries shall pay any dividends or make any distributions on
its Equity Securities; purchase, redeem, retire, defease or otherwise
acquire for value any of its Equity Securities; return any capital to
any holder of its Equity Securities as such; make any distribution of
assets, Equity Securities, obligations or securities to any holder of
its Equity Securities as such; or set apart any sum for any such
purpose; except as follows:
(i) Either Borrower or any of their Subsidiaries may pay
dividends on its capital stock payable solely in such Person's
own capital stock, provided that, in the case of any such
dividend payable by an Ineligible Material Subsidiary, such
dividend is delivered and pledged to Agent to the extent required
by Subparagraph 2.15(b); and
(ii) Any Subsidiary of either Borrower may pay dividends
to or repurchase its capital stock from such Borrower.
(g) Change in Business. Neither Borrower nor any of their
Subsidiaries shall engage to any material extent, either directly or
indirectly, in any business substantially different from (i) their
present business or (ii) any business reasonably related thereto.
(h) Employee Benefit Plans.
(i) Neither Borrower nor any ERISA Affiliate shall (A)
adopt or institute any Employee Benefit Plan that is an employee
pension benefit plan within the meaning of Section 3(2) of ERISA,
(B) take any action which will result in the partial or complete
withdrawal, within the meanings of sections 4203 and 4205 of
ERISA, from a Multiemployer Plan, (C) engage or permit any Person
to engage in any transaction prohibited by section 406 of ERISA
or section 4975 of the IRC involving any Employee Benefit Plan or
Multiemployer Plan which would subject either Borrower or any
ERISA Affiliate to any tax, penalty or other liability including
a liability to indemnify, (D) incur or allow to exist any
accumulated funding deficiency (within the meaning of section 412
of the IRC or section 302 of ERISA), (E) fail to make full
payment when due of all amounts due as contributions to any
Employee Benefit Plan or Multiemployer Plan, (F) fail to comply
with the requirements of section 4980B of the IRC or Part 6 of
Title I(B) of ERISA, or (G) adopt any amendment to any Employee
Benefit Plan which would require the posting of security pursuant
to section 401(a)(29) of the IRC, where singly or cumulatively,
the above would be reasonably and substantially likely to have a
Material Adverse Effect.
(ii) Neither Borrower nor any of their Subsidiaries shall
(A) engage in any transaction prohibited by any Governmental Rule
applicable to any Foreign Plan, (B) fail to make full payment
when due of all amounts due as contributions to any Foreign Plan
or (C) otherwise fail to comply with the requirements of any
Governmental Rule applicable to any Foreign Plan,
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where singly or cumulatively, the above would be reasonably and
substantially likely to have a Material Adverse Effect.
(i) Transactions With Affiliates. Neither Borrower nor any of
their Subsidiaries shall enter into any Contractual Obligation with any
Affiliate (other than FIL, any other borrower under the FIL Credit
Agreement or one of their Subsidiaries) or engage in any other
transaction with any such Affiliate except upon terms at least as
favorable to such Borrower or such Subsidiary as an arms-length
transaction with unaffiliated Persons, except as disclosed or reflected
in the Financial Statements of FIL dated December 31, 1999, furnished by
Borrowers to Agent prior to the date hereof, or in the Financial
Statements delivered to Agent pursuant to clause (i) or (ii) of
Subparagraph 5.01(a).
(j) Accounting Changes. Neither Borrower nor any of their
Subsidiaries shall change (i) their fiscal year (currently April 1
through March 31) or (ii) their accounting practices except as required
by GAAP.
(k) Burdensome Contractual Obligations. None of the Borrowers,
the Guarantors and any of their Subsidiaries will enter into any
Contractual Obligation (excluding this Agreement and the other Credit
Documents) that restricts the ability of any Subsidiary of FIL to pay or
make dividends or distributions in cash or kind, to make loans, advances
or other payments of whatsoever nature or to make transfers or
distributions of all or any part of their assets to Borrowers or to any
Subsidiary of such Subsidiary.
SECTION VI. DEFAULT.
6.01. Events of Default. The occurrence or existence of any one or
more of the following shall constitute an "Event of Default" hereunder:
(a) Non-Payment. Either Borrower shall (i) fail to pay when due
any principal of any Loan or (ii) fail to pay within three (3) Business
Days after the same becomes due any interest, fee or other payment
required under the terms of this Agreement or any of the other Credit
Documents; or
(b) Specific Defaults. Either Borrower or any of its Subsidiaries
shall fail to observe or perform any covenant, obligation, condition or
agreement set forth in Paragraph 5.02; or
(c) Other Defaults. Either Borrower or any of its Subsidiaries
shall fail to observe or perform any other covenant, obligation,
condition or agreement contained in this Agreement or the other Credit
Documents and such failure shall continue for fifteen (15) Business Days
after the earlier of (i) either Borrower's written acknowledgement of
such failure and (ii) Agent's or any Lender's written notice to
Borrowers of such failure; or
(d) Representations and Warranties. Any representation, warranty,
certificate, information or other statement (financial or otherwise)
made or furnished by or on behalf of either Borrower to Agent or any
Lender in or in connection with this Agreement or any of the other
Credit Documents, or as an inducement to Agent or any Lender to enter
into this Agreement, shall be false, incorrect, incomplete or misleading
in any material respect when made (or deemed made) or furnished and
either (i) Agent or any Lender has delivered to Borrowers written notice
thereof and such representation, warranty, certificate, information or
other statement cannot be remedied or (ii) such representation,
warranty, certificate, information or other statement continues to be
false, incorrect, incomplete or misleading in any material respect
thirty (30) days after the earlier of (A) either Borrower's written
acknowledgement that such representation, warranty, certificate,
information or other statement was false, incorrect, incomplete or
misleading in any material respect and (B) Agent's or any Lender's
written notice to Borrowers that such representation, warranty,
certificate, information or other statement was false, incorrect,
incomplete or misleading in any material respect; or
(e) Cross-Default. (i) Either Borrower or any of its Subsidiaries
shall fail to make any payment on account of any Indebtedness of such
Person (other than the Obligations) when due (whether at
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scheduled maturity, by required prepayment, upon acceleration or
otherwise) and such failure shall continue beyond any period of grace
provided with respect thereto, if the amount of such Indebtedness
exceeds $10,000,000 or the effect of such failure is to cause, or permit
the holder or holders thereof to cause, Indebtedness of Borrowers and
their Subsidiaries (other than the Obligations) in an aggregate amount
exceeding $10,000,000 to become due (whether at scheduled maturity, by
required prepayment, upon acceleration or otherwise); or (ii) either
Borrower or any of its Subsidiaries shall otherwise fail to observe or
perform any agreement, term or condition contained in any agreement or
instrument relating to any Indebtedness of such Person (other than the
Obligations), or any other event shall occur or condition shall exist,
if the effect of such failure, event or condition is to cause, or permit
the holder or holders thereof to cause, Indebtedness of Borrowers and
their Subsidiaries (other than the Obligations) in an aggregate amount
exceeding $10,000,000 to become due (and/or to be secured by cash
collateral); or (iii) any Event of Default, as defined in the FIL Credit
Agreement, shall occur, without regard to any waiver of such Event of
Default under the FIL Credit Agreement; or
(f) Insolvency, Voluntary Proceedings. Either Borrower, FIL or
any of their Subsidiaries shall (i) apply for or consent to the
appointment of a receiver, trustee, liquidator or custodian of itself or
of all or a substantial part of its property, (ii) be unable, or admit
in writing its inability, to pay its debts generally as they mature,
(iii) make a general assignment for the benefit of its or any of its
creditors, (iv) become insolvent (as such term may be defined or
interpreted under any applicable statute), (v) commence a voluntary case
or other proceeding seeking liquidation, reorganization or other relief
with respect to itself or its debts under any bankruptcy, insolvency or
other similar law now or hereafter in effect or consent to any such
relief or to the appointment of or taking possession of its property by
any official in an involuntary case or other proceeding commenced
against it, or (vi) take any action for the purpose of effecting any of
the foregoing; or either Borrower, FIL or any Material Subsidiary shall
be dissolved or liquidated in full or in part; or
(g) Involuntary Proceedings. Proceedings for the appointment of a
receiver, trustee, liquidator or custodian of FIL, either Borrower or
any of their Subsidiaries or of all or a substantial part of the
property thereof, or an involuntary case or other proceedings seeking
liquidation, reorganization or other relief with respect to FIL, either
Borrower or any of their Subsidiaries or the debts thereof under any
bankruptcy, insolvency or other similar law now or hereafter in effect
shall be commenced and an order for relief entered or such proceeding
shall not be dismissed or discharged within sixty (60) days of
commencement; or
(h) Judgments. (i) One or more judgments, orders, decrees or
arbitration awards requiring Borrowers and/or their Subsidiaries to pay
an aggregate amount of $10,000,000 or more (exclusive of amounts covered
by insurance issued by an insurer not an Affiliate of Borrowers and
otherwise satisfying the requirements set forth in Subparagraph 5.01(d))
shall be rendered against Borrowers and/or their Subsidiaries in
connection with any single or related series of transactions, incidents
or circumstances and the same shall not be satisfied, vacated or stayed
for a period of sixty (60) consecutive days; (ii) any judgment, writ,
assessment, warrant of attachment, tax lien or execution or similar
process shall be issued or levied against a substantial part of the
property of either Borrower or any of their Subsidiaries and the same
shall not be released, stayed, vacated or otherwise dismissed within
sixty (60) days after issue or levy; or (iii) any other judgments,
orders, decrees, arbitration awards, writs, assessments, warrants of
attachment, tax liens or executions or similar processes which, alone or
in the aggregate, are reasonably and substantially likely to have a
Material Adverse Effect are rendered, issued or levied; or
(i) Credit Documents. Any Credit Document or any material term
thereof shall cease to be, or be asserted by either Borrower or any of
their Subsidiaries not to be, a legal, valid and binding obligation of
either Borrower or any of their Subsidiaries enforceable in accordance
with its terms; or
(j) Employee Benefit Plans. Any Reportable Event which
constitutes grounds for the termination of any Employee Benefit Plan by
the PBGC or for the appointment of a trustee by the PBGC to administer
any Employee Benefit Plan shall occur, or any Employee Benefit Plan
shall be terminated within the meaning of Title IV of ERISA or a trustee
shall be appointed by the PBGC to administer any Employee Benefit Plan;
or
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(k) Change of Control. Any Change of Control shall occur; or
(l) Material Adverse Effect. Any event(s) or condition(s) which
is (are) reasonably and substantially likely to have a Material Adverse
Effect shall occur or exist.
6.02. Remedies. At any time after the occurrence and during the
continuance of any Event of Default (other than an Event of Default referred to
in Subparagraph 6.01(f) or 6.01(g)), Agent may, with the consent of the Required
Lenders, or shall, upon instructions from the Required Lenders, by written
notice to Borrowers, (a) terminate the Commitments and the obligations of
Lenders to make Loans and/or (b) declare all outstanding Obligations payable by
Borrowers to be immediately due and payable without presentment, demand, protest
or any other notice of any kind, all of which are hereby expressly waived,
anything contained herein or in the Notes to the contrary notwithstanding. Upon
the occurrence or existence of any Event of Default described in Subparagraph
6.01(f) or 6.01(g), immediately and without notice, (1) the Commitments and the
obligations of Lenders to make Loans shall automatically terminate and (2) all
outstanding Obligations payable by Borrowers hereunder shall automatically
become immediately due and payable, without presentment, demand, protest or any
other notice of any kind, all of which are hereby expressly waived, anything
contained herein or in the Notes to the contrary notwithstanding. In addition to
the foregoing remedies, upon the occurrence or existence of any Event of
Default, Agent may exercise any other right, power or remedy available to it
under any of the Credit Documents or otherwise by law, either by suit in equity
or by action at law, or both.
6.03. Lender Rate Contract Remedies. Notwithstanding any other provision
of this Section VI, each Lender or its Affiliate which has entered into a Lender
Rate Contract shall have the right, with prior notice to Agent, but without the
approval or consent of Agent or any other Lender, (a) to declare an event of
default, termination event or other similar event thereunder which will result
in the early termination of such Lender Rate Contract, (b) to determine net
termination amounts in accordance with the terms of such Lender Rate Contract
and to set-off amounts between Lender Rate Contracts of such Lender, and (c) to
prosecute any legal action against either Borrower or their Subsidiaries to
enforce net amounts owing to such Lender or its Affiliate under such Lender Rate
Contracts.
SECTION VII. THE AGENT AND RELATIONS AMONG LENDERS.
7.01. Appointment, Powers and Immunities. Each Lender hereby appoints
and authorizes Agent to act as its agent hereunder and under the other Credit
Documents with such powers as are expressly delegated to Agent by the terms of
this Agreement and the other Credit Documents, together with such other powers
as are reasonably incidental thereto. Agent shall not have any duties or
responsibilities except those expressly set forth in this Agreement or in any
other Credit Document, be a trustee for any Lender or have any fiduciary duty to
any Lender. Notwithstanding anything to the contrary contained herein Agent
shall not be required to take any action which is contrary to this Agreement or
any other Credit Document or any applicable Governmental Rule. Neither Agent nor
any Lender shall be responsible to any other Lender for any recitals,
statements, representations or warranties made by Borrowers or any of their
Subsidiaries contained in this Agreement or in any other Credit Document, for
the value, validity, effectiveness, genuineness, enforceability or sufficiency
of this Agreement or any other Credit Document or for any failure by Borrowers
or any of their Subsidiaries to perform their respective obligations hereunder
or thereunder. Agent may employ agents and attorneys-in-fact and shall not be
responsible to any Lender for the negligence or misconduct of any such agents or
attorneys-in-fact selected by it with reasonable care. Neither Agent nor any of
its directors, officers, employees, agents or advisors shall be responsible to
any Lender for any action taken or omitted to be taken by it or them hereunder
or under any other Credit Document or in connection herewith or therewith,
except for its or their own gross negligence or willful misconduct. Except as
otherwise provided under this Agreement, Agent shall take such action with
respect to the Credit Documents as shall be directed by the Required Lenders.
7.02. Reliance by Agent. Agent shall be entitled to rely upon any
certificate, notice or other document (including any cable, telegram, facsimile
or telex) believed by it in good faith to be genuine and correct and to have
been signed or sent by or on behalf of the proper Person or Persons, and upon
advice and statements of legal counsel, independent accountants and other
experts selected by Agent with reasonable care. As to any other matters not
expressly provided for by this Agreement, Agent shall not be required to take
any action or exercise any
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discretion, but shall be required to act or to refrain from acting upon
instructions of the Required Lenders and shall in all cases be fully protected
by Lenders in acting, or in refraining from acting, hereunder or under any other
Credit Document in accordance with the instructions of the Required Lenders, and
such instructions of the Required Lenders and any action taken or failure to act
pursuant thereto shall be binding on all of Lenders.
7.03. Defaults. Agent shall not be deemed to have knowledge or notice of
the occurrence of any Default unless Agent has received a written notice from a
Lender or either Borrower, referring to this Agreement, describing such Default
and stating that such notice is a "Notice of Default". If Agent receives such a
notice of the occurrence of a Default, Agent shall give prompt notice thereof to
Lenders. Agent shall take such action with respect to such Default as shall be
reasonably directed by the Required Lenders; provided, however, that until Agent
shall have received such directions, Agent may (but shall not be obligated to)
take such action, or refrain from taking such action, with respect to such
Default as it shall deem advisable in the best interest of Lenders.
7.04. Indemnification. Without limiting the Obligations of Borrowers
hereunder, each Lender agrees to indemnify Agent, ratably in accordance with
their Proportionate Shares, for any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever which may at any time be imposed on, incurred
by or asserted against Agent in any way relating to or arising out of this
Agreement or any documents contemplated by or referred to herein or therein or
the transactions contemplated hereby or thereby or the enforcement of any of the
terms hereof or thereof; provided, however, that no Lender shall be liable for
any of the foregoing to the extent they arise from Agent's gross negligence or
willful misconduct. Agent shall be fully justified in refusing to take or in
continuing to take any action hereunder unless it shall first be indemnified to
its satisfaction by Lenders 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
obligations of each Lender under this Paragraph 7.04 shall survive the payment
and performance of the Obligations, the termination of this Agreement and any
Lender ceasing to be a party to this Agreement (with respect to events which
occurred prior to the time such Lender ceased to be a Lender hereunder).
7.05. Non-Reliance. Each Lender represents that it has, independently
and without reliance on Agent, or any other Lender, and based on such documents
and information as it has deemed appropriate, made its own appraisal of the
business, prospects, management, financial condition and affairs of Borrowers
and their Subsidiaries and its own decision to enter into this Agreement and
agrees that it will, independently and without reliance upon Agent or any other
Lender, and based on such documents and information as it shall deem appropriate
at the time, continue to make its own appraisals and decisions in taking or not
taking action under this Agreement. Neither Agent nor any of its affiliates nor
any of their respective directors, officers, employees, agents or advisors shall
(a) be required to keep any Lender informed as to the performance or observance
by Borrowers or any of their Subsidiaries of the obligations under this
Agreement or any other document referred to or provided for herein or to make
inquiry of, or to inspect the properties or books of Borrowers or any of their
Subsidiaries; (b) have any duty or responsibility to provide any Lender with any
credit or other information concerning Borrowers or any of their Subsidiaries
which may come into the possession of Agent, except for notices, reports and
other documents and information expressly required to be furnished to Lenders by
Agent hereunder; or (c) be responsible to any Lender for (i) any recital,
statement, representation or warranty made by Borrowers or any officer, employee
or agent of Borrowers in this Agreement or in any of the other Credit Documents,
(ii) the value, validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement or any Credit Document, (iii) the value or
sufficiency of the Collateral or the validity or perfection of any of the liens
or security interests intended to be created by the Credit Documents, or (iv)
any failure by Borrowers to perform its obligations under this Agreement or any
other Credit Document.
7.06. Resignation or Removal of Agent. Agent may resign at any time by
giving thirty (30) days prior written notice thereof to Borrowers and Lenders,
and Agent may be removed at any time with or without cause by the Required
Lenders. Upon any such resignation or removal, the Required Lenders shall have
the right to appoint a successor Agent, which Agent, if not a Lender, shall be
reasonably acceptable to Borrowers; provided, however, that Borrowers shall have
no right to approve a successor Agent if a Default has occurred and is
continuing. 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 the duties and obligations
thereafter arising hereunder. After any retiring Agent's
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resignation or removal hereunder as Agent, the provisions of this Section VII
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.
7.07. Agent in its Individual Capacity. Agent and its affiliates may
make loans to, accept deposits from and generally engage in any kind of banking
or other business with Borrowers and their Subsidiaries and affiliates as though
Agent were not Agent hereunder. With respect to Loans, if any, made by Agent in
its capacity as a Lender, Agent in its capacity as a Lender shall have the same
rights and powers under this Agreement and the other Credit Documents as any
other Lender and may exercise the same as though it were not Agent, and the
terms "Lender" or "Lenders" shall include Agent in its capacity as a Lender.
7.08. Documentation Agent, Managing Agents and Co-Agent. Documentation
Agent, Managing Agents and Co-Agent do not assume any responsibility or
obligation under this Agreement or any of the other Credit Documents or any
duties as agents for the Lenders. The title "Documentation Agent", "Managing
Agent" and "Co-Agent" implies no fiduciary responsibility on the part of any
Documentation Agent, Managing Agent and Co-Agent to any Person, and the use of
such title does not impose on any Documentation Agent, Managing Agent and
Co-Agent any duties or obligations under this Agreement or any of the other
Credit Documents.
SECTION VIII. MISCELLANEOUS.
8.01. Notices. Except as otherwise provided herein, all notices,
requests, demands, consents, instructions or other communications to or upon
either Borrower, any Lender or Agent under this Agreement or the other Credit
Documents shall be in writing and faxed, mailed or delivered, if to either
Borrower or Agent, at its respective facsimile number or address set forth below
or, if to any Lender, at the address or facsimile number specified for such
Lender in Part B of Schedule I (or to such other facsimile number or address for
any party as indicated in any notice given by that party to the other parties).
All such notices and communications shall be effective (a) when sent by an
overnight courier service of recognized standing, on the second Business Day
following the deposit with such service; (b) when delivered by hand, upon
delivery; (c) when faxed, upon confirmation of receipt; or (d) by any other
means, upon receipt; provided, however, that any notice delivered to Agent under
Section II shall not be effective until received by Agent.
Agent: ABN AMRO Bank N.V.
Syndications Group
1325 Avenue of the Americas, 9th Floor
New York, NY 10019
U.S.A.
Attn: Linda Boardman
Tel. No: (212) 314-1724
Fax. No: (212) 314-1712
With a copy in each case to:
ABN AMRO Bank N.V.
101 California Street, Suite 4550
San Francisco, CA 94111-5812
Attn: Mathew Harvey
Tel: (415) 984-3733
Fax: (415) 362-3524
Borrower: Flextronics International USA, Inc.
2090 Fortune Drive
San Jose, CA 95131
Attn: Treasurer
Tel. No: (408) 576-7233
Fax. No: (408) 526-9215
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Borrower: The DII Group, Inc.
2090 Fortune Drive
San Jose, CA 95131
Attn: Treasurer
Tel. No: (408) 576-7233
Fax. No: (408) 526-9215
Each Notice of Borrowing, Notice of Interest Period Selection and Notice of Term
Loan Conversion shall be given by the applicable Borrower to Agent's New York
office located at the address referred to above during such office's normal
business hours; provided, however, that any such notice received by Agent after
11:00 a.m. (California time) on any Business Day shall be deemed received by
Agent on the next Business Day. In any case where this Agreement authorizes
notices, requests, demands or other communications by Borrowers to Agent or any
Lender to be made by telephone or facsimile, Agent or any Lender may
conclusively presume that anyone purporting to be a person designated in any
incumbency certificate or other similar document received by Agent or a Lender
is such a person.
8.02. Expenses. Borrowers jointly and severally agree to pay on demand,
whether or not any Loan is made hereunder, (a) all reasonable fees and expenses,
including reasonable attorneys' fees and expenses, incurred by Agent in
connection with the syndication of the Loans, the preparation, negotiation,
execution and delivery of, and the exercise of its duties under, this Agreement
and the other Credit Documents, and the preparation, negotiation, execution and
delivery of amendments and waivers hereunder and thereunder and (b) all
reasonable fees and expenses, including reasonable attorneys' fees and expenses,
incurred by Agent and Lenders in the enforcement or attempted enforcement of any
of the Obligations or in preserving any of Agent's or Lenders' rights and
remedies (including, without limitation, all such fees and expenses incurred in
connection with any "workout" or restructuring affecting the Credit Documents or
the Obligations or any bankruptcy or similar proceeding involving Borrowers or
any of their Subsidiaries). As used herein, the term "reasonable attorneys' fees
and expenses" shall include, without limitation, allocable costs and expenses of
Agent's and Lenders' in-house legal counsel and staff. The obligations of
Borrowers under this Paragraph 8.02 shall survive the payment and performance of
the Obligations and the termination of this Agreement.
8.03. Indemnification. To the fullest extent permitted by law, Borrowers
jointly and severally agree to protect, indemnify, defend and hold harmless
Agent, Lenders and their Affiliates and their respective directors, officers,
employees, agents and advisors ("Indemnitees") from and against any and all
liabilities, losses, damages or expenses of any kind or nature and from any
suits, claims or demands (including in respect of or for reasonable attorney's
fees and other expenses) arising on account of or in connection with any matter
or thing or action or failure to act by Indemnitees, or any of them, arising out
of or relating to the Credit Documents or any transaction contemplated thereby,
including without limitation any use by Borrowers of any proceeds of the Loans,
except to the extent such liability arises from the willful misconduct or gross
negligence of such Indemnitee. Upon receiving knowledge of any suit, claim or
demand asserted by a third party that Agent or any Lender believes is covered by
this indemnity, Agent or such Lender shall give Borrowers notice of the matter
and an opportunity to defend it, at Borrowers' sole cost and expense, with legal
counsel satisfactory to Agent or such Lender, as the case may be. Agent or such
Lender may also require Borrowers to defend the matter. Any failure or delay of
Agent or any Lender to notify Borrowers of any such suit, claim or demand shall
not relieve Borrowers of their obligations under this Paragraph 8.03 but shall
reduce such obligations to the extent of any increase in those obligations
caused solely by any such failure or delay which is unreasonable. The
obligations of Borrowers under this Paragraph 8.03 shall survive the payment and
performance of the Obligations and the termination of this Agreement.
8.04. Waivers; Amendments. Any term, covenant, agreement or condition of
this Agreement or any other Credit Document may be amended or waived, and any
consent under this Agreement or any other Credit Document may be given, if such
amendment, waiver or consent is in writing and is signed by Borrowers and the
Required Lenders (or Agent on behalf of the Required Lenders with the written
approval of the Required Lenders); provided, however that:
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<PAGE> 53
(a) Any amendment, waiver or consent which would (i) increase the
Total Facility A Commitment, (ii) postpone, delay or extend the Facility
A Revolving Loan Maturity Date, (iii) reduce the principal of or
interest on the Facility A Loans, the Facility A Commitment Fees or any
other fees or amounts payable for the account of all Facility A Lenders
hereunder or postpone, delay or extend the scheduled date for payment of
any such principal, interest, fees or amounts must be in writing and
signed or approved in writing by all Facility A Lenders;
(b) Any amendment, waiver or consent which would (i) increase the
Total Facility B Commitment, (ii) postpone, delay or extend the Facility
B Revolving Loan Maturity Date or the Term Loan Maturity Date, (iii)
reduce the principal of or interest on the Facility B Loans, the
Facility B Commitment Fees or any other fees or amounts payable for the
account of all Facility B Lenders hereunder or postpone, delay or extend
the scheduled date for payment of any such principal, interest, fees or
amounts must be in writing and signed or approved in writing by all
Facility B Lenders;
(c) Any amendment, waiver or consent which would (i) reduce the
principal of or interest on the Loans or any fees or other amounts
payable for the account of all Lenders hereunder or extend the scheduled
date for payment of any such principal, interest, fees or amounts, (ii)
reduce any fees or other amounts payable for the account of all Lenders
hereunder or postpone, delay or extend the scheduled date for payment of
any such fees or amounts, (iii) amend this Paragraph 8.04, (iv) amend
the definition of Required Lenders, or (v) release any substantial part
of the Collateral or any Guarantor (except for releases as provided in
Paragraph 2.15), must be in writing and signed or approved in writing by
all Lenders;
(d) Any amendment, waiver or consent which would (i) increase or
decrease the Facility A Commitment of any Facility A Lender (except for
a pro rata decrease in the Facility A Commitments of all Facility A
Lenders) or (ii) increase or decrease the Facility B Commitment of any
Facility B Lender (except for a pro rata decrease in the Facility B
Commitments of all Facility B Lenders) must be in writing and signed by
such Lender; and
(e) Any amendment, waiver or consent which affects the rights or
obligations of Agent must be in writing and signed by Agent.
No failure or delay by Agent or any Lender in exercising any right under this
Agreement or any other Credit Document shall operate as a waiver thereof or of
any other right hereunder or thereunder nor shall any single or partial exercise
of any such right preclude any other further exercise thereof or of any other
right hereunder or thereunder. Unless otherwise specified in such waiver or
consent, a waiver or consent given hereunder shall be effective only in the
specific instance and for the specific purpose for which given.
8.05. Successors and Assigns.
(a) Binding Effect. This Agreement and the other Credit Documents
shall be binding upon and inure to the benefit of Borrowers, Lenders,
Agent, all future holders of the Notes and their respective successors
and permitted assigns, except that neither Borrower may assign or
transfer any of its rights or obligations under any Credit Document
without the prior written consent of Agent and each Lender.
(b) Participations. Any Lender may at any time sell to one or
more banks or other financial institutions ("Participants")
participating interests in any Loan owing to such Lender, any Note held
by such Lender, any Commitment of such Lender or any other interest of
such Lender under this Agreement and the other Credit Documents. In the
event of any such sale by a Lender of participating interests, such
Lender's obligations under this Agreement shall remain unchanged, such
Lender shall remain solely responsible for the performance thereof, such
Lender shall remain the holder of its Notes for all purposes under this
Agreement and Borrowers and Agent shall continue to deal solely and
directly with such Lender in connection with such Lender's rights and
obligations under this Agreement. Any agreement pursuant to which any
such sale is effected may require the selling Lender to obtain the
consent of the Participant in order for such Lender to agree in writing
to any amendment, waiver or consent of a type specified in Subparagraph
8.04(a), Subparagraph 8.04(b), Subparagraph 8.04(c) or Subparagraph
8.04(d) to the extent applicable but may not otherwise require the
selling Lender to obtain the consent of such Participant to any
49
<PAGE> 54
other amendment, waiver or consent hereunder. Borrowers also agree that
any Lender which has transferred any participating interest in its
Commitments or Loans shall, notwithstanding any such transfer, be
entitled to the full benefits accorded such Lender under Paragraph 2.12,
Paragraph 2.13, and Paragraph 2.14, as if such Lender had not made such
transfer.
(c) Assignments. Any Lender may, at any time, sell and assign to
any other Lender or any Eligible Assignee (individually, an "Assignee
Lender") all or a portion of its rights and obligations under this
Agreement and the other Credit Documents (such a sale and assignment to
be referred to herein as an "Assignment") pursuant to an assignment
agreement in the form of Exhibit F (an "Assignment Agreement"), executed
by each Assignee Lender and such assignor Lender (an "Assignor Lender")
and delivered to Agent for its acceptance and recording in the Register;
provided, however, that:
(i) Without the written consent of Agent and, if no
Default has occurred and is continuing, FIL (which consent of
Agent and FIL shall not be unreasonably withheld), no Lender may
make any Assignment of its Commitment or Loans to any Assignee
Lender which is not, immediately prior to such Assignment, a
Lender hereunder or an Affiliate thereof;
(ii) Without the written consent of Agent and, if no
Default has occurred and is continuing, FIL (which consent of
Agent and FIL shall not be unreasonably withheld), no Facility A
Lender may make any Assignment of its Facility A Commitment and
Facility A Loans to any Assignee Lender if, after giving effect
to such Assignment, the Facility A Commitment (or, after the
termination of the Facility A Commitments, the Facility A Loans)
of such Lender or such Assignee Lender would be less than Five
Million Dollars ($5,000,000), except that a Facility A Lender may
make an Assignment which reduces its Facility A Commitment (or,
after the termination of the Facility A Commitments, its Facility
A Loans) to zero without the written consent of FIL and
Administrative Agent;
(iii) Without the written consent of Agent and, if no
Default has occurred and is continuing, FIL (which consent of
Agent and FIL shall not be unreasonably withheld), no Facility B
Lender may make any Assignment of its Facility B Commitment and
Facility B Loans to any Assignee Lender if, after giving effect
to such Assignment, the Facility B Commitment (or, after the
termination of the Facility B Commitments, the Facility B Loans)
of such Lender or such Assignee Lender would be less than Five
Million Dollars ($5,000,000), except that a Facility B Lender may
make an Assignment which reduces its Facility B Commitment (or,
after the termination of the Facility B Commitments, its Facility
B Loans) to zero without the written consent of FIL and
Administrative Agent;
(iv) Without the written consent of Agent and, if no
Default has occurred and is continuing, FIL (which consent of
Agent and FIL shall not be unreasonably withheld), no Facility A
Lender may make any Assignment of its Facility A Commitment and
Facility A Loans which does not assign and delegate an equal pro
rata interest in such Facility A Lender's Facility A Commitment,
Facility A Loans and all other rights, duties and obligations of
such Facility A Lender under this Agreement and the other Credit
Documents relating to Facility A;
(v) Without the written consent of Agent and, if no
Default has occurred and is continuing, FIL (which consent of
Agent and FIL shall not be unreasonably withheld), no Facility B
Lender may make any Assignment of its Facility B Commitment and
Facility B Loans which does not assign and delegate an equal pro
rata interest in such Facility B Lender's Facility B Commitment,
Facility B Loans and all other rights, duties and obligations of
such Facility B Lender under this Agreement and the other Credit
Documents relating to Facility B; and
(vi) Any Assignor Lender which is, or which has an
Affiliate which is, a party to a Lender Rate Contract may not
make an Assignment of all of its Commitments or all of its Loans
to an Assignee Lender unless such Assignee Lender or its
Affiliate shall also assume all obligations of such Assignor
Lender or its Affiliate with respect to such Lender Rate
Contract.
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<PAGE> 55
Upon such execution, delivery, acceptance and recording of each
Assignment Agreement, from and after the Assignment Effective Date
determined pursuant to such Assignment Agreement, (A) each Assignee
Lender thereunder shall be a Lender hereunder with Commitments or Loans
as set forth on Attachment 1 to such Assignment Agreement (under the
caption "Commitments or Loans After Assignment") and shall have the
rights, duties and obligations of such a Lender under this Agreement and
the other Credit Documents, and (B) the Assignor Lender thereunder shall
be a Lender with Commitments or Loans as set forth on Attachment 1 to
such Assignment Agreement (under the caption "Commitments or Loans After
Assignment"), or, if the Commitments or Loans of the Assignor Lender
have been reduced to zero, the Assignor Lender shall cease to be a
Lender and to have any obligation to make any Loan; provided, however,
that any such Assignor Lender which ceases to be a Lender shall continue
to be entitled to the benefits of any provision of this Agreement which
by its terms survives the termination of this Agreement. Each Assignment
Agreement shall be deemed to amend Schedule I to the extent, and only to
the extent, necessary to reflect the addition of each Assignee Lender,
the deletion of each Assignor Lender which reduces its Commitments or
Loans to zero, and the resulting adjustment of Commitments or Loans
arising from the purchase by each Assignee Lender of all or a portion of
the rights and obligations of an Assignor Lender under this Agreement
and the other Credit Documents. On or prior to the Assignment Effective
Date determined pursuant to each Assignment Agreement, Borrowers, at
their own expense, shall, if requested by Assignee Lenders, execute and
deliver to Agent, in exchange for the surrendered Notes, if any, of the
Assignor Lender thereunder, new Notes to the order of each Assignee
Lender thereunder and, if the Assignor Lender is continuing as a Lender
hereunder, new Notes to the order of the Assignor Lender. The Notes
surrendered by the Assignor Lender shall be returned by Agent to
Borrowers marked "replaced". Each Assignee Lender which becomes a Lender
and was not previously such a Lender hereunder shall, prior to becoming
such a Lender, deliver such certificates and other evidence as is
required by Subparagraph 2.13(b).
(d) Register. Agent shall maintain at its address referred to in
Paragraph 8.01 a copy of each Assignment Agreement delivered to it and a
register (the "Register") for the recordation of the names and addresses
of Lenders and the Commitments or Loans of each Lender from time to
time. The entries in the Register shall be conclusive in the absence of
manifest error, and Borrowers, Agent and Lenders may treat each Person
whose name is recorded in the Register as the owner of the Commitments
or Loans recorded therein for all purposes of this Agreement. The
Register shall be available for inspection by Borrowers or any Lender at
any reasonable time and from time to time upon reasonable prior notice.
(e) Registration. Upon its receipt of an Assignment Agreement
executed by an Assignor Lender and an Assignee Lender (and, to the
extent required by Subparagraph 8.05(c), by Borrowers and Agent)
together with payment to Agent by Assignor Lender of a registration and
processing fee of $3,000, Agent shall (i) promptly accept such
Assignment Agreement and (ii) on the Effective Date determined pursuant
thereto record the information contained therein in the Register and
give notice of such acceptance and recordation to Lenders and Borrowers.
Agent may, from time to time at its election, prepare and deliver to
Lenders and Borrowers a revised Schedule I reflecting the names,
addresses and respective Commitments or Loans of all Lenders then
parties hereto.
(f) Confidentiality. Subject to Paragraph 8.11, Agent and Lenders
may disclose the Credit Documents and any financial or other information
relating to Borrowers, FIL or any Subsidiary to each other or to any
potential Participant or Assignee Lender.
(g) Pledges to Federal Reserve Banks. Notwithstanding any other
provision of this Agreement, any Lender may at any time assign all or a
portion of its rights under this Agreement and the other Credit
Documents to a Federal Reserve Bank. No such assignment shall relieve
the assigning Lender from its obligations under this Agreement and the
other Credit Documents.
8.06. Setoff; Security Interest.
(a) Setoff. In addition to any rights and remedies of Lenders
provided by law, each Lender shall have the right, with the prior
consent of Agent but without prior notice to or consent of Borrowers,
any such notice and consent being expressly waived by Borrowers to the
extent permitted by applicable
51
<PAGE> 56
law, upon the occurrence and during the continuance of an Event of
Default, to set-off and apply against the Obligations of either Borrower
any amount owing from such Lender to such Borrower. The aforesaid right
of set-off may be exercised by such Lender against either Borrower or
against any trustee in bankruptcy, debtor in possession, assignee for
the benefit of creditors, receiver or execution, judgment or attachment
creditor of such Borrower or against anyone else claiming through or
against such Borrower or such trustee in bankruptcy, debtor in
possession, assignee for the benefit of creditors, receiver, or
execution, judgment or attachment creditor, notwithstanding the fact
that such right of set-off may not have been exercised by such Lender at
any prior time. Each Lender agrees promptly to notify the applicable
Borrower after any such set-off and application made by such Lender,
provided that the failure to give such notice shall not affect the
validity of such set-off and application.
(b) Security Interest. As security for the Obligations, each
Borrower hereby grants to Agent and each Lender, for the benefit of all
Lenders, a continuing security interest in any and all deposit accounts
or moneys of such Borrower now or hereafter maintained with such Lender.
Each Lender shall have all of the rights of a secured party with respect
to such security interest.
8.07. No Third Party Rights. Nothing expressed in or to be implied from
this Agreement is intended to give, or shall be construed to give, any Person,
other than the parties hereto and their permitted successors and assigns
hereunder, any benefit or legal or equitable right, remedy or claim under or by
virtue of this Agreement or under or by virtue of any provision herein.
8.08. Partial Invalidity. If at any time any provision of this Agreement
is or becomes illegal, invalid or unenforceable in any respect under the law or
any jurisdiction, neither the legality, validity or enforceability of the
remaining provisions of this Agreement nor the legality, validity or
enforceability of such provision under the law of any other jurisdiction shall
in any way be affected or impaired thereby.
8.09. Jury Trial. EACH OF BORROWERS, LENDERS AND AGENT, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL
BY JURY AS TO ANY ISSUE RELATING HERETO IN ANY ACTION, PROCEEDING, OR
COUNTERCLAIM ARISING OUT OF OR RELATING TO ANY CREDIT DOCUMENT.
8.10. Counterparts. This Agreement may be executed in any number of
identical counterparts, any set of which signed by all the parties hereto shall
be deemed to constitute a complete, executed original for all purposes.
8.11. Borrowers' Liabilities. Each Borrower is jointly and severally
liable for the payment and performance of all other Obligations under this
Agreement and the other Credit Documents, and each Borrower is liable for the
payment and performance of all Obligations under this Agreement and the other
Credit Documents as provided in the Guaranty.
8.12. Confidentiality. Neither any Lender nor Agent shall disclose to
any Person any information with respect to Borrowers or any of their
Subsidiaries which is furnished pursuant to this Agreement or under the other
Credit Documents, except that any Lender or Agent may disclose any such
information (a) to its own directors, officers, employees, auditors, counsel and
other advisors and to its Affiliates; (b) to any other Lender or Agent; (c)
which is otherwise available to the public; (d) if required or appropriate in
any report, statement or testimony submitted to any Governmental Authority
having or claiming to have jurisdiction over such Lender or Agent; (e) if
required in response to any summons or subpoena; (f) in connection with any
enforcement by Lenders and Agent of their rights under this Agreement or the
other Credit Documents or any litigation among the parties relating to the
Credit Documents or the transactions contemplated thereby; (g) to comply with
any Requirement of Law applicable to such Lender or Agent; (h) to any Assignee
Lender or Participant or any prospective Assignee Lender or Participant,
provided that such Assignee Lender or Participant or prospective Assignee Lender
or Participant agrees to be bound by this Paragraph 8.12; or (i) otherwise with
the prior consent of the applicable Borrower; provided, however, that (i) any
Lender or Agent served with any summons or subpoena demanding the disclosure of
any such information shall use reasonable efforts to notify Borrowers promptly
of such summons or subpoena if not prohibited by any Requirement of Law and, if
requested by Borrowers and not disadvantageous to such Lender or Agent, to
cooperate with Borrowers in obtaining a protective order restricting such
disclosure, and (ii) any
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<PAGE> 57
disclosure made in violation of this Agreement shall not affect the obligations
of Borrowers and their Subsidiaries under this Agreement and the other Credit
Documents.
8.13. Consent to Jurisdiction. Each Borrower irrevocably submits to the
non-exclusive jurisdiction of the courts of the State of California and the
courts of the United States of America located in the Northern District of
California and agrees that any legal action, suit or proceeding arising out of
or relating to this Agreement or any of the other Credit Documents may be
brought against such party in any such courts. Final judgment against either
Borrower in any such action, suit or proceeding shall be conclusive and may be
enforced in any other jurisdiction by suit on the judgment, a certified or
exemplified copy of which shall be conclusive evidence of the judgment, or in
any other manner provided by law. Nothing in this Subparagraph 8.13 shall affect
the right of Agent or any Lender to commence legal proceedings or otherwise sue
either Borrower in any other appropriate jurisdiction, or concurrently in more
than one jurisdiction, or to serve process, pleadings and other papers upon
either Borrower in any manner authorized by the laws of any such jurisdiction.
Each Borrower agrees that process served either personally or by registered mail
shall, to the extent permitted by law, constitute adequate service of process in
any such suit. Each Borrower irrevocably waives to the fullest extent permitted
by applicable law (a) any objection which it may have now or in the future to
the laying of the venue of any such action, suit or proceeding in any court
referred to in the first sentence above; (b) any claim that any such action,
suit or proceeding has been brought in an inconvenient forum; (c) its right of
removal of any matter commenced by any other party in the courts of the State of
California to any court of the United States of America; (d) any immunity which
it or its assets may have in respect of its obligations under this Agreement or
any other Credit Document from any suit, execution, attachment (whether
provisional or final, in aid of execution, before judgment or otherwise) or
other legal process; and (e) any right it may have to require the moving party
in any suit, action or proceeding brought in any of the courts referred to above
arising out of or in connection with this Agreement or any other Credit Document
to post security for the costs of such Borrower or to post a bond or to take
similar action.
8.14. Usury. In no event shall any provision of this Agreement or any
other Credit Document ever obligate either Borrower to pay or allow any Lender
to collect interest on any Loan or any other Obligation of either Borrower
hereunder at a rate greater than the maximum non-usurious rate permitted by
applicable law (herein referred to as the "highest lawful rate"), or obligate
either Borrower to pay any taxes, assessments, charges, insurance premiums or
other amounts to the extent that such payments, when added to the interest
payable on the Loans or any other Obligations, would be held to constitute the
payment by either Borrower of interest at a rate greater than the highest lawful
rate. This provision shall control over any provision to the contrary. Without
limiting the generality of the foregoing, in the event the maturity of all or
any part of the principal amount of the Obligations of either Borrower shall be
accelerated for any reason, then such principal amount so accelerated shall be
credited with any interest theretofore paid thereon in advance and remaining
unearned at the time of such acceleration. If, pursuant to the terms of this
Agreement, any funds are applied to the payment of any part of the principal
amount of the Obligations of either Borrower prior to the maturity thereof, then
(a) any interest which would otherwise thereafter accrue on the principal amount
so paid by such application shall be canceled, and (b) the Obligations of either
Borrower remaining unpaid after such application shall be credited with the
amount of all interest, if any, theretofore collected on the principal amount so
paid by such application and remaining unearned at the date of said application;
and if the funds so applied shall be sufficient to pay in full all the
Obligations of such Borrower, then the Lenders shall refund to such Borrower all
interest theretofore paid thereon in advance and remaining unearned at the time
of such acceleration. Regardless of any other provision in this Agreement or any
other Credit Document, neither Borrower shall be required to pay any unearned
interest on any Obligations or any portion thereof, or be required to pay
interest thereon at a rate in excess of the highest lawful rate construed by
courts having competent jurisdiction thereof.
8.15. Effect. On the Closing Date and upon the repayment in full of all
existing monetary obligations outstanding under the Existing FIUI Credit
Agreement, (a) the Existing FIUI Credit Agreement as well as the Existing FIUI
Credit Documents shall be terminated and deemed to have been replaced by this
Agreement and the other Credit Documents; and (b) all Liens created pursuant to
the Existing FIUI Credit Agreement and the other FIUI Credit Documents shall
terminate and be released; provided, however, that nothing contained herein
shall have any effect on Borrower's obligations to pay amounts (if any) payable
under Subparagraph 2.10(c), Subparagraph 2.10(d), Subparagraph 2.11(a),
Paragraph 2.12, Paragraph 8.02, or Paragraph 8.03 of the Existing FIUI Credit
Agreement which by their terms expressly provide that they shall survive the
payment and performance of the Obligations and the termination of the Existing
FIUI Credit Agreement. Agent (as agent under the Existing FIUI
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Credit Agreement), from time to time, upon request by Borrower shall, without
further consideration other than reimbursement for any costs and expenses,
execute, deliver and acknowledge all such documents, agreements, certificates
and instruments and do such acts as Borrower may reasonably require to more
effectively evidence or effectuate the termination of such Liens.
[The first signature page follows.]
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<PAGE> 59
IN WITNESS WHEREOF, Borrowers, Agent, Documentation Agent, Managing
Agents, Co-Agent and Lenders have caused this Agreement to be executed as of the
day and year first above written.
BORROWERS: FLEXTRONICS INTERNATIONAL U.S.A., INC.
By:
--------------------------------------
Name:
-------------------------------
Title:
------------------------------
THE DII GROUP, INC.
By:
--------------------------------------
Name:
-------------------------------
Title:
------------------------------
AGENT: ABN AMRO BANK N.V.,
As Agent
By:
--------------------------------------
Name:
-------------------------------
Title:
------------------------------
By:
--------------------------------------
Name:
-------------------------------
Title:
------------------------------
S-1
<PAGE> 60
DOCUMENTATION AGENT: FLEET NATIONAL BANK,
As Documentation Agent
By:
--------------------------------------
Name:
-------------------------------
Title:
------------------------------
By:
--------------------------------------
Name:
-------------------------------
Title:
------------------------------
MANAGING AGENTS: BANK OF AMERICA, NATIONAL ASSOCIATION,
As a Managing Agent
By:
--------------------------------------
Name:
-------------------------------
Title:
------------------------------
By:
--------------------------------------
Name:
-------------------------------
Title:
------------------------------
CITICORP USA, INC.,
As a Managing Agent
By:
--------------------------------------
Name:
-------------------------------
Title:
------------------------------
By:
--------------------------------------
Name:
-------------------------------
Title:
------------------------------
S-2
<PAGE> 61
CO-AGENT AND LENDERS: ABN AMRO BANK N.V.,
As a Lender
By:
-----------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
By:
-----------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
FLEET NATIONAL BANK,
As a Lender
By:
-----------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
By:
-----------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
BANK OF AMERICA, NATIONAL ASSOCIATION,
As a Lender
By:
-----------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
By:
-----------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
CITICORP USA, INC.,
As a Lender
By:
-----------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
By:
-----------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
S-3
<PAGE> 62
THE BANK OF NOVA SCOTIA,
As a Co-Agent and a Lender
By:
-----------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
By:
-----------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
BANK AUSTRIA CREDITANSTALT CORPORATE FINANCE INC.,
As a Lender
By:
-----------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
By:
-----------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
BANQUE NATIONALE DE PARIS,
As a Lender
By:
-----------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
By:
-----------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
DEN DANKSE BANK AKTIESELSKAB,
As a Lender
By:
-----------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
By:
-----------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
S-4
<PAGE> 63
THE FUJI BANK, LIMITED, LOS ANGELES AGENCY,
As a Lender
By:
-----------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
By:
-----------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
THE INDUSTRIAL BANK OF JAPAN, LIMITED,
As a Lender
By:
-----------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
By:
-----------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
THE SUMITOMO BANK, LIMITED,
As a Lender
By:
-----------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
By:
-----------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
WELLS FARGO BANK, N.A.,
As a Lender
By:
-----------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
By:
-----------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
S-5
<PAGE> 64
THE DAI-ICHI KANGYO BANK, LTD.,
As a Lender
By:
-----------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
By:
-----------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
ALLIED IRISH BANK,
As a Lender
By:
-----------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
By:
-----------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
BANCA DI ROMA S.P.A. - SINGAPORE BRANCH,
As a Lender
By:
-----------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
By:
-----------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
BANK HAPOALIM, B.M.,
As a Lender
By:
-----------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
By:
-----------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
S-6
<PAGE> 65
COMERICA BANK,
As a Lender
By:
-----------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
By:
-----------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
S-7
<PAGE> 66
SCHEDULE II
PRICING GRID
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------
APPLICABLE
MARGIN APPLICABLE
FIL'S FOR MARGIN FOR
DEBT/ PRICING BASE RATE LIBOR FACILITY A FACILITY B
EBITDA PERIOD BORROWINGS AND BORROWINGS AND COMMITMENT FEE COMMITMENT FEE
RATIO LEVEL PORTIONS LIBOR PORTIONS PERCENTAGE PERCENTAGE
------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
<1.00 1 0% 0.625% 0.175% 0.150%
-
>1.00,
<1.50 2 0% 0.750% 0.175% 0.150%
-
>1.50,
<2.00 3 0% 0.875% 0.200% 0.175%
-
>2.00,
<2.50 4 0% 1.000% 0.225% 0.200%
-
>2.50,
<3.00 5 0% 1.250% 0.300% 0.250%
-
>3.00 6 0% 1.750% 0.375% 0.300%
------------------------------------------------------------------------------------------
</TABLE>
EXPLANATION
1. The Applicable Margin For Base Rate Borrowings, Base Rate Portions,
LIBOR Borrowings, LIBOR Portions, the Facility A Commitment Fee
Percentage and the Facility B Commitment Fee Percentage will be set for
each Pricing Period and will vary depending upon whether such period is
a Level 1 Period, a Level 2 Period, a Level 3 Period, a Level 4 Period,
a Level 5 Period or a Level 6 Period (each a "Pricing Period Level").
The applicable Pricing Period Level will be determined based on FIL's
corresponding Debt/EBITDA Ratio for the immediately preceding
consecutive four-quarter period.
2. The first Pricing Period, which commences on the date of this Agreement
and ends 45 days after the quarter ended June 30, 2000, will be a Level
4 Period.
3. The second Pricing Period, which commences 45 days after the end of June
30, 2000 calendar quarter and ends 45 days after the quarter ended
September 30, 2000, will be a Level 1 Period, a Level 2 Period, a Level
3 Period, a Level 4 Period, a Level 5 Period or a Level 6 Period,
depending upon FIL's Debt/EBITDA Ratio for the consecutive four-quarter
period ending on June 30, 2000.
4. Each Pricing Period thereafter will commence 45 days after the end of
the immediately preceding quarter and will end 45 days after the end of
the next applicable quarter and will be a Level 1 Period, a Level 2
Period, a Level 3 Period, a Level 4 Period, a Level 5 Period or a Level
6 Period depending upon FIL's Debt/EBITDA Ratio for the consecutive
four-quarter period ending on the last day of the immediately preceding
quarter.
5. Level 2 pricing will apply during any Pricing Period (other than the
first Pricing Period) in which FIL's senior unsecured long-term debt
rating from S&P or Moody's is equal to or better than either BBB- or
Baa3. Such pricing adjustment (if any) occurring as a result of such
debt rating will take place when FIL notifies Agent that such debt
rating has been achieved, and will continue until such debt rating drops
below BBB- or Baa3 in which case the pricing will be calculated as set
forth above.
II-1
<PAGE> 67
6. Examples:
(a) FIL's Debt/EBITDA Ratio is 1.76 for the consecutive
four-quarter period ending on June 30, 2000, and FIL's senior unsecured
long-term debt rating from S&P or Moody's is less than either BBB- of
Baa3. The Pricing Period commencing 45 days after the quarter ended June
30, 2000 through the date which is 45 days after the quarter ended
September 30, 2000 will be a Level 3 Period, and the Applicable Margin
for LIBOR Borrowings and the LIBOR Portions during such Pricing Period
will be 0.875%.
(b) FIL's Debt/EBITDA Ratio is 2.10 for the consecutive
four-quarter period ending on September 30, 2000, and FIL's senior
unsecured long-term debt rating from S&P or Moody's is less than either
BBB- of Baa3. The Pricing Period commencing 45 days after the quarter
ended September 30, 2000 through the date which is 45 days after the
quarter ended December 31, 2000 will be a Level 4 Period, and the
Applicable Margin for LIBOR Borrowings and the LIBOR Portions during
such Pricing Period will be 1.000%.
(c) FIL's senior unsecured long-term debt rating from S&P or
Moody's is at least equal to BBB- or Baa3. Commencing after FIL notifies
Agent that such debt rating has been achieved, Level 2 pricing will
apply, and the Applicable Margin for LIBOR Borrowings and the LIBOR
Portions during such Pricing Period will be 0.7500%.
II-2
<PAGE> 68
SCHEDULE 3.01
INITIAL CONDITIONS PRECEDENT
A. PRINCIPAL CREDIT DOCUMENTS.
(1) The Credit Agreement, duly executed by each Borrower, each
Lender, Agent, Documentation Agent, each Managing Agent and Co-Agent;
(2) Such Revolving Notes as the Lenders shall request, each duly
executed by the applicable Borrower;
(3) The Guaranty, duly executed by FIL, each Eligible Material
Subsidiary, Flextronics Holdings UK Limited and Flextronics Singapore
Pte Ltd., with such changes thereto as may be appropriate based on the
law of the applicable jurisdictions; and
(4) Pledge Agreements of FIL and Flextronics Holdings UK Limited,
each, duly executed by such Person, with such changes thereto as may be
appropriate based on the laws of the applicable jurisdictions.
B. FIUI CORPORATE DOCUMENTS.
(1) The Certificate of Incorporation of FIUI, certified as of a
recent date prior to the Closing Date by the Secretary of State of
California;
(2) A Certificate of Good Standing (or comparable certificate)
for FIUI, certified as of a recent date prior to the Closing Date by the
Secretary of State of California;
(3) A certificate of the Secretary or an Assistant Secretary of
FIUI, dated the Closing Date, certifying (a) that attached thereto is a
true and correct copy of the Bylaws of FIUI as in effect on the Closing
Date; (b) that attached thereto are true and correct copies of
resolutions duly adopted by the Board of Directors of FIUI and
continuing in effect, which (i) authorize the execution, delivery and
performance by FIUI of this Agreement and the other Credit Documents
executed or to be executed by FIUI and the consummation of the
transactions contemplated hereby and thereby and (ii) designate the
officers authorized so to execute, deliver and perform on behalf of
FIUI; and (c) that there are no proceedings for the dissolution or
liquidation of FIUI; and
(4) A certificate of the Secretary or an Assistant Secretary of
FIUI, dated the Closing Date, certifying the incumbency, signatures and
authority of the officers of FIUI authorized to execute, deliver and
perform this Agreement, the other Credit Documents and all other
documents, instruments or agreements related thereto executed or to be
executed by FIUI.
C. DII CORPORATE DOCUMENTS.
(1) The Certificate of Incorporation of DII, certified as of a
recent date prior to the Closing Date by the Secretary of State of
Delaware;
(2) A Certificate of Good Standing (or comparable certificate)
for DII, certified as of a recent date prior to the Closing Date by the
Secretary of State of Delaware;
(3) A certificate of the Secretary or an Assistant Secretary of
DII, dated the Closing Date, certifying (a) that attached thereto is a
true and correct copy of the Bylaws of DII as in effect on the Closing
Date; (b) that attached thereto are true and correct copies of
resolutions duly adopted by the Board of Directors of DII and continuing
in effect, which (i) authorize the execution, delivery and performance
by DII of this Agreement and the other Credit Documents executed or to
be executed by DII and the
3.01-1
<PAGE> 69
consummation of the transactions contemplated hereby and thereby and
(ii) designate the officers authorized so to execute, deliver and
perform on behalf of DII; and (c) that there are no proceedings for the
dissolution or liquidation of DII; and
(4) A certificate of the Secretary or an Assistant Secretary of
DII, dated the Closing Date, certifying the incumbency, signatures and
authority of the officers of DII authorized to execute, deliver and
perform this Agreement, the other Credit Documents and all other
documents, instruments or agreements related thereto executed or to be
executed by DII.
D. OTHER MATERIAL SUBSIDIARY CORPORATE DOCUMENTS.
(1) The Certificate of Incorporation (or comparable certificate)
of each Eligible Material Subsidiary, any Subsidiary executing a Pledge
Agreement or the Guaranty, and any Subsidiary whose shares are being
pledged pursuant to a Pledge Agreement, certified as of a recent date
prior to the Closing Date by the Secretary of State (or comparable
public official) of its jurisdiction of incorporation (or, if any such
Subsidiary is organized under the laws of any jurisdiction outside the
United States, such other evidence as Agent may request to establish
that such Person is duly organized and existing under the laws of such
jurisdiction), together with an English translation thereof (if
appropriate);
(2) To the extent such jurisdiction has the legal concept of a
corporation being in good standing and a Governmental Authority in such
jurisdiction issues any evidence of such good standing, a Certificate of
Good Standing (or comparable certificate) for each Eligible Material
Subsidiary, any Subsidiary executing a Pledge Agreement or the Guaranty,
and any Subsidiary whose shares are being pledged pursuant to a Pledge
Agreement, certified as of a recent date prior to the Closing Date by
the Secretary of State (or comparable public official) of its
jurisdiction of incorporation (or, if any such Person is organized under
the laws of any jurisdiction outside the United States, such other
evidence as Agent may request to establish that such Person is duly
qualified to do business and in good standing under the laws of such
jurisdiction), together with an English translation thereof (if
appropriate);
(3) A certificate of the Secretary or an Assistant Secretary (or
comparable officer) of each Eligible Material Subsidiary, any Subsidiary
executing a Pledge Agreement or the Guaranty, and any Subsidiary whose
shares are being pledged pursuant to a Pledge Agreement, dated the
Closing Date, certifying (a) that attached thereto is a true and correct
copy of the Bylaws of such Subsidiary as in effect on the Closing Date
(or, if any such Subsidiary is organized under the laws of any
jurisdiction outside the United States, any comparable document provided
for in the respective corporate laws of that jurisdiction); (b) (except
in the case of a Subsidiary which is not executing any Credit Documents)
that attached thereto are true and correct copies of resolutions duly
adopted by the Board of Directors of such Subsidiary (or other
comparable enabling action) and continuing in effect, which (i)
authorize the execution, delivery and performance by such Person of the
Credit Documents to be executed by such Person and the consummation of
the transactions contemplated thereby and (ii) designate the officers,
directors and attorneys authorized so to execute, deliver and perform on
behalf of such Person; and (c) that there are no proceedings for the
dissolution or liquidation of such Person, together with a certified
English translation thereof (if appropriate); and
(4) A certificate of the Secretary or an Assistant Secretary (or
comparable officer) of each Eligible Material Subsidiary and any
Subsidiary executing a Pledge Agreement or the Guaranty, dated the
Closing Date, certifying the incumbency, signatures and authority of the
officers, directors and attorneys of such Person authorized to execute,
deliver and perform the Credit Documents to be executed by such Person,
together with a certified English translation thereof (if appropriate).
E. FINANCIAL STATEMENTS, FINANCIAL CONDITION, ETC.
(1) A copy of the audited consolidated and consolidating
Financial Statements of FIL and its Subsidiaries for the fiscal year
ended March 31, 1999, audited by Arthur Andersen LLP, together with a
copy of the unqualified opinion delivered by such accountants in
connection with such Financial Statements;
3.01-2
<PAGE> 70
(2) A copy of the unaudited Financial Statements of FIL and its
Subsidiaries for the fiscal quarter ended December 31, 1999 and for the
fiscal year to such date (prepared on a consolidated and consolidating
basis), certified by the chief financial officer, treasurer, controller
or principal accounting officer of FIL to present fairly the financial
condition, results of operations and other information reflected therein
and to have been prepared in accordance with GAAP (subject to normal
year-end audit adjustments);
(3) A copy of the 10-K report filed by FIL with the Securities
and Exchange Commission for the fiscal year ended March 31, 1999;
(4) A copy of the 10-Q report filed by FIL with the Securities
and Exchange Commission for the quarter ended December 31, 1999;
(5) The consolidated plan and forecast of FIL and its
Subsidiaries for the fiscal year to end March 31, 2001 (reflecting among
other events the anticipated Borrowings under this Agreement), including
quarterly cash flow projections and quarterly projections of FIL's
compliance with the financial tests and ratios specified in the FIL
Credit Agreement; and
(6) Such other financial, business and other information
regarding FIL, either Borrower or any of their Subsidiaries as Agent or
any Lender may reasonably request, including information as to possible
contingent liabilities, tax matters, environmental matters and
obligations for employee benefits and compensation.
F. COLLATERAL DOCUMENTS.
(1) The stock certificates representing all of the outstanding
capital stock of each Subsidiary pledged to Agent pursuant to a Pledge
Agreement and existing on the Closing Date, other than subsidiaries
whose stock is not in certificated form, together with undated stock
powers, duly executed by the Borrower or Subsidiary that owns such
stock, in blank and attached thereto;
(2) Any other items required by any applicable jurisdiction;
(3) Such other documents, instruments and agreements as Agents
may reasonably request to establish and perfect the Liens granted to
Agent or any Lender in this Agreement, the Security Documents and the
other Credit Documents; and
(4) Such other evidence as Agent may request to establish that
the Liens granted to Agent or any Lender in this Agreement, the Security
Documents and the other Credit Documents are perfected and prior to the
Liens of other Persons in the Collateral, except for any such Liens
which are expressly permitted by the Credit Agreement to be prior.
G. OPINIONS. Favorable written opinions from each of the following counsel
for Borrowers and their Subsidiaries, each dated the Closing Date, addressed to
Agent for the benefit of Agent and Lenders, covering such legal matters as Agent
may reasonably request and otherwise in form and substance satisfactory to
Agent:
(1) Fenwick & West, counsel for FIL and its Subsidiaries;
(2) Bruckhaus Westrick Heller L`ber, Austrian counsel for FIL
and its Subsidiaries;
(3) Mayer, Brown & Platt, English counsel for FIL and its
Subsidiaries;
(4) Foo, Teo & Associates, Labuan counsel for FIL and its
Subsidiaries;
(5) Cuesta Campos Y Asociados, S.C., Mexican counsel for FIL
and its Subsidiaries;
3.01-3
<PAGE> 71
(6) Allen & Gledhill, Singapore counsel for FIL and its
Subsidiaries;
(7) Magnusson Wahlin Advokatbyra, Swedish counsel for FIL and
its Subsidiaries; and
(8) Curtis Mallet-Prevost, US counsel for DII and its
Subsidiaries.
H. OTHER ITEMS.
(1) A duly completed and timely delivered Notice of Borrowing
for the applicable Borrowing;
(2) Copies of the acquisition agreement or similar agreement
entered into in connection with the DII Acquisition, duly
executed by FIL and DII, together with all exhibits and
schedules thereto;
(3) Evidence satisfactory to Agent and the Lenders that the
DII Acquisition has been effected in accordance with all
applicable Governmental Rules;
(4) Copies of such other documents, instruments and agreements
executed by FII, DII or any other Person in connection
with the DII Acquisition as Agent or any Lender may
reasonably request;
(5) An organization chart for FIL, FIUI, DII and their
Subsidiaries, setting forth the relationship among such
Persons, certified by the Secretary or an Assistant
Secretary of FIL;
(6) Evidence of the amounts owing to the lenders and agent
under the Existing FIUI Credit Agreement on the Closing
Date and instructions for the payment of such amounts;
(7) Evidence of the amounts owing on the Closing Date to the
lenders and agent under any existing credit or loan
agreement or similar financing agreement of DII and
instructions for the payment of such amounts;
(8) A certificate of the Chief Financial Officer of each
Borrower, addressed to Agent and dated the Closing Date,
certifying that:
(a) The representations and warranties set forth in
Paragraph 4.01 and in the other Credit Documents are true and
correct in all material respects as of such date (except for such
representations and warranties made as of a specified date, which
shall be true as of such date); and
(b) No Default has occurred and is continuing as of such date;
(9) All fees and expenses payable to Agent and Lenders on or
prior to the Closing Date (including all fees payable to
Agent pursuant to the Agent's Fee Letter);
(10) All fees and expenses of Agent's counsels through the
Closing Date; and
(11) Such other evidence as Agent or any Lender may reasonably
request to establish the accuracy and completeness of the
representations and warranties and the compliance with the
terms and conditions contained in this Agreement and the
other Credit Documents.
3.01-4
<PAGE> 72
SCHEDULE 4.01(o)
SUBSIDIARIES
A. PRIOR TO THE CLOSING OF THE DII ACQUISITION:
<TABLE>
<CAPTION>
JURISDICTION ISSUED AND DIRECT
OF MATERIAL OUTSTANDING PERCENTAGE OWNER OF
SUBSIDIARY ORGANIZATION SUBSIDIARY SHARE CAPITAL OWNERSHIP SHARES
---------- ------------ ---------- ------------- ---------- ----------
<S> <C> <C> <C> <C> <C>
FLEXTRONICS Singapore
INTERNATIONAL SINGAPORE
PTE. LTD.
FLEXTRONICS SINGAPORE Singapore No 6,700,000 auth @ 100% Flextronics
PTE. LTD. S$1/share International
36 Robinson Road 4,600,000 Ltd.
#18-01 City House issued + paid up
Singapore 068877
FLEXTRONICS (MALAYSIA) Malaysia No RM4,025,400 100% Flextronics
SDN. BHD. authorized Singapore
7th Floor, Wisma RM2,725,000 Pte. Ltd.
Hamzah-Kwong Hing paid up
No 1, Leboh Ampang
50100 KL, Malaysia
DTM LATIN AMERICA (L), Labuan No 10,000 100% Flextronics
LTD. shares $10,000 International
Level 10, Wisma $2 Ltd.
Oceanic, Jalan OKK paid up
Awang Besar
87007 Labuan F.T.
Malaysia
FLEXTRONICS Labuan Yes 10,000 100% Flextronics
INTERNATIONAL MARKETING shares 10000 International
(L) LTD. authorized Ltd.
Level 10, Wisma Oceanic, $10,000
Jalan OKK Awang Besar paid up
87007 Labuan F.T.
Malaysia
FLEXTRONICS Labuan Yes 10,000 100% Flextronics
INTERNATIONAL LATIN shares $10,000 International
AMERICA (L), LTD. $2 Ltd.
Level 10, Wisma Oceanic, paid up
Jalan OKK Awang Besar
87007 Labuan F.T.
Malaysia
ASTRON TECHNOLOGIES LTD. Mauritius No US$1M 100% Flextronics
6th Floor, Li Wan Po auth'd US$100K International
House paid up Ltd.
12 Remy Ollier Street
Port Lois, Mauritius
FLEXTRONICS Hong Kong No HK4,000,000 100% Flextronics
MANUFACTURING (HK) LTD. authorized International
Unit B, 11/F., Block A, HK2 Ltd.
Wo paid up
Kee Hong Building,
585-609
Castle Peak Road, Kwai
Chung,
New Territories, Hong
Kong
</TABLE>
4.01-1
<PAGE> 73
<TABLE>
<CAPTION>
JURISDICTION ISSUED AND DIRECT
OF MATERIAL OUTSTANDING PERCENTAGE OWNER OF
SUBSIDIARY ORGANIZATION SUBSIDIARY SHARE CAPITAL OWNERSHIP SHARES
---------- ------------ ---------- ------------- ---------- ----------
<S> <C> <C> <C> <C> <C>
FLEXTRONICS INDUSTRIAL PRC Yes US$3,500,000 100% Flextronics
(SHENZHEN) CO., LTD. authorized Singapore
Blk C9, 2nd Industrial US$3,500,000 Pte. Ltd.
Zone paid up
Xixiang, Shenzhen
People's Republic of
China
FLEXTRONICS COMPUTER PRC No US$1,200,000 100% Flextronics
(SHEKOU) LTD. authorized Singapore
5/F. Nanshan Building US$1,200,000 Pte. Ltd.
Shekou Industrial Zone paid up
Industrial 8 Road
Shenzhen. Guangdong,
China
ZHUHAI DAO MEN CHAO YI PRC No RMB100,000,000 96.25% Flextronics
ELECTRONICS CO., LTD. auth'd Manufacturing
Sam Chow Industrial City RMB100,000,000 (HK) Ltd.
Jin An Town, Doumen, paid up
Zhuhai
People's Republic of
China
ASTRON GROUP LTD. Hong Kong No HK6,750,292 99.90% Flextronics
6th Floor, Hole Weal authorized Manufacturing
Ind. Bldg. HK6,750,292 (HK) Ltd.
22-28 Tai Chung Road paid up
Tsuen Wan,
New Territories,
Hong Kong
FICO INVESTMENT HOLDING Hong Kong No HK10,000 90% Flextronics
LTD. HOLDING LTD. authorized International
Rm 10, 18/F, Blk B HK10,000 Ltd.
Kong Nam Ind. Bldg. paid up
603 Castle Peak Road
Tsuen Wan, New
Territories,
Hong Kong
FOREST KEYBOARD PRC No HK 55 million 100% FICO
MANUFACTURING authorized HK Investment
(SHENZHEN) LTD. 42,981,525 issued Holding
Gong Ming Zhen Ltd.
Chang Zhen Village
Industrial Zone
PRC
EUROPE
FLEXTRONICS Sweden Yes 10,000,000 kr 100% F.L.
INTERNATIONAL SWEDEN AB Tronics AB
Box 532
371 23 Karlskrona
Sweden
FLEXTRONICS GROUP Sweden No 100,000 kr 100% Flextronics
SWEDEN AB Holdings
Box 532 UK Ltd.
371 23 Karlskrona
Sweden
</TABLE>
4.01-2
<PAGE> 74
<TABLE>
<CAPTION>
JURISDICTION ISSUED AND DIRECT
OF MATERIAL OUTSTANDING PERCENTAGE OWNER OF
SUBSIDIARY ORGANIZATION SUBSIDIARY SHARE CAPITAL OWNERSHIP SHARES
---------- ------------ ---------- ------------- ---------- ----------
<S> <C> <C> <C> <C> <C>
FLEXTRONICS LIMITED Scotland No Authorized 250,000 100% FIUK
4 Livingstone Boulevard ordy shares @
Hamilton International GBPound
Technology Park Sterling1
Blantyre Issued 60,000
Scotland G72 0BP ordy shares @
GBPound Sterling1
FLEXTRONICS England No Authorized 190,476 100% Flextronics
INTERNATIONAL (UK) LTD. ordy shares @ International
4 Livingstone Boulevard GBPound Ltd.
Hamilton International Sterling1
Technology Park Issued 186,588
Blantyre ordy shares @
Scotland G72 0BP GBPound Sterling1
FLEXTRONICS HOLDINGS England No Authorized 500,000 100% Flextronics
(UK) LTD. ordy shares @ International
50 Stratton Street GBPound Ltd.
London Sterling1
W1X 6NX Issued 1,000
ordy shares @
GBPound Sterling1
FLEXTRONICS KFT Hungary No $15,000 100% FLX Cyprus
HU 9600, Sarvar Ltd.
Ikervari ut 42
Hungary
FLEXTRONICS Austria No ATS 92% Flextronics
INTERNATIONAL GMBH 160,000,000.00 International
Wienerbergstrasse 7 Ltd.
1810 Vienna, Austria
FLEXTRONICS Austria No ATS 25,000,000.00 100% Flextronics
INTERNATIONAL GMBH International
Friesacher Strasse 3 GmbH
9330 Althofen, Austria
FLEXTRONICS Hungary Yes HUF 100% Flextronics
INTERNATIONAL KFT. 539,000,000.00 International
8660 Tab GmbH
Munkas U. 28, Hungary
NEUTRONICS ECOPLAST Hungary No HUF 100% Flextronics
MUANYAGIPARI TERMEKEKET 727,290,000.00 International
GYARTO KFT. GmbH
9600 Sarvar
Ikervari u. 42, Hungary
NEUTRONICS COMPONENTS Hungary No ATS 600,000.00 100% Flextronics
ELEKTRONIKAI International
ALKATRESZGYARTO GmbH
VAMSZABADTERULETI KFT.
9600 Sarvar
Ikervari u. 42, Hungary
MECHA DESIGN S.R.L. Italy No Lit 55% Flextronics
Via G&A, Philips 12 160,000,000.00 International
20052 Monza, Italy GmbH
</TABLE>
4.01-3
<PAGE> 75
<TABLE>
<CAPTION>
JURISDICTION ISSUED AND DIRECT
OF MATERIAL OUTSTANDING PERCENTAGE OWNER OF
SUBSIDIARY ORGANIZATION SUBSIDIARY SHARE CAPITAL OWNERSHIP SHARES
---------- ------------ ---------- ------------- ---------- ----------
<S> <C> <C> <C> <C> <C>
FLEXTRONICS Netherlands No 100% Flextronics
INTERNATIONAL International
EUROPE, B.V. Ltd.
Koningslaan 34,
P.O.Box 74658,
1070 BR Amsterdam, the
Netherlands
FLX CYPRUS LTD. LTD. Cyprus No auth'd: CYP 100% held Flextronics
c/o Chrysanthou & 10,000 iss'd/ in trust by International
Christoforou paid up: 2 locals: Ltd.
Corner Th. Dervis - CYP 1,000 Christo-
Florinis Street fourou and
6th Floor Chrysanthou
P. O. Box 1675, CY-1512
Nicosia, Cyprus 1066
FLEXTRONICS Finland Yes 2000 shares, 100% FHFin
INTERNATIONAL 506,000 Euros
FINDLAND OY
Patentti- ja
Reekisterihallitus
PRH/2 rekisteritoimisto
Arkadiankatu 6 A
00100 Helsinki, Finland
FLEXTRONICS France No 96% Kyrel EMS Oyj
INTERNATIONAL FRANCE SA
2 rue Lavoisier
Z.I.Moncel-Les-Luneville
54 300 LUNEVILLE
FLEXTRONICS HOLDING Finland No EURO 8,000 100% F.L.Tronics
FINLAND OY Holding AB
PO Box 23
FIN-39201 Kyroskoski
Finland
FLEXTRONICS Norway No 100 shares @ 100% F.L.
INTERNATIONAL NORWAY AS 1,000 NOK Tronics
Televeien 1 Holding AB
4879 Grimstad, Norway
HTR TAB Hungary No 100% Neutronics
8660 Tab HTR
Munkas U. 28, Hungary Technikai
Rendszerszolg
altato Kft
HTR ZALA Hungary No 100% Neutronics
8660 Tab HTR
Munkas U. 28, Hungary Technikai
Rendszerszolg
altato Kft
HTR REAL ESTATE Hungary No 100% Neutronics
8660 Tab HTR
Munkas U. 28, Hungary Technikai
Rendszerszolg
altato Kft
KOSKITUONTI OY Finland No 100% Kyrel EMS Oyj
Patentti- ja
Reekisterihallitus
PRH/2 rekisteritoimisto
Arkadiankatu 6 A
00100 Helsinki, Finland
</TABLE>
4.01-4
<PAGE> 76
<TABLE>
<CAPTION>
JURISDICTION ISSUED AND DIRECT
OF MATERIAL OUTSTANDING PERCENTAGE OWNER OF
SUBSIDIARY ORGANIZATION SUBSIDIARY SHARE CAPITAL OWNERSHIP SHARES
---------- ------------ ---------- ------------- ---------- ----------
<S> <C> <C> <C> <C> <C>
ALFATEL OH Finland No 100% Kyrel EMS Oyj
Patentti- ja
Reekisterihallitus
PRH/2 rekisteritoimisto
Arkadiankatu 6 A
00100 Helsinki, Finland
KOSTRON OY Finland No 100% Kyrel EMS
Patentti- ja Oyj
Reekisterihallitus
PRH/2 rekisteritoimisto
Arkadiankatu 6 A
00100 Helsinki, Finland
IGROTTA AB Sweden No 100% Flextronics
Box 532 International
371 23 Karlskrona Sweden AB
Sweden
MOCTOL AB Sweden No 100% Igrotta AB
Box 532
371 23 Karlskrona
Sweden
NOITALL AB Sweden No 100% Igrotta AB
Box 532
371 23 Karlskrona
Sweden
TOLIPIG AB Sweden No 100% Igrotta AB
Box 532
371 23 Karlskrona
Sweden
MARATHON BUSINESS PARK USA No 100% Flextronics
LLC International
47951 Westinghouse Drive USA, Inc.
Fremont, CA 94539
MEXICO, BRASIL, OTHERS
FLEXTRONICS Mexico Yes $50,000 Fixed 99.90% Flextronics
MANUFACTURING MEX, SA Capital International
DE CV Ltd.
Carretara Base Aerea
Militar
5850
Zapopan, Jalisco 45100
Mexico
DTM PRODUCTS DE MEXICO, Mexico No 99.90% Flextronics
S.A. DE C.V. International
Carretara Base Aerea Ltd.
Militar 5850
Zapopan, Jalisco 45100
Mxico
</TABLE>
4.01-5
<PAGE> 77
<TABLE>
<CAPTION>
JURISDICTION ISSUED AND DIRECT
OF MATERIAL OUTSTANDING PERCENTAGE OWNER OF
SUBSIDIARY ORGANIZATION SUBSIDIARY SHARE CAPITAL OWNERSHIP SHARES
---------- ------------ ---------- ------------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Mexico No $50,000 Fixed 99% Flextronics
Capital International
PARQUE DE TECNOLOGIA Ltd.
ELECTRONICA, S.A. DE
C.V.
Carretara Base Aerea
Militar
5850
Zapopan, Jalisco 45100
Mexico
FLEXTRONICS Brazil No 100% Flextronics
INTERNATIONAL International
TECNOLOGIA LTDA Ltd.
Al. Jurua, 548
Alphaville, Barueri
Sao Paulo, Brazil
06454-070
FLEXTRONICS DO BRASIL Brazil No 99.90% FIT
SERVICOS, LTDA
Av. das Nacoes Unidas,
12995, 18o. andar,
sala F, Sao Paulo,
Brazil, 04578-000
FLEXTRONICS Brazil No US 30,000 100% Flextronics
INTERNATIONAL authorized International
INDUSTRIAL, LTDA Ltd.
FLEXTRONICS Netherlands
INTERNATIONAL N.V. Antilles
Landhuis Joonchi
Kaya Richard J. Beaujon
z/n
P.O. Box 837
Curacao, Netherlands
Antilles
UNITED STATES
FLEXTRONICS California Yes 999 shares 100% Flextronics
INTERNATIONAL USA, INC. International
2090 Fortune Drive Ltd.
San Jose, CA 95131
FLEXTRONICS California Yes 100% Flextronics
INTERNATIONAL - 1500186 International
FREMONT, INC. USA Inc.
47951 Westinghouse
Drive
Fremont, CA 94539
FLEXTRONICS California, No 100% Flextronics
DISTRIBUTION, INC. USA International
2241 Lundy Avenue (USA)
San Jose, CA 95131 (FIUI-CA)
DTM PRODUCTS, INC. Colorado, No 1,000,000 Common 100% Flextronics
6268 Monarch Park Place, USA Stock$10,000 International
Niwot, CO 80503 USA
</TABLE>
4.01-6
<PAGE> 78
<TABLE>
<CAPTION>
JURISDICTION ISSUED AND DIRECT
OF MATERIAL OUTSTANDING PERCENTAGE OWNER OF
SUBSIDIARY ORGANIZATION SUBSIDIARY SHARE CAPITAL OWNERSHIP SHARES
---------- ------------ ---------- ------------- ---------- ----------
<S> <C> <C> <C> <C> <C>
PROACTIVE CORPORATION Florida No 100% Flextronics
6421 Congress Ave., International
Suite 114 Technologia, Ltda.
PLEASE CONFIRM:
QCOM SP. ZO. O. Poland PLN 780,000 100% Flextronics
International
ul.Rzeznicka 54/56 Taby AB
PL-80-822 Gdansk
Poland
QCOM AB Sweden 141,943 shares 100% F.L.
Tronics
Gribbylundsvagen 15 (total of SEK Holdings AB
1,419,430)
Box 7314
SE-187 14 Taby, Sweden
QCOM FINANS AB Sweden 100 shares 100% Flextronics
International
Gribbylundsvagen 15 (SEK 100,000) Taby AB
Box 7314
SE-187 14 Taby, Sweden
FLEXTRONICS Poland 40 shares at PLN 100% F.L.
INTERNATIONAL POLAND 100 each Tronics
SP. ZO. O. Holdings AB
Tczew
Poland
VASTBRIGHT
CABLETRON
FLEXTRONICS
INTERNATIONAL IRELAND
FLEXTRONICS
INTERNATIONAL NEW
HAMPSHIRE
FLEXTRONICS
INTERNATIONAL HOLLAND BV
FLEXTRONICS HOLDING
GERMANY GMBH
FLEXTRONICS HOLDING
GERMANY AND CO K.G.
FLEXTRONICS
INTERNATIONAL DENMARK
APS
FLEISCHER-TRADING,
SERVICOS E
CONSULTADORIA LDA
FLEXTRONICS HOLDING GmBH
</TABLE>
4.01-7
<PAGE> 79
<TABLE>
<CAPTION>
JURISDICTION ISSUED AND DIRECT
OF MATERIAL OUTSTANDING PERCENTAGE OWNER OF
SUBSIDIARY ORGANIZATION SUBSIDIARY SHARE CAPITAL OWNERSHIP SHARES
---------- ------------ ---------- ------------- ---------- ----------
<S> <C> <C> <C> <C> <C>
FLEXTRONICS TECHNOLOGY
GmBH
IN USA:
CBA
SUMMIT
EMC
</TABLE>
4.01-8
<PAGE> 80
B. After the Closing of the DII Acquisition:
To be completed by FII within 30 days of the Closing Date
<TABLE>
<CAPTION>
JURISDICTION ISSUED AND DIRECT
OF MATERIAL OUTSTANDING PERCENTAGE OWNER OF
SUBSIDIARY ORGANIZATION SUBSIDIARY SHARE CAPITAL OWNERSHIP SHARES
---------- ------------ ---------- ------------- ---------- ----------
<S> <C> <C> <C> <C> <C>
</TABLE>
4.01-9
<PAGE> 81
EXHIBIT A
NOTICE OF REVOLVING LOAN BORROWING
[Date]
ABN AMRO Bank N.V.
as Agent
Syndications Group
1325 Avenue of the Americas, 9th Floor
New York, NY 10019
U.S.A.
Attn: Linda Boardman
1. Reference is made to that certain Credit Agreement, dated as of April
3, 2000 (the "Credit Agreement"), among Flextronics International USA, Inc. and
The DII Group, Inc. (each a "Borrower" and collectively the "Borrowers"), the
financial institutions listed in Schedule I to the Credit Agreement (the
"Lenders") and ABN AMRO Bank N.V., as agent for Lenders (in such capacity,
"Agent"). Unless otherwise indicated, all terms defined in the Credit Agreement
have the same respective meanings when used herein.
2. Pursuant to Subparagraph 2.02(a) of the Credit Agreement, the
undersigned Borrower hereby irrevocably requests a Revolving Loan Borrowing to
be made upon the following terms:
(a) The requested Borrowing is to be under Facility [__];
(b) The principal amount of such Borrowing are to be
__________;
(c) Such Borrowing is to consist of [Base Rate] [LIBOR] Loans;
(d) If such Borrowing is to consist of LIBOR Loans, the
initial Interest Period for such Borrowing is to be
__________ month[s]; and
(e) The date of such Borrowing is to be __________, ____.
3. The undersigned Borrower hereby certifies to Lenders and Agent that,
on the date of this Notice of Revolving Loan Borrowing and after giving effect
to the requested Revolving Loan Borrowing:
(a) The representations and warranties of Borrowers and their
Subsidiaries set forth in Paragraph 4.01 of the Credit Agreement and in
the other Credit Documents are true and correct in all material respects
as if made on such date (except for representations and warranties
expressly made as of a specified date, which shall be true as of such
date); and
(b) No Default has occurred and is continuing.
4. Please disburse the proceeds of the requested Revolving Loan
Borrowing to___________________________________________________
_______________________________________________________________.
A-1
<PAGE> 82
IN WITNESS WHEREOF, the undersigned Borrower has executed this Notice of
Revolving Loan Borrowing on the date set forth above.
[_________________________________]
By:
--------------------------------
Name:
----------------------------
Title:
--------------------------
A-2
<PAGE> 83
EXHIBIT B
NOTICE OF TERM LOAN BORROWING
[Date]
ABN AMRO Bank N.V.
as Agent
Syndications Group
1325 Avenue of the Americas, 9th Floor
New York, NY 10019
U.S.A.
Attn: Linda Boardman
1. Reference is made to that certain Credit Agreement, dated as of April
3, 2000 (the "Credit Agreement"), among Flextronics International USA, Inc. and
The DII Group, Inc. (each a "Borrower" and collectively the "Borrowers"), the
financial institutions listed in Schedule I to the Credit Agreement (the
"Lenders") and ABN AMRO Bank N.V., as agent for Lenders (in such capacity,
"Agent"). Unless otherwise indicated, all terms defined in the Credit Agreement
have the same respective meanings when used herein.
2. Pursuant to Subparagraph 2.01(b) of the Credit Agreement, the
undersigned Borrower[s] hereby irrevocably request[s] [a] Term Loan Borrowing[s]
to be made on the Facility B Revolving Loan Maturity Date upon the following
terms:
(a) The principal amount of such Borrowing is to be $__________;
and
(b) Such Borrowing is to consist initially of the following
Portion[s] [specify for each Portion the initial amount and Type and for
each LIBOR Portion the initial Interest Period]:
<TABLE>
<CAPTION>
Portion Portion Interest
Amount Type Period
------- -------- -----------
<S> <C> <C> <C>
$________ __________ __ month[s]
$________ __________ __ month[s]
$________ __________ __ month[s]
$________ __________ __ month[s]
</TABLE>
3. The undersigned Borrower[s] hereby certif[ies][y] to Lenders and
Agent that, on the date of this Notice of Term Loan Borrowing and after giving
effect to the requested Term Loan Borrowing:
(a) The representations and warranties of Borrowers and their
Subsidiaries set forth in Paragraph 4.01 of the Credit Agreement and in
the other Credit Documents are true and correct in all material respects
as if made on such date (except for representations and warranties
expressly made as of a specified date, which shall be true as of such
date); and
(b) No Default has occurred and is continuing.
4. Please disburse the proceeds of the requested Term Loan Borrowing
first to Lenders in such amounts as may be necessary to repay the principal
amount of all Revolving Loans outstanding on the Facility B Revolving Loan
Maturity Date and the balance, if any, to______________________________________
______________________________________________________________________________.
B-1
<PAGE> 84
IN WITNESS WHEREOF, the undersigned Borrower[s] [has][have] executed
this Notice of Term Loan Borrowing on the date set forth above.
[_________________________________]
By:
---------------------------------
Name:
--------------------------
Title:
-------------------------
B-2
<PAGE> 85
EXHIBIT C(1)
REVOLVING LOAN NOTE
______________, ________ April __, 2000
FOR VALUE RECEIVED, the undersigned ("Borrower"), hereby promises to pay
to the order of ____________________, a ____________________ ("Lender"), the
aggregate outstanding principal balance of all Revolving Loans made by Lender to
Borrower pursuant to the Credit Agreement referred to below (as amended from
time to time, the "Credit Agreement"), on or before the Facility [A] [B]
Revolving Loan Maturity Date specified in the Credit Agreement; and to pay
interest on said sum, or such lesser amount, at the rates and on the dates
provided in the Credit Agreement.
Borrower shall make all payments hereunder, for the account of Lender's
Applicable Lending Offices, to Agent as indicated in the Credit Agreement, in
Dollars as required by the Credit Agreement and in same day or immediately
available funds.
Borrower hereby authorizes Lender to record on the schedule(s) annexed
to this note the date and amount of each Revolving Loan, the Facility pursuant
to which made, and the date and amount of each payment or prepayment of
principal made by Borrower and agrees that all such notations shall constitute
prima facie evidence of the matters noted; provided, however, that the failure
of Lender to make any such notation shall not affect Borrower's obligations
hereunder.
This note is one of the Revolving Loan Notes referred to in the Credit
Agreement, dated as of April 3, 2000, among Borrower, [FIUI] [DII], Lender and
the other lenders from time to time parties thereto (collectively, the
"Lenders") and ABN AMRO, as agent for Lenders. This note is subject to the terms
of the Credit Agreement, including the rights of prepayment and the rights of
acceleration of maturity set forth therein. Terms used herein have the meanings
assigned to those terms in the Credit Agreement, unless otherwise defined
herein.
The transfer, sale or assignment of any rights under or interest in this
note is subject to certain restrictions contained in the Credit Agreement,
including Paragraph 8.05 thereof.
C(1)-1
<PAGE> 86
Borrower shall pay all reasonable fees and expenses, including
reasonable attorneys' fees, incurred by Lender in the enforcement or attempt to
enforce any of Borrower's obligations hereunder not performed when due. Borrower
hereby waives notice of presentment, demand, protest or notice of any other
kind. This note shall be governed by and construed in accordance with the laws
of the State of California.
[_____________]
By:
---------------------------------
Name:
---------------------------
Title:
-----------------------
C(1)-2
<PAGE> 87
LOANS AND PAYMENTS OF PRINCIPAL
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Amount of
Amount of Principal Paid
Date Loan or Prepaid
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</TABLE>
C(1)-3
<PAGE> 88
EXHIBIT C(2)
TERM LOAN NOTE
--------------, -------- ----------, ----
FOR VALUE RECEIVED, the undersigned ("Borrower"), hereby promises to pay
to the order of ____________________, a ____________________ ("Lender"), the
principal amount of the Term Loan made by Lender to Borrower pursuant to the
Credit Agreement referred to below (as amended from time to time, the "Credit
Agreement"), in a single installment on the Term Loan Maturity Date specified in
the Credit Agreement; and to pay interest on said sum at the rates and on the
dates provided in the Credit Agreement.
Borrower shall make all payments hereunder, for the account of Lender's
Applicable Lending Offices, to Agent as indicated in the Credit Agreement, in
Dollars as required by the Credit Agreement and in same day or immediately
available funds.
This note is one of the Term Loan Notes referred to in the Credit
Agreement, dated as of April 3, 2000, among Borrower, [FIUI] [DII], Lender and
the other lenders from time to time parties thereto (collectively, the
"Lenders") and ABN AMRO, as agent for Lenders. This note is subject to the terms
of the Credit Agreement, including the rights of prepayment and the rights of
acceleration of maturity set forth therein. Terms used herein have the meanings
assigned to those terms in the Credit Agreement, unless otherwise defined
herein.
The transfer, sale or assignment of any rights under or interest in this
note is subject to certain restrictions contained in the Credit Agreement,
including Paragraph 8.05 thereof.
C(2)-1
<PAGE> 89
Borrower shall pay all reasonable fees and expenses, including
reasonable attorneys' fees, incurred by Lender in the enforcement or attempt to
enforce any of Borrower's obligations hereunder not performed when due. Borrower
hereby waives notice of presentment, demand, protest or notice of any other
kind. This note shall be governed by and construed in accordance with the laws
of the State of California.
[_____________]
By:
---------------------------------
Name:
---------------------------
Title:
-----------------------
C(2)-2
<PAGE> 90
EXHIBIT D
GUARANTY
THIS GUARANTY, dated as of April 3, 2000, is executed by each of the
undersigned (each such entity and each entity which hereafter executes and
delivers a Subsidiary Joinder in substantially the form of Attachment 1 hereto
to be referred to herein as a "Guarantor"), in favor of ABN AMRO BANK N.V.,
acting as agent (in such capacity, and each successor thereto in such capacity,
"Agent") for the financial institutions which are from time to time parties to
the Credit Agreement referred to in Recital A below (collectively, "Lenders").
RECITALS
A. Pursuant to a Credit Agreement dated as of April 3, 2000 (as amended
from time to time, the "Credit Agreement"), among Flextronics International USA,
Inc. and The DII Group, Inc. (each a "Borrower" and collectively, the
"Borrowers"), Lenders and Agent, Lenders have agreed to extend certain credit
facilities to Borrowers upon the terms and subject to the conditions set forth
therein. Each Guarantor (other than FIL) is a direct or indirect Subsidiary of
FIL and expects to derive substantial direct and indirect benefit from the
transactions contemplated by the Credit Agreement.
B. Lenders' obligations to extend the credit facilities to Borrowers
under the Credit Agreement are subject, among other conditions, to receipt by
Agent of (1) this Guaranty, duly executed by each existing Eligible Material
Subsidiary, and (2) Subsidiary Joinders, duly executed by each future Eligible
Material Subsidiary.
AGREEMENT
NOW, THEREFORE, in consideration of the above recitals and for other
good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, each Guarantor hereby agrees with Agent, for the ratable benefit
of Lenders and Agent, as follows:
1. DEFINITIONS AND INTERPRETATION.
(a)Definitions. When used in this Guaranty, the following terms
shall have the following respective meanings:
"Agent" shall have the meaning given to that term in the
introductory paragraph hereof.
"Aggregate Guaranty Payments" shall mean, with respect to
any Guarantor at any time, the aggregate net amount of all
payments made by such Guarantor under this Guaranty (including,
without limitation, under Paragraph 5 hereof) at or prior to such
time.
"Alternative Currency" shall mean any currency (other than
United States Dollars).
"Borrowers" shall have the meaning given to that term in
the Recital A hereof.
"Credit Agreement" shall have the meaning given to that
term in the Recital A hereof.
"Debtor Relief Proceeding" shall mean any suit, action,
case or other proceeding commenced by, against or for any
Borrower or its property seeking the dissolution, liquidation,
reorganization, rearrangement or other relief of such Borrower or
its debts under any applicable bankruptcy, insolvency or debtor
relief law or other similar Governmental Rule now or hereafter in
effect or seeking the appointment of a receiver, trustee,
liquidator, custodian or other similar official for such Borrower
or any substantial part of its property or any general assignment
by any
1
<PAGE> 91
Borrower for the benefit of its creditors, whether or not
any such suit, action, case or other proceeding is voluntary or
involuntary.
"Disallowed Post-Commencement Interest and Expenses" shall
mean interest computed at the rate provided in the Credit
Agreement and claims for reimbursement, costs, expenses or
indemnities under the terms of any of the Credit Documents
accruing or claimed at any time after the commencement of any
Debtor Relief Proceeding, if the claim for such interest,
reimbursement, costs, expenses or indemnities is not allowable,
allowed or enforceable against Borrowers in such Debtor Relief
Proceeding.
"Dollar Equivalent" shall mean, as to any amount
denominated in an Alternative Currency as of any date of
determination, the amount of Dollars that would be required to
purchase the amount of such Alternative Currency based upon the
spot selling rate at which ABN AMRO's London office offers to
sell such Alternative Currency for Dollars in the London foreign
exchange market at approximately 11:00 a.m. London time on such
date for delivery two (2) Business Days later.
"Fair Share" shall mean, with respect to any Guarantor at
any time, an amount equal to (i) a fraction, the numerator which
is the Maximum Guaranty Amount of such Guarantor and the
denominator of which is the aggregate Maximum Guaranty Amounts of
all Guarantors, multiplied by (ii) the aggregate amount paid by
all Funding Guarantors under this Guaranty at or prior to such
time.
"FMM Process Agent" shall have the meaning given to that
term in Subparagraph 6(l)(iii) hereof.
"Fair Share Shortfall" shall mean, with respect to any
Guarantor at any time, the amount, if any, by which the Fair
Share of such Guarantor at such time exceeds the Aggregate
Guaranty Payments of such Guarantor at such time.
"FIL" shall have the meaning given to that term in the
Recital A hereof.
"Funding Guarantor" shall have the meaning given to that
term in Paragraph 5 hereof.
"Guaranteed Obligations" shall mean and include, with
respect to any Guarantor, all loans, advances, debts,
liabilities, and obligations, howsoever arising, owed by any
Borrower (other than such Guarantor in its capacity as a Borrower
if such Guarantor is a Borrower) to Agent or any Lender of every
kind and description (whether or not evidenced by any note or
instrument and whether or not for the payment of money)
individual or joint and several, direct or indirect, absolute or
contingent, due or to become due, now existing or hereafter
arising pursuant to the terms of the Credit Documents, including
all interest, fees, charges, expenses, attorneys' fees and
accountants' fees chargeable to any Borrower or payable by any
Borrower thereunder.
"Guarantor" shall have the meaning given to that term in
the introductory paragraph hereof.
"Lenders" shall have the meaning given to that term in the
introductory paragraph hereof.
"Maximum Guaranty Amount" shall mean, with respect to any
Guarantor at any time, (i) the full amount of the Guaranteed
Obligations at such time or (ii) if any court of competent
jurisdiction determines in any action to enforce this Guaranty
that enforcement against such Guarantor for the full amount of
the Guaranteed Obligations is not lawful under or would be
subject to avoidance under Section 548 of the United States
Bankruptcy Code or any applicable provision of any comparable law
of any state or other jurisdiction, then the maximum amount
lawful and not subject to such avoidance.
2
<PAGE> 92
"Mexican Guarantor" shall mean Flextronics Manufacturing
Mex, S.A. de C.V. and its successors or assigns.
"Subordinated Obligations" shall have the meaning given to
that term in Paragraph 4 hereof.
"Subsidiary Joinder" shall mean an instrument
substantially in the form of Attachment 1 hereto.
"Taxes" shall have the meaning given to such term in
Subparagraph 6(h).
Unless otherwise defined herein, all other capitalized terms used herein
and defined in the Credit Agreement shall have the respective meanings
given to those terms in the Credit Agreement.
(b) Other Interpretive Provisions. The rules of construction set
forth in Section I of the Credit Agreement shall, to the extent not
inconsistent with the terms of this Guaranty, apply to this Guaranty and
are hereby incorporated by reference. Each Guarantor acknowledges
receipt of copies of the Credit Agreement and the other Credit
Documents.
2. GUARANTY.
(a) Payment Guaranty. Each Guarantor unconditionally guarantees
and promises to pay and perform as and when due, whether at stated
maturity, upon acceleration or otherwise, any and all of the Guaranteed
Obligations. If any Debtor Relief Proceeding relating to any Borrower is
commenced, each Guarantor further unconditionally guarantees and
promises to pay and perform, upon the demand of Agent, any and all of
the Guaranteed Obligations (including any and all Disallowed
Post-Commencement Interest and Expenses) in accordance with the terms of
the Credit Documents, whether or not such obligations are then due and
payable by any Guarantor and whether or not such obligations are
modified, reduced or discharged in such Debtor Relief Proceeding. This
Guaranty is a guaranty of payment and not of collection.
(b) Continuing Guaranty. This Guaranty is an irrevocable
continuing guaranty of the Guaranteed Obligations which shall continue
in effect until all obligations of Lenders to extend credit to all
Borrowers have terminated and all of the Guaranteed Obligations have
been fully paid. If any payment on any Guaranteed Obligation is set
aside, avoided or rescinded or otherwise recovered from Agent or any
Lender, such recovered payment shall constitute a Guaranteed Obligation
hereunder and, if this Guaranty was previously released or terminated,
it automatically shall be fully reinstated, as if such payment was never
made.
(c) Joint, Several and Independent Obligations. The liability of
each Guarantor hereunder is joint and several and is independent of the
Guaranteed Obligations. A separate action or actions may be brought and
prosecuted against each Guarantor for the full amount of the Guaranteed
Obligations irrespective of whether action is brought against any
Borrower, any other Guarantor or any other guarantor of the Guaranteed
Obligations or whether any Borrower, any other Guarantor or any other
guarantor of the Guaranteed Obligations is joined in any such action or
actions.
(d) Fraudulent Transfer Limitation. If, in any action to enforce
this Guaranty, any court of competent jurisdiction determines that
enforcement against any Guarantor for the full amount of the Guaranteed
Obligations is not lawful under or would be subject to avoidance under
Section 548 of the United States Bankruptcy Code or any applicable
provision of any comparable law of any state or other jurisdiction, the
liability of such Guarantor under this Guaranty shall be limited to the
maximum amount lawful and not subject to such avoidance.
(e) Termination. Notwithstanding any termination of this Guaranty
in accordance with Paragraph 3 hereof, this Guaranty shall continue to
be in full force and effect and applicable to any Guaranteed
3
<PAGE> 93
Obligations arising thereafter which arise because prior payments of
Guaranteed Obligations are rescinded or otherwise required to be
surrendered by Agent or any Lender after receipt.
3. AUTHORIZATIONS, WAIVERS, ETC.
(a) Authorizations. Each Guarantor authorizes Agent and Lenders,
in their discretion, without notice to such Guarantor, irrespective of
any change in the financial condition of any Borrower, such Guarantor,
any other Guarantor or any other guarantor of the Guaranteed Obligations
since the date hereof, and without affecting or impairing in any way the
liability of such Guarantor hereunder, from time to time to:
(i) Create new Guaranteed Obligations and renew,
compromise, extend, accelerate or otherwise change the time for
payment or performance of, or otherwise amend or modify the
Credit Documents or change the terms of the Guaranteed
Obligations or any part thereof, including increase or decrease
of the rate of interest thereon;
(ii) Take and hold security for the payment or performance
of the Guaranteed Obligations and exchange, enforce, waive or
release any such security; apply such security and direct the
order or manner of sale thereof; and purchase such security at
public or private sale;
(iii) Otherwise exercise any right or remedy they may have
against any Borrower, such Guarantor, any other Guarantor, any
other guarantor of the Guaranteed Obligations or any security,
including, without limitation, the right to foreclose upon any
such security by judicial or nonjudicial sale;
(iv) Settle, compromise with, release or substitute any
one or more makers, endorsers or guarantors of the Guaranteed
Obligations; and
(v) Assign the Guaranteed Obligations, this Guaranty or
the other Credit Documents in whole or in part to the extent
provided in the Credit Agreement and the other Credit Documents.
(b) Waivers. Each Guarantor hereby waives:
(i) Any right to require Agent or any Lender to (A)
proceed against any Borrower, any other Guarantor or any other
guarantor of the Guaranteed Obligations, (B) proceed against or
exhaust any security received from any Borrower, such Guarantor,
any other Guarantor or any other guarantor of the Guaranteed
Obligations or otherwise marshal the assets of any Borrower, such
Guarantor, any other Guarantor or any other guarantor of the
Guaranteed Obligations or (C) pursue any other remedy in Agent's
or any Lender's power whatsoever;
(ii) Any defense arising by reason of the application by
any Borrower of the proceeds of any borrowing;
(iii) Any defense resulting from the absence, impairment
or loss of any right of reimbursement, subrogation, contribution
or other right or remedy of Guarantor against any Borrower, any
other Guarantor, any other guarantor of the Guaranteed
Obligations or any security, whether resulting from an election
by Agent or any Lender to foreclose upon security by nonjudicial
sale, or otherwise;
(iv) Any setoff or counterclaim of any Borrower or any
defense which results from any disability or other defense of any
Borrower or the cessation or stay of enforcement from any cause
whatsoever of the liability of any Borrower (including, without
limitation, the lack of validity or enforceability of any of the
Credit Documents);
-4-
<PAGE> 94
(v) Any defense based upon any law, rule or regulation
which provides that the obligation of a surety must not be
greater or more burdensome than the obligation of the principal;
(vi) Until all obligations of Agent or any Lender to
extend credit to all Borrowers have terminated and all of the
Guaranteed Obligations have been fully paid, any right of
subrogation, reimbursement, indemnification or contribution and
other similar right to enforce any remedy which Agent, Lenders or
any other Person now has or may hereafter have against any
Borrower on account of the Guaranteed Obligations, and any
benefit of, and any right to participate in, any security now or
hereafter received by Agent, any Lender or any other Person on
account of the Guaranteed Obligations;
(vii) All presentments, demands for performance, notices
of non-performance, notices delivered under the Credit Documents,
protests, notice of dishonor, and notices of acceptance of this
Guaranty and of the existence, creation or incurring of new or
additional Guaranteed Obligations and notices of any public or
private foreclosure sale;
(viii) The benefit of any statute of limitations to the
extent permitted by law;
(ix) Any appraisement, valuation, stay, extension,
moratorium redemption or similar law or similar rights for
marshalling;
(x) Any right to be informed by Agent or any Lender of the
financial condition of any Borrower, any other Guarantor or any
other guarantor of the Guaranteed Obligations or any change
therein or any other circumstances bearing upon the risk of
nonpayment or nonperformance of the Guaranteed Obligations;
(xi) Until all obligations of Agent or any Lender to
extend credit to any Borrower have terminated and all of the
Guaranteed Obligations have been fully paid, any right to revoke
this Guaranty;
(xii) Any defense arising from an election for the
application of Section 1111(b)(2) of the United States Bankruptcy
Code which applies to the Guaranteed Obligations;
(xiii) Any defense based upon any borrowing or grant of a
security interest under Section 364 of the United States
Bankruptcy Code; and
(xiv) Any right it may have to a fair value hearing to
determine the size of a deficiency judgment following any
foreclosure on any security for the Guaranteed Obligations.
Without limiting the scope of any of the foregoing provisions of this
Paragraph 3, each Guarantor hereby further waives (A) all rights and
defenses arising out of an election of remedies by Agent or any Lender,
even though that election of remedies, such as a nonjudicial foreclosure
with respect to security for a Guaranteed Obligation, has destroyed such
Guarantor's rights of subrogation and reimbursement against any Borrower
by the operation of Section 580d of the Code of Civil Procedure or
otherwise, (B) all rights and defenses such Guarantor may have by reason
of protection afforded to any Borrower with respect to the Guaranteed
Obligations pursuant to the antideficiency or other laws of California
limiting or discharging the Guaranteed Obligations, including, without
limitation, Section 580a, 580b, 580d, or 726 of the California Code of
Civil Procedure, and (C) all other rights and defenses available to such
Guarantor by reason of Sections 2787 to 2855, inclusive, Section 2899 or
Section 3433 of the California Civil Code or Section 3605 of the
California Commercial Code.
(c) The Mexican Guarantor hereby expressly agrees that any rights
or privileges that it might have under the laws of Mexico shall not be
applicable to this Guaranty, including, but not limited to, any benefit
of "orden," "excusion," "division," "quita," "novacion," "prorroga,"
"espera" or "modificacion," provided in Articles 2813, 2814, 2816, 2817,
2818, 2820, 2821, 2822, 2823, 2827, 2836,
5
<PAGE> 95
2840, 2842, 2844, 2845, 2846, 2847, 2848, and 2849 of the Civil Code of
the Federal District of Mexico and the corresponding articles of the
Civil Codes in all States of the United Mexican States ("Mexico"), which
are not reproduced herein by express declaration that the contents of
such articles are known to the Mexican Guarantor.
(d) Financial Condition of Borrowers, Etc. Each Guarantor is
fully aware of the financial condition and affairs of each Borrower.
Each Guarantor has executed this Guaranty without reliance upon any
representation, warranty, statement or information concerning Borrowers
furnished to such Guarantor by Agent or any Lender and has,
independently and without reliance on Agent or any Lender, and based on
such documents and information as it has deemed appropriate, made its
own appraisal of the financial condition and affairs of each Borrower
and of other circumstances affecting the risk of nonpayment or
nonperformance of the Guaranteed Obligations. Each Guarantor is in a
position to obtain, and assumes full responsibility for obtaining, any
additional information about the financial condition and affairs of each
Borrower and of other circumstances affecting the risk of nonpayment or
nonperformance of the Guaranteed Obligations and will, independently and
without reliance upon Agent or any Lender, and based on such documents
and information as it shall deem appropriate at the time, continue to
make its own appraisals and decisions in taking or not taking action in
connection with this Guaranty.
4. SUBORDINATION. Each Guarantor hereby subordinates any and all debts,
liabilities and obligations owed to such Guarantor by each Borrower (the
"Subordinated Obligations") to the Guaranteed Obligations as provided in this
Paragraph 4.
(a) Prohibited Payments, Etc. Except during the continuance of a
Default (including the commencement and continuation of any Debtor
Relief Proceeding relating to either Borrower), each Guarantor may
receive regularly scheduled payments from Borrowers on account of
Subordinated Obligations. After the occurrence and during the
continuance of any Default (including the commencement and continuation
of any Debtor Relief Proceeding relating to either Borrower), however,
unless Agent otherwise agrees, no Guarantor shall demand, accept or take
any action to collect any payment on account of the Subordinated
Obligations.
(b) Prior Payment of Guaranteed Obligations. In any Debtor Relief
Proceeding relating to either Borrower, each Guarantor agrees that Agent
and Lenders shall be entitled to receive payment of all Guaranteed
Obligations (including any and all Disallowed Post-Commencement Interest
and Expenses) before such Guarantor receives payment of any Subordinated
Obligations.
(c) Turn-Over. After the occurrence and during the continuance of
any Default (including the commencement and continuation of any Debtor
Relief Proceeding relating to either Borrower), each Guarantor shall, if
Agent so requests, collect, enforce and receive payments on account of
the Subordinated Obligations as trustee for Agent and Lenders and
deliver such payments to Agent on account of the Guaranteed Obligations
(including any and all Disallowed Post-Commencement Interest and
Expenses), together with any necessary endorsements or other instruments
of transfer, but without reducing or affecting in any manner the
liability of such Guarantor under the other provisions of this Guaranty.
(d) Agent Authorization. After the occurrence and during the
continuance of any Default (including the commencement and continuation
of any Debtor Relief Proceeding relating to any Borrower), Agent is
authorized and empowered (but without any obligation to so do), in its
discretion, (i) in the name of each Guarantor, to collect and enforce,
and to submit claims in respect of, Subordinated Obligations and to
apply any amounts received thereon to the Guaranteed Obligations
(including any and all Disallowed Post-Commencement Interest and
Expenses), and (ii) to require each Guarantor (A) to collect and
enforce, and to submit claims in respect of, Subordinated Obligations
and (B) to pay any amounts received on such obligations to Agent for
application to the Guaranteed Obligations (including any and all
Disallowed Post-Commencement Interest and Expenses).
5. CONTRIBUTION AMONG GUARANTORS. Guarantors desire to allocate among
themselves, in a fair and equitable manner, their rights of contribution from
each other when any payment is made by any Guarantor under this Guaranty.
Accordingly, if any payment is made by any Guarantor under this Guaranty (a
"Funding Guarantor")
6
<PAGE> 96
that exceeds its Fair Share, the Funding Guarantor shall be entitled to a
contribution from each other Guarantor in the amount of such other Guarantor's
Fair Share Shortfall, so that all such contributions shall cause each
Guarantor's Aggregate Guaranty Payments to equal its Fair Share. The amounts
payable as contributions hereunder shall be determined by the Funding Guarantor
as of the date on which the related payment or distribution is made by the
Funding Guarantor, and such determination shall be binding on the other
Guarantors absent manifest error. The allocation and right of contribution among
Guarantors set forth in this Paragraph 5 shall not be construed to limit in any
way the liability of any Guarantor under this Guaranty or the amount of the
Guaranteed Obligations.
6. MISCELLANEOUS.
(a) Notices. Except as otherwise provided herein, all notices,
requests, demands, consents, instructions or other communications to or
upon any Guarantor or Agent under this Guaranty or the other Credit
Documents shall be in writing and faxed, mailed or delivered, if to
Agent, at its facsimile number or address set forth below, or, if to any
Guarantor, at its facsimile number or address set forth below its
signature below or in the respective Subsidiary Joinder for such
Guarantor (or to such other facsimile number or address for any party as
indicated in any notice given by that party to the other parties). All
such notices and communications shall be effective (i) when sent by any
overnight courier service of recognized standing, on the second Business
Day following the deposit with such service; (ii) when mailed, first
class postage prepaid and addressed through the United States Postal
Service, upon receipt; (iii) when delivered by hand, upon delivery; and
(iv) when faxed, upon confirmation of receipt.
Agent: ABN AMRO Bank N.V.
Syndications Group
1325 Avenue of the Americas, 9th Floor
New York, NY 10019
U.S.A.
Attn: Linda Boardman
Tel. No: (212) 314-1724
Fax. No: (212) 314-1712
With a copy to:
ABN AMRO Bank N.V.
101 California Street, Suite 4550 San Francisco, CA
94111-5812 U.S.A.
Attn: Mathew Harvey
Tel No: (415) 984-3733
Fax No: (415) 362-3524
(b) Payments.
(i) Each Guarantor shall make all payments of the
Guaranteed Obligations to Agent, or its order, at the office of
Agent and at the times specified in the Credit Documents for the
payment of such Guaranteed Obligations. Each Guarantor shall make
all other payments hereunder at such office as Agent may
designate. Each payment shall be made in same day or immediately
available funds not later than 11:00 a.m.(local time of the
office of Agent at which such payment is to be made) on the date
due.
(ii) Each Guarantor shall make all payments of the
Guaranteed Obligations hereunder in the currency in which such
Guaranteed Obligations are required to be paid by either Borrower
pursuant to the Credit Documents and shall make all other
payments hereunder in Dollars; provided, however, that, if Agent
shall request a Guarantor to pay any amount hereunder which would
otherwise be payable in another currency in the lawful currency
of the United States, such Guarantor shall pay to Agent the
Dollar Equivalent of such amount.
7
<PAGE> 97
(iii) If any sum due from any Guarantor under this
Guaranty or any other Credit Document to which such Guarantor is
a party or any order, judgment or award given or rendered in
relation hereto or thereto has to be converted from the currency
(the "first currency") in which the same is payable hereunder or
thereunder into another currency (the "second currency") for the
purpose of (A) making or filing a claim or proof against such
Guarantor with any Governmental Authority, (B) obtaining an order
or judgment in any court or other tribunal or (C) enforcing any
order or judgment given or made in relation hereto, such
Guarantor shall, to the fullest extent permitted by law,
indemnify and hold harmless each of the Persons to whom such sum
is due from and against any loss suffered as a result of any
discrepancy between (1) the rate of exchange used for such
purpose to convert the amounts in question from the first
currency into the second currency and (2) the rate or rates of
exchange at which such Person may, using reasonable efforts in
the ordinary course of business, purchase the first currency with
the second currency upon receipt of a sum paid to it in
satisfaction, in whole or in part, of any such order, judgment,
claim or proof. The foregoing indemnity shall constitute a
separate obligation of each Guarantor distinct from its other
obligations hereunder and shall survive the giving or making of
any judgment or order in relation to all or any of such
obligations.
(iv) If any amounts required to be paid by any Guarantor
under this Guaranty or any order, judgment or award given or
rendered in relation hereto remain unpaid after such amounts are
due, such Guarantor shall pay interest on the aggregate,
outstanding balance of such amounts from the date due until those
amounts are paid in full at a per annum rate equal to:
(1) In the case of amounts payable in Dollars, the
Base Rate plus two percent (2.00%), such rate to change from time to time as the
Base Rate shall change.
(2) In the case of amounts payable in any other
currency, the Overnight Rate for such currency plus three percent (3.0%), such
rate to change from time to time as the Overnight Rate shall change.
(c) Expenses. Each Guarantor shall pay on demand (i) all
reasonable and documented fees and expenses, including reasonable
attorneys' fees and expenses, incurred by Agent in connection with the
preparation, execution and delivery of, and the exercise of its duties
under, this Guaranty and the preparation, execution and delivery of
amendments and waivers hereunder and (ii) all reasonable and documented
fees and expenses, including reasonable attorneys' fees and expenses,
incurred by Agent and Lenders in connection with the enforcement or
attempted enforcement of this Guaranty or any of the Guaranteed
Obligations or in preserving any of Agent's or Lenders' rights and
remedies (including, without limitation, all such fees and expenses
incurred in connection with any "workout" or restructuring affecting the
Credit Documents or the Guaranteed Obligations or any bankruptcy or
similar proceeding involving Guarantor, any other Guarantor, any
Borrower, or any of their affiliates).
(d) Waivers; Amendments. This Guaranty may not be amended or
modified, nor may any of its terms be waived, except by written
instruments signed by each Guarantor and Agent. Each waiver or consent
under any provision hereof shall be effective only in the specific
instances for the purpose for which given. No failure or delay on
Agent's or any Lender's part in exercising any right hereunder shall
operate as a waiver thereof or of any other right nor shall any single
or partial exercise of any such right preclude any other further
exercise thereof or of any other right.
(e) Successors and Assigns. This Guaranty shall be binding upon
and inure to the benefit of Agent, Lenders, Guarantors and their
respective successors and assigns; provided, however, that no Guarantor
may assign or transfer any of its rights and obligations under this
Guaranty without the prior written consent of Agent and Lenders, and,
provided, further, that Agent or any Lender may sell, assign and
delegate their respective rights and obligations hereunder only as
permitted by the Credit Agreement. All references in this Guaranty to
any Person shall be deemed to include all permitted successors and
assigns of such Person.
8
<PAGE> 98
(f) Cumulative Rights, etc. The rights, powers and remedies of
Agent and Lenders under this Guaranty shall be in addition to all
rights, powers and remedies given to Agent and Lenders by virtue of any
applicable law, rule or regulation of any Governmental Authority, the
Credit Agreement, any other Credit Document or any other agreement, all
of which rights, powers, and remedies shall be cumulative and may be
exercised successively or concurrently without impairing Agent's or any
Lender's rights hereunder. Each Guarantor waives any right to require
Agent or any Lender to proceed against any Person or to exhaust any
Collateral or to pursue any remedy in Agent's or such Lender's power.
(g) Setoff; Security Interest.
(i) In addition to any rights and remedies of Lenders
provided by law, each Lender shall have the right, with the prior
consent of Agent but without prior notice to or consent of any
Guarantor, any such notice and consent being expressly waived by
each Guarantor to the extent permitted by applicable law, upon
the occurrence and during the continuance of an Event of Default,
to set-off and apply against the obligations of each Guarantor
any amount owing from such Lender to such Guarantor. The
aforesaid right of set-off may be exercised by such Lender
against a Guarantor or against any trustee in bankruptcy, debtor
in possession, assignee for the benefit of creditors, receiver or
execution, judgment or attachment creditor of such Guarantor or
against anyone else claiming through or against such Guarantor or
such trustee in bankruptcy, debtor in possession, assignee for
the benefit of creditors, receiver, or execution, judgment or
attachment creditor, notwithstanding the fact that such right of
set-off may not have been exercised by such Lender at any prior
time. Each Lender agrees promptly to notify the applicable
Guarantor after any such set-off and application made by such
Lender, provided that the failure to give such notice shall not
affect the validity of such set-off and application.
(ii) As security for the obligations of each Guarantor
hereunder, each Guarantor hereby grants to Agent and each Lender,
for the benefit of all Lenders, a continuing security interest in
any and all deposit accounts or moneys of such Guarantor now or
hereafter maintained with such Lender. Each Lender shall have all
of the rights of a secured party with respect to such security
interest.
(h) Payments Free of Taxes. All payments made by each Guarantor
under this Guaranty shall be made free and clear of, and without
deduction or withholding for or on account of, all present and future
Non-Excluded Taxes. If any Non-Excluded Taxes are required to be
withheld from any amounts payable to Agent or any Lender hereunder, the
amounts so payable to Agent or such Lender shall be increased to the
extent necessary to yield to Agent or such Lender (after payment of all
Non-Excluded Taxes) interest or any such other amounts payable hereunder
at the rates or in the amounts specified in this Guaranty or the other
Credit Documents, as applicable. Whenever any Non-Excluded Taxes are
payable by any Guarantor, as promptly as possible thereafter, such
Guarantor shall send to Agent for its own account or for the account of
such Lender, as the case may be, a certified copy of an original
official receipt received by such Guarantor showing payment thereof. If
Guarantors fail to pay any Non-Excluded Taxes when due to the
appropriate taxing authority or fail to remit to Agent the required
receipts or other required documentary evidence, Guarantors shall
indemnify Agent and Lenders for any taxes (including interest or
penalties) that may become payable by Agent or any Lender as a result of
any such failure. The obligations of Guarantors under this Subparagraph
6(h) shall survive the payment and performance of the Guaranteed
Obligations and the termination of this Guaranty. Nothing contained in
this Subparagraph 6(h) shall require Agent or any Lender to make
available any of its tax returns (or any other information relating to
its taxes which it deems to be confidential).
(i) Partial Invalidity. If at any time any provision of this
Guaranty is or becomes illegal, invalid or unenforceable in any respect
under the law or any jurisdiction, neither the legality, validity or
enforceability of the remaining provisions of this Guaranty nor the
legality, validity or enforceability of such provision under the law of
any other jurisdiction shall in any way be affected or impaired thereby.
(j) Jury Trial. EACH OF GUARANTORS, LENDERS AND AGENT, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY IRREVOCABLY WAIVES
ALL RIGHT
9
<PAGE> 99
TO TRIAL BY JURY AS TO ANY ISSUE RELATING HERETO IN ANY ACTION,
PROCEEDING, OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS GUARANTY.
(k) Counterparts. This Guaranty may be executed in any number of
identical counterparts, any set of which signed by all the Guarantors
shall be deemed to constitute a complete, executed original for all
purposes.
(l) Governing Law, Consent to Jurisdiction, Etc.
(i) This Guaranty shall be governed by and construed in
accordance with the laws of the State of California, except for
the purposes of any suit or legal action brought in Mexico in
which case it shall be governed by the laws of Mexico.
(ii) Each Guarantor irrevocably submits to the
non-exclusive jurisdiction of the courts of the State of
California and the courts of the United States of America located
in the Northern District of California and, in respect of the
Mexican Guarantor, the Mexican Guarantor and the Agent, on behalf
of Lenders, also irrevocably submit to the jurisdictions of the
courts of the Federal District of Mexico, Mexico, and agrees that
any legal action, suit or proceeding arising out of or relating
to this Guaranty or any of the other Credit Documents may be
brought against such party in any such courts. Final judgment
against a Guarantor in any such action, suit or proceeding shall
be conclusive and may be enforced in any other jurisdiction by
suit on the judgment, a certified or exemplified copy of which
shall be conclusive evidence of the judgment, or in any other
manner provided by law. Nothing in this Subparagraph 6(l) shall
affect the right of Agent or any Lender to commence legal
proceedings or otherwise sue any Guarantor in any other
appropriate jurisdiction, or concurrently in more than one
jurisdiction, or to serve process, pleadings and other papers
upon any Guarantor in any manner authorized by the laws of any
such jurisdiction. Subject to and except as otherwise provided in
paragraph (iii) below in respect of the Mexican Guarantor, each
Guarantor agrees that process served either personally or by
registered mail shall, to the extent permitted by law,
constitutes adequate service of process in any such suit. Without
limiting the foregoing, each Guarantor hereby appoints, in the
case of any such action or proceeding brought in the courts of or
in the State of California, CT Corporation, with offices on the
date hereof at 818 West Seventh Street, Los Angeles, California
90017, to receive for it and on its behalf, service of process in
the State of California with respect thereto, provided each
Guarantor may appoint any other person, reasonably acceptable to
Agent, with offices in the State of California to replace such
agent for service of process upon delivery to Agent of a
reasonably acceptable agreement of such new agent agreeing so to
act. Each Guarantor irrevocably waives to the fullest extent
permitted by applicable law (A) any objection which it may have
now or in the future to the laying of the venue of any such
action, suit or proceeding in any court referred to in the first
sentence above; (B) any claim that any such action, suit or
proceeding has been brought in an inconvenient forum; (C) its
right of removal of any matter commenced by any other party in
the courts of the State of California to any court of the United
States of America; (D) any immunity which it or its assets may
have in respect of its obligations under this Agreement or any
other Credit Document from any suit, execution, attachment
(whether provisional or final, in aid of execution, before
judgment or otherwise) or other legal process; and (E) any right
it may have to require the moving party in any suit, action or
proceeding brought in any of the courts referred to above arising
out of or in connection with this Agreement or any other Credit
Document to post security for the costs of any Guarantor or to
post a bond or to take similar action.
(iii) The Mexican Guarantor hereby irrevocably appoints CT
Corporation, Los Angeles Agency, (the "FMM Process Agent"), with
an office on the date hereof in 818 West Seventh Street, Los
Angeles, California 90017, in the case of any action, suit or
proceeding arising out of or relating to this Guaranty or any of
the other Credit Documents brought in the courts of or in the
State of California, as its agent to receive for it and on its
behalf service of process in the State of California with respect
thereto. Such service may be made by mailing or delivering a copy
of such process to the Mexican Guarantor in care of the FMM
Process Agent at the FMM Process Agent's above address, and the
Guarantor hereby irrevocably authorizes and directs the
10
<PAGE> 100
FMM Process Agent to accept such service on its behalf; provided,
that for any notice or service of process to be effective under
Mexican law, such notice or service of process shall be deemed to
have been given or made when delivered either (i) personally,
return receipt requested, (ii) by courier delivery or certified
mail, return receipt requested, or (iii) by facsimile followed by
personal or courier delivery, return receipt requested. The
Mexican Guarantor agrees that a final judgment in any such
proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner
provided by law. For purposes of perfecting the appointment of
the FMM Process Agent under the applicable laws of Mexico, the
Mexican Guarantor agrees to execute and deliver the power of
attorney attached hereto as Attachment 2, formalized before a
notary public in Mexico and duly recorded at the Public Registry
of Commerce (Registro Publico de Comercio) of the corporate
domicile of the Mexican Guarantor, and to execute and deliver any
and all other documents (including Mexican notarial deeds) as may
be required by the Agent in its sole discretion.
[The first signature page follows.]
11
<PAGE> 101
IN WITNESS WHEREOF, each Guarantor has caused this Guaranty to be
executed as of the day and year first above written.
FLEXTRONICS INTERNATIONAL LTD., acting
through its Hong Kong branch
By:
--------------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
Address:
Room 908, Dominion Center
43-59 Queens Road East
Wanchai, Hong Kong
Attn: Chief Financial Officer
Telephone: (___) ___-____
Facsimile: (408) 428-1300
With a copy to:
2090 Fortune Drive
San Jose, CA, 95131
U.S.A.
Attn: Treasurer
Telephone: (___) ___-____
Facsimile: (408) 428-1300
FLEXTRONICS INTERNATIONAL LATIN AMERICA (L)
LTD.
By:
--------------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
Address:
Level 10, Wisma Oceanic
Jalan OKK Awang Besar
Labuan, F.T.
Malaysia
Attn: ___________________
Telephone: (___) ___-____
Facsimile: (___) ___-____
FLEX INTERNATIONAL MARKETING (L) LTD.
12
<PAGE> 102
By:
-----------------------------
Name:
---------------------
Title:
--------------------
Address:
Level 10, Wisma Oceanic
Jalan OKK Awang Besar
Labuan, F.T.
Malaysia
Attn: ___________________
Telephone: (___) ___-____
Facsimile: (___) ___-____
FLEXTRONICS MANUFACTURING MEX,
S.A. DE C.V.
By:
-----------------------------
Name:
---------------------
Title:
--------------------
Address:
Carretara Base Aerea Militar 5850
Zapopan, Jalisco 4500
Mexico
Attn: ___________________
Telephone: (___) ___-____
Facsimile: (___) ___-____
FLEXTRONICS SINGAPORE PTE LTD.
By:
-----------------------------
Name:
---------------------
Title:
--------------------
Address:
36 Robinson Road
#18-01 City House
Singapore 068877
Attn: ___________________
Telephone: (___) ___-____
Facsimile: (___) ___-____
13
<PAGE> 103
FLEXTRONICS HOLDINGS UK LIMITED
By:
-----------------------------
Name:
---------------------
Title:
--------------------
Address:
50 Stratton Street
London W1X 6NX
England
Attn: ___________________
Telephone: (___) ___-____
Facsimile: (___) ___-____
FLEXTRONICS INTERNATIONAL USA,
INC.
By:
-----------------------------
Name:
---------------------
Title:
--------------------
Address:
2090 Fortune Drive
San Jose, California 95131
U.S.A.
Attn: Treasurer
Telephone: (___) ___-____
Facsimile: (___) ___-____
DOVATRON INTERNATIONAL, INC.
By:
-----------------------------
Name:
---------------------
Title:
--------------------
Address:
Attn: ___________________
Telephone: (___) ___-____
Facsimile: (___) ___-____
14
<PAGE> 104
ATTACHMENT 1
SUBSIDIARY JOINDER
THIS SUBSIDIARY JOINDER (this "Agreement"), dated as of
____________, ____, is executed by [NEW ELIGIBLE MATERIAL SUBSIDIARY], a
_________ [corporation] [partnership] [etc.] ("New Subsidiary") in favor of ABN
AMRO BANK N.V., acting as agent (in such capacity, and each successor thereto in
such capacity, "Agent") for the financial institutions which are from time to
time parties to the Credit Agreement referred to in Recital A below
(collectively, the "Lenders").
RECITALS
A. Pursuant to a Credit Agreement dated as of April 3, 2000 (as
amended from time to time, the "Credit Agreement"), among Flextronics
International USA, Inc. ("FIUI") and The DII Group, Inc. ("DII", and together
with FIUI, each a "Borrower" and collectively the "Borrowers"), Lenders and
Agent, Lenders have agreed to extend certain credit facilities to Borrowers upon
the terms and subject to the conditions set forth therein.
B. Lenders' obligations to extend the credit facilities to
Borrowers under the Credit Agreement are subject, among other conditions, to
receipt by Agent of (1) a Guaranty, dated as of April 3, 2000, duly executed by
each existing Eligible Material Subsidiary and any other Subsidiary designated
as a Guarantor from time to time, and (2) Subsidiary Joinders, duly executed by
each future Eligible Material Subsidiary.
C. New Subsidiary is a new Eligible Material Subsidiary and
expects to derive substantial direct and indirect benefit from the transactions
contemplated by the Credit Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the above recitals and for
other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, New Subsidiary hereby agrees with Agent, for the ratable
benefit of Lenders and Agent, as follows:
1. DEFINITIONS AND INTERPRETATION. Unless otherwise defined
herein, all capitalized terms used herein and defined in the Guaranty shall have
the respective meanings given to those terms in the Guaranty. New Subsidiary
acknowledges receipt of copies of the Guaranty, the Credit Agreement and the
other Credit Documents.
2. REPRESENTATIONS AND WARRANTIES. On and as of the date of this
Agreement (the "Effective Date") and for the ratable benefit of the Agent and
Lenders, New Subsidiary hereby makes each of the representations and warranties
made by each Guarantor in the Guaranty.
3. AGREEMENT TO BE BOUND. New Subsidiary agrees that, on and as
of the Effective Date, it shall become a Guarantor under the Guaranty and shall
be bound by all the provisions of the Guaranty to the same extent as if New
Subsidiary had executed the Guaranty on the Closing Date.
4. WAIVER. Without limiting the generality of the waivers in the
Guaranty, New Subsidiary specifically agrees to be bound by the Guaranty and
waives any right to notice of acceptance of its execution of this Agreement and
of its agreement to be bound by the Guaranty.
5. GOVERNING LAW. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of California.
(1)-1
<PAGE> 105
IN WITNESS WHEREOF, New Subsidiary has caused this Agreement to
be executed by its duly authorized officer.
[NEW SUBSIDIARY]
By:
-----------------------------------
Name:
---------------------------
Title:
--------------------------
Address:
[_________________________]
[_________________________]
[_________________________]
Attn: [___________________]
Telephone: [(___) ___-____]
Facsimile: [(___) ___-____]
(1)-2
<PAGE> 106
ATTACHMENT 2
To be executed and delivered
by the Guarantor in the presence of,
and to be certified by,
a Mexican Notary Public
FORM OF SPECIAL IRREVOCABLE POWER OF ATTORNEY
[__________________], S.A. DE C.V. (the "Grantor"), a sociedad
anonima de capital variable duly incorporated and validly existing under the
laws of the United Mexican States ("Mexico"), hereby grants an irrevocable power
of attorney for litigation and collections in favor of [____________________]
(the "Attorney-In-Fact"), in terms of the first paragraph of article 2554 of the
Civil Code for the Federal District of Mexico and the corresponding articles of
the Civil Codes of all States of Mexico. This power of attorney is limited in
its scope but is as broad as necessary and may be exercised in any jurisdiction,
so that the Attorney-In-Fact, in the name and on behalf of the Grantor, receives
any and all notices and service of process of any nature in connection with any
suits, actions, proceedings and judgments of all kinds, including, without
limitation, judicial, administrative or arbitration proceedings in any way
relating to the Guaranty Agreement (the "Guaranty Agreement") dated
[___________], 2000 entered into by and among the Grantor, the other Guarantors,
the Lenders party thereto and ABN AMRO Bank N.V. as agent. The Grantor hereby
appoints as its domicile to receive any notices relating thereto,
[_______________] United States of America, or any other domicile of the
Attorney-In-Fact notified to the Grantor. This Power of Attorney is granted in
satisfaction of a condition set forth in the Guaranty Agreement, and it is
therefore irrevocable, in accordance with article 2596 of the Civil Code for the
Federal District of Mexico and the corresponding Articles of the Civil Code of
all States of Mexico.
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<PAGE> 107
ATTACHMENT 2
To be executed and delivered
by the Guarantor in the presence of,
and to be certified by,
a Mexican Notary Public
FORM SPECIAL IRREVOCABLE POWER OF ATTORNEY
"NUMERO
LIBRO
FOLIO
En la Ciudad de [_________] a los [____________] dias de mes de
[___________] de mil novecientos noventa y nueve, yo, el Licenciado
[__________________________], titular de la Notaria numero [____________] del
[_______________], hago constar el PODER ESPECIAL IRREVOCABLE, que se consigna
al tenor de la siguiente:
CLAUSULA UNICA
Por medio del presente instrumento, la sociedad denominada [__________________],
SOCIEDAD ANONIMA DE CAPITAL VARIABLE (la "Otorgante"), representada como ha
quedado dicho, otorga en favor de la sociedad denominada [_______________], un
poder especial irrevocable para pleitos y cobranzas, en los terminos de primer
parrafo del Articulo dos mil quinientos cincuenta y cuatro del Codigo Civil para
el Distrito Federal y correlativos de los Estados de la Republica, que es
limitado en cuanto a su objeto, pero tan amplio como sea necesario, para ser
ejercido en cualquier jurisdiccion y a efecto de que, en nombre y representacion
de la Otorgante, reciba toda clase de notificaciones y emplazamientos de
cualquier naturaleza en relacion con cualquier demanda, accion, procedimiento o
juicio, incluyendo sin limitacion alguna procedimientos judiciales,
administrativos o arbitrales, derivados del Contrato de Garantia (Guaranty
Agreement; el "Contrato de Garantia") de fecha [___] de [_______] de 2000,
celebrado entre la Otorgante, las acreditantes (Lenders) ahi descritas y ABN
AMRO Bank N.V. como agente administrativo. La Otorgante senala como domicilio
convencional para recibir cualesquiera de las notificaciones o emplazamientos
antes citados el ubicado en [___________________________], Estados Unidos de
America, o cualquier otro domicilio que en el futuro designe
[__________________________]. El presente poder es irrevocable, en virtud de que
se otorga en cumplimiento de una condicion prevista en el Contrato de Garantia
en terminos del Articule 2596 del Codigo Civil para el Distrito Federal y
correlativos de los Estados de la Republica.
D(1)-1
<PAGE> 108
EXHIBIT E
PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT, dated as of [ ], is executed by
[____________________], a [________] ("Pledgor"), in favor of ABN AMRO BANK
N.V., acting as agent (in such capacity and each successor thereto acting in
such capacity, "Agent") for the financial institutions which are from time to
time parties to the Credit Agreement referred to in Recital A below
(collectively, "Lenders").
RECITALS
A. Pursuant to a Credit Agreement, dated as of April 3, 2000 (as amended
from time to time, the "Credit Agreement"), among Flextronics International USA,
Inc. ("FIUI") and The DII Group, Inc. ("DII", and together with FIUI, each a
"Borrower" and collectively the "Borrowers"), Lenders and Agent, Lenders have
agreed to extend certain credit facilities to Borrowers upon the terms and
subject to the conditions set forth therein.
B. Lenders' obligations to extend the credit facilities to Borrowers
under the Credit Agreement are subject, among other conditions, to receipt by
Agent of this Agreement, duly executed by Pledgor.
AGREEMENT
NOW, THEREFORE, in consideration of the above recitals and for other
good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, Pledgor hereby agrees with Agent, for the ratable benefit of
Lenders and Agent, as follows:
1. DEFINITIONS AND INTERPRETATION.
(a) Definitions. When used in this Agreement, the following terms
shall have the following respective meanings:
"Agent" shall have the meaning given to that term in the
introductory paragraph hereof.
"Collateral" shall have the meaning given to that term in
Paragraph 2 hereof.
"Credit Agreement" shall have the meaning given to that
term in Recital A hereof.
"Equity Securities" of any Person shall mean (a) all
common stock, preferred stock, participations, shares,
partnership interests or other equity interests in and of such
Person (regardless of how designated and whether or not voting or
non-voting) and (b) all warrants, options and other rights to
acquire any of the foregoing.
"Lenders" shall have the meaning given to that term in the
introductory paragraph hereof.
"Pledged Shares" shall mean collectively the Equity
Securities pledged to Agent pursuant to Paragraph 2 hereof.
"Pledgor" shall have the meaning given to that term in the
introductory paragraph hereof.
"Secured Obligations" shall mean and include all loans,
advances, debts, liabilities, and obligations, howsoever arising,
owed by Pledgor to Agent or any Lender of every kind and
description (whether or not evidenced by any note or instrument
and whether or not for the payment of money) individual or joint
and several, direct or indirect, absolute or contingent, due
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<PAGE> 109
or to become due, now existing or hereafter arising pursuant to
the terms of the Credit Documents, including all interest, fees,
charges, expenses, attorneys' fees and accountants' fees
chargeable to Pledgor or payable by Pledgor thereunder.
"Subsidiary" of any Person shall mean (a) any corporation
of which more than 50% of the issued and outstanding Equity
Securities having ordinary voting power to elect a majority of
the Board of Directors of such corporation (irrespective of
whether at the time capital stock of any other class or classes
of such corporation shall or might have voting power upon the
occurrence of any contingency) is at the time directly or
indirectly owned or controlled by such Person, by such Person and
one or more of its other Subsidiaries or by one or more of such
Person's other Subsidiaries, (b) any partnership, joint venture,
limited liability company or other association of which more than
50% of the equity interest having the power to vote, direct or
control the management of such partnership, joint venture or
other association is at the time owned and controlled by such
Person, by such Person and one or more of the other Subsidiaries
or by one or more of such Person's other Subsidiaries or (c) any
other Person included in the Financial Statements of such Person
on a consolidated basis.
"UCC" shall mean the Uniform Commercial Code as in effect
in the State of California from time to time.
Unless otherwise defined herein, all other capitalized terms used herein
and defined in the Credit Agreement shall have the respective meanings
given to those terms in the Credit Agreement, and all terms defined in
the UCC shall have the respective meanings given to those terms in the
UCC.
(b) Other Interpretive Provisions. The rules of construction set
forth in Section I of the Credit Agreement shall, to the extent not
inconsistent with the terms of this Agreement, apply to this Agreement
and are hereby incorporated by reference.
2. PLEDGE. As security for the Secured Obligations, Pledgor hereby
pledges and assigns to Agent (for the ratable benefit of Lenders and Agent) and
grants to Agent (for the ratable benefit of Lenders and Agent) a security
interest in all right, title and interest of Pledgor in and to the property
described in subparagraphs (a) - (d) below, whether now owned or hereafter
acquired (collectively and severally, the "Collateral"):
(a) All of the Equity Securities described in Attachment 1
hereto, whether certificated or uncertificated;
(b) All dividends, cash, instruments and other property from time
to time received, receivable or otherwise distributed or distributable
in respect of or in exchange for any of the property described in
subparagraph (a) above; and
(c) All proceeds of the foregoing.
3. REPRESENTATIONS AND WARRANTIES. Pledgor represents and warrants to
Lenders and Agent as follows:
(a) Pledgor is the record legal and beneficial owner of the
Collateral (or, in the case of after-acquired Collateral, at the time
Pledgor acquires rights in the Collateral, will be the record legal and
beneficial owner thereof). No other Person has (or, in the case of
after-acquired Collateral, at the time Pledgor acquires rights therein,
will have) any right, title, claim or interest (by way of Lien, purchase
option or otherwise) in, against or to the Collateral.
(b) Agent has (or in the case of after-acquired Collateral, at
the time Pledgor acquires rights therein, will have) a first priority
perfected security interest in the Collateral.
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<PAGE> 110
(c) All Pledged Shares have been (or in the case of
after-acquired Pledged Shares, at the time Pledgor acquires rights
therein, will have been) duly authorized, validly issued and fully paid
and are (or in the case of after-acquired Pledged Shares, at the time
Pledgor acquires rights therein, will be) non-assessable.
(d) Pledgor has delivered to Agent, together with all necessary
stock powers, endorsements, assignments and other necessary instruments
of transfer, the originals of all Pledged Shares, other certificated
securities, other Collateral and all certificates, instruments and other
writings evidencing the same.
(e) Set forth in Attachment 1 hereto is a true, complete and
accurate list, as of the date of this Agreement, of all Equity
Securities of Ineligible Material Subsidiaries owned directly by
Pledgor.
4. COVENANTS. Pledgor hereby agrees as follows:
(a) Pledgor, at Pledgor's expense, shall promptly procure,
execute and deliver to Agent all documents, instruments and agreements
and perform all acts which are necessary or desirable, or which Agent
may request, to establish, maintain, preserve, protect and perfect the
Collateral, the Lien granted to Agent therein and the first priority of
such Lien or to enable Agent to exercise and enforce its rights and
remedies hereunder with respect to any Collateral. Without limiting the
generality of the preceding sentence, Pledgor shall (i) procure, execute
and deliver to Agent all stock powers, endorsements, assignments,
financing statements and other instruments of transfer requested by
Agent, (ii) deliver to Agent promptly upon receipt the originals of all
Pledged Shares, other certificated securities, other Collateral and all
certificates, instruments and other writings evidencing the same and
(iii) cause the Lien of Agent to be recorded or registered in the books
of any financial intermediary or clearing corporation requested by
Agent.
(b) Pledgor shall pay promptly when due all taxes and other
Governmental Charges, all Liens and all other charges now or hereafter
imposed upon, relating to or affecting any Collateral.
(c) Pledgor shall appear in and defend any action or proceeding
which may affect its title to or Agent's interest in the Collateral.
(d) Pledgor shall not surrender or lose possession of (other than
to Agent), sell, encumber, lease, rent, option, or otherwise dispose of
or transfer any Collateral or right or interest therein except as
permitted in the Credit Agreement, and, notwithstanding any provision of
the Credit Agreement, Pledgor shall keep the Collateral free of all
Liens.
5. VOTING RIGHTS AND DIVIDENDS PRIOR TO DEFAULT. Unless an Event of
Default has occurred and is continuing:
(a) Pledgor may exercise or refrain from exercising any and all
voting and other consensual rights pertaining to the Pledged Shares or
any part thereof; provided, however, that Pledgor shall not exercise or
refrain from exercising any such rights where the consequence of such
action or inaction would be (i) to impair any Collateral, the Lien
granted to Agent therein, the first priority of such Lien or Agent's
rights and remedies hereunder with respect to any Collateral or (ii)
otherwise inconsistent with the terms of this Agreement and the other
Credit Documents.
(b) Pledgor may receive and retain all dividends and interest paid in
cash in respect of the Pledged Shares, except for any such dividends and
interest paid in connection with a partial or total liquidation or
dissolution or in connection with a reduction of capital, capital
surplus or paid-in-surplus. Pledgor shall promptly deliver to Agent to
hold as Collateral all dividends and interest which Pledgor is not
entitled to receive and retain pursuant to the preceding sentence, in
the same form as so received (with any
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<PAGE> 111
necessary endorsement), and, until so delivered, shall hold such
dividends and interest in trust for the benefit of Agent, segregated
from the other property or funds of Pledgor.
6. AUTHORIZED ACTION BY AGENT. Pledgor hereby irrevocably appoints Agent
as its attorney-in-fact and agrees that Agent may perform (but Agent shall not
be obligated to and shall incur no liability to Pledgor or any third party for
failure so to do) any act which Pledgor is obligated by this Agreement to
perform, and to exercise such rights and powers as Pledgor might exercise with
respect to the Collateral, including, without limitation, the right to (a)
collect by legal proceedings or otherwise and endorse, receive and receipt for
all dividends, interest, payments, proceeds and other sums and property now or
hereafter payable on or on account of the Collateral; (b) enter into any
extension, reorganization, deposit, merger, consolidation or other agreement
pertaining to, or deposit, surrender, accept, hold or apply other property in
exchange for the Collateral; (c) insure, process, preserve and enforce the
Collateral; (d) make any compromise or settlement, and take any action it deems
advisable, with respect to the Collateral; (e) pay any Indebtedness of Pledgor
relating to the Collateral; and (f) execute UCC financing statements and other
documents, instruments and agreements required hereunder; provided, however,
that Agent may exercise such powers only after the occurrence and during the
continuance of an Event of Default. Pledgor agrees to reimburse Agent upon
demand for all reasonable and documented costs and expenses, including
reasonable and documented attorneys' fees, Agent may incur while acting as
Pledgor's attorney-in-fact hereunder, all of which costs and expenses are
included in the Secured Obligations. Pledgor agrees that such care as Agent
gives to the safekeeping of its own property of like kind shall constitute
reasonable care of the Collateral when in Agent's possession; provided, however,
that Agent shall not be required to make any presentment, demand or protest, or
give any notice and need not take any action to preserve any rights against any
prior party or any other Person in connection with the Secured Obligations or
with respect to the Collateral.
7. EVENTS OF DEFAULT.
(a) Event of Default. Pledgor shall be deemed in default under
this Agreement upon the occurrence and during the continuance of an
Event of Default, as that term is defined in the Credit Agreement.
(b) Voting Rights and Dividends. Upon the occurrence and during
the continuance of an Event of Default:
(i) All rights of Pledgor to exercise the voting and other
consensual rights which it would otherwise be entitled to
exercise pursuant to subparagraph 5(a) hereof and to receive the
dividends and interest payments which it would otherwise be
authorized to receive and retain pursuant to subparagraph 5(a)
hereof shall cease and all such rights shall thereupon become
vested in Agent which shall thereupon have the sole right, but
not the obligation, to exercise such voting and other consensual
rights and to receive and hold as Collateral such dividends and
interest payments.
(ii) Pledgor shall promptly deliver to Agent to hold as
Collateral all dividends and interest received by Pledgor after
the occurrence and during the continuance of any Event of
Default, in the same form as so received (with any necessary
endorsement), and, until so delivered, shall hold such dividends
and interest in trust for the benefit of Agent, segregated from
the other property or funds of Pledgor.
(c) Other Rights and Remedies. In addition to all other rights and
remedies granted to Agent by this Agreement, the Credit Agreement, the
other Credit Documents, the UCC and other applicable Governmental Rules,
Agent may, upon the occurrence and during the continuance of any Event
of Default, exercise any one or more of the following rights and
remedies: (i) collect, receive, appropriate or realize upon the
Collateral or otherwise foreclose or enforce Agent's security interests
in any or all Collateral in any manner permitted by applicable
Governmental Rules or in this Agreement; (ii) notify any or all issuers
of or transfer or paying agents for the Collateral or any applicable
clearing corporation, financial intermediary or other Person to register
the Collateral in the name of Agent or its nominee and/or to pay all
dividends, interest and other amounts payable in respect of the
Collateral directly to Agent; (iii) sell or
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<PAGE> 112
otherwise dispose of any or all Collateral at one or more public or
private sales, whether or not such Collateral is present at the place
of sale, for cash or credit or future delivery, on such terms and in
such manner as Agent may determine; and (iv) require Pledgor to assemble
all records and information relating to the Collateral and make it
available to Agent at a place to be designated by Agent. In any case
where notice of any sale or disposition of any Collateral is required,
Pledgor hereby agrees that seven (7) days notice of such sale or
disposition is reasonable.
(d) Securities Laws.
(i) Pledgor acknowledges and recognizes that Agent may be
unable to effect a public sale of all or a part of the Pledged
Shares and may be compelled to resort to one or more private
sales to a restricted group of purchasers who will be obligated
to agree, among other things, to acquire the Pledged Shares for
their own account, for investment and not with a view to the
distribution or resale thereof. Pledgor acknowledges that any
such private sales may be at prices and on terms less favorable
to Agent than those of public sales, and agrees that such private
sales shall be deemed to have been made in a commercially
reasonable manner and that Agent has no obligation to delay sale
of any Pledged Shares to permit the issuer thereof to register it
for public sale under the Securities Act of 1933, as amended, or
under any state securities law.
(ii) Upon the occurrence and during the continuance of an
Event of Default and at Agent's request, Pledgor shall, and shall
cause all issuers of Collateral and all officers and directors
thereof and all other necessary Persons to, execute and deliver
all documents, instruments and agreements and perform all other
acts necessary or, in the opinion of Agent, advisable to sell the
Collateral in any public or private sale, including any acts
requested by Agent to (A) register any Collateral under the
Securities Act of 1933, (B) qualify any Collateral under any
state securities or "Blue Sky" laws or (C) otherwise permit any
such sale to be made in full compliance with all applicable
Governmental Rules.
8. MISCELLANEOUS.
(a) Notices. Except as otherwise specified herein, all notices,
requests, demands, consents, instructions or other communications to or
upon Pledgor or Agent under this Agreement shall be given as provided in
Paragraph 8.01 of the Credit Agreement.
(b) Waivers; Amendments. Any term, covenant, agreement or
condition of this Agreement may be amended or waived only as provided in
the Credit Agreement. No failure or delay by Agent or any Lender in
exercising any right hereunder shall operate as a waiver thereof or of
any other right nor shall any single or partial exercise of any such
right preclude any other further exercise thereof or of any other right.
Unless otherwise specified in any such waiver or consent, a waiver or
consent given hereunder shall be effective only in the specific instance
and for the specific purpose for which given.
(c) Successors and Assigns. This Agreement shall be binding upon
and inure to the benefit of Agent, Lenders, Pledgor and their respective
successors and assigns; provided, however, that Pledgor may not assign
or transfer any of its rights and obligations under this Agreement
without the prior written consent of Agent and Lenders, and, provided,
further, that Agent or any Lender may sell, assign and delegate their
respective rights and obligations hereunder only as permitted by the
Credit Agreement. All references in this Agreement to any Person shall
be deemed to include all permitted successors and assigns of such
Person.
(d) Cumulative Rights, etc. The rights, powers and remedies of
Agent and Lenders under this Agreement shall be in addition to all
rights, powers and remedies given to Agent and Lenders by virtue of any
applicable law, rule or regulation of any Governmental Authority, the
Credit Agreement, any other Credit Document or any other agreement, all
of which rights, powers, and remedies shall be cumulative and may be
exercised successively or concurrently without impairing Agent's or any
Lender's rights hereunder.
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<PAGE> 113
Pledgor waives any right to require Agent or any Lender to
proceed against any Person or to exhaust any Collateral or to pursue any
remedy in Agent's or such Lender's power.
(e) Partial Invalidity. If at any time any provision of this
Agreement is or becomes illegal, invalid or unenforceable in any respect
under the law of any jurisdiction, neither the legality, validity or
enforceability of the remaining provisions of this Agreement nor the
legality, validity or enforceability of such provision under the law of
any other jurisdiction shall in any way be affected or impaired thereby.
(f) Governing Law.
(i) This Agreement shall be governed by and construed in
accordance with the laws of the State of California without
reference to conflicts of laws rules (except to the extent
otherwise provided in the UCC).
(ii) The Pledgor agrees that for the exclusive benefit of
the Agent, the Documentation Agent, the Managing Agents, the
Co-Agent and the Lenders, any suit, action or proceeding by the
Agent, the Documentation Agent, the Managing Agents, the Co-Agent
and the Lenders arising our of or in connection with this
Agreement may be brought by the Agent, the Documentation Agent,
the Managing Agents, the Co-Agent or the Lenders in any competent
court of the State of California or any federal court of the
United States of America sitting in the State of California, and
the Pledgor submits to the non-exclusive jurisdiction of each
such court. The Pledgor further agrees, for the non-exclusive
benefit of the Agent, the Documentation Agent, the Managing
Agents, the Co-Agent and the Lenders, that nothing contained in
this paragraph (f) shall limit the right of the Agent, the
Documentation Agent, the Managing Agents, the Co-Agent or the
Lenders to take suit, action or proceedings against Pledgor in
any other competent jurisdiction. Pledgor irrevocably waives any
right it may have to the trial by jury of such proceedings in any
such court.
[The signature page follows.]
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<PAGE> 114
IN WITNESS WHEREOF, Pledgor has caused this Agreement to be executed as
of the day and year first above written.
[____________________]
By:
---------------------------------
Name:
-------------------------
Title:
------------------------
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<PAGE> 115
ATTACHMENT 1
TO PLEDGE AGREEMENT
PLEDGED SHARES
<TABLE>
<CAPTION>
Classes of Voting Issued and Shares Owned Shares
Jurisdiction Equity Or Outstanding by Pledged to
Subsidiary Of Organization Securities Non-Voting Shares Pledgor Agent
---------- --------------- ---------- ---------- ----------- ------------ ----------
<S> <C> <C> <C> <C> <C> <C>
</TABLE>
E(1)-1
<PAGE> 116
EXHIBIT F
ASSIGNMENT AGREEMENT
THIS ASSIGNMENT AGREEMENT, dated as of the date set forth at the top of
Attachment 1 hereto, by and among:
(1) The bank designated under item A of Attachment 1 hereto as
the Assignor Lender ("Assignor Lender"); and
(2) Each bank designated under item B of Attachment 1 hereto as
an Assignee Lender (individually, an "Assignee Lender").
RECITALS
A. Assignor Lender is one of the Lenders which is a party to the Credit
Agreement dated as of April 3, 2000, among Flextronics International USA, Inc.
("FIUI") and The DII Group, Inc. ("DII", and together with FIUI, each a
"Borrower" and collectively the "Borrowers"), Assignor Lender and the other
financial institutions parties thereto (collectively, the "Lenders") and ABN
AMRO Bank N.V., as agent for Lenders (in such capacity, "Agent"). (Such credit
agreement, as amended, supplemented or otherwise modified in accordance with its
terms from time to time to be referred to herein as the "Credit Agreement").
B. Assignor Lender wishes to sell, and Assignee Lender wishes to
purchase, all or a portion of Assignor Lender's rights under the Credit
Agreement pursuant to Subparagraph 8.05(c) of the Credit Agreement.
AGREEMENT
Now, therefore, the parties hereto hereby agree as follows:
1. Definitions. Except as otherwise defined in this Assignment
Agreement, all capitalized terms used herein and defined in the Credit Agreement
have the respective meanings given to those terms in the Credit Agreement.
2. Sale and Assignment. Subject to the terms and conditions of this
Assignment Agreement, Assignor Lender hereby agrees to sell, assign and delegate
to each Assignee Lender and each Assignee Lender hereby agrees to purchase,
accept and assume the rights, obligations and duties of a Lender under the
Credit Agreement and the other Credit Documents with Commitments or Loans equal
to the respective amounts set forth under the caption "Commitments or Loans
Assigned" opposite such Assignee Lender's name on Attachment 1 hereto. Such
sale, assignment and delegation shall become effective on the date designated in
Attachment 1 hereto (the "Assignment Effective Date"), which date shall be,
unless Agent shall otherwise consent, at least five (5) Business Days after the
date following the date counterparts of this Assignment Agreement are delivered
to Agent in accordance with Paragraph 3 hereof.
3. Assignment Effective Notice. Upon (a) receipt by Agent of five (5)
counterparts of this Assignment Agreement (to each of which is attached a fully
completed Attachment 1), each of which has been executed by Assignor Lender and
each Assignee Lender (and, to the extent required by Subparagraph 8.05(c) of the
Credit Agreement, by Borrowers and Agent) and (b) payment to Agent of the
registration and processing fee specified in Subparagraph 8.05(e) of the Credit
Agreement by Assignor Lender, Agent will transmit to Borrowers, Assignor Lender
and each Assignee Lender an Assignment Effective Notice substantially in the
form of Attachment 2 hereto, fully completed (an "Assignment Effective Notice").
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4. Assignment Effective Date. At or before 12:00 noon (California time)
on the Assignment Effective Date, each Assignee Lender shall pay to Assignor
Lender, in immediately available or same day funds, an amount equal to the
purchase price, as agreed between Assignor Lender and such Assignee Lender (the
"Purchase Price"), for each portion of a Commitment or Loan purchased by such
Assignee Lender hereunder. Effective upon receipt by Assignor Lender of each
Purchase Price payable by each Assignee Lender, the sale, assignment and
delegation to such Assignee Lender of such Commitments or Loans as described in
Paragraph 2 hereof shall become effective.
5. Payments After the Assignment Effective Date. Assignor Lender and
each Assignee Lender hereby agree that Agent shall, and hereby authorize and
direct Agent to, allocate amounts payable under the Credit Agreement and the
other Credit Documents as follows:
(a) All principal payments made after the Assignment Effective
Date with respect to each portion of a Loan assigned to an Assignee
Lender pursuant to this Assignment Agreement shall be payable to such
Assignee Lender.
(b) All interest, fees and other amounts accrued after the
Assignment Effective Date with respect to each portion of a Loan
assigned to an Assignee Lender pursuant to this Assignment Agreement
shall be payable to such Assignee Lender.
Assignor Lender and each Assignee Lender shall make any separate arrangements
between themselves which they deem appropriate with respect to payments between
them of amounts paid under the Credit Documents on account of the Commitments or
Loans assigned to such Assignee Lender, and neither Agent nor Borrowers shall
have any responsibility to effect or carry out such separate arrangements.
[6. Delivery of Notes. On or prior to the Assignment Effective Date,
Assignor Lender will deliver to Agent the Notes payable to Assignor Lender. On
or prior to the Assignment Effective Date, Borrowers will deliver to Agent new
Notes for each Assignee Lender and Assignor Lender, in each case in principal
amounts reflecting, in accordance with the Credit Agreement, their respective
Commitments (as adjusted pursuant to this Assignment Agreement). As provided in
Subparagraph 8.05(c) of the Credit Agreement, each such new Note shall be dated
the Closing Date. Promptly after the Assignment Effective Date, Agent will send
to each of Assignor Lender and the Assignee Lenders its new Notes and will send
to Borrowers the superseded Notes payable to Assignor Lender, marked
"Replaced."]
7. Delivery of Copies of Credit Documents. [Concurrently with the
execution and delivery hereof, Assignor Lender will provide to each Assignee
Lender (if it is not already a Lender party to the Credit Agreement) conformed
copies of all documents delivered to Assignor Lender on or prior to the Closing
Date in satisfaction of the conditions precedent set forth in the Credit
Agreement.]
8. Further Assurances. Each of the parties to this Assignment Agreement
agrees that at any time and from time to time upon the written request of any
other party, it will execute and deliver such further documents and do such
further acts and things as such other party may reasonably request in order to
effect the purposes of this Assignment Agreement.
9. Further Representations, Warranties and Covenants. Assignor Lender
and each Assignee Lender further represent and warrant to and covenant with each
other, Agent and Lenders as follows:
(a) Other than the representation and warranty that it is the
legal and beneficial owner of the interest being assigned hereby free
and clear of any adverse claim, Assignor Lender makes no representation
or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with
the Credit Agreement or the other Credit Documents or the execution,
legality, validity, enforceability, genuineness, sufficiency or value of
the Credit Agreement or the other Credit Documents furnished or the
Collateral or any security interest therein.
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<PAGE> 118
(b) Assignor Lender makes no representation or warranty and
assumes no responsibility with respect to the financial condition of
Borrowers or any of their oblations under the Credit Agreement or any
other Credit Documents.
(c) Each Assignee Lender confirms that it has received a copy of
the Credit Agreement and such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter
into this Assignment Agreement.
(d) Each Assignee Lender will, independently and without reliance
upon Agent, Assignor Lender or any other Lender and based upon 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 the Credit Agreement and the other Credit Documents.
(e) Each Assignee Lender appoints and authorizes Agent to take
such action as Agent on its behalf and to exercise such powers under the
Credit Agreement and the other Credit Documents as Agent is authorized
to exercise by the terms thereof, together with such powers as are
reasonably incidental thereto, all in accordance with Section VII of the
Credit Agreement.
(f) Each Assignee Lender agrees that it will perform in
accordance with their terms all of the obligations which by the terms of
the Credit Agreement and the other Credit Documents are required to be
performed by it as a Lender.
(g) Attachment 1 hereto sets forth administrative information
with respect to each Assignee Lender.
10. Effect of this Assignment Agreement. On and after the Assignment
Effective Date, (a) each Assignee Lender shall be a Lender with Commitments or
Loans as set forth under the caption "Commitments or Loans After Assignment"
opposite such Assignee Lender's name on Attachment 1 hereto and shall have the
rights, duties and obligations of such a Lender under the Credit Agreement and
the other Credit Documents and (b) Assignor Lender shall be a Lender with
Commitments or Loans as set forth under the caption "Commitments or Loans After
Assignment" opposite Assignor Lender's name on Attachment 1 hereto and shall
have the rights, duties and obligations of such a Lender under the Credit
Agreement and the other Credit Documents, or, if the Commitments or Loans of
Assignor Lender have been reduced to $0, Assignor Lender shall cease to be a
Lender and shall have no further obligation to make any Loans.
11. Miscellaneous. This Assignment Agreement shall be governed by, and
construed in accordance with, the laws of the State of California. Paragraph
headings in this Assignment Agreement are for convenience of reference only and
are not part of the substance hereof.
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<PAGE> 119
IN WITNESS WHEREOF, the parties hereto have caused this Assignment
Agreement to be executed by their respective duly authorized officers as of the
date set forth in Attachment 1 hereto.
, as
--------------------------------
Assignor Lender
By:
---------------------------------
Name:
--------------------------
Title:
-------------------------
, as
--------------------------------
Assignor Lender
By:
---------------------------------
Name:
--------------------------
Title:
-------------------------
, as
--------------------------------
Assignor Lender
By:
---------------------------------
Name:
--------------------------
Title:
-------------------------
, as
--------------------------------
Assignor Lender
By:
---------------------------------
Name:
--------------------------
Title:
-------------------------
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<PAGE> 120
CONSENTED TO AND ACKNOWLEDGED BY:
---------------------------------
By:
--------------------------------
Name:
------------------------
Title:
-----------------------
,
----------------------------------
As Agent
By:
--------------------------------
Name:
------------------------
Title:
-----------------------
ACCEPTED FOR RECORDATION
IN REGISTER:
,
---------------------------------
As Agent
By:
--------------------------------
Name:
------------------------
Title:
-----------------------
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<PAGE> 121
ATTACHMENT 1
TO ASSIGNMENT AGREEMENT
PART A
<TABLE>
<CAPTION>
Commitments or Loans Commitments or Loans
Assigned After Assignment
---------------------------------------- ---------------------------------------
Facility B Facility B
Facility A Commitment/ Facility A Commitment/
Commitment Loan Commitment Loan
------------------ ----------------- ----------------- -----------------
Assignor Lender:
----------------------
<S> <C> <C> <C> <C>
-------------- $------------ $------------ $------------ $------------
Assignee Lenders:
----------------------
-------------- $------------ $------------ $------------ $------------
-------------- $------------ $------------ $------------ $------------
-------------- $------------ $------------ $------------ $------------
-------------- $------------ $------------ $------------ $------------
</TABLE>
F(1)-1
<PAGE> 122
PART B
[ASSIGNEE PARTICIPANT]
Domestic Lending Office:
Euro-Dollar Lending Office:
Address for Notices:
Wiring Instructions:
PART C
ASSIGNMENT EFFECTIVE DATE ________, ____
F(1)-2
<PAGE> 123
ATTACHMENT 2
TO ASSIGNMENT AGREEMENT
FORM OF
ASSIGNMENT EFFECTIVE NOTICE
Reference is made to the Credit Agreement, dated as of April 3, 2000,
among Flextronics International USA, Inc. ("FIUI") and The DII Group, Inc.
("DII", and together with FIUI, each a "Borrower" and collectively the
"Borrowers"), the financial institutions parties thereto (the "Lenders") and ABN
AMRO Bank N.V., as agent for Lenders (in such capacity, "Agent"). Agent hereby
acknowledges receipt of five executed counterparts of a completed Assignment
Agreement, a copy of which is attached hereto. [Note: Attach copy of Assignment
Agreement.] Terms defined in such Assignment Agreement are used herein as
therein defined.
1. Pursuant to such Assignment Agreement, you are advised that the
Assignment Effective Date will be __________.
2. Pursuant to such Assignment Agreement, Assignor Lender is required to
deliver to Agent on or before the Assignment Effective Date the Notes payable to
Assignor Lender.
3. Pursuant to such Assignment Agreement, Borrowers are required to
deliver to Agent on or before the Assignment Effective Date the following Notes,
each dated _________________ [Insert appropriate date]:
[Describe each new Note for Assignor Lender and each Assignee Lender as
to principal amount.]
4. Pursuant to such Assignment Agreement, each Assignee Lender is
required to pay its Purchase Price to Assignor Lender at or before 12:00 Noon [(
time)]on the Assignment Effective Date in immediately available funds.
Very truly yours,
ABN AMRO BANK N.V.
as Agent
By:
---------------------------------
Name:
--------------------------
Title:
-------------------------
F(2)-1
