<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 10-Q
(Mark One)
X Quarterly report pursuant to Section 13 or 15(d) ofthe Securities
----- Exchange Act of 1934 For the quarterly period ended May 31, 1996.
----- Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from _______________ to ______________.
Commission file number: 0-21308
JABIL CIRCUIT, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 38-1886260
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) identification No.)
10800 Roosevelt Blvd
St. Petersburg, FL 33716
(Address of principal executive offices, including zip code)
Registrant's Telephone No., including area code: (813) 577-9749
________________________________
Indicate by check mark whether the Registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the Registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days:
Yes X No ___
As of May 31, 1996, there were 17,753,120 shares of the
Registrant's Common Stock outstanding.
<PAGE> 2
JABIL CIRCUIT, INC. AND SUBSIDIARIES
INDEX
PART I. FINANCIAL INFORMATION
-----------------------------
Item 1. Financial Statements
Consolidated Balance Sheets at
May 31, 1996 and August 31,1995...................... 3
Consolidated Statements of Operations
for the nine months ended May 31, 1996 and 1995...... 4
Consolidated Statements of Cash Flows
for the nine months ended May 31, 1996 and 1995...... 5
Notes to Consolidated Financial
Statements........................................... 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations........................................... 9
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form
8-K.................................................. 14
Signatures............................................ 15
<PAGE> 3
JABIL CIRCUIT, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except for share and per share data)
<TABLE>
<CAPTION>
August 31, May 31,
1995 1996
----------- ----------
(UNAUDITED)
<S> <C> <C>
ASSETS
Current assets
Cash $5,486 $28,004
Accounts receivable - Net 116,472 98,706
Inventories 91,658 59,390
Refundable income taxes 2,043 - -
Prepaid expenses and other current assets 701 714
Deferred income taxes 1,837 3,243
------- -------
Total current assets 218,197 190,057
Property, plant and equipment, net 61,722 71,891
Other assets 1,042 1,517
------- -------
$280,961 $263,465
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Note payable to bank $73,000 --
Current installments of long term debt 7,474 $5,008
Current installments of capital leases 656 501
Accounts payable 90,612 55,054
Accrued expenses 13,122 19,915
------- -------
Total current liabilities 184,864 80,478
Long term debt, less current installments 26,343 57,913
Capital leases, less current installments 1,589 1,169
Deferred income taxs 3,625 3,254
Deferred grant revenue 4,945 3,412
------- -------
Total liabilities 221,366 146,226
Stockholders' equity
Common stock 15 18
Additional paid in capital 16,718 56,509
Retained earnings 42,970 60,760
------- -------
59,703 117,287
Less:
Unearned compensation from grant
of stock option 108 48
------- -------
Net stockholders' equity 59,595 117,239
$280,961 $263,465
======== ========
</TABLE>
<PAGE> 4
JABIL CIRCUIT, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except for per share data)
(Unaudited)
Three months ended Nine months ended
May 31, May 31, May 31, May 31,
1995 1996 1995 1996
Net revenue $132,441 $219,701 $354,079 $689,184
Cost of revenue 124,610 201,142 331,387 635,039
------- ------- ------- -------
Gross profit 7,831 18,559 22,692 54,145
Operating expenses:
Selling, general
and administrative 4,464 6,612 13,217 18,243
Research and development 405 576 1,228 1,503
------- ------- ------- -------
Operating income 2,962 11,371 8,247 34,399
Interest expense 1,521 1,768 4,268 6,754
------- ------- ------ -------
Income before income tax 1,441 9,603 3,979 27,645
Income taxes 207 3,366 1,685 9,855
------- ------- ------- -------
Net income $1,234 $6,237 $2,294 $17,790
======= ======= ======= =======
Net income per share $0.08 $0.33 $0.15 $0.98
======= ======= ======= =======
Weighted average number of
shares of common stock and
common stock equivilents 15,533 18,893 15,463 18,226
======= ======= ======= =======
<PAGE> 5
JABIL CIRCUIT, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(Unaudited)
Nine months ended
May 31, May 31,
1995 1996
Cash flows from operating activities: ------- -------
Net income $2,294 $17,790
Adjustments to reconcile net income to net
cash provided by (used in) operating activities:
Depreciation and amortization 8,350 12,862
Recognition of grant revenue (427) (1,613)
Deferred income taxes (610) (1,777)
Gain on sale of property (70) (1)
Foreign currency translation (gain) loss 43 80
Changes in operating assets and liabilities:
Accounts receivable (5,898) 17,766
Inventories (28,007) 32,268
Prepaid expenses and other current assets (297) 236
Refundable income taxes (365) 2,043
Other assets (938) (475)
Accounts payable and accrued expenses 34,756 (28,765)
------- -------
Net cash provided by (used in) operating activities 8,831 50,414
Cash flows from investing activities:
Acquisition of property,plant and equipment (13,389) (23426)
Proceeds from sale of property andequipment 391 207
------- -------
Net cash used in investing activities (12,998) (23,219)
Cash flows from financing activities:
Increase/(Decrease) in note payable 1,900 (73,000)
Proceeds from long-term debt 7,080 59,889
Payments of long-term debt (3,038) (30,785)
Payments of capital lease obligations (683) (575)
Net proceeds from issuance of common stock 515 39,794
Proceeds from Scottish grant 2,675 0
------- -------
Net cash provided/(used) by financing activities 8,449 (4,677)
Net increase (decrease) in cash 4,282 22,518
Cash at beginning of period 1,798 5,486
------- -------
Cash at end of period $6,080 $28,004
======= =======
Supplemental disclosure information:
Cash Paid:
Interest 4,458 7,169
======= =======
Income taxes 2,660 7,383
======= =======
Non-Cash Investing and Financing activities:
Tax benefit ofoptions exercised 266 111
======= =======
Capital lease obligations incurred to 2373 0
======= =======
<PAGE> 6
Jabil Circuit Inc.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1) Summary of Significant Accounting Policies
A) Basis of Presentation
The accompanying consolidated financial statements of Jabil
Circuit, Inc. and subsidiaries ("the Company") are unaudited and
have been prepared based upon prescribed guidance of the
Securities and Exchange Commission ("SEC"). As such, they do not
include all disclosures required by generally accepted
accounting principles, and should be read in conjunction with
the annual audited consolidated statements as of and for the
year ended August 31, 1995 contained in the Company's 1995
annual report on Form 10-K. In the opinion of management, the
accompanying consolidated financial statements include all
adjustments, consisting of normal and recurring adjustments
necessary for a fair presentation of the financial position,
results of operations and cash flows for the periods presented
when read in conjunction with the annual audited consolidated
financial statements and related notes thereto. The results of
operations for the nine month period ended May 31, 1996 are not
necessarily indicative of the results that should be expected
for a full fiscal year.
B) Net Income Per Share
Net income per share is computed using the weighted average
number of common shares and dilutive common equivalent shares
outstanding during the applicable period. Common equivalent
shares consist of stock options, using the treasury stock
method.
2) Public Stock offering
The Company completed a secondary public offering of 4,025,000
shares on November 3, 1995 in which the Company sold 2,875,000
shares (including an over-allotment option of 375,000 shares)
and certain selling stockholders sold 1,150,000 shares. Net
proceeds to the Company (net of underwriters' discounts,
commissions and other offering costs of $350,000) were
approximately $39,152,500.
3) Debt
In May 1996 , the Company completed a private placement of $50
million Senior Notes due 2004. The Notes have a fixed interest
rate of 6.89%, with interest payable on a semi-annual basis.
Principal is payable in six equal annual installments beginning
May 30, 1999.
<PAGE> 7
4) Note Payable to Bank
In May 1996 the Company renegotiated their secured line of
credit facility and has established a $60,000,000 unsecured
revolving credit facility with a syndicate of banks
("Revolver"). At May 31, 1996 there were no borrowings under the
revolver and the entire $60,000,000 was available. Under the
terms of the Revolver, borrowings may be made under either
Floating Rate Loans, or Eurodollar rate loans. The Company pays
interest on outstanding floating rate loans at the bank's prime
rate. The Company pays interest on outstanding Eurodollar loans
at the London Interbank Offering Rate (LIBOR) in effect at the
loan inception date plus a factor of .75% to 1.25% depending on
the company's funded debt to total capitalization ratios. The
Company pays a commitment fee on the unused portion of the
Revolver at .175% to .25% depending on the Company's funded debt
to total capitalization ratios.
5) Commitments and Contingencies
At May 31, 1996 the Company had outstanding approximately
$1,000,000 in equipment purchase commitments.
During the 1993 and 1994 fiscal years, the Company and Epson
America, Inc. ("Epson") entered into several written and oral
agreements and purchase orders providing for the joint
development by the parties, and manufacture by the Company, of
notebook computers pursuant to specifications provided by Epson.
Pursuant to the parties' agreements, the Company procured
materials for production. The Company contends that Epson
breached the agreement by refusing to honor its purchase
commitments citing production delays resulting from the
unavailability of certain components and defects in certain
materials supplied to the Company. On December 23, 1994, the
Company instituted a breach of contract action against Epson in
the Circuit Court of the Sixth Judicial Circuit of the State of
Florida, requesting certain specified and unspecified monetary
damages, including damages in an amount equal to $6,278,282,
representing unpaid receivables, and incidental and
consequential damages, including, among others, loss of design
and development costs, costs of unused or specially purchased
inventory and lost profits. Such action was subsequently removed
to the United States District Court for the Middle District of
Florida. On July 21, 1995, Epson filed a counterclaim citing
damages in excess of $52 million for, among other things, breach
of contract and negligent misrepresentation. The Company
mitigated damages arising from Epson's breach by selling
notebook computers to an electronics distributor. Epson contends
that the Jabil computer manual furnished with these computers
infringed certain Epson copyrights. The Company expects
discovery to conclude during the fourth quarter of fiscal 1996
and the trial to commence later in the 1996 calendar year.
<PAGE> 8
The parties have been unsuccessful in mediating or arbitrating
their dispute, despite participation in multiple mediation and
non-binding arbitration sessions. The Company intends to pursue
aggressively its legal claims and contest vigorously Epson's
counterclaims. The Company believes strongly in the validity of
its claims and believes that any potential exposure to the Company
is substantially less than the $52 million claimed by Epson.
However, such litigation may result in substantial costs and
diversion of resources and, given the uncertainties inherent
in litigation, could have a material adverse effect on the Company's
operating results and financial condition, if decided adversely to
the Company.
<PAGE> 9
JABIL CIRCUIT, INC. AND SUBSIDIARIES
THIS MANAGEMENT'S DICSUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS CONTAINS TREND ANALYSIS AND A NUMBER OF FORWARD LOOKING
STATEMENTS. THESE STATEMENTS ARE BASED ON CURRENT EXPECTATIONS AND ACTUAL
RESULTS MAY DIFFER MATERIALLY. AMONG THE FACTORS WHICH COULD CAUSE ACTUAL
RESULTS TO VARY ARE THOSE DESCRIBED IN "BUSINESS FACTORS" BELOW.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The following table sets forth, for the three months and nine
months ended May 31, 1995 and May 31, 1996, certain items as a
percentage of net revenue. The table and the discussion and
analysis that follows should be read in conjunction with the
consolidated financial statements and notes thereto that appear
on pages 3 through 7 of this report.
Three months ended Nine months ended
------------------ -----------------
May 31, May 31, May 31, May 31,
1995 1996 1995 1996
Net revenue 100.0% 100.0% 100.0% 100.0%
Cost of revenue 94.1% 91.6% 93.6% 92.2%
Gross profit 5.9% 8.4% 6.4% 7.8%
Operating expenses:
Selling, general and administrative 3.4% 3.0% 3.7% 2.6%
Research and development 0.3% 0.3% 0.4% 0.2%
Operating income 2.2% 5.1% 2.3% 5.0%
Interest expense 1.1% 0.8% 1.2% 1.0%
Income before income taxes 1.1% 4.3% 1.1% 4.0%
Income taxes 0.2% 1.5% 0.5% 1.4%
Net income 0.9% 2.8% 0.6% 2.6%
<PAGE> 10
The Company's net revenue for the third quarter and first nine
months of fiscal 1996 increased 65.9% and 94.6% to $220 million
and $689 million respectively from $132 million and $354 million
in the third quarter and first nine months of fiscal 1995.
These increases were due primarily to increased demand from
established customers. Foreign source revenue represented 28%
and 33% of net revenue for the third quarter and first nine
months of fiscal 1996, compared to 25% and 14% for the same
periods of fiscal 1995. Quarterly and year to date increases in
foreign sales are attributable to increased sales from the
Company's foreign operations in Scotland and Malaysia along with
increased exports to customer's foreign sites.
Gross margin increased to 8.4% and 7.8% for the third quarter
and first nine months of fiscal 1996 from 5.9% and 6.4% for the
comparable periods of fiscal 1995. This increase was primarily
a result of increased utilization of the Company's domestic and
foreign manufacturing facilities. Additionally, 1995 third
quarter and year to date margins were reduced by the effect of
valuation reserves related to the Epson project which reduced
gross margins 2.0% and 1.1% of revenues, respectively.
Selling, general and administrative expenses decreased to 3.0%
and 2.6% in the third quarter and first nine months of fiscal
1996 compared to 3.4% and 3.7% in the same periods of fiscal
year 1995. In absolute dollars, these expenses increased over
the comparable periods of fiscal 1995 by $2.1 million and $5.0
million due to increases in certain variable expenses including
increased staffing to support increased revenue levels, the
addition of the Company's Malaysia operation, and certain
non-recurring costs associated with the private placement of
debt.
Research and development expenses of 0.3% in the third quarter
were consistent as a percentage of net revenue with those in
fiscal 1995 while decreasing for the first nine months of fiscal
1996 to 0.2% as compared to 0.3% for the same period of fiscal
1995. In absolute dollars, the expenses were up slightly in
fiscal 1996 due to the expansion of circuit design activities.
Interest expense increased $0.2 million and $2.5 million,
respectively in the third quarter and first nine months of
fiscal 1996 to $1.8 million and $6.8 million from $1.5 million
and $4.3 million in the comparable periods of fiscal 1995. This
increase was due to additional short-term and long-term
borrowings required to support the Company's increased
activities, international expansion, and to a lesser extent,
higher effective interest rates.
<PAGE> 11
The Company's effective tax rate increased to 35.1% for the
third quarter of fiscal 1996 from 14.4% in fiscal 1995. The
lower effective rate in the third quarter of fiscal 1995 was a
result of the utilization of loss carryforwards against the
income of the Company's foreign subsidiary in Scotland. The
effective rate for the first nine months of fiscal 1996 was
35.6% as compared to 42.4% for the first nine months of fiscal
1995. This rate difference was primarily due to net operating
losses at the Company's foreign subsidiary in Scotland which
could not be utilized to offset other Company earnings for U.S.
income tax purposes in the first nine months of fiscal 1995. The
effective tax rate for fiscal 1996 was slightly above the U.S.
regulatory rate of 35% due to domestic state income taxes which
were slightly offset by lower effective tax rates at the
Company's foreign subsidiaries.
Liquidity and Capital Resources
At May 31, 1996 the Company's principal sources of liquidity
consisted of cash and available borrowings under the Company's
credit facilities. The Company and its subsidiaries have
committed line of credit facilities in place with a syndicate of
banks that provide up to $60 million of working capital
borrowing capacity.
The Company generated $50.4 million of cash in operating
activities for the nine months ended May 31, 1996. This increase
in cash was primarily due to decreases in inventories of $32.3
million and accounts receivable of $17.8 million, depreciation
and amortization of $12.9 million and net income of $17.8
million offset by a decrease in accounts payable of $28.8
million.
Net cash used in investing activities of $23.2 million for the
nine months ended May 31, 1996 was a result of the Company's
capital expenditures for equipment at both domestic and foreign
operations in order to support increased activities.
<PAGE> 12
The company used $4.7 million of cash in financing activities
for the nine months ended May 31, 1996. This was attributable
to a $73 million reduction in borrowings under the company's
line of credit facilities and a $30.8 million reduction in
certain long term debt offset by $39.8 million received from the
Company's secondary public offering completed November 3, 1995
and $ 59.9 million in proceeds from long term debt. At May 31,
1996 there were no borrowings under the working capital facility
versus $73.0 million at August 31, 1995.
In May 1996 , the Company completed a private placement of $50
million Senior Notes due 2004.
At May 31, 1996, borrowing capacity of $60.0 million was
available under the working capital facility which expires in
1998.
The Company believes that funds provided by operations and
available under the credit agreements combined with trade credit
from its vendors and proceeds from the secondary public
offering and debt financing will be sufficient to satisfy its
currently anticipated working capital and capital expenditure
requirements for the next twelve months.
Business Factors
Due to the nature of turnkey manufacturing and the Company's
relatively small number of customers, the Company's quarterly
operating results are affected by the levels and timing of
orders; the level of capacity utilization of its manufacturing
facilities and associated fixed costs; fluctuations in materials
costs; and by the mix of materials costs versus manufacturing
costs. Similarly, operating results are affected by price
competition; level of experience in manufacturing a particular
product; degree of automation used in the assembly process;
efficiencies achieved by the Company in managing inventories and
fixed assets; timing of expenditures in anticipation of
increased sales; customer product delivery requirements; and
shortages of components or labor. In the past, some of the
Company's customers have terminated their manufacturing
arrangement with the Company, and other customers have
significantly reduced or delayed the volume of manufacturing
services ordered from the Company. Any such termination of a
manufacturing relationship or change, reduction or delay in
orders could have an adverse affect of the Company's results of
operations.
<PAGE> 13
In particular, Quantum Corporation announced in January 1996
the cancellation of orders to Jabil for the manufacture of
subassemblies for its high end disk drive products. This
cancellation is expected to have an adverse impact on the
Company's Malaysian plant over the next quarter. In light of
this event and uncertain general industry conditions for the
second half of calendar 1996 for computer equipment
manufacturers, the Company's management intends to closely
monitor manufacturing costs and to maintain flexibility in order
to respond to changing business conditions and uncertainty.
There can be no assurance that these events plus changing
business conditions and uncertainties will not have an adverse
effect on the Company's results of operations or financial
condition.
Litigation
During the 1993 and 1994 fiscal years, the Company and Epson
America, Inc. ("Epson") entered into serveral written and oral
agreements and purchase orders providing for the joint development
by the parties, and manufacture by the Company, of notebook computers
pursuant to specifications provided by Epson. Pursuant to the parties'
agreements, the Company procured materials for production. The Company
contends that Epson breached the agreement by refusing to honor its
purchase commitments citing production delays resulting from the
unavailability of certain components and defects in certain materials
supplied to the Company. On December 23, 1994, the Company instituted
a breach of contract action against Epson in the Circuit Court of the
Sixth Judicial Circuit of the State of Florida, requesting certain
specified and unspecified monetary damages, including damages in an
amount equal to $6,278,282, representing unpaid receivables, and
incidental and consequential damanges, including, among others, loss
of design and development costs, costs of unused or specially purchased
inventory and lost profits. Such action was subsequently removed to
the United States District Court for the Middle District of Florida.
On July 21, 1995, Epson filed a counterclaim citing damages in excess
of $52 million for, among other things, breach of contract and negligent
misrepresention. The Company mitigated damages arising from Epson's
breach by selling notebook computers to an electronics distributor.
Epson contends that the Jabil computer manual furnished with these
computers infringed certain Epson copyrights. The Company expects
discovery to conclude during the second quarter of fiscal 1996 and
the trial to commence later in 1996 calendar year. The parties have
been unsuccessful in mediating or arbitrating their dispute, despite
participation in multiple mediation and non binding arbitration
sessions. The Company intends to pursue aggressively its legal claims
and contest vigorously Epson's counterclaims. The Company believes
strongly in the validity of its claims and believes that any potential
exposure to the Company is substantially less than the $52 million
claimed by Epson.However, such litigation may result in substatial
costs and diversion of resources and, given the uncertainties inherent
in litigation, could have a material adverse effect on the Company's
operating results and financial condition, if decided adversely to
the Company.
<PAGE> 14
JABIL CIRCUIT, INC. AND SUBSIDIARIES
Part II - OTHER INFORMATION
Item 6: Exhibits and Reports on Form 8-K
(a) Exhibits
10.53 Note purchase agreement and notes dated May 30, 1996,
between the registrant , certain lenders and NBD Bank as
collateral agent.
10.54 Loan agreementdated May 30, 1996, between registrant and
certain banks and NBD Bank as agent for the banks.
11.1 Statement re Computation of Net Income per Share
27 Financial Data Schedule, which is submitted electronically
to the Securities and Exchange Commission for information
only and not filed.
(b) Form 8-K
No Reports on Form 8-K were filed by the Registrant
during the quarter ended May 31, 1995.
<PAGE> 15
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act
of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
Jabil Circuit, Inc.
-------------------
Registrant
Date: 7/12/96 /s/ Thomas A. Sansone
---------------------
Thomas A. Sansone
President
Date: 7/12/96 /s/ Ronald J. Rapp
----------------------
Ronald J. Rapp
Chief Financial Officer
JABIL CIRCUIT, INC.
NOTE PURCHASE AGREEMENT
Dated as of May 30, 1996
$50,000,000 6.89% Senior Notes Due May 30, 2004
THIS NOTE PURCHASE AGREEMENT AND THE NOTES MAY BE SUBJECT TO
THE TERMS OF AN INTERCREDITOR AGREEMENT, DATED AS OF MAY 30,
1996, AS MAY BE AMENDED, RESTATED OR OTHERWISE MODIFIED FROM
TIME TO TIME, AMONG CERTAIN LENDERS AND NBD BANK AS COLLATERAL
AGENT. BY ACCEPTANCE OF A NOTE, THE HOLDER THEREOF MAY BECOME
BOUND BY THE PROVISIONS OF SUCH INTERCREDITOR AGREEMENT, WHETHER
OR NOT SUCH HOLDER BECOMES A PARTY THERETO.
TABLE OF CONTENTS
PAGE
1. AUTHORIZATION OF NOTES . . . . . . . . . . . . . . . . . .
. . . 1
2. SALE AND PURCHASE OF NOTES . . . . . . . . . . . . . . . .
. . . 1
3. CLOSING. . . . . . . . . . . . . . . . . . . . . . . . . .
. . . 2
4. CONDITIONS TO CLOSING. . . . . . . . . . . . . . . . .2
4.1 Representations and Warranties . . . . . . . . .2
4.2 Performance; No Default. . . . . . . . . . . . .2
4.3 Compliance Certificates. . . . . . . . . . . . .2
4.4 Opinions of Counsel . . . . . . . . . . . . . . 3
4.5 PurchasePermitted By Applicable Law, etc. . . . 3
4.6 Sale of Other Notes . . . . . . . . . . . . . . 3
4.7 Payment of Special Counsel Fees. . . . . . . . .3
4.8 Private Placement Number . . . . . . . . . . . .4
4.9 Guaranty Agreement . . . . . . . . . . . . . . .4
4.10 Stock Pledge . . . . . . . . . .
. . . . . . . . . . . . . 4 4.11 Bank Loan Agreement. . .
. . . . . . . . . . . . . . . . . 4 4.12 Intercreditor
Agreement. . . . . . . . . . . . . . . . . . 4 4.13
Changes in Corporate Structure . . . . . . . . . . . . . . 4
4.14 Lien Releases. . . . . . . . . . . . . . . . . . . . . .
. 4 4.15 Proceedings and Documents. . . . . . . . . . . .
. . . . . 5
5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. . . . . . .
. . . 5 5.1 Organization; Power and Authority. . . . . .
. . . . . . . 5 5.2 Authorization, etc.. . . . . . . . .
. . . . . . . . . . . 5 5.3 Disclosure . . . . . . . . .
. . . . . . . . . . . . . . . 5 5.4 Organization and
Ownership of Shares of Subsidiaries; Affiliates 6 5.5
Financial Statements . . . . . . . . . . . . . . . . . . . 7
5.6 Compliance with Laws, Other Instruments, etc.. . . . . .
. 7 5.7 Governmental Authorizations, etc.. . . . . . . .
. . . . . 7 5.8 Litigation; Observance of Agreements,
Statutes and Orders. 7 5.9 Taxes. . . . . . . . . . . . .
. . . . . . . . . . . . . . 8 5.10 Title to Property;
Leases. . . . . . . . . . . . . . . . . 8 5.11 Licenses,
Permits, etc.. . . . . . . . . . . . . . . . . . 8 5.12
Compliance with ERISA. . . . . . . . . . . . . . . . . . . 9
5.13 Private Offering by the Company. . . . . . . . . . . . .
. 10 5.14 Use of Proceeds; Margin Regulations. . . . . . .
. . . . . 10 5.15 Existing Debt; Future Liens. . . . . . .
. . . . . . . . . 10 5.16 Foreign Assets Control
Regulations, etc. . . . . . . . . . 11 5.17 Status under
Certain Statutes. . . . . . . . . . . . . . . 11 5.18
Environmental Matters. . . . . . . . . . . . . . . . . . . 11
6. REPRESENTATIONS OF THE PURCHASER . . . . . . . . . . . . .
. . . 12 6.1 Purchase for Investment. . . . . . . . . . .
. . . . . . . 12 6.2 Source of Funds. . . . . . . . . . .
. . . . . . . . . . . 12
7. INFORMATION AS TO COMPANY. . . . . . . . . . . . . . . . .
. . . 13 7.1 Financial and Business Information . . . . .
. . . . . . . 13 7.2 Officer's Certificate. . . . . . . .
. . . . . . . . . . . 16 7.3 Inspection . . . . . . . . .
. . . . . . . . . . . . . . . 17
8. PREPAYMENT OF THE NOTES, ETC.. . . . . . . . . . . . . . .
. . . 18 8.1 Required Prepayments; Payment at Maturity. .
. . . . . . . 18 8.2 Optional Prepayments with Make-Whole
Amount. . . . . . . . 18 8.3 Prepayment Upon Change in
Control. . . . . . . . . . . . . 18 8.4 Allocation of
Partial Prepayments. . . . . . . . . . . . . 20 8.5
Maturity; Surrender, etc.. . . . . . . . . . . . . . . . . 20
8.6 Purchase of Notes. . . . . . . . . . . . . . . . . . . .
. 20 8.7 Make-Whole Amount. . . . . . . . . . . . . . . .
. . . . . 21
9. AFFIRMATIVE COVENANTS. . . . . . . . . . . . . . . . . . .
. . . 22 9.1 Compliance with Law. . . . . . . . . . . . .
. . . . . . . 22 9.2 Insurance. . . . . . . . . . . . . .
. . . . . . . . . . . 22 9.3 Maintenance of Properties. .
. . . . . . . . . . . . . . . 22 9.4 Payment of Taxes and
Claims. . . . . . . . . . . . . . . . 23 9.5 Corporate
Existence, etc.. . . . . . . . . . . . . . . . . 23 9.6
Guaranty Agreement . . . . . . . . . . . . . . . . . . . . 23
9.7 Pari Passu . . . . . . . . . . . . . . . . . . . . . . .
. 24 9.8 Incorporated Covenants . . . . . . . . . . . . .
. . . . . 24 9.9 Additional Covenants.. . . . . . . . . .
. . . . . . . . . 24
10. NEGATIVE COVENANTS . . . . . . . . . . . . . . . . . . . .
. . . 25 10.1 Transactions with Affiliates . . . . . . . .
. . . . . . . 25 10.2 Line of Business.. . . . . . . . . .
. . . . . . . . . . . 25 10.3 Consolidated Tangible Net
Worth. . . . . . . . . . . . . . 25 10.4 Pro Forma
Consolidated Fixed Charges Coverage Ratio. . . . 25 10.5
Limitation on Debt.. . . . . . . . . . . . . . . . . . . . 25
10.6 Limitation on Priority Debt. . . . . . . . . . . . . . .
. 26 10.7 Liens. . . . . . . . . . . . . . . . . . . . . .
. . . . . 26 10.8 Merger, Consolidation, etc.. . . . . . .
. . . . . . . . . 30 10.9 Sale of Assets, etc. . . . . . .
. . . . . . . . . . . . . 31
11. EVENTS OF DEFAULT. . . . . . . . . . . . . . . . . . . . .
. . . 33
12. REMEDIES ON DEFAULT, ETC.. . . . . . . . . . . . . . . . .
. . . 36 12.1 Acceleration . . . . . . . . . . . . . . . .
. . . . . . . 36 12.2 Other Remedies . . . . . . . . . . .
. . . . . . . . . . . 37 12.3 Rescission . . . . . . . . .
. . . . . . . . . . . . . . . 37 12.4 No Waivers or
Election of Remedies, Expenses, etc. . . . . 37
13. REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES. . . . . . .
. . . 38 13.1 Registration of Notes. . . . . . . . . . . .
. . . . . . . 38 13.2 Transfer and Exchange of Notes . . .
. . . . . . . . . . . 38 13.3 Replacement of Notes . . . .
. . . . . . . . . . . . . . . 38
14. PAYMENTS ON NOTES. . . . . . . . . . . . . . . . . . . . .
. . . 39 14.1 Place of Payment . . . . . . . . . . . . . .
. . . . . . . 39 14.2 Home Office Payment. . . . . . . . .
. . . . . . . . . . . 39
15. EXPENSES, ETC. . . . . . . . . . . . . . . . . . . . . . .
. . . 39 15.1 Transaction Expenses . . . . . . . . . . . .
. . . . . . . 39 15.2 Survival . . . . . . . . . . . . . .
. . . . . . . . . . . 40
16. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE
AGREEMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . .
40
17. AMENDMENT AND WAIVER . . . . . . . . . . . . . . . . . . .
. . . 40 17.1 Requirements . . . . . . . . . . . . . . . .
. . . . . . . 40 17.2 Solicitation of Holders of Notes . .
. . . . . . . . . . . 42 17.3 Binding Effect, etc. . . . .
. . . . . . . . . . . . . . . 42 17.4 Notes held by
Company, etc.. . . . . . . . . . . . . . . . 42
18. NOTICES. . . . . . . . . . . . . . . . . . . . . . . . . .
. . . 43
19. REPRODUCTION OF DOCUMENTS. . . . . . . . . . . . . . . . .
. . . 43
20. CONFIDENTIAL INFORMATION . . . . . . . . . . . . . . . . .
. . . 43
21. SUBSTITUTION OF PURCHASER. . . . . . . . . . . . . . . . .
. . . 45
22. MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . .
. . . 45 22.1 Additional Notes . . . . . . . . . . . . . .
. . . . . . . 45 22.2 Successors and Assigns . . . . . . .
. . . . . . . . . . . 45 22.3 Payments Due on Non-Business
Days. . . . . . . . . . . . . 45 22.4 Severability . . . .
. . . . . . . . . . . . . . . . . . . 46 22.5 Construction
. . . . . . . . . . . . . . . . . . . . . . . 46 22.6
Counterparts . . . . . . . . . . . . . . . . . . . . . . . 46
22.7 Governing Law. . . . . . . . . . . . . . . . . . . . . .
. 46
SCHEDULE A -- Information Relating to Purchasers
SCHEDULE B -- Defined Terms
SCHEDULE 3 -- Payment Instructions
SCHEDULE 4.13 -- Changes in Corporate Structure
SCHEDULE 5.3 -- Disclosure Materials
SCHEDULE 5.4 -- Subsidiaries of the Company and Ownership
of Subsidiary Stock
SCHEDULE 5.5 -- Financial Statements
SCHEDULE 5.8 -- Certain Litigation
SCHEDULE 5.11 -- Patents, etc.
SCHEDULE 5.12 -- ERISA
SCHEDULE 5.14 -- Use of Proceeds
SCHEDULE 5.15 -- Existing Debt
SCHEDULE 9.8 -- Incorporated Covenants
SCHEDULE 10.3 -- Certain Definitions Used in Tangible Net
Worth Covenant
EXHIBIT 1 -- Form of 6.89% Senior Note due May 30, 2004
EXHIBIT 4.4(a) -- Form of Opinion of General Counsel of the
Company
EXHIBIT 4.4(b) -- Form of Opinion of Special Counsel for
the Purchasers
EXHIBIT 4.9 -- Form of Guaranty Agreement
EXHIBIT 4.10 -- Form of Pledge Agreement
EXHIBIT 4.12 -- Form of Intercreditor Agreement
JABIL CIRCUIT, INC.
10800 Roosevelt Boulevard St. Petersburg, Florida 33716
$50,000,000 6.89% Senior Notes due May 30,
2004
Dated as of May
30, 1996
[Separately addressed to each of the Purchasers listed in
Schedule A hereto]
Ladies and Gentlemen:
JABIL CIRCUIT, INC., a Delaware corporation (together with
its successors and assigns, the "Company"), agrees with you as
follows:
1. AUTHORIZATION OF NOTES.
The Company will authorize the issue and sale of
$50,000,000 aggregate principal amount of its 6.89% Senior Notes
due May 30, 2004 (the "Notes", such term to include any such
notes issued in substitution therefor pursuant to Section 13 of
this Agreement or the Other Agreements (as hereinafter
defined)). The Notes shall be substantially in the form set out
in Exhibit 1, with such changes therefrom, if any, as may be
approved by you and the Company. Certain capitalized terms used
in this Agreement are defined in Schedule B; references to a
"Schedule" or an "Exhibit" are, unless otherwise specified, to a
Schedule or an Exhibit attached to this Agreement.
2. SALE AND PURCHASE OF NOTES.
Subject to the terms and conditions of this Agreement, the
Company will issue and sell to you and you will purchase from
the Company, at the Closing provided for in Section 3, Notes in
the principal amount specified opposite your name in Schedule A
at the purchase price of 100% of the principal amount thereof.
Contemporaneously with entering into this Agreement, the Company
is entering into separate Note Purchase Agreements (the "Other
Agreements") identical with this Agreement with each of the
other purchasers named in Schedule A (the "Other Purchasers"),
providing for the sale at such Closing to each of the Other
Purchasers of Notes in the principal amount specified opposite
its name in Schedule A. Your obligation hereunder and the
obligations of the Other Purchasers under the Other Agreements
are several and not joint obligations and you shall have no
obligation under any Other Agreement and no liability to any
Person for the performance or non-performance by any Other
Purchaser thereunder.
3. CLOSING.
The sale and purchase of the Notes to be purchased by you
and the Other Purchasers shall occur at the offices of Hebb &
Gitlin, One State Street, Hartford, Connecticut 06103, at 10:00
a.m., eastern time, at a closing (the "Closing") on May 30,
1996. At the Closing, the Company will deliver to you one or
more Notes (as set forth below your name on Schedule A), in the
denominations indicated in Schedule A, in the aggregate
principal amount of your purchase, dated the date of the Closing
and payable to you or payable as indicated in Schedule A,
against payment by federal funds wire transfer in immediately
available funds of the purchase price thereof, as directed by
the Company in Schedule 3. If at the Closing the Company shall
fail to tender such Notes to you as provided above in this
Section 3, or any of the conditions specified in Section 4 shall
not have been fulfilled to your satisfaction, you shall, at your
election, be relieved of all further obligations under this
Agreement, without thereby waiving any rights you may have by
reason of such failure or such nonfulfillment.
4. CONDITIONS TO CLOSING.
Your obligation to purchase and pay for the Notes to be
sold to you at the Closing is subject to the fulfillment to your
satisfaction, prior to or at the Closing, of the following
conditions:
4.1 Representations and Warranties.
The representations and warranties of the Obligors in the
Financing Documents shall be correct when made and at the time
of the Closing.
4.2 Performance; No Default.
The Obligors shall have performed and complied with all
agreements and conditions contained in the Financing Documents
required to be performed or complied with by them prior to or at
the Closing and after giving effect to the issue and sale of the
Notes (and the application of the proceeds thereof as
contemplated by Schedule 5.14) no Default or Event of Default
shall have occurred and be continuing. Neither the Company nor
any Subsidiary shall have entered into any transaction since the
date of the Memorandum that would have been prohibited by any of
Sections 10.1, 10.5, 10.6, 10.7, 10.8 and 10.9 had such Sections
applied since such date.
4.3 Compliance Certificates.
(a) Company Officer's Certificate. The Company
shall have delivered to you an Officer's Certificate, dated
the date of the Closing, certifying that the conditions
specified in Sections 4.1, 4.2 and 4.13 have been fulfilled.
(b) Company Secretary's Certificate. The Company
shall have delivered to you a certificate of the Secretary
or an Assistant Secretary of the Company, dated the date of
the Closing, certifying as to the resolutions attached thereto
and other corporate proceedings relating to the
authorization, execution and delivery of the Financing
Documents.
(c) Secretary's Certificate of Initial Guarantor.
The Initial Guarantor shall have delivered to you a
certificate of the Secretary or an Assistant Secretary of such
Subsidiary, dated the date of the Closing, certifying as to
the resolutions attached thereto and other corporate
proceedings relating to the authorization, execution and
delivery of the Guaranty Agreement.
4.4 Opinions of Counsel.
You shall have received opinions in form and substance
satisfactory to you, dated the date of the Closing,
(a) from Linda V. Moore, Esq., the General Counsel
of the Company, substantially in the form of Exhibit 4.4(a)
and covering such other matters incident to the transactions
contemplated hereby as you or your counsel may reasonably
request (and the Company hereby instructs its counsel to
deliver such opinion to you), and
(b) from Hebb & Gitlin, your special counsel in
connection with such transactions, substantially in the form
of Exhibit 4.4(b) and covering such other matters incident
to such transactions as you may reasonably request.
4.5 Purchase Permitted By Applicable Law, etc.
On the date of the Closing your purchase of Notes shall (a)
be permitted by the laws and regulations of each jurisdiction to
which you are subject, without recourse to provisions (such as
section 1405(a)(8) of the New York Insurance Law) permitting
limited investments by insurance companies without restriction
as to the character of the particular investment, (b) not
violate any applicable law or regulation (including, without
limitation, Regulation G, T or X of the Board of Governors of
the Federal Reserve System) and (c) not subject you to any tax,
penalty or liability under or pursuant to any applicable law or
regulation, which law or regulation was not in effect on the
date of your execution and delivery of this Agreement. If
requested by you, you shall have received an Officer's
Certificate certifying as to such matters of fact as you may
reasonably specify to enable you to determine whether such
purchase is so permitted.
4.6 Sale of Other Notes.
Contemporaneously with the Closing the Company shall sell
to the Other Purchasers, and the Other Purchasers shall
purchase, the Notes to be purchased by them at the Closing as
specified in Schedule A.
4.7 Payment of Special Counsel Fees.
Without limiting the provisions of Section 15.1, the
Company shall have paid on or before the Closing the fees,
charges and disbursements of your special counsel referred to in
Section 4.4 to the extent reflected in a statement of such
counsel rendered to the Company at least one Business Day prior
to the date of the Closing.
4.8 Private Placement Number.
A private placement number issued by Standard & Poor's
CUSIP Service Bureau (in cooperation with the Securities
Valuation Office of the National Association of Insurance
Commissioners) shall have been obtained for the Notes.
4.9 Guaranty Agreement.
You shall have received a counterpart of the Guaranty
Agreement, duly executed and delivered by the Initial Guarantor,
substantially in the form of Exhibit 4.9 (as amended or
supplemented from time to time, the "Guaranty Agreement"), and
the Guaranty Agreement shall be in full force and effect.
4.10 Stock Pledge.
The Company and the Collateral Agent shall have entered
into the Pledge Agreement and Irrevocable Proxy, substantially
in the form of Exhibit 4.10 (as amended or supplemented from
time to time, the "Pledge Agreement"), and the Pledge Agreement
shall be in full force and effect. The Lien of the Collateral
Agent contemplated by the Pledge Agreement shall have been
perfected.
4.11 Bank Loan Agreement.
The Company, Jabil Circuit Ltd. and the Banks shall have
entered into the Bank Loan Agreement, in form and substance
satisfactory to you, and the Company shall have delivered to you
copies of the Bank Loan Agreement and each other document
executed in connection therewith requested by you, certified as
true and correct by a Responsible Officer.
4.12 Intercreditor Agreement.
The Banks, you and the Other Purchasers and the Collateral
Agent shall have executed and delivered (and the Obligors shall
have executed and delivered the consent and agreement thereto)
the Intercreditor Agreement, substantially in the form of
Exhibit 4.12 (as amended from time to time, the "Intercreditor
Agreement"), and the Intercreditor Agreement shall be in full
force and effect.
4.13 Changes in Corporate Structure.
Except as specified in Schedule 4.13, the Company shall not
have changed its jurisdiction of incorporation or been a party
to any consolidation or merger and shall not have succeeded to
all or any substantial part of the liabilities of any other
entity, at any time following the date of the most recent
financial statements referred to in Schedule 5.5.
4.14 Lien Releases.
You shall have received written evidence, in form and
substance satisfactory to you, that the Company's bank lenders
(or their agent acting on their behalf) under the credit
facility of the Company to be replaced by the Bank Loan
Agreement shall have released all Liens that such banks or such
agent may have on any property of the Company and its
Subsidiaries.
4.15 Proceedings and Documents.
All corporate and other proceedings in connection with the
transactions contemplated by the Financing Documents and all
documents and instruments incident to such transactions shall be
satisfactory to you and your special counsel, and you and your
special counsel shall have received all such counterpart
originals or certified or other copies of such documents as you
or they may reasonably request.
5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents and warrants to you that:
5.1 Organization; Power and Authority.
Each Obligor is a corporation duly organized, validly
existing and in good standing under the laws of its jurisdiction
of incorporation, and is duly qualified as a foreign corporation
and is in good standing in each jurisdiction in which such
qualification is required by law, other than those jurisdictions
as to which the failure to be so qualified or in good standing
could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect. Each Obligor has
the corporate power and authority to own or hold under lease the
properties it purports to own or hold under lease, to transact
the business it transacts, to execute and deliver the Financing
Documents to which it is or is to be a party and to perform the
provisions thereof.
5.2 Authorization, etc.
The Financing Documents have been duly authorized by all
necessary corporate action on the part of the Obligors, and each
of this Agreement, the Pledge Agreement, the Guaranty Agreement
and the Intercreditor Agreement constitutes, and upon execution
and delivery thereof each Note will constitute, a legal, valid
and binding obligation of each Obligor party thereto enforceable
against each such Obligor in accordance with its terms, except
as such enforceability may be limited by (a) applicable
bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting the enforcement of creditors' rights
generally and (b) general principles of equity (regardless of
whether such enforceability is considered in a proceeding in
equity or at law).
5.3 Disclosure.
The Company, through its agents, SPP Hambro & Co. and NBD
Bank, N.A. Capital Markets Division, has delivered to you and
each Other Purchaser a copy of a Direct Placement Memorandum,
dated February 1996 (the "Memorandum"), relating to the
transactions contemplated hereby. The Memorandum fairly
describes, in all material respects, the general nature of the
business and principal properties of the Company and its
Subsidiaries. Except as disclosed in Schedule 5.3, the
Financing Documents, the Memorandum, the documents, certificates
or other writings delivered to you by or on behalf of the
Company in connection with the transactions contemplated by the
Financing Documents and the financial statements listed in
Schedule 5.5, taken as a whole, do not contain any untrue
statement of a material fact or omit to state any material fact
necessary to make the statements therein not misleading in light
of the circumstances under which they were made. Except as
disclosed in the Memorandum or as expressly described in
Schedule 5.3, or in one of the documents, certificates or other
writings identified therein, or in the financial statements
listed in Schedule 5.5, since August 31, 1995, there has been no
change in the business, operations, affairs, financial
condition, assets or properties of the Company or any Subsidiary
except changes that individually or in the aggregate could not
reasonably be expected to have a Material Adverse Effect. There
is no fact known to the Company that could reasonably be
expected to have a Material Adverse Effect that has not been set
forth herein or in the Memorandum or in the other documents,
certificates and other writings delivered to you by or on behalf
of the Company specifically for use in connection with the
transactions contemplated hereby.
5.4 Organization and Ownership of Shares of Subsidiaries;
Affiliates.
(a) Schedule 5.4 contains (except as noted therein)
complete and correct lists (i) of the Company's
Subsidiaries, showing, as to each Subsidiary, the correct
name thereof, the jurisdiction of its organization, and the
percentage of shares of each class of its capital stock or
similar equity interests outstanding owned by the Company
and each other Subsidiary, (ii) of the Company's Affiliates,
other than Subsidiaries, and (iii) of the Company's
directors and senior officers.
(b) All of the outstanding shares of capital stock
or similar equity interests of each Subsidiary shown in
Schedule 5.4 as being owned by the Company and its
Subsidiaries have been validly issued, are fully paid and
nonassessable and are owned by the Company or another
Subsidiary free and clear of any Lien (except as otherwise
disclosed in Schedule 5.4).
(c) Each Subsidiary identified in Schedule 5.4 is a
corporation or other legal entity duly organized, validly
existing and in good standing under the laws of its
jurisdiction of organization, and is duly qualified as a foreign
corporation or other legal entity and is in good standing in
each jurisdiction in which such qualification is required by
law, other than those jurisdictions as to which the failure to
be so qualified or in good standing could not, individually
or in the aggregate, reasonably be expected to have a
Material Adverse Effect. Each such Subsidiary has the corporate
or other power and authority to own or hold under lease the
properties it purports to own or hold under lease and to
transact the business it transacts and proposes to transact.
(d) No Subsidiary is a party to, or otherwise
subject to any legal restriction or any agreement (other
than this Agreement, the agreements listed in Schedule 5.4
and customary limitations imposed by corporate law statutes)
restricting the ability of such Subsidiary to pay dividends
out of profits or make any other similar distributions of
profits to the Company or any of its Subsidiaries that owns
outstanding shares of capital stock or similar equity
interests of such Subsidiary.
5.5 Financial Statements.
The Company has delivered to each Purchaser copies of the
financial statements of the Company and its Subsidiaries listed
in Schedule 5.5. All of said financial statements (including in
each case the related schedules and notes) fairly present in all
material respects the consolidated financial position of the
Company and its Subsidiaries as of the respective dates
specified in such Schedule and the consolidated results of their
operations and cash flows for the respective periods so
specified and have been prepared in accordance with GAAP
consistently applied throughout the periods involved except as
set forth in the notes thereto (subject, in the case of any
interim financial statements, to normal year-end adjustments).
5.6 Compliance with Laws, Other Instruments, etc.
The execution, delivery and performance by the Obligors of
the Financing Documents will not
(a) contravene, result in any breach of, or
constitute a default under, or result in the creation of any
Lien in respect of any property of the Company (other than
as contemplated by the Pledge Agreement) or any Subsidiary
under, any indenture, mortgage, deed of trust, loan,
purchase or credit agreement, lease, corporate charter or
by-laws, or any other agreement or instrument to which the
Company or any Subsidiary is bound or by which the Company or
any Subsidiary or any of their respective properties may be
bound or affected,
(b) conflict with or result in a breach of any of
the terms, conditions or provisions of any order, judgment,
decree, or ruling of any court, arbitrator or Governmental
Authority applicable to the Company or any Subsidiary, or
(c) violate any provision of any statute or other
rule or regulation of any Governmental Authority applicable
to the Company or any Subsidiary.
5.7 Governmental Authorizations, etc.
No consent, approval or authorization of, or registration,
filing or declaration with, any Governmental Authority is
required in connection with the execution, delivery or
performance by the Obligors of the Financing Documents.
5.8 Litigation; Observance of Agreements, Statutes and
Orders.
(a) Except as disclosed in Schedule 5.8, there are
no actions, suits or proceedings pending or, to the
knowledge of the Company, threatened against or affecting
the Company or any Subsidiary or any property of the Company or
any Subsidiary in any court or before any arbitrator of any
kind or before or by any Governmental Authority that,
individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect.
(b) Neither the Company nor any Subsidiary is in
default under any term of any agreement or instrument to
which it is a party or by which it is bound, or any order,
judgment, decree or ruling of any court, arbitrator or
Governmental Authority or is in violation of any applicable
law, ordinance, rule or regulation (including without
limitation Environmental Laws) of any Governmental Authority,
which default or violation, individually or in the
aggregate, could reasonably be expected to have a Material
Adverse Effect.
5.9 Taxes.
The Company and its Subsidiaries have filed all tax returns
that are required to have been filed in any jurisdiction, and
have paid all taxes shown to be due and payable on such returns
and all other taxes and assessments levied upon them or their
properties, assets, income or franchises, to the extent such
taxes and assessments have become due and payable and before
they have become delinquent, except for any taxes and
assessments (i) the amount of which is not individually or in
the aggregate Material or (ii) the amount, applicability or
validity of which is currently being contested in good faith by
appropriate proceedings and with respect to which the Company or
a Subsidiary, as the case may be, has established adequate
reserves in accordance with GAAP. The Company knows of no basis
for any other tax or assessment that could reasonably be
expected to have a Material Adverse Effect. The charges,
accruals and reserves on the books of the Company and its
Subsidiaries in respect of Federal, state or other taxes for all
fiscal periods are adequate. The Federal income tax liabilities
of the Company and its Subsidiaries have been determined by the
Internal Revenue Service and paid for all fiscal years up to and
including the fiscal year ended August 31, 1995.
5.10 Title to Property; Leases.
The Company and its Subsidiaries have good and sufficient
title to their respective properties that individually or in the
aggregate are Material, including all such properties reflected
in the most recent audited balance sheet referred to in Section
5.5 or purported to have been acquired by the Company or any
Subsidiary after said date (except as sold or otherwise disposed
of in the ordinary course of business), in each case free and
clear of Liens prohibited by this Agreement. All leases that
individually or in the aggregate are Material are valid and
subsisting and are in full force and effect in all material
respects.
5.11 Licenses, Permits, etc.
Except as disclosed in Schedule 5.11,
(a) the Company and its Subsidiaries own or possess
all licenses, permits, franchises, authorizations, patents,
copyrights, service marks, trademarks and trade names, or
rights thereto, that individually or in the aggregate are
Material, without known conflict with the rights of others;
(b) to the best knowledge of the Company, no product
of the Company or any Subsidiary infringes in any material
respect any license, permit, franchise, authorization,
patent, copyright, service mark, trademark, trade name or other
right owned by any other Person; and
(c) to the best knowledge of the Company, there is
no Material violation by any Person of any right of the
Company or any of its Subsidiaries with respect to any
patent, copyright, service mark, trademark, trade name or other
right owned or used by the Company or any of its
Subsidiaries.
5.12 Compliance with ERISA.
(a) The Company and each ERISA Affiliate have
operated and administered each Plan in compliance with all
applicable laws except for such instances of noncompliance
as have not resulted in and could not reasonably be expected to
result in a Material Adverse Effect. Neither the Company nor
any ERISA Affiliate has incurred any liability pursuant to
Title I or IV of ERISA or the penalty or excise tax
provisions of the Code relating to employee benefit plans (as
defined in section 3 of ERISA), and no event, transaction or
condition has occurred or exists that could reasonably be
expected to result in the incurrence of any such liability by
the Company or any ERISA Affiliate, or in the imposition of
any Lien on any of the rights, properties or assets of the
Company or any ERISA Affiliate, in either case pursuant to
Title I or IV of ERISA or to such penalty or excise tax
provisions or to section 401(a)(29) or 412 of the Code,
other than such liabilities or Liens as would not be
individually or in the aggregate Material.
(b) The present value of the aggregate benefit
liabilities under each of the Plans (other than
Multiemployer Plans), determined as of the end of such Plan's
most recently ended plan year on the basis of the actuarial
assumptions specified for funding purposes in such Plan's
most recent actuarial valuation report, did not exceed the
aggregate current value of the assets of such Plan allocable to
such benefit liabilities. The term "benefit liabilities"
has the meaning specified in section 4001 of ERISA and the
terms "current value" and "present value" have the meaning
specified in section 3 of ERISA.
(c) The Company and its ERISA Affiliates have not
incurred withdrawal liabilities (and are not subject to
contingent withdrawal liabilities) under section 4201 or
4204 of ERISA in respect of Multiemployer Plans that
individually or in the aggregate are Material.
(d) The expected postretirement benefit obligation
(determined as of the last day of the Company's most
recently ended fiscal year in accordance with Financial
Accounting Standards Board Statement No. 106, without regard to
liabilities attributable to continuation coverage mandated
by section 4980B of the Code) of the Company and its
Subsidiaries is not Material.
(e) Schedule 5.12 sets forth all ERISA Affiliates
and all "employee benefit plans" maintained by the Company
(or any "affiliate" thereof) or in respect of which the
Notes could constitute an "employer security" ("employee benefit
plan" has the meaning specified in section 3 of ERISA,
"affiliate" has the meaning specified in section 407(d) of
ERISA and section V of the Department of Labor Prohibited
Transaction Exemption 95-60 (60 FR 35925, July 12, 1995) and
"employer security" has the meaning specified in section
407(d) of ERISA).
(f) The execution and delivery of the Financing
Documents and the issuance and sale of the Notes hereunder
will not involve any transaction that is subject to the
prohibitions of section 406 of ERISA or in connection with which
a tax could be imposed pursuant to section 4975(c)(1)(A)-(D)
of the Code. The representation by the Company in the first
sentence of this Section 5.12(f) is made in reliance upon
and subject to the accuracy of your representation in Section
6.2 as to the sources of the funds used to pay the purchase
price of the Notes to be purchased by you.
5.13 Private Offering by the Company.
Neither the Company nor anyone acting on its behalf has
offered the Notes or any similar securities for sale to, or
solicited any offer to buy any of the same from, or otherwise
approached or negotiated in respect thereof with, any person
other than you, the Other Purchasers and not more than 65 other
Institutional Investors, each of which has been offered the
Notes at a private sale for investment. Neither the Company nor
anyone acting on its behalf has taken, or will take, any action
that would subject the issuance or sale of the Notes to the
registration requirements of section 5 of the Securities Act.
For purposes of this Section 5.13 only, each reference to the
Notes shall be deemed to include a reference to the Guaranty
Agreement.
5.14 Use of Proceeds; Margin Regulations.
The Company will apply the proceeds of the sale of the
Notes as set forth in Schedule 5.14. No part of the proceeds
from the sale of the Notes hereunder will be used, directly or
indirectly, for the purpose of buying or carrying any margin
stock within the meaning of Regulation G of the Board of
Governors of the Federal Reserve System (12 CFR 207), or for the
purpose of buying or carrying or trading in any securities under
such circumstances as to involve the Company in a violation of
Regulation X of said Board (12 CFR 224) or to involve any broker
or dealer in a violation of Regulation T of said Board (12 CFR
220). Margin stock does not constitute more than 1% of the
value of the consolidated assets of the Company and its
Subsidiaries and the Company does not have any present intention
that margin stock will constitute more than 1% of the value of
such assets. As used in this Section, the terms "margin stock"
and "purpose of buying or carrying" shall have the meanings
assigned to them in said Regulation G.
5.15 Existing Debt; Future Liens.
(a) Except as described therein, Schedule 5.15 sets
forth a complete and correct list of all outstanding Debt of
the Company and its Subsidiaries as of May 6, 1996 (and
specifying, as to each such Debt, whether it is secured or
unsecured), since which date there has been no Material
change in the amounts, interest rates, sinking funds,
instalment payments or maturities of the Debt of the Company or
its Subsidiaries. Neither the Company nor any Subsidiary is
in default and no waiver of default is currently in effect,
in the payment of any principal or interest on any Debt of
the Company or such Subsidiary and no event or condition exists
with respect to any Debt of the Company or any Subsidiary
that would permit (or that with notice or the lapse of time,
or both, would permit) one or more Persons to cause such Debt to
become due and payable before its stated maturity or before
its regularly scheduled dates of payment.
(b) Except as disclosed in Schedule 5.15, neither
the Company nor any Subsidiary has agreed or consented to
cause or permit in the future (upon the happening of a
contingency or otherwise) any of its property, whether now owned
or hereafter acquired, to be subject to a Lien not permitted
by Section 10.7.
5.16 Foreign Assets Control Regulations, etc.
Neither the sale of the Notes by the Company hereunder nor
its use of the proceeds thereof, nor any other transaction
contemplated by the Financing Documents, will violate the
Trading with the Enemy Act, as amended, or any of the foreign
assets control regulations of the United States Treasury
Department (31 CFR, Subtitle B, Chapter V, as amended) or any
enabling legislation or executive order relating thereto.
NO&C Status under Certain Statutes.
Neither the Company nor any Subsidiary is subject to
regulation under the Investment Company Act of 1940, as amended,
the Public Utility Holding Company Act of 1935, as amended, the
Transportation Acts (49 U.S.C.), as amended, or the Federal
Power Act, as amended.
5.18 Environmental Matters.
Neither the Company nor any Subsidiary has knowledge of any
claim or has received any notice of any claim, and no proceeding
has been instituted raising any claim against the Company or any
of its Subsidiaries or any of their respective real properties
now or formerly owned, leased or operated by any of them or
other assets, alleging any damage to the environment or
violation of any Environmental Laws, except, in each case, such
as could not reasonably be expected to result in a Material
Adverse Effect. Except as otherwise disclosed to you in writing,
(a) neither the Company nor any Subsidiary has
knowledge of any facts that would give rise to any claim,
public or private, of violation of Environmental Laws or
damage to the environment emanating from, occurring on or in any
way related to real properties now or formerly owned, leased
or operated by any of them or to other assets or their use,
except, in each case, such as could not reasonably be expected
to result in a Material Adverse Effect;
(b) neither the Company nor any of its Subsidiaries
has stored any Hazardous Materials on real properties now or
formerly owned, leased or operated by any of them and has
not disposed of any Hazardous Materials in a manner contrary to
any Environmental Laws in each case in any manner that could
reasonably be expected to result in a Material Adverse
Effect; and
(c) all buildings on all real properties now owned,
leased or operated by the Company or any of its Subsidiaries
are in compliance with applicable Environmental Laws, except
where failure to comply could not reasonably be expected to
result in a Material Adverse Effect.
6. REPRESENTATIONS OF THE PURCHASER.
6.1 Purchase for Investment.
You represent that you are purchasing the Notes for your
own account or for one or more separate accounts maintained by
you or for the account of one or more pension or trust funds and
not with a view to the distribution thereof, provided that the
disposition of your or their property shall at all times be
within your or their control. You understand that the Notes
have not been registered under the Securities Act and may be
resold only if registered pursuant to the provisions of the
Securities Act or if an exemption from registration is
available, except under circumstances where neither such
registration nor such an exemption is required by law, and that
the Company is not required to register the Notes.
6.2 Source of Funds.
You represent, with respect to the funds with which you are
acquiring the Notes, that all of such funds are from or are
attributable to one or more of the following:
(a) General Account -- your general account assets
or from assets of one or more segments of such general
account, and that, solely for purposes of determining
whether such acquisition is a "prohibited transaction" (as
provided for in section 406 of ERISA or section 4975 of the
Code) and in reliance on the representations of the Company
set forth in Section 5.12 and the related disclosure of
"employee benefit plans" set forth in Schedule 5.12, all
requirements for an exemption under Department of Labor
Prohibited Transaction Exemption 95-60 (60 FR 35925, July
12, 1995) in respect of such "employee benefit plans" have been
satisfied; or
(b) Separate Account -- a "separate account" (as
defined in section 3 of ERISA):
(i) 10% Pooled Separate Account -- in respect
of which all requirements for an exemption under
Department of Labor Prohibited Transaction Class
Exemption 90-1 are met with respect to the use of such
funds to purchase the Notes; or
(ii) Identified Plan Assets -- that is
comprised of employee benefit plans identified by you
in writing and with respect to which the Company
hereby warrants and represents that, as of the date of the
Closing, neither the Company nor any ERISA Affiliate
is a "party in interest" (as defined in section 3 of
ERISA) or a "disqualified person" (as defined in section 4975 of
the Code) with respect to any plan so identified; or
(iii) Guaranteed Separate Account -- that is
maintained solely in connection with fixed contractual
obligations of an insurance company, under which any
amounts payable, or credited, to any employee benefit plan
having an interest in such account and to any
participant or beneficiary of such plan (including an
annuitant) are not affected in any manner by the investment
performance of the separate account (as provided by 29
C.F.R. SECTION 2510.3- 101(h)(1)(iii)); or
(c) Qualified Professional Asset Manager -- an
"investment fund" managed by a "qualified professional asset
manager" (as such terms are defined in Part V of Department
of Labor Prohibited Transaction Class Exemption 84-14) and all
the requirements for an exemption under such Exemption are met
with respect to the use of funds to purchase the Notes; or
(d) Excluded Plan -- an employee benefit plan that
is excluded from the provisions of section 406 of ERISA by
virtue of section 4(b) of ERISA; or
(e) Exempt Funds -- a separate investment account
that is not subject to ERISA and no funds of which come from
assets of an "employee benefit plan" or a "plan" or any
other entity that is deemed to hold assets of an "employee
benefit plan" or a "plan" ("employee benefit plan" is
defined in section 3 of ERISA, and "plan" is defined in
section 4975(e)(1) of the Code).
7. INFORMATION AS TO COMPANY.
7.1 Financial and Business Information.
The Company shall deliver to each holder of Notes that is
an Institutional Investor:
(a) Quarterly Statements -- concurrently with the
filing of the Company's Quarterly Report on Form 10-Q with
the Securities and Exchange Commission after the end of each
quarterly fiscal period in each fiscal year of the Company
(other than the last quarterly fiscal period of each such
fiscal year) but in any event within 60 days after the end
of each quarterly fiscal period in each fiscal year of the
Company (other than the last quarterly fiscal period of each
such fiscal year), duplicate copies of
(i) consolidated balance sheets of the Company
and its Subsidiaries, and of the Company and its
Restricted Subsidiaries, and consolidating balance
sheets of the Company and its Restricted Subsidiaries,
as at the end of such quarter, and
(ii) consolidated statements of operations and
cash flows of the Company and its Subsidiaries, and of
the Company and its Restricted Subsidiaries, and
consolidating statements of operations and cash flows of the
Company and its Restricted Subsidiaries, for such quarter
and (in the case of the second and third quarters) for
the portion of the fiscal year ending with such
quarter,
setting forth in each case in comparative form the figures
for the corresponding periods in the previous fiscal year,
all in reasonable detail, prepared in accordance with GAAP
applicable to quarterly financial statements generally, and
certified by a Senior Financial Officer as fairly
presenting, in all material respects, the financial position
of the companies being reported on and their results of
operations and cash flows, subject to changes resulting from
year-end adjustments;
(b) Annual Statements -- concurrently with the
filing of the Company's Annual Report on Form 10-K with the
Securities and Exchange Commission after the end of each
fiscal year of the Company but in any event within 90 days after
the end of each fiscal year of the Company, duplicate copies
of
(i) consolidated balance sheets of the Company
and its Subsidiaries, and of the Company and its
Restricted Subsidiaries, and consolidating balance
sheets of the Company and its Restricted Subsidiaries,
as at the end of such year,
consolidated statements of operations and
cash flows of the Company and its Subsidiaries, and of
the Company and its Restricted Subsidiaries, and
consolidating statements of operations and cash flows of the
Company and its Restricted Subsidiaries, for such year, and
(iii) a consolidated statement of changes in
stockholders' equity of the Company and its
Subsidiaries, and of the Company and its Restricted
Subsidiaries, for such year,
setting forth in comparative form the figures for the
previous fiscal year, all in reasonable detail, prepared in
accordance with GAAP, and accompanied by
(A) in the case of such consolidated
financial statements, an opinion thereon of
independent certified public accountants of
recognized national standing, which opinion shall state that
such financial statements present fairly, in all
material respects, the financial position of the
companies being reported upon and their results of
operations and cash flows and have been prepared in conformity
with GAAP, and that the examination of such
accountants in connection with such financial
statements has been made in accordance with generally
accepted auditing standards, and that such audit provides a
reasonable basis for such opinion in the
circumstances,
(B) a certification by a Senior Financial
Officer that such consolidated and consolidating
financial statements fairly present, in all
material respects, the financial position of the companies being
reported on and their results of operations and
cash flows, and
(C) a certificate of such accountants
stating that they have reviewed the Financing
Documents and stating further whether, in making
their audit, they have become aware of any condition or event
that then constitutes a Default or an Event of
Default, and, if they are aware that any such
condition or event then exists, specifying the
nature and period of the existence thereof (it being understood
that such accountants shall not be liable,
directly or indirectly, for any failure to obtain
knowledge of any Default or Event of Default unless such
accountants should have obtained knowledge thereof in
making an audit in accordance with generally
accepted auditing standards or did not make such
an audit);
(c) SEC and Other Reports -- promptly upon their
becoming available, one copy of (i) each financial
statement, report, notice or proxy statement sent by the
Company or any Subsidiary to public securities holders
generally, and (ii) each regular or periodic report, each
registration statement (without exhibits except as expressly
requested by such holder), and each prospectus and all
amendments thereto filed by the Company or any Subsidiary
with the Securities and Exchange Commission and of all press
releases and other statements made available generally by the
Company or any Subsidiary to the public concerning
developments that are Material;
(d) Notice of Default or Event of Default --
promptly, and in any event within five days after a
Responsible Officer becoming aware of the existence of any
Default or Event of Default or that any Person has given any
notice or taken any action with respect to a claimed default
hereunder or that any Person has given any notice or taken
any action with respect to a claimed default of the type
referred to in Section 11(f), a written notice specifying
the nature and period of existence thereof and what action
the Company is taking or proposes to take with respect thereto;
(e) ERISA Matters -- promptly, and in any event
within five days after a Responsible Officer becoming aware
of any of the following, a written notice setting forth the
nature thereof and the action, if any, that the Company or an
ERISA Affiliate proposes to take with respect thereto:
(i) with respect to any Plan, any reportable
event, as defined in section 4043(b) of ERISA and the
regulations thereunder, for which notice thereof has
not been waived pursuant to such regulations as in effect on the
date of the Closing; or
(ii) the taking by the PBGC of steps to
institute, or the threatening by the PBGC of the
institution of, proceedings under section 4042 of ERISA for
the termination of, or the appointment of a trustee to
administer, any Plan, or the receipt by the Company or
any ERISA Affiliate of a notice from a Multiemployer
Plan that such action has been taken by the PBGC with respect
to such Multiemployer Plan; or
(iii) any event, transaction or condition that
could result in the incurrence of any liability by the
Company or any ERISA Affiliate pursuant to Title I or
IV of ERISA or the penalty or excise tax provisions of the Code
relating to employee benefit plans, or in the
imposition of any Lien on any of the rights,
properties or assets of the Company or any ERISA Affiliate
pursuant to Title I or IV of ERISA or such penalty or
excise tax provisions, if such liability or Lien,
taken together with any other such liabilities or Liens then
existing, could reasonably be expected to have a
Material Adverse Effect;
(f) Notices from Governmental Authority -- promptly,
and in any event within 30 days of receipt thereof, copies
of any notice to the Company or any Subsidiary from any
Federal or state Governmental Authority relating to any order,
ruling, statute or other law or regulation that could
reasonably be expected to have a Material Adverse Effect;
(g) Information Furnished to Banks, etc. -- not
later than the time furnished to any of the Banks or the
Collateral Agent, copies of each report, statement,
document, notice or other item furnished to any of the Banks or
the Collateral Agent pursuant to Section 5.1(d) or Section
5.1(g) (or any similar successor provisions) of the Bank
Loan Agreement or, upon request of any holder of Notes,
pursuant to any other provision of the Bank Loan Agreement or
any related instrument, agreement or other document, and,
promptly following effectiveness thereof, a copy of each
amendment of, supplement to or waiver with respect to the
Bank Loan Agreement or any related instrument, agreement or
other document;
(h) Termination or Reduction of Commitments Under
Bank Loan Agreement -- within three Business Days of its
delivery to any of the Banks or the agent under the Bank
Loan Agreement, a copy of any request or notice by the
Company to the Banks or such agent to terminate or reduce the
Commitments (as such term is defined in the Intercreditor
Agreement) under the Bank Loan Agreement;
(i) Names and Addresses of Holders of Notes --
promptly following a request therefor by any holder of Notes
that is an Institutional Holder, a list of the names and
addresses of, and principal amount of Notes held by each of, the
holders of Notes (as required to be reflected in the
register maintained by the Company pursuant to Section
13.1); and
(j) Requested Information -- with reasonable
promptness, such other data and information relating to the
business, operations, affairs, financial condition, assets
or properties of the Company or any of its Subsidiaries or
relating to the ability of the Obligors to perform their
obligations under the Financing Documents as from time to
time may be reasonably requested by any such holder of Notes,
including, without limitation, information required by 17
C.F.R. SECTION 230.144A, as amended from time to time.
7.2 Officer's Certificate.
Each set of financial statements delivered to a holder of
Notes pursuant to Section 7.1(a) or Section 7.1(b) shall be
accompanied by a certificate of a Senior Financial Officer
setting forth:
(a) Covenant Compliance -- the information
(including detailed calculations) required in order to
establish whether the Company was in compliance with the
requirements of Section 9.8 and Section 10.3 through Section
10.9, inclusive, during the quarterly or annual period
covered by the statements then being furnished (including
with respect to each such Section, where applicable, the
calculations of the maximum or minimum amount, ratio or
percentage, as the case may be, permissible under the terms
of such Sections, and the calculation of the amount, ratio or
percentage then in existence); and
(b) Event of Default -- a statement that such
officer has reviewed the relevant terms of the Financing
Documents and has made, or caused to be made, under his or
her supervision, a review of the transactions and conditions of
the Company and its Subsidiaries from the beginning of the
quarterly or annual period covered by the statements then
being furnished to the date of the certificate and that such
review shall not have disclosed the existence during such period
of any condition or event that constitutes a Default or an
Event of Default or, if any such condition or event existed
or exists (including, without limitation, any such event or
condition resulting from the failure of the Company or any
Subsidiary to comply with any Environmental Law), specifying
the nature and period of existence thereof and what action
the Company shall have taken or proposes to take with respect
thereto.
7.3 Inspection.
The Company shall permit the representatives of each holder
of Notes that is an Institutional Investor:
(a) No Default -- if no Default or Event of Default
then exists, at the expense of such holder and upon
reasonable prior notice to the Company, to visit the
principal executive office of the Company, to discuss the
affairs, finances and accounts of the Company and its
Subsidiaries with the Company's officers, and (with the
consent of the Company, which consent will not be unreasonably
withheld) its independent public accountants, and (with the
consent of the Company, which consent will not be
unreasonably withheld) to visit the other offices and properties
of the Company and each Subsidiary, all at such reasonable
times and as often as may be reasonably requested in
writing; and
(b) Default -- if a Default or Event of Default then
exists, at the expense of the Company to visit and inspect
any of the offices or properties of the Company or any
Subsidiary, to examine all their respective books of account,
records, reports and other papers, to make copies and
extracts therefrom, and to discuss their respective affairs,
finances and accounts with their respective officers and
independent public accountants (and by this provision the
Company authorizes said accountants to discuss the affairs,
finances and accounts of the Company and its Subsidiaries), all
at such times and as often as may be requested.
8. PREPAYMENT OF THE NOTES, ETC.
8.1 Required Prepayments; Payment at Maturity.
On May 30, 1999 and on each May 30 thereafter to and
including May 30, 2003, the Company will prepay $8,333,333.33
principal amount (or such lesser principal amount as shall then
be outstanding) of the Notes at par and without payment of the
Make-Whole Amount or any premium, and the Company will pay all
of the principal amount of the Notes remaining outstanding, if
any, on May 30, 2004.
8.2 Optional Prepayments with Make-Whole Amount.
The Company may, at its option, upon notice as provided
below, prepay at any time all, or from time to time any part of,
the Notes (but if in part, in an amount not less than
$1,000,000), at 100% of the principal amount so prepaid, plus
the Make-Whole Amount determined for the prepayment date with
respect to such principal amount. The Company will give each
holder of Notes written notice of each optional prepayment under
this Section 8.2 not less than 30 days and not more than 60 days
prior to the date fixed for such prepayment. Each such notice
shall specify such date, the aggregate principal amount of the
Notes to be prepaid on such date, the principal amount of each
Note held by such holder to be prepaid (determined in accordance
with Section 8.4), and the interest to be paid on the prepayment
date with respect to such principal amount being prepaid, and
shall be accompanied by a certificate of a Senior Financial
Officer as to the estimated Make-Whole Amount due in connection
with such prepayment (calculated as if the date of such notice
were the date of the prepayment), setting forth the details of
such computation. Two Business Days prior to such prepayment,
the Company shall deliver to each holder of Notes a certificate
of a Senior Financial Officer specifying the calculation of such
Make-Whole Amount as of the specified prepayment date.
Each partial prepayment of the Notes pursuant to this
Section 8.2 will be applied first, to the amount due on the
maturity date of the Notes and second, to the mandatory
prepayments applicable to the Notes, as set forth in Section
8.1, in the inverse order of the maturity thereof.
8.3 Prepayment Upon Change in Control.
(a) Notice and Offer. In the event of
(i) a Change in Control or
(ii) the obtaining of knowledge of a Control
Notice Event by a Senior Financial Officer (including,
without limitation, via the receipt of a notice of a
Control Notice Event from any holder of Notes),
the Company shall, within three Business Days of the
occurrence of either of such events, give written notice of
such Change in Control or Control Notice Event to each
holder of Notes via an overnight courier of national reputation
and, simultaneously with the sending of such written notice,
give telephonic advice of such Change in Control or Control
Notice Event to an investment officer or other similar
representative or agent of each such holder specified in
Schedule A at the telephone number specified therein, or to
such other Person at such other number as any holder of a Note
may specify to the Company in writing. In the event of a
Change in Control, such written notice shall contain, and
such written notice shall constitute, an irrevocable offer to
prepay all, but not less than all, the Notes held by such
holder on a date specified in such notice (the "Control
Prepayment Date") that is not less than 30 days and not more
than 60 days after the date of such notice. (If the Control
Prepayment Date shall not be specified in such notice, the
Control Prepayment Date shall be the first Business Day on
or following the 30th day after such notice.) With respect to
any written notice given by the Company in respect of a
Change in Control, if the Company shall not have received a
written response to such written notice from any holder of
Notes within five Business Days after the date of initially
sending via overnight courier such notice to such holder,
the Company shall immediately send a second written notice
via an overnight courier of national reputation to such holder
of Notes.
(b) Acceptance and Payment; Rejection.
(i) Acceptance and Payment. To accept such
offered prepayment, a holder of Notes shall cause a
notice of such acceptance to be delivered to the
Company not later than the fifth Business Day preceding the
applicable Control Prepayment Date. If so accepted,
such offered prepayment shall be due and payable on
the Control Prepayment Date. Such offered prepayment
shall be made at 100% of the principal amount of such Notes,
together with interest on the principal amount of the
Notes then being prepaid accrued to the Control
Prepayment Date. No Make-Whole Amount shall be payable in
respect of any such Notes.
(ii) Rejection. A failure by any holder of
Notes to respond in writing to all written offers of
prepayment referred to in Section 8.3(a) shall be deemed
to constitute a rejection of such offer by such holder.
(c) Officer's Certificate. Each offer to prepay the
Notes pursuant to this Section 8.3 shall be accompanied by
an Officer's Certificate, dated the date of such offer,
(i) stating the principal amount of each Note
offered to be prepaid;
(ii) specifying the Control Prepayment Date;
(iii) stating the interest to be paid on each
such Note, accrued to the Control Prepayment Date;
(iv) certifying that the conditions of this
Section 8.3 have been fulfilled; and
(v) specifying, in reasonable detail, the
nature and date or proposed date of the Change in
Control.
(d) Notice Concerning Status of Holders of Notes.
Following each Control Prepayment Date, the Company shall,
at the request of any then remaining holder of Notes,
provide to such holder a certificate signed by a Responsible
Officer containing a list of the then current holders of
Notes (together with their addresses) and setting forth as
to each such holder the outstanding principal amount of Notes
held by such holder at such time.
(e) Effect on Mandatory Prepayments. Any partial
prepayment of the Notes pursuant to this Section 8.3 shall
reduce the principal amount of each required prepayment of
the Notes becoming due under Section 8.1 on and after the date
of such prepayment and the principal amount of the required
payment due on May 30, 2004 in the same proportion as the
aggregate unpaid principal amount of the Notes is reduced as
a result of such prepayment.
8.4 Allocation of Partial Prepayments.
In the case of each partial prepayment of the Notes
pursuant to Section 8.1 or Section 8.2, the principal amount of
the Notes to be prepaid shall be allocated among all of the
Notes at the time outstanding in proportion, as nearly as
practicable, to the respective unpaid principal amounts thereof
not theretofore called for prepayment.
8.5 Maturity; Surrender, etc.
In the case of each payment or prepayment of Notes pursuant
to this Section 8 or Section 10.9(c), the principal amount of
each Note to be paid or prepaid, as the case may be, shall
mature and become due and payable on the date fixed for such
payment or prepayment, together with interest on such principal
amount accrued to such date and the applicable Make-Whole
Amount, if any. From and after such date, unless the Company
shall fail to pay such principal amount when so due and payable,
together with the interest and Make-Whole Amount, if any, as
aforesaid, interest on such principal amount shall cease to
accrue. Any Note paid or prepaid in full shall be surrendered
to the Company and cancelled and shall not be reissued, and no
Note shall be issued in lieu of any prepaid principal amount of
any Note.
8.6 Purchase of Notes.
The Company will not and will not permit any Affiliate to
purchase, redeem, pay, prepay or otherwise acquire, directly or
indirectly, any of the outstanding Notes except upon the payment
or prepayment of the Notes in accordance with the terms of this
Agreement and the Notes. The Company will promptly cancel all
Notes acquired by it or any Affiliate pursuant to any payment,
prepayment or purchase of Notes pursuant to any provision of
this Agreement and no Notes may be issued in substitution or
exchange for any such Notes.
8.7 Make-Whole Amount.
The term "Make-Whole Amount" means, with respect to any
Note, an amount equal to the excess, if any, of the Discounted
Value of the Remaining Scheduled Payments with respect to the
Called Principal of such Note over the amount of such Called
Principal, provided that the Make-Whole Amount may in no event
be less than zero. For the purposes of determining the
Make-Whole Amount, the following terms have the following
meanings:
"Called Principal" means, with respect to any Note,
the principal of such Note that is to be prepaid pursuant to
Section 8.2 or Section 10.9(c), or has become or is declared
to be immediately due and payable pursuant to Section 12.1, as
the context requires.
"Discounted Value" means, with respect to the Called
Principal of any Note, the amount obtained by discounting
all Remaining Scheduled Payments with respect to such Called
Principal from their respective scheduled due dates to the
Settlement Date with respect to such Called Principal, in
accordance with accepted financial practice and at a
discount factor (applied on the same periodic basis as that on
which interest on the Notes is payable) equal to the
Reinvestment Yield with respect to such Called Principal.
"Reinvestment Yield" means, with respect to the
Called Principal of any Note, 0.50% over the yield to
maturity implied by (i) the yields reported, as of 10:00 A.M.
(New York City time) on the second Business Day preceding the
Settlement Date with respect to such Called Principal, on
the display designated as "Page 500" on the Telerate Access
Service (or such other display as may replace Page 500 on the
Telerate Access Service) for actively traded U.S. Treasury
securities having a maturity equal to the Remaining Average
Life of such Called Principal as of such Settlement Date, or
(ii) if such yields are not reported as of such time or the
yields reported as of such time are not ascertainable, the
Treasury Constant Maturity Series Yields reported, for the
latest day for which such yields have been so reported as of the
second Business Day preceding the Settlement Date with
respect to such Called Principal, in Federal Reserve
Statistical Release H.15 (519) (or any comparable successor
publication) for actively traded U.S. Treasury securities having
a constant maturity equal to the Remaining Average Life of
such Called Principal as of such Settlement Date. Such
implied yield will be determined, if necessary, by (a)
converting U.S. Treasury bill quotations to bond-equivalent
yields in accordance with accepted financial practice and
(b) interpolating linearly between (1) the actively traded U.S.
Treasury security with the maturity closest to and greater
than the Remaining Average Life and (2) the actively traded
U.S. Treasury security with the maturity closest to and less
than the Remaining Average Life.
"Remaining Average Life" means, with respect to any
Called Principal, the number of years (calculated to the
nearest one-twelfth year) obtained by dividing (i) such
Called Principal into (ii) the sum of the products obtained by
multiplying (a) the principal component of each Remaining
Scheduled Payment with respect to such Called Principal by
(b) the number of years (calculated to the nearest one-twelfth
year) that will elapse between the Settlement Date with
respect to such Called Principal and the scheduled due date
of such Remaining Scheduled Payment.
"Remaining Scheduled Payments" means, with respect to
the Called Principal of any Note, all payments of such
Called Principal and interest thereon that would be due
after the Settlement Date with respect to such Called Principal
if no payment of such Called Principal were made prior to
its scheduled due date, provided that if such Settlement
Date is not a date on which interest payments are due to be made
under the terms of the Notes, then the amount of the next
succeeding scheduled interest payment will be reduced by the
amount of interest accrued to such Settlement Date and
required to be paid on such Settlement Date pursuant to Section
8.2, Section 10.9(c) or Section 12.1.
"Settlement Date" means, with respect to the Called
Principal of any Note, the date on which such Called
Principal is to be prepaid pursuant to Section 8.2 or
Section 10.9(c), or has become or is declared to be immediately
due and payable pursuant to Section 12.1, as the context
requires.
9. AFFIRMATIVE COVENANTS.
The Company covenants that so long as any of the Notes are
outstanding:
9.1 Compliance with Law.
The Company will and will cause each of its Subsidiaries to
comply with all laws, ordinances or governmental rules or
regulations to which each of them is subject, including, without
limitation, Environmental Laws, and will obtain and maintain in
effect all licenses, certificates, permits, franchises and other
governmental authorizations necessary to the ownership of their
respective properties or to the conduct of their respective
businesses, in each case to the extent necessary to ensure that
non-compliance with such laws, ordinances or governmental rules
or regulations or failures to obtain or maintain in effect such
licenses, certificates, permits, franchises and other
governmental authorizations could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse
Effect.
9.2 Insurance.
The Company will and will cause each of its Subsidiaries to
maintain, with financially sound and reputable insurers,
insurance with respect to their respective properties and
businesses against such casualties and contingencies, of such
types, on such terms and in such amounts (including deductibles,
co-insurance and self-insurance, if adequate reserves are
maintained with respect thereto) as is customary in the case of
entities of established reputations engaged in the same or a
similar business and similarly situated.
9.3 Maintenance of Properties.
The Company will and will cause each of its Subsidiaries to
maintain and keep, or cause to be maintained and kept, their
respective properties in good repair, working order and
condition (other than ordinary wear and tear), so that the
business carried on in connection therewith may be properly
conducted at all times, provided that this Section shall not
prevent the Company or any Subsidiary from discontinuing the
operation and the maintenance of any of its properties if such
discontinuance is desirable in the conduct of its business and
the Company has concluded that such discontinuance could not,
individually or in the aggregate, reasonably be expected to have
a Material Adverse Effect.
9.4 Payment of Taxes and Claims.
The Company will and will cause each of its Subsidiaries to
file all tax returns required to be filed in any jurisdiction
and to pay and discharge all taxes shown to be due and payable
on such returns and all other taxes, assessments, governmental
charges, or levies imposed on them or any of their properties,
assets, income or franchises, to the extent such taxes and
assessments have become due and payable and before they have
become delinquent and all claims for which sums have become due
and payable that have or might become a Lien on properties or
assets of the Company or any Subsidiary, provided that neither
the Company nor any Subsidiary need pay any such tax or
assessment or claims if (a) the amount, applicability or
validity thereof is contested by the Company or such Subsidiary
on a timely basis in good faith and in appropriate proceedings,
and the Company or a Subsidiary has established adequate
reserves therefor in accordance with GAAP on the books of the
Company or such Subsidiary or (b) the nonpayment of all such
taxes and assessments in the aggregate could not reasonably be
expected to have a Material Adverse Effect.
9.5 Corporate Existence, etc.
The Company will at all times preserve and keep in full
force and effect its corporate existence. Subject to Sections
10.8 and 10.9, the Company will at all times preserve and keep
in full force and effect the corporate existence of each of its
Restricted Subsidiaries (unless merged with or into the Company
or a Wholly-Owned Restricted Subsidiary) and all rights and
franchises of the Company and its Restricted Subsidiaries
unless, in the good faith judgment of the Company, the
termination of or failure to preserve and keep in full force and
effect such corporate existence, right or franchise could not,
individually or in the aggregate, have a Material Adverse
Effect.
9.6 Guaranty Agreement.
The Company will cause each Subsidiary that at any time
becomes liable in respect of any Guaranty of any of the
obligations under the Bank Loan Agreement or of any related
agreement, instrument or other document after the date of the
Closing to become (simultaneously or prior to becoming liable in
respect of such Guaranty of any of the obligations under the
Bank Loan Agreement or such other related obligations) a
Guarantor under the Guaranty Agreement by executing and
delivering to each holder of Notes a Joinder Agreement in the
form attached to the Guaranty Agreement as Annex 2. Each such
Joinder Agreement shall be accompanied by copies of the
constitutive documents of such Subsidiary and corporate
resolutions (or equivalent) authorizing such transaction, in
each case certified as true and correct by a Responsible Officer
of the Company and an officer of such Subsidiary.
9.7 Pari Passu.
The Company covenants that its obligations under the Notes
and under this Agreement and the Other Agreements do and will
rank at least pari passu with all its other present and future
unsecured Senior Debt including, without limitation, the Bank
Debt.
9.8 Incorporated Covenants.
The Company will, and will cause each Subsidiary to, comply
with the covenants set forth in Schedule 9.8 (as such covenants
may be amended from time to time in accordance with Section
17.1, the "Incorporated Covenants"). The Incorporated
Covenants, and certain related definitions also set forth in
such Schedule, are (with certain modifications) based upon
certain provisions of the Bank Loan Agreement as in effect on
the date of Closing. Nothing in this Section 9.8, in Schedule
9.8 or elsewhere in this Agreement with respect to any of the
Incorporated Covenants shall be deemed to excuse, waive, or
otherwise affect the obligation of the Company to comply with,
each and every other covenant or agreement contained in this
Agreement, it being understood and agreed that the Company is
obligated to comply in all respects with both the Incorporated
Covenants and all such other covenants and agreements.
9.9 Additional Covenants.
If at any time the Company shall enter into, be a party to
or otherwise be bound by the provisions of any instrument or
agreement under or in respect of which Debt of the Company has
been issued, or any agreement relating thereto, whether now or
hereafter existing (including, without limitation, the Bank Loan
Agreement), and such instrument or agreement contains covenants
or other provisions that either are not substantially provided
for in this Agreement, or are more favorable to the lenders or
other creditors thereunder or are more onerous to the Company
than the covenants or other provisions provided for in this
Agreement (provided that this Section 9.9 shall not apply to the
covenant set forth in Section 5.2(c) of the Bank Loan Agreement
as in effect on the date of Closing or as may otherwise be in
effect after the date of Closing so long as such covenant is no
more onerous to the Company than as in effect on the date of
Closing), then the Company shall provide prompt written notice
of such fact to each holder of Notes. The Company agrees, upon
written request therefor delivered by the Required Holders, to
enter into one or more amendments of this Agreement providing
for substantially the same covenants and provisions (as such
covenants or other provisions may be amended from time to time
in accordance with Section 17.1, the "Most Favored Covenants")
as those provided for in such other instrument or agreement
(with such modifications thereof as may be necessary to give the
holders of Notes substantially the same benefits and protections
afforded the lenders or other creditors under such other
instrument or agreement) to the extent required and as may be
selected by the Required Holders in their sole and absolute
discretion.
10. NEGATIVE COVENANTS.
The Company covenants that so long as any of the Notes are
outstanding:
10.1 Transactions with Affiliates.
The Company will not, and will not permit any of its
Restricted Subsidiaries to, enter into directly or indirectly
any transaction or Material group of related transactions
(including without limitation the purchase, lease, sale or
exchange of properties of any kind or the rendering of any
service) with any Affiliate (other than the Company or another
Restricted Subsidiary), except in the ordinary course and
pursuant to the reasonable requirements of the Company's or such
Restricted Subsidiary's business and upon fair and reasonable
terms no less favorable to the Company or such Restricted
Subsidiary than would be obtainable in a comparable arm's-length
transaction with a Person not an Affiliate.
10.2 Line of Business.
The Company will not, and will not permit any of its
Restricted Subsidiaries to, engage in any business if, as a
result, the general nature of the business in which the Company
and its Restricted Subsidiaries, taken as a whole, would then be
engaged would be substantially changed from the general nature
of the business in which the Company and its Restricted
Subsidiaries, taken as a whole, are engaged on the date of this
Agreement as described in the Memorandum.
10.3 Consolidated Tangible Net Worth.
The Company will not permit or suffer Consolidated Tangible
Net Worth at any time to be less than the sum of (a) $80,000,000
plus (b) 75% of the Net Cash Proceeds of Capital Stock of the
Company offered or otherwise sold after the date of Closing,
plus (c) an aggregate amount equal to 50% of Consolidated Net
Income (but in each case, only if a positive number) for each
completed fiscal year of the Company commencing with the fiscal
year ending August 31, 1996. As used in this Section 10.3, the
terms "Consolidated Tangible Net Worth," "Net Cash Proceeds,"
"Capital Stock" and "Consolidated Net Income" have the meanings
specified in Schedule 10.3.
10.4 Pro Forma Consolidated Fixed Charges Coverage Ratio.
The Company will not, at the end of any fiscal quarter of
the Company, permit the Pro Forma Consolidated Fixed Charges
Coverage Ratio in respect of the 12-month period then ended to
be less than 3.00 to 1.00.
10.5 Limitation on Debt.
The Company will not, and will not permit any of its
Restricted Subsidiaries to, create, assume, incur, guaranty or
otherwise become obligated in respect of any Debt, except:
(a) Debt evidenced by the Notes and the Guaranty
Agreement;
(b) Debt of any Restricted Subsidiary owing to the
Company or a Wholly- Owned Restricted Subsidiary;
(c) Debt in existence as of the date of the Closing
(after giving effect to the application of the proceeds of
the Notes pursuant to Section 5.14) and described in
Schedule 5.15;
(d) additional Debt of the Company and its
Restricted Subsidiaries, not otherwise permitted under
clause (a), clause (b) or clause (c) above, provided that at
the time of the incurrence thereof and after giving effect
thereto and to the application of the proceeds thereof,
Consolidated Debt shall not exceed 60% of Consolidated Total
Capitalization; and
(e) Debt of the Company or any Restricted Subsidiary
extending, renewing or refunding any then existing Debt that
was originally incurred in compliance with clause (a),
clause (b), clause (c) or clause (d) of this Section 10.5,
provided that the principal amount of such new Debt does not
exceed the principal amount of such extended, renewed or
refunded Debt outstanding immediately prior to the incurrence
of such new Debt.
10.6 Limitation on Priority Debt.
The Company will not
(a) create, assume, incur, guaranty or otherwise
become obligated in respect of any Debt secured by any Lien
on any property of the Company or any Restricted Subsidiary
that would constitute a portion of Priority Debt,
(b) permit any Restricted Subsidiary to create,
assume, incur, guaranty or otherwise become obligated in
respect of any Debt that would constitute a portion of
Priority Debt, or
(c) permit the creation of any Lien on property of
the Company or any Restricted Subsidiary to secure any Debt
of the Company or any Restricted Subsidiary that would
constitute a portion of Priority Debt,
unless at the time of the incurrence thereof and after giving
effect thereto and to the application of the proceeds thereof,
and immediately after giving effect to the creation of any such
Lien, Priority Debt would not exceed 10% of Consolidated
Adjusted Net Worth at such time.
10.7 Liens.
(a) Negative Pledge. The Company will not, and will
not permit any of its Restricted Subsidiaries to, directly
or indirectly create, assume, incur or suffer to be created,
assumed or incurred or to exist (upon the happening of a
contingency or otherwise), any Lien on or with respect to
any property or asset (including, without limitation, any
document or instrument in respect of goods or accounts
receivable) of the Company or any such Restricted
Subsidiary, whether now owned or held or hereafter acquired,
or any income or profits therefrom, or assign or otherwise
convey any right to receive income or profits, except:
(i) Liens for taxes, assessments or other
governmental charges that are not yet due and payable
or the payment of which is not at the time required by
Section 9.4;
(ii) Liens
(A) arising from judicial attachments and
judgments,
(B) securing appeal bonds, supersedeas
bonds, and
(C) arising in connection with court
proceedings (including, without limitation,
surety bonds and letters of credit or any other
instrument serving a similar purpose),
provided that the execution or other enforcement of
such Liens is effectively stayed and the claims
secured thereby are being actively contested in good
faith and by appropriate proceedings, and provided further that
the aggregate amount so secured will not at any time
exceed $10,000,000;
Liens (other than any Lien imposed by
ERISA) incurred or deposits made in the ordinary
course of business
(A) in connection with workers'
compensation, unemployment insurance, social
security and other like laws,
(B) to secure (or to obtain letters of
credit that secure) the performance of tenders,
statutory obligations, surety and performance
bonds (of a type other than set forth in Section 10.7(a)(ii)),
bids, leases (other than Capital Leases),
purchase, construction or sales contracts and
other similar obligations, in each case not incurred or made in
connection with the borrowing of money, the
obtaining of advances or credit or the payment of
the deferred purchase price of property,
(C) to secure the claims or demands of
materialmen, mechanics, carriers, warehousemen,
vendors, repairmen, landlords, lessors and other
like Persons, arising in the ordinary course of
business, and
(D) in the nature of reservations,
exceptions, encroachments, easements,
rights-of-way, covenants, conditions, restrictions, leases and
other similar title exceptions or encumbrances
affecting real property,
provided that (1) any amounts secured by such Liens
are not overdue and (2) such Liens do not, in the
aggregate, materially detract from the value of such
property or materially impair the use of such property in the
conduct of the business of the Company, or the conduct
of the business of the Company and its Restricted
Subsidiaries taken as a whole;
(iv) (A) Liens in existence as of the date of
the Closing securing Debt and listed in Schedule
5.15, and
(B) Liens securing renewals, extensions
(as to time) and refinancings of Debt secured by
the Liens listed in Schedule 5.15, provided that
the amount of Debt secured by each such Lien is not
increased in excess of the amount of Debt outstanding on the
date of such renewal, extension or refinancing,
and none of such Liens is extended to include any
additional property of the Company or any
Restricted Subsidiary;
(v) Liens on property of a Restricted
Subsidiary, provided that such Liens secure only
obligations owing to the Company or a Restricted
Subsidiary;
(vi) Liens on property acquired or constructed
by the Company or any Restricted Subsidiary after the
date of the Closing to secure Debt of the Company or
such Restricted Subsidiary incurred in connection with such
acquisition or construction, provided that
(A) no such Lien shall extend to or cover
any property other than the property being
acquired or constructed,
(B) the amount of Debt secured by any
such Lien shall not exceed an amount equal to the
Fair Market Value (as determined in good faith by
the Company) of the property being acquired or
constructed, determined at the time of such acquisition or at
the time of substantial completion of such
construction,
(C) such Lien shall be created
concurrently with or within 180 days after such
acquisition or the substantial completion of such
construction, and
no Default or Event of Default shall
exist at the time of, or after giving effect to,
the creation, incurrence or assumption of such
Lien;
(vii) Liens existing on property at the time of
the acquisition thereof, including Liens existing on
property of a corporation at the time such property is
acquired as an entirety or substantially as an entirety by the
Company or a Restricted Subsidiary, or at the time
such corporation becomes a Restricted Subsidiary or is
merged or consolidated with or into the Company or a
Restricted Subsidiary, provided that
(A) no such Lien shall extend to or cover
any property other than the property subject to
such Lien at the time of any such transaction,
(B) the amount of Debt secured by any
such Lien shall not exceed the Fair Market Value
(as determined in good faith by the Company) of
the property subject thereto, determined at the time of any
such transaction,
(C) such Lien was not created in
contemplation of any such transaction, and
(D) no Default or Event of Default shall
exist at the time of, or after giving effect to,
any such transaction;
(viii)the Lien of the Collateral Agent under the
Pledge Agreement (but, unless otherwise agreed by the
Required Holders, only with respect to collateral
relating to shares in Jabil Circuit Ltd.); and
(ix) Liens securing Debt (other than any Bank
Debt) of the Company or any Restricted Subsidiary and
not otherwise permitted by clauses (i) through (viii),
inclusive, of this Section 10.7(a), but only to the extent that
the Debt secured by each such Lien is, at the time of
the incurrence of such Debt, permitted to be incurred
under Section 10.5(d) or Section 10.5(e), as the case
may be, and Section 10.6.
(b) Equal and Ratable Lien; Equitable Lien. In case
any property shall be subjected to a Lien in violation of
this Section 10.7, the Company will forthwith make or cause
to be made, to the fullest extent permitted by applicable law,
provision whereby the Notes will be secured equally and
ratably with all other obligations secured thereby pursuant
to such agreements and instruments as shall be approved by
the Required Holders, and the Company will cause to be delivered
to each holder of a Note an opinion of independent counsel
to the effect that such agreements and instruments are
enforceable in accordance with their terms, and in any such case
the Notes shall have the benefit, to the full extent that,
and with such priority as, the holders of Notes may be
entitled under applicable law, of an equitable Lien on such
property securing the Notes. Such violation of this Section
10.7 will constitute an Event of Default hereunder, whether
or not any such provision is made pursuant to this Section
10.7(b).
(c) Financing Statements. The Company will not, and
will not permit any of its Restricted Subsidiaries to, sign
or file a financing statement under the Uniform Commercial
Code of any jurisdiction that names the Company or such
Restricted Subsidiary as debtor, or sign any security
agreement authorizing any secured party thereunder to file
any such financing statement, except, in any such case, a
financing statement filed or to be filed to perfect or
protect a security interest that the Company or such
Restricted Subsidiary is entitled to create, assume or incur, or
permit to exist, under the foregoing provisions of this
Section 10.7 or to evidence for informational purposes a
lessor's interest in property leased to the Company or any such
Restricted Subsidiary.
(d) Liens of Restricted Subsidiaries. Each Person
that becomes a Restricted Subsidiary after the date of the
Closing will be deemed to have granted on the date such
Person becomes a Restricted Subsidiary all the Liens in
existence on its property on such date.
(e) Negative Pledge Limitation. The Company will
not, and will not permit any Restricted Subsidiary to, enter
into any agreement (other than the Financing Documents and
the Bank Loan Agreement) with any Person that prohibits or
limits the ability of the Company or any Restricted
Subsidiary (other than Jabil Malaysia) to create, incur,
assume or suffer to exist any Lien upon any of its assets,
rights, revenues or property, real, personal or mixed,
tangible or intangible, whether now owned or hereafter
acquired.
10.8 Merger, Consolidation, etc.
The Company will not, and will not permit any of its
Restricted Subsidiaries to, consolidate or merge with or into
any other Person or convey, transfer or lease all or
substantially all of its assets in a single transaction or
series of transactions to any Person (except that a Restricted
Subsidiary of the Company may (x) merge into, or convey,
transfer or lease all or substantially all of its assets in a
single transaction or series of transactions to, the Company
(if, in the case of a merger, the Company is the survivor of
such merger), (y) consolidate or merge with or into, or convey,
transfer or lease all or substantially all of its assets in a
single transaction or series of transactions to, a Wholly-Owned
Restricted Subsidiary of the Company and (z) convey, transfer or
lease all of its assets in compliance with the provisions of
Section 10.9), provided that the foregoing restriction does not
apply to the consolidation or merger of the Company with or
into, or the conveyance, transfer or lease of all or
substantially all of the assets of the Company in a single
transaction or series of transactions to, any Person so long as:
(a) the successor formed by such consolidation or
the survivor of such merger or the Person that acquires by
conveyance, transfer or lease all or substantially all of
the assets of the Company as an entirety, as the case may be
(the "Successor Corporation"), shall be a solvent
corporation organized and existing under the laws of the
United States of America, any state thereof or the District of
Columbia;
(b) if the Company is not the Successor Corporation,
such corporation shall have executed and delivered to each
holder of Notes its assumption of the due and punctual
performance and observance of each covenant and condition of the
Financing Documents (pursuant to such agreements and
instruments as shall be reasonably satisfactory to the
Required Holders), and the Company shall have caused to be
delivered to each holder of Notes an opinion of independent
counsel reasonably satisfactory to the Required Holders, to
the effect that all agreements or instruments effecting such
assumption are enforceable in accordance with their terms and
comply with the terms hereof; and
(c) immediately after giving effect to such
transaction:
(i) no Default or Event of Default would
exist, and
(ii) the Successor Corporation would be
permitted by the provisions of Section 10.5(d) to
incur at least $1.00 of additional Debt owing to a Person
other than a Restricted Subsidiary.
No such conveyance, transfer or lease of all or substantially
all of the assets of the Company shall have the effect of
releasing the Company or any successor corporation that shall
theretofore have become such in the manner prescribed in this
Section 10.8 from its liability under the Financing Documents.
10.9 Sale of Assets, etc.
(a) Sale of Assets, etc. The Company will not, and
will not permit any of its Restricted Subsidiaries to, make
any Asset Disposition, unless:
(i) in the good faith opinion of the Company,
the Asset Disposition is in exchange for consideration
having a Fair Market Value at least equal to that of
the property exchanged; and
(ii) immediately after giving effect to the
Asset Disposition,
(A) no Default or Event of Default would
exist,
(B) the Company would be permitted by the
provisions of Section 10.5(d) to incur at least
$1.00 of additional Debt owing to a Person other
than a Restricted Subsidiary and the Company would be
permitted by the provisions of Section 10.6 to incur at
least $1.00 of additional Priority Debt,
(C) the Disposition Value of all property
that was the subject of any Asset Disposition
occurring in the then current fiscal year of the
Company would not exceed 10% of Consolidated Total Assets as of
the end of the then most recently ended fiscal
quarter of the Company, and
(D) the Disposition Value of all property
that was the subject of any Asset Disposition
occurring on or after the date of the Closing
would not exceed 25% of Consolidated Total Assets as of the end
of the then most recently ended fiscal quarter of
the Company.
If the Net Proceeds Amount for any Transfer is applied to a
Debt Prepayment Application, as more particularly provided
in subsection (c) of this Section 10.9, or a Property
Reinvestment Application, in each case within 12 months after
such Transfer, then such Transfer, only for the purpose of
determining compliance with subsections (a)(ii)(C) and
(a)(ii)(D) of this Section 10.9 as of any date, shall be deemed
not to be an Asset Disposition.
(b) Sale of Subsidiary Stock. The Company will not,
and will not permit any of its Restricted Subsidiaries to,
sell or otherwise dispose of any shares of Subsidiary Stock
of any Restricted Subsidiary, nor will the Company permit any
such Restricted Subsidiary to issue, sell or otherwise
dispose of any shares of its own Subsidiary Stock; provided
that the foregoing restrictions do not apply to:
(i) the issue of directors' qualifying shares
by any such Restricted Subsidiary;
(ii) any such Transfer of Subsidiary Stock of a
Restricted Subsidiary constituting a Transfer
described in clause (a) of the definition of "Asset
Disposition"; and
(iii) the Transfer of all of the Subsidiary
Stock of a Restricted Subsidiary owned by the Company
and its other Restricted Subsidiaries if:
<u such Transfer satisfies the
requirements of Section 10.9(a),
(B) in connection with such Transfer the
entire investment (whether represented by stock,
Debt, claims or otherwise) of the Company and its
other Restricted Subsidiaries in such Restricted
Subsidiary is sold, transferred or otherwise disposed of to a
Person other than (1) the Company, (2) another
Restricted Subsidiary not being simultaneously
disposed of, or (3) an Affiliate, and
(C) the Restricted Subsidiary being
disposed of has no continuing investment in (1)
any other Restricted Subsidiary not being
simultaneously disposed of, or (2) the Company.
(c) Debt Prepayment Offer. In connection with any
Transfer consummated after the date of the Closing and any
Debt Prepayment Application by the Company pursuant to
subsection (a) of this Section 10.9 with respect thereto, the
following procedure will apply:
(i) The Company shall provide written notice
to each holder of Notes of, and such written notice
shall constitute, an irrevocable offer by the Company
to prepay the Notes of each such holder with such holder's
Ratable Portion of the Net Proceeds Amount with
respect to such Transfer. Such holder's Ratable
Portion of the Net Proceeds Amount shall be applied to the
prepayment of principal of such holder's Notes, plus accrued
interest with respect to such principal amount being
prepaid, plus the Make-Whole Amount with respect to
such principal amount. Such written notice shall be given to
each holder of Notes not less than 30 days and not more
than 60 days prior to the actual date of prepayment
(the "Debt Prepayment Application Date"), and shall
set forth:
(A) the Debt Prepayment Application Date,
(B) the principal amount of the Notes to
be so prepaid, the amount of accrued interest
thereon being paid, and the estimated Make-Whole
Amount due in connection with such prepayment
(calculated as if the date of such notice were the date of the
prepayment), setting forth the details of such
computation, and
(C) a statement describing the Transfer
in respect of such prepayment and a calculation
of the Net Proceeds Amount in respect thereof.
(ii) Each holder of a Note that fails to
respond to such offer in writing at least 10 days
prior to the Debt Prepayment Application Date shall be
deemed to have rejected such offer. The Company may retain for
its own purposes the Ratable Portion of any rejecting
holder.
(iii) Any partial prepayment of the Notes
pursuant to this Section 10.9 shall reduce the
principal amount of each required prepayment of the
Notes becoming due under Section 8.1 on and after the date of
such prepayment and the principal amount of the
required payment due on the maturity date of the Notes
in the same proportion as the aggregate unpaid
principal amount of the Notes is reduced as a result of such
partial prepayment.
11. EVENTS OF DEFAULT.
An "Event of Default" shall exist if any of the following
conditions or events shall occur and be continuing:
(a) the Company defaults in the payment of any
principal or Make-Whole Amount, if any, on any Note when the
same becomes due and payable, whether at maturity or at a
date fixed for prepayment or by declaration or otherwise; or
(b) the Company defaults in the payment of any
interest on any Note for more than five Business Days after
the same becomes due and payable; or
(c) (i) the Company defaults in the performance of
or compliance with any term contained in Section
7.1(d) or any of Sections 10.3 through 10.9,
inclusive, or in any Incorporated Covenant in Section 5.2 of
Schedule 9.8, or
(ii) the Company defaults in the performance of
or compliance with any term contained in any
Incorporated Covenant (other than those referred to in
paragraph (c)(i) of this Section 11) and such default is not
remedied within 15 calendar days; or
(d) any Obligor defaults in the performance of or
compliance with any term contained in any Financing Document
(other than those referred to in paragraphs (a), (b) and (c)
of this Section 11) and such default is not remedied within 30
Business Days after the earlier of (i) a Responsible Officer
obtaining actual knowledge of such default and (ii) the
Company receiving written notice of such default from any holder
of a Note; or
(e) any representation or warranty made in writing
by or on behalf of any Obligor or by any officer of such
Obligor in any Financing Document or in any writing
furnished in connection with the transactions contemplated by
any Financing Document proves to have been false or
incorrect in any material respect on the date as of which
made; or
(f) any Obligor or any of their respective
Subsidiaries shall fail to pay any part of the principal of,
the premium or make-whole amount, if any, or the interest on,
or any other payment of money due under any of its Indebtedness
(other than Indebtedness under this Agreement and the
Notes), beyond any period of grace provided with respect
thereto, that individually or together with other such
Indebtedness as to which any such failure exists has an
aggregate outstanding principal amount in excess of
$500,000; or any Obligor or any of their respective
Subsidiaries shall fail to perform or observe any other term,
covenant or agreement contained in any agreement, document
or instrument evidencing or securing any such Indebtedness
having in excess of such aggregate outstanding principal amount,
or under which any such Indebtedness was issued or created,
beyond any period of grace, if any, provided with respect
thereto and any such Obligor or Subsidiary has been notified
by the creditor of such default, or any other event or condition
shall occur or exist, and the effect of any such failure, or
as a consequence of the occurrence or existence of any such
event or condition, is (i) to cause, or permit the holders
of such Indebtedness (or a trustee or other representative on
behalf of such holders) to cause, any payment of such
Indebtedness to become due prior to its regularly scheduled
due date, (ii) that any such Obligor or Subsidiary has become
obligated to purchase or repay any such Indebtedness prior to
its regularly scheduled due date or one or more Persons have
the right to require any such Obligor or Subsidiary so to
purchase or repay such Indebtedness prior to its regularly
scheduled due date or (iii) to permit the holders of such
Indebtedness (or a trustee or other representative on behalf
of such holders) to elect a majority of the board of directors
of any such Obligor or Subsidiary; provided that if an Event
of Default would exist under the foregoing provisions of
this clause (f) solely as a result of a failure by the
Company to perform or observe Section 5.2(c) of the Bank Loan
Agreement, then such failure shall not constitute an Event
of Default unless, as a consequence of such failure, any
such Indebtedness, which Indebtedness individually or together
with other such Indebtedness as to which any such failure
exists has an aggregate outstanding principal amount in
excess of $1,000,000, shall have become due prior to its
regularly scheduled due date, or any such Obligor or
Subsidiary has become obligated to purchase or repay in
excess of such amount of any such Indebtedness prior to its
regularly scheduled due date, or the holders of in excess of
such amount of such Indebtedness (or a trustee on behalf of
such holders) shall have exercised a right to elect a
majority of the board of directors of any such Obligor or
Subsidiary; or
(g) any Obligor or any Restricted Subsidiary (i) is
generally not paying, or admits in writing its inability to
pay, its debts as they become due, (ii) files, or consents
by answer or otherwise to the filing against it of, a petition
for relief or reorganization or arrangement or any other
petition in bankruptcy, for liquidation or to take advantage
of any bankruptcy, insolvency, reorganization, moratorium or
other similar law of any jurisdiction, (iii) makes an
assignment for the benefit of its creditors, (iv) consents
to the appointment of a custodian, receiver, trustee or other
officer with similar powers with respect to it or with
respect to any substantial part of its property, (v) is
adjudicated as insolvent or to be liquidated, or (vi) takes
corporate action for the purpose of any of the foregoing; or
(h) a court or governmental authority of competent
jurisdiction enters an order appointing, without consent by
any Obligor or any Restricted Subsidiary, a custodian,
receiver, trustee or other officer with similar powers with
respect to any Obligor or any Restricted Subsidiary or with
respect to any substantial part of the property of any
Obligor or any Restricted Subsidiary, or constituting an order
for relief or approving a petition for relief or
reorganization or any other petition in bankruptcy or for
liquidation or to take advantage of any bankruptcy or insolvency
law of any jurisdiction, or ordering the dissolution,
winding-up or liquidation of any Obligor or any Restricted
Subsidiary, or any such petition shall be filed against any
Obligor or any Restricted Subsidiary and such petition shall
not be dismissed within 60 days; or
(i) a final judgment or judgments for the payment of
money aggregating in excess of $10,000,000 are rendered
against one or more of the Obligors and the Restricted
Subsidiaries and which judgments are not, within 45 days after
entry thereof, bonded, discharged or stayed pending appeal,
or are not discharged within 45 days after the expiration of
such stay; or
(j) (i) the Guaranty Agreement shall cease to be
in full force and effect or shall be declared by a
court or governmental authority of competent
jurisdiction to be void, voidable or unenforceable against any
Guarantor,
(ii) the validity or enforceability of the
Guaranty Agreement against any Guarantor shall be
contested by such Guarantor, the Company or any
Affiliate, or
(iii) any Guarantor, the Company or any
Affiliate shall deny that such Guarantor has any
further liability or obligation under the Guaranty Agreement;
or
(k) (i) any Plan shall fail to satisfy the minimum
funding standards of ERISA or the Code for any plan
year or part thereof or a waiver of such standards or
extension of any amortization period is sought or granted under
section 412 of the Code, a notice of intent to terminate any Plan
shall have been or is reasonably expected to be filed
with the PBGC or the PBGC shall have instituted
proceedings under ERISA section 4042 to terminate or appoint a
trustee to administer any Plan or the PBGC shall have
notified the Company or any ERISA Affiliate that a
Plan may become a subject of any such proceedings,
(iii) the aggregate "amount of unfunded benefit
liabilities" (within the meaning of section
4001(a)(18) of ERISA) under all Plans, determined in
accordance with Title IV of ERISA, shall exceed $100,000,
(iv) the Company or any ERISA Affiliate shall
have incurred or is reasonably expected to incur any
liability pursuant to Title I or IV of ERISA or the
penalty or excise tax provisions of the Code relating to
employee benefit plans,
(v) the Company or any ERISA Affiliate
withdraws from any Multiemployer Plan, or
(vi) the Company or any Restricted Subsidiary
establishes or amends any employee welfare benefit
plan that provides post-employment welfare benefits in
a manner that would increase the liability of the Company or
any Restricted Subsidiary thereunder; and any such event
or events described in clauses (i) through (vi) above,
either individually or together with any other such
event or events, could reasonably be expected to have a Material
Adverse Effect.
As used in Section 11(k), the terms "employee benefit plan"
and "employee welfare benefit plan" shall have the
respective meanings assigned to such terms in section 3 of
ERISA.
12. REMEDIES ON DEFAULT, ETC.
12.1 Acceleration.
(a) If an Event of Default with respect to the
Company described in paragraph (g) or (h) of Section 11
(other than an Event of Default described in clause (i) of
paragraph (g) or described in clause (vi) of paragraph (g) by
virtue of the fact that such clause encompasses clause (i)
of paragraph (g)) has occurred, all the Notes then
outstanding shall automatically become immediately due and
payable.
(b) If any other Event of Default has occurred and
is continuing, any holder or holders of more than 60% in
principal amount of the Notes at the time outstanding may at
any time at its or their option, by notice or notices to the
Company, declare all the Notes then outstanding to be
immediately due and payable.
(c) If any Event of Default described in paragraph
(a) or (b) of Section 11 has occurred and is continuing, any
holder or holders of Notes at the time outstanding affected
by such Event of Default may at any time, at its or their
option, by notice or notices to the Company, declare all the
Notes held by it or them to be immediately due and payable.
Upon any Notes becoming due and payable under this Section
12.1, whether automatically or by declaration, such Notes will
forthwith mature and the entire unpaid principal amount of such
Notes, plus (x) all accrued and unpaid interest thereon and (y)
the Make-Whole Amount determined in respect of such principal
amount (to the full extent permitted by applicable law), shall
all be immediately due and payable, in each and every case
without presentment, demand, protest or further notice, all of
which are hereby waived. The Company acknowledges, and the
parties hereto agree, that each holder of a Note has the right
to maintain its investment in the Notes free from repayment by
the Company (except as herein specifically provided for) and
that the provision for payment of a Make-Whole Amount by the
Company in the event that the Notes are prepaid or are
accelerated as a result of an Event of Default, is intended to
provide compensation for the deprivation of such right under
such circumstances.
12.2 Other Remedies.
If any Default or Event of Default has occurred and is
continuing, and irrespective of whether any Notes have become or
have been declared immediately due and payable under Section
12.1, the holder of any Note at the time outstanding may proceed
to protect and enforce the rights of such holder by an action at
law, suit in equity or other appropriate proceeding, whether for
the specific performance of any agreement contained in any
Financing Document, or for an injunction against a violation of
any of the terms thereof, or in aid of the exercise of any power
granted thereby or by law or otherwise.
12.3 Rescission.
At any time after any Notes have been declared due and
payable pursuant to clause (b) or (c) of Section 12.1, the
holders of not less than 60% in principal amount of the Notes
then outstanding, by written notice to the Company, may rescind
and annul any such declaration and its consequences if (a) the
Company has paid all overdue interest on the Notes, all
principal of and Make-Whole Amount, if any, on any Notes that
are due and payable and are unpaid other than by reason of such
declaration, and all interest on such overdue principal and
Make-Whole Amount, if any, and (to the extent permitted by
applicable law) any overdue interest in respect of the Notes, at
the Default Rate, (b) all Events of Default and Defaults, other
than non-payment of amounts that have become due solely by
reason of such declaration, have been cured or have been waived
pursuant to Section 17, and (c) no judgment or decree has been
entered for the payment of any monies due pursuant hereto or to
the Notes. No rescission and annulment under this Section 12.3
will extend to or affect any subsequent Event of Default or
Default or impair any right consequent thereon.
12.4 No Waivers or Election of Remedies, Expenses, etc.
No course of dealing and no delay on the part of any holder
of any Note in exercising any right, power or remedy shall
operate as a waiver thereof or otherwise prejudice such holder's
rights, powers or remedies. No right, power or remedy conferred
by any Financing Document upon any holder of any Note shall be
exclusive of any other right, power or remedy referred to herein
or therein or now or hereafter available at law, in equity, by
statute or otherwise. Without limiting the obligations of the
Company under Section 15, the Company will pay to the holder of
each Note on demand such further amount as shall be sufficient
to cover all costs and expenses of such holder incurred in any
enforcement or collection under this Section 12, including,
without limitation, reasonable attorneys' fees, expenses and
disbursements.
13. REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES.
13.1 Registration of Notes.
The Company shall keep at its principal executive office a
register for the registration and registration of transfers of
Notes. The name and address of each holder of one or more
Notes, each transfer thereof and the name and address of each
transferee of one or more Notes shall be registered in such
register. Prior to due presentment for registration of
transfer, the Person in whose name any Note shall be registered
shall be deemed and treated as the owner and holder thereof for
all purposes hereof, and the Company shall not be affected by
any notice or knowledge to the contrary. The Company shall give
to any holder of a Note that is an Institutional Investor
promptly upon request therefor, a complete and correct copy of
the names and addresses of all registered holders of Notes.
13.2 Transfer and Exchange of Notes.
Upon surrender of any Note at the principal executive
office of the Company for registration of transfer or exchange
(and in the case of a surrender for registration of transfer,
duly endorsed or accompanied by a written instrument of transfer
duly executed by the registered holder of such Note or his
attorney duly authorized in writing and accompanied by the
address for notices of each transferee of such Note or part
thereof), the Company shall execute and deliver, at the
Company's expense (except as provided below), one or more new
Notes (as requested by the holder thereof) in exchange therefor,
in an aggregate principal amount equal to the unpaid principal
amount of the surrendered Note. Each such new Note shall be
payable to such Person as such holder may request and shall be
substantially in the form of Exhibit 1. Each such new Note
shall be dated and bear interest from the date to which interest
shall have been paid on the surrendered Note or dated the date
of the surrendered Note if no interest shall have been paid
thereon. The Company may require payment of a sum sufficient to
cover any stamp tax or governmental charge imposed in respect of
any such transfer of Notes. Notes shall not be transferred in
denominations of less than $100,000, provided that if necessary
to enable the registration of transfer by a holder of its entire
holding of Notes, one Note may be in a denomination of less than
$100,000. Any transferee, by its acceptance of a Note
registered in its name (or the name of its nominee), shall be
deemed to have made the representation set forth in Section 6.2.
13.3 Replacement of Notes.
Upon receipt by the Company of evidence reasonably
satisfactory to it of the ownership of and the loss, theft,
destruction or mutilation of any Note (which evidence shall be,
in the case of an Institutional Investor, notice from such
Institutional Investor of such ownership and such loss, theft,
destruction or mutilation), and
(a) in the case of loss, theft or destruction, of
indemnity reasonably satisfactory to it (provided that if
the holder of such Note is, or is a nominee for, an original
Purchaser or another Institutional Investor, such Person's own
unsecured agreement of indemnity shall be deemed to be
satisfactory), or
(b) in the case of mutilation, upon surrender and
cancellation thereof,
the Company at its own expense shall execute and deliver, in
lieu thereof, a new Note, dated and bearing interest from the
date to which interest shall have been paid on such lost,
stolen, destroyed or mutilated Note or dated the date of such
lost, stolen, destroyed or mutilated Note if no interest shall
have been paid thereon.
14. PAYMENTS ON NOTES.
14.1 Place of Payment.
Subject to Section 14.2, payments of principal, Make-Whole
Amount, if any, and interest becoming due and payable on the
Notes shall be made in St. Petersburg, Florida at the principal
office of the Company in such jurisdiction. The Company may at
any time, by notice to each holder of a Note, change the place
of payment of the Notes so long as such place of payment shall
be either the principal office of the Company located in the
United States or the principal office of a bank or trust company
located in the United States.
14.2 Home Office Payment.
So long as you or your nominee shall be the holder of any
Note, and notwithstanding anything contained in Section 14.1 or
in such Note to the contrary, the Company will pay all sums
becoming due on such Note for principal, Make-Whole Amount, if
any, and interest by the method and at the address specified for
such purpose below your name in Schedule A, or by such other
method or at such other address as you shall have from time to
time specified to the Company in writing for such purpose,
without the presentation or surrender of such Note or the making
of any notation thereon, except that upon written request of the
Company made concurrently with or reasonably promptly after
payment or prepayment in full of any Note, you shall surrender
such Note for cancellation, reasonably promptly after any such
request, to the Company at its principal executive office or at
the place of payment most recently designated by the Company
pursuant to Section 14.1. Prior to any sale or other
disposition of any Note held by you or your nominee you will, at
your election, either endorse thereon the amount of principal
paid thereon and the last date to which interest has been paid
thereon or surrender such Note to the Company in exchange for a
new Note or Notes pursuant to Section 13.2. The Company will
afford the benefits of this Section 14.2 to any Institutional
Investor that is the direct or indirect transferee of any Note
purchased by you under this Agreement and that has made the same
agreement relating to such Note as you have made in this Section
14.2.
15. EXPENSES, ETC.
15.1 Transaction Expenses.
Whether or not the transactions contemplated by the
Financing Documents are consummated, the Company will pay all
costs and expenses (including reasonable attorneys' fees of a
special counsel and, if reasonably required, local or other
counsel) incurred by you and each Other Purchaser or holder of a
Note in connection with such transactions and in connection with
any amendments, waivers or consents under or in respect of any
of the Financing Documents (whether or not such amendment,
waiver or consent becomes effective), including, without
limitation: (a) the costs and expenses incurred in enforcing or
defending (or determining whether or how to enforce or defend)
any rights under the Financing Documents or in responding to any
subpoena or other legal process or informal investigative demand
issued in connection with the Financing Documents, or by reason
of being a holder of any Note, and (b) the costs and expenses,
including financial advisors' fees, incurred in connection with
the insolvency or bankruptcy of the Company or any Subsidiary or
in connection with any work-out or restructuring of the
transactions contemplated hereby and by the Notes. The Company
will pay, and will save you and each other holder of a Note
harmless from, all claims in respect of any fees, costs or
expenses if any, of brokers and finders (other than those
retained by you).
15.2 Survival.
The obligations of the Company under this Section 15 will
survive the payment or transfer of any Note, the enforcement,
amendment or waiver of any provision of each of the Financing
Documents, and the termination of each of the Financing
Documents.
16. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE
AGREEMENT.
All representations and warranties contained herein shall
survive the execution and delivery of the Financing Documents,
the purchase or transfer by you of any Note or portion thereof
or interest therein and the payment of any Note, and may be
relied upon by any subsequent holder of a Note, regardless of
any investigation made at any time by or on behalf of you or any
other holder of a Note. All statements contained in any
certificate or other instrument delivered by or on behalf of the
Company pursuant to any Financing Document shall be deemed
representations and warranties of the Company under this
Agreement. Subject to the preceding sentence, the Financing
Documents embody the entire agreement and understanding between
you and the Company and supersede all prior agreements and
understandings relating to the subject matter hereof.
17. AMENDMENT AND WAIVER.
17.1 Requirements.
(a) Requirements Generally. This Agreement and the
Notes may be amended, and the observance of any term hereof
or of the Notes may be waived (either retroactively or
prospectively), with (and only with) the written consent of the
Company and the Required Holders, except that (a) no
amendment or waiver of any of the provisions of Section 1,
2, 3, 4, 5, 6 or 21, or any defined term (as it is used
therein), will be effective as to you unless consented to by you
in writing, and (b) no such amendment or waiver may, without
the written consent of the holder of each Note at the time
outstanding affected thereby, (i) subject to the provisions of
Section 12 relating to acceleration or rescission, change the
amount or time of any prepayment or payment of principal of,
or reduce the rate or change the time of payment or method
of computation of interest or of the Make-Whole Amount on, the
Notes, (ii) change the percentage of the principal amount of
the Notes the holders of which are required to consent to
any such amendment or waiver, or (iii) amend any of Sections
8, 11(a), 11(b), 12, 17 or 20.
(b) Incorporated Covenants. Notwithstanding the
provisions of Section 17.1(a), each Purchaser agrees, and
each other holder of Notes by its acceptance of any Note
shall be deemed to have agreed, to grant its written consent,
promptly following its receipt of written request by the
Company for such consent, to any amendment of, or waiver
with respect to, (prospectively only) any of the Incorporated
Covenants and related defined terms set forth in Schedule 9.8
in a manner consistent with any one or more amendments of,
or waivers with respect to, the covenants and related
defined terms in the Bank Loan Agreement that correspond to the
Incorporated Covenants and related defined terms, provided
that (A) the Company shall have delivered to each holder of
Notes a copy of such amendment or waiver relating to the
Bank Loan Agreement, together with a certificate of a
Responsible Officer of the Company to the effect that such
copy is true and complete and that such amendment or waiver
relating to the Bank Loan Agreement has become effective in
accordance with the terms of the Bank Loan Agreement and (B)
the effect of the requested amendment or waiver relating to
the Incorporated Covenants shall be no less favorable (and
no more onerous) to the holders of Notes than the corresponding
amendment or waiver relating to the Bank Loan Agreement is to
the Banks.
(c) Most Favored Covenants. Notwithstanding the
provisions of Section 17.1(a), if at any time
(i) this Agreement shall have been amended to
provide for one or more Most Favored Covenants
contemplated by Section 9.9, and
(ii) the Company shall have obtained an
amendment of, or waiver with respect to, the covenant
corresponding to any such Most Favored Covenant
pursuant to the terms of each other agreement at the time having
the benefit thereof, and
(iii) the Company shall have delivered to each
holder of Notes a copy of each such amendment or
waiver referred to in clause (ii) above, together with
a certificate of a Responsible Officer of the Company to the
effect that each such copy is true and complete and
that each such amendment or waiver has become
effective in accordance with the terms of the agreement to
which it relates,
each Purchaser agrees, and each other holder of Notes by
its acceptance of any Note shall be deemed to have agreed,
to grant its written consent, promptly following its receipt
of written request by the Company for such consent to any
amendment of, or waiver with respect to, (prospectively
only) each of such Most Favored Covenants in a manner no
less favorable (and no more onerous) to the holders of the Notes
than the corresponding amendment or waiver relating to such
other agreements with respect to which such waivers or
amendments have been so obtained.
17.2 Solicitation of Holders of Notes.
(a) Solicitation. The Company will provide each
holder of the Notes (irrespective of the amount of Notes
then owned by it) with sufficient information, sufficiently
far in advance of the date a decision is required, to enable
such holder to make an informed and considered decision with
respect to any proposed amendment, waiver or consent in
respect of any of the provisions hereof or of the Notes. The
Company will deliver executed or true and correct copies of
each amendment, waiver or consent effected pursuant to the
provisions of this Section 17 to each holder of outstanding
Notes promptly following the date on which it is executed and
delivered by, or receives the consent or approval of, the
requisite holders of Notes.
(b) Payment. The Company will not directly or
indirectly pay or cause to be paid any remuneration, whether
by way of supplemental or additional interest, fee or
otherwise, or grant any security, to any holder of Notes as
consideration for or as an inducement to the entering into
by any holder of Notes or any waiver or amendment of any of
the terms and provisions hereof unless such remuneration is
concurrently paid, or security is concurrently granted, on the
same terms, ratably to each holder of Notes then outstanding
even if such holder did not consent to such waiver or
amendment.
17.3 Binding Effect, etc.
Any amendment or waiver consented to as provided in this
Section 17 applies equally to all holders of Notes and is
binding upon them and upon each future holder of any Note and
upon the Company without regard to whether such Note has been
marked to indicate such amendment or waiver. No such amendment
or waiver will extend to or affect any obligation, covenant,
agreement, Default or Event of Default not expressly amended or
waived or impair any right consequent thereon. No course of
dealing between the Company and the holder of any Note nor any
delay in exercising any rights hereunder or under any Note shall
operate as a waiver of any rights of any holder of such Note.
As used herein, the term "this Agreement" and references thereto
shall mean this Agreement as it may from time to time be amended
or supplemented.
17.4 Notes held by Company, etc.
Solely for the purpose of determining whether the holders
of the requisite percentage of the aggregate principal amount of
Notes then outstanding approved or consented to any amendment,
waiver or consent to be given under any of the Financing
Documents, or have directed the taking of any action provided in
any of the Financing Documents to be taken upon the direction of
the holders of a specified percentage of the aggregate principal
amount of Notes then outstanding, Notes directly or indirectly
owned by the Company or any of its Affiliates shall be deemed
not to be outstanding.
18. NOTICES.
All notices and communications provided for hereunder shall
be in writing and sent (a) by telecopy if the sender on the same
day sends a confirming copy of such notice by a recognized
overnight delivery service (charges prepaid), or (b) by
registered or certified mail with return receipt requested
(postage prepaid), or (c) by a recognized overnight delivery
service (with charges prepaid). Any such notice must be sent:
(i) if to you or your nominee, to you or it at the
address specified for such communications in Schedule A, or
at such other address as you or it shall have specified to
the Company in writing,
(ii) if to any other holder of any Note, to such
holder at such address as such other holder shall have
specified to the Company in writing, or
(iii)if to the Company, to the Company at its address
set forth at the beginning hereof to the attention of Chris
A. Lewis, or at such other address as the Company shall have
specified to the holder of each Note in writing.
Notices under this Section 18 will be deemed given only when
actually received.
19. REPRODUCTION OF DOCUMENTS.
The Financing Documents and all documents relating thereto,
including, without limitation, (a) consents, waivers and
modifications that may hereafter be executed, (b) documents
received by you at the Closing (except the Notes themselves),
and (c) financial statements, certificates and other information
previously or hereafter furnished to you, may be reproduced by
you by any photographic, photostatic, microfilm, microcard,
miniature photographic or other similar process and you may
destroy any original document so reproduced. The Company agrees
and stipulates that, to the extent permitted by applicable law,
any such reproduction shall be admissible in evidence as the
original itself in any judicial or administrative proceeding
(whether or not the original is in existence and whether or not
such reproduction was made by you in the regular course of
business) and any enlargement, facsimile or further reproduction
of such reproduction shall likewise be admissible in evidence.
This Section 19 shall not prohibit the Company or any other
holder of Notes from contesting any such reproduction to the
same extent that it could contest the original, or from
introducing evidence to demonstrate the inaccuracy of any such
reproduction.
20. CONFIDENTIAL INFORMATION.
For the purposes of this Section 20, "Confidential
Information" means information delivered to you by or on behalf
of the Company or any Subsidiary in connection with the
transactions contemplated by or otherwise pursuant to this
Agreement that is proprietary in nature and that was clearly
marked or labeled or otherwise adequately identified when
received by you as being confidential information of the Company
or such Subsidiary, provided that such term does not include
information that
(a) was publicly known or otherwise known to you
prior to the time of such disclosure,
(b) subsequently becomes publicly known through no
act or omission by you or any person acting on your behalf,
(c) otherwise becomes known to you other than
through disclosure by the Company or any Subsidiary or
(d) constitutes financial statements delivered to
you under Section 7.1 that are otherwise publicly available.
You will maintain the confidentiality of such Confidential
Information in accordance with procedures adopted by you in good
faith to protect confidential information of third parties
delivered to you, provided that you may deliver or disclose
Confidential Information to
(i) your directors, officers, employees, agents,
attorneys and affiliates (to the extent such disclosure
reasonably relates to the administration of the investment
represented by your Notes),
(ii) your financial advisors and other professional
advisors who agree to hold confidential the Confidential
Information substantially in accordance with the terms of
this Section 20,
(iii)any other holder of any Note,
(iv) any Institutional Investor to which you sell or
offer to sell such Note or any part thereof or any
participation therein (if such Person has agreed in writing
prior to its receipt of such Confidential Information to be
bound by the provisions of this Section 20),
(v) any Person from which you offer to purchase any
security of the Company (if such Person has agreed in
writing prior to its receipt of such Confidential
Information to be bound by the provisions of this Section 20),
(vi) any federal or state regulatory authority having
jurisdiction over you,
(vii)the National Association of Insurance
Commissioners or any similar organization, or any nationally
recognized rating agency that requires access to information
about your investment portfolio or
(viii)any other Person to which such delivery or
disclosure may be necessary or appropriate (w) to effect
compliance with any law, rule, regulation or order
applicable to you, (x) in response to any subpoena or other
legal process, (y) in connection with any litigation to
which you are a party or (z) if an Event of Default has
occurred and is continuing, to the extent you may reasonably
determine such delivery and disclosure to be necessary or
appropriate in the enforcement or for the protection of the
rights and remedies under the Financing Documents.
Each holder of a Note, by its acceptance of a Note, will be
deemed to have agreed to be bound by and to be entitled to the
benefits of this Section 20 as though it were a party to this
Agreement. On reasonable request by the Company in connection
with the delivery to any holder of a Note of information
required to be delivered to such holder under this Agreement or
requested by such holder (other than a holder that is a party to
this Agreement or its nominee), such holder will enter into an
agreement with the Company embodying the provisions of this
Section 20.
21. SUBSTITUTION OF PURCHASER.
You shall have the right to substitute any one of your
Affiliates as the purchaser of the Notes that you have agreed to
purchase hereunder, by written notice to the Company, which
notice shall be signed by both you and such Affiliate, shall
contain such Affiliate's agreement to be bound by this Agreement
and shall contain a confirmation by such Affiliate of the
accuracy with respect to it of the representations set forth in
Section 6. Upon receipt of such notice, wherever the word "you"
is used in this Agreement (other than in this Section 21), such
word shall be deemed to refer to such Affiliate in lieu of you.
In the event that such Affiliate is so substituted as a
purchaser hereunder and such Affiliate thereafter transfers to
you all of the Notes then held by such Affiliate, upon receipt
by the Company of notice of such transfer, wherever the word
"you" is used in this Agreement (other than in this Section 21),
such word shall no longer be deemed to refer to such Affiliate,
but shall refer to you, and you shall have all the rights of an
original holder of the Notes under this Agreement.
22. MISCELLANEOUS.
22.1 Additional Notes.
Subject to the terms and provisions hereof (including, but
not limited to, Sections 10.5 and 10.6), the Company may, from
time to time, issue and sell additional promissory notes
pursuant to agreements which may incorporate by reference all or
certain of the provisions of this Agreement and the Other
Agreements. Such incorporation by reference shall not have the
effect of constituting such promissory notes as Notes for any
purpose, whether for acceleration of the Notes, rescission of
such acceleration, or the exercise of any other amendments or
waivers of the provisions hereof or of the Other Agreements, or
otherwise.
22.2 Successors and Assigns.
All covenants and other agreements contained in this
Agreement by or on behalf of any of the parties hereto bind and
inure to the benefit of their respective successors and assigns
(including, without limitation, any subsequent holder of a Note)
whether so expressed or not.
22.3 Payments Due on Non-Business Days.
Anything in the Financing Documents to the contrary
notwithstanding, any payment of principal of or Make-Whole
Amount or interest on any Note that is due on a date other than
a Business Day shall be made on the next succeeding Business Day
without including the additional days elapsed in the computation
of the interest payable on such next succeeding Business Day.
22.4 Severability.
Any provision of this Agreement that is prohibited or
unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition
or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability
in any jurisdiction shall (to the full extent permitted by law)
not invalidate or render unenforceable such provision in any
other jurisdiction.
22.5 Construction.
Each covenant contained herein shall be construed (absent
express provision to the contrary) as being independent of each
other covenant contained herein, so that compliance with any one
covenant shall not (absent such an express contrary provision)
be deemed to excuse compliance with any other covenant. Where
any provision herein refers to action to be taken by any Person,
or which such Person is prohibited from taking, such provision
shall be applicable whether such action is taken directly or
indirectly by such Person.
22.6 Counterparts.
This Agreement may be executed in any number of
counterparts, each of which shall be an original but all of
which together shall constitute one instrument. Each
counterpart may consist of a number of copies hereof, each
signed by less than all, but together signed by all, of the
parties hereto.
22.7 Governing Law.
THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED
BY, THE LAW OF THE STATE OF NEW YORK, EXCLUDING CHOICE-OF-LAW
PRINCIPLES OF THE LAW OF SUCH STATE THAT WOULD REQUIRE THE
APPLICATION OF THE LAWS OF A JURISDICTION OTHER THAN SUCH STATE.
[Remainder of page intentionally blank. Next page is signature
page.] If you are in agreement with the foregoing, please
sign the form of agreement on the accompanying counterpart of
this Agreement and return it to the Company, whereupon the
foregoing shall become a binding agreement between you and the
Company.
Very truly yours,
JABIL CIRCUIT, INC.
By
Name:
Title:
The foregoing is hereby agreed to.
[PURCHASER]
By Name: Title: SCHEDULE A
INFORMATION RELATING TO PURCHASERS
Purchaser NameCONNECTICUT GENERAL LIFE INSURANCE COMPANYName in
Which to Register Note(s)CIG & Co.Note Registration Number;
Principal AmountR-1; $9,100,000 R-2; $5,700,000 R-3; $3,400,000
R-4; $3,400,000Payment on Account of Note
Method
Account Information
Federal Funds Wire Transfer
Chase Manhattan Bank, N.A. Chase NYC/CTR/ BNF=CIGNA Private
Placements/AC=9009001802 ABA# 021000021
OBI=[name of company; description of security; interest rate;
maturity date; PPN; due date and application (as among
principal, premium and interest of the payment being made);
contact name and phone.]Accompanying InformationName of
Company:JABIL CIRCUIT, INC. Description of Security:
6.89% Senior Notes due May 30, 2004 PPN:
466313 A* 4 Due Date and
Application (as among principal, Make-Whole Amount and interest)
of the payment being made:Address for Notices Related to
PaymentsCIG & Co. c/o CIGNA Investments, Inc. 900 Cottage Grove
Road Hartford, CT 06152-2206 Attention: Securities Processing
S-206
with a copy to:
Chase Manhattan Bank, N.A. Private Placement Servicing P.O. Box
1508 Bowling Green Station New York, NY 10081 Attention: CIGNA
Private Placements FAX: 212-552-3107/1005Contact for Telephonic
Notices Pursuant to Section 8.3(a)CIG & Co. Attention: Edward
Lewis, Private Securities Division S-307 Tel:
860/726-6868Address for All other NoticesCIG & Co. 900 Cottage
Grove Road Hartford, CT 06152-2307 Attention: Private
Securities Division S-307
FAX: 860/726-7203Signature Page FormatCONNECTICUT GENERAL LIFE
INSURANCE COMPANY By CIGNA Investments, Inc.
By______________________________Tax Identification
Number13-3574027Purchaser NameLIFE INSURANCE COMPANY OF NORTH
AMERICAName in Which to Register Note(s)CIG & Co.Note
Registration Number; Principal AmountR-5; $3,400,000Payment on
Account of Note
Method
Account Information
Federal Funds Wire Transfer
Chase Manhattan Bank, N.A. Chase NYC/CTR/ BNF=CIGNA Private
Placements/AC=9009001802 ABA# 021000021
OBI=[name of company; description of security; interest rate;
maturity date; PPN; due date and application (as among
principal, premium and interest of the payment being made);
contact name and phone.]Accompanying InformationName of
Company:JABIL CIRCUIT, INC. Description of Security:
6.89% Senior Notes due May 30, 2004 PPN:
466313 A* 4 Due Date and
Application (as among principal, Make-Whole Amount and interest)
of the payment being made:Address for Notices Related to
PaymentsCIG & Co. c/o CIGNA Investments, Inc. 900 Cottage Grove
Road Hartford, CT 06152-2206 Attention: Securities Processing
S-206
with a copy to:
Chase Manhattan Bank, N.A. Private Placement Servicing P.O. Box
1508 Bowling Green Station New York, NY 10081 Attention: CIGNA
Private Placements FAX: 212-552-3107/1005Contact for Telephonic
Notices Pursuant to Section 8.3(a)CIG & Co. Attention: Edward
Lewis, Private Securities Division S-307 Tel:
860/726-6868Address for All other NoticesCIG & Co. 900 Cottage
Grove Road Hartford, CT 06152-2307 Attention: Private
Securities Division S-307
FAX: 860/726-7203Signature Page FormatLIFE INSURANCE COMPANY OF
NORTH AMERICA By CIGNA Investments, Inc.
By______________________________Tax Identification
Number13-3574027Purchaser NameMETROPOLITAN LIFE INSURANCE
COMPANYName in Which Note is RegisteredMETROPOLITAN LIFE
INSURANCE COMPANYNote Registration Number, Principal AmountR-6
$25,000,000Payment on Account of Note
Method
Account Information
Federal Funds Wire Transfer
The Chase Manhattan Bank, N.A. 33 East 23rd Street ABA No.
021000021 Account No. 002-2-410591Accompanying InformationName
of Company:JABIL CIRCUIT, INC. Description of Security:
6.89% Senior Notes due May 30, 2004 PPN:
466313 A* 4 Due Date and
Application (as among principal, Make-Whole Amount and interest)
of the payment being made:Address for Notices Related to
PaymentsMetropolitan Life Insurance Company One Madison Avenue
New York, NY 10010 Attention: Treasurer
with a copy to:
Metropolitan Life Insurance Company 334 Madison Avenue P.O. Box
633 Convent Station, NJ 07961-0633 Attention: Vice President
Tel: 201/254-3222Contact for Telephonic Notices Pursuant to
Section 8.3(a)Metropolitan Life Insurance Company Attention:
Vice President Tel: 201/254-3222Address for All other
NoticesMetropolitan Life Insurance Company One Madison Avenue
New York, NY 10010 Attention: Treasurer
with a copy to:
Metropolitan Life Insurance Company 334 Madison Avenue P.O. Box
633 Convent Station, NJ 07961-0633 Attention: Vice President
Tel: 201/254-3222Signature Page FormatMETROPOLITAN LIFE
INSURANCE COMPANY
By__________________________ Name:
Title:Tax Identification
Number13-5581829 SCHEDULE B
DEFINED TERMS
As used herein, the following terms have the respective
meanings set forth below or set forth in the Section hereof
following such term:
Acquisition -- means any acquisition, directly or
indirectly, by the Company or any Restricted Subsidiary, after
the date of the Closing, of
(a) any Capital Stock or other equity interests of a
Person that concurrently with such acquisition becomes a
Restricted Subsidiary, or
(b) all or substantially all of the assets of a
Person.
Affiliate -- means, at any time, and with respect to any
Person,
(a) any other Person that at such time directly or
indirectly through one or more intermediaries Controls, or
is Controlled by, or is under common Control with, such
first Person, and
(b) any Person beneficially owning or holding,
directly or indirectly, 10% or more of any class of voting
or equity interests of the Company or any Subsidiary or any
corporation of which the Company and its Subsidiaries
beneficially own or hold, in the aggregate, directly or
indirectly, 10% or more of any class of voting or equity
interests.
As used in this definition, "Control" means the possession,
directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether
through the ownership of voting securities, by contract or
otherwise. Unless the context otherwise clearly requires, any
reference to an "Affiliate" is a reference to an Affiliate of
the Company.
Agreement, this -- is defined in Section 17.3.
Asset Disposition -- means any Transfer except:
(a) any Transfer from a Restricted Subsidiary to the
Company or a Wholly- Owned Restricted Subsidiary, or
(b) any Transfer made in the ordinary course of
business and involving only property that is either (i)
inventory held for sale or (ii) equipment, fixtures, supplies or
materials no longer required in the operation of the
business of the Company or any of its Restricted
Subsidiaries or that is obsolete.
Bank Debt -- means any Debt of the Company or any of its
Subsidiaries owed to any of the Banks under the Bank Loan
Agreement or any related agreement, instrument or other document.
Bank Loan Agreement -- means the Loan Agreement dated as of
May 30, 1996, among the Company, the Banks set forth on the
signature pages thereof, and NBD Bank, as agent for such Banks,
as may be amended, restated or otherwise modified from time to
time, or replaced by a new agreement in which the Banks acting
as lenders as of the date of Closing hold more than 50% of the
commitments (measured by principal amount) to lend under such
new agreement; provided that if any such new agreement shall at
any time be entered into by the Company, then concurrently
therewith the Company shall, unless otherwise agreed by the
Required Holders, cause the Banks under such new agreement to
enter into a new intercreditor agreement with the holders of the
Notes substantially in the form of the Intercreditor Agreement.
Banks -- means the banks initially party to the Bank Loan
Agreement (namely, NBD Bank, Sun Bank of Tampa Bay, Barnett Bank
of Pinellas County and The First National Bank of Boston) and
each other bank or other Person from time to time acting as a
lender or other provider of financial accommodations to the
Company or any Subsidiary under the Bank Loan Agreement.
Business Day -- means any day other than a Saturday, a
Sunday or a day on which commercial banks in New York City are
required or authorized to be closed.
Capital Lease -- means a lease with respect to which the
lessee is required concurrently to recognize the acquisition of
an asset and the incurrence of a liability in accordance with
GAAP.
Capital Lease Obligation -- means, with respect to any
Person and a Capital Lease, the amount of the obligation of such
Person as the lessee under such Capital Lease that would, in
accordance with GAAP, appear as a liability on a balance sheet
of such Person.
Capital Stock -- means any class of capital stock, share
capital or similar equity interest of a Person, provided that as
used in Section 10.3 such term shall have the meaning specified
in Schedule 10.3.
Change in Control -- means, at any time, the acquisition or
holding, directly or indirectly, by
(a) any person (as such term is used in section
13(d) and section 14(d)(2) of the Exchange Act as in effect
on the date of the Closing), or
(b) related Persons constituting a group (as such
term is used in Rule 13d- 5 under the Exchange Act as in
effect on the date of the Closing),
other than Acceptable Control Persons, of the beneficial or
record ownership of more than 50% of the Voting Stock of the
Company. For purposes of this definition and the definition of
"Acceptable Control Persons," "group of Persons" shall mean two
or more Persons that are acting together as a partnership,
limited partnership, syndicate or other group for the purpose of
acquiring, holding or disposing of Securities of an issuer.
As used in this definition, "Acceptable Control Persons" means
any group of Persons that includes each of William D. Morean,
Thomas A. Sansone and Ronald J. Rapp, provided that Mr. Morean,
Mr. Sansone and Mr. Rapp at all times (i) hold the positions of
Chief Executive Officer, President and Chief Financial Officer,
respectively, of the Company, or positions with another title
but equal or greater responsibilities, and (ii) are actively
involved in the day-today management of the Company.
Closing -- is defined in Section 3.
Code -- means the Internal Revenue Code of 1986, as amended
from time to time, and the rules and regulations promulgated
thereunder from time to time.
Collateral Agent -- means NBD Bank, as collateral agent
under the Pledge Agreement and the Intercreditor Agreement, and
any successor or assign appointed in accordance with the
provisions of the Intercreditor Agreement.
Company -- is defined in the introductory sentence.
Confidential Information -- is defined in Section 20.
Consolidated Adjusted Net Worth -- means, at any time,
stockholders' equity of the Company and its Restricted
Subsidiaries as would be shown on a consolidated balance sheet
for such Persons at such time in accordance with GAAP, excluding
therefrom, however, any Preferred Stock that is mandatorily
redeemable.
Consolidated Debt -- means, as of any date of
determination, the total of all Debt of the Company and its
Restricted Subsidiaries outstanding on such date, after
eliminating all offsetting debits and credits between the
Company and its Restricted Subsidiaries and all other items
required to be eliminated in the course of the preparation of
consolidated financial statements of the Company and its
Restricted Subsidiaries in accordance with GAAP.
Consolidated Fixed Charges -- means, with respect to any
period, the sum of (a) Consolidated Interest Charges for such
period plus (b) Consolidated Lease Rentals for such period.
Consolidated Interest Charges -- means, with respect to any
period, the sum (without duplication) of the following (in each
case, eliminating all offsetting debits and credits between the
Company and its Restricted Subsidiaries and all other items
required to be eliminated in the course of the preparation of
consolidated financial statements of the Company and its
Restricted Subsidiaries in accordance with GAAP): (a) all
interest in respect of Debt of the Company and its Restricted
Subsidiaries (including imputed interest on Capital Lease
Obligations) deducted in determining Consolidated Net Earnings
for such period, together with all interest capitalized or
deferred during such period and not deducted in determining
Consolidated Net Earnings for such period, plus (b) all debt
discount and expense amortized or required to be amortized in
the determination of Consolidated Net Earnings for such period.
Consolidated Lease Rentals -- means, with respect to any
period, the sum of the rental and other obligations required to
be paid during such period by the Company or any Restricted
Subsidiary as lessee under all leases of real or personal
property (other than Capital Leases), excluding any amount
required to be paid by the lessee (whether or not therein
designated as rental or additional rental) on account of
maintenance and repairs, insurance, taxes, assessments, water
rates and similar charges, provided that if, at the date of
determination, any such rental or other obligations are
contingent or not otherwise definitely determinable by the terms
of the related lease, the amount of such obligations (a) shall
be assumed to be equal to the amount of such obligations for the
period of 12 consecutive calendar months immediately preceding
the date of determination or (b) if the related lease was not in
effect during such preceding 12-month period, shall be the
amount estimated by a Senior Financial Officer on a reasonable
basis and in good faith.
Consolidated Net Earnings -- means, with reference to any
period, the net earnings (or loss) of the Company and its
Restricted Subsidiaries for such period (taken as a cumulative
whole), as determined in accordance with GAAP, after eliminating
all offsetting debits and credits between the Company and its
Restricted Subsidiaries and all other items required to be
eliminated in the course of the preparation of consolidated
financial statements of the Company and its Restricted
Subsidiaries in accordance with GAAP, provided that there shall
be excluded:
(a) the income (or loss) of any Person accrued prior
to the date it becomes a Restricted Subsidiary or is
consolidated or merged with or into the Company or a
Restricted Subsidiary, and the income (or loss) of any Person,
all or substantially all of the assets of which have been
acquired in any manner, realized by such other Person prior
to the date of acquisition,
(b) the income (or loss) of any Person (other than a
Restricted Subsidiary) in which the Company or any
Restricted Subsidiary has an ownership interest, except to
the extent that any such income has been actually received by
the Company or such Restricted Subsidiary in the form of
cash dividends or similar cash distributions,
(c) the undistributed earnings of any Restricted
Subsidiary to the extent that the declaration or payment of
dividends or similar distributions by such Restricted
Subsidiary is not at the time permitted by the terms of its
charter or any agreement, instrument, judgment, decree,
order, statute, rule or governmental regulation applicable
to such Restricted Subsidiary,
(d) any restoration to income of any contingency
reserve, except to the extent that provision for such
reserve was made out of income accrued during such period,
(e) any aggregate net gain (but not any aggregate
net loss) during such period arising from the sale,
conversion, exchange or other disposition of capital assets
(such term to include, without limitation, (i) all non-current
assets and, without duplication, (ii) the following, whether
or not current: all fixed assets, whether tangible or
intangible, all inventory sold in conjunction with the
disposition of fixed assets, and all Securities),
(f) any gains resulting from any write-up of any
assets (but not any loss resulting from any write-down of
any assets),
(g) any net gain from the collection of the proceeds
of life insurance policies,
(h) any net income or gain (but not any net loss)
during such period from (i) any change in accounting
principles in accordance with GAAP, (ii) any prior period
adjustments resulting from any change in accounting principles
in accordance with GAAP, (iii) any extraordinary items, or
(iv) any discontinued operations or the disposition thereof,
(i) any deferred credit representing the excess of
equity in any Restricted Subsidiary at the date of
acquisition over the cost of the investment in such Restricted
Subsidiary,
(j) in the case of a successor to the Company by
consolidation or merger or as a transferee of its assets,
any earnings of the successor corporation prior to such
consolidation, merger or transfer of assets,
(k) any portion of such net income that cannot be
freely converted into United States dollars, and
(l) any extraordinary, unusual or nonrecurring gains
or losses.
Consolidated Net Earnings Available for Fixed Charges --
means, with respect to any period, Consolidated Net Earnings for
such period plus all amounts deducted in the computation thereof
on account of (a) Consolidated Fixed Charges, (b) taxes imposed
on or measured by income or excess profits and (c) depreciation
and amortization (for purposes of this clause (c), it is agreed
that the foregoing reference to "amortization" shall exclude
amortization of grants from the Scottish government of the type
described in note 1.f. to the consolidated financial statements
of the Company and its subsidiaries for the fiscal year ended
August 31, 1995).
Consolidated Net Income -- is defined in Schedule 10.3.
Consolidated Tangible Net Worth -- is defined in Schedule
10.3.
Consolidated Total Assets -- means, at any time, the total
assets of the Company and its Restricted Subsidiaries that would
be shown as assets on a consolidated balance sheet of the
Company and its Restricted Subsidiaries as of such time prepared
in accordance with GAAP, after eliminating all amounts properly
attributable to minority interests, if any, in the stock and
surplus of Restricted Subsidiaries.
Consolidated Total Capitalization -- means, at any time,
the sum of (a) Consolidated Adjusted Net Worth at such time plus
(b) Consolidated Debt at such time.
Control Notice Event -- means
(a) the execution by the Company or any Subsidiary
or Affiliate of any letter of intent or similar agreement
with respect to any proposed transaction or event or series
of transactions or events that, individually or in the
aggregate, could reasonably be expected to result in a
Change in Control,
(b) the execution of any written agreement that,
when fully performed by the parties thereto, would result in
a Change in Control, or
(c) the making of any written offer by any person
(as such term is used in section 13(d) and section 14(d)(2)
of the Exchange Act as in effect on the date of the Closing)
or related persons constituting a group (as such term is used in
Rule 13d-5 under the Exchange Act as in effect on the date
of the Closing) to the holders of the Voting Stock of the
Company which offer, if accepted by the requisite number of such
holders, would result in a Change in Control.
Control Prepayment Date -- is defined in Section 8.3(a).
Debt -- means with respect to any Person, at any time,
without duplication,
(a) its liabilities for borrowed money and its
redemption obligations in respect of mandatorily redeemable
Preferred Stock;
(b) its liabilities for the deferred purchase price
of property acquired by such Person (excluding accounts
payable arising in the ordinary course of business but
including all liabilities created or arising under any
conditional sale or other title retention agreement with
respect to any such property);
(c) all liabilities in respect of Capital Leases of
such Person;
(d) all liabilities secured by any Lien with respect
to any property owned by such Person (whether or not it has
assumed or otherwise become liable for such liabilities);
(e) all its liabilities in respect of letters of
credit or instruments serving a similar function issued or
accepted for its account by banks and other financial
institutions (whether or not representing obligations for
borrowed money), but only to the extent that such
liabilities at such time constitute liabilities in accordance
with GAAP;
(f) Swaps of such Person; and
(g) any Guaranty of such Person with respect to
liabilities of a type described in any of clauses (a)
through (f) hereof;
provided that in no event shall Debt include any unfunded
obligations of the Company in respect of any Plan. Debt of any
Person shall include all obligations of such Person of the
character described in clauses (a) through (g) above to the
extent such Person remains legally liable in respect thereof
notwithstanding that any such obligation is deemed to be
extinguished under GAAP.
For the purposes of this Agreement, including, without
limitation, Sections 10.5 and 10.6, (i) any Person becoming a
Restricted Subsidiary after the date of the Closing shall be
deemed, at the time it shall become a Restricted Subsidiary, to
have incurred all of its then outstanding Debt and (ii) with
respect to any property acquired by the Company or any
Restricted Subsidiary that is encumbered by a Lien securing Debt
(whether or not the Company or such Restricted Subsidiary shall
have assumed such Debt), the Company or such Restricted
Subsidiary shall be deemed to have incurred such Debt at the
time of the acquisition of such property. If, at any time, any
Wholly-Owned Restricted Subsidiary shall cease to qualify under
this Agreement as a "Wholly-Owned Restricted Subsidiary," the
Company and/or any Restricted Subsidiary shall be deemed to have
incurred any Debt owing by such Person to such former
Wholly-Owned Restricted Subsidiary on the first date on which
such former Wholly-Owned Restricted Subsidiary ceased to be a
Wholly-Owned Restricted Subsidiary.
Debt Prepayment Application -- means, with respect to any
Transfer of property, the application by the Company or its
Restricted Subsidiaries of cash in an amount equal to the Net
Proceeds Amount with respect to such Transfer to pay Senior Debt
(other than Senior Debt owing to any of the Restricted
Subsidiaries or any Affiliate and Senior Debt in respect of any
revolving credit or similar facility providing the Company with
the right to obtain loans or other extensions of credit from
time to time, except to the extent that in connection with such
payment of Senior Debt the availability of credit under such
credit facility is permanently reduced by an amount not less
than the amount of such proceeds applied to the payment of such
Senior Debt), provided that in the course of making such
application the Company shall offer to prepay each outstanding
Note in accordance with Section 10.9(c) in a principal amount
that equals the Ratable Portion for such Note. If any holder of
a Note fails to accept such offer of prepayment, then, for
purposes of the preceding sentence only, the Company
nevertheless will be deemed to have paid Senior Debt in an
amount equal to the Ratable Portion for such Note.
Debt Prepayment Application Date -- is defined in Section
10.9(c).
Default -- means an event or condition the occurrence or
existence of which would, with the lapse of time or the giving
of notice or both, become an Event of Default.
Default Rate -- means that rate of interest that is the
greater of (i) 2.00% per annum above the rate of interest stated
in clause (a) of the first paragraph of the Notes or (ii) 2.00%
over the rate of interest publicly announced by The First
National Bank of Chicago in Chicago, Illinois (or its successor)
from time to time as its "base" or "prime" rate.
Disposition Value -- means, at any time, with respect to
any property
(a) in the case of property that does not constitute
Subsidiary Stock, the book value thereof, valued at the time
of such disposition in good faith by the Company, and
(b) in the case of property that constitutes
Subsidiary Stock, an amount equal to that percentage of book
value of the assets of the Restricted Subsidiary that issued
such stock as is equal to the percentage that the book value of
such Subsidiary Stock represents of the book value of all of
the outstanding capital stock of such Restricted Subsidiary
(assuming, in making such calculations, that all Securities
convertible into such capital stock are so converted and giving
full effect to all transactions that would occur or be
required in connection with such conversion) determined at
the time of the disposition thereof, in good faith by the
Company.
Environmental Laws -- means any and all Federal, state,
local, and foreign statutes, laws, regulations, ordinances,
rules, judgments, orders, decrees, permits, concessions, grants,
franchises, licenses, agreements or governmental restrictions
relating to pollution and the protection of the environment or
the release of any materials into the environment, including,
but not limited to, those related to hazardous substances or
wastes, air emissions and discharges to waste or public systems.
ERISA -- means the Employee Retirement Income Security Act
of 1974, as amended from time to time, and the rules and
regulations promulgated thereunder from time to time in effect.
ERISA Affiliate -- means any trade or business (whether or
not incorporated) that is treated as a single employer together
with the Company under section 414 of the Code.
Event of Default -- is defined in Section 11.
Exchange Act -- means the Securities Exchange Act of 1934,
as amended.
Fair Market Value -- means, at any time and with respect to
any property, the sale value of such property that would be
realized in an arm's-length sale at such time between an
informed and willing buyer and an informed and willing seller
(neither being under a compulsion to buy or sell).
Financing Documents -- means, collectively, this Agreement,
the Notes, the Guaranty Agreement, the Pledge Agreement, the
Intercreditor Agreement and any other Collateral Document (as
defined in the Intercreditor Agreement) entered into from time
to time.
GAAP -- means generally accepted accounting principles as
in effect from time to time in the United States of America.
Governmental Authority -- means
(a) the government of
(i) the United States of America or any state
or other political subdivision thereof, or
(ii) any jurisdiction in which the Company or
any Subsidiary conducts all or any part of its
business, or that asserts jurisdiction over any
properties of the Company or any Subsidiary, or
(b) any entity exercising executive, legislative,
judicial, regulatory or administrative functions of, or
pertaining to, any such government.
Guarantor -- means, at any time, each Person (including,
without limitation, the Initial Guarantor) that at such time is
a guarantor under the Guaranty Agreement.
Guaranty -- means, with respect to any Person, any
obligation (except the endorsement in the ordinary course of
business of negotiable instruments for deposit or collection) of
such Person guaranteeing or in effect guaranteeing any
indebtedness, dividend or other obligation of any other Person
in any manner, whether directly or indirectly, including,
without limitation, obligations incurred through an agreement,
contingent or otherwise, by such Person:
(a) to purchase such indebtedness or obligation or
any property constituting security therefor;
(b) to advance or supply funds (i) for the purchase
or payment of such indebtedness or obligation, or (ii) to
maintain any working capital or other balance sheet
condition or any income statement condition of any other Person
or otherwise to advance or make available funds for the
purchase or payment of such indebtedness or obligation;
(c) to lease properties or to purchase properties or
services primarily for the purpose of assuring the owner of
such indebtedness or obligation of the ability of any other
Person to make payment of the indebtedness or obligation; or
(d) otherwise to assure the owner of such
indebtedness or obligation against loss in respect thereof.
In any computation of the indebtedness or other liabilities of
the obligor under any Guaranty, the indebtedness or other
obligations that are the subject of such Guaranty shall be
assumed to be direct obligations of such obligor.
Guaranty Agreement -- is defined in Section 4.9.
Hazardous Material -- means any and all pollutants, toxic
or hazardous wastes or any other substances that might pose a
hazard to health or safety, the removal of which may be required
or the generation, manufacture, refining, production,
processing, treatment, storage, handling, transportation,
transfer, use, disposal, release, discharge, spillage, seepage,
or filtration of which is or shall be restricted, prohibited or
penalized by any applicable law (including, without limitation,
asbestos, urea formaldehyde foam insulation and polychlorinated
biphenyls).
holder -- means, with respect to any Note, the Person in
whose name such Note is registered in the register maintained by
the Company pursuant to Section 13.1.
Incorporated Covenants -- is defined in Section 9.8.
Indebtedness -- means, with respect to any Person, all Debt
of such Person and, without duplication, all "Indebtedness" (as
such term is defined in Schedule 9.8 as in effect on the date of
Closing) of such Person.
Initial Guarantor -- means Jabil Circuit of Michigan, Inc.
Institutional Investor -- means (a) any original purchaser
of a Note, (b) any holder of a Note holding more than 5% of the
aggregate principal amount of the Notes then outstanding, and
(c) any bank, trust company, savings and loan association or
other financial institution, any pension plan, any investment
company, any insurance company, any broker or dealer, or any
other similar financial institution or entity, regardless of
legal form.
Intercreditor Agreement -- is defined in Section 4.12.
Jabil Malaysia -- means Jabil Circuit, Sdn Bhd.
Lien -- means, with respect to any Person, any mortgage,
lien, pledge, charge, security interest or other encumbrance, or
any interest or title of any vendor, lessor, lender or other
secured party to or of such Person under any conditional sale or
other title retention agreement or Capital Lease, upon or with
respect to any property or asset of such Person (including in
the case of stock, stockholder agreements, voting trust
agreements and all similar arrangements).
Make-Whole Amount -- is defined in Section 8.7.
Material -- means material in relation to the business,
operations, affairs, financial condition, assets or properties
of the Company and its Restricted Subsidiaries taken as a whole.
Material Adverse Effect -- means a material adverse effect
on (a) the business, operations, affairs, financial condition,
assets or properties of the Company and its Restricted
Subsidiaries taken as a whole, or (b) the ability of any Obligor
to perform its obligations under any of the Financing Documents,
or (c) the validity or enforceability of any of the Financing
Documents.
Memorandum -- is defined in Section 5.3.
Most Favored Covenants -- is defined in Section 9.9.
Multiemployer Plan -- means any Plan that is a
"multiemployer plan" (as such term is defined in section
4001(a)(3) of ERISA).
Net Cash Proceeds -- is defined in Schedule 10.3.
Net Proceeds Amount -- means, with respect to any Transfer
of any property by any Person, an amount equal to the difference
of
(a) the aggregate amount of the consideration
(valued at the Fair Market Value of such consideration at
the time of the consummation of such Transfer) received by
such Person in respect of such Transfer, minus
(b) all ordinary and reasonable out-of-pocket costs
and expenses actually incurred by such Person in connection
with such Transfer.
Notes -- is defined in Section 1.
Obligors -- means the Company and each Guarantor.
Officer's Certificate -- means a certificate of a Senior
Financial Officer or of any other officer of the Company whose
responsibilities extend to the subject matter of such
certificate.
Other Agreements -- is defined in Section 2.
Other Purchasers -- is defined in Section 2.
PBGC -- means the Pension Benefit Guaranty Corporation
referred to and defined in ERISA or any successor thereto.
Person -- means an individual, partnership, corporation,
limited liability company, association, trust, unincorporated
organization, or a government or agency or political subdivision
thereof.
Plan -- means an "employee benefit plan" (as defined in
section 3(3) of ERISA) that is or, within the preceding five
years, has been established or maintained, or to which
contributions are or, within the preceding five years, have been
made or required to be made, by the Company or any ERISA
Affiliate or with respect to which the Company or any ERISA
Affiliate may have any liability.
Pledge Agreement -- is defined in Section 4.10.
Preferred Stock -- means any class of Capital Stock of a
Person that is preferred over any other class of Capital Stock
of such Person as to the payment of dividends or other equity
distributions or the payment of any amount upon liquidation or
dissolution of such corporation.
Priority Debt -- means, at any time, without duplication,
the sum of
(a) all Debt of the Company secured by any Lien on
any property of the Company or any Restricted Subsidiary,
other than any such Debt secured by Liens permitted by any
one or more of clauses (a)(i) through (a)(viii), inclusive, of
Section 10.7, plus
(b) all Debt of Restricted Subsidiaries,
provided that there shall be excluded from Priority Debt (i)
unsecured Debt of Jabil Malaysia guarantied by the Company in an
amount not exceeding $30,000,000, (ii) Debt of any Guarantor
under the Guaranty Agreement, (iii) unsecured Debt of any
Guarantor referred to in the foregoing clause (ii) under such
Guarantor's guaranty of obligations under the Bank Loan
Agreement or any related agreement, instrument or other
document, so long as such obligations of such Guarantor are
subject to the sharing provisions of the Intercreditor
Agreement, and (iv) any Debt of any Restricted Subsidiary under
clause (b) above owing solely to the Company or any Wholly-Owned
Restricted Subsidiary. Without limitation of the foregoing, it
is agreed that any Debt of Jabil Circuit Ltd., or of any other
"Borrowing Subsidiary" (as such term is defined in the Bank Loan
Agreement), under the Bank Loan Agreement shall constitute
Priority Debt.
Pro Forma Consolidated Fixed Charges Coverage Ratio --
means, at any time, the ratio of (a) Consolidated Net Earnings
Available for Fixed Charges for the immediately preceding period
of four consecutive fiscal quarters of the Company (for purposes
of this definition, a "One Year Retrospective Period"), after
giving effect to the assumptions set forth in the last paragraph
of this definition, to (b) Consolidated Fixed Charges for such
One Year Retrospective Period, after giving effect to the
assumptions set forth in the last paragraph of this definition.
For purposes of determining "Consolidated Net Earnings
Available for Fixed Charges" and "Consolidated Fixed Charges" in
this definition, any Acquisition or Asset Disposition by the
Company or any Restricted Subsidiary that is consummated during
the One Year Retrospective Period shall be deemed to have been
consummated as of the first day of such One Year Retrospective
Period (and the earnings and other results of operations during
such period in respect of the property acquired or disposed of
shall accordingly be included in the case of an Acquisition, or
excluded in the case of an Asset Disposition, for purposes of
such determinations) and any Debt incurred in connection with
any such Acquisition shall be deemed to be outstanding as of
such first day. For purposes of this paragraph, an Acquisition
shall include any acquisition of a Person (including, without
limitation, an acquisition of Capital Stock of any Subsidiary
that, immediately prior to such acquisition, was not a
Restricted Subsidiary) that becomes a Restricted Subsidiary or
the acquisition of all or substantially all of the assets of any
Person.
property or properties -- means, unless otherwise
specifically limited, any kind of property or asset, whether
real, personal or mixed, tangible or intangible, choate or
inchoate.
Property Reinvestment Application -- means, with respect to
any Transfer of property, the satisfaction of each of the
following conditions:
(a) an amount equal to the Net Proceeds Amount with
respect to such Transfer shall have been applied to the
acquisition by the Company, or any of its Restricted
Subsidiaries making such Transfer, of property that upon such
acquisition is unencumbered by any Lien (other than Liens
described in clauses (a)(i) through (a)(ix), inclusive, of
Section 10.7) and that
(i) constitutes property that is (x) properly
classifiable under GAAP as non-current to the extent
that such proceeds are derived from the transfer of
property that was properly classifiable as non-current, and
otherwise properly classifiable as either current or
non-current, (y) of a similar nature and of at least
equivalent value as the property that was the subject of such
Transfer, and (z) to be used in the ordinary course of
business of the Company and its Restricted
Subsidiaries, or
(ii) constitutes equity interests of a Person
that shall be, on or prior to the time of such
acquisition, a Restricted Subsidiary of the Company, and
that shall invest the proceeds of such acquisition in property
of the nature described in the immediately preceding
clause (i); and
(b) the Company shall have delivered a certificate
of an officer of the Company to each holder of a Note
referring to Section 10.9 and generally identifying the
property that was the subject of such Transfer, the Disposition
Value of such property, and the nature, terms, amount and
application of the proceeds from the Transfer.
Ratable Portion -- for any Note means, with respect to any
Transfer of property, an amount equal to the product of (x) the
Net Proceeds Amount of such Transfer multiplied by (y) a
fraction the numerator of which is the outstanding principal
amount of such Note and the denominator of which is the
aggregate outstanding principal amount of Senior Debt (excluding
Senior Debt owing to any of the Restricted Subsidiaries or any
Affiliate and Senior Debt in respect of any revolving credit or
similar facility providing the Company with the right to obtain
loans or other extensions of credit from time to time, except to
the extent that in connection with such payment of Senior Debt
the availability of credit under such credit facility is
permanently reduced by an amount not less than the amount of
such proceeds applied to the payment of such Senior Debt).
Required Holders -- means, at any time, the holders of at
least 66-_% in principal amount of the Notes at the time
outstanding (exclusive of Notes then owned by the Company or any
of its Affiliates).
Responsible Officer -- means the chief executive officer,
the President, any Senior Financial Officer and any other
officer of the Company with responsibility for the
administration of the relevant portion of this agreement.
Restricted Subsidiary -- means, at any time, each and every
Subsidiary at least 80% (by number of votes) of the Voting Stock
of which is legally and beneficially owned by the Company and
its Wholly-Owned Restricted Subsidiaries at such time.
Securities Act -- means the Securities Act of 1933, as
amended from time to time.
Security -- has the meaning set forth in section 2(1) of
the Securities Act. Senior Debt -- means any Debt of the
Company that is not in any manner subordinated in right of
payment or security to the Notes or to any other Debt of the
Company.
Senior Financial Officer -- means the chief financial
officer, principal accounting officer, treasurer or comptroller
of the Company.
Subsidiary -- means, as to any Person, any corporation,
association or other business entity in which such Person or one
or more of its Subsidiaries or such Person and one or more of
its Subsidiaries owns sufficient equity or voting interests to
enable it or them (as a group) ordinarily, in the absence of
contingencies, to elect a majority of the directors (or Persons
performing similar functions) of such entity, and any
partnership or joint venture if more than a 50% interest in the
profits or capital thereof is owned by such Person or one or
more of its Subsidiaries or such Person and one or more of its
Subsidiaries (unless such partnership can and does ordinarily
take major business actions without the prior approval of such
Person or one or more of its Subsidiaries). Unless the context
otherwise clearly requires, any reference to a "Subsidiary" is a
reference to a Subsidiary of the Company.
Subsidiary Stock -- means, with respect to any Person, the
Capital Stock (or any options or warrants to purchase stock or
other Securities exchangeable for or convertible into any
Capital Stock) of any Subsidiary of such Person.
Swaps -- means, with respect to any Person, payment
obligations with respect to interest rate swaps, currency swaps
and similar obligations obligating such Person to make payments,
whether periodically or upon the happening of a contingency.
For the purposes of this Agreement, the amount of the obligation
under any Swap shall be the amount determined in respect thereof
as of the end of the then most recently ended fiscal quarter of
such Person, based on the assumption that such Swap had
terminated at the end of such fiscal quarter, and in making such
determination, if any agreement relating to such Swap provides
for the netting of amounts payable by and to such Person
thereunder or if any such agreement provides for the
simultaneous payment of amounts by and to such Person, then in
each such case, the amount of such obligation shall be the net
amount so determined.
Transfer -- means, with respect to any Person, any
transaction in which such Person sells, conveys, transfers or
leases (as lessor) any of its property, including, without
limitation, Subsidiary Stock.
Voting Stock -- means, with respect to any Person, any
Capital Stock of such Person whose holders are entitled under
ordinary circumstances to vote for the election of directors (or
Persons performing similar functions) of such Person
(irrespective of whether at the time Capital Stock of any other
class or classes shall have or might have voting powers by
reason of the happening of any contingency).
Wholly-Owned Restricted Subsidiary -- means, at any time,
any Restricted Subsidiary 100% of all of the equity interests
(except directors' qualifying shares) and voting interests of
which are owned by any one or more of the Company and the
Company's other WhollyOwned Restricted Subsidiaries at such
time. SCHEDULE 3
PAYMENT INSTRUCTIONS
Account Name: Jabil Circuit, Inc.
Account #: 59869-04
ABA #: 072000326
NBD Bank
611 Woodward Avenue
Detroit, Michigan 48278
Contact: Rick Ellis
(313) 225-3743
SCHEDULE 4.13
CHANGES IN CORPORATE STRUCTURE
None. SCHEDULE 5.3
DISCLOSURE MATERIALS
None. SCHEDULE 5.4
SUBSIDIARIES OF THE COMPANY AND OWNERSHIP OF SUBSIDIARY
STOCK
Subsidiaries Ownership %
Jabil Circuit of Michigan 100%
Jabil Circuit, Ltd. 100%
Jabil Circuit Sdn Bhd 100%
SCHEDULE 5.5
FINANCIAL STATEMENTS
Jabil Circuit, Inc. Annual Report for the fiscal years ended
August 31, 1993, 1994 and 1995
Jabil Circuit, Inc. 10-K for the fiscal year ended August 31,
1995
Jabil Circuit, Inc. 10-Q for the fiscal quarter ended February
29, 1996 SCHEDULE 5.8
CERTAIN LITIGATION
Jabil Circuit, Inc. v. Epson America, Inc. (Case number
95-57-CIV-T-23E).
Commercial Transaction/Breach of Contract suit. Case in
late stages of discovery as of the effective date. The
parties are presently involved in settlement negotiations
the likely outcome of which will not have a Material Adverse
Effect.
SCHEDULE 5.11
PATENTS, ETC.
Jabil Circuit, Inc. presently has several patents primarily
related to the initial business when the Company started
operations in Michigan in the 1970's- 1980's. None of the
patents is valued on the balance sheet. The Company does
not derive revenue of any significance from patented technology.
SCHEDULE 5.12
ERISA
The following plans are administered under ERISA:
Jabil Circuit, Inc. Welfare Benefit Plan
Restated Cash or Deferred Profit Sharing Plan of
Jabil Circuit, Inc.
SCHEDULE 5.14
USE OF PROCEEDS
Approximately $24 million will be used to pay off term debt
with existing banks. Approximately $26 million will be used
to paydown Jabil Circuit, Inc.'s short- term borrowings, or
revolving credit facility.
SCHEDULE 5.15
EXISTING DEBT
SCHEDULE 9.8
INCORPORATED COVENANTS
(Note:Certain capitalized terms used in the covenants contained
in this Schedule are defined below in this Schedule under
the heading "CERTAIN DEFINED TERMS USED IN THIS SCHEDULE;"
other capitalized terms used in this Schedule shall have the
meanings ascribed to them in Schedule B to the Note Purchase
Agreement of which this Schedule is a part. The number and
letter designations of the covenants contained in this
Schedule correspond (with some modifications) to those used in
the corresponding provisions of the Bank Loan Agreement.)
********
5.1 Affirmative Covenants.
(a) Preservation of Corporate Existence, Etc. The
Company will, and will cause each Subsidiary to, do or cause to
be done all things necessary to preserve, renew and keep in full
force and effect its legal existence, except to the extent
permitted by Section 5.2(g) of this Schedule, and its
qualification as a foreign corporation in good standing in each
jurisdiction in which such qualification is necessary under
applicable law.
(b) Compliance with Laws, Etc. The Company will,
and will cause each Subsidiary to, comply in all material
respects with all applicable laws, rules, regulations and orders
of any governmental authority, whether federal, state, local or
foreign (including without limitation ERISA, the Code and
Environmental Laws), in effect from time to time; and pay and
discharge promptly when due all taxes, assessments and
governmental charges or levies imposed upon it or upon its
income, revenues or property, before the same shall become
delinquent or in default, as well as all lawful claims for
labor, materials and supplies or otherwise, which, if unpaid,
would give rise to Liens upon such properties or any portion
thereof, except to the extent that payment of any of the
foregoing is then being contested in good faith by appropriate
legal proceedings and with respect to which adequate financial
reserves have been established on the books and records of the
Company and its Subsidiaries.
(c) Maintenance of Properties; Insurance. The
Company will, and will cause each Subsidiary to, maintain,
preserve and protect all property that is material to the
conduct of the business of the Company or any of its
Subsidiaries and keep such property in good repair, working
order and condition and from time to time make, or cause to be
made all needful and proper repairs, renewals, additions,
improvements and replacements thereto necessary in order that
the business carried on in connection therewith may be properly
conducted at all times in accordance with customary and prudent
business practices for similar businesses; and, maintain in full
force and effect insurance with responsible and reputable
insurance companies or associations in such amounts, on such
terms and covering such risks, as is usually carried by
companies engaged in similar businesses and owning similar
properties similarly situated and maintain in full force and
effect public liability insurance, insurance against claims for
personal injury or death or property damage occurring in
connection with any of its activities or any properties owned,
occupied or controlled by it, in such amount as it shall
reasonably deem necessary.
(d) [Reserved.]
(e) Accounting; Access to Records, Books, Etc. The
Company will, and will cause each Subsidiary to, maintain a
system of accounting established and administered in accordance
with sound business practices to permit preparation of financial
statements in accordance with GAAP and to comply with the
requirements of the Financing Documents and, at any reasonable
time during normal business hours and from time to time, (i)
permit any holder of Notes or any agents or representatives
thereof to examine and make copies of and abstracts from the
records and books of account of, and visit the properties of,
the Company and its Subsidiaries, and to discuss the affairs,
finances and accounts of the Company and its Subsidiaries with
their respective directors, officers, employees and independent
auditors, provided that representatives of the Company selected
by the Company are present during any such visit or discussion,
and by this provision the Company does hereby authorize such
Persons to discuss such affairs, finances and accounts with any
holder of Notes subject to the above terms and conditions and
(ii) permit any holder of Notes and any of its agents or
representative to conduct a comprehensive field audit of its
books, records, property and assets, which audits shall be
performed once per year (unless an Event of Default has
occurred, in which case audits may be performed more frequently)
and which audits shall be at the expense of the Company. In
connection with any activities of any holder of Notes pursuant
to this Section 5.1(e), prior to any Default or Event of
Default, any holder of Notes: (i) shall endeavor to give the
Company three Business Days notice of any audit or visit, (ii)
shall follow the Company's standard security procedures, and
(iii) agrees that inventory will not be audited unless the
Company has relied on inventory in the "Borrowing Base" (as
defined in the Bank Loan Agreement) during the twelve months
prior to any such audit.
(f) Stamp Taxes. The Company will pay all stamp
taxes and similar taxes, if any, including interest and
penalties, if any, payable in respect of the Notes. The
efficacy of this subsection shall survive the payment in full of
the Notes.
(g) [Reserved.]
(h) Further Assurances. The Company will execute
and deliver, within 30 days after request therefor by the
Required Holders, all further instruments and documents and take
all further action that may be necessary, in order to give
effect to, and to aid in the exercise and enforcement of the
rights and remedies of the holders of Notes under, the Financing
Documents.
5.2 Negative Covenants.
(a) Current Ratio. The Company will not permit or
suffer the Consolidated Current Ratio to be less than 1.40 to
1.00 at any time.
(b) Fixed Charge Coverage Ratio. The Company will
not permit or suffer the Consolidated Fixed Charge Coverage
Ratio to be less than, at any time, 3.0 to 1.0; calculated as of
the end of each fiscal quarter for the four immediately
preceding fiscal quarters.
(c) [Reserved.]
(d) Funded Indebtedness to Total Capitalization.
The Company will not permit or suffer the ratio of Consolidated
Funded Indebtedness to Consolidated Total Capitalization at any
time to exceed 0.60 to 1.0.
(e) Indebtedness. The Company will not, and will
not permit any Subsidiary to, create, incur, assume or in any
manner become liable in respect of, or suffer to exist, any
Indebtedness other than:
(i) Indebtedness under the Financing Documents;
(ii) The Indebtedness described in Schedule
5.2(e) to the Bank Loan Agreement as in effect on the date of
Closing, having the same terms as those existing on the date of
Closing, but no extension or renewal thereof shall be permitted;
(iii) Indebtedness of any Subsidiary of the
Company owing to the Company or to any other Subsidiary of the
Company;
(iv) Interest rate or currency swaps, rate caps
or other similar transactions with any Bank (valued in an amount
equal to the highest termination payment, if any, that would be
payable by such Person upon termination for any reason on the
date of determination), so long as such Indebtedness is incurred
in compliance with the other provisions of the Note Purchase
Agreement of which this Schedule is a part (including, without
limitation, Sections 10.5 and 10.6 thereof);
(v) Indebtedness incurred under the Bank Loan
Agreement and related instruments, agreements or other
documents, so long as such Indebtedness is incurred in
compliance with the other provisions of the Note Purchase
Agreement of which this Schedule is a part (including, without
limitation, Sections 10.5 and 10.6 thereof); and
(vi) Unsecured Indebtedness of Jabil Malaysia
in an aggregate amount not exceeding $30,000,000 and a guaranty
by the Company of such Indebtedness; provided, however, the
aggregate amount of Indebtedness of Jabil Malaysia shall not
exceed the book value of its accounts receivable, inventory and
fixed assets as reported in the books of Jabil Malaysia and the
terms and conditions of such Indebtedness, including the form of
guaranty to be executed by the Company, shall be satisfactory to
the Required Holders.
(f) Liens. The Company will not, and will not
permit any Subsidiary to, create, incur or suffer to exist any
Lien on any of the assets, rights, revenues or property, real,
personal or mixed, tangible or intangible, whether now owned or
hereafter acquired, of the Company or any of its Subsidiaries,
other than:
(i) Liens for taxes not delinquent or for
taxes being contested in good faith by appropriate proceedings
and as to which adequate financial reserves have been
established on its books and records;
(ii) Liens (other than any Lien imposed by
ERISA) created and maintained in the ordinary course of business
which are not material in the aggregate and which constitute (A)
pledges or deposits under worker's compensation laws,
unemployment insurance laws or similar legislation, (B) good
faith deposits in connection with bids, tenders, contracts or
leases to which the Company or any of its Subsidiaries is a
party for a purpose other than borrowing money or obtaining
credit, including rent security deposits, (C) liens imposed by
law, such as those of carriers, warehousemen and mechanics, if
payment of the obligation secured thereby is not yet due, (D)
Liens securing taxes, assessments or other governmental charges
or levies not yet subject to penalties for nonpayment, and (E)
pledges or deposits to secure public or statutory obligations of
the Company or any of its Subsidiaries, or surety, customs or
appeal bonds to which the Company or any of its Subsidiaries is
a party;
(iii) Liens affecting real property which
constitute minor survey exceptions or defects or irregularities
in title, minor encumbrances, easements or reservations of, or
rights of others for, rights of way, sewers, electric lines,
telegraph and telephone lines and other similar purposes, or
zoning or other restrictions as to the use of such real
property, provided that all of the foregoing, in the aggregate,
do not at any time materially detract from the value of said
properties or materially impair their use in the operation of
the businesses of the Company or any of its Subsidiaries;
(iv) Liens existing on the date of Closing upon
the same terms as the date of Closing, but no extensions,
renewals and replacements thereof shall be permitted, with each
existing Lien described in Schedule 5.2(f) to the Bank Loan
Agreement as in effect on the date of Closing;
(v) Liens granted by a Subsidiary in favor of
the Company;
(vi) The interest or title of a lessor under
any lease otherwise permitted under the Financing Documents with
respect to the property subject to such lease to the extent
performance of the obligations of the Company or its Subsidiary
thereunder is not delinquent; and
(vii) Liens in favor of the Collateral Agent for
the benefit of the holders of the Notes and the Banks as
contemplated by the Intercreditor Agreement.
(g) Merger; Acquisitions; Etc. The Company will
not, and will not permit any Subsidiary to, subject to Section
5.2(j) of this Schedule, purchase or otherwise acquire, whether
in one or a series of transactions, all or a substantial portion
of the business, assets, rights, revenues or property, real,
personal or mixed, tangible or intangible, of any Person, or all
or a substantial portion of the capital stock of or other
ownership interest in any other Person; nor merge or consolidate
or amalgamate with any other Person or take any other action
having a similar effect, nor enter into any joint venture or
similar arrangement with any other Person, provided, however,
that this Section 5.2(g) shall not prohibit any merger,
acquisition or joint venture if (i) the Company shall be the
surviving or continuing corporation thereof, (ii) immediately
before and after such merger or acquisition, no Default or Event
of Default shall exist or shall have occurred and be continuing
and the representations and warranties contained in Section 5 of
the Note Purchase Agreements shall be true and correct on and as
of the date thereof (both before and after such merger or
acquisition is consummated) as if made on the date such merger
or acquisition is consummated, (iii) the aggregate amount paid
or payable in cash for all such mergers, acquisitions or joint
ventures by the Company and its Subsidiaries after the date of
Closing does not exceed $10,000,000, and (iv) prior to the
consummation of such merger or acquisition, the Company shall
have provided to each holder of Notes an opinion of counsel and
a certificate of the chief financial officer of the Company
(attaching computations and pro forma financial statements to
demonstrate compliance with all financial covenants hereunder
both before and after such merger, acquisition or joint venture
has been completed), each stating that such merger or
acquisition complies with this Section 5.2(g) and that any other
conditions under the Financing Documents relating to such
transaction have been satisfied.
(h) Disposition of Assets; Etc. The Company will
not, and will not permit any Subsidiary to, sell, lease,
license, transfer, assign or otherwise dispose of all or a
substantial portion of its business, assets, rights, revenues or
property, real, personal or mixed, tangible or intangible,
whether in one or a series of transactions, other than inventory
sold in the ordinary course of business upon customary credit
terms and sales of scrap or obsolete material or equipment,
provided, however, that this Section 5.2(h) shall not prohibit
any such sale, lease, license, transfer, assignment or other
disposition if the aggregate book value (disregarding any
write-downs of such book value other than ordinary depreciation
and amortization) of all of the business, assets, rights,
revenues and property disposed of after the date of Closing
shall be less than $5,000,000 in the aggregate and if,
immediately before and after such transaction, no Default or
Event of Default shall exist or shall have occurred and be
continuing.
(i) Nature of Business. The Company will not, and
will not permit any Subsidiary to, make any substantial change
in the nature of its business from that engaged in on the date
of Closing or engage in any other businesses other than the
design, development and manufacturing of computer-grade
electronic products.
(j) Investments, Loans and Advances. The Company
will not, and will not permit any Subsidiary to, subject to
Section 5.2(g) of this Schedule, purchase or otherwise acquire
any capital stock of or other ownership interest in, or debt
securities of or other evidences of Indebtedness of, any other
Person; nor make any loan or advance of any of its funds or
property or make any other extension of credit to, or make any
investment or acquire any interest whatsoever in, any other
Person; nor incur any Contingent Liability; other than (i)
extensions of trade credit made in the ordinary course of
business on customary credit terms and commission, travel and
similar advances made to officers and employees in the ordinary
course of business, and (ii) commercial paper of any United
States issuer having the highest rating then given by Moody's
Investors Service, Inc., or Standard & Poor's, a division of
McGraw-Hill, Inc., direct obligations of and obligations fully
guaranteed by the United States of America or any agency or
instrumentality thereof, or certificates of deposit of any
commercial bank which is a member of the Federal Reserve System
and which has capital, surplus and undivided profit (as shown on
its most recently published statement of condition) aggregating
not less than $100,000,000, provided, however, that each of the
foregoing investments has a maturity date not later than 365
days after the acquisition thereof by the Company or any of its
Subsidiaries, (iii) those investments, loans, advances and other
transactions described in Schedule 5.2(j) to the Bank Loan
Agreement as in effect on the date of Closing, having the same
terms as existing on the date of Closing, but no extension or
renewal thereof shall be permitted, and (iv) investments, loans
and advances to any Subsidiary; provided, that, the aggregate
amount of such investments, loans and advances outstanding at
any time to Subsidiaries who are not Guarantors shall not exceed
$30,000,000 and the aggregate amount of such investments, loans
and advances to Jabil Ltd. shall not exceed $15,000,000.
(k) Transactions with Affiliates. The Company will
not, and will not permit any Subsidiary to, enter into, become a
party to, or become liable in respect of, any contract or
undertaking with any Affiliate except in the ordinary course of
business and on terms not less favorable to the Company or any
Subsidiary than those which could be obtained if such contract
or undertaking were an arms length transaction with a Person
other than an Affiliate.
(l) Sale and Leaseback Transactions. The Company
will not, and will not permit any Subsidiary to, become or
remain liable in any way, whether directly or by assignment or
as a guarantor or other contingent obligor, for the obligations
of the lessee or user under any lease or contract for the use of
any real or personal property if such property is owned on the
date of Closing or thereafter acquired by the Company or any of
its Subsidiaries and has been or is to be sold or transferred to
any other Person and was, is or will be used by the Company or
any such Subsidiary for substantially the same purpose as such
property was used by the Company or such Subsidiary prior to
such sale or transfer.
(m) Lease Rentals and Use Payments. The Company
will not, and will not permit any Subsidiary to, become or
remain liable in any way, whether directly or by assignment or
as a guarantor or other contingent obligor, for the obligations
of any lessee or user under any lease (other than a Capital
Lease) of real or personal property if the highest annual rent
and other amounts (exclusive of property taxes, property and
liability insurance premiums and maintenance costs), which may
be payable by the lessee or user thereunder in any fiscal year
of the Company during the term thereof when added to the
aggregate of all such rents and other amounts in respect of
which the Company and its Subsidiaries are liable which may be
payable in such fiscal year, shall exceed $10,000,000.
(n) [Reserved.]
(o) Inconsistent Agreements. The Company will not,
and will not permit any Subsidiary to, enter into any agreement
containing any provision which would be violated or breached by
the Financing Documents or any of the transactions contemplated
thereby or by performance by the Company or any of its
Subsidiaries of its obligations in connection therewith.
(p) Accounting Changes. The Company will not, and
will not permit any Subsidiary to, change its fiscal year or
make any significant changes (i) in accounting treatment and
reporting practices except as permitted by GAAP and disclosed to
each holder of Notes, or (ii) in tax reporting treatment except
as permitted by law and disclosed to each holder of Notes.
(q) [Reserved.]
(r) [Reserved.]
********
CERTAIN DEFINED TERMS USED IN THIS SCHEDULE:
For purposes of this Schedule 9.8, the following terms have
the respective meanings set forth below:
"Balloon Payments" shall have the meaning specified
in the Bank Loan Agreement.
"Consolidated" shall mean, when used with reference
to any financial term in this Schedule, the aggregate for the
Company and its consolidated Subsidiaries of the amounts
signified by such term for all such Persons determined on a
consolidated basis in accordance with GAAP.
"Consolidated Fixed Charge Coverage Ratio" of any
Person shall mean, as of any date, the ratio of (a) Consolidated
EBITDA as calculated for the four most recently ended
consecutive fiscal quarters of the Company plus all payments
relating to operating leases of such Person during such period
to (b) all consolidated interest expense during such period for
such Person, plus all payments relating to operating leases of
such Person during such period.
"Contingent Liabilities" of any Person shall mean, as
of any date, all obligations of such Person or of others for
which such Person is contingently liable, as obligor, guarantor,
surety or in any other capacity, or in respect of which
obligations such Person assures a creditor against loss or
agrees to take any action to prevent any such loss (other than
endorsements of negotiable instruments for collection in the
ordinary course of business), including without limitation all
reimbursement obligations of such Person in respect of any
letters of credit, surety bonds or similar obligations and all
obligations of such Person to advance funds to, or to purchase
assets, property or services from, any other Person in order to
maintain the financial condition of such other Person.
"Current Assets" and "Current Liabilities" of any
Person shall mean, as of any date, all assets or liabilities,
respectively, of such Person which, in accordance with GAAP,
should be classified as current assets or current liabilities,
respectively, on a balance sheet of such Person; provided,
however, that, regardless of proper classification under GAAP,
the Balloon Payments shall be excluded from the calculation of
Current Liabilities and the aggregate amount of outstanding
Revolving Credit Advances shall be included in the calculation
of Current Liabilities hereunder.
"Current Ratio" shall mean, as of any date, the ratio
of (a) Consolidated Current Assets to (b) Consolidated Current
Liabilities.
"EBIT" shall mean, with respect to any Person, for
any period, the sum of (a) Net Income or loss plus (b) all
amounts deducted in determining such Net Income or loss on
account of (i) interest expense and (ii) taxes based on or
measured by income, all as determined in accordance with GAAP.
"EBITDA" shall mean, with respect to any Person, for
any period, EBIT for such period plus, to the extent deducted in
determining such EBIT, depreciation and positive amortization
expense, all as determined in accordance with GAAP.
"Funded Indebtedness" of any Person shall mean, as of
any date, all Indebtedness of such Person for borrowed money,
including without limitation, all obligations under any Capital
Lease, other than Subordinated Debt.
"Indebtedness" of any Person shall mean (i)
indebtedness for borrowed money, (ii) obligations evidenced by
bonds, debentures, notes or other similar instruments, (iii)
obligations to pay the deferred purchase price of property or
services, except for trade accounts payable arising in the
ordinary course of business that are not more than 90 days past
due or as are reasonably being contested, (iv) obligations as
lessee under leases which have been in accordance with GAAP,
recorded as Capital Leases, (v) obligations to purchase property
or services if payment is required regardless of whether such
property is delivered or services are performed (generally
called "take or pay" contracts), (vi) obligations in respect of
currency or interest rate swaps or comparable transactions
valued at the maximum termination payment payable by the
obligor, (vii) all obligations of others similar in character to
those described in clauses (i) through (iv) of this definition
for which such Person is contingently liable, as guarantor,
surety, accommodation party, partner or in any other capacity,
or in respect of which obligations such Person assures a
creditor against loss or agrees to take any action to prevent
any such loss (other than endorsements of negotiable instruments
for collection in the ordinary course of business), including
without limitation all reimbursement obligations of such Person
in respect of letters of credit, surety bonds or similar
obligations and all obligations of such Person to advance funds
to, or to purchase assets, property or services from, any other
Person in order to maintain the financial condition of such
other Person and (viii) liabilities in respect of unfunded
vested benefits under plans covered by Title IV of ERISA.
"Revolving Credit Advance" shall have the meaning
specified in the Bank Loan Agreement.
"Subordinated Debt" of any Person shall mean, as of
any date, that Indebtedness of such Person for borrowed money
which is expressly subordinate and junior in right and priority
of payment to the Indebtedness owed to the holders of the Notes
under the Financing Documents in a manner and by one or more
agreements satisfactory in form and substance to the Required
Holders and as approved by the Required Holders in writing.
"Subsidiary" of any Person shall mean any other
Person (whether now existing or hereafter organized or acquired)
in which (other than directors' qualifying shares required by
law) at least a majority of the securities or other ownership
interests of each class having ordinary voting power or
analogous right (other than securities or other ownership
interests which have such power or right only by reason of the
happening of a contingency), at the time as of which any
determination is being made, are owned, beneficially and of
record, by such Person or by one or more of the other
Subsidiaries of such Person or by any combination thereof.
Unless otherwise specified, reference to "Subsidiary" shall mean
a Subsidiary of the Company.
"Total Capitalization" of any Person shall mean the
sum of (a) Tangible Net Worth (as defined in Schedule 10.3) plus
(b) Funded Indebtedness plus (c) deferred income taxes of such
Person. SCHEDULE 10.3
CERTAIN DEFINITIONS USED IN TANGIBLE NET WORTH COVENANT
For purposes of Section 10.3, the following terms have the
respective meanings set forth below:
"Capital Stock" shall include all capital stock and any
securities exchangeable for or convertible into capital stock
and any warrants, rights or other options to purchase or
otherwise acquire capital stock or such securities or any other
form of equity securities.
"Consolidated" shall mean, when used with reference to any
financial term in this Schedule, the aggregate for the Company
and its consolidated Subsidiaries of the amounts signified by
such term for all such Persons determined on a consolidated
basis in accordance with GAAP.
"Consolidated Net Income" shall have the meaning provided
for by the definitions of "Consolidated" and "Net Income" in
this Schedule.
"Consolidated Tangible Net Worth" shall have the meaning
provided for by the definitions of "Consolidated" and "Tangible
Net Worth" in this Schedule.
"Net Cash Proceeds" shall mean, in connection with any
issuance or sale of any Capital Stock, the cash proceeds
received from such issuance, net of investment banking fees,
reasonable and documented attorneys' fees, accountants' fees,
underwriting discounts and commissions and other customary fees
and other costs and expenses actually incurred in connection
therewith.
"Net Income" of any Person shall mean, for any period, the
net income (after deduction for income and other taxes of such
Person determined by reference to income or profits of such
Person) of such Person for such period, all as determined in
accordance with GAAP.
"Tangible Net Worth" of any Person shall mean, as of any
date, (a) the amount of any capital stock, paid in capital and
similar equity accounts plus (or minus in the case of a deficit)
the capital surplus and retained earnings of such Person and the
amount of any foreign currency translation adjustment account
shown as a capital account of such Person, less (b) the net book
value of all items of the following character which are included
in the assets of such Person: (i) goodwill, including, without
limitation, the excess of cost over book value of any asset,
(ii) organization or experimental expenses, (iii) unamortized
debt discount and expense, (iv) patents, trademarks, trade names
and copyrights, (v) treasury stock, (vi) franchises, licenses
and permits, and (vii) other assets which are deemed intangible
assets under GAAP.
EXHIBIT 1
[FORM OF NOTE]
THIS NOTE AND THE NOTE PURCHASE AGREEMENTS REFERRED TO BELOW
MAY BE SUBJECT TO THE TERMS OF AN INTERCREDITOR AGREEMENT, DATED
AS OF MAY 30, 1996, AS MAY BE AMENDED, RESTATED OR OTHERWISE
MODIFIED FROM TIME TO TIME, AMONG CERTAIN LENDERS AND NBD BANK
AS COLLATERAL AGENT. BY ACCEPTANCE OF THIS NOTE, THE HOLDER
HEREOF MAY BECOME BOUND BY THE PROVISIONS OF SUCH INTERCREDITOR
AGREEMENT, WHETHER OR NOT SUCH HOLDER BECOMES A PARTY THERETO.
JABIL CIRCUIT, INC.
6.89% SENIOR NOTE DUE MAY 30, 2004
No. R-__
[Date] $__________
PPN 466313 A* 4
FOR VALUE RECEIVED, the undersigned, JABIL CIRCUIT, INC.
(herein called the "Company"), a corporation organized and
existing under the laws of the State of Delaware, hereby
promises to pay to , or registered
assigns, the principal sum of
DOLLARS ($__________) on May 30, 2004, with interest (computed
on the basis of a 360-day year of twelve 30-day months) (a) on
the unpaid balance thereof at the rate of 6.89% per annum from
the date hereof, payable semiannually, on the 30th day of May
and November in each year, commencing with the May 30 or
November 30 next succeeding the date hereof, until the principal
hereof shall have become due and payable, and (b) to the extent
permitted by law on any overdue payment (including any overdue
prepayment) of principal, any overdue payment of interest and
any overdue payment of any Make-Whole Amount (as defined in the
Note Purchase Agreements referred to below), payable
semiannually as aforesaid (or, at the option of the registered
holder hereof, on demand), at a rate per annum from time to time
equal to the greater of (i) 6.89% or (ii) 2.00% over the rate of
interest publicly announced by The First National Bank of
Chicago (or its successor) from time to time in Chicago,
Illinois as its "base" or "prime" rate.
Payments of principal of, interest on and any Make-Whole
Amount with respect to this Note are to be made in lawful money
of the United States of America at the address shown in the
register maintained by the Company for such purpose or at such
other place as the Company shall have designated by written
notice to the holder of this Note as provided in the Note
Purchase Agreements referred to below.
This Note is one of a series of Senior Notes (herein called
the "Notes") issued pursuant to separate Note Purchase
Agreements, dated as of May 30, 1996 (as from time to time
amended, the "Note Purchase Agreements"), between the Company
and the respective Purchasers named therein and is entitled to
the benefits thereof. This Note is also entitled to the
benefits of the Pledge Agreement (as such term is defined in the
Note Purchase Agreements). Each holder of this Note will be
deemed, by its acceptance hereof, (i) to have agreed to the
confidentiality provisions set forth in Section 20 of the Note
Purchase Agreements and (ii) to have made the representation set
forth in Section 6.2 of the Note Purchase Agreements.
This Note is a registered Note and, as provided in the Note
Purchase Agreements, upon surrender of this Note for
registration of transfer, duly endorsed, or accompanied by a
written instrument of transfer duly executed, by the registered
holder hereof or such holder's attorney duly authorized in
writing, a new Note for a like principal amount will be issued
to, and registered in the name of, the transferee. Prior to due
presentment for registration of transfer, the Company may treat
the Person in whose name this Note is registered as the owner
hereof for the purpose of receiving payment and for all other
purposes, and the Company will not be affected by any notice to
the contrary.
The Company will make required prepayments of principal on
the dates and in the amounts specified in the Note Purchase
Agreements. This Note is also subject to optional prepayment,
in whole or from time to time in part, at the times and on the
terms specified in the Note Purchase Agreements, but not
otherwise.
If an Event of Default, as defined in the Note Purchase
Agreements, occurs and is continuing, the principal of this Note
may be declared or otherwise become due and payable in the
manner, at the price (including any applicable Make-Whole
Amount) and with the effect provided in the Note Purchase
Agreements.
THIS NOTE AND THE NOTE PURCHASE AGREEMENTS ARE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW
YORK, EXCLUDING CHOICE-OF-LAW PRINCIPLES OF THE LAW OF SUCH
STATE THAT WOULD REQUIRE THE APPLICATION OF THE LAWS OF A
JURISDICTION OTHER THAN SUCH STATE.
JABIL CIRCUIT, INC.
By
Name:
Title:
EXHIBIT 4.4(a)
[FORM OF OPINION OF GENERAL COUNSEL OF THE COMPANY]
[Letterhead of Jabil Circuit, Inc.]
[Closing Date]
To the Persons Listed on Annex 1 hereto
Re: Jabil Circuit, Inc. (the "Company")
Ladies and Gentlemen:
Reference is made to the separate Note Purchase Agreements,
each dated as of May 30, 1996 (collectively, the "Note Purchase
Agreement"), between the Company and each of the purchasers
listed on Schedule A attached thereto (the "Purchasers"), which
provide, among other things, for the issuance and sale by the
Company of its 6.89% Senior Notes due May 30, 2004, in the
aggregate principal amount of $50,000,000. The capitalized
terms used herein and not defined herein have the meanings
specified in the Note Purchase Agreement.
I am the General Counsel of the Company and have acted as
counsel to the Company in connection with the transactions
contemplated by the Note Purchase Agreement. The opinion is
delivered to you pursuant to Section 4.4(a) of the Note Purchase
Agreement. In acting as such counsel, I have examined:
(a) the Note Purchase Agreement;
(b) the Company's 6.89% Senior Notes due May 30,
2004, dated the date hereof, in the form of Exhibit 1 to the
Note Purchase Agreement and registered in the names, in the
principal amounts and with the registration numbers set forth on
Schedule A to the Note Purchase Agreement (the "Notes");
(c) the Guaranty Agreement;
(d) the Pledge Agreement;
(e) the Intercreditor Agreement;
(f) the documents executed and delivered by the
Company and the Guarantor in connection with the
transactions contemplated by the Financing Documents;
(g) the bylaws and minute books of the Company and a
certified copy of the certificate of incorporation of the
Company, as in effect on the date hereof;
(h) the bylaws and minute books of the Guarantor and
a certified copy of the articles of incorporation of the
Guarantor, as in effect on the date hereof;
(i) a long-form good standing certificate of the
Company from the State of Delaware and foreign good standing
certificates for the Company from each of the states set
forth on Annex 2 hereto;
(j) a good standing certificate of the Guarantor
from the State of Michigan;
(k) a letter from SPP Hambro & Co. and NBD Bank,
dated the date hereof, making certain representations with
respect to the manner in which the Notes were offered (the
"Offeree Letter");
(l) the opinion of Hebb & Gitlin, special counsel to
the Purchasers, dated the date hereof; and
(m) originals, or copies certified or otherwise
identified to my satisfaction, of such other documents,
records, instruments and certificates of public officials as I
have deemed necessary or appropriate to enable me to render
this opinion.
The documents referred to in clauses (a) through (e), inclusive,
above are hereinafter referred to collectively as the "Financing
Documents;" the documents referred to in clauses (a), (b), (d)
and (e) above are hereinafter referred to collectively as the
"Company Financing Documents;" and the documents referred to in
clauses (c) and (e) above are hereinafter referred to
collectively as the "Guarantor Financing Documents."
In rendering my opinion, I have relied, to the extent I
deem necessary and proper, on:
(a) warranties and representations as to certain
factual matters contained in the Note Purchase Agreement;
(b) the Offeree Letter; and
(c) such opinion of Hebb & Gitlin with respect to
all matters governed by New York law.
I have no actual knowledge of any of the facts contained in the
documents listed in item (a) or item (b) of the immediately
preceding sentence.
My opinion is based upon the federal laws of the United
States of America and the laws of the State of Florida, the
State of Delaware (with respect to corporate law), the State of
Michigan and, in reliance upon the opinion of Hebb & Gitlin, the
State of New York. If the Financing Documents were governed by
the laws of the State of Florida, my opinion would not vary
materially from that set forth below.
Based on the foregoing, I am of the following opinions:
1. (a) The Company is a corporation duly incorporated,
validly existing and in good standing under the laws of the
State of Delaware and has all requisite corporate power and
authority to carry on its business and own its property.
(b) The Guarantor is a corporation duly
incorporated, validly existing and in good standing under
the laws of the State of Michigan and has all requisite
corporate power and authority to carry on its business and
own its property.
2. (a) The Company has duly qualified and is in good
standing as a foreign corporation in each jurisdiction where
the character of its properties or the nature of its
activities makes such qualification necessary, except where the
failure to so qualify and be in good standing would not have
a material adverse effect on the ability of the Company to
perform its obligations under the Company Financing Documents.
(b) The Guarantor has duly qualified and is in good
standing as a foreign corporation in each jurisdiction where
the character of its properties or the nature of its
activities makes such qualification necessary, except where the
failure to so qualify and be in good standing would not have
a material adverse effect on the ability of the Guarantor to
perform its obligations under the Guarantor Financing Documents.
3. To the best of my knowledge after due inquiry, there
is no default or existing condition that with the passage of
time or the giving of notice, or both, would result in a default
by the Company or the Guarantor under any contract, lease or
commitment known to me to which the Company or the Guarantor is
a party or any of their respective properties may be bound,
except where such default would not have a material adverse
effect on the ability of the Company or the Guarantor to perform
their respective obligations set forth in the Financing
Documents.
4. To the best of my knowledge after due inquiry, there
is no judgment, order, action, suit, proceeding, inquiry, order
or investigation, at law or in equity, before any court or
Governmental Authority, arbitration board or tribunal, pending
or threatened against the Company or the Guarantor that, in the
aggregate, could have a material adverse effect on the business,
operations, affairs, financial condition, assets or properties
of the Company and its Subsidiaries, taken as a whole, or the
ability of the Company or the Guarantor to perform their
respective obligations under the Financing Documents.
5. (a) The Company has the requisite corporate power
and authority to execute and deliver the Company Financing
Documents, to issue and sell the Notes, and to perform its
obligations set forth in each of the Company Financing Documents.
(b) The Guarantor has the requisite corporate power
and authority to execute and deliver the Guarantor Financing
Documents and to perform its obligations thereunder.
6. (a) Each of the Company Financing Documents has been
duly authorized by all necessary corporate action on the
part of the Company (no action on the part of the
stockholders of the Company being required in respect thereof),
has been executed and delivered by a duly authorized officer
of the Company, and constitutes a legal, valid and binding
obligation of the Company, enforceable against the Company
in accordance with its terms.
(b) Each of the Guarantor Financing Documents has
been duly authorized by all necessary corporate action on
the part of the Guarantor (no action on the part of the
stockholders of the Guarantor being required in respect
thereof), has been executed and delivered by a duly
authorized officer of the Guarantor, and constitutes a
legal, valid and binding obligation of the Guarantor,
enforceable against the Guarantor in accordance with its
terms.
7. (a) The execution and delivery by the Company of the
Company Financing Documents, the issue and sale of the Notes
by the Company, and the performance by the Company of its
obligations thereunder will not conflict with, constitute a
violation of, result in a breach of any provision of,
constitute a default under, or result in the creation or
imposition of any Lien upon any of its properties (other than
the Liens granted pursuant to the Pledge Agreement) pursuant
to the certificate of incorporation or bylaws of the
Company, any applicable statute, rule or regulation to which the
Company is subject, or, to the best of my knowledge after
due inquiry, any agreement or instrument to which the
Company is a party or by which its properties may be bound.
(b) The execution and delivery by the Guarantor of
the Guarantor Financing Documents and the performance by the
Guarantor of its obligations thereunder will not conflict
with, constitute a violation of, result in a breach of any
provision of, constitute a default under, or result in the
creation or imposition of any Lien upon any of its
properties pursuant to the articles of incorporation or bylaws
of the Guarantor, any applicable statute, rule or regulation
to which the Guarantor is subject, or, to the best of my
knowledge after due inquiry, any agreement or instrument to
which the Guarantor is a party or by which its properties
may be bound.
8. All consents, approvals and authorizations of, and
all designations, declarations, filings, registrations,
qualifications and recordations with, Governmental Authorities,
required on the part of the Company and the Guarantor in
connection with the execution and delivery of each of the
Financing Documents and the issue and sale of the Notes and the
use of the proceeds thereof, have been obtained.
9. Under existing law, the Notes are not subject to the
registration requirements under the Securities Act of 1933, as
amended, and the Company is not required to qualify an indenture
with respect thereto under the Trust Indenture Act of 1939, as
amended.
10. The Company is the record and beneficial owner of
100% of the shares of the common stock of Jabil Circuit Limited
and has not granted any security interest in such common stock
other than the security interests granted pursuant to the Pledge
Agreement.
11. The Pledge Agreement, together with the delivery to
the Collateral Agent of the certificates evidencing the shares
of stock identified on Schedule 1 to the Pledge Agreement (the
"Pledged Shares") and stock powers executed by the Company in
blank, will create under the Michigan Uniform Commercial Code a
perfected security interest in the Pledged Shares in favor of
the Collateral Agent for the benefit of the holders of the Notes
and the other Persons specified in the Pledge Agreement. The
Collateral Agent will acquire such security interest in the
Pledged Shares free of any adverse claims.
12. The Company
(a) is not an "investment company" within the
meaning of the Investment Company Act of 1940, as amended,
and
(b) is not a "holding company" or an "affiliate" of
a "holding company," or a "subsidiary company" of a "holding
company," or a "public utility" within the meaning of the
Public Utility Holding Company Act of 1935, as amended.
All opinions herein contained with respect to the
enforceability of documents and instruments are qualified to the
extent that:
(a) the availability of equitable remedies,
including, without limitation, specific enforcement and
injunctive relief, is subject to the discretion of the court
before which any proceedings therefor may be brought; and
(b) the enforceability of certain terms provided in
the Financing Documents may be limited by applicable
bankruptcy, reorganization, arrangement, insolvency,
moratorium or similar laws affecting the enforcement of
creditors' rights generally as at the time in effect.
I acknowledge that this opinion is being issued at the
request of the Company pursuant to Section 4.4(a) of the Note
Purchase Agreement and I agree that the parties listed on Annex
1 hereto may rely and are relying hereon in connection with the
consummation of the transactions contemplated by the Note
Purchase Agreement. Hebb & Gitlin may rely on this opinion for
the sole purpose of rendering their opinion to be rendered
pursuant to Section 4.4(b) of the Note Purchase Agreement.
Subsequent holders of the Notes may rely on this opinion as if
it were addressed to them.
Very truly yours,
Linda V. Moore
General Counsel
ANNEX 1 Addressees
Jabil Circuit, Inc. 10800 Roosevelt Boulevard St. Petersburg,
Florida 33716
Connecticut General Life Insurance Company c/o CIGNA
Investments, Inc. 900 Cottage Grove Road Hartford, CT 06152
Life Insurance Company of North America c/o CIGNA Investments,
Inc. 900 Cottage Grove Road Hartford, CT 06152
Metropolitan Life Insurance Company One Madison Avenue New York,
NY 10010
Hebb & Gitlin One State Street Hartford, CT 06103
ANNEX 2 Foreign Good
Standing Certificates
States in which qualified as a foreign corporation
California
Florida
Michigan
EXHIBIT 4.4(b)
[FORM OF OPINION OF SPECIAL COUNSEL TO THE PURCHASERS]
[Letterhead of Hebb & Gitlin]
[Closing Date]
To the Persons Listed on Annex 1 hereto
Re: Jabil Circuit, Inc. (the "Company")
Ladies and Gentlemen:
Reference is made to the separate Note Purchase Agreements,
each dated as of May 30, 1996 (collectively, the "Note Purchase
Agreement"), between the Company and each of the purchasers
listed on Schedule A attached thereto (the "Purchasers"), which
provide, among other things, for the issuance and sale by the
Company of its 6.89% Senior Notes due May 30, 2004, in the
aggregate principal amount of $50,000,000. The capitalized
terms used herein and not defined herein have the meanings
specified in the Note Purchase Agreement.
We have acted as special counsel to the Purchasers in
connection with the transactions contemplated by the Note
Purchase Agreement. This opinion is delivered to you pursuant
to Section 4.4(b) of the Note Purchase Agreement. In acting as
such counsel, we have examined:
(a) the Note Purchase Agreement;
the Company's 6.89% Senior Notes due May 30,
2004, dated the date hereof, in the form of Exhibit 1 to the
Note Purchase Agreement and registered in the names, in the
principal amounts and with the registration numbers set forth on
Schedule A to the Note Purchase Agreement (the "Notes");
(c) the Guaranty Agreement;
(d) the Pledge Agreement;
(e) the Intercreditor Agreement;
(f) an Officer's Certificate of the Company, dated
the date hereof, delivered pursuant to Section 4.3(a) of the
Note Purchase Agreement;
(g) a certificate of the Secretary of the Company,
dated the date hereof, delivered pursuant to Section 4.3(b)
of the Note Purchase Agreement;
(h) a certificate of the Secretary of the Initial
Guarantor, dated the date hereof, delivered pursuant to
Section 4.3(c) of the Note Purchase Agreement;
(i) a letter from SPP Hambro & Co. and NBD Bank,
dated the date hereof, making certain representations with
respect to the manner in which the Notes were offered (the
"Offeree Letter");
(j) the opinion of Linda V. Moore, Esq., General
Counsel of the Company, dated the date hereof, delivered
pursuant to Section 4.4(a) of the Note Purchase Agreement;
and
(k) originals, or copies certified or otherwise
identified to our satisfaction, of such other documents,
records, instruments and certificates of public officials as we
have deemed necessary or appropriate to enable us to render
this opinion.
The documents referred to in clauses (a) through (e), inclusive,
above are hereinafter referred to collectively as the "Financing
Documents" and the documents referred to in clauses (a), (b),
(d) and (e) above are hereinafter referred to collectively as
the "Company Financing Documents."
We have assumed the genuineness of all signatures and
documents submitted to us as originals, that all copies
submitted to us conform to the originals, the legal capacity of
all natural Persons, and, as to documents executed by the
Purchasers and other Persons other than the Company and the
Initial Guarantor, that each such Person executing documents had
the power to enter into and perform its obligations under such
documents, and that such documents have been duly authorized,
executed and delivered by, and are binding on and enforceable
against, such Persons. We have further assumed that the Initial
Guarantor has received fair consideration and reasonably
equivalent value in consideration for executing the Guaranty
Agreement.
In rendering our opinion, we have relied, to the extent we
deem necessary and proper, on:
(a) warranties and representations as to certain
factual matters contained in the Financing Documents;
(b) the Offeree Letter; and
(c) such opinion of Linda V. Moore, Esq. with
respect to all questions governed by Florida law, Delaware
law and Michigan law and with respect to all questions
concerning the due incorporation, valid existence and good
standing of, and the authorization, execution and delivery
of agreements and instruments by, the Company and the
Initial Guarantor, and our conclusions as to such matters are
subject to the same assumptions and qualifications as are
contained in such opinion; based on such investigation as we
have deemed appropriate, such opinion is satisfactory in
form and scope to us and in our opinion the Purchasers and we
are justified in relying thereon.
Based on the foregoing, we are of the following opinions:
1. (a) The Company is a corporation duly incorporated,
validly existing and in good standing under the laws of the
State of Delaware.
(b) The Initial Guarantor is a corporation duly
incorporated, validly existing and in good standing under
the laws of the State of Michigan.
2. (a) The Company has the requisite corporate power
and authority to execute and deliver the Company Financing
Documents, to issue and sell the Notes, and to perform its
obligations set forth in each of the Company Financing Documents.
(b) The Initial Guarantor has the requisite
corporate power and authority to execute and deliver the
Guaranty Agreement and to perform its obligations thereunder.
3. (a) Each of the Company Financing Documents has been
duly authorized by all necessary corporate action on the
part of the Company, has been executed and delivered by a
duly authorized officer of the Company, and constitutes a legal,
valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms.
(b) The Guaranty Agreement has been duly authorized
by all necessary corporate action on the part of the Initial
Guarantor, has been executed and delivered by a duly
authorized officer of the Initial Guarantor, and constitutes a
legal, valid and binding obligation of the Initial
Guarantor, enforceable against the Initial Guarantor in
accordance with its terms.
4. (a) The execution and delivery of the Company
Financing Documents, and the issuance and sale of the Notes,
by the Company and the performance by the Company of its
obligations thereunder will not conflict with, result in a
breach of any provision of, constitute a default under, or
result in the creation or imposition of any Lien upon any of
its properties (other than the Liens granted pursuant to the
Pledge Agreement) pursuant to, the certificate of
incorporation or bylaws of the Company.
(b) The execution and delivery of the Guaranty
Agreement by the Initial Guarantor and the performance by
the Initial Guarantor of its obligations thereunder will not
conflict with, result in a breach of any provision of,
constitute a default under, or result in the creation or
imposition of any Lien upon any of its properties pursuant
to, the articles of incorporation or bylaws of the Initial
Guarantor.
5. No consents, approvals or authorizations of
governmental authorities are required on the part of the Company
or the Initial Guarantor under the laws of the United States of
America or the State of New York in connection with (a) the
execution and delivery by the Company of any of the Company
Financing Documents, or the offer, issuance, sale and delivery
of the Notes or (b) the execution and delivery by the Initial
Guarantor of the Guaranty Agreement. Our opinion in this
paragraph 5 is based solely on a review of generally applicable
laws of the United States of America and the State of New York,
and not on any search with respect to, or review of, any orders,
decrees, judgments or other determinations specifically
applicable to the Company or the Initial Guarantor.
6. Neither the issuance of the Notes nor the intended
use of the proceeds of the Notes (as set forth in Section 5.14
of the Note Purchase Agreement) will violate Regulations G, T or
X of the Federal Reserve Board.
7. Under existing law, the Notes are not subject to the
registration requirements under the Securities Act of 1933, as
amended, or the "blue sky" laws of the State of New York, and
the Company is not required to qualify an indenture with respect
thereto under the Trust Indenture Act of 1939, as amended.
All opinions contained herein with respect to the
enforceability of agreements and instruments are qualified to
the extent that:
(a) the availability of equitable remedies,
including, without limitation, specific enforcement and
injunctive relief, is subject to the discretion of the court
before which any proceedings therefor may be brought; and
(b) the enforceability of certain terms provided in
the Financing Documents may be limited by applicable
bankruptcy, reorganization, arrangement, insolvency,
moratorium or similar laws affecting the enforcement of
creditors' rights generally as at the time in effect.
Except in reliance on the opinion of Linda V. Moore, Esq.
as expressly set forth above, we express no opinion as to the
law of any jurisdiction other than the law of the State of New
York and United States federal law. Without limiting the
foregoing, we express no opinion with respect to any matter of
Scottish law, including, without limitation, any matter with
respect to Scottish conflicts of laws principles or creation or
perfection of the security interest contemplated by the Pledge
Agreement to the extent that it may be affected by Scottish law.
Subsequent holders of the Notes may rely on this opinion as
if it were addressed to them. Linda V. Moore, Esq. may rely on
this opinion as to matters of New York law for the sole purpose
of rendering her opinion referred to above.
Very truly yours,
ANNEX 1
Addressees
Connecticut General Life Insurance Company c/o CIGNA
Investments, Inc. 900 Cottage Grove Road Hartford, CT 06152
Life Insurance Company of North America c/o CIGNA Investments,
Inc. 900 Cottage Grove Road Hartford, CT 06152
Metropolitan Life Insurance Company One Madison Avenue New York,
NY 10010
EXHIBIT 4.9
[FORM OF GUARANTY AGREEMENT]
GUARANTY AGREEMENT
Dated as of May 30, 1996
Re:
$50,000,000 6.89% Senior Notes Due May 30, 2004
Issued by Jabil Circuit, Inc.
THIS GUARANTY AGREEMENT MAY BE SUBJECT TO THE TERMS OF AN
INTERCREDITOR AGREEMENT, DATED AS OF MAY 30, 1996, AS MAY BE
AMENDED, RESTATED OR OTHERWISE MODIFIED FROM TIME TO TIME, AMONG
CERTAIN LENDERS AND NBD BANK AS COLLATERAL AGENT.
TABLE OF CONTENTS
PAGE
1. PRELIMINARY STATEMENT. . . . . . . . . . . . . . . .
.Exhibit 4.9-1
2. GUARANTY AND OTHER RIGHTS AND UNDERTAKINGS . . . . .
.Exhibit 4.9-1 2.1 Guarantied Obligations . . . . . . . .
. . . . .Exhibit 4.9-1 2.2 Waivers and Other Agreements .
. . . . . . . . .Exhibit 4.9-2 2.3 Nature of Guaranty . .
. . . . . . . . . . . . .Exhibit 4.9-3 2.4 Obligations
Absolute . . . . . . . . . . . . . .Exhibit 4.9-4 2.5 No
Investigation by Noteholders. . . . . . . . .Exhibit 4.9-5
2.6 Indemnity. . . . . . . . . . . . . . . . . . . .Exhibit
4.9-5 2.7 Subordination, Subrogation, Etc. . . . . . . .
.Exhibit 4.9-5 2.8 Waiver . . . . . . . . . . . . . . . .
. . . . .Exhibit 4.9-5 2.9 Limitation on Guarantied
Obligations . . . . . .Exhibit 4.9-6 2.10 Marshaling . . .
. . . . . . . . . . . . . . . .Exhibit 4.9-6 2.11 Setoff,
Counterclaim or Other Deductions . . . .Exhibit 4.9-6 2.12
No Election of Remedies by Noteholders . . . . .Exhibit 4.9-6
2.13 Separate Action; Other Enforcement Rights. . . .Exhibit
4.9-6 2.14 Noteholder Setoff. . . . . . . . . . . . . . .
.Exhibit 4.9-7 2.15 Delay or Omission; No Waiver . . . . .
. . . . .Exhibit 4.9-7 2.16 Restoration of Rights and
Remedies . . . . . . .Exhibit 4.9-7 2.17 Cumulative
Remedies. . . . . . . . . . . . . . .Exhibit 4.9-7
3. INTERPRETATION OF THIS AGREEMENT . . . . . . . . . .
.Exhibit 4.9-7 3.1 Terms Defined. . . . . . . . . . . . .
. . . . .Exhibit 4.9-7 3.2 Section Headings and
Construction. . . . . . . .Exhibit 4.9-8
4. WARRANTIES AND REPRESENTATIONS . . . . . . . . . . .
.Exhibit 4.9-8
5. MISCELLANEOUS. . . . . . . . . . . . . . . . . . . .
.Exhibit 4.9-9 5.1 Successors and Assigns . . . . . . . .
. . . . .Exhibit 4.9-9 5.2 Severability . . . . . . . . .
. . . . . . . . .Exhibit 4.9-9 5.3 Communications . . . .
. . . . . . . . . . . . .Exhibit 4.9-9 5.4 Governing Law.
. . . . . . . . . . . . . . . . Exhibit 4.9-10 5.5
Benefits of Guaranty Restricted to Noteholders Exhibit 4.9-10
5.6 Survival of Representations and Warranties; Entire
AgreementExhibit 4.9-10 5.7 Amendment. . . . . . . . . . .
. . . . . . . . Exhibit 4.9-10 5.8 Joinder Agreement. . .
. . . . . . . . . . . . Exhibit 4.9-10 5.9 Survival . . .
. . . . . . . . . . . . . . . . Exhibit 4.9-10 5.10
Execution in Counterpart . . . . . . . . . . . Exhibit 4.9-11
Annex 1 -- Addresses of Guarantors Annex 2 -- Form of
Joinder Agreement GUARANTY AGREEMENT
GUARANTY AGREEMENT, dated as of May 30, 1996 (as amended,
restated or otherwise modified from time to time, this
"Agreement"), by JABIL CIRCUIT OF MICHIGAN, INC. (together with
each other Person that becomes a party hereto from time to time
by execution and delivery of a Joinder Agreement, and including
their respective successors and assigns, the "Guarantors"), in
favor of each of the Noteholders (as such term is hereinafter
defined).
1. PRELIMINARY STATEMENTS
1.1 Jabil Circuit, Inc. (together with its successors and
assigns, the "Company"), a Delaware corporation, has authorized
the issuance of its 6.89% Senior Notes due May 30, 2004 (as may
be amended, restated or otherwise modified from time to time,
the "Notes"), in the aggregate principal amount of $50,000,000,
pursuant to the separate Note Purchase Agreements (collectively,
as may be amended, restated or otherwise modified from time to
time, the "Note Purchase Agreement"), each dated as of May 30,
1996, entered into by the Company with each of the purchasers of
the Notes named on Schedule A to the Note Purchase Agreement
(the "Purchasers").
1.2 In order to induce the Purchasers to purchase the
Notes, Jabil Circuit of Michigan, Inc. has agreed to become a
Guarantor hereunder and the Company has agreed, pursuant to the
Note Purchase Agreement, that each other Subsidiary that at any
time becomes liable in respect of any Guaranty of any of the
obligations under the Bank Loan Agreement or any related
agreement, instrument or other document, will be required to
become a Guarantor hereunder.
1.3 Each Guarantor will receive direct and indirect
economic, financial and other benefits from the indebtedness
incurred under the Note Purchase Agreement and the Notes by the
Company, and under this Agreement, and the incurrence of such
indebtedness is in the best interests of such Guarantor.
1.4 All acts and proceedings required by law and by the
constitutive documents of each Guarantor necessary to constitute
this Agreement a valid and binding agreement for the uses and
purposes set forth herein in accordance with its terms have been
done and taken, and the execution and delivery hereof have been
in all respects duly authorized.
2. GUARANTY AND OTHER RIGHTS AND UNDERTAKINGS
2.1 Guarantied Obligations.
(a) Each Guarantor, in consideration of the
execution and delivery of the Note Purchase Agreement, the
purchase of the Notes by the Purchasers and other
consideration, hereby irrevocably, unconditionally and
absolutely guaranties, on a continuing basis, to each
Noteholder, as and for such Guarantor's own debt:
(i) the prompt payment of the principal of the
Notes and any and all accrued and unpaid interest
(including, without limitation, interest which
otherwise may cease to accrue by operation of any insolvency
law, rule, regulation or interpretation thereof) and
Make-Whole Amount on the Notes and all other
obligations of the Company to the Noteholders under the Note
Purchase Agreement when due, whether by mandatory or
optional prepayment, acceleration or otherwise, all in
accordance with the terms of the Note Purchase
Agreement and the Notes, including, without limitation, overdue
interest, indemnification payments and all reasonable
costs and expenses incurred by the Noteholders and the
Collateral Agent in connection with enforcing any
obligations of the Company under the Note Purchase Agreement
and the Notes, including, without limitation, the
reasonable fees and disbursements of Noteholders'
special counsel,
(ii) the prompt and punctual performance and
observance of each and every term, covenant or
agreement contained in the Note Purchase Agreement and
the Notes to be performed or observed on the part of the
Company, and
(iii) the prompt and complete payment, on
demand, of any and all reasonable costs and expenses
incurred by the Noteholders in connection with
enforcing the obligations of such Guarantor hereunder,
including, without limitation, the reasonable fees and
disbursements of Noteholders' special counsel.
All of the obligations set forth in subsections (i), (ii)
and (iii) of this Section 2.1 are referred to herein as the
"Guarantied Obligations" and the guaranty thereof contained
herein is a primary, original and immediate obligation of each
Guarantor and is an absolute, unconditional, continuing and
irrevocable guaranty of payment and performance and shall
remain in full force and effect until the full, final and
indefeasible payment of the Guarantied Obligations.
(b) If for any reason any duty, agreement or
obligation of the Company contained in the Note Purchase
Agreement shall not be performed or observed by the Company
as provided therein, or if any amount payable under or in
connection with the Note Purchase Agreement or the Notes shall
not be paid in full when the same becomes due and payable,
each Guarantor undertakes to perform or cause to be
performed promptly each of such duties, agreements and
obligations and to pay forthwith each such amount to the
Noteholders regardless of any defense or setoff or
counterclaim which the Company may have or assert, and
regardless of any other condition or contingency.
2.2 Waivers and Other Agreements.
Each Guarantor hereby unconditionally
(a) waives any requirement that the Noteholders,
upon the occurrence of an Event of Default, first make
demand upon, or seek to enforce remedies against, the
Company before demanding payment under or seeking to enforce the
obligations of such Guarantor under this Agreement,
(b) agrees that the obligations of such Guarantor
under this Agreement will not be discharged except by
complete performance of all obligations of the Company
contained in the Note Purchase Agreement, the Notes and the
other Financing Documents,
(c) agrees that the obligations of such Guarantor
under this Agreement shall remain in full force and effect
without regard to, and shall not be affected or impaired,
without limitation, by any invalidity, irregularity or
unenforceability in whole or in part of the Note Purchase
Agreement, the Notes or any other Financing Document, or any
limitation on the liability of any Guarantor under this
Agreement, or any limitation on the method or terms of
payment under the Note Purchase Agreement, the Notes or any
other Financing Document which may at any time be caused or
imposed in any manner whatsoever (including, without
limitation, usury laws),
(d) waives diligence, presentment and protest with
respect to, and any notice of default or dishonor in the
payment of any amount at any time payable by the Company
under or in connection with the Note Purchase Agreement, the
Notes or any other Financing Document, and further waives
any requirement of notice of acceptance of, or other
formality relating to, the obligations of such Guarantor under
this Agreement, and
(e) agrees that to the extent the Company makes a
payment or payments to any Noteholder, which payment or
payments or any part thereof are subsequently invalidated,
declared to be fraudulent or preferential, set aside or
required, for any of the foregoing reasons or for any other
reason, to be repaid or paid over to a custodian, trustee,
receiver or any other party or officer under any bankruptcy,
reorganization, arrangement, insolvency, readjustment of debt,
dissolution or liquidation law of any jurisdiction, state or
federal law, or any common law or equitable cause, then to
the extent of such payment or repayment, the obligation or part
thereof intended to be satisfied shall be revived and
continued in full force and effect as if said payment had
not been made and each Guarantor shall be primarily liable for
such obligation.
2.3 Nature of Guaranty.
The obligations of each Guarantor under this Agreement
constitute an absolute and unconditional and irrevocable
guaranty of payment and not a guaranty of collection and are
wholly independent of and in addition to other rights and
remedies of the Noteholders and are not contingent upon the
pursuit by the Noteholders of any such rights and remedies, such
pursuit being hereby waived by such Guarantor. Notwithstanding
anything to the contrary set forth in the Note Purchase
Agreement, the Notes or any other Financing Document, the
obligations of each Guarantor under this Agreement are joint and
several with the obligations of each other Guarantor and any
other guarantor of all or any part of the Guarantied Obligations.
2.4 Obligations Absolute.
The obligations, covenants, agreements and duties of each
Guarantor under this Agreement shall not be released, affected
or impaired by any of the following, whether or not undertaken
with notice to or consent of such Guarantor:
(a) any assignment or transfer, in whole or in part,
of any Note although made without notice to or consent of
such Guarantor, or
(b) any waiver by any Noteholder, or by any other
Person, of the performance or observance by the Company of
any of the agreements, covenants, terms or conditions
contained in the Note Purchase Agreement or in any other
Financing Document, or
(c) any indulgence in or the extension of the time
for payment by the Company of any amounts payable under or
in connection with the Note Purchase Agreement, the Notes or
any other Financing Document, or of the time for performance
by the Company of any other obligations under or arising out of
the Note Purchase Agreement, the Notes or any other
Financing Document, or the extension or renewal thereof, or
(d) the modification, amendment or waiver (whether
material or otherwise) of any duty, agreement or obligation
of the Company set forth in the Note Purchase Agreement, the
Notes or any other Financing Document (the modification,
amendment or waiver from time to time of the Note Purchase
Agreement, the Notes and the other Financing Documents being
expressly authorized without further notice to or consent of
such Guarantor), or
(e) the voluntary or involuntary liquidation, sale
or other disposition of all or substantially all of the
assets of the Company or any receivership, insolvency,
bankruptcy, reorganization or other similar proceedings
affecting the Company or any of its assets, or
(f) the merger or consolidation of the Company or
any Guarantor with any other Person, or
(g) the release or discharge of the Company from the
performance or observance of any agreement, covenant, term
or condition contained in the Note Purchase Agreement, the
Notes or any other Financing Document, by operation of law,
or
(h) any other cause, whether similar or dissimilar
to the foregoing, that would release, affect or impair the
obligations, covenants, agreements or duties of any
Guarantor under this Agreement.
2.5 No Investigation by Noteholders.
Each Guarantor hereby waives unconditionally any obligation
that, in the absence of such provision, the Noteholders might
otherwise have to investigate or to assure that there has been
compliance with the law of any jurisdiction with respect to the
Guarantied Obligations, recognizing that, to save both time and
expense, such Guarantor has requested that the Noteholders not
undertake such investigation. Each Guarantor hereby expressly
confirms that the obligations of such Guarantor hereunder shall
remain in full force and effect without regard to compliance or
noncompliance with any such law and irrespective of any
investigation or knowledge of any such law by any Noteholder.
2.6 Indemnity.
As a separate, additional and continuing obligation, each
Guarantor unconditionally and irrevocably undertakes and agrees
with the Noteholders that, should the Guarantied Obligations not
be recoverable from such Guarantor under Section 2.1 for any
reason whatsoever (including, without limitation, by reason of
any provision of the Note Purchase Agreement or the Notes or any
other agreement or instrument executed in connection therewith
being or becoming void, unenforceable or otherwise invalid under
any applicable law) then, notwithstanding any knowledge thereof
by any Noteholder at any time, such Guarantor as sole, original
and independent obligor, upon demand by the Required Holders,
will make payment of the Guarantied Obligations to the
Noteholders by way of a full indemnity in such currency and
otherwise in such manner as is provided in the Note Purchase
Agreement and the Notes.
2.7 Subordination, Subrogation, Etc.
Each Guarantor agrees that any present or future
indebtedness, obligations or liabilities of the Company to such
Guarantor shall be fully subordinate and junior in right and
priority of payment to any present or future indebtedness,
obligations or liabilities of the Company to the Noteholders.
Each Guarantor waives any right of subrogation to the rights of
the Noteholders against the Company or any other Person
obligated for payment of the Guarantied Obligations and any
right of reimbursement, contribution or indemnity whatsoever
(including, without limitation, any such right as against any
other Guarantor) arising or accruing out of any payment that
such Guarantor may make pursuant to this Agreement, and any
right of recourse to security for the debts and obligations of
the Company, unless and until the entire amount of the
Guarantied Obligations shall have been paid in full.
2.8 Waiver.
To the extent that it lawfully may, each Guarantor agrees
that it will not at any time insist upon or plead, or in any
manner whatsoever claim or take any benefit or advantage of any
applicable present or future stay, extension or moratorium law,
which may affect observance or performance of the provisions of
this Agreement, the Note Purchase Agreement, the Notes or any
other Financing Document; nor will it claim, take or insist upon
any benefit or advantage of any present or future law providing
for the evaluation or appraisal of any security for its
obligations hereunder or the Company under the Note Purchase
Agreement, the Notes or any other Financing Document prior to
any sale or sales thereof which may be made under or by virtue
of any instrument governing the same; nor will it, after any
such sale or sales, claim or exercise any right, under any
applicable law, to redeem any portion of such security so sold.
2.9 Limitation on Guarantied Obligations.
Notwithstanding anything in Section 2.1 or elsewhere in
this Agreement or any other Financing Document to the contrary,
the obligations of each Guarantor under this Agreement shall at
each point in time be limited to an aggregate amount equal to
the greatest amount that would not result in such obligations
being subject to avoidance, or otherwise result in such
obligations being unenforceable, at such time under applicable
law (including, without limitation, to the extent, and only to
the extent, applicable to any such Guarantor, Section 548 of the
Bankruptcy Code of the United States of America and any
comparable provisions of the law of any other jurisdiction, any
capital preservation law of any jurisdiction and any other law
of any jurisdiction that at such time limits the enforceability
of the obligations of such Guarantor under this Agreement).
2.10 Marshaling.
Neither any Noteholder nor any Person acting for the
benefit of any Noteholder shall be under any obligation to
marshal any assets in favor of any Guarantor or against or in
payment of any or all of the Guarantied Obligations.
2.11 Setoff, Counterclaim or Other Deductions.
Except as otherwise required by law, each payment by each
Guarantor shall be made without setoff, counterclaim or other
deduction.
2.12 No Election of Remedies by Noteholders.
No election to proceed in one form of action or proceeding,
or against any party, or on any obligation, shall constitute a
waiver of such Noteholder's right to proceed in any other form
of action or proceeding or against other parties unless such
Noteholder has expressly waived such right in writing.
Specifically, but without limiting the generality of the
foregoing, no action or proceeding by any Noteholder against the
Company or any Guarantor under any document or instrument
evidencing obligations of the Company or any Guarantor to such
Noteholder shall serve to diminish the liability of any
Guarantor under this Agreement, except to the extent that such
Noteholder finally and unconditionally shall have realized
payment by such action or proceeding in respect of the
Guarantied Obligations.
2.13 Separate Action; Other Enforcement Rights.
Each of the rights and remedies granted under this
Agreement to each Noteholder in respect of the Notes held by
such Noteholder may be exercised by such Noteholder without
notice by such Noteholder to, or the consent of or any other
action by, any other Noteholder. Each Noteholder may proceed to
protect and enforce this Agreement by suit or suits or
proceedings in equity, at law or in bankruptcy, and whether for
the specific performance of any covenant or agreement contained
herein or in execution or aid of any power herein granted or for
the recovery of judgment for the obligations hereby guarantied
or for the enforcement of any other proper, legal or equitable
remedy available under applicable law.
2.14 Noteholder Setoff.
Each Noteholder shall have, to the fullest extent permitted
by law and this Agreement, a right of set-off against any and
all credits and any and all other property of each Guarantor now
or at any time whatsoever,with or in the possession of such
Noteholder, or anyone acting for such Noteholder, to ensure the
full performance of any and all obligations of each Guarantor
hereunder.
2.15 Delay or Omission; No Waiver.
No course of dealing on the part of any Noteholder and no
delay or failure on the part of any such Person to exercise any
right hereunder shall impair such right or operate as a waiver
of such right or otherwise prejudice such Person's rights,
powers and remedies hereunder. Every right and remedy given by
this Agreement or by law to any Noteholder may be exercised from
time to time as often as may be deemed expedient by such Person.
2.16 Restoration of Rights and Remedies.
If any Noteholder shall have instituted any proceeding to
enforce any right or remedy under this Agreement or under any
Note held by such Noteholder, and such proceeding shall have
been dismissed, discontinued or abandoned for any reason, or
shall have been determined adversely to such Noteholder, then
and in every such case each such Noteholder, the Company and
each Guarantor shall, except as may be limited or affected by
any determination (including, without limitation, any
determination in connection with any such dismissal) in such
proceeding, be restored severally and respectively to its
respective former positions hereunder and thereunder, and
thereafter, subject as aforesaid, the rights and remedies of
such Noteholders shall continue as though no such proceeding had
been instituted.
2.17 Cumulative Remedies.
No remedy under this Agreement, the Note Purchase
Agreement, the Notes or any other Financing Document is intended
to be exclusive of any other remedy, but each and every remedy
shall be cumulative and in addition to any and every other
remedy given pursuant to this Agreement, the Note Purchase
Agreement, the Notes or any other Financing Document.
3. INTERPRETATION OF THIS AGREEMENT
3.1 Terms Defined.
As used in this Agreement, the capitalized terms have the
meaning specified in the Note Purchase Agreement unless
otherwise specified below or set forth in the section of this
Agreement referred to immediately following such term (such
definitions, unless otherwise expressly provided, to be equally
applicable to both the singular and plural forms of the terms
defined):
Agreement, this -- has the meaning assigned to such term in
the first paragraph hereof.
Company -- Section 1.1.
Guarantied Obligations -- Section 2.1.
Guarantor -- has the meaning assigned to such term in the
first paragraph hereof.
Note Purchase Agreement -- Section 1.1.
Noteholder -- means, at any time, each Person that is the
holder of any Note at such time.
Notes -- Section 1.1.
Person -- means an individual, partnership, corporation,
limited liability company, association, trust, unincorporated
organization, or a government or agency or political subdivision
thereof.
Purchasers -- Section 1.1.
3.2 Section Headings and Construction.
(a) Section Headings, etc. The titles of the
Sections appear as a matter of convenience only, do not
constitute a part hereof and shall not affect the construction
hereof. The words "herein," "hereof," "hereunder" and
"hereto" refer to this Agreement as a whole and not to any
particular Section or other subdivision.
(b) Construction. Each covenant contained herein
shall be construed (absent express provision to the
contrary) as being independent of each other covenant
contained herein, so that compliance with any one covenant shall
not (absent such an express contrary provision) be deemed to
excuse compliance with any other covenant. Where any
provision herein refers to action to be taken by any Person,
or which such Person is prohibited from taking, such provision
shall be applicable whether such action is taken directly or
indirectly by such Person.
4. WARRANTIES AND REPRESENTATIONS
Each Guarantor warrants and represents, as of the date such
Guarantor becomes a Guarantor hereunder, that each of the
warranties and representations made by the Company in Section 5
of the Note Purchase Agreement with respect to Subsidiaries,
Restricted Subsidiaries or the Guarantors generally are true
with respect to such Guarantor on the date that such Guarantor
becomes a Guarantor, with the same effect as though such
warranties and representations were made on and as of such date
rather than on and as of the date of this Agreement.
5. MISCELLANEOUS
5.1 Successors and Assigns.
(a) All covenants and other agreements contained in
this Agreement by or on behalf of any of the parties hereto
shall bind and inure to the benefit of their respective
successors and assigns (including, without limitation, any
subsequent holder of a Note) whether so expressed or not.
(b) Each Guarantor agrees to take such action as may
be reasonably requested by any Noteholder to confirm such
Guarantor's guaranty of the Guarantied Obligations in
connection with the transfer of the Notes of such Noteholder.
5.2 Severability.
Any provision of this Agreement that is prohibited or
unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition
or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability
in any jurisdiction shall (to the full extent permitted by law)
not invalidate or render unenforceable such provision in any
other jurisdiction.
5.3 Communications.
All communications hereunder shall be in writing, shall be
delivered in the manner required by the Note Purchase Agreement,
and shall be addressed, if to any Guarantor, at the applicable
address set forth on Annex 1 hereto, and if to any of the
Noteholders:
(a) if such Noteholder is a Purchaser, at the
address for such Noteholder set forth on Schedule A to the
Note Purchase Agreement, and further including any parties
referred to on such Schedule A which are required to receive
notices in addition to such Noteholder, and
(b) if such Noteholder is not a Purchaser, at the
address for such Noteholder set forth in the register for
the registration and transfer of Notes maintained pursuant
to Section 13.1 of the Note Purchase Agreement,
or to any such party at such other address as such party may
designate by notice duly given in accordance with this Section
5.3.
Notices shall be deemed given only when actually received.
5.4 Governing Law.
THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED
BY, THE LAW OF THE STATE OF NEW YORK, EXCLUDING CHOICE-OF-LAW
PRINCIPLES OF THE LAW OF SUCH STATE THAT WOULD REQUIRE THE
APPLICATION OF THE LAWS OF A JURISDICTION OTHER THAN SUCH STATE.
5.5 Benefits of Guaranty Restricted to Noteholders.
Nothing express or implied in this Agreement is intended or
shall be construed to give to any Person other than the
Guarantors and the Noteholders any legal or equitable right,
remedy or claim under or in respect hereof or any covenant,
condition or provision therein or herein contained, and all such
covenants, conditions and provisions are and shall be held to be
for the sole and exclusive benefit of the Guarantors and the
Noteholders.
5.6 Survival of Representations and Warranties; Entire
Agreement.
All representations and warranties contained herein or made
in writing by any Guarantor in connection herewith shall survive
the execution and delivery of this Agreement.
5.7 Amendment.
This Agreement may be amended in accordance with Section
5.8 and this Agreement may be further amended, and the
observance of any term hereof may be waived (either
retroactively or prospectively), with (and only with) the
written consent of each Guarantor and the Required Holders,
except that no amendment or waiver of any of the provisions of
Section 2, or any defined term as it is used therein, will be
effective unless consented to by each Guarantor and each
Noteholder in writing; provided that this Agreement may, in the
manner specified in Section 5.7, be amended to add one or more
new Guarantors hereunder without the consent of any other
Guarantor or any holder of Notes.
5.8 Joinder Agreement.
Upon execution and delivery by any Person of a counterpart
of a Joinder Agreement substantially in the form attached to
this Agreement as Annex 2, this Agreement shall for all
purposes, without further action, be deemed to have been amended
to add such Person as a Guarantor hereunder with the same effect
as if such Person had been an original party hereto.
5.9 Survival.
So long as the Guarantied Obligations and all payment
obligations of each Guarantor hereunder shall not have been
fully and finally performed and indefeasibly paid, the
obligations of each Guarantor hereunder shall survive the
transfer and payment of any Note and the payment in full of all
the Notes.
5.10 Execution in Counterpart.
This Agreement may be executed in any number of
counterparts, each of which shall be an original but all of
which together shall constitute one instrument. Each
counterpart may consist of a number of copies hereof, each
signed by less than all, but together signed by all, of the
parties hereto.
[Remainder of page intentionally blank. Next page is signature
page.] IN WITNESS WHEREOF, each Guarantor has caused this
Agreement to be executed on its behalf by one of its duly
authorized officers.
JABIL CIRCUIT OF
MICHIGAN, INC.
By
Name:
Title:
Annex 1
Addresses of Guarantors
Jabil Circuit of Michigan, Inc. c/o Jabil Circuit, Inc.
10800 Roosevelt Blvd. St. Petersburg, Florida 33716
Attention: Chris A. Lewis
(addresses of any other Guarantors to be added
pursuant to Joinder Agreement)
Annex 2
[FORM OF JOINDER AGREEMENT]
Joinder Agreement
[Date]
To each of the Noteholders (as defined in the Guaranty
Agreement hereinafter referred to)
Ladies and Gentlemen:
Reference is made to the Guaranty Agreement, dated as of
May 30, 1996 (as amended, restated or otherwise modified from
time to time, the "Guaranty Agreement"), by Jabil Circuit of
Michigan, Inc., a Michigan corporation (together with its
successors and assigns, "Jabil Michigan"; together each other
Person that at any time becomes or has become a party to the
Guaranty Agreement, the "Guarantors"), in favor of each of the
Noteholders (as defined in the Agreement). Capitalized terms
used herein and not otherwise defined have the meanings ascribed
to such terms in the Guaranty Agreement.
[NEW GUARANTOR], a ________________________ (the "New
Guarantor"), agrees with you as follows:
1. Guaranty. The New Guarantor hereby unconditionally
and expressly agrees to become, and by execution and delivery of
this Agreement does become, a "Guarantor" under and as defined
in the Guaranty Agreement. Without limitation of the foregoing
or of anything in the Guaranty Agreement, by such execution and
delivery hereof the New Guarantor does become fully liable, as a
Guarantor, for the payment of the Guarantied Obligations as
further provided in Section 2 of the Guaranty Agreement. As
provided in Section 5.8 of the Guaranty Agreement, the Guaranty
Agreement is hereby amended, without any further action, to add
the New Guarantor as a Guarantor thereunder as if the New
Guarantor had been an original party to the Guaranty Agreement.
Annex 1 to the Guaranty Agreement is hereby amended by adding
the following address of the New Guarantor for purposes of
communications pursuant to Section 5.3 of the Guaranty
Agreement: [insert name and address of New Guarantor].
2. Further Assurances. The New Guarantor agrees to
cooperate with the Noteholders and execute such further
instruments and documents as the Required Holders shall
reasonably request to effect, to the reasonable satisfaction of
the Required Holders, the purposes of this Agreement.
3. Binding Effect. This Agreement shall be binding upon
the New Guarantor and shall inure to the benefit of the
Noteholders and their respective successors and assigns.
4. Governing Law. THIS AGREEMENT SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL
BE GOVERNED BY, THE LAW OF THE STATE OF NEW YORK, EXCLUDING
CHOICE-OF-LAW PRINCIPLES OF THE LAW OF SUCH STATE THAT WOULD
REQUIRE THE APPLICATION OF THE LAWS OF A JURISDICTION OTHER THAN
SUCH STATE.
IN WITNESS WHEREOF, the New Guarantor has caused this
Agreement to be executed on its behalf by one of its duly
authorized officers.
[NEW GUARANTOR]
By
Name:
Title:
EXHIBIT 4.10
[FORM OF PLEDGE AGREEMENT]
[Prepared by counsel for NBD Bank]
EXHIBIT 4.12
[FORM OF INTERCREDITOR AGREEMENT]
[Prepared by counsel for NBD Bank]
THIS LOAN AGREEMENT, dated as of May 30, 1996 (as
amended or modified from time to time, this "Agreement"), is by
and among JABIL CIRCUIT, INC., a Delaware corporation (the
"Company"), each of the Subsidiaries of the Company designated
in Section 1.1 as a Borrowing Subsidiary (individually, a
"Borrowing Subsidiary" and collectively, the "Borrowing
Subsidiaries") (the Company and the Borrowing Subsidiaries may
each be referred to as a "Borrower" and, collectively, as the
"Borrowers"), and the Banks set forth on the signature pages
hereof (collectively, the "Banks" and individually, a "Bank")
and NBD BANK, a Michigan banking corporation, as agent for the
Banks (in such capacity, the "Agent").
INTRODUCTION
The Borrowers desire to obtain a revolving credit
facility, including letters of credit and bank guarantees, in
the aggregate principal amount of $60,000,000 (or the equivalent
thereof in any other Permitted Currency), in order to refinance
certain existing indebtedness and provide funds for their
general corporate purposes, and the Banks are willing to
establish such a credit facility in favor of the Borrowers on
the terms and conditions herein set forth.
In consideration of the premises and of the mutual
agreements herein contained, the parties hereto agree as follows:
ARTICLE I.
DEFINITIONS
1.1 Certain Definitions. As used herein the following
terms shall have the following respective meanings:
"Advance" shall mean any Loan and any Letter of Credit
Advance.
"Affiliate" when used with respect to any person shall
mean any other person which, directly or indirectly, controls or
is controlled by or is under common control with such person.
For purposes of this definition "control" (including the
correlative meanings of the terms "controlled by" and "under
common control with"), with respect to any person, shall mean
possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of such
person, whether through the ownership of voting securities or by
contract or otherwise.
"Applicable Administrative Office" shall be: (a) with
respect to all Advances denominated in Dollars, the principal
office of the Agent in Detroit, Michigan; (b) with respect to
all other Advances, to the principal London office of the
Agent's affiliate, The First National Bank of Chicago, currently
located at First Chicago House, 90 Long Acre, London, England;
and (c) for all other purposes, the principal office of the
Agent in Detroit, Michigan.
"Applicable Margin" shall mean with respect to any
Floating Rate Loan, Eurocurrency Rate Loan, commitment fee or
S/L/C fee, as the case may be, the applicable percentage set
forth in the applicable table below as adjusted on the first
Business Day of the calendar month after the date on which the
financial statements and compliance certificate required
pursuant to Section 5.1(d)(iii) and (iv) are delivered to the
Banks and shall remain in effect until the next change to be
effected pursuant to this definition, provided, that, if any
financial statements referred to above are not delivered within
the time period specified above, then, until the financial
statements are delivered, the ratio of Funded Indebtedness to
Total Capitalization as of the end of the fiscal quarter that
would have been covered thereby shall for the purposes of this
definition be deemed to be greater than 0.60 to 1.0:
Applicable Margin
Funded Indebtedness to Total Capitalization Floating Rate Loan
Eurocur-rency Rate Loan Commitment Fee S/L/C Fee
Equal to or less than 0.40:1.0 0.00% 0.75% 0.175% 0.875%
Greater than 0.40:1.0 but less than or equal to 0.50:1.0 0.00%
1.00% 0.20% 1.125%
Greater than 0.50:1.0 0.00% 1.25% 0.25% 1.375%
"Balloon Payments" shall mean a certain balloon payment
due to NBD by the Company on March 31, 1996 in the amount of
$1,350,000 and a certain balloon payment due to Sun Bank of
Tampa Bay by the Company on June 30, 1996 in the amount of
$2,115,000, with respect to certain term loans owing by the
Company to such Banks.
"Bank Guarantee" shall mean each guarantee and any
other similar instrument having an analogous effect denominated
in Pounds Sterling, issued by the Issuing Bank hereunder in
favor of HM Customs and Excise for the benefit of a Borrower for
the purpose of guaranteeing value-added-tax and duty import
payments.
"Bank Obligations" shall mean all indebtedness,
obligations and liabilities, whether now owing or hereafter
arising, direct, indirect, contingent or otherwise, of the
Borrowers to the Agent or any Bank pursuant to the Loan
Documents.
"Borrowing" shall mean the aggregation of Advances made
to any Borrower, or continuations and conversions of such
Advances, made pursuant to Article II on a single date and for a
single Interest Period. A Borrowing may be referred to for
purposes of this Agreement by reference to the type of Loan
comprising the relating Borrowing, e.g., a "Floating Rate
Borrowing" if such Loans are Floating Rate Loans or a
"Eurocurrency Rate Borrowing" if such Loans are Eurocurrency
Rate Loans.
"Borrowing Base" shall mean, with respect to any
Borrower, as of any date the sum of (a) an amount equal to the
sum of (i) 90% of Eligible Accounts Receivable owing to such
Borrower by an account debtor located in the United States with
an Investment Grade Senior Debt Rating on the date of
calculation of the Borrowing Base, plus (ii) 80% of Eligible
Accounts Receivable owing to such Borrower by an account debtor
located in the United States other than account debtors
qualifying under clause (i) above, plus (iii) 80% of Eligible
Accounts Receivable owing to such Borrower by an account debtor
located outside of the United States but qualifying as an
"Eligible Account Receivable" pursuant to clause (g)(i) of such
definition, plus (iv) the applicable percentage indicated as the
"Advance Ratio" on Schedule 1.1(b) of Eligible Accounts
Receivable owing to such Borrower by an account debtor listed on
Schedule 1.1(b) pursuant to clause (g)(ii) of the definition of
"Eligible Account Receivable", plus (b) an amount equal to 50%
of Eligible Inventory of such Borrower not to exceed (i) on an
aggregate basis, the lesser of (A) $20,000,000 or (B) 30% of the
aggregate Borrowing Base as of such date or (ii) with respect to
each Borrower, 30% of the Borrowing Base of such Borrower as of
such date.
"Borrowing Base Certificate" for any date shall mean an
appropriately completed report as of such date in substantially
the form of Exhibit A hereto, certified as true and correct by a
duly authorized officer of the Borrower submitting such
Borrowing Base Certificate.
"Borrowing Subsidiary" shall mean each of the
Subsidiaries of the Company set forth on Schedule 1.1(a) on the
Effective Date together with any other Subsidiary of the Company
upon request by the Company to the Agent for designation of such
Subsidiary as a "Borrowing Subsidiary" hereunder, so long as (a)
all of the Banks approve, in their sole and absolute discretion,
the designation of such Subsidiary as a "Borrowing Subsidiary",
(b) each of the Guarantors guarantees the obligations of such
new Borrowing Subsidiary pursuant to the terms of the Guaranty,
(c) such new Borrowing Subsidiary delivers Notes executed in
favor of each Bank, all documents and items referred to in
Section 2.5 and Security Documents granting a security interest
in all assets pursuant to Section 2.11, all in form and
substance satisfactory to the Banks, and (d) the Company and
such new Borrowing Subsidiary execute an agreement in the form
of Exhibit B hereto.
"Business Day" shall mean a day other than a Saturday,
Sunday or other day on which (a) the Agent is not open to the
public for carrying on substantially all of its banking
functions or banks located in New York City are authorized or
required to close, and (b) if such reference relates to the date
for payment or purchase of any amount denominated in any
currency other than Dollars or in respect of any Eurocurrency
Rate Loan, banks are not generally open to the public for
carrying on substantially all of their banking functions in the
principal financial center of the country issuing such currency
and in London, England.
"Capital Expenditures" shall mean, for any period, the
additions to property, plant and equipment and other capital
expenditures of the Company and its Subsidiaries for such period
as the same are (or should be) set forth, in accordance with
Generally Accepted Accounting Principles, in consolidated
financial statements of the Company and its Subsidiaries for
such period.
"Capital Lease" of any person shall mean any lease
which, in accordance with Generally Accepted Accounting
Principles, is capitalized on the books of such person.
"Capital Stock" shall include all capital stock and any
securities exchangeable for or convertible into capital stock
and any warrants, rights or other options to purchase or
otherwise acquire capital stock or such securities or any other
form of equity securities.
"Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time, and the regulations thereunder.
"Collateral Agent" shall mean NBD.
"C/L/C" shall mean any commercial letter of credit
issued by the Issuing Bank hereunder.
"Commitment" shall mean, with respect to each Bank, the
commitment of each such Bank to make Loans and to participate in
Letter of Credit Advances made through the Issuing Bank pursuant
to Section 2.1(a) and (b), in amounts not exceeding in aggregate
principal amount outstanding at any time the respective
commitment amount for each such Bank set forth next to the name
of each such Bank in the signature pages hereof, as such amounts
may be reduced from time to time pursuant to Section 2.2.
"Consolidated" or "consolidated" shall mean, when used
with reference to any financial term in this Agreement, the
aggregate for the Company and its consolidated Subsidiaries of
the amounts signified by such term for all such persons
determined on a consolidated basis in accordance with Generally
Accepted Accounting Principles.
"Contingent Liabilities" of any person shall mean, as
of any date, all obligations of such person or of others for
which such person is contingently liable, as obligor, guarantor,
surety or in any other capacity, or in respect of which
obligations such person assures a creditor against loss or
agrees to take any action to prevent any such loss (other than
endorsements of negotiable instruments for collection in the
ordinary course of business), including without limitation all
reimbursement obligations of such person in respect of any
letters of credit, surety bonds or similar obligations and all
obligations of such person to advance funds to, or to purchase
assets, property or services from, any other person in order to
maintain the financial condition of such other person.
"Current Assets" and "Current Liabilities" of any
person shall mean, as of any date, all assets or liabilities,
respectively, of such person which, in accordance with Generally
Accepted Accounting Principles, should be classified as current
assets or current liabilities, respectively, on a balance sheet
of such person; provided, however, that, regardless of proper
classification under Generally Accepted Accounting Principles,
the Balloon Payments shall be excluded from the calculation of
Current Liabilities and the aggregate amount of outstanding
Revolving Credit Advances shall be included in the calculation
of Current Liabilities hereunder.
"Current Ratio" shall mean, as of any date, the ratio
of (a) Consolidated Current Assets to (b) Consolidated Current
Liabilities.
"Default" shall mean any of the events or conditions
described in Section 6.1 which might become an Event of Default
with notice or lapse of time or both.
"Dollar Equivalent" shall mean, with respect to each
Advance, the sum in Dollars resulting from the conversion of the
amount of such Advance from the Permitted Currency in which such
Advance is denominated into Dollars at the spot exchange rate
determined by the Agent to be available to it for the purchase
of such Permitted Currency with Dollars at approximately 11:00
a.m. local time of the Applicable Administrative Office on the
date any Advance is disbursed or rolled over, or on such other
date as a determination of the Dollar Equivalent is made.
"Dollars" and "$" shall mean the lawful money of the
United States of America. "Domestic Borrower" shall
mean any Borrower incorporated or formed in any State of the
United States of America or any political subdivision of any
such State.
"Domestic Subsidiary" shall mean any Subsidiary of any
Borrower incorporated or formed in any State of the United
States or any political subdivision of any such State.
"EBIT" shall mean, with respect to any person, for any
period, the sum of (a) Net Income or loss plus (b) all amounts
deducted in determining such Net Income or loss on account of
(i) all consolidated interest expense and (ii) taxes based on or
measured by income, all as determined in accordance with
Generally Accepted Accounting Principles.
"EBITDA" shall mean, with respect to any person, for
any period, EBIT for such period plus, to the extent deducted in
determining such EBIT, depreciation and positive amortization
expense, all as determined in accordance with Generally Accepted
Accounting Principles.
"Effective Date" shall mean the effective date
specified in the final paragraph of this Agreement.
"Eligible Accounts Receivable" shall mean, as of any
date, those trade accounts receivable owned by a Borrower or a
Guarantor which are payable in Dollars (or, with respect to
account debtors located outside of the United States which are
not excluded from the Borrowing Base under subparagraph (g)
below, payable in a Permitted Currency and valued on the basis
of the Dollar Equivalent thereof), valued at the face amount
thereof less sales, excise or similar taxes and less returns,
discounts, claims, credits and allowances of any nature at any
time issued, owing, granted, outstanding, available or claimed,
but shall not include any such account receivable (a) that is
not a bona fide existing obligation created by the sale and
actual delivery of inventory, goods or other property or the
furnishing of services or other good and sufficient
consideration to customers of such Borrower or such Guarantor in
the ordinary course of business, (b) that is more than 90 days
past due or that remains outstanding more than 90 days after the
earlier of the date of the invoice or the shipment of the
related inventory, goods or other property or the furnishing of
the related services or other consideration, (c) that is subject
to any dispute, contra-account, defense, offset or counterclaim
or any Lien, or the inventory, goods, property, services or
other consideration of which such account receivable constitutes
proceeds is subject to any such Lien, (d) in respect of which
the inventory, goods, property, services or other consideration
have been rejected or the amount is in dispute, (e) that is due
from any Affiliate or Subsidiary of the Borrower or the
Guarantor, (f) that has failed to meet established or customary
credit standards of the Borrower or the Guarantor, (g) that is
payable by any person located outside the United States (which
shall not be deemed to include any territories of the United
States) unless either (i) such receivable is insured by foreign
credit insurance, acceptable to the Agent, and the Agent is
listed as lender loss payee and additional insured with respect
to such insurance, or (ii) such receivable is owing by an
account debtor listed on Schedule 1.1(b), which Schedule may be
amended to add or delete account debtors with the consent of the
Majority Banks and, with respect to additions, the Company shall
have provided 90 days prior written notice to the Agent of such
requested addition together with any information reasonably
requested by the Agent with respect to such account debtor, and,
with respect to deletions, such deletion shall be effective 90
days after the Agent provides written notice to the Company of
any such deletion, (h) with respect to which any representation
or warranty contained in Section 4.11 is incorrect at any time,
(i) that is payable by the United States or any of its
departments, agencies or instrumentalities or by any state or
other foreign or domestic governmental entity, (j) that is
payable by any person that is the subject of any proceeding
seeking to adjudicate it a bankrupt or insolvent or seeking
liquidation, winding up or reorganization, arrangement,
adjustment, protection, relief or composition of it or its debts
under any law relating to bankruptcy, insolvency or
reorganization or relief or protection of debtors or seeking the
appointment of a receiver, trustee, custodian or other similar
official for it or for any substantial part of its property, or
that is not generally paying its debts as they become due or has
admitted in writing its inability to pay its debts generally or
has made a general assignment for the benefit of creditors, (k)
that is evidenced by a promissory note or other instrument, (l)
that is subordinate or junior in right or priority of payment to
any other unsecured obligation or claim, (m) that is payable by
Epson of America, Inc. or any of its Affiliates, or (n) that for
any other reason is at any time reasonably deemed by the Agent
and the Required Banks to be ineligible.
"Eligible Inventory" shall mean, as of any date, that
inventory owned by a Borrower or a Guarantor that constitutes
raw materials valued at the lower of cost or market on a FIFO
basis, but shall not include any such inventory (a) that does
not constitute raw materials readily salable or usable in the
business of the Borrower or the Guarantor, as the case may be,
(b) that is located outside the United States (which shall not
be deemed to include any territories of the United States),
except inventory owned by a Foreign Borrower which is located in
the same jurisdiction in which such Foreign Borrower is
organized, (c) that is subject to, or any accounts or other
proceeds resulting from the sale or other disposition thereof
could be subject to, any Lien, including any sale on approval or
sale or return transaction or any consignment, (d) that is not
in the possession of the Borrower or the Guarantor, as the case
may be, (e) that is held for lease or is the subject of any
lease, (f) that is subject to any trademark, trade name or
licensing arrangement, or any law, rule or regulation, (g) if
such inventory is located on premises not owned by the Borrower
or the Guarantor, as the case may be, and the landlord or other
owner of such premises shall not have waived its distraint, lien
and similar rights with respect to such inventory and shall not
have agreed to permit the Banks and the Agent to enter such
premises pursuant to a waiver and agreement of such person in
favor of and in form and substance acceptable to the Banks and
the Agent, (h) with respect to which any insurance proceeds are
not payable to the Banks and the Agent as a loss payee or are
payable to any loss payee other than the Banks and the Agent or
the Borrower or the Guarantor, as the case may be, (i) relating
to contracts or orders for Epson America, Inc., or its
Affiliates or (j) that for any other reason is at any time
reasonably deemed by the Agent and the Required Banks to be
ineligible.
"Environmental Certificate" shall mean an appropriately
completed environmental certificate in the form of Exhibit C
attached hereto, delivered by each Borrower, certified as true
and correct as of such date by an executive officer of each
Borrower acceptable to the Agent.
"Environmental Laws" at any date shall mean all
provisions of law, statute, ordinances, rules, regulations,
judgments, writs, injunctions, decrees, orders, awards and
standards which are applicable to any Borrower or any Subsidiary
and promulgated by the government of the United States of
America or any foreign government or by any state, province,
municipality or other political subdivision thereof or therein
or by any court, agency, instrumentality, regulatory authority
or commission of any of the foregoing concerning the protection
of, or regulating the discharge of substances into, the
environment.
"Equivalent" of an amount of one currency (the "first
currency") denominated in another currency (the "second
currency"), as of any date of determination, shall mean the
amount of the second currency which could be purchased with the
amount of the first currency at the spot exchange rate quoted
by the Agent at approximately 11:00 a.m. local time of the
Applicable Administrative Office on such date.
"ERISA" shall mean the Employee Retirement Income
Security Act of 1974, as amended from time to time, and the
regulations thereunder.
"ERISA Affiliate" shall mean, with respect to any
person, any trade or business (whether or not incorporated)
which, together with such person or any Subsidiary of such
person, would be treated as a single employer under Section 414
of the Code.
"Eurocurrency Rate" applicable to any Eurocurrency
Interest Period means, the per annum rate that is equal to the
sum of:
(a) the Applicable Margin, plus
(b) the rate per annum obtained by dividing (i)
the per annum rate of interest at which deposits in the
Permitted Currency in which such Eurocurrency Rate Loan is to be
denominated for such Eurocurrency Interest Period and in an
aggregate amount comparable to the amount of the related
Eurocurrency Rate Loan to be made by the Agent in its capacity
as a Bank hereunder are offered to the Agent by other prime
banks in the applicable interbank market selected by the Agent
in its reasonable discretion, at approximately 11:00 a.m. local
time in London, England on the second Eurocurrency Business Day
prior to the first day of such Eurocurrency Interest Period by
(ii) an amount equal to one minus the stated maximum rate
(expressed as a decimal) of all reserve requirements including,
without limitation, any marginal, emergency, supplemental,
special or other reserves, that is specified on the first day of
such Eurocurrency Interest Period by the Board of Governors of
the Federal Reserve System (or any successor agency thereto) or
the relevant fiscal or monetary authority for determining the
maximum reserve requirement with respect to eurocurrency funding
(currently referred to as "Eurocurrency liabilities" in
Regulation D of such Board) maintained by a member bank of such
System; all as conclusively determined by the Agent, absent
manifest error, such sum to be rounded up, if necessary, to the
nearest whole multiple of one one-hundredth of one percent
(1/100 of 1%); which Eurocurrency Rate shall change
simultaneously with any change in the Applicable Margin.
"Eurocurrency Business Day" shall mean, with respect to
any Eurocurrency Rate Loan, a day which is both a Business Day
and a day on which dealings in deposits of the relevant
Permitted Currency are carried out in the relevant interbank
market.
"Eurocurrency Interest Period" shall mean, with respect
to any Eurocurrency Rate Loan, the period commencing on the day
such Eurocurrency Rate Loan is made or converted to a
Eurocurrency Rate Loan and ending on the date one, two, three or
six months thereafter, as any Borrower may elect under Section
2.4 or 2.7, and each subsequent period commencing on the last
day of the immediately preceding Eurocurrency Interest Period
and ending on the date one, two, three or six months thereafter,
as a Borrower may elect under Section 2.4 or 2.7, provided,
however, that (a) any Eurocurrency Interest Period which
commences on the last Eurocurrency Business Day of a calendar
month (or on any day for which there is no numerically
corresponding day in the appropriate subsequent calendar month)
shall end on the last Eurocurrency Business Day of the
appropriate subsequent calendar month, (b) each Eurocurrency
Interest Period which would otherwise end on a day which is not
a Eurocurrency Business Day shall end on the next succeeding
Eurocurrency Business Day or, if such next succeeding
Eurocurrency Business Day falls in the next succeeding calendar
month, on the next preceding Eurocurrency Business Day, and (c)
no Eurocurrency Interest Period shall be permitted which would
end after the Termination Date.
"Eurocurrency Rate Loan" shall mean any Loan which
bears interest at the Eurocurrency Rate.
"Event of Default" shall mean any of the events or
conditions described in Section 6.1.
"Federal Funds Rate" shall mean the per annum rate that
is equal to the per annum rate established and announced by the
Federal Reserve Bank of New York from time to time as the
opening federal funds rate; as conclusively determined by the
Agent, absent manifest error, such rate to be rounded up, if
necessary, to the nearest whole multiple of one one-hundredth of
one percent (1/100 of 1%), which Federal Funds Rate shall change
simultaneously with any change in such announced rates.
"Fixed Charge Coverage Ratio" of any person shall mean,
as of any date, the ratio of (a) Consolidated EBITDA as
calculated for the four most recently ended consecutive fiscal
quarters of the Company plus all payments relating to operating
leases of such person during such period to (b) all consolidated
interest expense during such period for such person, plus all
payments relating to operating leases of such person.
"Floating Rate" shall mean, as of any date, the per
annum rate equal to the sum of (i) the Applicable Margin, plus
(ii) greater of (x) the Prime Rate in effect from time to time,
or (y) the Federal Funds Rate in effect from time to time; which
Floating Rate shall change simultaneously with any change in
such Prime Rate or Federal Funds Rate, as the case may be.
"Floating Rate Loan" shall mean any Loan which bears
interest at the Floating Rate.
"Foreign Borrower" shall mean any Borrower incorporated
or formed in any jurisdiction other than any State of the United
States of America or any political subdivision of any such State.
"Foreign Subsidiary" shall mean any Subsidiary
incorporated or formed in any jurisdiction other than any State
of the United States of America or any political subdivision of
any such State.
"Funded Indebtedness" of any person shall mean, as of
any date, all Indebtedness of such person for borrowed money,
including without limitation, all obligations under any Capital
Lease, other than Subordinated Debt.
"Generally Accepted Accounting Principles" shall mean
Generally Accepted Accounting Principles in effect from time to
time and applied on a basis consistent with that reflected in
the financial statements referred to in Section 4.6.
"Guarantor" shall mean each Domestic Borrower and each
Domestic Subsidiary of any Borrower and each person becoming a
Domestic Borrower or Domestic Subsidiary of any Borrower, or
otherwise entering into a Guaranty from time to time.
"Guaranty" shall mean the guaranty entered into by each
Guarantor for the benefit of the Agent and the Banks pursuant to
Article VIII of this Agreement and any other guaranties entered
into by a Guarantor pursuant to Section 5.1(f), as amended or
modified from time to time.
"Indebtedness" of any person shall mean (i)
indebtedness for borrowed money, (ii) obligations evidenced by
bonds, debentures, notes or other similar instruments, (iii)
obligations to pay the deferred purchase price of property or
services, except for trade accounts payable arising in the
ordinary course of business that are not more than 90 days past
due or as are reasonably being contested, (iv) obligations as
lessee under leases which have been in accordance with Generally
Accepted Accounting Principles, recorded as Capital Leases, (v)
obligations to purchase property or services if payment is
required regardless of whether such property is delivered or
services are performed (generally called "take or pay"
contracts), (vi) obligations in respect of currency or interest
rate swaps or comparable transactions valued at the maximum
termination payment payable by the obligor, (vii) all
obligations of others similar in character to those described in
clauses (i) through (iv) of this definition for which such
person is contingently liable, as guarantor, surety,
accommodation party, partner or in any other capacity, or in
respect of which obligations such person assures a creditor
against loss or agrees to take any action to prevent any such
loss (other than endorsements of negotiable instruments for
collection in the ordinary course of business), including
without limitation all reimbursement obligations of such person
in respect of letters of credit, surety bonds or similar
obligations and all obligations of such person to advance funds
to, or to purchase assets, property or services from, any other
person in order to maintain the financial condition of such
other person and (viii) liabilities in respect of unfunded
vested benefits under plans covered by Title IV of ERISA.
"Intercreditor Agreement" shall mean the Intercreditor
Agreement dated of approximately even date herewith, as amended
or modified from time to time, among the Company, the Banks, the
Agent, the Collateral Agent and the Note Purchasers.
"Interest Payment Date" shall mean (a) with respect to
any Eurocurrency Rate Loan, the last day of each Interest Period
with respect to such Eurocurrency Rate Loan and, in the case of
any Interest Period exceeding three months, those days that
occur during such Interest Period at intervals of three months
after the first day of such Interest Period, and (b) in all
other cases, the last Business Day of each August, November,
February and May occurring after the date hereof, commencing
with the first such Business Day occurring after the date of
this Agreement.
"Interest Period" shall mean any Eurocurrency Interest
Period.
"Investment Grade Senior Debt Rating" means, at any
date, a person's senior unsecured long term debt is rated BBB-
or better by Standard & Poor's Corporation and Baa3 or better by
Moody's Investor Service, Inc.
"Issuing Bank" shall mean NBD, together with its
successors and assigns, and any other Bank hereafter designated
as an "Issuing Bank" upon the prior written agreement of the
Company, the Agent and such Bank.
"Jabil Malaysia" shall mean Jabil Circuit Sbn Bhd., a
corporation organized and existing under the laws of Malaysia.
"Jabil Ltd" shall mean Jabil Circuit Ltd., a
corporation organized and existing under the laws of Scotland.
"Letter of Credit" shall mean a Bank Guarantee, S/L/C
or C/L/C having a stated expiry date or a date by which any
draft drawn thereunder must be presented not later than twelve
months after the date of issuance and not later than the fifth
Business Day before the Termination Date, issued by the Issuing
Bank on behalf of the Banks for the account of any Borrower
under an application and related documentation acceptable to the
Issuing Bank requiring, among other things, immediate
reimbursement by such Borrower to the Issuing Bank in respect of
all drafts or other demand for payment honored thereunder and
all reasonable and customary expenses paid or incurred by the
Issuing Bank relative thereto.
"Letter of Credit Advance" shall mean any issuance of a
Letter of Credit under Section 2.4 made pursuant to Section 2.1
in which each Bank acquires a pro rata participation (based on
such Bank's Commitment) pursuant to Section 2.4(d).
"Letter of Credit Documents" shall have the meaning set
forth in Section 3.3(b).
"Lien" shall mean any pledge, assignment, deed of
trust, hypothecation, mortgage, security interest, conditional
sale or title retaining contract, financing statement filing, or
any other type of lien, charge, encumbrance or other similar
claim or right.
"Loan" shall mean any Revolving Credit Loan or any
Swing Line Loan, as the context may require.
"Loan Documents" shall mean this Agreement, the Notes,
the Letter of Credit Documents, the Environmental Certificate,
the Security Documents and any other agreement, instrument or
document executed at any time in connection with this Agreement.
"Majority Banks" shall mean Banks holding not less than
fifty-one percent (51%) of the aggregate principal amount of the
Advances then outstanding (or fifty-one percent (51%) of the
Commitments if no Advances are then outstanding).
"Material Adverse Effect" shall mean a material adverse
effect on (a) the business, assets, operations or financial
condition of any Borrower or any Subsidiary, (b) the ability of
any Borrower to perform its obligations under any Loan Document,
or (c) the validity or enforceability of any Loan Document or
the rights or remedies of the Agent or the Banks under any Loan
Document.
"Multiemployer Plan" shall mean any "multiemployer
plan" as defined in Section 4001(a)(3) of ERISA or Section
414(f) of the Code.
"NBD" shall mean NBD Bank, a Michigan banking
corporation, together with its branches and affiliates,
including without limitation, The First National Bank of Chicago
and its branches.
"Net Cash Proceeds" shall mean, in connection with any
issuance or sale of any Capital Stock, the cash proceeds
received from such issuance, net of investment banking fees,
reasonable and documented attorneys' fees, accountants' fees,
underwriting discounts and commissions and other customary fees
and other costs and expenses actually incurred in connection
therewith.
"Net Income" of any person shall mean, for any period,
the net income (after deduction for income and other taxes of
such person determined by reference to income or profits of such
person) of such person for such period, all as determined in
accordance with Generally Accepted Accounting Principles.
"Notes" shall mean the Revolving Credit Notes and the
Swing Line Notes; "Note" shall mean any Revolving Credit Note or
any Swing Line Note.
"Note Purchase Agreement" shall mean the Note Purchase
Agreement between the Company and the Note Purchasers dated as
of May 30, 1996, as amended or modified from time to time.
"Note Purchasers" shall mean Connecticut General Life
Insurance Company, Life Insurance Company of North America and
Metropolitan Life Insurance Company.
"Original Dollar Amount" shall mean, with respect to
any Advance, the Equivalent in Dollars of the original principal
amount of such Advance specified in the related request therefor
given by a Borrower pursuant to Section 2.4 (a) as such amount
is reduced by payments of principal made in respect of such
Advance in Dollars (or the Dollar Equivalent thereof in the case
of a payment made in a Permitted Currency other than Dollars)
and (b) as such amount is adjusted pursuant to Section 3.1(c).
"Overdue Rate" shall mean (a) in respect of principal
of Floating Rate Loans, a rate per annum that is equal to the
sum of three percent (3%) per annum plus the Floating Rate, (b)
in respect of principal of Eurocurrency Rate Loans or Swing Line
Loans, a rate per annum that is equal to the sum of three
percent (3%) per annum plus the per annum rate in effect thereon
until the end of the then current Interest Period for such Loan
and, thereafter, a rate per annum that is equal to the sum of
three percent (3%) per annum plus, with respect to Loans
denominated in Dollars, the Floating Rate and, with respect to
Loans denominated in any other Permitted Currency, the relevant
market rate for such Permitted Currency plus the Applicable
Margin for Eurocurrency Rate Loans, and (c) in respect of other
amounts payable by any Borrower hereunder (other than interest),
a per annum rate that is equal to the sum of three percent (3%)
per annum plus the Floating Rate.
"PBGC" shall mean the Pension Benefit Guaranty
Corporation and any entity succeeding to any or all of its
functions under ERISA.
"Permitted Currency" shall mean Dollars and any
currency which is freely transferable and convertible into
Dollars and is either (a) issued by an OECD country (as such
designation shall change from time to time) and is approved by
the Banks or (b) any other currency approved by the Banks. A
list of all OECD countries as of the Effective Date is set forth
in Schedule 1.1(c), which Schedule shall be updated, if
necessary, by the Agent on each anniversary of the Effective
Date.
"Permitted Liens" shall mean Liens permitted by Section
5.2(f) hereof.
"Person" or "person" shall include an individual, a
corporation, a limited liability company, an association, a
partnership, a trust or estate, a joint stock company, an
unincorporated organization, a joint venture, a trade or
business (whether or not incorporated), a government (foreign or
domestic) and any agency or political subdivision thereof, or
any other entity.
"Plan" shall mean, with respect to any person, any
pension plan (other than a Multiemployer Plan) subject to Title
IV of ERISA or to the minimum funding standards of Section 412
of the Code which has been established or maintained by such
person, any Subsidiary of such person or any ERISA Affiliate, or
by any other person if such person, any Subsidiary of such
person or any ERISA Affiliate could have liability with respect
to such pension plan.
"Pledge Agreement" shall mean the Pledge Agreement
entered into by the Company in favor of the Collateral Agent for
the benefit of the Banks and the Note Purchasers pursuant to the
Intercreditor Agreement in substantially the form of Exhibit D
hereto, as amended or modified from time to time.
"Prime Rate" shall mean the per annum rate announced by
the Agent from time to time as its "prime rate" (it being
acknowledged that such announced rate may not necessarily be the
lowest rate charged by the Agent to any of its customers), which
Prime Rate shall change simultaneously with any change in such
announced rate.
"Private Placement Debt" shall mean the Indebtedness
evidenced by the Senior Notes.
"Private Placement Documents" shall mean the Note
Purchase Agreement, the Senior Notes, together with any and all
other documents, instruments and certificates executed and
delivered pursuant thereto, as amended or modified from time to
time and any other documents executed in exchange or replacement
therefor.
"Prohibited Transaction" shall mean any non-exempt
transaction involving any Plan which is proscribed by Section
406 of ERISA or Section 4975 of the Code.
"Reportable Event" shall mean a reportable event as
described in Section 4043(b) of ERISA including those events as
to which the thirty (30) day notice period is waived under Part
2615 of the regulations promulgated by the PBGC under ERISA.
"Required Banks" shall mean Banks holding not less than
sixty-six percent (66%) of the aggregate principal amount of the
Advances then outstanding (or sixty-six percent (66%) of the
Commitments if no Advances are then outstanding).
"Requirement of Law" shall mean as to any person, the
certificate of incorporation and by-laws or other organizational
or governing documents of such person, and any law, treaty, rule
or regulation or determination of an arbitrator or a court or
other governmental authority, in each case applicable to or
binding upon such person or any of its property or to which such
person or any of its property is subject.
"Revolving Credit Advance" shall mean any Revolving
Credit Loan and any Letter of Credit Advance.
"Revolving Credit Note" shall mean any promissory note
of any Borrower evidencing the Revolving Credit Advances in
substantially the form annexed hereto as Exhibit E, as amended
or modified from time to time and together with any promissory
note or notes issued in exchange or replacement therefor.
"Revolving Credit Loan" shall mean any Borrowing under
Section 2.4 evidenced by the Revolving Credit Notes and made
pursuant to Section 2.1(a).
"Security Documents" shall mean, collectively, the
Pledge Agreement, the Guaranties, the Intercreditor Agreement
and all other related agreements and documents, including
financing statements and similar documents delivered pursuant to
this Agreement or otherwise entered into by any person to secure
the Advances.
"Senior Notes" shall mean the 6.89% Senior Notes due
May __, 2004 issued pursuant to the Note Purchase Agreement.
"S/L/C" shall mean any standby letter of credit issued
by the Issuing Bank hereunder.
"Subordinated Debt" of any person shall mean, as of any
date, that Indebtedness of such person for borrowed money which
is expressly subordinate and junior in right and priority of
payment to the Advances and other Indebtedness of such person to
the Banks in manner and by agreement satisfactory in form and
substance to the Required Banks.
"Subsidiary" of any person shall mean any other person
(whether now existing or hereafter organized or acquired) in
which (other than directors' qualifying shares required by law)
at least a majority of the securities or other ownership
interests of each class having ordinary voting power or
analogous right (other than securities or other ownership
interests which have such power or right only by reason of the
happening of a contingency), at the time as of which any
determination is being made, are owned, beneficially and of
record, by such person or by one or more of the other
Subsidiaries of such person or by any combination thereof.
Unless otherwise specified, reference to "Subsidiary" shall mean
a Subsidiary of the Company.
"Swing Line Bank" shall mean NBD, together with its
successors and assigns, and any other Bank hereafter designated
as a "Swing Line Bank" upon the prior written agreement of the
Company, the Agent and such Bank.
"Swing Line Facility" shall have the meaning specified
in Section 2.1(b).
"Swing Line Interest Period" shall mean, with respect
to any Swing Line Loan, the period commencing on the day such
Swing Line Loan is made and ending on the date agreed upon
between the Borrower requesting such Loan and the Swing Line
Bank at the time such Swing Line Loan is made, provided no Swing
Line Interest Period which would end after the Termination Date
shall be permitted.
"Swing Line Loan" shall mean any borrowing under
Section 2.4 evidenced by a Swing Line Note and made pursuant to
Section 2.1(b).
"Swing Line Note" means any promissory note of any
Borrower payable to the order of the Swing Line Bank, in
substantially the form annexed hereto as Exhibit F, as amended
or modified from time to time and together with any promissory
note or notes issued in exchange or replacement therefor.
"Swing Line Rate" shall mean, with respect to any Swing
Line Rate Loan, the rate per annum agreed upon between the
Borrower requesting such Loan and the Swing Line Bank at the
time such Swing Line Rate Loan is made.
"Tangible Net Worth" of any person shall mean, as of
any date, (a) the amount of any capital stock, paid in capital
and similar equity accounts plus (or minus in the case of a
deficit) the capital surplus and retained earnings of such
person and the amount of any foreign currency translation
adjustment account shown as a capital account of such person,
less (b) the net book value of all items of the following
character which are included in the assets of such person: (i)
goodwill, including, without limitation, the excess of cost over
book value of any asset, (ii) organization or experimental
expenses, (iii) unamortized debt discount and expense, (iv)
patents, trademarks, trade names and copyrights, (v) treasury
stock, (vi) franchises, licenses and permits, and (vii) other
assets which are deemed intangible assets under Generally
Accepted Accounting Principles.
"Termination Date" shall mean the earlier to occur of
(a) May 30, 1998 and (b) the date on which the Commitments shall
be terminated pursuant to Section 2.2 or 6.2.
"Total Capitalization" of any person shall mean the sum
of (a) Tangible Net Worth plus (b) Funded Indebtedness plus (c)
deferred income taxes of such person.
"Unfunded Benefit Liabilities" shall mean, with respect
to any Plan as of any date, the amount of the unfunded benefit
liabilities determined in accordance with Section 4001(a)(18) of
ERISA.
1.2 Other Definitions; Rules of Construction. As used
herein, the terms "Agent", "Banks", "Company", "Borrower",
"Borrowers", "Borrowing Subsidiary", "Borrowing Subsidiaries"
and "this Agreement" shall have the respective meanings ascribed
thereto in the introductory paragraph of this Agreement. Such
terms, together with the other terms defined in Section 1.1,
shall include both the singular and the plural forms thereof and
shall be construed accordingly. All computations required
hereunder and all financial terms used herein shall be made or
construed in accordance with Generally Accepted Accounting
Principles unless such principles are inconsistent with the
express requirements of this Agreement provided that, if the
Company notifies the Agent that the Company wishes to amend any
covenant in Article V to eliminate the effect of any change in
Generally Accepted Accounting Principles in the operation of
such covenant (or if the Agent notifies the Company that the
Required Banks wish to amend Article V for such purpose), then
the Borrowers' compliance with such covenant shall be determined
on the basis of Generally Accepted Accounting Principles in
effect immediately before the relevant change in Generally
Accepted Accounting Principles became effective, until either
such notice is withdrawn or such covenant is amended in a manner
satisfactory to the Borrowers and the Required Banks. Use of
the terms "herein", "hereof", and "hereunder" shall be deemed
references to this Agreement in its entirety and not to the
Section or clause in which such term appears. References to
"Sections" and "subsections" shall be to Sections and
subsections, respectively, of this Agreement unless otherwise
specifically provided.
ARTICLE II. THE
COMMITMENTS AND THE ADVANCES
2.1 Commitments of the Banks.
(a) Revolving Credit Advances. Each Bank agrees,
for itself only, subject to the terms and conditions of this
Agreement, to make Revolving Credit Loans to the Borrowers
pursuant to Section 2.4 and to participate in Letter of Credit
Advances to the Borrowers pursuant to Section 2.4, from time to
time from and including the Effective Date to but excluding the
Termination Date, not to exceed in aggregate principal amount at
any time outstanding the amount determined pursuant to Section
2.1(c). On the date of each Advance, the Dollar Equivalent on
such date of all Advances, including the Advances to be made or
requested on such date, shall not exceed the aggregate
Commitments.
(b) Swing Line Loan. (i) Any Borrower may
request the Swing Line Bank to make, and the Swing Line Bank
may, in its sole discretion provided that the requirements of
Section 2.6 are complied with by the Borrowers at the time of
such request, make, Swing Line Loans to any Borrower from time
to time on any Business Day during the period from the Effective
Date until the Termination Date in an aggregate principal amount
not to exceed at any date the lesser of (A) $5,000,000 (or the
Dollar Equivalent thereof in any other Permitted Currency) (the
"Swing Line Facility") and (B) the aggregate of the unused
portions of the Commitments of the Banks as of such date. Each
Bank's Commitment shall be deemed utilized by an amount equal to
such Bank's pro rata share (based on such Bank's Commitment) of
each Swing Line Loan for purposes of determining the amount of
Revolving Credit Advances required to be made by such Bank, but
no Bank's Commitment, other than the Swing Line Bank, shall be
deemed utilized for purposes of determining commitment fees
under Section 2.3(a). Swing Line Loans shall bear interest at
the Floating Rate or at the Swing Line Rate, as elected by the
Borrower requesting such Loan pursuant to Section 2.4. Within
the limits of the Swing Line Facility, so long as the Swing Line
Bank, in its sole discretion, elects to make Swing Line Loans,
the Borrowers may borrow and reborrow under this Section
2.1(b)(i).
(ii) The Swing Line Bank may at any time in
its sole and absolute discretion require that any Swing Line
Loan be refunded by a Revolving Credit Loan which is, in the
case of any Swing Line Loan denominated in Dollars, a Floating
Rate Loan, and in the case of any Swing Line Loan in any other
Permitted Currency, a Eurocurrency Rate Loan in the same
Permitted Currency in which such Swing Line Loan is denominated,
and upon written notice thereof by the Swing Line Bank to the
Agent, the Banks and the Borrower for any such Swing Line Loan,
such Borrower shall be deemed to have requested a Revolving
Credit Loan for the account of such Borrower for any such Swing
Line Loan bearing interest at the Floating Rate or Eurocurrency
Rate with an Interest Period of one month, as provided above, in
an amount equal to the amount of any such Swing Line Loan in the
same Permitted Currency in which such Swing Line Loan is
denominated (unless a Default or Event of Default has occurred
and is continuing at which time all Swing Line Loans being
refunded under this Section 2.1(b)(ii) or Section 2.1(b)(iii)
may, at the option of the Required Banks, be converted to
Dollars), and such Revolving Credit Loan shall be made to refund
such Swing Line Loan. Each Bank shall be absolutely and
unconditionally obligated (except as set forth in Section
2.1(b)(i)) to fund its pro rata share (based on such Bank's
Commitment) of such Revolving Credit Loan or, if applicable,
purchase a participating interest in the Swing Line Loans
pursuant to Section 2.1(b)(iii) and such obligation shall not be
affected by any circumstance, including, without limitation, (A)
any set-off, counterclaim, recoupment, defense or other right
which such Bank or any Borrower or any of their respective
Subsidiaries may have against the Agent, any Borrower or any of
their respective Subsidiaries or anyone else for any reason
whatsoever; (B) the occurrence or continuance of a Default or an
Event of Default, subject to Section 2.1(b)(iii); (C) any
adverse change in the condition (financial or otherwise) of any
Borrower or any of its Subsidiaries; (D) any breach of this
Agreement by any Borrower or any of their respective
Subsidiaries or any other Bank; or (E) any other circumstance,
happening or event whatsoever, whether or not similar to any of
the foregoing (including any Borrower's failure to satisfy any
conditions contained in Article II or any other provision of
this Agreement).
(iii) If, for any reason (including
without limitation as a result of the occurrence of an Event of
Default with respect to any Borrower pursuant to Section
6.1(i)), Revolving Credit Loans may not be made by the Banks as
described in Section 2.1(b)(ii), then (A) each Borrower agrees
that each Swing Line Loan not paid pursuant to Section
2.1(b)(ii) shall bear interest, payable on demand by the Agent,
at the Overdue Rate then applicable to Floating Rate Loans with
respect to Swing Line Loans denominated in Dollars and at the
Overdue Rate then applicable to Eurocurrency Rate Loans in the
Permitted Currency in which such Swing Line Loan is denominated
in all other cases, and (B) effective on the date each such
Revolving Credit Loan would otherwise have been made, each Bank
severally agrees that it shall unconditionally and irrevocably,
without regard to the occurrence of any Default or Event of
Default, in lieu of deemed disbursement of loans, to the extent
of such Bank's Commitment, purchase a participating interest in
the Swing Line Loans by paying its participation percentage
thereof. Each Bank will immediately transfer to the Agent, in
same day funds, the amount of its participation. Each Bank
shall share on a pro rata basis (calculated by reference to its
Commitment) in any interest which accrues thereon and in all
repayments thereof. If and to the extent that any Bank shall
not have so made the amount of such participating interest
available to the Agent, such Bank and the Borrower of such Swing
Line Loan severally agree to pay to the Agent forthwith on
demand such amount together with interest thereon, for each day
from the date of demand by the Agent until the date such amount
is paid to the Agent, at (x) in the case of any Borrower, at the
interest rate specified above and (y) in the case of such Bank,
the Federal Funds Rate.
(c) Limitation on Amount of Advances.
Notwithstanding anything in this Agreement to the contrary, (i)
the Dollar Equivalent of the aggregate principal amount of the
Revolving Credit Advances made by any Bank at any time
outstanding shall not exceed the amount of its respective
Commitment as of the date any such Advance is made and (ii) the
Dollar Equivalent of the aggregate principal amount of all
Revolving Credit Advances at any time outstanding to any
Borrower shall not exceed the lesser of (A) the Borrowing Base
of such Borrower as of the close of business on the last day of
the week next preceding the date any such Advance is made and
(B) the amount set forth next to the name of such Borrower set
forth on Schedule 1.1(a), provided, however, that the Dollar
Equivalent of the aggregate principal amount of Letter of Credit
Advances (other than Bank Guarantees) outstanding at any time
shall not exceed $5,000,000 and the Dollar Equivalent of the
aggregate principal amount of Bank Guarantees outstanding at any
time shall not exceed $3,000,000.
2.2 Termination and Reduction of Commitments. (a) (i)
The Company shall have the right to terminate or reduce the
Commitments at any time and from time to time at its option,
provided that (A) the Company shall give five days' prior
written notice of such termination or reduction to the Agent
(with sufficient executed copies for each Bank) specifying the
amount and effective date thereof, (B) each partial reduction of
the Commitments shall be in a minimum amount of $5,000,000 and
in integral multiples of $1,000,000 and shall reduce the
Commitments of all of the Banks proportionately in accordance
with the respective commitment amounts for each such Bank set
forth in the signature pages hereof next to the name of each
such Bank, (C) no such termination or reduction shall be
permitted with respect to any portion of the Commitments as to
which a request for a Borrowing pursuant to Section 2.4 is then
pending and (D) the Commitments may not be terminated if any
Advances are then outstanding and may not be reduced below the
principal amount of Advances then outstanding.
The Commitments or any portion thereof terminated or reduced
pursuant to this Section 2.2(a), whether optional or mandatory,
may not be reinstated. The Borrowers shall immediately prepay
the Loans to the extent they exceed the reduced aggregate
Commitments pursuant hereto, and any reduction hereunder shall
reduce the Commitment amount of each Bank proportionately in
accordance with the respective Commitment amounts for each such
Bank set forth on the signature pages hereof next to the name of
each such Bank.
(b) For purposes of this Agreement, a Letter of
Credit Advance (i) shall be deemed outstanding in an amount
equal to the sum of the maximum amount available to be drawn
under the related Letter of Credit on or after the date of
determination and on or before the stated expiry date thereof
plus the amount of any draws under such Letter of Credit that
have not been reimbursed by a Revolving Credit Loan as provided
in Section 3.3 and (ii) shall be deemed outstanding at all times
on and before such stated expiry date or such earlier date on
which all amounts available to be drawn under such Letter of
Credit have been fully drawn, and thereafter until all related
reimbursement obligations have been paid. Upon each payment
made by the Agent in respect of any draft or other demand for
payment under any Letter of Credit, the amount of any Letter of
Credit Advance outstanding immediately prior to such payment
shall be automatically reduced by the amount of each Revolving
Credit Loan deemed advanced in respect of the related
reimbursement obligation of the Borrower.
2.3 Fees. (a) The Company agrees to pay to the Banks
a commitment fee on the daily average unused amount of the
Commitments, for the period from the Effective Date to but
excluding the Termination Date, at a rate equal to the
Applicable Margin. Accrued commitment fees shall be payable
quarterly in arrears in Dollars on the last Business Day of each
August, November, February and May, commencing on the first such
Business Day occurring after the date of this Agreement, and on
the Termination Date. For the purpose of calculating the
commitment fee under this Section 2.3(a) only, but not for the
purpose of calculating the Borrowing Base availability, the
aggregate amount of S/L/Cs and Bank Guarantees outstanding shall
constitute usage of the Commitment while the aggregate amount of
C/L/Cs outstanding shall not constitute usage of the Commitment.
All Letters of Credit shall constitute usage of the Borrowing
Base. For the purpose of calculating the commitment fee under
this Section 2.3(a) only, but not for the purpose of calculating
the available Commitment of each Bank, Swing Line Loans shall
not constitute usage of the Commitment for any Bank other than
the Swing Line Bank.
(b) The Borrowers agree to pay (i) with respect
to S/L/Cs, (A) a fee to Agent for the benefit of the Banks
computed at the Applicable Margin on the maximum amount
available to be drawn from time to time under such S/L/C for the
period from and including the date of issuance of such S/L/C to
and including the stated expiry date of such S/L/C, and (B) to
pay an additional fee to the Issuing Bank for its own account
computed at the rate of one-eighth of one percent (1/8 of 1%)
per annum of such maximum amount for such period, which fee
shall be paid annually in advance at the time such S/L/C is
issued or amended, (ii) with respect to C/L/Cs, a fee to the
Agent for the ratable benefit of the Banks computed at the rate
of three-eighths of one percent (3/8 of 1%) per annum, which
fees shall be paid at each time as any C/L/C is presented or
drawn upon, in whole or in part on the amount of such C/L/C
which is presented or drawn upon, in whole or in part, and (iii)
with respect to Bank Guarantees, a fee to the Agent for the
ratable benefit of the Banks computed at the rate of
seven-eighths of one percent (7/8 of 1%) per annum on the
maximum amount available to be drawn from time to time under
such Bank Guarantee for the period from and including the date
of issuance of such Bank Guarantee to and including the stated
expiry date of such Bank Guarantee, which fee shall be paid by
the Borrower in advance at three month intervals from issuance
of the Bank Guarantee. Such fees are nonrefundable and the
Borrowers shall not be entitled to any rebate of any portion
thereof if such Letter of Credit does not remain outstanding
through its stated expiry date or for any other reason. The
Borrowers further agree to pay to the Issuing Bank, on demand,
such other customary and reasonable administrative fees, charges
and expenses of the Issuing Bank in respect of the issuance,
negotiation, acceptance, amendment, transfer and payment of such
Letter of Credit or otherwise payable pursuant to the
application and related documentation under which such Letter of
Credit is issued in accordance with a schedule of fees provided
by the Issuing Bank to the Company.
(c) The Company agrees to pay to the Agent an
arrangement fee and an agency fee for its services as Agent
under this Agreement in such amounts as may from time to time be
agreed upon by the Company and the Agent.
2.4 Disbursement of Advances. (a) Except with respect
to Swing Line Loans, a Borrower shall give the Agent notice of
its request for each Advance in substantially the form of
Exhibit G hereto at the principal office of the Agent and at the
Applicable Administrative Office with respect to such Advance
not later than 12:00 p.m. local time of the Applicable
Administrative Office (i) three Eurocurrency Business Days prior
to the date such Advance is requested to be made if such
Borrowing is to be made as a Eurocurrency Rate Borrowing, and
(ii) three Business Days prior to the date any Letter of Credit
Advance is requested to be made and (iii) on the date such
Advance is requested to be made if such Advance is to be made as
a Floating Rate Borrowing. Such notice shall specify whether a
Eurocurrency Rate Loan, Floating Rate Loan or a Letter of Credit
Advance is requested and, in the case of each requested
Eurocurrency Rate Loan, the Interest Period to be initially
applicable to such Loan and the Permitted Currency in which such
Loan is to be denominated. With respect to Swing Line Loans, a
Borrower shall give the Swing Line Bank notice of its request
for each Swing Line Loan in substantially the form of Exhibit G
hereto at the Applicable Administrative Office with respect to
such Advance not later than 1:00 p.m. local time of the
Applicable Administrative Office on the same Business Day any
Swing Line Loan is requested to be made which notice shall
specify the Permitted Currency in which such Loan is to be
denominated and whether such Borrower elects the Swing Line Rate
or the Floating Rate with respect to such Swing Line Loan. The
Agent, on the same day any such notice is given, shall provide
notice of such requested Loan, other than any Swing Line Loan,
to each Bank (which notice shall be provided by 2:00 p.m. local
time of the Applicable Administrative Office with respect to
Floating Rate Loans). Subject to the terms and conditions of
this Agreement, the proceeds of each such requested Loan shall
be made available to the Borrower requesting such Loan by
depositing the proceeds thereof, in immediately available,
freely transferable cleared funds, in the case of any Loan
denominated in Dollars in an account maintained and designated
by such Borrower, and, in all other cases, in an account
maintained and designated by such Borrower at a bank acceptable
to the Agent in the principal financial center of the country
issuing the Permitted Currency in which such Loan is denominated
or in such other place specified by the Agent. Subject to the
terms and conditions of this Agreement, the Issuing Bank shall,
on the date any Letter of Credit Advance is requested to be
made, issue the related Letter of Credit on behalf of the Banks
for the account of the Borrower requesting such Letter of
Credit. Notwithstanding anything herein to the contrary, the
Issuing Bank may decline to issue any requested Letter of Credit
on the basis that the beneficiary, the purpose of issuance or
the terms or the conditions of drawing are unacceptable to it in
its reasonable discretion.
(b) Each Bank, on the date any Loan is requested
to be made, shall make its pro rata share of such Loan available
in immediately available, freely transferable cleared funds for
disbursement to the Borrower requesting such Loan pursuant to
the terms and conditions of this Agreement, in the case of any
Loan denominated in Dollars, at the principal office of the
Agent and, in all other cases, to the account of the Agent at
its designated branch or correspondent bank in the country
issuing such Permitted Currency in which such Loan is
denominated or at such other place specified by the Agent.
Unless the Agent shall have received notice from any Bank prior
to the date such Loan is requested to be made under this Section
2.4 that such Bank will not make available to the Agent such
Bank's pro rata portion of such Loan, the Agent may assume that
such Bank has made such portion available to the Agent on the
date such Loan is requested to be made in accordance with this
Section 2.4. If and to the extent such Bank shall not have so
made such pro rata portion available to the Agent, the Agent may
(but shall not be obligated to) make such amount available to
such Borrower, and such Bank agrees to pay to the Agent
forthwith on demand such amount together with interest thereon,
for each day from the date such amount is made available to such
Borrower by the Agent until the date such amount is repaid to
the Agent, at a rate per annum equal to the Federal Funds Rate
or the relevant market interbank compensation rate with respect
to Permitted Currencies other than Dollars then in effect. If
such Bank shall pay such amount to the Agent together with
interest, such amount so paid shall constitute a Loan by such
Bank as part of the related Borrowing for purposes of this
Agreement and interest shall accrue from the date of the related
Borrowing. The failure of any Bank to make its pro rata portion
of any such Borrowing available to the Agent shall not relieve
any other Bank of its obligation to make available its pro rata
portion of such Loan on the date such Loan is requested to be
made, but no Bank shall be responsible for failure of any other
Bank to make such pro rata portion available to the Agent on the
date of any such Loan.
(c) All Revolving Credit Loans made under this
Section 2.4 shall be evidenced by the Revolving Credit Notes and
all Swing Line Loans made under this Section 2.4 shall be
evidenced by the Swing Line Notes, and all such Loans shall be
due and payable and bear interest as provided in Article III.
Each Bank is hereby authorized by the Borrowers to record on its
books and records, the date, amount and type of each Loan and
the duration of the related Interest Period (if applicable), the
amount of each payment or prepayment of principal thereon, and
the other information provided for in such books and records,
which books and records shall constitute prima facie evidence of
the information so recorded, provided, however, that failure of
any Bank to record, or any error in recording, any such
information shall not relieve the Borrowers of their obligation
to repay the outstanding principal amount of the Loans, all
accrued interest thereon and other amounts payable with respect
thereto in accordance with the terms of the Notes and this
Agreement. Subject to the terms and conditions of this
Agreement, each Borrower may borrow Revolving Credit Loans under
this Section 2.4, prepay Revolving Credit Loans pursuant to
Section 3.1 and reborrow Revolving Credit Loans.
(d) Nothing in this Agreement shall be construed
to require or authorize any Bank to issue any Letter of Credit,
it being recognized that the Issuing Bank has the sole
obligation under this Agreement to issue Letters of Credit on
behalf of the Banks, and the Commitment of each Bank with
respect to Letter of Credit Advances is expressly conditioned
upon the Issuing Bank's performance of such obligations. Upon
such issuance by the Issuing Bank, each Bank shall automatically
acquire a pro rata participation interest in such Letter of
Credit Advance based on the amount of its respective Commitment.
If the Issuing Bank shall honor a draft or other demand for
payment presented or made under any Letter of Credit, the
Issuing Bank shall provide notice thereof to each Bank on the
date such draft or demand is honored unless a Borrower shall
have satisfied its reimbursement obligation by payment to the
Issuing Bank on such date. Each Bank, on such date, shall make
its pro rata share of the amount paid by the Issuing Bank
available in immediately available funds at the principal office
of the Agent for the account of the Issuing Bank, subject to
Section 9.5(b). If and to the extent such Bank shall not have
made such pro rata portion available to the Agent, such Bank and
the Borrower severally agree to pay to the Agent forthwith on
demand such amount together with interest thereon, for each day
from the date such amount was paid by the Issuing Bank until
such amount is so made available to the Agent at a per annum
rate equal to, in the case of the Borrower at the Floating Rate
or the relevant interbank compensation market rate plus the
Applicable Margin with respect to Permitted Currencies other
than Dollars and, in the case of any Bank, the Federal Funds
Rate or the relevant interbank compensation market rate with
respect to Permitted Currencies other than Dollars. If such
Bank shall pay such amount to the Agent together with such
interest, such amount so paid shall, subject to Section
3.3(a)(ii), constitute a Revolving Credit Loan by such Bank as
part of the Revolving Credit Borrowing disbursed in respect of
the reimbursement obligation of the Borrower for purposes of
this Agreement. The failure of any Bank to make its pro rata
portion of any such amount paid by the Issuing Bank available to
the Agent shall not relieve any other Bank of its obligation to
make available its pro rata portion of such amount, but no Bank
shall be responsible for failure of any other Bank to make such
pro rata portion available to the Agent.
2.5 Conditions for First Disbursement. The obligation
of each Bank to make its first Advance hereunder is subject to
receipt by each Bank and the Agent of the following documents
and completion of the following matters, in form and substance
reasonably satisfactory to the Agent:
(a) Charter Documents. Certificates of recent
date of the appropriate authority or official of each Borrower's
and each Guarantor's state of incorporation listing all charter
documents of such Borrower or such Guarantor, on file in that
office and certifying as to the good standing and corporate
existence of such Borrower or such Guarantor, together with
copies of such charter documents of such Borrower or such
Guarantor, certified as of a recent date by such authority or
official and certified as true and correct as of the Effective
Date by a duly authorized officer of such Borrower or such
Guarantor;
(b) By-Laws and Corporate Authorizations. Copies
of the by-laws of each Borrower and each Guarantor together with
all authorizing resolutions and evidence of other corporate
action taken by such Borrower or such Guarantor to authorize the
execution, delivery and performance by such Borrower or such
Guarantor of the Loan Documents to which it is a party and the
consummation by such Borrower or such Guarantor of the
transactions contemplated hereby, certified as true and correct
as of the Effective Date by a duly authorized officer of such
Borrower or such Guarantor;
(c) Incumbency Certificate. Certificates of
incumbency of each Borrower and each Guarantor containing, and
attesting to the genuineness of, the signatures of those
officers authorized to act on behalf of such Borrower or such
Guarantor in connection with the Loan Documents and the
consummation by such Borrower or such Guarantor of the
transactions contemplated hereby, certified as true and correct
as of the Effective Date by a duly authorized officer of such
Borrower or such Guarantor;
(d) Notes. The Notes, duly executed on behalf of
each Borrower, for each Bank;
(e) Security Documents. The Security Documents
duly executed on behalf of each Borrower and each Guarantor
granting to the Banks and the Agent the collateral and security
intended to be provided pursuant to Section 2.11.
(f) Legal Opinion. The favorable written opinion
of Linda Moore, General Counsel of the Company, and the
favorable written opinion of counsel of Jabil Circuit Ltd, each
in substantially the form of Exhibit H attached hereto; and
(g) Consents, Approvals, Etc. Copies of all
governmental and nongovernmental consents, approvals,
authorizations, declarations, registrations or filings, if any,
required on the part of each Borrower and each Guarantor in
connection with the execution, delivery and performance of the
Loan Documents or the transactions contemplated hereby or as a
condition to the legality, validity or enforceability of this
Agreement and the Notes, certified as true and correct and in
full force and effect as of the Effective Date by a duly
authorized officer of such Borrower or such Guarantor, or, if
none are required, a certificate of such officer to that effect.
(h) Private Placement Debt. The Company shall
have completed the closing of the Private Placement Debt on
terms and conditions satisfactory to the Banks and all Private
Placement Documents shall have been delivered to the Agent and
the Banks and approved by the Banks, together with the
Intercreditor Agreement in form and substance satisfactory to
the Banks.
2.6 Further Conditions for Disbursement. The
obligation of each Bank to make any Advance (including its first
Advance), or any continuation or conversion under Section 2.7,
is further subject to the satisfaction of the following
conditions precedent:
(a) The representations and warranties contained
in Article IV hereof and in any other Loan Document shall be
true and correct in all material respects on and as of the date
such Advance is made, continued or converted (both before and
after such Advance is made, continued or converted) as if such
representations and warranties were made on and as of such date;
and
(b) No Event of Default and no Default shall
exist or shall have occurred and be continuing on the date such
Advance is made, continued or converted (whether before or after
such Advance is made, continued or converted);
(c) The Agent shall have received the Borrowing
Base Certificates required pursuant to Section 5.1(d)(v)
calculated as of the close of business on the last day of the
week immediately preceding the date such Advance is made;
(d) In the case of any Letter of Credit Advance,
the Borrower requesting such Letter of Credit Advance shall have
delivered to the Agent an application for the related Letter of
Credit and other related documentation requested by and
acceptable to the Agent appropriately completed and duly
executed on behalf of such Borrower.
Each Borrower shall be deemed to have made a representation and
warranty to the Banks at the time of the requesting of, the
making of, and the continuation or conversion of, each Advance
to the effects set forth in clauses (a) and (b) of this Section
2.6. For purposes of this Section 2.6, the representations and
warranties contained in Section 4.6 hereof shall be deemed made
with respect to the most recent financial statements delivered
pursuant to Section 5.1(d)(ii) and (iii).
2.7 Subsequent Elections as to Borrowings. A Borrower
may elect (a) to continue a Eurocurrency Rate Borrowing, or a
portion thereof, as a Eurocurrency Rate Borrowing, or (b) may
elect to convert a Eurocurrency Rate Borrowing, or a portion
thereof, to a Floating Rate Borrowing or (c) elect to convert a
Floating Rate Borrowing, or a portion thereof, to a Eurocurrency
Rate Borrowing, or (d) elect to convert a Loan denominated in a
Permitted Currency to a Loan denominated in another Permitted
Currency, in each case by giving notice thereof to the Agent in
substantially the form of Exhibit I hereto at the principal
office of the Agent and at the Applicable Administrative Office
with respect to such Loan not later than 12:00 p.m. local time
of the Applicable Administrative Office (i) three Eurocurrency
Business Days prior to the date any such continuation of or
conversion to a Eurocurrency Rate Borrowing is to be effective
and (ii) the date such continuation or conversion is to be
effective in all other cases, provided that an outstanding
Eurocurrency Rate Borrowing may only be converted on the last
day of the then current Interest Period with respect to such
Borrowing, and provided, further, if a continuation of a
Borrowing as, or a conversion of a Borrowing to, a Eurocurrency
Rate Borrowing is requested, such notice shall also specify the
Interest Period to be applicable thereto upon such continuation
or conversion. The Agent, on the day any such notice is given,
shall promptly provide notice of such election to the Banks. If
a Borrower shall not timely deliver such a notice with respect
to any outstanding Eurocurrency Rate Borrowing, the Borrower
shall be deemed to have elected to convert such Eurocurrency
Rate Borrowing to a Floating Rate Borrowing on the last day of
the then current Interest Period with respect to such Borrowing.
2.8 Limitation of Requests and Elections.
Notwithstanding any other provision of this Agreement to the
contrary, if, upon receiving a request for a Eurocurrency Rate
Borrowing pursuant to Section 2.4, or a request for a
continuation of a Eurocurrency Rate Borrowing as a Eurocurrency
Rate Borrowing, or a request for a conversion of a Floating Rate
Borrowing to a Eurocurrency Rate Borrowing pursuant to Section
2.7, (a) in the case of any Eurocurrency Rate Borrowing,
deposits in the relevant Permitted Currency for periods
comparable to the Interest Period elected by the Borrower are
not available to any Bank in the relevant interbank or secondary
market and such Bank has provided to the Agent and the Borrowers
a certificate prepared in good faith to that effect, or (b) any
Bank reasonably determines that the Eurocurrency Rate will not
adequately and fairly reflect the cost to such Bank of making,
funding or maintaining the related Eurocurrency Rate Loan and
such Bank has provided to the Agent and the Borrowers a
certificate prepared in good faith to that effect, or (c) by
reason of national or international financial, political or
economic conditions or by reason of any applicable law, treaty,
rule or regulation (whether domestic or foreign) now or
hereafter in effect, or the interpretation or administration
thereof by any governmental authority charged with the
interpretation or administration thereof, or compliance by any
Bank with any directive of such authority (whether or not having
the force of law), including without limitation exchange
controls, it is impracticable, unlawful or impossible for any
Bank (i) to make or fund the relevant Eurocurrency Rate
Borrowing or (ii) to continue such Eurocurrency Rate Borrowing
as a Eurocurrency Rate Borrowing or (iii) to convert a Loan to
such a Eurocurrency Rate Loan, and such Bank has provided to the
Agent and the Borrowers a certificate prepared in good faith to
that effect, then the Borrowers shall not be entitled, so long
as such circumstances continue, to request a Eurocurrency Rate
Borrowing of the affected type pursuant to Section 2.4 or a
continuation of or conversion to a Eurocurrency Rate Borrowing
pursuant to Section 2.7. In the event that such circumstances
no longer exist, the Banks shall again honor requests, subject
to this Agreement, for Eurocurrency Rate Borrowings of the
affected type pursuant to Section 2.4, and requests for
continuations of and conversions to Eurocurrency Rate Borrowings
of the affected type pursuant to Section 2.7.
2.9 Minimum Amounts; Limitation on Number of
Borrowings. Except for (a) Borrowings and conversions thereof
which exhaust the entire remaining amount of the Commitments,
(b) conversions or payments required pursuant to Section 3.1(c)
or Section 3.7, (c) Revolving Credit Loans requested as a result
of the refusal of the Agent to make a Swing Line Loan, in which
case the minimum amount of the Loan shall be $100,000, and (d)
Revolving Credit Loans disbursed to satisfy reimbursement
obligations under Letters of Credit pursuant to Section 3.3(a),
each Revolving Credit Loan and each continuation or conversion
pursuant to Section 2.7 and each prepayment thereof shall be in
a minimum amount of, with respect to Floating Rate Loans,
$1,000,000 and in integral multiples of $100,000 and, with
respect to Eurocurrency Rate Loans, $3,000,000 and in integral
multiples of $500,000. Notwithstanding anything herein to the
contrary, (a) all Loans must be denominated in a Permitted
Currency and (b) Floating Rate Loans must be denominated in
Dollars.
2.10 Borrowing Base Adjustments. Each Borrower agrees
that if at any time any trade account receivable or any
inventory of such Borrower fails to constitute Eligible Account
Receivable or Eligible Inventory, as the case may be, for any
reason, the Agent may, at any time and notwithstanding any prior
classification of eligibility, classify such asset or property
as ineligible and exclude the same from the computation of the
Borrowing Base.
2.11 Security and Collateral. To secure the payment
when due of the Notes and all other obligations of the Borrowers
under this Agreement to the Banks and the Agent, each Borrower
shall execute and deliver, or cause to be executed and
delivered, to the Banks and the Agent Security Documents
granting the following:
(a) Pledges of 66% of all capital stock of Jabil
Circuit Ltd.
(b) Guaranties of all Domestic Borrowers and
present and future Domestic Subsidiaries.
ARTICLE III.
PAYMENTS AND PREPAYMENTS
3.1 Principal Payments. (a) Unless earlier payment is
required under this Agreement, the Borrowers shall pay to the
Banks on the Termination Date the entire outstanding principal
amount of the Loans.
(b) The Borrowers may at any time and from time
to time prepay all or a portion of the Loans without premium or
penalty, provided that (i) a Borrower may not prepay any portion
of any Loan as to which an election for continuation of or
conversion to a Eurocurrency Rate Loan is pending pursuant to
Section 2.7, and (ii) unless earlier payment is required under
this Agreement or unless Borrower pays all amounts required
pursuant to Section 3.9, any Eurocurrency Rate Loan may only be
prepaid on the last day of the then current Interest Period with
respect to such Loan and (iii) such prepayment shall only be
permitted if a Borrower shall have given notice thereof on the
Business Day of such prepayment with respect to prepayment of
Floating Rate Loans, not less than three Eurocurrency Business
Days' notice thereof with respect to prepayment of Eurocurrency
Rate Loans, such notice specifying the Loan or portion thereof
to be so prepaid and shall have paid to the Banks, together with
such prepayment of principal, all accrued interest to the date
of payment on such Loan or portion thereof so prepaid and all
amounts owing to the Banks under Section 3.9 in connection with
such prepayment. Upon the giving of such notice, the aggregate
principal amount of such Loan or portion thereof so specified in
such notice, together with such accrued interest and other
amounts, shall become due and payable on the specified date.
(c) If at any time (i) the Dollar Equivalent of
the aggregate outstanding principal amount of the Revolving
Credit Advances shall exceed the lesser of the Borrowing Base or
the aggregate Commitments or (ii) the Dollar Equivalent of the
aggregate outstanding principal amount of the Revolving Credit
Advances to any Borrower shall exceed the lesser of the
Borrowing Base of such Borrower or the sublimit specified for
such Borrower on Schedule 1.1(a), the Borrowers, in the case of
clause (i) above, or the relevant Borrower, in the case of
clause (ii) above, shall forthwith pay to the Banks, without
demand, an amount not less than the amount of such excess for
application to the outstanding principal amount of the Loans,
provided that if any such prepayment would be in excess of the
outstanding amount of the Loans, the Borrowers or the relevant
Borrower, as the case may be, shall deliver cash collateral to
the Agent to secure the outstanding Letters of Credit in the
amount of such excess which is greater than the outstanding
Loans and the Company hereby grants to the Agent, for the
benefit of the Banks, a first priority lien and security
interest in such collateral, and all such cash collateral shall
be under the sole and exclusive control of the Agent.
(d) If, pursuant to Section 2.7, a Borrowing, or
portion thereof, is continued or converted, such Borrowing or
portion thereof shall be repaid on the last day of the related
Interest Period in the Permitted Currency in which such
Borrowing is then denominated and (i) in the case of any
conversion, the Agent shall readvance to the Borrower making
such request the Equivalent of the Original Dollar Amount of the
Borrowing or portion thereof as has been so repaid by the
Borrower in the Permitted Currency requested pursuant to Section
2.7, and (ii) in the case of any continuation when the aggregate
outstanding amount of Advances exceeds 90% of the aggregate
Commitments, the Agent shall readvance to the Borrower the same
amount of such Permitted Currency as has been so repaid. The
Agent shall provide prompt notice to the Company and the Banks
of the activation of clause (ii) above. For purposes of
effecting the repayment required by this Section 3.1(d), the
Agent shall apply the proceeds of such readvance toward the
repayment of such Borrowing or portion thereof on the last day
of the related Interest Period. In the case of any conversion,
the Agent shall be deemed to have applied the proceeds of such
Advance toward the purchase of the Permitted Currency to be
repaid and to have applied the proceeds of such purchase toward
such repayment. If after any such application there shall
remain owing an amount of the Permitted Currency due to the
Agent, for the benefit of the Banks, or if an excess of such
Permitted Currency shall result, such Borrower shall pay to the
Banks, or, if no Default or Event of Default shall have occurred
and be continuing, the Banks shall return to such Borrower the
amount of such deficiency or such excess. In the case of any
continuation described in clause (ii) above, on the last day of
such Interest Period, the Original Dollar Amount of such
Borrowing or portion thereof shall be adjusted to equal the
amount in Dollars resulting from the conversion of the amount of
such Permitted Currency so readvanced to Dollars determined as
of the second Business Day preceding such day. On the date of
each such conversion or continuation, if the Dollar Equivalent
on such date of all outstanding Advances, including the Advances
being continued or converted, exceeds the aggregate Commitments
of the Banks, the Borrower shall take the following actions in
the following order until such excess of the Dollar Equivalent
of all Advances over the aggregate Commitments of the Banks is
eliminated: (a) on such date, first, reduce or withdraw any
pending request for a new Advance in Dollars to be made on such
date, second, repay in Dollars any Floating Rate Loan
denominated in Dollars then outstanding, and third, reduce the
amount of, or repay, in the Permitted Currency in which such
Borrowing is denominated, any Advance which the Borrower has
requested to be converted or continued on such date, and (b) on
the last day of each Eurocurrency Interest Period ending
thereafter, reduce the amount of, or repay in the Permitted
Currency in which such Borrowing is denominated, any Advance
which the Borrower has requested to be converted or continued on
such last day.
3.2 Interest Payments. The Borrowers shall pay
interest to the Banks on the unpaid principal amount of each
Loan, for the period commencing on the date such Loan is made
until such Loan is paid in full, on each Interest Payment Date
and at maturity (whether at stated maturity, by acceleration or
otherwise), and thereafter on demand, at the following rates per
annum:
(a) With respect to Revolving Credit Loans:
(i) During such periods that such Loan is a
Floating Rate Loan, the Floating Rate.
(ii) During such periods that such Loan is an
Eurocurrency Rate Loan, the Eurocurrency Rate applicable to such
Loan for each related Eurocurrency Interest Period.
(b) With respect to Swing Line Loans, the Swing
Line Rate or Floating Rate applicable to such Loan.
Notwithstanding the foregoing paragraphs (a) through (b), the
Borrowers shall pay interest on demand at the Overdue Rate on
the outstanding principal amount of any Loan and any other
amount payable by the Borrowers hereunder (other than interest)
on and after an Event of Default.
3.3 Letter of Credit Reimbursement Payments. (a)(i)
Each Borrower agrees to pay to the Banks, on the day on which
the Issuing Bank shall honor a draft or other demand for payment
presented or made under any Letter of Credit, an amount equal to
the amount paid by the Issuing Bank in respect of such draft or
other demand under such Letter of Credit and all expenses paid
or incurred by the Issuing Bank relative thereto. Unless a
Borrower shall have made such payment to the Agent on such day,
upon each such payment by the Issuing Bank, subject to Section
3.3(a)(ii), the Issuing Bank shall be deemed to have disbursed
to such Borrower, and such Borrower shall be deemed to have
elected to satisfy its reimbursement obligation by, a Revolving
Credit Loan bearing interest at the Floating Rate for the
account of the Banks in an amount equal to the amount so paid by
the Issuing Bank in respect of such draft or other demand under
such Letter of Credit. Such Revolving Credit Loan shall,
subject to Section 3.3(a)(ii), be disbursed notwithstanding any
failure to satisfy any conditions for disbursement of any Loan
set forth in Article II hereof and, to the extent of the
Revolving Credit Loan so disbursed, the reimbursement obligation
of the Borrower under this Section 3.3 shall be deemed
satisfied; provided, however, that nothing in this Section 3.3
shall be deemed to constitute a waiver of any Default or Event
of Default caused by the failure to the conditions for
disbursement or otherwise.
(ii) If, for any reason (including without
limitation as a result of the occurrence of an Event of Default
with respect to any Borrower pursuant to Section 6.1(i)),
Floating Rate Loans may not be made by the Banks as described in
Section 3.3(a)(i), then (A) each Borrower agrees that each
reimbursement amount not paid pursuant to the first sentence of
Section 3.3(a)(i) shall bear interest, payable on demand by the
Agent, at the interest rate then applicable to Floating Rate
Loans, and (B) effective on the date each such Floating Rate
Loan would otherwise have been made, each Bank severally agrees
that it shall unconditionally and irrevocably, without regard to
the occurrence of any Default or Event of Default, in lieu of
deemed disbursement of loans, to the extent of such Bank's
Commitment, purchase a participating interest in each
reimbursement amount. Each Bank will immediately transfer to
the Agent, in same day funds, the amount of its participation.
Each Bank shall share on a pro rata basis (calculated by
reference to its Commitment) in any interest which accrues
thereon and in all repayments thereof. If and to the extent
that any Bank shall not have so made the amount of such
participating interest available to the Agent, such Bank and the
Borrower severally agree to pay to the Agent forthwith on demand
such amount together with interest thereon, for each day from
the date of demand by the Agent until the date such amount is
paid to the Agent, at (x) in the case of any Borrower, the
interest rate then applicable to Floating Rate Loans and (y) in
the case of such Bank, the Federal Funds Rate.
(b) The reimbursement obligation of each Borrower
under this Section 3.3 shall be absolute, unconditional and
irrevocable and shall remain in full force and effect until all
obligations of the Borrowers to the Banks hereunder shall have
been satisfied, and such obligations of the Borrowers shall not
be affected, modified or impaired upon the happening of any
event, including without limitation, any of the following,
whether or not with notice to, or the consent of, any Borrower:
(i) Any lack of validity or enforceability
of any Letter of Credit or any documentation relating to any
Letter of Credit or to any transaction related in any way to
such Letter of Credit (the "Letter of Credit Documents");
(ii) Any amendment, modification, waiver,
consent, or any substitution, exchange or release of or failure
to perfect any interest in collateral or security, with respect
to any of the Letter of Credit Documents;
(iii) The existence of any claim, setoff,
defense or other right which any Borrower may have at any time
against any beneficiary or any transferee of any Letter of
Credit (or any persons or entities for whom any such beneficiary
or any such transferee may be acting), the Agent, the Issuing
Bank or any Bank or any other person or entity, whether in
connection with any of the Letter of Credit Documents, the
transactions contemplated herein or therein or any unrelated
transactions;
(iv) Any draft or other statement or document
presented under any Letter of Credit proving to be forged,
fraudulent, invalid or insufficient in any respect or any
statement therein being untrue or inaccurate in any respect;
(v) Payment by the Issuing Bank to the
beneficiary under any Letter of Credit against presentation of
documents which do not comply with the terms of the Letter of
Credit, including failure of any documents to bear any reference
or adequate reference to such Letter of Credit;
(vi) Any failure, omission, delay or lack on
the part of the Agent, the Issuing Bank or any Bank or any party
to any of the Letter of Credit Documents to enforce, assert or
exercise any right, power or remedy conferred upon the Agent,
the Issuing Bank, any Bank or any such party under this
Agreement or any of the Letter of Credit Documents, or any other
acts or omissions on the part of the Agent, the Issuing Bank,
any Bank or any such party;
(vii) Any other event or circumstance that
would, in the absence of this clause, result in the release or
discharge by operation of law or otherwise of any Borrower from
the performance or observance of any obligation, covenant or
agreement contained in this Section 3.3.
No setoff, counterclaim, reduction or diminution of any
obligation or any defense of any kind or nature which any
Borrower has or may have against the beneficiary of any Letter
of Credit shall be available hereunder to such Borrower against
the Agent, the Issuing Bank or any Bank. Nothing in this
Section 3.3 shall limit the liability, if any, of the Agent or
the Issuing Bank to any Borrower pursuant to Section 9.5.
3.4 Payment Method. (a) All payments to be made by
the Borrower hereunder shall be made to the Agent for the
account of the Banks in the specified or relevant currency in
freely transferable, cleared, same-day funds, not later than
1:00 p.m. local time in the place specified for payment on the
date on which such payment is due. Payments of principal and
interest on any Loan denominated, and of any other amounts due,
in a Permitted Currency other than Dollars shall be made by the
Borrowers by credit to the account of the Agent at its
designated branch or correspondent bank in the country issuing
the relevant Permitted Currency or in such other place specified
by the Agent with respect to such Loan or amount under Section
2.4(b). Payments of any other amounts due under this Agreement
shall be made to the Applicable Administrative Office of the
Agent. Payments received after 1:00 p.m. at the place for
payment shall be deemed to be payments made prior to 1:00 p.m.
at the place for payment on the next succeeding Business Day.
Each Borrower hereby authorizes the Agent to charge its account
with the Agent in order to cause timely payment of amounts due
hereunder to be made (subject to sufficient funds being
available in such account for that purpose).
(b) At the time of making each such payment, a
Borrower shall, subject to the other terms and conditions of
this Agreement, specify to the Agent that Borrowing or other
obligation of the Borrowers hereunder to which such payment is
to be applied. In the event that a Borrower fails to so specify
the relevant obligation or if an Event of Default shall have
occurred and be continuing, the Agent may apply such payments as
it may determine in its sole discretion to obligations of the
Borrowers to the Banks arising under this Agreement.
(c) On the day such payments are deemed received,
the Agent shall promptly remit to the Banks their pro rata
shares of such payments in immediately available funds, (i) in
the case of payments of principal and interest on any Borrowing
denominated in a Permitted Currency other than Dollars, at an
account maintained and designated by each Bank at a bank in the
principal financial center of the country issuing the Permitted
Currency in which such Borrowing is denominated or in such other
place specified by the Agent and agreed to by the Banks and (ii)
in all other cases, to the Banks at their respective address in
the United States specified for notices pursuant to Section 9.2.
Such pro rata shares shall be determined with respect to each
such Bank, (i) in the case of payments of principal and interest
on any Borrowing, by the ratio which the outstanding principal
balance of its Loan included in such Borrowing bears to the
outstanding principal balance of the Loans of all of the Banks
included in such Borrowing and (ii) in the case of fees paid
pursuant to Section 2.3 and other amounts payable hereunder
(other than the Agent's fees payable pursuant to Section 2.3(c)
and amounts payable to any Bank under Section 2.4 or 3.6) by the
ratio which the Commitment of such Bank bears to the Commitments
of all the Banks.
(d) This Agreement arises in the context of an
international transaction, and the specification of payment in a
specific currency at a specific place pursuant to this Agreement
is of the essence. Such specified currency shall be the
currency of account and payment under this Agreement. The
obligations of the Borrowers hereunder shall not be discharged
by an amount paid in any other currency or at another place,
whether pursuant to a judgment or otherwise, to the extent that
the amount so paid, on prompt conversion into the applicable
currency and transfer to the Banks under normal banking
procedure, does not yield the amount of such currency due under
this Agreement. In the event that any payment, whether pursuant
to a judgment or otherwise, upon conversion and transfer, does
not result in payment of the amount of such currency due under
this Agreement, the Banks shall have an independent cause of
action against the Borrowers for the currency deficit.
(e) If for purposes of obtaining judgment in any
court it becomes necessary to convert any currency due hereunder
into any other currency, the Borrowers will pay such additional
amount, if any, as may be necessary to ensure that the amount
paid in respect of such judgment is the amount in such other
currency which, when converted at the Agent's spot rate of
exchange prevailing on the date of payment, would yield the same
amount of the currency due hereunder. Any amount due from the
Borrowers under this Section 3.4(e) will be due as a separate
debt and shall not be affected by judgment being obtained for
any other sum due under or in respect of this Agreement.
3.5 No Setoff or Deduction. (a) All such payments
shall be made free and clear of any present or future taxes or
withholdings and without any set-off or counter claim or any
restriction or condition or deduction whatsoever. The Borrowers
shall indemnify the Agent and each Bank against any taxes or
charges (other than on net overall income) which may be claimed
from it in respect of the Advances or any of them or any sum
payable by the Borrowers or any of them hereunder and against
any costs, charges and expenses or liabilities in respect of
such claim and such indemnity shall survive the termination of
the Commitments.
(b) If at any time any Borrower is required by
law or by any directive or order of any court of competent
jurisdiction to make any deduction or withholding of whatsoever
nature from any payment due under this Agreement or any of the
Loan Documents, such Borrower will ensure that the same does not
exceed the minimum liability therefor and will (a) pay to any
Bank on request such additional amount as such Bank certifies
will result in the net amount received by it after all
deductions being equal to the full amount which would have been
receivable had there been no deduction or withholding and (b)
pay forthwith to the relevant authorities the full amount of the
deduction or withholding and deliver to the Agent such an
official receipt, certificate or other proof evidencing the
amount paid in respect of such deduction or withholding. Any
additional amount paid under this sub-clause shall not be
treated as interest but as agreed compensation.
(c) If any payment by any Borrower is made to or
for the account of any Bank after deduction for or on account of
tax, and additional payments are made by the Borrower then, if
any Bank shall receive or be granted a credit against or
remission for such tax, such Bank shall, to the extent that it
can do so without prejudice to the retention of the amount of
such credit or remission, reimburse to such Borrower such amount
as such Bank shall, in its absolute opinion, have concluded to
be attributable to the relevant tax or deduction or withholding.
Nothing herein contained shall interfere with the right of any
Bank to arrange its affairs in whatever manner it thinks fit
and, in particular, the Banks shall not be under any obligation
to claim relief from its corporation profits or similar tax
liability in respect of such tax in priority to any other
claims, reliefs, credits or deductions available to it nor
oblige any Bank to disclose any information relating to its tax
affairs. Such reimbursement shall be made as soon as reasonably
practical upon such Bank certifying that the amount of such
credit or remission has been received by it.
3.6 Payment on Non-Business Day; Payment Computations.
Except as otherwise provided in this Agreement to the contrary,
whenever any installment of principal of, or interest on, any
Loan or any other amount due hereunder becomes due and payable
on a day which is not a Business Day, the maturity thereof shall
be extended to the next succeeding Business Day and, in the case
of any installment of principal, interest shall be payable
thereon at the rate per annum determined in accordance with this
Agreement during such extension. Computations of interest and
other amounts due under this Agreement shall be made on the
basis of a year of 360 days or as determined by custom and
practice in the relevant market with respect to any Loan
denominated in a Permitted Currency other than Dollars, for the
actual number of days elapsed, including the first day but
excluding the last day of the relevant period.
3.7 Additional Costs. (a) In the event that any
applicable law, treaty, rule or regulation (whether domestic or
foreign) now or hereafter in effect and whether or not presently
applicable to any Bank or the Agent, or any interpretation or
administration thereof by any governmental authority charged
with the interpretation or administration thereof, or compliance
by any Bank or the Agent with any directive of any such
authority (whether or not having the force of law), shall (i)
affect the basis of taxation of payments to any Bank or the
Agent of any amounts payable by any Borrower under this
Agreement (other than taxes imposed on the overall net income of
the Bank or the Agent, by the jurisdiction, or by any political
subdivision or taxing authority of any such jurisdiction, in
which any Bank or the Agent, as the case may be, has its
principal office), or (ii) shall impose, modify or deem
applicable any reserve, special deposit or similar requirement
against assets of, deposits with or for the account of, or
credit extended by any Bank or the Agent, as the case may be, or
(iii) shall impose any other condition with respect to this
Agreement, the Commitments, the Notes or the Advances, and the
result of any of the foregoing is to increase the cost to any
Bank or the Agent, as the case may be, of making, funding or
maintaining any Loan or to reduce the amount of any sum
receivable by any Bank or the Agent, thereon, then the Borrowers
shall pay to such Bank or the Agent, as the case may be, from
time to time, upon request by such Bank (with a copy of such
request to be provided to the Agent) or the Agent, additional
amounts sufficient to compensate such Bank or the Agent, as the
case may be, for such increased cost or reduced sum receivable
to the extent, in the case of any Eurocurrency Rate Loan, such
Bank or the Agent, as the case may be, is not compensated
therefor in the computation of the interest rate applicable to
such Eurocurrency Rate Loan. Each Bank or the Agent, as the
case may be, seeking compensation hereunder shall deliver to the
Borrowers a statement setting forth (i) such increased cost or
reduced sum receivable as such Bank or the Agent, as the case
may be, has calculated in good faith, (ii) a description of the
event giving rise thereto, and (iii) a calculation in reasonable
detail of the amounts requested. Such statement as to the
amount of such increased cost or reduced sum receivable,
prepared in good faith and in reasonable detail by such Bank or
the Agent, as the case may be, and submitted by such Bank or the
Agent, as the case may be, to the Borrowers, shall be conclusive
and binding for all purposes absent manifest error in
computation.
(b) In the event that any applicable law, treaty,
rule or regulation (whether domestic or foreign) now or
hereafter in effect and whether or not presently applicable to
any Bank or the Agent, but applicable to banks or financial
institutions generally, or any interpretation or administration
thereof by any governmental authority charged with the
interpretation or administration thereof, or compliance by any
Bank or the Agent with any directive of any such authority
(whether or not having the force of law), including any
risk-based capital guidelines, affects the amount of capital
required or expected to be maintained by such Bank or the Agent
(or any corporation controlling such Bank or the Agent) and such
Bank or the Agent, as the case may be, determines that the
amount of such capital is increased by or based upon the
existence of such Bank's or the Agent's obligations hereunder
and such increase has the effect of reducing the rate of return
on such Bank's or the Agent's (or such controlling
corporation's) capital as a consequence of such obligations
hereunder to a level below that which such Bank or the Agent (or
such controlling corporation) could have achieved but for such
circumstances (taking into consideration its policies with
respect to capital adequacy) by an amount deemed by such Bank or
the Agent to be material, then the Borrowers shall pay to such
Bank or the Agent, as the case may be, from time to time, upon
request by such Bank (with a copy of such request to be provided
to the Agent) or the Agent, additional amounts sufficient to
compensate such Bank or the Agent (or such controlling
corporation) for any reduced rate of return which such Bank or
the Agent reasonably determines to be allocable to the existence
of such Bank's or the Agent's obligations hereunder. Each Bank
or the Agent, as the case may be, seeking compensation hereunder
shall deliver to the Borrowers a statement setting forth (i)
such increased cost or reduced sum receivable as such Bank or
the Agent, as the case may be, has calculated in good faith,
(ii) a description of the event giving rise thereto, and (iii) a
calculation in reasonable detail of the amounts requested. Such
statement as to the amount of such compensation, prepared in
good faith and in reasonable detail by such Bank or the Agent,
as the case may be, and submitted by such Bank or the Agent to
the Borrowers, shall be conclusive and binding for all purposes
absent manifest error in computation.
3.8 Illegality and Impossibility. In the event that
any applicable law, treaty, rule or regulation (whether domestic
or foreign) now or hereafter in effect and whether or not
presently applicable to any Bank, or any interpretation or
administration thereof by any governmental authority charged
with the interpretation or administration thereof, or compliance
by any Bank with any directive of such authority (whether or not
having the force of law), including without limitation exchange
controls, shall make it unlawful or impossible for any Bank to
maintain any Advance under this Agreement or shall make it
impracticable, unlawful or impossible for, or shall in any way
limit or impair the ability of, any Borrower to make or any Bank
to receive any payment under this Agreement at the place
specified for payment hereunder, or to freely convert any amount
paid into Dollars at market rates of exchange or to transfer any
amount paid or so converted to the address of its principal
office specified in Section 9.2, the Borrowers shall upon
receipt of notice thereof from such Bank, repay in full the then
outstanding principal amount of each Loan so affected, together
with all accrued interest thereon to the date of payment and all
amounts owing to such Bank under Section 3.9, (a) on the last
day of the then current Interest Period applicable to such Loan
if such Bank may lawfully continue to maintain such Loan to such
day, or (b) immediately if such Bank may not continue to
maintain such Loan to such day.
3.9 Indemnification. If any Borrower makes any
payment of principal with respect to any Loan on any other date
than the last day of an Interest Period applicable thereto,
(whether pursuant to Section 3.8 or Section 6.2 or otherwise),
or if any Borrower fails to borrow or convert any Loan after
notice has been given to the Banks in accordance with Section
2.4 or Section 2.7, the Borrowers shall reimburse each Bank on
demand for any resulting net loss or expense incurred by each
such Bank after giving credit for any earnings or other
quantifiable financial benefit to such Bank from such Bank's
investment or other amounts prepaid or not reborrowed, including
without limitation any loss incurred in obtaining, liquidating
or employing deposits from third parties, whether or not such
Bank shall have funded or committed to fund such Loan. A
statement as to the amount of such loss or expense, prepared in
good faith and in reasonable detail by such Bank and submitted
by such Bank to the Borrowers, shall be conclusive and binding
for all purposes absent manifest error in computation, provided
that before delivery of such statement, each Bank shall use
reasonable efforts in accordance with its normal practices and
procedures to reduce amounts payable under this Section.
Calculation of all amounts payable to such Bank under this
Section 3.9 shall be made as though such Bank shall have
actually funded or committed to fund the relevant Loan through
the purchase of an underlying deposit in an amount equal to the
amount of such Loan and having a maturity comparable to the
related Interest Period; provided, however, that such Bank may
fund any Loan in any manner it sees fit and the foregoing
assumption shall be utilized only for the purpose of calculation
of amounts payable under this Section 3.9.
3.10 Right of Banks to Fund Through Other Offices.
Each Bank may perform its Commitment to fund its pro rata share
of any Eurocurrency Rate Loan or, with respect to the Swing Line
Bank, any Swing Line Loan to the Borrowers by causing an
affiliate of such Bank to provide such funds in accordance with
the terms of this Agreement. For all purposes of this
Agreement, any amounts so advanced shall be deemed to have been
advanced by such Bank, and the obligation of the Borrowers to
repay such amounts shall be as provided in this Agreement.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES
Each Borrower and each Guarantor represents and
warrants to the Agent and the Banks that:
5. Corporate Existence and Power. Each Borrower and
each Guarantor is a Person duly organized, validly existing and
in good standing under the laws of the state or other political
subdivision of its jurisdiction of incorporation or
organization, as the case may be, and is duly qualified to do
business, and is in good standing, in all additional
jurisdictions where such qualification is necessary under
applicable law, except where the failure to be so qualified
would not have a material adverse effect on the business and
financial condition of the Company and its Subsidiaries taken as
a whole. Each Borrower and each Guarantor have all requisite
corporate power to own or lease the properties used in its
business and to carry on its business as now being conducted and
as proposed to be conducted, and to execute and deliver the Loan
Documents to which it is a party and to engage in the
transactions contemplated by the Loan Documents.
5.1 Corporate Authority. The execution, delivery and
performance by each Borrower and each Guarantor of the Loan
Documents to which it is a party have been duly authorized by
all necessary corporate action and are not in contravention of
any material law, rule or regulation, or any judgment, decree,
writ, injunction, order or award of any arbitrator, court or
governmental authority, or of the terms of such Borrower's or
such Guarantor's charter or by-laws, or of any material contract
or undertaking to which such Borrower or such Guarantor is a
party or by which such Borrower or such Guarantor or any of
their property is bound and do not result in the imposition of
any Lien except for Permitted Liens.
5.2 Binding Effect. The Loan Documents when delivered
hereunder will be, legal, valid and binding obligations of each
Borrower and each Guarantor party thereto enforceable against
each Borrower and each Guarantor party thereto in accordance
with their respective terms; except as such enforceability may
be limited by bankruptcy, insolvency, reorganization, moratorium
or other similar laws relating to creditors' rights and except
that the remedy of specific performance and injunctive and other
forms of equitable relief are subject to equitable defenses and
to the discretion of the court before which any proceedings may
be brought.
5.3 Subsidiaries. Schedule 4.4 hereto correctly sets
forth the corporate name, jurisdiction of incorporation and
ownership of each Subsidiary of each Borrower. Each Subsidiary
and each corporation becoming a Subsidiary of any Borrower after
the date hereof is and will be a corporation duly organized,
validly existing and in good standing under the laws of its
jurisdiction of incorporation and is and will be duly qualified
to do business in each additional jurisdiction where such
qualification is or may be necessary under applicable law,
except where the failure to be so qualified would not have a
Material Adverse Effect.
5.4 Litigation. Except as set forth in Schedule 4.5
hereto, there is no action, suit or proceeding pending or, to
the best of each Borrower's and each Guarantor's knowledge,
threatened against or affecting any Borrower or any of their
respective Subsidiaries before or by any court, governmental
authority or arbitrator, which if adversely decided would
result, either individually or collectively, in any material
adverse change in the business, properties, operations or
financial condition of the Company and its Subsidiaries taken as
a whole or in any Material Adverse Effect.
5.5 Financial Condition. The consolidated balance
sheet of the Company and its Subsidiaries and the related
consolidated statements of income, shareholders equity and cash
flows of the Company and its Subsidiaries for the fiscal year
ended August 31, 1995 and reported on by KPMG Peat Marwick,
independent certified public accountants, and the interim
consolidated balance sheet, statements of income, and cash flows
of the Company and its Subsidiaries as of and for the six-month
period ended February 29, 1996, copies of which have been
furnished to the Banks, fairly present, and the financial
statements of the Company and its Subsidiaries delivered
pursuant to Section 5.1(d) will fairly present the consolidated
financial position of the Company and its Subsidiaries as at the
respective dates thereof, and the consolidated results of
operations of the Company and its Subsidiaries for the
respective periods indicated, all in accordance with Generally
Accepted Accounting Principles consistently applied (subject, in
the case of said interim statements, to normal year-end
adjustments). There has been no material adverse change in the
financial condition of the Company and its Subsidiaries taken as
a whole since August 31, 1995. There is no material Contingent
Liability of the Company that is not reflected in such financial
statements or in the notes thereto.
5.6 Use of Loans. Each Borrower will use the proceeds
of the Loans for its general corporate purposes, including
repayment of certain existing revolving credits. No Borrower
nor any of their respective Subsidiaries extends or maintains,
in the ordinary course of business, credit for the purpose,
whether immediate, incidental, or ultimate, of buying or
carrying margin stock (within the meaning of Regulation U of the
Board of Governors of the Federal Reserve System), and no part
of the proceeds of any Loan will be used for the purpose,
whether immediate, incidental, or ultimate, of buying or
carrying any such margin stock or maintaining or extending
credit to others for such purpose. After applying the proceeds
of each Loan, such margin stock will not constitute more than
25% of the value of the assets (either of any Borrower alone or
of the Borrowers and their respective Subsidiaries on a
consolidated basis) that are subject to any provisions of this
Agreement that may cause the Loans to be deemed secured,
directly or indirectly, by margin stock.
5.7 Consents, Etc. Except for such consents,
approvals, authorizations, declarations, registrations or
filings delivered by the Borrowers or the Guarantors pursuant to
Section 2.5(g), if any, each of which is in full force and
effect, no consent, approval or authorization of or declaration,
registration or filing with any governmental authority or any
nongovernmental person, including without limitation any
creditor, lessor or stockholder of any Borrower or any
Guarantor, is required on the part of any Borrower or any
Guarantor in connection with the execution, delivery and
performance of the Loan Documents or the transactions
contemplated hereby or as a condition to the legality, validity
or enforceability of the Loan Documents.
5.8 Taxes. Each Borrower and each of their respective
Subsidiaries has filed all material tax returns (federal, state
and local applicable in the United States or any foreign
jurisdiction) required to be filed and have paid all taxes shown
thereon to be due, including interest and penalties, or have
established adequate financial reserves on their respective
books and records for payment thereof except where the failure
to file such returns, pay such taxes or establish such reserves
would not have a Material Adverse Effect.
5.9 Title to Properties. Except as otherwise
disclosed in the latest balance sheet delivered pursuant to this
Agreement, a Borrower or one or more of its Subsidiaries have
good and marketable fee simple title to all of the real property
to the best of such Borrower's knowledge absent manifest error,
and a valid and indefeasible ownership interest in all of the
other properties and assets reflected in said balance sheet or
subsequently acquired by a Borrower or any such Subsidiary
material to the business or financial condition of Borrower's
and their respective Subsidiaries taken as a whole, except for
title defects that do not have a Material Adverse Effect. All
of such properties and assets are free and clear of any Lien,
except for Permitted Liens.
5.10 Borrowing Base. All trade accounts receivable
and inventory of any Borrower represented or reported by such
Borrower to be, or are otherwise included in, Eligible Accounts
Receivable and Eligible Inventory comply in all respects with
the requirements therefor set forth in the definition thereof,
and the computations of the Borrowing Base set forth in each
Borrowing Base Certificate is true and correct.
5.11 ERISA. The Borrowers, their respective
Subsidiaries, their ERISA Affiliates and their respective Plans
are in substantial compliance in all material respects with
those provisions of ERISA and of the Code which are applicable
with respect to any Plan. No Prohibited Transaction and no
Reportable Event has occurred with respect to any such Plan
which would cause an Event of Default. No Borrower, any of
their respective Subsidiaries nor any of their ERISA Affiliates
is an employer with respect to any Multiemployer Plan. The
Borrowers, their respective Subsidiaries and their ERISA
Affiliates have met the minimum funding requirements under ERISA
and the Code with respect to each of their respective Plans, if
any, and have not incurred any liability to the PBGC, other than
premiums which are not yet due and payable. The execution,
delivery and performance of the Loan Documents does not
constitute a Prohibited Transaction. There is no material
unfunded benefit liability, determined in accordance with
Section 4001(a)(18) of ERISA, with respect to any Plan of any
Borrower, their respective Subsidiaries or their ERISA
Affiliates.
5.12 Disclosure. No report or other information
furnished in writing or on behalf of any Borrower or any
Guarantor to any Bank or the Agent in connection with the
negotiation or administration of this Agreement contains any
material misstatement of fact or omits to state any material
fact or any fact necessary to make the statements contained
therein not misleading in light of the circumstances in which
they were made. Neither this Agreement, the Notes, the Security
Documents nor any other document, certificate, or report or
statement or other information furnished to any Bank or the
Agent by or on behalf of any Borrower or any Guarantor in
connection with the transactions contemplated hereby contains
any untrue statement of a material fact or omits to state a
material fact in order to make the statements contained herein
and therein not misleading in light of the circumstances in
which they were made. There is no fact known to any Borrower or
any Guarantor which has or which in the future may have (so far
as any Borrower or any Guarantor reasonably can now foresee
based on information currently available to such Borrower or any
Guarantor) a Material Adverse Effect, which has not been set
forth in this Agreement or in the other documents, certificates,
statements, reports and other information furnished in writing
to the Banks by or on behalf of any Borrower in connection with
the transactions contemplated hereby.
5.13 Environmental and Safety Matters. All
representations and warranties made by each Borrower in the
Environmental Certificate delivered pursuant to Section
2.5(e)(iv) are true and correct.
5.14 No Material Adverse Change. Neither any Borrower
nor any of its Subsidiaries has received any notice, citation or
communication of the nature referred to in Section 5.1(d)(i),
except in respect of such matters as have been or are being
remediated in all material respects or are being contested or
remediated in good faith, and, in the case of any such matter
being so contested or remediated, and as of the date of this
Agreement, adequate provision for all material costs of any
remediation is reflected in the financial statements referred to
in Section 4.6 of this Agreement, and in respect of any such
notice, citation or communication received after the date of
this Agreement, will be reflected in the subsequent financial
statements furnished to the Agent and the Banks pursuant to
Sections 5.1(d)(ii), 5.1(d)(iii) and 5.1(d)(iv).
5.15 No Default. Neither any Borrower nor any
Subsidiary is in default or has received any written notice of
default under or with respect to any of its Contractual
Obligations in any respect which could have a Material Adverse
Effect. No Default or Event of Default has occurred and is
continuing.
5.16 No Burdensome Restrictions. No Requirement of Law
or Contractual Obligation applicable to any Borrower or any
Subsidiary could have a Material Adverse Effect.
ARTICLE V.
COVENANTS
6. Affirmative Covenants. Each Borrower covenants
and agrees that, until the Termination Date and thereafter until
irrevocable payment in full of the principal of and accrued
interest on the Notes and the performance of all other
obligations of the Borrowers under this Agreement, unless the
Required Banks shall otherwise consent in writing, it shall, and
shall cause each of its Subsidiaries to:
(a) Preservation of Corporate Existence, Etc. Do
or cause to be done all things necessary to preserve, renew and
keep in full force and effect its legal existence, except to the
extent permitted by Section 5.2(g), and its qualification as a
foreign corporation in good standing in each jurisdiction in
which such qualification is necessary under applicable law.
(b) Compliance with Laws, Etc. Comply in all
material respects with all applicable laws, rules, regulations
and orders of any governmental authority, whether federal,
state, local or foreign (including without limitation ERISA, the
Code and Environmental Laws), in effect from time to time; and
pay and discharge promptly when due all taxes, assessments and
governmental charges or levies imposed upon it or upon its
income, revenues or property, before the same shall become
delinquent or in default, as well as all lawful claims for
labor, materials and supplies or otherwise, which, if unpaid,
would give rise to Liens upon such properties or any portion
thereof, except to the extent that payment of any of the
foregoing is then being contested in good faith by appropriate
legal proceedings and with respect to which adequate financial
reserves have been established on the books and records of any
such Borrower.
(c) Maintenance of Properties; Insurance.
Maintain, preserve and protect all property that is material to
the conduct of the business of any Borrower or any of their
respective Subsidiaries and keep such property in good repair,
working order and condition and from time to time make, or cause
to be made all needful and proper repairs, renewals, additions,
improvements and replacements thereto necessary in order that
the business carried on in connection therewith may be properly
conducted at all times in accordance with customary and prudent
business practices for similar businesses; and, maintain in full
force and effect insurance with responsible and reputable
insurance companies or associations in such amounts, on such
terms and covering such risks, as is usually carried by
companies engaged in similar businesses and owning similar
properties similarly situated and maintain in full force and
effect public liability insurance, insurance against claims for
personal injury or death or property damage occurring in
connection with any of its activities or any properties owned,
occupied or controlled by it, in such amount as it shall
reasonably deem necessary.
(d) Reporting Requirements. Furnish to the Banks
and the Agent the following:
(i) Promptly and in any event within seven
calendar days after becoming aware of the occurrence of (A) any
Event of Default or Default, or (B) the commencement of any
material litigation against, by or affecting any Borrower or any
of their respective Subsidiaries or (C) entering into any
material contract or undertaking that is not entered into in the
ordinary course of business or (D) any development in the
business or affairs of any Borrower or any of their respective
Subsidiaries which has resulted in or which is likely in the
reasonable judgment of such Borrower, to result in a Material
Adverse Effect, a statement of the chief financial officer of
such Borrower setting forth details of each such Default or
Event of Default or such litigation, material contract or
undertaking or development and the action which such Borrower or
such Subsidiary, as the case may be, has taken and proposes to
take with respect thereto;
(ii) As soon as available and in any event
within 45 days after the end of each of the first three fiscal
quarters of each fiscal year of the Company, the consolidated
balance sheet of the Company and its Subsidiaries as of the end
of such quarter, and the related consolidated statements of
income and cash flow for the period commencing at the end of the
previous fiscal year and ending with the end of such quarter,
setting forth in each case in comparative form the corresponding
figures for the corresponding date or period of the preceding
fiscal year, all in reasonable detail and duly certified
(subject to normal year-end adjustments) by the treasurer of the
Company as having been prepared in accordance with Generally
Accepted Accounting Principles, together with a certificate of
the treasurer of the Company stating (A) that no Event of
Default or Default has occurred and is continuing or, if an
Event of Default or Default has occurred and is continuing, a
statement setting forth the details thereof and the action which
the Company has taken and proposes to take with respect thereto,
and (B) that a computation (which computation shall accompany
such certificate and shall be in reasonable detail) showing
compliance with Section 5.2(a), (b), (c) and (d) hereof is in
conformity with the terms of this Agreement;
(iii) As soon as available and in any
event within 90 days after the end of each fiscal year of the
Company, a copy of the consolidated balance sheet of the Company
and its Subsidiaries as of the end of such fiscal year and the
related consolidated statements of income, shareholders equity
and cash flows of the Company and its Subsidiaries for such
fiscal year, with a customary audit report of KPMG Peat Marwick,
or other independent certified public accountants selected by
the Company and acceptable to the Required Banks, without
qualifications unacceptable to the Required Banks, together with
(A) either (I) a written statement of the accountants that in
making the examination necessary for their report or opinion
they obtained no knowledge of the occurrence of any Default or
Event of Default under this Agreement or (II) if they know of
any Default or Event of Default, their written disclosure of its
nature and status, provided that, the accountants shall not be
liable directly or indirectly to anyone for any failure to
obtain knowledge of any Default or Event of Default under this
Agreement, and (B) a certificate of the treasurer of the Company
stating (I) that no Event of Default or Default has occurred and
is continuing or, if an Event of Default or Default has occurred
and is continuing, a statement setting forth the details thereof
and the action which the Company has taken and proposes to take
with respect thereto, and (II) that a computation (which
computation shall accompany such certificate and shall be in
reasonable detail) showing compliance with Section 5.2(a), (b),
(c) and (d) hereof is in conformity with the terms of this
Agreement;
(iv) No later than the following Business
Day, a Borrowing Base Certificate prepared for each Borrower as
of the close of business on the last day of each month, together
with supporting schedules, in form and detail satisfactory to
the Agent, setting forth such information as the Agent may
request with respect to the aging, value, location and other
information relating to the computation of the Borrowing Base
for each Borrower and the eligibility of any property or assets
included in such computation, including interim updates to the
accounts payable reports delivered pursuant to Section
5.1(d)(vi) with respect to accounts receivable of any Borrower
subject to offset, certified as true and correct by the
controller of each such Borrower;
(v) As soon as available and in any event
within 30 calendar days after the end of each calendar quarter,
a report with respect to each Borrower setting forth a summary,
as of the end of such quarter, of (A) inventory, indicating the
types of inventory, amounts, locations and values of the types
of inventory, and (B) accounts payable, containing an aging of
such accounts payable and consolidated totals, all in form and
detail satisfactory to the Banks and certified as correct by the
controller of each Borrower;
(vi) As soon as available and in any event
within 15 calendar days after the end of each calendar month, a
report with respect to each Borrower setting forth a summary, as
of the end of such month, of (A) accounts receivable, indicating
the total of accounts receivable by type, by account debtor, by
terms and by age, describing any returns, defenses, setoffs or
other pertinent information in connection therewith, and (B)
inventory, all in form and detail satisfactory to the Banks and
certified as correct by the controller of each Borrower;
(vii) Promptly after the sending or
filing thereof, copies of all reports, proxy statements and
financial statements which any Borrower sends to or files with
any of their respective security holders or any securities
exchange or the Securities and Exchange Commission or any
successor agency thereof;
(viii) Promptly and in any event within 10
calendar days after receiving or becoming aware thereof (A) a
copy of any notice of intent to terminate any Plan of any
Borrower, their respective Subsidiaries or any ERISA Affiliate
filed with the PBGC, (B) a statement of the chief financial
officer of such Borrower setting forth the details of the
occurrence of any Reportable Event with respect to any such
Plan, (C) a copy of any notice that any Borrower, any of their
respective Subsidiaries or any ERISA Affiliate may receive from
the PBGC relating to the intention of the PBGC to terminate any
such Plan or to appoint a trustee to administer any such Plan,
or (D) a copy of any notice of failure to make a required
installment or other payment within the meaning of Section
412(n) of the Code or Section 302(f) of ERISA with respect to
any such Plan; and
(ix) Promptly, such other information
respecting the business, properties, operations or condition,
financial or otherwise, of any Borrower or any of their
respective Subsidiaries as any Bank or the Agent may from time
to time reasonably request.
(e) Accounting; Access to Records, Books, Etc.
Maintain a system of accounting established and administered in
accordance with sound business practices to permit preparation
of financial statements in accordance with Generally Accepted
Accounting Principles and to comply with the requirements of
this Agreement and, at any reasonable time during normal
business hours and from time to time, (i) permit any Bank or the
Agent or any agents or representatives thereof to examine and
make copies of and abstracts from the records and books of
account of, and visit the properties of, the Borrowers and their
respective Subsidiaries, and to discuss the affairs, finances
and accounts of the Borrowers and their respective Subsidiaries
with their respective directors, officers, employees and
independent auditors, provided that representatives of the
Company selected by the Company are present during any such
visit or discussion, and by this provision the Company does
hereby authorize such persons to discuss such affairs, finances
and accounts with any Bank or the Agent subject to the above
terms and conditions and (ii) permit the Agent and any of its
agents or representative to conduct a comprehensive field audit
of its books, records, property and assets, which audits shall
be performed once per year (unless an Event of Default has
occurred in which case audits may be performed more frequently)
and which audits shall be at the expense of the Borrowers. In
connection with any activities of the Agent or any Bank pursuant
to this Section 5.1(e), prior to any Default or Event of Default
hereunder, the Agent and each of the Banks: (i) shall endeavor
to give the Company three Business Days notice of any audit or
visit, (ii) shall follow the Company's standard security
procedures, and (iii) agree that inventory will not be audited
unless the Company has relied on inventory in the Borrowing Base
during the twelve months prior to any such audit.
(f) Stamp Taxes. The Borrowers will pay all
stamp taxes and similar taxes, if any, including interest and
penalties, if any, payable in respect of the Notes. The
efficacy of this subsection shall survive the payment in full of
the Notes.
(g) Additional Security and Collateral. Promptly
cause each person becoming a Domestic Subsidiary of any Borrower
from time to time to execute and deliver to the Banks and the
Agent, within 30 days after such person becomes a Domestic
Subsidiary, a Guaranty, together with other related documents
described in Section 2.5, and, the Company shall pledge 66% of
the stock of each person becoming a Foreign Subsidiary of the
Borrower if such Foreign Subsidiary is not financed outside of
this Agreement, within 30 days after such person becomes a
Foreign Subsidiary, in each case sufficient to pledge such stock
to the Collateral Agent for the benefit of the Lenders pursuant
to the Intercreditor Agreement. Each Borrower shall notify the
Banks and the Agent, within 10 days after the occurrence
thereof, any person's becoming a Subsidiary.
(h) Further Assurances. Will execute and deliver
within 30 days after request therefor by the Required Banks or
the Agent, all further instruments and documents and take all
further action that may be necessary, in order to give effect
to, and to aid in the exercise and enforcement of the rights and
remedies of the Banks and the Agent under, this Agreement and
the Notes. In addition, the Company agrees to promptly deliver
to the Agent and the Banks supplements to Schedule 4.4 listing
any Subsidiary not listed in Schedule 4.4 hereto.
6.1 Negative Covenants. Until the Termination Date
and thereafter until irrevocable payment in full of the
principal of and accrued interest on the Notes and the
performance of all other obligations of each Borrower under this
Agreement, each Borrower agrees that, unless the Required Banks
shall otherwise consent in writing it shall not:
(a) Current Ratio. Permit or suffer the
Consolidated Current Ratio to be less than 1.40 to 1.00 at any
time.
(b) Fixed Charge Coverage Ratio. Permit or
suffer the Consolidated Fixed Charge Coverage Ratio to be less
than, at any time, 3.0 to 1.0; calculated as of the end of each
fiscal quarter for the four immediately preceding fiscal
quarters.
(c) Tangible Net Worth. Permit or suffer
Consolidated Tangible Net Worth at any time to be less than the
sum of (i) $85,000,000 plus (ii) 75% of the Net Cash Proceeds of
Capital Stock of the Company offered or otherwise sold after the
Effective Date, plus (iii) an aggregate amount equal to 60% of
Consolidated Net Income (but, in each case, only if a positive
number) for each completed fiscal year of the Company commencing
with the fiscal year ending August 31, 1996.
(d) Funded Indebtedness to Total Capitalization.
Permit or suffer the ratio of Consolidated Funded Indebtedness
to Consolidated Total Capitalization at any time to exceed 0.60
to 1.0.
(e) Indebtedness. Create, incur, assume or in
any manner become liable in respect of, or suffer to exist, any
Indebtedness other than:
(i) The Advances;
(ii) The Indebtedness described in Schedule
5.2(e) hereto, having the same terms as those existing on the
date of this Agreement, but no extension or renewal thereof
shall be permitted;
(iii) Indebtedness of any Subsidiary of a
Borrower owing to a Borrower or to any other Subsidiary of a
Borrower;
(iv) Interest rate or currency swaps, rate
caps or other similar transactions with any Bank (valued in an
amount equal to the highest termination payment, if any, that
would be payable by such person upon termination for any reason
on the date of determination) not exceeding the aggregate amount
of the Commitments;
(v) The Private Placement Debt in an
aggregate principal amount not exceeding $50,000,000, together
with guaranties of such Indebtedness by Domestic Subsidiaries;
(vi) Unsecured Indebtedness of Jabil Malaysia
in an aggregate amount not exceeding $30,000,000 and a guaranty
by the Company of such Indebtedness; provided, however, the
aggregate amount of Indebtedness of Jabil Malaysia shall not
exceed the book value of its accounts receivable, inventory and
fixed assets as reported in the books of Jabil Malaysia and the
terms and conditions of such Indebtedness, including the form of
guaranty to be executed by the Company, shall be satisfactory to
the Banks.
(f) Liens. Create, incur or suffer to exist any
Lien on any of the assets, rights, revenues or property, real,
personal or mixed, tangible or intangible, whether now owned or
hereafter acquired, of any Borrower or any of its Subsidiaries,
other than:
(i) Liens for taxes not delinquent or for
taxes being contested in good faith by appropriate proceedings
and as to which adequate financial reserves have been
established on its books and records;
(ii) Liens (other than any Lien imposed by
ERISA) created and maintained in the ordinary course of business
which are not material in the aggregate and which constitute (A)
pledges or deposits under worker's compensation laws,
unemployment insurance laws or similar legislation, (B) good
faith deposits in connection with bids, tenders, contracts or
leases to which a Borrower or any of its Subsidiaries is a party
for a purpose other than borrowing money or obtaining credit,
including rent security deposits, (C) liens imposed by law, such
as those of carriers, warehousemen and mechanics, if payment of
the obligation secured thereby is not yet due, (D) Liens
securing taxes, assessments or other governmental charges or
levies not yet subject to penalties for nonpayment, and (E)
pledges or deposits to secure public or statutory obligations of
a Borrower or any of its Subsidiaries, or surety, customs or
appeal bonds to which a Borrower or any of its Subsidiaries is a
party;
(iii) Liens affecting real property which
constitute minor survey exceptions or defects or irregularities
in title, minor encumbrances, easements or reservations of, or
rights of others for, rights of way, sewers, electric lines,
telegraph and telephone lines and other similar purposes, or
zoning or other restrictions as to the use of such real
property, provided that all of the foregoing, in the aggregate,
do not at any time materially detract from the value of said
properties or materially impair their use in the operation of
the businesses of a Borrower or any of its Subsidiaries;
(iv) Liens existing on the date hereof upon
the same terms as the date hereof, but no extensions, renewals
and replacements thereof shall be permitted, with each existing
Lien described in Schedule 5.2(f) hereto;
(v) Liens granted by any Subsidiary in favor
of a Borrower or any other Subsidiary which are subordinated to
the Liens of the Agent and the Banks under the Security
Documents on terms and pursuant to agreements satisfactory to
the Banks;
(vi) The interest or title of a lessor under
any lease otherwise permitted under this Agreement with respect
to the property subject to such lease to the extent performance
of the obligations of a Borrower or its Subsidiary thereunder is
not delinquent; and
(vii) Liens in favor of the Collateral
Agent for the benefit of the Banks and the Note Purchasers
contemplated by the Intercreditor Agreement.
(g) Merger; Acquisitions; Etc. Subject to
Section 5.2(j), purchase or otherwise acquire, whether in one or
a series of transactions, all or a substantial portion of the
business assets, rights, revenues or property, real, personal or
mixed, tangible or intangible, of any person, or all or a
substantial portion of the capital stock of or other ownership
interest in any other person; nor merge or consolidate or
amalgamate with any other person or take any other action having
a similar effect, nor enter into any joint venture or similar
arrangement with any other person, provided, however, that this
Section 5.2(g) shall not prohibit any merger, acquisition or
joint venture if (i) a Borrower shall be the surviving or
continuing corporation thereof, (ii) immediately before and
after such merger or acquisition, no Default or Event of Default
shall exist or shall have occurred and be continuing and the
representations and warranties contained in Article IV shall be
true and correct on and as of the date thereof (both before and
after such merger or acquisition is consummated) as if made on
the date such merger or acquisition is consummated, (iii) the
aggregate amount paid or payable in cash for all such mergers,
acquisitions or joint ventures by the Borrowers after the
Effective Date does not exceed $10,000,000, and (iv) prior to
the consummation of such merger or acquisition, the Company
shall have provided to the Banks an opinion of counsel and a
certificate of the chief financial officer of the Company
(attaching computations and pro forma financial statements to
demonstrate compliance with all financial covenants hereunder
both before and after such merger, acquisition or joint venture
has been completed), each stating that such merger or
acquisition complies with this Section 5.2(g) and that any other
conditions under this Agreement relating to such transaction
have been satisfied.
(h) Disposition of Assets; Etc. Sell, lease,
license, transfer, assign or otherwise dispose of all or a
substantial portion of its business, assets, rights, revenues or
property, real, personal or mixed, tangible or intangible,
whether in one or a series of transactions, other than inventory
sold in the ordinary course of business upon customary credit
terms and sales of scrap or obsolete material or equipment,
provided, however, that this Section 5.2(h) shall not prohibit
any such sale, lease, license, transfer, assignment or other
disposition if the aggregate book value (disregarding any
write-downs of such book value other than ordinary depreciation
and amortization) of all of the business, assets, rights,
revenues and property disposed of after the date of this
Agreement shall be less than $5,000,000 in the aggregate and if,
immediately before and after such transaction, no Default or
Event of Default shall exist or shall have occurred and be
continuing.
(i) Nature of Business. Make any substantial
change in the nature of its business from that engaged in on the
date of this Agreement or engage in any other businesses other
than the design, development and manufacturing of computer-grade
electronic products.
(j) Investments, Loans and Advances. Subject to
Section 5.2(g), purchase or otherwise acquire any capital stock
of or other ownership interest in, or debt securities of or
other evidences of Indebtedness of, any other person; nor make
any loan or advance of any of its funds or property or make any
other extension of credit to, or make any investment or acquire
any interest whatsoever in, any other person; nor incur any
Contingent Liability; other than (i) extensions of trade credit
made in the ordinary course of business on customary credit
terms and commission, travel and similar advances made to
officers and employees in the ordinary course of business, and
(ii) commercial paper of any United States issuer having the
highest rating then given by Moody's Investors Service, Inc., or
Standard & Poor's Corporation, direct obligations of and
obligations fully guaranteed by the United States of America or
any agency or instrumentality thereof, or certificates of
deposit of any commercial bank which is a member of the Federal
Reserve System and which has capital, surplus and undivided
profit (as shown on its most recently published statement of
condition) aggregating not less than $100,000,000, provided,
however, that each of the foregoing investments has a maturity
date not later than 365 days after the acquisition thereof by
the Company or any of its Subsidiaries, (iii) those investments,
loans, advances and other transactions described in Schedule
5.2(j) hereto, having the same terms as existing on the date of
this Agreement, but no extension or renewal thereof shall be
permitted and (iv) investments, loans and advances to any
Subsidiary; provided, that, the aggregate amount of such
investments, loans and advances outstanding at any time to
Subsidiaries who are not a Guarantor shall not exceed
$30,000,000 and the aggregate amount of such investments, loans
and advances to Jabil Ltd. shall not exceed $15,000,000.
(k) Transactions with Affiliates. Enter into,
become a party to, or become liable in respect of, any contract
or undertaking with any Affiliate except in the ordinary course
of business and on terms not less favorable to a Borrower or any
Subsidiary than those which could be obtained if such contract
or undertaking were an arms length transaction with a person
other than an Affiliate.
(l) Sale and Leaseback Transactions. Become or
remain liable in any way, whether directly or by assignment or
as a guarantor or other contingent obligor, for the obligations
of the lessee or user under any lease or contract for the use of
any real or personal property if such property is owned on the
date of this Agreement or thereafter acquired by a Borrower or
any of its Subsidiaries and has been or is to be sold or
transferred to any other person and was, is or will be used by a
Borrower or any such Subsidiary for substantially the same
purpose as such property was used by a Borrower or such
Subsidiary prior to such sale or transfer.
(m) Lease Rentals and Use Payments. Become or
remain liable in any way, whether directly or by assignment or
as a guarantor or other contingent obligor, for the obligations
of any lessee or user under any lease (other than a Capital
Lease) of real or personal property if the highest annual rent
and other amounts (exclusive of property taxes, property and
liability insurance premiums and maintenance costs), which may
be payable by the lessee or user thereunder in any fiscal year
of the Company during the term thereof when added to the
aggregate of all such rents and other amounts in respect of
which the Borrowers and its Subsidiaries are liable which may be
payable in such fiscal year, shall exceed $10,000,000.
(n) Negative Pledge Limitation. Enter into any
Agreement, with any person, other than the Banks pursuant hereto
or the Note Purchasers pursuant to the Note Purchase Agreement,
which prohibits or limits the ability of any Borrower or any
Subsidiary (other than Jabil Malaysia) to create, incur, assume
or suffer to exist any Lien upon any of its assets, rights,
revenues or property, real, personal or mixed, tangible or
intangible, whether now owned or hereafter acquired.
(o) Inconsistent Agreements. Enter into any
agreement containing any provision which would be violated or
breached by this Agreement or any of the transactions
contemplated hereby or by performance by any Borrower or any of
its Subsidiaries of its obligations in connection therewith.
(p) Accounting Changes. A Borrower shall not
change its fiscal year or make any significant changes (i) in
accounting treatment and reporting practices except as permitted
by Generally Accepted Accounting Principles and disclosed to the
Banks, or (ii) in tax reporting treatment except as permitted by
law and disclosed to the Banks.
(q) Additional Covenants. If at any time any
Borrower shall enter into or be a party to any instrument or
agreement, including all such instruments or agreements in
existence as of the date hereof and all such instruments or
agreements entered into after the date hereof, relating to or
amending any terms or conditions applicable to any of its
Indebtedness which includes covenants, terms, conditions or
defaults not substantially provided for in this Agreement or
more favorable to the lender or lenders thereunder than those
provided for in this Agreement, then the Borrowers shall
promptly so advise the Agent and the Banks. Thereupon, if the
Agent shall request, upon notice to the Borrowers, the Agent and
the Banks shall enter into an amendment to this Agreement or an
additional agreement (as the Agent may request), providing for
substantially the same covenants, terms, conditions and defaults
as those provided for in such instrument or agreement to the
extent required and as may be selected by the Agent. In
addition to the foregoing, any covenants, terms, conditions or
defaults in the Private Placement Documents not substantially
provided for in this Agreement or more favorable to the holders
of the Private Placement Debt issued in connection therewith,
are hereby incorporated by reference into this Agreement to the
same extent as if set forth fully herein, and no subsequent
amendment, waiver or modification thereof shall effect any such
covenants, terms, conditions or defaults as incorporated herein.
ARTICLE VI.
DEFAULT
7. Events of Default. The occurrence of any one of
the following events or conditions shall be deemed an "Event of
Default" hereunder unless waived by the Required Banks pursuant
to Section 9.1:
(a) Nonpayment of Principal. Any Borrower shall
fail to pay when due any principal of the Notes; or
(b) Nonpayment of Interest. Any Borrower shall
fail to pay when due any interest or any fees or any other
amount payable hereunder and such failure shall remain
unremedied for five days; or
(c) Misrepresentation. Any representation or
warranty made by any Borrower or any Guarantor in Article IV
hereof, any other Loan Document or any other certificate,
report, financial statement or other document furnished by or on
behalf of any Borrower or any Guarantor in connection with this
Agreement shall prove to have been incorrect in any material
respect when made or deemed made; or
(d) Certain Covenants. Any Borrower shall fail
to perform or observe any term, covenant or agreement contained
in Section 5.2 hereof; or
(e) Other Defaults. Any Borrower or any
Guarantor shall fail to perform or observe any other term,
covenant or agreement contained in this Agreement or any other
Loan Document, and any such failure shall remain unremedied for
15 calendar days (or such longer or shorter period of time as
may be specified in any Security Document); or
(f) Cross Default. Any Borrower, any Guarantor or any of
their respective Subsidiaries shall fail to pay any part of the
principal of, the premium, if any, or the interest on, or any
other payment of money due under any of its Indebtedness (other
than Indebtedness hereunder), beyond any period of grace
provided with respect thereto, which individually or together
with other such Indebtedness as to which any such failure exists
has an aggregate outstanding principal amount in excess of
$500,000; or any Borrower, any Guarantor or any of their
respective Subsidiaries shall fail to perform or observe any
other term, covenant or agreement contained in any agreement,
document or instrument evidencing or securing any such
Indebtedness having such aggregate outstanding principal amount,
or under which any such Indebtedness was issued or created,
beyond any period of grace, if any, provided with respect
thereto and such Borrower, such Guarantor or such Subsidiary has
been notified by the creditor of such default; and the effect of
any such failure is either (i) to cause, or permit the holders
of such Indebtedness (or a trustee on behalf of such holders) to
cause, any payment of such Indebtedness to become due prior to
its due date or (ii) to permit the holders of such Indebtedness
(or a trustee on behalf of such holders) to elect a majority of
the board of directors of such Borrower, such Guarantor or such
Subsidiary; or
(g) Judgments. One or more judgments or orders
for the payment of money in an aggregate amount of $5,000,000
shall be rendered against or shall affect any Borrower or any of
their respective Subsidiaries, or any other judgment or order
(whether or not for the payment of money) shall be rendered
against or shall affect any Borrower or any of their respective
Subsidiaries which causes or could cause a Material Adverse
Effect, and either (i) such judgment or order shall have
remained unsatisfied or uninsured for a period of 21 days and
such Borrower or such Subsidiary shall not have taken action
necessary to stay enforcement thereof by reason of pending
appeal or otherwise, prior to the expiration of the applicable
period of limitations for taking such action or, if such action
shall have been taken, a final order denying such stay shall
have been rendered, or (ii) enforcement proceedings shall have
been commenced by any creditor upon any such judgment or order;
or
(h) ERISA. The occurrence of a Reportable Event
that results in or could result in material liability of any
Borrower, any Subsidiary of any Borrower or their ERISA
Affiliates to the PBGC or to any Plan and such Reportable Event
is not corrected within thirty (30) days after the occurrence
thereof; or the occurrence of any Reportable Event which could
constitute grounds for termination of any Plan of any Borrower,
their respective Subsidiaries or their ERISA Affiliates by the
PBGC or for the appointment by the appropriate United States
District Court of a trustee to administer any such Plan and such
Reportable Event is not corrected within thirty (30) days after
the occurrence thereof; or the filing by any Borrower, any
Subsidiary of any Borrower or any of their ERISA Affiliates of a
notice of intent to terminate a Plan or the institution of other
proceedings to terminate a Plan; or any Borrower, any Subsidiary
of any Borrower or any of their ERISA Affiliates shall fail to
pay when due any material liability to the PBGC or to a Plan; or
the PBGC shall have instituted proceedings to terminate, or to
cause a trustee to be appointed to administer, any Plan of any
Borrower, their respective Subsidiaries or their ERISA
Affiliates; or any person engages in a Prohibited Transaction
with respect to any Plan which results in or could result in
material liability of the any Borrower, any Subsidiary of any
Borrower, any of their ERISA Affiliates, any Plan of any
Borrower, their respective Subsidiaries or their ERISA
Affiliates or fiduciary of any such Plan; or failure by any
Borrower, any Subsidiary of any Borrower or any of their ERISA
Affiliates to make a required installment or other payment to
any Plan within the meaning of Section 302(f) of ERISA or
Section 412(n) of the Code that results in or could result in
liability of any Borrower, any Subsidiary of any Borrower or any
of their ERISA Affiliates to the PBGC or any Plan; or the
withdrawal of any Borrower, any of their respective Subsidiaries
or any of their ERISA Affiliates from a Plan during a plan year
in which it was a "substantial employer" as defined in Section
4001(9a)(2) of ERISA; or any Borrower, any of their respective
Subsidiaries or any of their ERISA Affiliates becomes an
employer with respect to any Multiemployer Plan without the
prior written consent of the Required Banks; or
(i) Insolvency, Etc. Any Borrower or any
Guarantor shall be dissolved or liquidated (or any judgment,
order or decree therefor shall be entered), or shall generally
not pay its debts as they become due, or shall admit in writing
its inability to pay its debts generally, or shall make a
general assignment for the benefit of creditors, or shall
institute, or there shall be instituted against any Borrower or
any Guarantor, any proceeding or case seeking to adjudicate it a
bankrupt or insolvent or seeking liquidation, winding up,
reorganization, arrangement, adjustment, protection, relief or
composition of it or its debts under any law relating to
bankruptcy, insolvency or reorganization or relief or protection
of debtors or seeking the entry of an order for relief, or the
appointment of a receiver, trustee, custodian or other similar
official for it or for any substantial part of its assets,
rights, revenues or property, and, if such proceeding is
instituted against any Borrower or any Guarantor and is being
contested by such Borrower in good faith by appropriate
proceedings, such proceeding shall remain undismissed or
unstayed for a period of 60 days; or any Borrower or such
Guarantor shall take any action (corporate or other) to
authorize or further any of the actions described above in this
subsection; or
(j) Loan Documents. Any event of default
described in any Loan Document shall have occurred and be
continuing, or any material provision of Article VIII hereof or
of any Loan Document shall at any time for any reason cease to
be valid and binding and enforceable against any obligor
thereunder, or the validity, binding effect or enforceability
thereof shall be contested by any person, or any obligor, shall
deny that it has any or further liability or obligation
thereunder, or any Loan Document shall be terminated,
invalidated or set aside, or be declared ineffective or
inoperative or in any way cease to give or provide to the Banks
and the Agent the benefits purported to be created thereby.
(k) Change of Control. The Company shall
experience a Change of Control. For purposes of this Section
6.1(k), a "Change of Control" shall occur if during any
twelve-month period (i) any person or group of persons (within
the meaning of Section 13 or 14 of the Securities Exchange Act
of 1934, as amended) shall have acquired beneficial ownership
(within the meaning of Rule 13D-3 promulgated by the Securities
and Exchange Commission under said Act) of 50% or more in voting
power of the voting shares of the Company that were outstanding
as of the date of this Agreement and (ii) a majority of the
board of directors of the Company shall cease for any reason to
consist of individuals who as of a date twelve months prior to
any date compliance herewith is determined were directors of the
Company.
7.1 Remedies. (a) Upon the occurrence and during the
continuance of any Event of Default, the Agent may, with the
consent of the Required Banks, and, upon being directed to do so
by the Required Banks, shall by notice to the Borrowers (i)
terminate the Commitments or (ii) declare the outstanding
principal of, and accrued interest on, the Notes and all other
amounts owing under this Agreement to be immediately due and
payable, or (iii) demand immediate delivery of cash collateral,
and the Borrowers agree to deliver such cash collateral upon
demand, in an amount equal to the maximum amount that may be
available to be drawn at any time prior to the stated expiry of
all outstanding Letters of Credit, or any one or more of the
foregoing, whereupon the Commitments shall terminate forthwith
and all such amounts, including cash collateral, shall become
immediately due and payable, provided that in the case of any
event or condition described in Section 6.1(i) with respect to
any Borrower, the Commitments shall automatically terminate
forthwith and all such amounts, including cash collateral, shall
automatically become immediately due and payable without notice;
in all cases without demand, presentment, protest, diligence,
notice of dishonor or other formality, all of which are hereby
expressly waived. Such cash collateral delivered in respect of
outstanding Letters of Credit shall be deposited in a special
cash collateral account to be held by the Agent as collateral
security for the payment and performance of the Borrowers'
obligations under this Agreement to the Banks and the Agent.
(b) The Agent may, with the consent of the
Required Banks, and, upon being directed to do so by the
Required Banks, shall, in addition to the remedies provided in
Section 6.2(a), exercise and enforce any and all other rights
and remedies available to it or the Banks, whether arising under
this Agreement, the Notes, any other Loan Document or under
applicable law, in any manner deemed appropriate by the Agent,
including suit in equity, action at law, or other appropriate
proceedings, whether for the specific performance (to the extent
permitted by law) of any covenant or agreement contained in this
Agreement or any other Loan Document or in aid of the exercise
of any power granted in this Agreement or any other Loan
Document.
(c) Upon the occurrence and during the
continuance of any Event of Default, each Bank may at any time
and from time to time, without notice to any Borrower (any
requirement for such notice being expressly waived by each
Borrower) set off and apply against any and all of the
obligations of each Borrower now or hereafter existing under
this Agreement, whether owing to such Bank or any other Bank or
the Agent, any and all deposits (general or special, time or
demand, provisional or final) at any time held and other
indebtedness at any time owing by such Bank to or for the credit
or the account of any Borrower and any property of any Borrower
from time to time in possession of such Bank, irrespective of
whether or not such Bank shall have made any demand hereunder
and although such obligations may be contingent and unmatured.
Each of the Borrowers hereby grants to the Banks and the Agent a
lien on and security interest in all such deposits, indebtedness
and property as collateral security for the payment and
performance of the obligations of each Borrower under this
Agreement. The rights of such Bank under this Section 6.2(c)
are in addition to other rights and remedies (including, without
limitation, other rights of setoff) which such Bank may have.
7.2 Distribution of Proceeds of Collateral. All
proceeds received by the Agent pursuant to the Security
Documents for application to the Bank Obligations or any
payments on any of the liabilities secured by the Security
Documents received by the Agent or any Bank upon and during the
continuance of any Event of Default shall be allocated and
distributed as follows:
(a) First, to the payment of all costs and
expenses, including without limitation all attorneys' fees, of
the Agent in connection with the enforcement of the Security
Documents and otherwise administering this Agreement;
(b) Second, to the payment of all costs, expenses
and fees, including without limitation, commitment fees and
attorneys fees, owing to the Banks pursuant to the Bank
Obligations on a pro rata basis in accordance with the Bank
Obligations consisting of fees, costs and expenses owing to the
Banks under the Bank Obligations, for application to payment of
such liabilities;
(c) Third, to the Banks on a pro rata basis in
accordance with the Bank Obligations consisting of interest
owing to the Banks under the Bank Obligations, for application
to payment of such liabilities;
(d) Fourth, to the Banks on a pro rata basis in
accordance with the Bank Obligations consisting of principal
(including without limitation any cash collateral for any
outstanding Letters of Credit) owing to the Banks under the Bank
Obligations, for application to payment of such liabilities;
(e) Fifth, to the payment of any and all other
amounts owing to the Banks on a pro rata basis in accordance
with the total amount of such Indebtedness owing to each of the
Banks, for application to payment of such liabilities; and
(f) Sixth, to the Borrowers or such other person
as may be legally entitled thereto.
7.3 Letter of Credit Liabilities. For the purposes of
payments and distributions under Section 6.3, the full amount of
Bank Obligations on account of any Letter of Credit then
outstanding but not drawn upon shall be deemed to be then due
and owing. Amounts distributable to the Banks on account of
such Bank Obligations under such Letter of Credit shall be
deposited in a separate interest bearing collateral account in
the name of and under the control of the Agent and held by the
Agent first as security for such Letter of Credit Bank
Obligations and then as security for all other Bank Obligations
and the amount so deposited shall be applied to the Letter of
Credit Bank Obligations at such times and to the extent that
such Letter of Credit Bank Obligations become absolute
liabilities and if and to the extent that the Letter of Credit
Bank Obligations fail to become absolute Bank Obligations
because of the expiration or termination of the underlying
letters of credit without being drawn upon then such amounts
shall be applied to the remaining Bank Obligations in the order
provided in Section 6.3. Each Borrower hereby grants to the
Agent, for the benefit of the Banks, a lien and security
interest in all such funds deposited in such separate interest
bearing collateral account, as security for all the Bank
Obligations as set forth above.
ARTICLE VII. THE
AGENT AND THE BANKS
8. Appointment and Authorization. Each Bank hereby
irrevocably appoints and authorizes the Agent to take such
action as agent on its behalf and to exercise such powers under
this Agreement and the Loan Documents as are delegated to the
Agent by the terms hereof or thereof, together with all such
powers as are reasonably incidental thereto. The provisions of
this Article VII are solely for the benefit of the Agent and the
Banks, and the Borrowers shall not have any rights as a third
party beneficiary of any of the provisions hereof. In
performing its functions and duties under this Agreement, the
Agent shall act solely as agent of the Banks and does not assume
and shall not be deemed to have assumed any obligation towards
or relationship of agency or trust with or for the Borrowers.
Each of the Banks also authorizes the Agent to execute for and
on its behalf the Intercreditor Agreement dated as of the date
hereof in the form of Exhibit M attached hereto.
8.1 Agent and Affiliates. NBD Bank in its capacity as
a Bank hereunder shall have the same rights and powers hereunder
as any other Bank and may exercise or refrain from exercising
the same as though it were not the Agent. NBD Bank and its
affiliates may (without having to account therefor to any Bank)
accept deposits from, lend money to, and generally engage in any
kind of banking, trust, financial advisory or other business
with any Borrower or any Subsidiary of any Borrower as if it
were not acting as Agent hereunder, and may accept fees and
other consideration therefor without having to account for the
same to the Banks.
8.2 Scope of Agent's Duties. The Agent shall have no
duties or responsibilities except those expressly set forth
herein, and shall not, by reason of this Agreement, have a
fiduciary relationship with any Bank, and no implied covenants,
responsibilities, duties, obligations or liabilities shall be
read into this Agreement or shall otherwise exist against the
Agent. As to any matters not expressly provided for by this
Agreement (including, without limitation, collection and
enforcement actions under the Notes), the Agent shall not be
required to exercise any discretion or take any action, but the
Agent shall take such action or omit to take any action pursuant
to the written instructions of the Required Banks and may
request instructions from the Required Banks. The Agent shall
in all cases be fully protected in acting, or in refraining from
acting, pursuant to the written instructions of the Required
Banks, which instructions and any action or omission pursuant
thereto shall be binding upon all of the Banks; provided,
however, that the Agent shall not be required to act or omit to
act if, in the judgment of the Agent, such action or omission
may expose the Agent to personal liability or is contrary to
this Agreement, the Notes or applicable law.
8.3 Reliance by Agent. The Agent shall be entitled to
rely upon any certificate, notice, document or other
communication (including any cable, telegram, telex, facsimile
transmission or oral communication) believed by it to be genuine
and correct and to have been sent or given by or on behalf of a
proper person. The Agent may treat the payee of any Note as the
holder thereof unless and until the Agent receives written
notice of the assignment thereof pursuant to the terms of this
Agreement signed by such payee and the Agent receives the
written agreement of the assignee that such assignee is bound
hereby to the same extent as if it had been an original party
hereto. The Agent may employ agents (including without
limitation collateral agents) and may consult with legal
counsel (who may be counsel for the Borrowers), independent
public accountants and other experts selected by it and shall
not be liable to the Banks, except as to money or property
received by it or its authorized agents, for the negligence or
misconduct of any such agent selected by it with reasonable care
or for any action taken or omitted to be taken by it in good
faith in accordance with the advice of such counsel, accountants
or experts.
8.4 Default. The Agent shall not be deemed to have
knowledge of the occurrence of any Default or Event of Default,
unless the Agent has received written notice from a Bank or a
Borrower specifying such Default or Event of Default and stating
that such notice is a "Notice of Default". In the event that
the Agent receives such a notice, the Agent shall give prompt
written notice thereof to the Banks. 8.5 Liability
of Agent. Neither the Agent nor any of its directors, officers,
agents, or employees shall be liable to the Banks for any action
taken or not taken by it or them in connection herewith with the
consent or at the request of the Required Banks or in the
absence of its or their own gross negligence or willful
misconduct. Neither the Agent nor any of its directors,
officers, agents or employees shall be responsible for or have
any duty to ascertain, inquire into or verify (i) any recital,
statement, warranty or representation contained in this
Agreement or any Note or any Guaranty, or in any certificate,
report, financial statement or other document furnished in
connection with this Agreement, (ii) the performance or
observance of any of the covenants or agreements of any Borrower
or any Guarantor, (iii) the satisfaction of any condition
specified in Article II hereof, or (iv) the validity,
effectiveness, legal enforceability, value or genuineness of
this Agreement or the Notes or any collateral subject thereto or
any other instrument or document furnished in connection
herewith.
8.6 Nonreliance on Agent and Other Banks. Each Bank
acknowledges and agrees that it has, independently and without
reliance on the Agent or any other Bank, and based on such
documents and information as it has deemed appropriate, made its
own credit analysis of the Borrowers and decision to enter into
this Agreement and that it will, independently and without
reliance upon the Agent or any other Bank, and based on such
documents and information as it shall deem appropriate at the
time, continue to make its own analysis and decision in taking
or not taking action under this Agreement. The Agent shall not
be required to keep itself informed as to the performance or
observance by any Borrower or any Guarantor of this Agreement,
the Notes or any other documents referred to or provided for
herein or to inspect the properties or books of any Borrower or
any Guarantor and, except for notices, reports and other
documents and information expressly required to be furnished to
the Banks by the Agent hereunder, the Agent shall not have any
duty or responsibility to provide any Bank with any information
concerning the affairs, financial condition or business of the
Borrowers or any of their respective Subsidiaries which may come
into the possession of the Agent or any of its affiliates.
8.7 Indemnification. The Banks agree to indemnify the
Agent (to the extent not reimbursed by the Borrowers, but
without limiting any obligation of the Borrowers to make such
reimbursement), ratably according to the respective principal
amounts of the Advances then outstanding made by each of them
(or if no Advances are at the time outstanding, ratably
according to the respective amounts of their Commitments), from
and against any and all claims, damages, losses, liabilities,
costs or expenses of any kind or nature whatsoever (including,
without limitation, fees and disbursements of counsel) which may
be imposed on, incurred by, or asserted against the Agent in any
way relating to or arising out of this Agreement or the
transactions contemplated hereby or any action taken or omitted
by the Agent under this Agreement, provided, however, that no
Bank shall be liable for any portion of such claims, damages,
losses, liabilities, costs or expenses resulting from the
Agent's gross negligence or willful misconduct. Without
limitation of the foregoing, each Bank agrees to reimburse the
Agent promptly upon demand for its ratable share of any
out-of-pocket expenses (including without limitation reasonable
fees and expenses of counsel) incurred by the Agent in
connection with the preparation, execution, delivery,
administration, modification, amendment or enforcement (whether
through negotiations, legal proceedings or otherwise) of, or
legal advice in respect of rights or responsibilities under,
this Agreement, to the extent that the Agent is not reimbursed
for such expenses by the Borrowers, but without limiting the
obligation of the Borrowers to make such reimbursement. Each
Bank agrees to reimburse the Agent promptly upon demand for its
ratable share of any amounts owing to the Agent by the Banks
pursuant to this Section. If the indemnity furnished to the
Agent under this Section shall, in the judgment of the Agent, be
insufficient or become impaired, the Agent may call for
additional indemnity from the Banks and cease, or not commence,
to take any action until such additional indemnity is furnished.
8.8 Resignation of Agent. The Agent may resign as
such at any time upon thirty days' prior written notice to the
Borrowers and the Banks. In the event of any such resignation,
the Company and the Required Banks shall, by an instrument in
writing delivered to the Banks and the Agent, appoint a
successor, which shall be a Bank or any other commercial bank
organized under the laws of the United States or any State
thereof and having a combined capital and surplus of at least
$500,000,000. If a successor is not so appointed or does not
accept such appointment before the Agent's resignation becomes
effective, the resigning Agent may appoint a temporary successor
to act until such appointment by the Company and the Required
Banks is made and accepted. Any successor to the Agent shall
execute and deliver to the Borrowers and the Banks an instrument
accepting such appointment and thereupon such successor Agent,
without further act, deed, conveyance or transfer shall become
vested with all of the properties, rights, interests, powers,
authorities and obligations of its predecessor hereunder with
like effect as if originally named as Agent hereunder. Upon
request of such successor Agent, the Borrowers and the resigning
Agent shall execute and deliver such instruments of conveyance,
assignment and further assurance and do such other things as may
reasonably be required for more fully and certainly vesting and
confirming in such successor Agent all such properties, rights,
interests, powers, authorities and obligations. The provisions
of this Article VII shall thereafter remain effective for such
resigning Agent with respect to any actions taken or omitted to
be taken by such Agent while acting as the Agent hereunder.
8.9 Sharing of Payments. The Banks agree among
themselves that, in the event that any Bank shall obtain payment
in respect of any Advance or any other obligation owing to the
Banks under this Agreement through the exercise of a right of
set-off, banker's lien, counterclaim or otherwise in excess of
its ratable share of payments received by all of the Banks on
account of the Advances and other obligations (or if no Advances
are outstanding, ratably according to the respective amounts of
the Commitments), such Bank shall promptly notify the Agent and
purchase from the other Banks participations in such Advances
and other obligations in such amounts, and make such other
adjustments from time to time, as shall be equitable to the end
that all of the Banks share such payment in accordance with such
ratable shares. The Banks further agree among themselves that
if payment to a Bank obtained by such Bank through the exercise
of a right of set-off, banker's lien, counterclaim or otherwise
as aforesaid shall be rescinded or must otherwise be restored,
each Bank which shall have shared the benefit of such payment
shall, by repurchase of participations theretofore sold, return
its share of that benefit to each Bank whose payment shall have
been rescinded or otherwise restored. The Borrowers agree that
any Bank so purchasing such a participation may, to the fullest
extent permitted by law, exercise all rights of payment,
including set-off, banker's lien or counterclaim, with respect
to such participation as fully as if such Bank were a holder of
such Advance or other obligation in the amount of such
participation. The Banks further agree among themselves that, in
the event that amounts received by the Banks and the Agent
hereunder are insufficient to pay all such obligations or
insufficient to pay all such obligations when due, the fees and
other amounts owing to the Agent in such capacity shall be paid
therefrom before payment of obligations owing to the Banks under
this Agreement, other than agency fees and arrangement fees
payable pursuant to Section 2.3(d) of this Agreement which shall
be paid on a pro rata basis with amounts owing to the Banks.
Except as otherwise expressly provided in this Agreement, if any
Bank or the Agent shall fail to remit to the Agent or any other
Bank an amount payable by such Bank or the Agent to the Agent or
such other Bank pursuant to this Agreement on the date when such
amount is due, such payments shall be made together with
interest thereon for each date from the date such amount is due
until the date such amount is paid to the Agent or such other
Bank at a rate per annum equal to the rate at which borrowings
are available to the payee in its overnight federal funds
market. It is further understood and agreed among the Banks and
the Agent that if the Agent or any Bank shall engage in any
other transactions with any Borrower and shall have the benefit
of any collateral or security therefor which does not expressly
secure the obligations arising under this Agreement except by
virtue of a so-called dragnet clause or comparable provision,
the Agent or such Bank shall be entitled to apply any proceeds
of such collateral or security first in respect of the
obligations arising in connection with such other transaction
before application to the obligations arising under this
Agreement.
8.10 Local Custom. Notwithstanding anything herein to
the contrary, if requested by the Required Banks, all Loans made
hereunder shall be made in compliance with applicable local
market custom and legal practice as determined solely by the
Required Banks, whether or not such custom and legal practices
have the force of law; provided, that, the Agent shall consult
with the Company regarding compliance with local custom and
legal practice if such custom or legal practice does not have
the force of law.
ARTICLE VIII.
GUARANTY
As an inducement to the Banks and the Agent to enter
into the transactions contemplated by this Agreement, each
Guarantor agrees with the Banks and the Agent as follows:
9. Guarantee of Obligations. (a) Each Guarantor
hereby (i) guarantees, as principal obligor and not as surety
only, to the Banks the prompt payment of the principal of and
any and all accrued and unpaid interest (including interest
which otherwise may cease to accrue by operation of any
insolvency law, rule, regulation or interpretation thereof) on
the Advances and all other obligations of each Borrower to the
Banks and the Agent under this Agreement when due, whether by
scheduled maturity, acceleration or otherwise, all in accordance
with the terms of this Agreement and the Notes, including,
without limitation, default interest, indemnification payments
and all reasonable costs and expenses incurred by the Banks and
the Agent in connection with enforcing any obligations of the
Borrowers hereunder, including without limitation the reasonable
fees and disbursements of counsel, (ii) guarantees the prompt
and punctual performance and observance of each and every term,
covenant or agreement contained in this Agreement and the Notes
to be performed or observed on the part of each Borrower, (iii)
guarantees the prompt and complete payment of all obligations
and performance of all covenants of any Borrower under any
interest rate or currency swap agreements or similar
transactions with any Bank, and (iv) agrees to make prompt
payment, on demand, of any and all reasonable costs and expenses
incurred by the Banks or the Agent in connection with enforcing
the obligations of the Guarantor hereunder, including, without
limitation, the reasonable fees and disbursements of counsel
(all of the foregoing being collectively referred to as the
"Guaranteed Obligations").
(b) If for any reason any duty, agreement or
obligation of any Borrower contained in this Agreement shall not
be performed or observed by any Borrower as provided therein, or
if any amount payable under or in connection with this Agreement
shall not be paid in full when the same becomes due and payable,
each Guarantor undertakes to perform or cause to be performed
promptly each of such duties, agreements and obligations and to
pay forthwith each such amount to the Agent for the account of
the Banks regardless of any defense or setoff or counterclaim
which any Borrower may have or assert, and regardless of any
other condition or contingency.
9.1 Waivers and Other Agreements. Each Guarantor
hereby unconditionally (a) waives any requirement that the Banks
or the Agent, upon the occurrence of an Event of Default first
make demand upon, or seek to enforce remedies against any
Borrower before demanding payment under or seeking to enforce
the obligations of any Guarantor hereunder, (b) covenants that
the obligations of each Guarantor hereunder will not be
discharged except by complete performance of all obligations of
the Borrowers contained in this Agreement, the Notes and the
other Loan Documents, (c) agrees that the obligations of each
Guarantor hereunder shall remain in full force and effect
without regard to, and shall not be affected or impaired,
without limitation, by any invalidity, irregularity or
unenforceability in whole or in part of this Agreement, the
Notes or any other Loan Document, or any limitation on the
liability of any Guarantor thereunder, or any limitation on the
method or terms of payment thereunder which may or hereafter be
caused or imposed in any manner whatsoever (including, without
limitation, usury laws), (d) waives diligence, presentment and
protest with respect to, and any notice of default or dishonor
in the payment of any amount at any time payable by any Borrower
under or in connection with this Agreement, the Notes or any
other Loan Document, and further waives any requirement of
notice of acceptance of, or other formality relating to, the
obligations of any Guarantor hereunder and (e) agrees that the
Guaranteed Obligations shall include any amounts paid by any
Borrower to the Banks or the Agent which may be required to be
returned to any Borrower or to its representative or to a
trustee, custodian or receiver for any Borrower.
9.2 Nature of Guaranty. The obligations of each
Guarantor hereunder constitute an absolute and unconditional and
irrevocable guaranty of payment and not a guaranty of collection
and are wholly independent of and in addition to other rights
and remedies of the Banks and the Agent and are not contingent
upon the pursuit by the Banks and the Agent of any such rights
and remedies, such pursuit being hereby waived by each Guarantor.
9.3 Obligations Absolute. The obligations, covenants,
agreements and duties of each Guarantor under this Agreement
shall not be released, affected or impaired by any of the
following whether or not undertaken with notice to or consent of
such Guarantor: (a) an assignment or transfer, in whole or in
part, of the Advances made to any Borrower or of this Agreement
or any Note although made without notice to or consent of such
Guarantor, or (b) any waiver by any Bank or the Agent or by any
other person, of the performance or observance by any Borrower
of any of the agreements, covenants, terms or conditions
contained in this Agreement or in the other Loan Documents, or
(c) any indulgence in or the extension of the time for payment
by any Borrower of any amounts payable under or in connection
with this Agreement or any other Loan Document, or of the time
for performance by any Borrower of any other obligations under
or arising out of this Agreement or any other Loan Document, or
the extension or renewal thereof, or (d) the modification,
amendment or waiver (whether material or otherwise) of any duty,
agreement or obligation of any Borrower set forth in this
Agreement or any other Loan Document (the modification,
amendment or waiver from time to time of this Agreement and the
other Loan Documents being expressly authorized without further
notice to or consent of any Guarantor), or (e) the voluntary or
involuntary liquidation, sale or other disposition of all or
substantially all of the assets of any Borrower or any
receivership, insolvency, bankruptcy, reorganization, or other
similar proceedings, affecting any Borrower or any of its
assets, or (f) the merger or consolidation of any Borrower or
the Guarantors with any other person, or (g) the release of
discharge of any Borrower or any Guarantor from the performance
or observance of any agreement, covenant, term or condition
contained in this Agreement or any other Loan Document, by
operation of law, or (h) any other cause whether similar or
dissimilar to the foregoing which would release, affect or
impair the obligations, covenants, agreements or duties of any
Guarantor hereunder.
9.4 No Investigation by Banks or Agent. Each
Guarantor hereby waives unconditionally any obligation which, in
the absence of such provision, the Banks or the Agent might
otherwise have to investigate or to assure that there has been
compliance with the law of any jurisdiction with respect to the
Guaranteed Obligations recognizing that, to save both time and
expense, each Guarantor has requested that the Banks and the
Agent not undertake such investigation. Each Guarantor hereby
expressly confirms that the obligations of such Guarantor
hereunder shall remain in full force and effect without regard
to compliance or noncompliance with any such law and
irrespective of any investigation or knowledge of any Bank or
the Agent of any such law.
9.5 Indemnity. As a separate, additional and
continuing obligation, each Guarantor unconditionally and
irrevocably undertakes and agrees with the Banks and the Agent
that, should the Guaranteed Obligations not be recoverable from
such Guarantor under Section 8.1 for any reason whatsoever
(including, without limitation, by reason of any provision of
this Agreement or the Notes or any other agreement or instrument
executed in connection herewith being or becoming void,
unenforceable, or otherwise invalid under any applicable law)
then, notwithstanding any knowledge thereof by any Bank or the
Agent at any time, each Guarantor as sole, original and
independent obligor, upon demand by the Agent, will make payment
to the Agent for the account of the Banks and the Agent of the
Guaranteed Obligations by way of a full indemnity in such
currency and otherwise in such manner as is provided in this
Agreement and the Notes.
9.6 Subordination, Subrogation, Etc. Each Guarantor
agrees that any present or future indebtedness, obligations or
liabilities of any Borrower to such Guarantor shall be fully
subordinate and junior in right and priority of payment to any
present or future indebtedness, obligations or liabilities of
the Borrower to the Banks and the Agent. Each Guarantor waives
any right of subrogation to the rights of any Bank or the Agent
against any Borrower or any other person obligated for payment
of the Guaranteed Obligations and any right of reimbursement or
indemnity whatsoever arising or accruing out of any payment
which the Guarantor may make pursuant to this Agreement and the
Notes, and any right of recourse to security for the debts and
obligations of any Borrower, unless and until the entire
principal balance of and interest on the Guaranteed Obligations
shall have been paid in full.
9.7 Waiver. To the extent that it lawfully may, each
Guarantor agrees that it will not at any time insist upon or
plead, or in any manner whatsoever claim or take any benefit or
advantage of any applicable present or future stay, extension or
moratorium law, which may affect observance or performance of
the provisions of this Agreement or the Notes; nor will it
claim, take or insist upon any benefit or advantage of any
present or future law providing for the evaluation or appraisal
of any security for its obligations hereunder or any Borrower
under this Agreement and under the Notes prior to any sale or
sales thereof which may be made under or by virtue of any
instrument governing the same; nor will it, after any such sale
or sales claim or exercise any right, under any applicable law,
to redeem any portion of such security so sold.
9.8 Joint and Several Obligations; Contribution
Rights. (a) Notwithstanding anything to the contrary set forth
herein or in any Note or in any other Loan Document, the
obligations of the Guarantors hereunder are joint and several.
(b) If any Guarantor makes a payment in respect
of the Guaranteed Obligations it shall have the rights of
contribution set forth below against the other Guarantors;
provided that such Guarantor shall not exercise its right of
contribution until all the Guaranteed Obligations shall have
been finally paid in full in cash. If any Guarantor makes a
payment in respect of the Guaranteed Obligations that is smaller
in proportion to its Payment Share (as hereinafter defined) than
such payments made by the other Guarantors are in proportion to
the amounts of their respective Payment Shares, the Guarantor
making such proportionately smaller payment shall, when
permitted by the preceding sentence, pay to the other Guarantors
an amount such that the net payments made by the Guarantor in
respect of the Bank Obligations shall be shared among the
Guarantors pro rata in proportion to their respective Payment
Shares. If any Guarantor receives any payment that is greater
in proportion to the amount of its Payment Shares than the
payments received by the other Guarantors are in proportion to
the amounts of their respective Payment Shares, the Guarantor
receiving such proportionately greater payment shall, when
permitted by the second preceding sentence, pay to the other
Guarantors an amount such that the payments received by the
Guarantors shall be shared among the Guarantors pro rata in
proportion to their respective Payment Shares. Notwithstanding
anything to the contrary contained in this paragraph or in this
Agreement, no liability or obligation of any Guarantor that
shall accrue pursuant to this paragraph shall be paid nor shall
it be deemed owed pursuant to this paragraph until all of the
Bank Obligations shall be finally paid in full in cash.
For purposes hereof, the "Payment Share" of each
Guarantor shall be the sum of (a) the aggregate proceeds of the
Guaranteed Obligations received by such Guarantor plus (b) the
product of (i) the aggregate Guaranteed Obligations remaining
unpaid on the date such Guaranteed Obligations become due and
payable in full, whether by stated maturity, acceleration, or
otherwise (the "Determination Date") reduced by the amount of
such Guaranteed Obligations attributed to such Guarantors
pursuant to clause (a) above, times (ii) a fraction, the
numerator of which is such Guarantor's net worth on the
effective date of this Agreement (determined as of the end of
the immediately preceding fiscal reporting period of such
Guarantor), and the denominator of which is the aggregate net
worth of all Guarantors on such effective date.
(c) It is the intent of each Guarantor, the Agent
and the Banks that each Guarantor's maximum Guaranteed
Obligations shall be in, but not in excess of:
(i) in a case or proceeding commenced by or
against such Guarantor under the Bankruptcy Code on or within
one year from the date on which any of the Guaranteed
Obligations are incurred, the maximum amount that would not
otherwise cause the Guaranteed Obligations (or any other
obligations of such Guarantor to the Agent and the Banks) to be
avoidable or unenforceable against such Guarantor under (A)
Section 548 of the Bankruptcy Code or (B) any state fraudulent
transfer or fraudulent conveyance act or statute applied in such
case or proceeding by virtue of Section 544 of the Bankruptcy
Code; or
(ii) in a case or proceeding commenced by or
against such Guarantor under the Bankruptcy Code subsequent to
one year from the date on which any of the Guaranteed
Obligations are incurred, the maximum amount that would not
otherwise cause the Guaranteed Obligations (or any other
obligations of such Guarantor to the Agent and the Banks) to be
avoidable or unenforceable against such Guarantor under any
state fraudulent transfer or fraudulent conveyance act or
statute applied in any such case or proceeding by virtue of
Section 544 of the Bankruptcy Code;
(iii) in a case or proceeding commenced by
or against such Guarantor under any law, statute or regulation
other than the Bankruptcy Code (including, without limitation,
any other bankruptcy, reorganization, arrangement, moratorium,
readjustment of debt, dissolution, liquidation or similar debtor
relief laws), the maximum amount that would not otherwise cause
the Guaranteed Obligations (or any other obligations of such
Guarantor to the Agent and the Banks) to be avoidable or
unenforceable against such Guarantor under such law, statute or
regulation including, without limitation, any state fraudulent
transfer or fraudulent conveyance act or statute applied in any
such case or proceeding.
(d) The Guarantors acknowledge and agree that
they have requested that the Banks make credit available to the
Borrowers with each Guarantor expecting to derive benefit,
directly and indirectly, from the loans and other credit
extended by the Banks to the Borrowers.
ARTICLE IX.
MISCELLANEOUS
10. Amendments, Etc. (a) No amendment, modification,
termination or waiver of any provision of this Agreement nor any
consent to any departure therefrom shall be effective unless the
same shall be in writing and signed by the Borrowers and the
Required Banks and, to the extent any rights or duties of the
Agent may be affected thereby, the Agent, provided, however,
that no such amendment, modification, termination, waiver or
consent shall, without the consent of the Agent and all of the
Banks, (i) authorize or permit the extension of time for, or any
reduction of the amount of, any payment of the principal of, or
interest on or the rate at which interest accrues on, the Notes
or any installment thereof or any Letter of Credit reimbursement
obligation, or any fees or other amount payable hereunder, (ii)
amend or terminate the respective Commitment of any Bank set
forth on the signature pages hereof or modify the provisions of
this Section regarding the taking of any action under this
Section or the provisions of Section 7.10 or the definitions of
Required Banks or Majority Banks, (iii) amend or modify the
Guaranty (other than any amendment solely for the purpose of
adding or deleting a Borrowing Subsidiary) or provide for the
release or discharge of any Guarantor's obligations under the
Guaranty, (iv) provide for the release of any material portion
of the collateral subject to any Security Document, (v) amend or
modify the definitions of Borrowing Base, Eligible Accounts
Receivable (other than any modification to Schedule 1.1(b)
referenced therein which may be effected upon consent of
Required Banks) or Eligible Inventory, (vi) amend, modify or
waive any other provision hereof requiring consent of all of the
Banks or (vii) increase the principal amount of the Swing Line
Facility.
(b) Any such amendment, waiver or consent shall
be effective only in the specific instance and for the specific
purpose for which given. (c) Notwithstanding
anything herein to the contrary, no Bank that is in default of
any of its obligations, covenants or agreements under this
Agreement shall be entitled to vote (whether to consent or to
withhold its consent) with respect to any amendment,
modification, termination or waiver of any provision of this
Agreement or any departure therefrom or any direction from the
Banks to the Agent, and, for purposes of determining the
Required Banks at any time when any Bank is in default under
this Agreement, the Commitments and Advances of such defaulting
Banks shall be disregarded.
10.1 Notices. (a) Except as otherwise provided in
Section 9.2(c) hereof, all notices and other communications
hereunder shall be in writing and shall be delivered or sent to
the Borrowers in care of the Company at 10800 Roosevelt Blvd.,
St. Petersburg, Florida 33716, Attention: Chief Financial
Officer, Facsimile No. (813) 579-8529, and to the Agent and the
Banks at the respective addresses and numbers for notices set
forth on the signatures pages hereof, or to such other address
as may be designated by any Borrower, the Agent or any Bank by
notice to the other parties hereto. All notices and other
communications shall be deemed to have been given at the time of
actual delivery thereof to such address, or if sent by certified
or registered mail, postage prepaid, to such address, on the
third day after the date of mailing, or if deposited prepaid
with Federal Express or other nationally recognized overnight
delivery service prior to the deadline for next day delivery, on
the Business Day next following such deposit, provided, however,
that notices to the Agent shall not be effective until received.
(b) Notices by a Borrower to the Agent with
respect to terminations or reductions of the Commitments
pursuant to Section 2.2, requests for Advances pursuant to
Section 2.4, requests for continuations or conversions of Loans
pursuant to Section 2.7 and notices of prepayment pursuant to
Section 3.1 shall be irrevocable and binding on the Borrowers.
(c) Any notice to be given by a Borrower to the
Agent pursuant to Sections 2.4 or 2.7 and any notice to be given
by the Agent or any Bank hereunder, may be given by telephone,
and all such notices given by a Borrower must be immediately
confirmed in writing in the manner provided in Section 9.2(a).
Any such notice given by telephone shall be deemed effective
upon receipt thereof by the party to whom such notice is to be
given.
10.2 No Waiver By Conduct; Remedies Cumulative. No
course of dealing on the part of the Agent or any Bank, nor any
delay or failure on the part of the Agent or any Bank in
exercising any right, power or privilege hereunder shall operate
as a waiver of such right, power or privilege or otherwise
prejudice the Agent's or such Bank's rights and remedies
hereunder; nor shall any single or partial exercise thereof
preclude any further exercise thereof or the exercise of any
other right, power or privilege. No right or remedy conferred
upon or reserved to the Agent or any Bank under this Agreement
or any other Loan Document is intended to be exclusive of any
other right or remedy, and every right and remedy shall be
cumulative, except as limited by this Agreement, and in addition
to every other right or remedy granted thereunder or now or
hereafter existing under any applicable law. Every right and
remedy granted by this Agreement or the Notes or any Guaranty or
by applicable law to the Agent or any Bank may be exercised from
time to time and as often as may be deemed expedient by the
Agent or any Bank and, unless contrary to the express provisions
of this Agreement or the Notes or such Guaranty, irrespective of
the occurrence or continuance of any Default or Event of
Default.
10.3 Reliance on and Survival of Various Provisions.
All terms, covenants, agreements, representations and warranties
of any Borrower or any Guarantor made herein, in any Guaranty or
in any certificate, report, financial statement or other
document furnished by or on behalf of any Borrower or any
Guarantor in connection with this Agreement shall be deemed to
be material and to have been relied upon by the Banks,
notwithstanding any investigation heretofore or hereafter made
by any Bank or on such Bank's behalf, and those covenants and
agreements of the Borrowers set forth in Sections 3.7, 3.9 and
9.5 hereof shall survive the repayment in full of the Advances
and the termination of the Commitments for a period of one year
from such repayment or termination.
10.4 Expenses. (a) Each of the Borrowers agrees to
pay, or reimburse the Agent for the payment of, on demand, (i)
the reasonable fees, without premium, and expenses of counsel to
the Agent, including without limitation the reasonable fees and
expenses of Dickinson, Wright, Moon, Van Dusen & Freeman in
connection with the preparation, execution, delivery and
administration of the Loan Documents and the consummation of the
transactions contemplated hereby, and in connection with
advising the Agent as to its rights and responsibilities with
respect thereto, and in connection with any amendments, waivers
or consents in connection therewith, and (ii) all stamp and
other taxes and fees payable or determined to be payable by the
Agent or any Bank in connection with the execution, delivery,
filing or recording of this Agreement, the Notes and the
consummation of the transactions contemplated hereby, and any
and all liabilities of the Agent and the Banks with respect to
or resulting from any delay in paying or omitting to pay such
taxes or fees, and (iii) all reasonable costs and expenses of
the Agent and the Banks (including without limitation reasonable
fees and expenses of counsel, which counsel shall be acceptable
to the Required Banks, including without limitation counsel who
are employees of the Agent or the Banks, and whether incurred
through negotiations, legal proceedings or otherwise) in
connection with any Default or Event of Default or the
enforcement of, or the exercise or preservation of any rights
under the Loan Documents or in connection with any refinancing
or restructuring of the credit arrangements provided under this
Agreement and (iv) all reasonable costs and expenses of the
Agent and the Banks (including reasonable fees and expenses of
counsel) in connection with any action or proceeding relating to
a court order, injunction or other process or decree restraining
or seeking to restrain the Agent from paying any amount under,
or otherwise relating in any way to, any Letter of Credit and
any and all costs and expenses which any of them may incur
relative to any payment under any Letter of Credit.
(b) Each of the Borrowers hereby indemnifies and
agrees to hold harmless the Banks, the Issuing Bank and the
Agent, their affiliates and their respective officers,
directors, employees and agents, harmless from and against any
and all claims, damages, losses, liabilities, costs or expenses
of any kind or nature whatsoever which the Banks, the Issuing
Bank or the Agent or any such person may incur or which may be
claimed against any of them by reason of or in connection with
any Letter of Credit, and neither any Bank, the Issuing Bank nor
the Agent, their affiliates or any of their respective officers,
directors, employees or agents shall be liable or responsible
for: (i) the use which may be made of any Letter of Credit or
for any acts or omissions of any beneficiary in connection
therewith; (ii) the validity, sufficiency or genuineness of
documents or of any endorsement thereon, even if such documents
should in fact prove to be in any or all respects invalid,
insufficient, fraudulent or forged; (iii) payment by the Issuing
Bank to the beneficiary under any Letter of Credit against
presentation of documents which do not comply with the terms of
any Letter of Credit, including failure of any documents to bear
any reference or adequate reference to such Letter of Credit;
(iv) any error, omission, interruption or delay in transmission,
dispatch or delivery of any message or advice, however
transmitted, in connection with any Letter of Credit; or (v) any
other event or circumstance whatsoever arising in connection
with any Letter of Credit; provided, however, that the Borrowers
shall not be required to indemnify the Banks, the Issuing Bank
and the Agent and such other persons, and the Issuing Bank shall
be liable to the Borrowers to the extent, but only to the
extent, of any direct, as opposed to consequential or
incidental, damages suffered by any Borrower which were caused
by (A) the Issuing Bank's wrongful dishonor of any Letter of
Credit after the presentation to it by the beneficiary
thereunder of a draft or other demand for payment and other
documentation strictly complying with the terms and conditions
of such Letter of Credit, or (B) payment by the Issuing Bank to
the beneficiary under any Letter of Credit against presentation
of documents which do not comply with the terms of the Letter of
Credit to the extent, but only to the extent, that such payment
constitutes gross negligence of wilful misconduct of the Issuing
Bank. It is understood that in making any payment under a
Letter of Credit, the Issuing Bank will rely on documents
presented to it under such Letter of Credit as to any and all
matters set forth therein without further investigation and
regardless of any notice or information to the contrary, and
such reliance and payment against documents presented under a
Letter of Credit substantially complying with the terms thereof
shall not be deemed gross negligence or wilful misconduct of the
Issuing Bank in connection with such payment. It is further
acknowledged and agreed that a Borrower may have rights against
the beneficiary or others in connection with any Letter of
Credit with respect to which the Issuing Bank is alleged to be
liable and it shall be a precondition of the assertion of any
liability of the Issuing Bank under this Section that such
Borrower shall first have exhausted all remedies in respect of
the alleged loss against such beneficiary and any other parties
obligated or liable in connection with such Letter of Credit and
any related transactions.
(c) Each of the Borrowers hereby indemnifies and
agrees to hold harmless the Banks and the Agent, their
affiliates and their respective officers, directors, employees
and agents, from and against any and all claims, damages,
losses, liabilities, costs or expenses of any kind or nature
whatsoever (including reasonable attorneys fees and
disbursements incurred in connection with any investigative,
administrative or judicial proceeding whether or not such person
shall be designated as a party thereto) which the Banks or the
Agent or any such person may incur or which may be claimed
against any of them by reason of or in connection with entering
into this Agreement or the transactions contemplated hereby,
including without limitation those arising under Environmental
Laws; provided, however, that the Borrowers shall not be
required to indemnify any such Bank and the Agent or such other
person, to the extent, but only to the extent, that such claim,
damage, loss, liability, cost or expense is attributable to the
gross negligence or willful misconduct of such Bank or the
Agent, as the case may be.
(d) In consideration of the execution and
delivery of this Agreement by each Bank and the extension of the
Commitments, each of the Borrowers hereby indemnifies,
exonerates and holds the Agent, each Bank, their affiliates and
each of their respective officers, directors, employees and
agents (collectively, the "Indemnified Parties") free and
harmless from and against any and all actions, causes of action,
suits, losses, costs, liabilities and damages, and expenses
incurred in connection therewith (irrespective of whether any
such Indemnified Party is a party to the action for which
indemnification hereunder is sought), including reasonable
attorneys' fees and disbursements (collectively, the
"Indemnified Liabilities"), incurred by the Indemnified Parties
or any of them as a result of, or arising out of, or relating to:
(i) any transaction financed or to be
financed in whole or in part, directly or indirectly, with the
proceeds of any Advance;
(ii) the entering into and performance of
this Agreement and any other agreement or instrument executed in
connection herewith by any of the Indemnified Parties (including
without limitation any action brought by or on behalf of any
Borrower as the result of any determination by the Required
Banks not to fund any Advance);
(iii) any investigation, litigation or
proceeding related to any acquisition or proposed acquisition by
any Borrower or any of its Subsidiaries of any portion of the
stock or assets of any person, whether or not the Agent or such
Bank is party thereto;
(iv) any investigation, litigation or
proceeding related to any environmental cleanup, audit,
compliance or other matter relating to the protection of the
environment or the release by any Borrower or any of its
Subsidiaries of any Hazardous Material; or
(v) the presence on or under, or the escape,
seepage, leakage, spillage, discharge, emission, discharging or
releasing from, any real property owned or operated by any
Borrower or any of its Subsidiaries of any Hazardous Material
(including any losses, liabilities, damages, injuries, costs,
expenses or claims asserted or arising under any Environmental
Law), regardless of whether caused by, or within the control of,
such Borrower or such Subsidiary, except for any such
Indemnified Liabilities arising for the account of a particular
Indemnified Party by reason of the activities of the Indemnified
Party on the property of any Borrower conducted subsequent to a
foreclosure on such property solely by reason of the relevant
Indemnified Party's gross negligence or willful misconduct, and
if and to the extent that the foregoing undertaking may be
unenforceable for any reason, each of the Borrowers hereby
agrees to make the maximum contribution to the payment and
satisfaction of each of the Indemnified Liabilities which is
permissible under applicable law. Each of the Borrowers shall
be obligated to indemnify the Indemnified Parties for all
Indemnified Liabilities subject to and pursuant to the foregoing
provisions, regardless of whether the Company or any of its
Subsidiaries had knowledge of the facts and circumstances giving
rise to such Indemnified Liability.
10.5 Successors and Assigns. (a) This Agreement shall
be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns, provided that no
Borrower may, without the prior consent of the Banks, assign its
rights or obligations hereunder or under the Notes and the Banks
shall not be obligated to make any Loan hereunder to any entity
other than the Borrowers.
(b) Any Bank may, without the prior consent of
the Company or the Agent sell to any financial institution or
institutions, and such financial institution or institutions may
further sell, a participation interest (undivided or divided)
in, the Advances and such Bank's Commitment and rights and
benefits under this Agreement and the other Loan Documents, and
to the extent of that participation interest such participant or
participants shall have the same rights and benefits against the
Borrowers under Section 3.7, 3.9 and 6.2(c) as it or they would
have had if such participant or participants were the Bank
making the Loans to the Borrowers hereunder, provided, however,
that (i) such Bank's obligations under this Agreement shall
remain unmodified and fully effective and enforceable against
such Bank, (ii) such Bank shall remain solely responsible to the
other parties hereto for the performance of such obligations,
(iii) such Bank shall remain the holder of its Notes for all
purposes of this Agreement, (iv) the Borrowers, the Agent and
the other Banks shall continue to deal solely and directly with
such Bank in connection with such Bank's rights and obligations
under this Agreement, and (v) such Bank shall not grant to its
participant any rights to consent or withhold consent to any
action taken by such Bank or the Agent under this Agreement
other than action requiring the consent of all of the Banks
hereunder.
(c) The Agent from time to time in its sole
discretion may appoint agents for the purpose of servicing and
administering this Agreement and the transactions contemplated
hereby and enforcing or exercising any rights or remedies of the
Agent provided under this Agreement, the Notes or otherwise. In
furtherance of such agency, the Agent may from time to time
direct that the Borrowers provide notices, reports and other
documents contemplated by this Agreement (or duplicates thereof)
to such agent. Each Borrower hereby consents to the appointment
of such agent and agrees to provide all such notices, reports
and other documents and to otherwise deal with such agent acting
on behalf of the Agent in the same manner as would be required
if dealing with the Agent itself.
(d) Each Bank may, with the prior consent of the
Company and the Agent, (in both cases, which consents shall not
be unreasonably withheld) assign to one or more banks or other
entities all or a portion of its rights and obligations under
this Agreement (including, without limitation, all or a portion
of its Commitment, the Advances owing to it and the Note or
Notes held by it); provided, however, that (i) each such
assignment shall be of a uniform, and not a varying, percentage
of all rights and obligations, (ii) except in the case of an
assignment of all of a Bank's rights and obligations under this
Agreement, (A) the amount of the Commitment of the assigning
Bank being assigned pursuant to each such assignment (determined
as of the date of the Assignment and Acceptance with respect to
such assignment) shall in no event be less than $5,000,000, and
in integral multiples of $1,000,000 thereafter, or such lesser
amount as the Company and the Agent may consent to and (B) after
giving effect to each such assignment, the amount of the
Commitment of the assigning Bank shall in no event be less than
$3,000,000, (iii) the parties to each such assignment shall
execute and deliver to the Agent, for its acceptance and
recording in the Register, an Assignment and Acceptance in the
form of Exhibit L hereto (an "Assignment and Acceptance"),
together with any Note or Notes subject to such assignment and a
processing and recordation fee of $3,000, and (iv) any Bank may
without the consent of the Company or the Agent, and without
paying any fee, assign to any Affiliate of such Bank that is a
bank or financial institution or to another Bank all or a
portion of its rights and obligations under this Agreement.
Upon such execution, delivery, acceptance and recording, from
and after the effective date specified in such Assignment and
Acceptance, (x) the assignee thereunder shall be a party hereto
and, to the extent that rights and obligations hereunder have
been assigned to it pursuant to such Assignment and Acceptance,
have the rights and obligations of a Bank hereunder and (y) the
Bank assignor thereunder shall, to the extent that rights and
obligations hereunder have been assigned by it pursuant to such
Assignment and Acceptance, relinquish its rights and be released
from its obligations under this Agreement (and, in the case of
an Assignment and Acceptance covering all of the remaining
portion of an assigning Bank's rights and obligations under this
Agreement, such Bank shall cease to be a party hereto).
(e) By executing and delivering an Assignment and
Acceptance, the Bank assignor thereunder and the assignee
thereunder confirm to and agree with each other and the other
parties hereto as follows: (i) other than as provided in such
Assignment and Acceptance, such assigning Bank makes no
representation or warranty and assumes no responsibility with
respect to any statements, warranties or representations made in
or in connection with this Agreement or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of
this Agreement or any other instrument or document furnished
pursuant hereto; (ii) such assigning Bank makes no
representation or warranty and assumes no responsibility with
respect to the financial condition of any Borrower or the
performance or observance by any Borrower of any of its
obligations under this Agreement or any other instrument or
document furnished pursuant hereto; (iii) such assignee confirms
that it has received a copy of this Agreement, together with
copies of the financial statements referred to in Section 4.6
and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to
enter into such Assignment and Acceptance; (iv) such assignee
will, independently and without reliance upon the Agent, such
assigning Bank or any other Bank and based on such documents and
information as it shall deem appropriate at the time, continue
to make its own credit decisions in taking or not taking action
under this Agreement; (v) such assignee appoints and authorizes
the Agent to take such action as agent on its behalf and to
exercise such powers and discretion under this Agreement as are
delegated to the Agent by the terms hereof, together with such
powers and discretion as are reasonably incidental thereto; and
(vi) such assignee agrees that it will perform in accordance
with their terms all of the obligations that by the terms of
this Agreement are required to be performed by it as a Bank.
(f) The Agent shall maintain at its address
designated on the signature pages hereof a copy of each
Assignment and Acceptance delivered to and accepted by it and a
register for the recordation of the names and addresses of the
Banks and the Commitment of, and principal amount of the
Advances owing to, each Bank from time to time (the "Register").
The entries in the Register shall be conclusive and binding for
all purposes, absent manifest error, and the Company, the
Borrowing Subsidiaries, the Agent and the Banks may treat each
person whose name is recorded in the Register as a Bank
hereunder for all purposes of this Agreement. The Register
shall be available for inspection by the Company or any Bank at
any reasonable time and from time to time upon reasonable prior
notice.
(g) Upon its receipt of an Assignment and
Acceptance executed by an assigning Bank and an assignee,
together with any Note or Notes subject to such assignment, the
Agent shall, if such Assignment and Acceptance has been
completed, (i) accept such Assignment and Acceptance, (ii)
record the information contained therein in the Register and
(iii) give prompt notice thereof to the Company. Within five
Business Days after its receipt of such notice, the Borrowers,
at their own expense, shall execute and deliver to the Agent in
exchange for the surrendered Note or Notes a new Note to the
order of such assignee in an amount equal to the Commitment
assumed by it pursuant to such Assignment and Acceptance and, if
the assigning Bank has retained a Commitment hereunder, a new
Note to the order of the assigning Bank in an amount equal to
the Commitment retained by it hereunder. Such new Note or Notes
shall be in an aggregate principal amount equal to the aggregate
principal amount of such surrendered Note or Notes, shall be
dated the effective date of such Assignment and Acceptance and
shall otherwise be in substantially the form of Exhibit L hereto.
(h) No Borrower shall be liable for any costs or
expenses of any Bank in effectuating any participation or
assignment under this Section 9.6.
(i) The Banks may, in connection with any
assignment or participation or proposed assignment or
participation pursuant to this Section 9.6, disclose to the
assignee or participant or proposed assignee or participant any
information relating to the Borrowers.
(j) Notwithstanding any other provision set forth
in this Agreement, any Bank may at any time create a security
interest in, or assign, all or any portion of its rights under
this Agreement (including, without limitation, the Loans owing
to it and the Note or Notes held by it) in favor of any Federal
Reserve Bank in accordance with Regulation A of the Board of
Governors of the Federal Reserve System; provided that such
creation of a security interest or assignment shall not release
such Bank from its obligations under this Agreement.
10.6 Counterparts. This Agreement may be executed in
any number of counterparts, all of which taken together shall
constitute one and the same instrument and any of the parties
hereto may execute this Agreement by signing any such
counterpart.
10.7 Governing Law; Consent to Jurisdiction. This
Agreement is a contract made under, and shall be governed by and
construed in accordance with, the law of the State of Michigan
applicable to contracts made and to be performed entirely within
such State and without giving effect to choice of law principles
of such State. Each Borrower further agrees that any legal
action or proceeding with respect to this Agreement or the Notes
or the transactions contemplated hereby shall be brought in any
court of the State of Michigan, or in any court of the United
States of America sitting in Michigan, and each Borrower hereby
irrevocably submits to and accepts generally and unconditionally
the jurisdiction of those courts with respect to its person and
property, and irrevocably appoints ____________________, whose
address is _________________________, as its agent for service
of process and irrevocably consents to the service of process in
connection with any such action or proceeding by personal
delivery to such agent or to the Borrowers or by the mailing
thereof by registered or certified mail, postage prepaid to the
Borrowers at the address set forth in Section 9.2. Nothing in
this paragraph shall affect the right of the Banks and the Agent
to serve process in any other manner permitted by law or limit
the right of the Banks or the Agent to bring any such action or
proceeding against the Borrowers or property in the courts of
any other jurisdiction. Each Borrower hereby irrevocably waives
any objection to the laying of venue of any such suit or
proceeding in the above described courts.
10.8 Table of Contents and Headings. The table of
contents and the headings of the various subdivisions hereof are
for the convenience of reference only and shall in no way modify
any of the terms or provisions hereof.
10.9 Construction of Certain Provisions. If any
provision of this Agreement refers to any action to be taken by
any person, or which such person is prohibited from taking, such
provision shall be applicable whether such action is taken
directly or indirectly by such person, whether or not expressly
specified in such provision.
10.10 Integration and Severability. This Agreement
and the Notes embody the entire agreement and understanding
between the Borrowers and the Agent and the Banks, and supersede
all prior agreements and understandings, relating to the subject
matter hereof. In case any one or more of the obligations of
any Borrower under this Agreement or the Notes shall be invalid,
illegal or unenforceable in any jurisdiction, the validity,
legality and enforceability of the remaining obligations of such
Borrower and the other Borrowers shall not in any way be
affected or impaired thereby, and such invalidity, illegality or
unenforceability in one jurisdiction shall not affect the
validity, legality or enforceability of the obligations of the
Borrowers under this Agreement or the Notes in any other
jurisdiction.
10.11 Independence of Covenants. All covenants
hereunder shall be given independent effect so that if a
particular action or condition is not permitted by any such
covenant, the fact that it would be permitted by an exception
to, or would be otherwise within the limitations of, another
covenant shall not avoid the occurrence of a Default or an Event
of Default if such action is taken or such condition exists.
10.12 Interest Rate Limitation. Notwithstanding
any provisions of this Agreement or the Notes, in no event shall
the amount of interest paid or agreed to be paid by any Borrower
exceed an amount computed at the highest rate of interest
permissible under applicable law. If, from any circumstances
whatsoever, fulfillment of any provision of this Agreement or
the Notes at the time performance of such provision shall be
due, shall involve exceeding the interest rate limitation
validly prescribed by law which a court of competent
jurisdiction may deem applicable hereto, then, ipso facto, the
obligations to be fulfilled shall be reduced to an amount
computed at the highest rate of interest permissible under
applicable law, and if for any reason whatsoever any Bank shall
ever receive as interest an amount which would be deemed
unlawful under such applicable law such interest shall be
automatically applied to the payment of principal of such Bank's
Advances outstanding hereunder (whether or not then due and
payable) and not to the payment of interest, or shall be
refunded to the Borrowers if such principal and all other
obligations of the Borrowers to such Bank have been paid in full.
10.13 Joint and Several Obligations; Contribution
Rights; Savings Clause. (a) Notwithstanding anything to the
contrary set forth herein or in any Note or in any other Loan
Document, the obligations of the Domestic Borrowers hereunder
and under the Notes and the other Loan Documents are joint and
several.
(b) If any Borrower makes a payment in respect of
the Bank Obligations it shall have the rights of contribution
set forth below against the other Borrowers; provided that no
Borrower shall exercise its right of contribution until all the
Bank Obligations shall have been finally paid in full in cash.
If any Borrower makes a payment in respect of the Bank
Obligations that is smaller in proportion to its Payment Share
(as hereinafter defined) than such payments made by the other
Borrowers are in proportion to the amounts of their respective
Payment Shares, the Borrower making such proportionately smaller
payment shall, when permitted by the preceding sentence, pay to
the other Borrowers an amount such that the net payments made by
the Borrower in respect of the Bank Obligations shall be shared
among the Borrowers pro rata in proportion to their respective
Payment Shares. If any Borrower receives any payment that is
greater in proportion to the amount of its Payment Shares than
the payments received by the other Borrowers are in proportion
to the amounts of their respective Payment Shares, the Borrower
receiving such proportionately greater payment shall, when
permitted by the second preceding sentence, pay to the other
Borrowers an amount such that the payments received by the
Borrowers shall be shared among the Borrowers pro rata in
proportion to their respective Payment Shares. Notwithstanding
anything to the contrary contained in this paragraph or in this
Agreement, no liability or obligation of any Borrower that shall
accrue pursuant to this paragraph shall be paid nor shall it be
deemed owed pursuant to this paragraph until all of the Bank
Obligations shall be finally paid in full in cash.
For purposes hereof, the "Payment Share" of each
Borrower shall be the sum of (a) the aggregate proceeds of the
Bank Obligations received by such Borrower plus (b) the product
of (i) the aggregate Bank Obligations remaining unpaid on the
date such Bank Obligations become due and payable in full,
whether by stated maturity, acceleration, or otherwise (the
"Determination Date") reduced by the amount of such Bank
Obligations attributed to such Borrower pursuant to clause (a)
above, times (ii) a fraction, the numerator of which is such
Borrower's net worth on the effective date of this Agreement
(determined as of the end of the immediately preceding fiscal
reporting period of such Borrower), and the denominator of which
is the aggregate net worth of all Borrowers on such effective
date.
(c) It is the intent of each Borrower, the Agent
and the Banks that each Borrower's maximum Bank Obligations
shall be, but not in excess of:
(i) in a case or proceeding commenced by or
against such Borrower under the Bankruptcy Code on or within one
year from the date on which any of the Bank Obligations are
incurred, the maximum amount that would not otherwise cause the
Bank Obligations (or any other obligations of such Borrower to
the Agent and the Banks) to be avoidable or unenforceable
against such Borrower under (A) Section 548 of the Bankruptcy
Code or (B) any state fraudulent transfer or fraudulent
conveyance act or statute applied in such case or proceeding by
virtue of Section 544 of the Bankruptcy Code; or
(ii) in a case or proceeding commenced by or
against such Borrower under the Bankruptcy Code subsequent to
one year from the date on which any of the Bank Obligations are
incurred, the maximum amount that would not otherwise cause the
Bank Obligations (or any other obligations of such Borrower to
the Agent and the Banks) to be avoidable or unenforceable
against such Borrower under any state fraudulent transfer or
fraudulent conveyance act or statute applied in any such case or
proceeding by virtue of Section 544 of the Bankruptcy Code;
(iii) in a case or proceeding commenced by
or against such Borrower under any law, statute or regulation
other than the Bankruptcy Code (including, without limitation,
any other bankruptcy, reorganization, arrangement, moratorium,
readjustment of debt, dissolution, liquidation or similar debtor
relief laws), the maximum amount that would not otherwise cause
the Bank Obligations (or any other obligations of such Borrower
to the Agent and the Banks) to be avoidable or unenforceable
against such Borrower under such law, statute or regulation
including, without limitation, any state fraudulent transfer or
fraudulent conveyance act or statute applied in any such case or
proceeding.
(d) The Domestic Borrowers acknowledge and agree
that they have requested that the Banks make credit available to
the Borrowers with each Domestic Borrower expecting to derive
benefit, directly and indirectly, from the loans and other
credit extended by the Banks to the Borrowers.
(e) The joint and several obligations of the
Domestic Borrowers described in this Section 9.14 shall remain
in full force and effect without regard to and shall not be
released, affected or impaired by: (i) any amendment,
assignment, transfer, modification of or addition or supplement
to the Bank Obligations, this Agreement, any Note or any other
Loan Document, except to the extent any such amendment,
assignment, transfer or modification specifically relates to the
matters set forth in Section 9.14; (ii) any extension,
indulgence, increase in the Bank Obligations or other action or
inaction in respect of any of the Loan Documents or otherwise
with respect to the Bank Obligations, or any acceptance of
security for, or guaranties of, any of the Bank Obligations or
Loan Documents, or any surrender, release, exchange, impairment
or alteration of any such security or guaranties including
without limitation the failing to perfect a security interest in
any such security or abstaining from taking advantage or of
realizing upon any guaranties or upon any security interest in
any such security; (iii) any default by any Borrower under, or
any lack of due execution, invalidity or unenforceability of, or
any irregularity or other defect in, any of the Loan Documents;
(iv) any waiver by the Banks or any other person of any required
performance or otherwise of any condition precedent or waiver of
any requirement imposed by any of the Loan Documents, any
guaranties or otherwise with respect to the Bank Obligations;
(v) any exercise or non-exercise of any right, remedy, power or
privilege in respect of this Agreement or any of the other Loan
Documents; (vi) any sale, lease, transfer or other disposition
of the assets of any Borrower or any consolidation or merger of
any Borrower with or into any other person, corporation, or
entity, or any transfer or other disposition by any Borrower or
any other holder of any shares of capital stock of any Borrower;
(vii) any bankruptcy, insolvency, reorganization or similar
proceedings involving or affecting any Borrower; (viii) the
release or discharge of any Borrower from the performance or
observance of any agreement, covenant, term or condition under
any of the Bank Obligations or contained in any of the Loan
Documents by operation of law; or (ix) any other cause whether
similar or dissimilar to the foregoing which, in the absence of
this provision, would release, affect or impair the obligations,
covenants, agreements and duties of any Borrower hereunder,
including without limitation any act or omission by the Agent,
or the Bank or any other any person which increases the scope of
such Borrower's risk; and in each case described in this
paragraph whether or not any Borrower shall have notice or
knowledge of any of the foregoing, each of which is specifically
waived by each Borrower. Each Borrower warrants to the Banks
that it has adequate means to obtain from each other Borrower on
a continuing basis information concerning the financial
condition and other matters with respect to the Borrowers and
that it is not relying on the Agent or the Banks to provide such
information either now or in the future.
10.14 Waivers, Etc. Each Borrower unconditionally
waives: (a) notice of any of the matters referred to in Section
9.14(e) above; (b) all notices which may be required by statute,
rule or law or otherwise to preserve any rights of the Agent, or
the Bank, including, without limitation, presentment to and
demand of payment or performance from the other Borrowers and
protect for non-payment or dishonor; (c) any right to the
exercise by the Agent, or the Bank of any right, remedy, power
or privilege in connection with any of the Loan Documents; (d)
any requirement that the Agent, or the Bank, in the event of any
default by any Borrower, first make demand upon or seek to
enforce remedies against, such Borrower or any other Borrower
before demanding payment under or seeking to enforce this
Agreement against any other Borrower; (f) any right to notice of
the disposition of any security which the Agent, or the Bank may
hold from any Borrower or otherwise and any right to object to
the commercial reasonableness of the disposition of any such
security; and (g) all errors and omissions in connection with
the Agent, or the Bank's administration of any of the Bank
Obligations, any of the Loan Documents', or any other act or
omission of the Agent, or the Bank which changes the scope of
the Borrower's risk, except as a result of the gross negligence
or willful misconduct of the Agent, or the Bank. The
obligations of each Borrower hereunder shall be complete and
binding forthwith upon the execution of this Agreement and
subject to no condition whatsoever, precedent or otherwise, and
notice of acceptance hereof or action in reliance hereon shall
not be required.
10.15 Waiver of Jury Trial. The Borrowers, the
Banks and the Agent, after consulting or having had the
opportunity to consult with counsel, knowingly, voluntarily and
intentionally waive any right either of them may have to a trial
by jury in any litigation based upon or arising out of this
Agreement or any other Loan Document or any of the transactions
contemplated by this Agreement or any course of conduct,
dealing, statements (whether oral or written) or actions of any
of them. Neither any Borrower, any Bank nor the Agent shall
seek to consolidate, by counterclaim or otherwise, any such
action in which a jury trial has been waived with any other
action in which a jury trial cannot be or has not been waived.
These provisions shall not be deemed to have been modified in
any respect or relinquished by any party hereto except by a
written instrument executed by such party.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered as of the date first
written above, but to be effective as of on the _____ day of
May, 1996, which shall be the Effective Date of this Agreement,
notwithstanding the day and year first above written.
JABIL CIRCUIT, INC.
By:
Its:
JABIL CIRCUIT LTD.
By:
Its:
JABIL CIRCUIT OF
MICHIGAN, INC.
By:
Its:
Address for Notices: NBD BANK, as a Bank and as
Agent
611 Woodward Avenue By:
Detroit, Michigan 48226 Attention: National Banking Division
Its: Facsimile No.: (313) 225-2649
Telephone No.: (313) 225-3743
Commitment Amount: $20,000,000
Initial Percentage of Total Commitments: 33.34%
Address for Notices: SUN TRUST BANK, TAMPA BAY
3601 34th Street, 77 North By:
St. Petersburg, Florida 33713 Attention: Frank Coe
Its: Corporate Banking
Division Facsimile No.: (813) 892-4810 Telephone No.:
(813) 892-4954
Commitment Amount: $15,000,000
Initial Percentage of Total Commitments: 25%
Address for Notices: BARNETT BANK OF PINELLAS
COUNTY
600 Cleveland Street By:
Clearwater, Florida 34615 Attention: M. Phillip Freeman
Its: Senior Vice President
Facsimile No.: (813) 539-9066 Telephone No.: (813)
539-9086
Commitment Amount: $12,500,000
Initial Percentage of Total Commitments: 20.83%
Address for Notices: THE FIRST NATIONAL BANK OF
BOSTON
115 Perimeter Center Place NE By:
Suite 500 Atlanta, Georgia 30346 Its:
Facsimile No.: (404) 393-4166 Telephone No.:
(404) 390-6533
Commitment Amount: $12,500,000
Initial Percentage of Total Commitments: 20.83%
WP6:[WPCMS.00007.2338]AGR_AA8_06.LOAN_AGR
EXHIBIT 11.1
JABIL CIRCUIT INC.
STATEMENTS OF COMPUTATION OF EARNINGS PER SHARE
(in thousands, except for per share amounts)
(Unaudited)
Three months ended Nine months ended
------------------ -----------------
May 31, May 31, May 31, May 31,
1995 1996 1995 1996
------- ------- ------- -------
Net income $1,234 $6,237 $2,294 $17,790
Computation of weighted average
common and common equivalent
shares outstanding:
Common stock 14,634 17,750 14,536 17,044
Options 899 1,143 927 1,182
Total number of shares used ------- ------- ------- -------
in computing per share amounts 15,533 18,893 15,463 18,226
Net income per share $0.08 $0.33 $0.15 $0.98
======= ======= ======= =======
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEET AND THE CONSOLIDATED STATEMENT OF INCOME FILED
AS PART OF THE ANNUAL REPORT ON FORM 10-Q AND IS QUALIFIED IN ITS ENTIRETY
B REFRENCE TO SUCH ANNUAL REPORT ON FORM 10-Q.
</LEGEND>
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> AUG-31-1996
<PERIOD-START> MAR-01-1996
<PERIOD-END> MAY-31-1996
<CASH> 28004
<SECURITIES> 0
<RECEIVABLES> 99725
<ALLOWANCES> 1019
<INVENTORY> 59390
<CURRENT-ASSETS> 190057
<PP&E> 124392
<DEPRECIATION> 52501
<TOTAL-ASSETS> 263465
<CURRENT-LIABILITIES> 80478
<BONDS> 0
0
0
<COMMON> 18
<OTHER-SE> 117221
<TOTAL-LIABILITY-AND-EQUITY> 263465
<SALES> 219701
<TOTAL-REVENUES> 219701
<CGS> 201142
<TOTAL-COSTS> 201142
<OTHER-EXPENSES> 6838
<LOSS-PROVISION> 350
<INTEREST-EXPENSE> 1768
<INCOME-PRETAX> 9603
<INCOME-TAX> 3366
<INCOME-CONTINUING> 6237
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 6237
<EPS-PRIMARY> .33
<EPS-DILUTED> .33
</TABLE>
