Exhibit 10.33
LECROY CORPORATION
AMENDED AND RESTATED 1993 STOCK INCENTIVE PLAN
AMENDMENT
AUGUST 16, 2000
This AMENDMENT (this "Amendment") TO THE AMENDED AND RESTATED 1993
STOCK INCENTIVE PLAN OF LECROY CORPORATION (THE "1993 PLAN") is effective as of
the date set forth above, pursuant to authority reserved in Section 10 of the
1993 Plan and the resolutions of the Board of directors of LeCroy Corporation
(the "Company") adopted on August 14, 2000.
NOW, THEREFORE, the 1993 Plan is hereby amended as follows:
ss.1. AMENDMENT TO SECTION 6(A) OF THE 1993 PLAN. Section 6(a) of the
1993 Plan is deleted in its entirety and is replaced with the following:
6. TERMS AND CONDITIONS OF STOCK OPTIONS.
(a) The price at which Common Stock may be purchased by a
Participant under an Option shall be determined by the Committee;
provided, however, that, notwithstanding anything in the Plan to the
contrary, unless approved by the holders of a majority of shares
present and entitled to vote at a duly convened meeting of stockholders
of the Company (i) the purchase price of any Option shall not be less
than 100% of the Fair Market Value of the Common Stock on the date of
grant of such Option and (ii) the purchase price of any Option may not
be reduced after the date of grant of such Option.
ss.2. AMENDMENT TO SECTION 9(F) OF THE 1993 PLAN. Section 9(f) of the
1993 Plan is deleted in its entirety and is replaced with the following:
9. GENERAL PROVISIONS.
(f) The Committee may cancel, with the consent of the
Participant, all or a portion of any Option granted under the Plan to
be conditioned upon the granting to the Participant of a new Option for
the same or a different number of shares as the Option surrendered, or
may require such voluntary surrender as a condition to a grant of a new
Option to such Participant; in each case, such new Options to have an
exercise price per share based upon the Fair Market Value of the Common
Stock as of the new grant date (i.e., the purchase price under a new
Option shall not be less than 100% of the Fair Market Value of the
Common Stock on the date of grant of such new Incentive Stock Option
(110%, if the grantee of such new Incentive Stock Option is a
greater-than-10% stockholder of the Company, as set forth in Section
5(b) above)). Subject to the provisions of Section 6(d), such new
Option shall be exercisable at such time or time, during such periods,
and for such numbers of shares, and in accordance with any other terms
or conditions, as are specified by the Committee at the time the new
Option is granted, all determined in accordance with the provisions of
the Plan without regard to the price, period of exercise, or any other
terms or conditions of the Option surrendered.
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ss.3. CONFORMED BY-LAWS. Attached hereto as Exhibit A is a conformed
copy of 1993 Plan that contains both of the foregoing amendments.
SS.4. MISCELLANEOUS. Except as expressly set forth in this Amendment,
all of the terms and provisions of the 1993 Plan shall remain in full force and
effect.
IN WITNESS WHEREOF, the Company has adopted this Amendment as of the
16th day of August, 2000.
LECROY CORPORATION
By: /S/ Raymond F. Kunzmann
-----------------------
Name: Raymond F. Kunzmann
Title: Vice President - Finance,
Chief Financial Officer,
Secretary and Treasurer
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EXHIBIT A
LECROY CORPORATION
AMENDED AND RESTATED 1993 STOCK INCENTIVE PLAN
1. PURPOSES OF THE PLAN.
The purposes of this Amended and Restated 1993 Stock Incentive Plan of
LeCroy Corporation (the "Company") are to promote the interests of the Company
and its stockholders by strengthening the Company's ability to attract,
motivate, and retain employees and consultants of exceptional ability and to
provide a means to encourage stock ownership and a proprietary interest in the
Company to selected employees and consultants of the Company upon whose
judgment, initiative, and efforts the financial success and growth of the
business of the Company largely depend.
2. DEFINITIONS.
(a) "Accelerate," "Accelerated," and "Acceleration," when used with
respect to an Option, mean that as of the relevant time of reference, such
Option shall become fully exercisable with respect to the total number of shares
of Common Stock subject to such Option and may be exercised for all or any
portion of such shares.
(b) "Acquisition" means
(i) a merger or consolidation in which securities
possessing more than 50% of the total combined voting power of
the Company's outstanding securities are transferred to a
person or persons different from the persons who held those
securities immediately prior to such transaction, or
(ii) the sale, transfer, or other disposition of all
or substantially all of the Company's assets to one or more
persons (other than any wholly owned subsidiary of the
Company) in a single transaction or series of related
transactions.
(c) "Beneficial Ownership" means beneficial ownership determined
pursuant to Securities and Exchange Commission Rule 13d-3 promulgated under the
Exchange Act.
(d) "Board" means the Board of Directors of the Company.
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(e) "Committee" means the Compensation Committee of the Board;
provided, that the Board by resolution duly adopted may at any time or from time
to time determine to assume any or all of the functions of the Committee under
the Plan, and during the period of effectiveness of any such resolution,
references herein to the "Committee" shall mean the Board acting in such
capacity.
(f) "Change in Control" means a change in ownership or control of the
Company effected through either of the following transactions:
(i) any person or related group of persons (other
than the Company or a person that directly or indirectly
controls, is controlled by, or is under common control with
the Company) directly or indirectly acquires Beneficial
Ownership of securities possessing more than 50% of the total
combined voting power of the Company's outstanding securities
pursuant to a tender or exchange offer made directly to the
Company's stockholders that the Board does not recommend such
stockholders to accept, or
(ii) over a period of 36 consecutive months or less,
there is a change in the composition of the Board such that a
majority of the Board members (rounded up to the next whole
number, if a fraction) ceases, by reason of one or more proxy
contests for the election of Board members, to be composed of
individuals who either (A) have been Board members
continuously since the beginning of such period, or (B) have
been elected or nominated for election as Board members during
such period by at least a majority of the Board members
described in the preceding clause (A) who were still in office
at the time such election or nomination was approved by the
Board.
(g) "Common Stock" means the authorized common stock of the Company.
(h) "Company" means LeCroy Corporation.
(i) "Eligible Employee" means any person who is, at the time of the
grant of an Option or Restricted Stock Award, an employee (including officers
and employee directors) or consultant of the Company or any Subsidiary.
(j) "Exchange Act" means the Securities Exchange Act of 1934, as
amended and in effect from time to time.
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(k) "Fair Market Value" means the value of a share of Common Stock as
of the relevant time of reference, as determined as follows. If the Common Stock
is then publicly traded, Fair Market Value shall be (i) the last sale price of a
share of Common Stock on the principal national securities exchange on which the
Common Stock is traded, if the Common Stock is then traded on a national
securities exchange; or (ii) the last sale price of the Common Stock reported in
the NASDAQ National Market System, if the Common Stock is not then traded on a
national securities exchange; or (iii) the average of the closing bid and asked
prices for the Common Stock quoted by an established quotation service for
over-the-counter securities, if the Common Stock is not then traded on a
national securities exchange or reported in the NASDAQ National Market System.
If the Common Stock is not then publicly traded, Fair Market Value shall be the
fair value of a share of the Common Stock as determined by the Board or the
Committee, taking into consideration such factors as it deems appropriate, which
may include recent sale and offer prices of Common Stock in arms'-length private
transactions.
(l) "Hostile Takeover" means a change in ownership of the Company
effected through the following transaction:
(i) any person or related group of persons (other
than the Company or a person that directly or indirectly
controls, is controlled by, or is under common control with
the Company) directly or indirectly acquires Beneficial
Ownership of securities possessing more than 50% of the total
combined voting power of the Company's outstanding securities
pursuant to a tender or exchange offer made directly to the
Company's stockholders that the Board does not recommend such
stockholders to accept, and
(ii) more than 50% of the securities so acquired in
such tender or exchange offer are accepted from holders other
than the officers and directors of the Company who are subject
to the short-swing profit restrictions of Section 16 of the
Exchange Act.
(m) "Participant" means any Eligible Employee selected to receive an
Option or Restricted Stock Award pursuant to Section 5.
(n) "Restricted Stock Award" means a right to the grant or purchase, at
a price determined by the Committee, of Common Stock which is nontransferable
and subject to substantial risk of forfeiture until specific conditions of
continuing employment or performance are met.
(o) "Incentive Stock Option" means an Option intended to qualify as an
"incentive stock option" under Section 422A of the Internal Revenue Code and
regulations thereunder.
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(p) "Option" means an Incentive Stock Option or a nonqualified stock
option.
(q) "Plan" means this Amended and Restated 1993 Stock Incentive Plan as
set forth herein and as amended and/or restated from time to time.
(r) "Subsidiary" means any subsidiary corporation (as defined in
Section 425 of the Internal Revenue Code) of the Company.
(s) "Takeover Price" means, with respect to any Incentive Stock Option,
the Fair Market Value per share of Common Stock on the date such Option is
surrendered to the Company in connection with a Hostile Takeover, or in the case
of a nonqualified Option, such Fair Market Value or, if greater, the highest
reported price per share of Common Stock paid by the tender offeror in effecting
such Hostile Takeover.
3. SHARES OF COMMON STOCK SUBJECT TO THE PLAN.
(a) Subject to adjustment in accordance with the provisions of Section
3(c) and Section 8 of the Plan, the aggregate number of shares of Common Stock
that may be issued or transferred pursuant to Options or Restricted Stock Awards
under the Plan shall not exceed 3,500,000 shares, which aggregate number of
shares, automatically and without further action, shall increase, effective as
of July 1, 1996 and each July 1 thereafter during the term of the Plan, by an
additional number of shares of Common Stock equal to five percent of the total
number of shares of Common Stock issued and outstanding as of the close of
business on the immediately preceding June 30, which is the last day of the
Company's fiscal year.
(b) The shares of Common Stock to be delivered under the Plan will be
made available, at the discretion of the Committee, from authorized but unissued
shares of Common Stock and/or from previously issued shares of Common Stock
reacquired by the Company.
(c) If shares covered by any Option cease to be issuable for any
reason, and/or shares covered by Restricted Stock Awards are forfeited, such
number of shares will no longer be charged against the limitation provided in
Section 3(a) and may again be made subject to Options or Restricted Stock
Awards.
4. ADMINISTRATION OF THE PLAN.
(a) The Plan will be governed by and interpreted and construed in
accordance with the internal laws of the State of Delaware (without reference to
principles of conflicts or choice of law). The captions of sections of the Plan
are for reference only and will not affect the interpretation or construction of
the Plan.
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(b) The Plan will be administered by the Committee, which shall consist
of two or more persons. The Committee has and may exercise such powers and
authority of the Board as may be necessary or appropriate for the Committee to
carry out its functions as described in the Plan. The Committee shall determine
the Eligible Employees to whom, and the time or times at which, Options or
Restricted Stock Awards may be granted and the number of shares subject to each
Option or Restricted Stock Award. The Committee also has authority (i) to
interpret the Plan, (ii) to determine the terms and provisions of the Option or
Restricted Stock Award instruments, and (iii) to make all other determinations
necessary or advisable for Plan administration. The Committee has authority to
prescribe, amend, and rescind rules and regulations relating to the Plan. All
interpretations, determinations, and actions by the Committee will be final,
conclusive, and binding upon all parties.
(c) No member of the Committee will be liable for any action taken or
determination made in good faith by the Committee with respect to the Plan or
any Option or Restricted Stock Award under it.
5. GRANTS.
(a) The Committee shall determine and designate from time to time those
Eligible Employees who are to be granted Options or Restricted Stock Awards, the
type of each Option to be granted and the number of shares covered thereby or
issuable upon exercise thereof, and the number of shares covered by each
Restricted Stock Award. Each Option and Restricted Stock Award will be evidenced
by a written agreement or instrument and may include any other terms and
conditions consistent with the Plan, as the Committee may determine.
(b) No person will be eligible for the grant of an Incentive Stock
Option who owns or would own immediately before the grant of such Option,
directly or indirectly, stock possessing more than ten percent of the total
combined voting power of all classes of stock of the Company or of any parent
corporation or Subsidiary. This will not apply if, at the time such Incentive
Stock Option is granted, its exercise price is at least 110% of the Fair Market
Value of the Common Stock and by its terms, it is not exercisable after the
expiration of five years from the date of grant. Subject to adjustment in
accordance with the provisions of Section 8 of the Plan, (i) no person may in
any year be granted Options or Restricted Stock Awards with respect to more than
300,000 shares of Common Stock, and (ii) no more than an aggregate of 6,000,000
shares of Common Stock may be issued pursuant to the exercise of Incentive Stock
Options granted under the Plan.
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6. TERMS AND CONDITIONS OF STOCK OPTIONS.
(a) The price at which Common Stock may be purchased by a Participant
under an Option shall be determined by the Committee; provided, however, that,
notwithstanding anything in the Plan to the contrary, unless approved by the
holders of a majority of shares present and entitled to vote at a duly convened
meeting of stockholders of the Company (i) the purchase price of any Option
shall not be less than 100% of the Fair Market Value of the Common Stock on the
date of grant of such Option and (ii) the purchase price of any Option may not
be reduced after the date of grant of such Option.
(b) Each Option shall be exercisable at such time or time, during such
periods, and for such numbers of shares as shall be determined by the Committee
and set forth in the agreement or instrument evidencing the Option grant
(subject to Acceleration by the Committee, in its discretion). The Option shall
expire no later than three months following termination of the optionee's
employment or consulting relationship with the Company or a Subsidiary, except
in the event that such termination is due to death or disability, in which case
the Option may be exercisable for a maximum of twelve months after such
termination. In any event, the Option shall expire no later than the tenth
anniversary of the date of grant.
(c) Unless the Compensation Committee otherwise determines (whether at
the time the Option is granted or otherwise), upon the exercise of an Option,
the purchase price will be payable in full in cash.
(d) Incentive Stock Options may be granted under the Plan only to
employees of the Company or a Subsidiary, and the aggregate Fair Market Value
(determined as of the date the Incentive Stock Option is granted) of the number
of shares with respect to which Incentive Stock Options are exercisable for the
first time by a Participant in any calendar year shall not exceed one hundred
thousand dollars ($100,000) or such other limit as may be required by the
Internal Revenue Code. Any Options that purport to be Incentive Stock Options
but which are granted to persons other than employees of the Company or a
Subsidiary shall be, and any Options that purport to be Incentive Stock Options
but are granted in amounts in excess of those specified in this Section 6(d),
shall to the extent of such excess be, nonqualified Options.
(e) No fractional shares will be issued pursuant to the exercise of an
Option, nor will any cash payment be made in lieu of fractional shares.
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(f) Subject to the short-swing profit restrictions of the Federal
securities laws, each Option granted to any officer of the Company may provide
that upon the occurrence of a Hostile Takeover, such Option, if outstanding for
at least six months, will automatically be canceled in exchange for a cash
distribution from the Company in an amount equal to the excess of (i) the
aggregate Takeover Price of the shares of Common Stock at the time subject to
the canceled Option (regardless of whether the Option is otherwise then
exercisable for such shares) over (ii) the aggregate Option price payable for
such shares. Such cash distribution shall be made within five days after the
consummation of the Hostile Takeover. Neither the approval of the Committee nor
the consent of the Board shall be required in connection with such Option
cancellation and cash distribution.
7. TERMS AND CONDITIONS OF RESTRICTED STOCK AWARDS.
(a) All shares of Common Stock subject to Restricted Stock Awards
granted or sold pursuant to the Plan may be issued or transferred for such
consideration (which may consist wholly of services) as the Committee may
determine, and will be subject to the following conditions:
(i) The shares may not be sold, transferred, or otherwise
alienated or hypothecated until the restrictions are removed or expire,
unless the Committee determines otherwise.
(ii) The Committee shall provide in the agreement or
instrument evidencing the grant of the Restricted Stock Awards that the
certificates representing shares subject to Restricted Stock Awards
granted or sold pursuant to the Plan will be held in escrow by the
Company until the restrictions on the shares lapse in accordance with
the provisions of subsection (b) of this Section 7.
(iii) Each certificate representing shares subject to
Restricted Stock Awards granted or sold pursuant to the Plan will bear
a legend making appropriate reference to the restrictions imposed.
(iv) The Committee may impose other conditions on any shares
subject to Restricted Stock Awards granted or sold pursuant to the Plan
as it may deem advisable, including without limitation, restrictions
under the Securities Act of 1933, as amended, under the requirements of
any stock exchange or securities quotations system upon which such
shares or shares of the same class are then listed, and under any blue
sky or other securities laws applicable to such shares.
(b) The restrictions imposed under subparagraph (a) above upon
Restricted Stock Awards will lapse at such time or times, and/or upon the
achievement of such predetermined performance objectives, as shall be determined
by the Committee and set forth in the agreement or instrument evidencing the
Option grant, provided, however, that the restrictions on Restricted Stock
Awards shall not fully lapse in less than three years from the date of grant, or
not less than one year from the date of grant if such restrictions also require
the achievement of one or more predetermined performance objectives. In the
event a holder of a Restricted Stock Award ceases to be an employee or
consultant of the Company, all shares under the Restricted Stock Award that
remain subject to restrictions at the time his or her employment or consulting
relationship terminates will be returned to or repurchased by the Company unless
the Committee determines otherwise.
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(c) Subject to the provisions of subparagraphs (a) and (b) above, the
holder will have all rights of a shareholder with respect to the shares covered
by Restricted Stock Awards granted or sold, including the right to receive all
dividends and other distributions paid or made with respect thereto; provided,
however, that he or she shall execute an irrevocable proxy or enter into a
voting agreement with the Company as determined by the Committee for the purpose
of granting the Company or its nominee the right to vote all shares that remain
subject to restrictions under this Section 7 in the same proportions (for and
against) as the outstanding voting shares of the Company that are not subject to
such restrictions are voted by the other shareholders of the Company on any
matter, unless the Committee determines otherwise.
8. ADJUSTMENT PROVISIONS.
(a) All of the share numbers set forth in the Plan reflect the capital
structure of the Company at the time of the amendment and restatement of the
Plan as of July 7, 1995. Subject to Section 8(b), if subsequent to such date the
outstanding shares of Common Stock of the Company are increased, decreased, or
exchanged for a different number or kind of shares or other securities, or if
additional shares or new or different shares or other securities are distributed
with respect to such shares of Common Stock or other securities, through merger
(including without limitation in connection with the reincorporation of the
Company as a Delaware corporation), consolidation, sale of all or substantially
all the property of the Company, reorganization, recapitalization,
reclassification, stock dividend, stock split, reverse stock split, or other
distribution with respect to such shares of Common Stock, or other securities,
an appropriate and proportionate adjustment shall be made in (i) the maximum
numbers and kinds of shares provided in Sections 3 and 5, (ii) the numbers and
kinds of shares or other securities subject to the then outstanding Options and
Restricted Stock Awards, and (iii) the price for each share or other unit of any
other securities subject to then outstanding Options (without change in the
aggregate purchase price as to which such Options remain exercisable).
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(b) The Committee shall have discretion to provide for the Acceleration
of one or more outstanding Options held by employees and the vesting of unvested
shares held by employees as Restricted Stock Awards upon the occurrence of a
Change in Control of the Company. Such Accelerated vesting may be conditioned on
the subsequent termination of the affected optionee's employment. Any Options
Accelerated in connection with a Change in Control shall remain fully
exercisable until the expiration or sooner termination of the Option Term.
(c) In the event of an Acquisition: The unvested shares of Common Stock
held by employees as Restricted Stock Awards shall immediately vest in full,
except to the extent that the Company's repurchase rights with respect to those
shares are to be assigned to the acquiring entity; and all outstanding Options
held by employees will Accelerate to the extent not assumed by the acquiring
entity or replaced by comparable options to purchase shares of the capital stock
of the successor or acquiring entity or parent thereof (the determination of
comparability to be made by the Committee, which determination shall be final,
binding, and conclusive). The Committee shall have discretion, exercisable
either in advance of an Acquisition or at the time thereof, to provide (upon
such terms as it may deem appropriate) for (i) the automatic Acceleration of one
or more outstanding Options held by employees that are assumed or replaced and
do not otherwise Accelerate by reason of the Acquisition, and/or (ii) the
subsequent termination of one or more of the Company's repurchase rights with
respect to shares held by employees as Restricted Stock Awards that are assigned
in connection with the Acquisition and do not otherwise terminate at that time,
in the event that the employment of the respective grantees of such Options or
Restricted Stock Awards should subsequently terminate following such
Acquisition.
(d) Each outstanding Option that is assumed in connection with an
Acquisition, or is otherwise to continue in effect subsequent to such
Acquisition, shall be appropriately adjusted, immediately after such
Acquisition, to apply to the number and class of securities that would have been
issued to the Option holder, in consummation of such Acquisition, had such
holder exercised such Option immediately prior to such Acquisition. Appropriate
adjustments shall also be made to the Option price payable per share, provided,
that the aggregate Option price payable for such securities shall remain the
same. The class and number of securities available for issuance under the Plan
following the consummation of such Acquisition shall be appropriately adjusted.
(e) Adjustments under this Section 8 will be made by the Committee in
accordance with the terms of such sections, whose determination as to what
adjustments will be made and the extent thereof so as to effectuate the intent
of such sections will be final, binding, and conclusive. No fractional shares
will be issued under the Plan on account of any such adjustments.
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9. GENERAL PROVISIONS.
(a) Nothing in the Plan or in any instrument executed pursuant to the
Plan will confer upon any Participant any right to continue in the employ of or
as a consultant to the Company or any of its Subsidiaries or affect the right of
the Company or any Subsidiary to terminate the employment or consulting
relationship of any Participant at any time, with or without cause.
(b) No shares of Common Stock will be issued or transferred pursuant to
an Option or Restricted Stock Award unless and until all then applicable
requirements imposed by Federal and state securities and other laws, rules and
regulations and by any regulatory agencies having jurisdiction, and by any stock
exchanges or securities quotations systems upon which the Common Stock may be
listed, have been fully met. As a condition precedent to the issuance of shares
pursuant to the grant or exercise of an Option or Restricted Stock Award, the
Company may require the Participant to take any reasonable action to meet such
requirements.
(c) No Participant and no beneficiary or other person claiming under or
through such Participant will have any right, title, or interest in or to any
shares of Common Stock allocated or reserved under the Plan or subject to any
Option, except as to such shares of Common Stock, if any, that have been issued
or transferred to such Participant.
(d) The Committee shall adopt rules regarding the withholding of
federal, state, or local taxes of any kind required by law to be withheld with
respect to payments and delivery of shares to Participants under the Plan. With
respect to any nonqualified stock option, the Committee, in its discretion, may
permit the Participant to satisfy, in whole or in part, any tax withholding
obligation that may arise in connection with the exercise of the nonqualified
stock option by electing to have the Company withhold shares of Common Stock
having a Fair Market Value equal to the amount of the tax withholding.
(e) No Option and no right under the Plan, contingent or otherwise,
will be transferable or assignable or subject to any encumbrance, pledge, or
charge of any nature except that, under such rules and regulations as the
Committee may establish pursuant to the terms of the Plan, a beneficiary may be
designated with respect to an Option in the event of death of a Participant. If
such beneficiary is the executor or administrator of the estate of the
Participant, any rights with respect to such Option may be transferred to the
person or persons or entity (including a trust) entitled thereto under the will
of the holder of such Option.
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(f) The Committee may cancel, with the consent of the Participant, all
or a portion of any Option granted under the Plan to be conditioned upon the
granting to the Participant of a new Option for the same or a different number
of shares as the Option surrendered, or may require such voluntary surrender as
a condition to a grant of a new Option to such Participant; in each case, such
new Options to have an exercise price per share based upon the Fair Market Value
of the Common Stock as of the new grant date (i.e., the purchase price under a
new Option shall not be less than 100% of the Fair Market Value of the Common
Stock on the date of grant of such new Incentive Stock Option (110%, if the
grantee of such new Incentive Stock Option is a greater-than-10% stockholder of
the Company, as set forth in Section 5(b) above)). Subject to the provisions of
Section 6(d), such new Option shall be exercisable at such time or time, during
such periods, and for such numbers of shares, and in accordance with any other
terms or conditions, as are specified by the Committee at the time the new
Option is granted, all determined in accordance with the provisions of the Plan
without regard to the price, period of exercise, or any other terms or
conditions of the Option surrendered.
(g) The written agreements or instruments evidencing Restricted Stock
Awards or Options granted under the Plan may contain such other provisions as
the Committee may deem advisable. Without limiting the foregoing, and if so
authorized by the Committee, the Company may, with the consent of the
Participant and at any time or from time to time, cancel all or a portion of any
Option granted under the Plan then subject to exercise and discharge its
obligation with respect to the Option either by payment to the Participant of an
amount of cash equal to the excess, if any, of the Fair Market Value, at such
time, of the shares subject to the portion of the Option so canceled over the
aggregate purchase price specified in the Option covering such shares, or by
issuance or transfer to the Participant of shares of Common Stock with a Fair
Market Value at such time, equal to any such excess, or by a combination of cash
and shares. Upon any such payment of cash or issuance of shares, (i) there shall
be charged against the aggregate limitations set forth in Section 3(a) a number
of shares equal to the number of shares so issued plus the number of shares
purchasable with the amount of any cash paid to the Participant on the basis of
the Fair Market Value as of the date of payment, and (ii) the number of shares
subject to the portion of the Option so canceled, less the number of shares so
charged against such limitations, shall thereafter be available for other
grants.
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10. AMENDMENT AND TERMINATION.
(a) The Board shall have the power, in its discretion, to amend,
modify, suspend, or terminate the Plan at any time, subject to the rights of
holders of outstanding Options and Restricted Stock Awards on the date of such
action, and to the approval of the stockholders of the Company if an amendment
or modification would change the eligibility requirements of the Plan, extend
the term of the Plan, or increase the number of shares of Common Stock subject
to grant as Options or Restricted Stock Awards under the Plan.
(b) The Committee may, with the consent of a Participant, make such
modifications in the terms and conditions of an Option or Restricted Stock Award
held by such Participant as it deems advisable.
(c) No amendment, suspension or termination of the Plan will, without
the consent of the Participant, alter, terminate, impair, or adversely affect
any right or obligation under any Option or Restricted Stock Award previously
granted to such Participant under the Plan.
11. EFFECTIVE DATE OF PLAN AND DURATION OF PLAN.
The Plan, as amended and restated in its present form, became effective
upon its adoption by the Board on July 7, 1995, subject to subsequent approval
by the Company's stockholders. Unless previously terminated, the Plan will
terminate on January 4, 2003.
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[Letterhead of LeCroy Corporation]
____________, 1995
[Name of officer]
---------------------------
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Re: Letter Agreement -- Treatment of Options after Hostile Takeover
Dear ____________:
This is to confirm the agreement of LeCroy Corporation (the "Company")
and you with respect to all stock options previously granted to you under the
Company's Amended and Restated 1993 Stock Incentive Plan (the "Plan").
Capitalized terms used and not otherwise defined in this Letter Agreement have
the respective meanings ascribed to them in the Plan.
We hereby agree as follows: Subject to the short-swing profit
restrictions of the Federal securities laws, upon the occurrence of a Hostile
Takeover, [if you are then an officer of the Company,] each Option granted to
you under the Plan prior to the date of this Letter Agreement, and which at the
time of such Hostile Takeover has been outstanding for at least six months, will
automatically be canceled in exchange for a cash distribution from the Company
in an amount equal to the excess of (i) the aggregate Takeover Price of the
shares of Common Stock at the time subject to the canceled Option (regardless of
whether the Option is otherwise then exercisable for such shares) over (ii) the
aggregate Option price payable for such shares. Such cash distribution shall be
made within five days after the consummation of the Hostile Takeover.
<PAGE>
14
Please confirm your agreement to the foregoing by countersigning both
of the enclosed copies of this Letter Agreement and returning one of them to the
undersigned. This Letter Agreement will then constitute an agreement under seal
governed by the internal laws of the State of Delaware (without reference to
principles of conflicts or choice of law).
Very truly yours,
LECROY CORPORATION
By _________________________
Name:
Title:
ACCEPTED AND AGREED TO:
_________________________
(signature)
<PAGE>
15
[Letterhead of LeCroy Corporation]
____________, 1995
[Name of officer]
---------------------------
---------------------------
Re: Letter Agreement -- Treatment of Options after Hostile Takeover
Dear ____________:
This is to confirm the agreement of LeCroy Corporation (the "Company")
and you with respect to certain options previously granted to you under the
Company's Amended and Restated 1993 Stock Incentive Plan (the "Plan"), as
specified in the attached Schedule 1 (the "Options"). Capitalized terms used and
not otherwise defined in this Letter Agreement have the respective meanings
ascribed to them in the Plan.
We hereby agree as follows: Subject to the short-swing profit
restrictions of the Federal securities laws, upon the occurrence of a Hostile
Takeover, [if you are then an officer of the Company,] each of the Options that
has then been outstanding for at least six months will automatically be canceled
in exchange for a cash distribution from the Company in an amount equal to the
excess of (i) the aggregate Takeover Price of the shares of Common Stock at the
time subject to the canceled Option (regardless of whether the Option is
otherwise then exercisable for such shares) over (ii) the aggregate Option price
payable for such shares. Such cash distribution shall be made within five days
after the consummation of the Hostile Takeover.
<PAGE>
16
Please confirm your agreement to the foregoing by countersigning both
of the enclosed copies of this Letter Agreement and returning one of them to the
undersigned. This Letter Agreement will then constitute an agreement under seal
governed by the internal laws of the State of Delaware (without reference to
principles of conflicts or choice of law).
Very truly yours,
LECROY CORPORATION
By _________________________
Name:
Title:
ACCEPTED AND AGREED TO:
_________________________
(signature)
<PAGE>
Exhibit 10.34
LECROY CORPORATION
1998 NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN
AMENDMENT
AUGUST 16, 2000
This AMENDMENT (this "Amendment") TO THE 1998 NON-EMPLOYEE DIRECTOR
STOCK OPTION PLAN OF LECROY CORPORATION (THE "1998 PLAN") is effective as of the
date set forth above, pursuant to authority reserved in Article XI of the 1998
Plan and the resolutions of the Board of Directors of LeCroy Corporation (the
"Company") adopted on August 14, 2000.
NOW, THEREFORE, the 1998 Plan is hereby amended as follows:
ss.1. AMENDMENT TO ARTICLE VII(3) OF THE 1998 PLAN. Article VII(3) of
the 1998 Plan is deleted in its entirety and is replaced with the following:
3. Price of Options. Unless approved by the holders of a
majority of the shares present and entitled to vote at a duly
convened meeting of stockholders of the Company, (i) the
exercise price of the option will be the Fair Market Value of
the Common Stock on the date of grant and (ii) the exercise
price of any option may not be reduced after the date of grant
of such option
ss.2. CONFORMED BY-LAWS. Attached hereto as Exhibit A is a conformed
copy of 1998 Plan that contains the foregoing amendment.
SS.4. MISCELLANEOUS. Except as expressly set forth in this Amendment,
all of the terms and provisions of the 1998 Plan shall remain in full force and
effect.
IN WITNESS WHEREOF, the Company has adopted this Amendment as of the
16th day of August, 2000.
LECROY CORPORATION
By: /S/Raymond F. Kunzmann
----------------------
Name: Raymond F. Kunzmann
Title: Vice President - Finance,
Chief Financial Officer, Secretary
and Treasurer
<PAGE>
EXHIBIT A
LECROY CORPORATION
1998 NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN
PART 1. PLAN ADMINISTRATION AND ELIGIBILITY
I. PURPOSE
The purpose of this 1998 Non-Employee Director Stock Option Plan (the
"Plan") of LeCroy Corporation (the "Company") is to encourage ownership in the
Company by outside directors of the Company (each, a "Non-Employee Director," or
collectively, the "Non-Employee Directors") whose continued services are
considered essential to the Company's continued progress and thus to provide
them with a further incentive to remain as directors of the Company.
II. ADMINISTRATION
The Board of Directors (the "Board") of the Company or any committee (the
"Committee") of the Board that will satisfy Rule 16b-3 of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and any regulations
promulgated thereunder, as from time to time in effect, including any successor
rule ("Rule 16b-3"), shall supervise and administer the Plan. The Committee
shall consist solely of two or more non-employee directors of the Company, who
shall be appointed by the Board. A member of the Board shall be deemed to be a
"non-employee director" only if he satisfies such requirements as the Securities
and Exchange Commission may establish for non-employee directors under Rule
16b-3. Members of the Board receive no additional compensation for their
services in connection with the administration of the Plan.
The Board or the Committee may adopt such rules or guidelines as it deems
appropriate to implement the Plan. All questions of interpretation of the Plan
or of any options issued under it shall be determined by the Board or the
Committee and such determination shall be final and binding upon all persons
having an interest in the Plan. Any or all powers and discretion vested in the
Board or the Committee under this Plan may be exercised by any subcommittee so
authorized by the Board or the Committee and satisfying the requirements of Rule
16b-3.
III. PARTICIPATION IN THE PLAN
Each member of the Board who is not an employee of the Company or any of
its subsidiaries or affiliates shall be eligible for grants of options under the
Plan.
<PAGE>
2
IV. STOCK SUBJECT TO THE PLAN
The maximum number of shares of the Company's $.01 par value Common Stock
("Common Stock") which may be issued under the Plan shall be Five Hundred
Thousand (500,000). The limitation on the number of shares which may be issued
under the Plan shall be subject to adjustment as provided in Section X of the
Plan.
If any outstanding option under the Plan for any reason expires,
terminated, or is cancelled without having been exercised in full, the shares
allocable to the unexercised portion of such option shall again become available
for grant pursuant to the Plan.
PART 2. TERMS OF THE PLAN
V. EFFECTIVE DATE OF THE PLAN
The Plan shall take effect on the date of adoption by the stockholders of
the Company. The Plan shall terminate on October 27, 2008, unless earlier
terminated by the Board of Directors or the Committee.
VI. TIME FOR GRANTING OPTIONS AND ISSUING SHARES
No options shall be granted after the date on which this Plan terminates.
The applicable terms of this Plan, and any terms and conditions applicable to
the options granted or the shares issued prior to such date, shall survive the
termination of the Plan and continue to apply to such options and shares.
VII. TERMS AND CONDITIONS
1. Initial Award. Beginning with the adoption of the Plan or upon his or
her initial election or appointment to the Board, each Non-Employee Director
will receive an option grant of 15,000 shares, to be vested ratably on a monthly
basis over 36 months.
2. Subsequent Awards. Additionally, after a director's initial grant, each
director will receive an annual option grant of 5,000 shares, to be vested
immediately.
3. Price of Options. Unless approved by the holders of a majority of the
shares present and entitled to vote at a duly convened meeting of stockholders
of the Company (i) the exercise price of the option will be the Fair Market
Value of the Common Stock on the date of grant and (ii) the exercise price of
any option may not be reduced after the date of grant of such option
4. Exercise of Options. Options may be exercised only by written notice to
the Company accompanied by payment in cash of the full consideration for the
shares as to which they are exercised.
<PAGE>
3
5. Period of Option. No option shall be exercisable after the expiration of
ten (10) years from the date upon which such option is granted. Options are
exercisable to the extent vested only while the optionee is serving as a
director of the Company or within three months after the optionee ceases to
serve as a director of the Company (except that if a director dies or becomes
disabled while he or she is serving as a director of the Company, the option is
exercisable for a maximum of one year after the optionee ceases to be a
director).
6. Exercise by Representative Following Death of Director. A Non-Employee
Director, by written notice to the Company, may designate one or more
persons(and from time to time change such designation) including his legal
representative, who, by reason of his death, shall acquire the right to exercise
all or a portion of the option. If the person or persons so designated wish to
exercise any portion of the option, they must do so within the term of the
option as provided in Section VII.5. Any exercise by a representative shall be
subject to the provisions of this Plan.
7. Options Nontransferable. Each option granted under the Plan by its terms
shall not be transferable by the optionee otherwise than by will, or by the laws
of descent and distribution, and shall be exercised during the lifetime of the
optionee only by him. No option or interest therein may be transferred,
assigned, pledged or hypothecated by the optionee during his lifetime, whether
by operation of law or otherwise, or be made subject to execution, attachment or
similar process.
PART 3. GENERAL PROVISIONS
VIII. ASSIGNMENTS
The rights and benefits under this Plan may not be assigned except for the
designation of a beneficiary as provided in Section VII.
IX. LIMITATION OF RIGHTS
No Right to Continue as a Director. Neither the Plan, nor the issuance of
shares of Common Stock nor any other action taken pursuant to the Plan, shall
constitute or be evidence of any agreement or understanding, express or implied,
that the Company will retain a director for any period of time, or at any
particular rate of compensation.
No Stockholders' Rights for Options. An optionee shall have no rights as a
stockholder with respect to the shares covered by his options until the date of
the issuance to him of a stock certificate therefor or the making of a book
entry with the Company's transfer agent, and no adjustment will be made for
dividends or other rights for which the record date is prior to the date such
certificate is issued.
<PAGE>
4
X. CHANGES IN PRESENT STOCK
In the event of any merger, consolidation, reorganization,
recapitalization, stock dividend, stock split, or other change in the corporate
structure or capitalization affecting the Company's present Common Stock, at the
time of such event the Board or the Committee shall make appropriate adjustments
to the number (including the aggregate numbers specified in Section IV) and kind
of shares to be issued under the Plan, and any outstanding Stock Option, and the
price of any Stock Option.
XI. AMENDMENT OF THE PLAN
The Board shall have the right to amend, modify, suspend or terminate the
Plan at any time for any purpose; provided, that following the approval of the
Plan by the Company's stockholders, the Company will seek stockholder approval
for any change to the extent required by applicable law, regulation or rule.
XII. DEFINITIONS
"Fair Market Value" shall be the mean the last sales price for the Common
Stock as reported on the NASDAQ National Market System on the date in question,
or if no sales of such stock were made on that date, the last sales price of the
Common Stock on the next preceding day on which sales were made.
XIII. COMPLIANCE WITH SECTION 16 OF THE EXCHANGE ACT
It is the Company's intent that the Plan comply in all respects with
Rule16b-3. If any provision of this Plan is found not to be in compliance with
such rule and regulations, the provision shall be deemed null and void, and the
remaining provisions of the Plan shall continue in full force and effect. All
transactions under this Plan shall be executed in accordance with the
requirements of Section 16 of the Exchange Act and regulations promulgated
thereunder. The Board or the Committee may, in its sole discretion, modify the
terms and conditions of this Plan in response to and consistent with any changes
in applicable law, rule or regulation.
XIV. NOTICE
Any written notice to the Company required by any of the provisions of this
Plan shall be addressed to the Secretary of the Company and shall become
effective when it is received.
XV. GOVERNING LAW
This Plan and all determinations made and actions taken pursuant hereto
shall be governed by the law of the State of Delaware and construed accordingly.
<PAGE>
Exhibit 10.35
LECROY CORPORATION
1998 NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN
AMENDMENT
OCTOBER 25, 2000
This AMENDMENT (this "Amendment") TO THE 1998 NON-EMPLOYEE DIRECTOR
STOCK OPTION PLAN OF LECROY CORPORATION (THE "1998 PLAN") is effective as of the
date set forth above, pursuant to authority reserved in Article XI of the 1998
Plan and the resolutions of the Board of directors of LeCroy Corporation (the
"Company") adopted on October 25, 2000.
NOW, THEREFORE, the 1998 Plan is hereby amended as follows:
ss.1. AMENDMENT TO ARTICLE VII(2) OF THE 1998 PLAN. Article VII(2) of
the 1998 Plan is deleted in its entirety and is replaced with the following:
2. Subsequent Awards. Additionally, after a director's initial
grant, each director will receive an annual option grant of 7,000
shares, to be vested immediately.
ss.2. CONFORMED BY-LAWS. Attached hereto as Exhibit A is a conformed
copy of 1998 Plan that contains the foregoing amendment.
SS.4. MISCELLANEOUS. Except as expressly set forth in this Amendment,
all of the terms and provisions of the 1998 Plan shall remain in full force and
effect.
IN WITNESS WHEREOF, the Company has adopted this Amendment as of the
25th day of October, 2000.
LECROY CORPORATION
By: /s/Raymond F. Kunzmann
----------------------
Name: Raymond F. Kunzmann
Title: Vice President-Finance, Chief
Financial Officer, Secretary and
Treasurer
<PAGE>
EXHIBIT A
LECROY CORPORATION
1998 NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN
PART 1. PLAN ADMINISTRATION AND ELIGIBILITY
I. PURPOSE
The purpose of this 1998 Non-Employee Director Stock Option Plan (the
"Plan") of LeCroy Corporation (the "Company") is to encourage ownership in the
Company by outside directors of the Company (each, a "Non-Employee Director," or
collectively, the "Non-Employee Directors") whose continued services are
considered essential to the Company's continued progress and thus to provide
them with a further incentive to remain as directors of the Company.
II. ADMINISTRATION
The Board of Directors (the "Board") of the Company or any committee (the
"Committee") of the Board that will satisfy Rule 16b-3 of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and any regulations
promulgated thereunder, as from time to time in effect, including any successor
rule ("Rule 16b-3"), shall supervise and administer the Plan. The Committee
shall consist solely of two or more non-employee directors of the Company, who
shall be appointed by the Board. A member of the Board shall be deemed to be a
"non-employee director" only if he satisfies such requirements as the Securities
and Exchange Commission may establish for non-employee directors under Rule
16b-3. Members of the Board receive no additional compensation for their
services in connection with the administration of the Plan.
The Board or the Committee may adopt such rules or guidelines as it deems
appropriate to implement the Plan. All questions of interpretation of the Plan
or of any options issued under it shall be determined by the Board or the
Committee and such determination shall be final and binding upon all persons
having an interest in the Plan. Any or all powers and discretion vested in the
Board or the Committee under this Plan may be exercised by any subcommittee so
authorized by the Board or the Committee and satisfying the requirements of Rule
16b-3.
<PAGE>
2
III. PARTICIPATION IN THE PLAN
Each member of the Board who is not an employee of the Company or any of
its subsidiaries or affiliates shall be eligible for grants of options under the
Plan.
IV. STOCK SUBJECT TO THE PLAN
The maximum number of shares of the Company's $.01 par value Common Stock
("Common Stock") which may be issued under the Plan shall be Five Hundred
Thousand (500,000). The limitation on the number of shares which may be issued
under the Plan shall be subject to adjustment as provided in Section X of the
Plan.
If any outstanding option under the Plan for any reason expires,
terminated, or is cancelled without having been exercised in full, the shares
allocable to the unexercised portion of such option shall again become available
for grant pursuant to the Plan.
PART 2. TERMS OF THE PLAN
V. EFFECTIVE DATE OF THE PLAN
The Plan shall take effect on the date of adoption by the stockholders of
the Company. The Plan shall terminate on October 27, 2008, unless earlier
terminated by the Board of Directors or the Committee.
VI. TIME FOR GRANTING OPTIONS AND ISSUING SHARES
No options shall be granted after the date on which this Plan terminates.
The applicable terms of this Plan, and any terms and conditions applicable to
the options granted or the shares issued prior to such date, shall survive the
termination of the Plan and continue to apply to such options and shares.
VII. TERMS AND CONDITIONS
1. Initial Award. Beginning with the adoption of the Plan or upon his or
her initial election or appointment to the Board, each Non-Employee Director
will receive an option grant of 15,000 shares, to be vested ratably on a monthly
basis over 36 months.
2. Subsequent Awards. Additionally, after a director's initial grant, each
director will receive an annual option grant of 7,000 shares, to be vested
immediately.
3. Price of Options. Unless approved by the holders of a majority of the
shares present and entitled to vote at a duly convened meeting of stockholders
of the Company (i) the exercise price of the option will be the Fair Market
Value of the Common Stock on the date of grant and (ii) the exercise price of
any option may not be reduced after the date of grant of such option
4. Exercise of Options. Options may be exercised only by written notice to
the Company accompanied by payment in cash of the full consideration for the
shares as to which they are exercised.
<PAGE>
3
5. Period of Option. No option shall be exercisable after the expiration of
ten (10) years from the date upon which such option is granted. Options are
exercisable to the extent vested only while the optionee is serving as a
director of the Company or within three months after the optionee ceases to
serve as a director of the Company (except that if a director dies or becomes
disabled while he or she is serving as a director of the Company, the option is
exercisable for a maximum of one year after the optionee ceases to be a
director).
6. Exercise by Representative Following Death of Director. A Non-Employee
Director, by written notice to the Company, may designate one or more
persons(and from time to time change such designation) including his legal
representative, who, by reason of his death, shall acquire the right to exercise
all or a portion of the option. If the person or persons so designated wish to
exercise any portion of the option, they must do so within the term of the
option as provided in Section VII.5. Any exercise by a representative shall be
subject to the provisions of this Plan.
7. Options Nontransferable. Each option granted under the Plan by its terms
shall not be transferable by the optionee otherwise than by will, or by the laws
of descent and distribution, and shall be exercised during the lifetime of the
optionee only by him. No option or interest therein may be transferred,
assigned, pledged or hypothecated by the optionee during his lifetime, whether
by operation of law or otherwise, or be made subject to execution, attachment or
similar process.
PART 3. GENERAL PROVISIONS
VIII. ASSIGNMENTS
The rights and benefits under this Plan may not be assigned except for the
designation of a beneficiary as provided in Section VII.
IX. LIMITATION OF RIGHTS
No Right to Continue as a Director. Neither the Plan, nor the issuance of
shares of Common Stock nor any other action taken pursuant to the Plan, shall
constitute or be evidence of any agreement or understanding, express or implied,
that the Company will retain a director for any period of time, or at any
particular rate of compensation.
No Stockholders' Rights for Options. An optionee shall have no rights as a
stockholder with respect to the shares covered by his options until the date of
the issuance to him of a stock certificate therefor or the making of a book
entry with the Company's transfer agent, and no adjustment will be made for
dividends or other rights for which the record date is prior to the date such
certificate is issued.
<PAGE>
4
X. CHANGES IN PRESENT STOCK
In the event of any merger, consolidation, reorganization,
recapitalization, stock dividend, stock split, or other change in the corporate
structure or capitalization affecting the Company's present Common Stock, at the
time of such event the Board or the Committee shall make appropriate adjustments
to the number (including the aggregate numbers specified in Section IV) and kind
of shares to be issued under the Plan, and any outstanding Stock Option, and the
price of any Stock Option.
XI. AMENDMENT OF THE PLAN
The Board shall have the right to amend, modify, suspend or terminate the
Plan at any time for any purpose; provided, that following the approval of the
Plan by the Company's stockholders, the Company will seek stockholder approval
for any change to the extent required by applicable law, regulation or rule.
XII. DEFINITIONS
"Fair Market Value" shall be the mean the last sales price for the Common
Stock as reported on the NASDAQ National Market System on the date in question,
or if no sales of such stock were made on that date, the last sales price of the
Common Stock on the next preceding day on which sales were made.
XIII. COMPLIANCE WITH SECTION 16 OF THE EXCHANGE ACT
It is the Company's intent that the Plan comply in all respects with
Rule16b-3. If any provision of this Plan is found not to be in compliance with
such rule and regulations, the provision shall be deemed null and void, and the
remaining provisions of the Plan shall continue in full force and effect. All
transactions under this Plan shall be executed in accordance with the
requirements of Section 16 of the Exchange Act and regulations promulgated
thereunder. The Board or the Committee may, in its sole discretion, modify the
terms and conditions of this Plan in response to and consistent with any changes
in applicable law, rule or regulation.
XIV. NOTICE
Any written notice to the Company required by any of the provisions of this
Plan shall be addressed to the Secretary of the Company and shall become
effective when it is received.
XV. GOVERNING LAW
This Plan and all determinations made and actions taken pursuant hereto
shall be governed by the law of the State of Delaware and construed accordingly.
<PAGE>
Exhibit 10.36
CREDIT AGREEMENT
DATED AS OF OCTOBER 11, 2000
AMONG
LECROY CORPORATION,
AS BORROWER
THE LENDERS PARTY HERETO
AND
THE BANK OF NEW YORK,
AS ADMINISTRATIVE AGENT
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C> <C>
ARTICLE 1 DEFINITIONS................................................................................1
Section 1.01 Defined Terms..............................................................................1
Section 1.02 Classification of Loans and Borrowings....................................................13
Section 1.03 Section 1.03 Terms Generally..............................................................14
Section 1.04 Section 1.04 Accounting Terms; GAAP.......................................................14
ARTICLE 2 THE CREDITS...............................................................................14
Section 2.01 Commitments...............................................................................14
Section 2.02 Loans and Borrowing.......................................................................15
Section 2.03 Section 2.03 Requests for Borrowings......................................................15
Section 2.04 Funding of Borrowings.....................................................................16
Section 2.05 Termination and Reduction of Revolving Commitments........................................16
Section 2.06 Repayment of Loans; Evidence of Debt......................................................17
Section 2.07 Prepayment of Loans.......................................................................17
Section 2.08 Payments Generally; Pro Rata Treatment; Sharing of Setoffs................................18
ARTICLE 3 INTEREST, FEES, YIELD PROTECTION, ETC.....................................................20
Section 3.01 Interest..................................................................................20
Section 3.02 Interest Elections........................................................................20
Section 3.03 Fees......................................................................................21
Section 3.04 Alternate Rate of Interest................................................................22
Section 3.05 Increased Costs; Illegality...............................................................22
Section 3.06 Break Funding Payment.....................................................................24
Section 3.07 Taxes.....................................................................................25
Section 3.08 Mitigation Obligations....................................................................25
ARTICLE 4 REPRESENTATIONS AND WARRANTIES............................................................26
Section 4.01 Organization; Powers......................................................................26
Section 4.02 Authorization; Enforceability.............................................................26
Section 4.03 Governmental Approvals; No Conflicts......................................................26
Section 4.04 Financial Condition; No Material Adverse Change...........................................27
Section 4.05 Properties................................................................................27
Section 4.06 Litigation and Environmental Matters......................................................27
Section 4.07 Compliance with Laws and Agreements.......................................................28
Section 4.08 Investment and Holding Company Status.....................................................28
Section 4.09 Taxes.....................................................................................28
Section 4.10 ERISA.....................................................................................28
Section 4.11 Disclosure................................................................................28
Section 4.12 Subsidiaries..............................................................................29
Section 4.13 Insurance.................................................................................29
Section 4.14 Labor Matters.............................................................................29
Section 4.15 Solvency..................................................................................29
Section 4.16 Security Documents........................................................................29
Section 4.17 Federal Reserve Regulations...............................................................30
ARTICLE 5 CONDITIONS................................................................................30
Section 5.01 Effective Date............................................................................30
Section 5.02 Each Credit Event.........................................................................34
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C>
ARTICLE 6 AFFIRMATIVE COVENANTS.....................................................................34
Section 6.01 Financial Statements and Other Information................................................34
Section 6.02 Notices of Material Events................................................................36
Section 6.03 Existence; Conduct of Business............................................................36
Section 6.04 Payment of Obligations....................................................................36
Section 6.05 Maintenance of Properties.................................................................37
Section 6.06 Books and Records; Inspection Rights; Collateral Audits...................................37
Section 6.07 Compliance with Laws......................................................................37
Section 6.08 Use of Proceeds...........................................................................37
Section 6.09 Information Regarding Collateral..........................................................37
Section 6.10 Insurance.................................................................................38
Section 6.11 Casualty and Condemnation.................................................................38
Section 6.12 Additional Subsidiaries...................................................................39
Section 6.13 Further Assurances........................................................................39
Section 6.14 Environmental Compliance..................................................................39
ARTICLE 7 NEGATIVE COVENANTS........................................................................40
Section 7.01 Indebtedness..............................................................................40
Section 7.02 Liens.....................................................................................41
Section 7.03 Fundamental Change........................................................................41
Section 7.04 Investments, Loans, Advances, Guarantees and Acquisitions.................................42
Section 7.05 Asset Sales...............................................................................43
Section 7.06 Sale and Lease-Back Transactions..........................................................44
Section 7.07 Hedging Agreements........................................................................44
Section 7.08 Restricted Payments.......................................................................44
Section 7.09 Transactions with Affiliates..............................................................45
Section 7.10 Restrictive Agreements....................................................................45
Section 7.11 Amendment of Material Documents...........................................................45
Section 7.12 Interest Coverage Ratio...................................................................45
Section 7.13 Reserved..................................................................................46
Section 7.14 Minimum Total Net Worth...................................................................46
Section 7.15 Leverage Ratio............................................................................46
Section 7.16 Capital Expenditures......................................................................46
ARTICLE 8 EVENTS OF DEFAULT.........................................................................47
ARTICLE 9 THE ADMINISTRATIVE AGENT..................................................................49
ARTICLE 10 MISCELLANEOUS.............................................................................51
Section 10.01 Notices...................................................................................51
Section 10.02 Waivers; Amendments.......................................................................52
Section 10.03 Expenses; Indemnity; Damage Waiver........................................................53
Section 10.04 Successors and Assigns....................................................................54
Section 10.05 Survival..................................................................................56
Section 10.06 Counterparts; Integration; Effectiveness..................................................56
Section 10.07 Severability..............................................................................57
Section 10.08 Right of Setoff...........................................................................57
Section 10.09 Governing Law; Jurisdiction; Consent to Service of Process................................57
Section 10.10 WAIVER OF JURY TRIAL......................................................................58
Section 10.11 Headings..................................................................................58
Section 10.12 Interest Rate Limitation..................................................................58
Section 10.13 Treatment of Certain Information..........................................................59
</TABLE>
ii
<PAGE>
SCHEDULES:
Schedule 2.01 Commitments
Schedule 4.06 Disclosure Matters
Schedule 4.12 Subsidiaries
Schedule 4.13 Insurance
Schedule 7.01 Existing Indebtedness
Schedule 7.04 Existing Investments
Schedule 7.10 Exiting Restrictions
EXHIBITS:
Exhibit A Form of Assignment and Acceptance
Exhibit B Form of Guarantee Agreement
Exhibit C Form of Revolving Note
Exhibit D Form of Security Agreement
Exhibit E Form of Opinion of Borrower's Counsel
Exhibit F Form of Solvency Certificate
iii
<PAGE>
CREDIT AGREEMENT, dated as of October 11, 2000, among LECROY
CORPORATION, the LENDERS party hereto and THE BANK OF NEW YORK, as
Administrative Agent.
The parties hereto agree as follows:
ARTICLE 1 DEFINITIONS
Section 1.01 Defined Terms
As used in this Agreement, the following terms have the
meanings specified below:
"ABR" when used in reference to any Loan or Borrowing, refers
to whether such Loan, or the Loans comprising such Borrowing, are bearing
interest at a rate determined by reference to the Alternate Base Rate.
"Adjusted LIBO Rate" means, with respect to any Eurodollar
Borrowing for any Interest Period, an interest rate per annum, (rounded upwards,
if necessary, to the next 1/16 of 1%) equal to (a) the LIBO Rate for such
Interest Period multiplied by (b) the Statutory Reserve Rate.
"Administrative Agent" means BNY, in its capacity as
administrative agent for the Lenders hereunder.
"Administrative Questionnaire" an Administrative Questionnaire
in a form supplied by the Administrative Agent.
"Affiliate" means, with respect to a specified Person, another
Person that directly, or indirectly through one or more intermediaries, Controls
or is Controlled by or is under common Control with the Person specified.
"Alternate Base Rate" means, for any day, a rate per annum
equal to the greater of (a) the Prime Rate in effect on such day and (b) the
Federal Funds Rate in effect on such day plus 1/2 of 1%. Any change in the
Alternate Base Rate due to a change in the Prime Rate or the Federal Funds Rate
shall be effective from and including the effective date of such change in the
Prime Rate or the Federal Funds Rate, respectively.
"Applicable Margin" means, at all times during the applicable
periods set forth below: (a) with respect to ABR Revolving Borrowings, the
percentage set forth below under the heading "ABR Margin" and adjacent to such
period, (b) with respect to Eurodollar Revolving Borrowings, the percentage set
forth below under the heading "Eurodollar Margin" and adjacent to such period
and (c) with respect to the commitment fee payable under Section 3.03(b), the
percentage set forth below under the heading "Fee Margin" and adjacent to such
period:
<PAGE>
<TABLE>
<CAPTION>
------------------------------------- ------------------ ----------------- ---------------- ----------------
WHEN THE LEVERAGE RATIO IS GREATER AND LESS THAN ABR EURODOLLAR FEE MARGIN
THAN OR EQUAL TO MARGIN MARGIN
------------------------------------- ------------------ ----------------- ---------------- ----------------
<S> <C> <C> <C> <C>
2.00:1.00 1.25% 2.50% 0.500%
------------------------------------- ------------------ ----------------- ---------------- ----------------
1.50:1.00 2.00:1.00 1.00% 2.25% 0.500%
------------------------------------- ------------------ ----------------- ---------------- ----------------
1.00:1.00 1.50:1.00 0.75% 2.00% 0.375%
------------------------------------- ------------------ ----------------- ---------------- ----------------
0.50:1.00 1.00:1.00 0.50% 1.75% 0.375%
------------------------------------- ------------------ ----------------- ---------------- ----------------
0.50:1.00 0.25% 1.50% 0.375%
------------------------------------- ------------------ ----------------- ---------------- ----------------
</TABLE>
Changes in the Applicable Margin resulting from a change in
the Leverage Ratio shall be based upon the certificate most recently delivered
under Section 6.01(c) and shall become effective on the fifth day following
receipt by the Administrative Agent of such certificate (or if such fifth day is
not a Business Day, on the immediately preceding Business Day). Notwithstanding
anything to the contrary in this definition, if the Borrower shall fail to
deliver to the Administrative Agent such a certificate on or prior to any date
required hereby, the Leverage Ratio shall be deemed to be 2.00:1.00 from and
including such date to the date of delivery to the Administrative Agent of such
certificate.
"Approved Fund" means, with respect to any Lender that is a
fund that invests in commercial loans, any other fund that invests in commercial
loans and is managed or advised by the same investment advisor as such Lender or
by an Affiliate of such investment advisor.
"Assignment and Acceptance" means an assignment and acceptance
entered into by a Lender and an assignee (with the consent of any party whose
consent is required by Section 10.04), and accepted by the Administrative Agent,
substantially in the form of Exhibit A or any other form approved by the
Administrative Agent.
"Availability Period" means the period from and including the
Effective Date to but excluding the earlier of the Revolving Maturity Date and
the date of termination of the Revolving Commitments.
"BNY" means The Bank of New York and its successors.
"Board" means the Board of Governors of the Federal Reserve
System of the United States of America.
"Borrower" means LeCroy Corporation, a Delaware corporation.
"Borrowing Request" means a request by the Borrower for a
Borrowing in accordance with Section 2.03.
"Borrowing" means Revolving Loans of the same Type made,
converted or continued on the same date and, in the case of Eurodollar Loans, as
to which a single Interest Period is in effect.
"Business Day" means any day that is not a Saturday, Sunday or
other day on which commercial banks in New York City are authorized or required
by law to remain closed, provided that, when used in connection with a
Eurodollar Loan, the term "Business Day" shall also exclude any day on which
banks are not open for dealings in dollar deposits in the London interbank
market.
2
<PAGE>
"Capital Expenditures" of any Person means expenditures
(whether paid in cash or other consideration or accrued as a liability) for
fixed or capital assets (excluding any capitalized interest and any such asset
acquired in connection with normal replacement and maintenance programs properly
charged to current operations and excluding any replacement assets acquired with
the proceeds of insurance) made by such Person.
"Capital Lease Obligations" of any Person means the
obligations of such Person to pay rent or other amounts under any lease of (or
other arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under GAAP,
and the amount of such obligations shall be the capitalized amount thereof
determined in accordance with GAAP.
"Change in Control" means the acquisition of ownership,
directly or indirectly, beneficially or of record, by any Person or group
(within the meaning of the Securities Exchange Act of 1934 and the rules of the
Securities and Exchange Commission thereunder as in effect on the date hereof),
of shares representing more than 50% of the aggregate ordinary voting power or
economic interests represented by the issued and outstanding equity securities
of the Borrower on a fully diluted basis.
"Change in Law" means (a) the adoption of any law, rule or
regulation after the date of this Agreement, (b) any change in any law, rule or
regulation or in the interpretation or application thereof by any Governmental
Authority after the date of this Agreement or (c) compliance by any Credit Party
(or, for purposes of Section 3.05(b), by any lending office of such Credit Party
or by such Credit Party's holding company, if any) with any request, guideline
or directive (whether or not having the force of law) of any Governmental
Authority made or issued after the date of this Agreement.
"Code" means the Internal Revenue Code of 1986, as amended
from time to time.
"Collateral" means any and all "Collateral", as defined in any
applicable Security Document.
"Consolidated EBITDA" means, for any period, net income of the
Borrower and the Subsidiaries excluding the Vigilant Network Segment, determined
on a consolidated basis in accordance with GAAP for such period plus (i) the sum
of, without duplication, each of the following of the Borrower and the
Subsidiaries (excluding the Vigilant Network Segment) on a consolidated basis in
accordance with GAAP, each to the extent utilized in determining net income for
such period (a) interest expense, (b) provision for income taxes, (c)
depreciation, amortization and other non-cash charges (whether or not such
non-cash charges are recurring), (d) extraordinary losses from sales, exchanges
and other dispositions of property not in the ordinary course of business, and
(e) foreign exchange losses, minus (ii) the sum of, without duplication, each of
the following with respect to the Borrower and the Subsidiaries (excluding the
Vigilant Network Segment) on a consolidated basis in accordance with GAAP, to
the extent utilized in determining such net income for such period: (a)
extraordinary gains from sales, exchanges and other dispositions of property not
in the ordinary course of business, (b) other non-recurring items, and (c)
foreign exchange gains.
3
<PAGE>
"Consolidated Interest Expense" means, for any period, the
interest expense, both expensed and capitalized (including the interest
component in respect of Capital Lease Obligations), accrued or paid by the
Borrower and its Subsidiaries during such period, determined on a consolidated
basis in accordance with GAAP.
"Control" means the possession, directly or indirectly, of the
power to direct or cause the direction of the management or policies of a
Person, whether through the ability to exercise voting power, by contract or
otherwise. The terms "Controlling" and "Controlled" have meanings correlative
thereto.
"Credit Parties" means the Administrative Agent and the
Lenders.
"Default" means any event or condition which constitutes an
Event of Default or that upon notice, lapse of time or both would, unless cured
or waived, become an Event of Default.
"Disclosed Matters" means the actions, suits and proceedings
and the environmental matters disclosed in Schedule 4.06.
"dollars" or "$" refers to lawful money of the United States
of America.
"Domestic Subsidiary" means any Subsidiary organized under the
laws of the United States of America or any State thereof.
"Effective Date" means the date on which the conditions
specified in Section 5.01 are satisfied (or waived in accordance with Section
10.02).
"Environmental Laws" means all laws, rules, regulations,
codes, ordinances, orders, decrees, judgments, injunctions, notices or binding
agreements issued, promulgated or entered into by any Governmental Authority,
relating in any way to the environment, preservation or reclamation of natural
resources, the management, release or threatened release of any Hazardous
Material or to health and safety matters.
"Environmental Liability" means any liability, contingent or
otherwise (including any liability for damages, costs of environmental
remediation, fines, penalties or indemnities), of any Loan Party directly or
indirectly resulting from or based upon (a) violation of any Environmental Law,
(b) the generation, use, handling, transportation, storage, treatment or
disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials,
(d) the release or threatened release of any Hazardous Materials into the
environment or (e) any contract, agreement or other consensual arrangement
pursuant to which liability is assumed or imposed with respect to any of the
foregoing.
4
<PAGE>
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) that, together with the Borrower or any Subsidiary, is treated as
a single employer under Section 414(b) or (c) of the Code or, solely for
purposes of Section 302 of ERISA and Section 412 of the Code, is treated as a
single employer under Section 414 of the Code.
"ERISA Event" means (a) any "reportable event", as defined in
Section 4043 of ERISA or the regulations issued thereunder with respect to a
Plan (other than an event for which the 30-day notice period is waived); (b) the
existence with respect to any Plan of an "accumulated funding deficiency" (as
defined in Section 412 of the Code or Section 302 of ERISA), whether or not
waived; (c) the filing pursuant to Section 412(d) of the Code or Section 303(d)
of ERISA of an application for a waiver of the minimum funding standard with
respect to any Plan; (d) the incurrence by the Borrower or any ERISA Affiliate
of any liability under Title IV of ERISA with respect to the termination of any
Plan; (e) the receipt by the Borrower or any ERISA Affiliate from the PBGC or a
plan administrator of any notice relating to an intention to terminate any Plan
or Plans or to appoint a trustee to administer any Plan; (f) the incurrence by
the Borrower or any ERISA Affiliate of any liability with respect to the
withdrawal or partial withdrawal from any Plan or Multiemployer Plan; or (g) the
receipt by the Borrower or any ERISA Affiliate of any notice, or the receipt by
any Multiemployer Plan from the Borrower or any ERISA Affiliate of any notice,
concerning the imposition of Withdrawal Liability or a determination that a
Multiemployer Plan is, or is expected to be, insolvent or in reorganization,
within the meaning of Title IV of ERISA.
"Eurodollar" when used in reference to any Loan or Borrowing,
refers to whether such Loan, or the Loans comprising such Borrowing, are bearing
interest at a rate determined by reference to the Adjusted LIBO Rate.
"Event of Default" has the meaning assigned to such term in
Article 8.
"Excluded Taxes" means, with respect to any Credit Party or
any other recipient of any payment to be made by or on account of any obligation
of any Loan Party under any Loan Document, (a) income or franchise taxes imposed
on (or measured by) its net income by the United States of America, or by the
jurisdiction under the laws of which such recipient is organized or in which its
principal office is located or, in the case of any Credit Party, in which its
applicable lending office is located, (b) any branch profits taxes imposed by
the United States of America or any similar tax imposed by any other
jurisdiction in which such Loan Party is located and (c) in the case of a
Foreign Lender, any withholding tax that is imposed on amounts payable to such
Foreign Lender at the time such Foreign Lender becomes a party to this Agreement
(or designates a new lending office) or is attributable to such Foreign Lender's
failure to comply with Section 3.07(e), except to the extent that such Foreign
Lender (or its assignor, if any) was entitled, at the time of designation of a
new lending office (or assignment), to receive additional amounts from such Loan
Party with respect to such withholding tax pursuant to Section 3.07(a).
5
<PAGE>
"Federal Funds Rate" means, for any day, the rate per annum,
(rounded, if necessary, to the next greater 1/100 of 1%) equal to the rate per
annum at which the Administrative Agent is offered overnight Federal funds by a
Federal funds broker selected by the Administrative Agent at or about 2:00 p.m.,
New York City time, on such day, provided that if such day is not a Business
Day, the Federal Funds Rate for such day shall be such rate at which the
Administrative Agent is offered overnight Federal funds by such Federal funds
broker at or about 2:00 p.m., New York City time, on the next preceding Business
Day.
"Financial Officer" means the chief financial officer,
principal accounting officer, treasurer or controller of the Borrower.
"Foreign Lender" means any Lender that is organized under the
laws of a jurisdiction other than that in which the applicable Loan Party is
located. For purposes of this definition, the United States of America, each
State thereof and the District of Columbia shall be deemed to constitute a
single jurisdiction.
"Foreign Subsidiary" means any Subsidiary organized under the
laws of any jurisdiction other than the United States of America or any State
thereof.
"GAAP" means generally accepted accounting principles in the
United States of America.
"Governmental Authority" means the government of the United
States of America, any other nation or any political subdivision thereof,
whether state or local, and any agency, authority, instrumentality, regulatory
body, court, central bank or other entity exercising executive, legislative,
judicial, taxing, regulatory or administrative powers or functions of or
pertaining to government.
"Guarantee" of or by any Person (the "guarantor") means any
obligation, contingent or otherwise, of the guarantor guaranteeing or having the
economic effect of guaranteeing any Indebtedness or other obligation of any
other Person (the "primary obligor") in any manner, whether directly or
indirectly, and including any obligation of the guarantor, direct or indirect,
(a) to purchase or pay (or advance or supply funds for the purchase or payment
of) such Indebtedness or other obligation or to purchase (or to advance or
supply funds for the purchase of) any security for the payment thereof, (b) to
purchase or lease property, securities or services for the purpose of assuring
the owner of such Indebtedness or other obligation of the payment thereof, (c)
to maintain working capital, equity capital or any other financial statement
condition or liquidity of the primary obligor as to enable the primary obligor
to pay such Indebtedness or other obligation or (d) as an account party in
respect of any letter of credit or letter of guaranty issued to support such
Indebtedness or obligation, provided that the term "Guarantee" shall not include
endorsements for collection or deposit in the ordinary course of business. The
term "Guaranteed" has a meaning correlative thereto.
"Guarantee Agreement" means the Guarantee Agreement,
substantially in the form of Exhibit B, among the Subsidiary Guarantors and the
Administrative Agent, for the benefit of the Secured Parties.
6
<PAGE>
"Hazardous Materials" means all explosive or radioactive
substances or wastes and all hazardous or toxic substances, wastes or other
pollutants, including petroleum or petroleum distillates, asbestos or asbestos
containing materials, polychlorinated biphenyls, radon gas, infectious or
medical wastes and all other substances or wastes of any nature regulated
pursuant to any Environmental Law.
"Hedging Agreement" means any interest rate protection
agreement, foreign currency exchange agreement, commodity price protection
agreement or other interest or currency exchange rate or commodity price hedging
arrangement.
"Indebtedness" of any Person means, without duplication, (a)
all obligations of such Person for borrowed money or with respect to deposits or
advances of any kind, (b) all obligations of such Person evidenced by bonds,
debentures, notes or similar instruments, (c) all obligations of such Person
upon which interest charges are customarily paid, (d) all obligations of such
Person under conditional sale or other title retention agreements relating to
property acquired by such Person, (e) all obligations of such Person in respect
of the deferred purchase price of property or services (excluding current
accounts payable incurred in the ordinary course of business), (f) all
Indebtedness of others secured by (or for which the holder of such Indebtedness
has an existing right, contingent or otherwise, to be secured by) any Lien on
property owned or acquired by such Person, whether or not the Indebtedness
secured thereby has been assumed, (g) all Guarantees by such Person of
Indebtedness of others, (h) all Capital Lease Obligations of such Person, (i)
all obligations, contingent or otherwise, of such Person as an account party in
respect of letters of credit and letters of guaranty and (j) all obligations,
contingent or otherwise, of such Person in respect of bankers' acceptances. The
Indebtedness of any Person shall include the Indebtedness of any other entity
(including any partnership in which such Person is a general partner) to the
extent such Person is liable therefor as a result of such Person's ownership
interest in or other relationship with such entity, except to the extent the
terms of such Indebtedness provide that such Person is not liable therefor.
"Indemnified Taxes" means Taxes other than Excluded Taxes.
"Indemnitee" has the meaning assigned to such term in Section
10.03(b).
"Interest Election Request" means a request by the Borrower to
convert or continue a Borrowing in accordance with Section 3.02.
"Interest Payment Date" means (a) with respect to any ABR
Loan, the last day of each March, June, September and December, and (b) with
respect to any Eurodollar Loan, the last day of the Interest Period applicable
to the Borrowing of which such Loan is a part and, in the case of a Eurodollar
Borrowing with an Interest Period of more than three months' duration, each day
prior to the last day of such Interest Period that occurs at intervals of three
months' duration after the first day of such Interest Period.
"Interest Period" means, with respect to any Eurodollar
Borrowing, the period commencing on the date of such Borrowing and ending on the
numerically corresponding day in the calendar month that is one, two, three, or
six months thereafter, as the Borrower may elect, provided that (a) if any
Interest Period would end on a day other than a Business Day, such Interest
Period shall be extended to the next succeeding Business Day, unless such next
succeeding Business Day would fall in the next calendar month, in which case
such Interest Period shall end on the next preceding Business Day, and (b) any
Interest Period that commences on the last Business Day of a calendar month (or
on a day for which there is no numerically corresponding day in the last
calendar month of such Interest Period) shall end on the last Business Day of
the last calendar month of such Interest Period. For purposes hereof, the date
of a Borrowing initially shall be the date on which such Borrowing is made and
thereafter shall be the effective date of the most recent conversion or
continuation of such Borrowing.
7
<PAGE>
"Lenders" means the Persons listed on Schedule 2.01 and any
other Person that shall have become a party hereto pursuant to an Assignment and
Acceptance, other than any such Person that ceases to be a party hereto pursuant
to an Assignment and Acceptance.
"Leverage Ratio" means, as of any date, the ratio of (i)
Indebtedness of the Borrower and its Subsidiaries determined on a consolidated
basis in accordance with GAAP as of such date to (ii) Consolidated EBITDA for
the four fiscal quarters ending on such date or, if such date is not the last
day of a fiscal quarter, for the immediately preceding four fiscal quarters.
"LIBO Rate" means, with respect to any Eurodollar Borrowing
for any Interest Period, the per annum rate determined by the Administrative
Agent as follows: (a) the Administrative Agent shall obtain the rate for
deposits in Dollars for a period comparable to such Interest Period which
appears on the Telerate Page 3750 (or any replacement page, if such page is
replaced in the Telerate Service or such other service or services as may be
designated by the British Bankers Association for the purpose of displaying the
London Interbank Offered Rate for Dollar deposits as of 11:00 a.m. (London time)
two Business Days prior to the first day of such Interest Period), and (b) if
the Administrative Agent is not able to obtain quotations for the determination
of the LIBO Rate pursuant to the foregoing clause (a), the LIBO Rate shall be
the per annum rate of interest quoted by the Administrative Agent at which
Dollar deposits are offered by the Administrative Agent to prime banks in the
London interbank market at approximately 11:00 a.m. (London time) two Business
Days prior to the first day of such Interest Period, which deposits are for a
period equal to such Interest Period and in an amount substantially equal to
such Eurodollar Borrowing.
"Lien" means, with respect to any asset, (a) any mortgage,
deed of trust, lien, pledge, hypothecation, encumbrance, charge or security
interest in, on or of such asset, (b) the interest of a vendor or a lessor under
any conditional sale agreement, capital lease or title retention agreement
relating to such asset and (c) in the case of securities, any purchase option,
call or similar right of a third party with respect to such securities.
"Loan Documents" means this Agreement, the Notes, the
Guarantee Agreement and the Security Documents.
"Loan Parties" means the Borrower and the Subsidiary
Guarantors.
"Loans" means the loans made by the Lenders to the Borrower
pursuant to this Agreement.
"Margin Stock" has the meaning assigned to such term in
Regulation U.
8
<PAGE>
"Material Adverse Effect" means a material adverse effect on
(a) the business, assets, operations, prospects or condition, financial or
otherwise, of the Borrower and the Subsidiaries, taken as a whole, (b) the
ability of any Loan Party to perform any of its obligations under any Loan
Document or (c) the rights of or benefits available to any Credit Party under
any Loan Document.
"Material Foreign Subsidiary" means each direct or indirect
Foreign Subsidiary as to which any of the following tests are or have at any
time been met: (i) the Borrower's and the other Subsidiaries' investments in and
advances to such Foreign Subsidiary is greater than or equal to 10% of the total
assets of the Borrower and its Subsidiaries on a consolidated basis as of the
last day of the most recently completed fiscal year of the Borrower, (ii) such
Foreign Subsidiary's proportionate share of the total assets (after intercompany
eliminations) of the Borrower and its Subsidiaries on a consolidated basis is
greater than or equal to 10% of the total assets of the Borrower and the
Subsidiaries on a consolidated basis as of the last day of the most recently
completed fiscal year of the Borrower, or (iii) the income from continuing
operations before income taxes, extraordinary items and the cumulative effect of
a change in accounting principles of such Foreign Subsidiary is greater than or
equal to 10% of such income of the Borrower and its Subsidiaries on a
consolidated basis as of the last day of the most recently completed fiscal year
of the Borrower.
"Material Indebtedness" means Indebtedness (other than
Indebtedness under the Loan Documents) or obligations in respect of one or more
Hedging Agreements, of any one or more of the Borrower and the Subsidiaries in
an aggregate principal amount exceeding $1,000,000. For purposes of determining
Material Indebtedness, the "principal amount" of the obligations of the Borrower
or any Subsidiary in respect of any Hedging Agreement at any time shall be the
maximum aggregate amount (giving effect to any netting agreements) that the
Borrower or such Subsidiary, as applicable, would be required to pay if such
Hedging Agreement were terminated at such time.
"Monitoring" has the meaning assigned to such term in Section
6.15.
"Multiemployer Plan" means a multiemployer plan as defined in
Section 4001(a)(3) of ERISA.
"Notes" means, with respect to each Lender, a promissory note
evidencing such Lender's Loans payable to the order of such Lender (or, if
required by such Lender, to such Lender and its registered assigns)
substantially in the form of Exhibit C.
"Obligations" has the meaning assigned to such term in the
Security Agreement.
"Other Taxes" means any and all current or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies arising from any payment made hereunder or from the execution, delivery
or enforcement of, or otherwise with respect to, the Loan Documents.
"Participant" has the meaning assigned to such term in Section
10.04(e).
9
<PAGE>
"PBGC" means the Pension Benefit Guaranty Corporation referred
to and defined in ERISA and any successor entity performing similar functions.
"Perfection Certificate" means a certificate in the form of
Annex 2 to the Security Agreement or any other form approved by the
Administrative Agent.
"Permitted Encumbrances" means:
(a) Liens imposed by law for taxes that are not yet due or
are being contested in compliance with Section 6.04;
(b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's and other like Liens imposed by law, arising in the ordinary course
of business and securing obligations that are not overdue by more than 30 days
or are being contested in compliance with Section 6.04;
(c) pledges and deposits made in the ordinary course of
business in compliance with workers' compensation, unemployment insurance and
other social security laws or regulations;
(d) deposits to secure the performance of bids, trade
contracts, leases, statutory obligations, surety and appeal bonds, performance
bonds and other obligations of a like nature, in each case in the ordinary
course of business;
(e) judgment liens in respect of judgments that do not
constitute an Event of Default under clause (k) of Article 8; and
(f) easements, zoning restrictions, rights-of-way and
similar encumbrances on real property imposed by law or arising in the ordinary
course of business that do not secure any monetary obligations and do not
materially detract from the value of the affected property or interfere with the
ordinary conduct of business of the Borrower or any Subsidiary.
"Permitted Investments" means:
(a) direct obligations of, or obligations the principal of
and interest on which are unconditionally guaranteed by, the United States of
America (or by any agency thereof to the extent that such obligations are backed
by the full faith and credit of the United States of America), in each case
measuring within one year from the date of acquisition thereof,
(b) investments in commercial paper maturing within 270
days from the date of acquisition thereof and having, at such date of
acquisition, the highest credit rating obtainable from Standard & Poor's Ratings
Services, a division of The McGraw-Hill Companies, or any successor thereto, or
from Moody's Investors Service, Inc. or any successor thereto;
(c) investments in certificates of deposit, banker's
acceptances and time deposits maturing within 180 days from the date of
acquisition thereof issued or guaranteed by or placed with, and money market
deposit accounts issued or offered by, any domestic office of any commercial
bank organized under the laws of the United States of America or any State
thereof that has a combined capital and surplus and undivided profits of not
less than $500,000,000; and
10
<PAGE>
(d) fully collateralized repurchase agreements with a term
of not more than 30 days for securities described in clause (a) of this
definition and entered into with a financial institution satisfying the criteria
described in clause (c) of this definition.
"Person" means any natural person, corporation, limited
liability company, trust, joint venture, association, company, partnership,
Governmental Authority or other entity.
"Plan" means any employee pension benefit plan (other than a
Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section
412 of the Code or Section 302 of ERISA, and in respect of which the Borrower,
any Subsidiary or any ERISA Affiliate is (or, if such plan were terminated,
would under Section 4069 of ERISA be deemed to be) an "employer" as defined in
Section 3(5) of ERISA.
"Prime Rate" means the rate of interest per annum publicly
announced from time to time by BNY as its prime commercial lending rate; each
change in the Prime Rate being effective from and including the date such change
is publicly announced as being effective. The Prime Rate is not intended to be
lowest rate of interest charged by BNY in connection with extensions of credit
to borrowers.
"Register" has the meaning assigned to such term in Section
10.04(c).
"Regulation T" means Regulation T of the Board as from time to
time in effect and all official rulings and interpretations thereunder or
thereof.
"Regulation U" means Regulation U of the Board as from time to
time in effect and all official rulings and interpretations thereunder or
thereof.
"Regulation X" means Regulation X of the Board as from time to
time in effect and all official rulings and interpretations thereunder or
thereof.
"Related Parties" means, with respect to any specified Person,
such Person's Affiliates and the respective directors, officers, employees,
agents and advisors of such Person and such Person's Affiliates.
"Required Lenders" means, at any time, Lenders having
Revolving Credit Exposures and unused Revolving Commitments representing at
least 51% of the sum of the total Revolving Credit Exposures and unused
Revolving Commitments at such time.
"Restricted Payment" means, as to any Person, any dividend or
other distribution by such Person (whether in cash, securities or other
property) with respect to any shares of any class of equity securities of such
Person, or any payment (whether in cash, securities or other property),
including any sinking fund or similar deposit, on account of the purchase,
redemption, retirement, acquisition, cancellation or termination of any such
shares or any option, warrant or other right to acquire any such shares.
11
<PAGE>
"Revolving Commitment" means the commitment of each Lender to
make Revolving Loans hereunder, expressed as an amount representing the maximum
aggregate amount of such Lender's Revolving Credit Exposure hereunder, as such
commitment may be reduced from time to time pursuant to Section 2.05 or pursuant
to assignments by or to such Lender pursuant to Section 10.04. The initial
amount of each Lender's Revolving Commitment is set forth on Schedule 2.01, or
in the Assignment and Acceptance pursuant to which such Lender shall have
assumed its Revolving Commitment, as applicable. The initial aggregate amount of
the Revolving Commitments is $15,000,000.
"Revolving Credit Exposure" means, with respect to any Lender
at any time, the sum of the aggregate outstanding principal amount of such
Lender's Revolving Loans at such time.
"Revolving Loan" means a Loan referred to in Section 2.01(a)
and made pursuant to Section 2.03.
"Revolving Maturity Date" means September 30, 2003.
"Secured Parties" means the "Secured Parties" as defined in
the Security Agreement.
"Security Agreement" means the Security Agreement,
substantially in the form of Exhibit D, among the Borrower, the Subsidiary
Guarantors and the Administrative Agent, for the benefit of the Secured Parties.
"Security Documents" means the Security Agreement and each
other security agreement, instrument or other document executed or delivered
pursuant to Section 6.12 or 6.13 to secure any of the Obligations.
"Statutory Reserve Rate" means a fraction (expressed as a
decimal), the numerator of which is the number one and the denominator of which
is the number one minus the aggregate of the maximum reserve percentages
(including any marginal, special, emergency or supplemental reserves) expressed
as a decimal established by the Board to which the Administrative Agent is
subject for eurocurrency funding (currently referred to as "Eurocurrency
Liabilities" in Regulation D of the Board). Such reserve percentages shall
include those imposed pursuant to such Regulation D. Eurodollar Loans shall be
deemed to constitute eurocurrency funding and to be subject to such reserve
requirements without benefit of or credit for proration, exemptions or offsets
that may be available from time to time to any Lender under such Regulation D or
any comparable regulation. The Statutory Reserve Rate shall be adjusted
automatically on and as of the effective date of any change in any reserve
percentage.
"subsidiary" means, with respect to any Person (the "parent")
at any date, any corporation, limited liability company, partnership,
association or other entity the accounts of which would be consolidated with
those of the parent in the parent's consolidated financial statements if such
financial statements were prepared in accordance with GAAP as of such date, as
well as any other corporation, limited liability company, partnership,
association or other entity of which securities or other ownership interests
representing more than 50% of the equity or more than 50% of the ordinary voting
power or, in the case of a partnership, more than 50% of the general partnership
interests are, as of such date, owned, controlled or held by the parent or one
or more subsidiaries of the parent.
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"Subsidiary" means any subsidiary of the Borrower.
"Subsidiary Guarantor" means Preamble Instruments, Inc., a
Delaware corporation, and any other Domestic Subsidiary that executes and
delivers the Security Documents and the Guarantee Agreement, in each case in
accordance with Sections 5.01(j), 5.01(k), 6.12 and 6.13.
"Taxes" means any and all current or future taxes, levies,
imposts, duties, deductions, charges or withholdings imposed by any Governmental
Authority.
"Total Consolidated Debt" means as at any date, with respect
to the Borrower and the Subsidiaries on a consolidated basis, all Indebtedness
of the Borrower and the Subsidiaries for borrowed money as at such date.
"Total Net Worth" means, as of any date, all amounts which
would, in conformity with GAAP, be included under "shareholders' equity" (or any
like caption) on a consolidated balance sheet of the Borrower and the
Subsidiaries as at such date, plus, if and to the extent not otherwise included
under "shareholders' equity" (or any other such like caption), all preferred
stock of the Borrower outstanding as at such date.
"Transactions" means (a) the execution, delivery and
performance by each Loan Party of each Loan Document to which it is a party, (b)
the borrowing of the Loans and the (c) the use of the proceeds of the Loans.
"Type" when used in reference to any Loan or Borrowing, refers
to whether the rate of interest on such Loan, or on the Loans comprising such
Borrowing, is determined by reference to the Adjusted LIBO Rate or the Alternate
Base Rate.
"Vigilant Network Segment" means together, Digitech
Industries, Inc., and Vigilant Networks, Inc., each a Delaware corporation.
"Withdrawal Liability" means liability to a Multiemployer Plan
as a result of a complete or partial withdrawal from such Multiemployer Plan, as
such terms are defined in Part I of Subtitle E of Title IV of ERISA.
Section 1.02 Classification of Loans and Borrowings
For purposes of this Agreement, Loans may be classified and
referred to by class (e.g., a "Revolving Loan") or by Type (e.g., a "Eurodollar
Loan") or by class and Type (e.g., a "Eurodollar Revolving Loan"). Borrowings
also may be classified and referred to by class (e.g., a "Revolving Borrowing")
or by Type (e.g., a "Eurodollar Borrowing") or by class and Type (e.g., a
"Eurodollar Revolving Borrowing").
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Section 1.03 Section 1.03 Terms Generally
The definitions of terms herein shall apply equally to the
singular and plural forms of the terms defined. Whenever the context may
require, any pronoun shall include the corresponding masculine, feminine and
neuter forms. The words "include", "includes" and "including" shall be deemed to
be followed by the phrase "without limitation". The word "will" shall be
construed to have the same meaning and effect as the word "shall". Unless the
context requires otherwise, (a) any definition of or reference to any agreement,
instrument or other document herein shall be construed as referring to such
agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any reference
herein to any Person shall be construed to include such Person's successors and
assigns, (c) the words "herein", "hereof' and "hereunder", and words of similar
import, shall be construed to refer to this Agreement in its entirety and not to
any particular provision hereof, (d) all references herein to Articles,
Sections, Exhibits and Schedules shall be construed to refer to Articles and
Sections of, and Exhibits and Schedules to, this Agreement and (e) the words
"asset" and "property" shall be construed to have the same meaning and effect
and to refer to any and all tangible and intangible assets and properties,
including cash, securities, accounts and contract rights. Any reference to an
applicable Lender shall mean Lenders having a Revolving Commitment.
Section 1.04 Section 1.04 Accounting Terms; GAAP
Except as otherwise expressly provided herein, all terms of an
accounting or financial nature shall be construed in accordance with GAAP, as in
effect from time to time, provided that, if the Borrower notifies the
Administrative Agent that the Borrower requests an amendment to any provision
hereof to eliminate the effect of any change occurring after the date hereof in
GAAP or in the application thereof on the operation of such provision (or if the
Administrative Agent notifies the Borrower that the Required Lenders request an
amendment to any provision hereof for such purpose), regardless of whether any
such notice is given before or after such change in GAAP or in the application
thereof, then such provision shall be interpreted on the basis of GAAP as in
effect and applied immediately before such change shall have become effective
until such notice shall have been withdrawn or such provision amended in
accordance herewith. Unless the context otherwise requires, any reference to a
fiscal period shall refer to the relevant fiscal period of the Borrower.
ARTICLE 2 THE CREDITS
Section 2.01 Commitments
Subject to the terms and conditions set forth herein, each
Lender having a Revolving Commitment agrees to make Revolving Loans to the
Borrower from time to time during the Availability Period in an aggregate
principal amount that will not result in such Lender's Revolving Credit Exposure
exceeding such Lender's Revolving Commitment. Within the foregoing limits and
subject to the terms and conditions set forth herein, the Borrower may borrow,
prepay and reborrow Revolving Loans.
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Section 2.02 Loans and Borrowing
(a) Each Revolving Loan shall be made as part of a Borrowing
consisting of Revolving Loans made by the Lenders ratably in accordance with
their respective Revolving Commitments. The failure of any Lender to make any
Loan required to be made by it shall not relieve any other Lender of its
obligations hereunder, provided that the Revolving Commitments of the Lenders
are several, and no Lender shall be responsible for any other Lender's failure
to make Loans as required.
(b) Each Borrowing shall be comprised entirely of (i)
Revolving Loans, and (ii) ABR Loans or, subject to Section 3.04, Eurodollar
Loans, as applicable, in each case as the Borrower may request in accordance
herewith. Each applicable Lender at its option may make any Eurodollar Loan by
causing any domestic or foreign branch or Affiliate of such Lender to make such
Loan, provided that any exercise of such option shall not affect the obligation
of the Borrower to repay such Loan in accordance with the terms of this
Agreement.
(c) At the commencement of each Interest Period for any
Eurodollar Borrowing, such Borrowing shall be in an aggregate amount that is an
integral multiple of $500,000 and not less than $1,000,000. At the time that
each ABR Borrowing is made, such Borrowing shall be in an aggregate amount that
is an integral multiple of $100,000 and not less than $500,000, provided that an
ABR Revolving Borrowing may be in an aggregate amount that is equal to the
entire unused balance of the total Revolving Commitments. Borrowings of more
than one Type may be outstanding at the same time, provided that there shall not
at any time be more than a total of five (5) Eurodollar Borrowings outstanding.
(d) Notwithstanding any other provision of this Agreement, the
Borrower shall not be entitled to request, or to elect to convert or continue,
any Borrowing if (i) the Interest Period requested with respect thereto would
end after the Revolving Maturity Date, or (ii) a Default or an Event of Default
then exists.
Section 2.03 Section 2.03 Requests for Borrowings
To request a Borrowing, the Borrower shall notify the
Administrative Agent of such request in writing (a) in the case of a Eurodollar
Borrowing, not later than 1:00 p.m., New York City time, three Business Days
before the date of the proposed Borrowing or (b) in the case of an ABR
Borrowing, not later than 1:00 p.m., New York City time, on the date of the
proposed Borrowing. Each such Borrowing Request shall be irrevocable, shall be
delivered by hand or telecopy to the Administrative Agent in a form approved by
the Administrative Agent and shall be signed by the Borrower. Each such
Borrowing Request shall specify the following information in compliance with
Section 2.02:
(i) the aggregate amount of the requested Borrowing;
(ii) the date of such Borrowing, which shall be a Business
Day;
(iii) whether such Borrowing is to be an ABR Borrowing or
a Eurodollar Borrowing;
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(iv) in the case of a Eurodollar Borrowing, the initial
Interest Period to be applicable thereto, which shall be a period contemplated
by the definition of the term "Interest Period"; and
(v) the location and number of the Borrower's account to
which funds are to be disbursed, which shall comply with the requirements of
Section 2.04.
If no election as to the Type of Borrowing is specified, then the requested
Borrowing shall be an ABR Borrowing. If no Interest Period is specified with
respect to any requested Eurodollar Borrowing, then the Borrower shall be deemed
to have selected an Interest Period of one month's duration. Promptly following
receipt of a Borrowing Request in accordance with this Section, the
Administrative Agent shall advise each Lender of the details thereof and of the
amount of such Lender's Loan to be made as part of the requested Borrowing.
Section 2.04 Funding of Borrowings
(a) Each Lender shall make each Loan to be made by it
hereunder on the proposed date thereof by wire transfer of immediately available
funds by 12:00 noon, New York City time, to the account of the Administrative
Agent most recently designated by it for such purpose by notice to the Lenders.
Subject to Section 5.02, the Administrative Agent will make such Loans available
to the Borrower by promptly crediting or otherwise transferring the amounts so
received, in like funds, to an account of the Borrower maintained with the
Administrative Agent and designated by the Borrower in the applicable Borrowing
Request.
(b) Unless the Administrative Agent shall have received notice
from a Lender prior to the proposed date of any Borrowing that such Lender will
not make available to the Administrative Agent such Lender's share of such
Borrowing, the Administrative Agent may assume that such Lender has made such
share available on such date in accordance with paragraph (a) of this Section
and may, in reliance upon such assumption, make available to the Borrower a
corresponding amount. In such event, if a Lender has not in fact made its share
of the applicable Borrowing available to the Administrative Agent, then the
applicable Lender and the Borrower severally agree to pay to the Administrative
Agent forthwith on demand such corresponding amount with interest thereon, for
each day from and including the date such amount is made available to the
Borrower to but excluding the date of payment to the Administrative Agent, at
(i) in the case of such Lender, the greater of the Federal Funds Rate and a rate
determined by the Administrative Agent in accordance with banking industry rules
on interbank compensation or (ii) in the case of the Borrower, the interest rate
that would be otherwise applicable to such Borrowing. If such Lender pays such
amount to the Administrative Agent, then such amount shall constitute such
Lender's Loan included in such Borrowing.
Section 2.05 Termination and Reduction of Revolving Commitments
(a) Unless previously terminated, the Revolving Commitments
shall terminate on the Revolving Maturity Date.
(b) The Borrower may at any time terminate, or from time to
time reduce, the Revolving Commitments, provided that (i) the Borrower shall not
terminate or reduce the Revolving Commitments if, after giving effect to any
concurrent prepayment of the Revolving Loans in accordance with Section 2.07,
the sum of the Revolving Credit Exposures would exceed the total Revolving
Commitments, and (ii) each such reduction shall be in an amount that is an
integral multiple of $500,000 and not less than $1,000,000.
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(c) The Borrower shall notify the Administrative Agent of any
election to terminate or reduce the Revolving Commitments under paragraph (b) of
this Section at least three Business Days prior to the effective date of such
termination or reduction, specifying such election and the effective date
thereof. Promptly following receipt of any notice, the Administrative Agent
shall advise the Lenders of the contents thereof. Each notice delivered by the
Borrower pursuant to this Section shall be irrevocable. Any termination or
reduction of the Revolving Commitments hereunder shall be permanent. Each
reduction of the Revolving Commitments hereunder shall be made ratably among the
Lenders in accordance with their respective Revolving Commitments.
Section 2.06 Repayment of Loans; Evidence of Debt
(a) The Borrower hereby unconditionally promises to pay to the
Administrative Agent for the account of each Lender the then unpaid principal
amount of each Revolving Loan on the Revolving Maturity Date.
(b) Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing the debt of the Borrower to such
Lender resulting from each Loan made by such Lender, including the amounts of
principal and interest payable and paid to such Lender from time to time
hereunder.
(c) The Administrative Agent shall maintain accounts in which
it shall record (i) the amount of each Loan made hereunder, the class and Type
thereof and the Interest Period applicable thereto, (ii) the amount of any
principal or interest due and payable or to become due and payable from the
Borrower to each Lender hereunder and (iii) the amount of any sum received by
the Administrative Agent hereunder for the account of the Lenders and each
Lender's share thereof.
(d) The entries made in the accounts maintained pursuant to
paragraph (b) or (c) of this Section shall, to the extent not inconsistent with
any entries made in any Note, be prima facie evidence of the existence and
amounts of the obligations recorded therein, provided that the failure of any
Lender or the Administrative Agent to maintain such accounts or any error
therein shall not in any manner affect the obligation of the Borrower to repay
the Loans in accordance with the terms of this Agreement.
(e) The Loans evidenced by such Note and interest thereon
shall at all times (including after assignment pursuant to Section 10.04) be
represented by one or more Notes in such form payable to the order of the payee
named therein and its registered assigns.
Section 2.07 Prepayment of Loans
(a) Subject to the requirements of this Agreement (i) the
Borrower shall have the right at any time and from time to time to prepay any
Revolving Loans, in whole or in part, and (ii) any voluntary prepayments made by
the Borrower shall, prior to the occurrence of a Default, be applied to any Type
of Loan, as selected by the Borrower.
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(b) In the event of any partial reduction or termination of
the Revolving Commitments, then (i) at or prior to the date of such reduction or
termination, the Administrative Agent shall notify the Borrower and the
applicable Lenders of the sum of the Revolving Credit Exposures after giving
effect thereto and (ii) if such sum would exceed the total Revolving Commitments
after giving effect to such reduction or termination, then the Borrower shall,
within five (5) days of such day (but in no event later than the Revolving
Maturity Date), prepay the Revolving Loans in an amount equal to such excess.
(c) The Borrower shall notify the Administrative Agent in
writing (by hand or by telecopy) of any prepayment hereunder (i) in the case of
prepayment of a Eurodollar Borrowing, not later than 1:00 p.m., New York City
time, three Business Days before the date of prepayment or (ii) in the case of
prepayment of an ABR Borrowing, not later than 1:00 p.m., New York City time, on
the date of prepayment. Each such notice shall be irrevocable, shall specify the
prepayment date and the principal amount of each Borrowing or portion thereof to
be prepaid, and shall be delivered by hand or telecopy to the Administrative
Agent in a form approved by the Administrative Agent. Promptly following receipt
of any such notice relating to a Borrowing, the Administrative Agent shall
advise the Lenders of the contents thereof. Each partial prepayment of any
Borrowing under Sections 2.05(c) and 2.07(a) shall, when added to the amount of
each concurrent reduction of the Revolving Commitments and prepayment of
Borrowings under such Sections, be in an integral multiple of $100,000 and not
less than $500,000. Each prepayment of a Borrowing shall be applied ratably to
the Loans included in the prepaid Borrowing. Prepayments shall be accompanied by
accrued interest to the extent required by Section 3.01.
Section 2.08 Payments Generally; Pro Rata Treatment; Sharing of Setoffs
(a) Each Loan Party shall make each payment required to be
made by it hereunder or under any other Loan Document (whether of principal of
Loans, interest or fees, or of amounts payable under Section 3.05, 3.06, 3.07 or
10.03, or otherwise) prior to 12:00 noon, New York City time, on the date when
due, in immediately available funds, without setoff or counterclaim. Any amounts
received after such time on any date may, in the discretion of the
Administrative Agent, be deemed to have been received on the next succeeding
Business Day for purposes of calculating interest thereon. All such payments
shall be made to the Administrative Agent at its office at One Wall Street, New
York, New York, or such other office as to which the Administrative Agent may
notify the other parties hereto, except that payments pursuant to Sections 3.05,
3.06, 3.07 and 10.03 shall be made directly to the Persons entitled thereto. The
Administrative Agent shall distribute any such payments received by it for the
account of any other Person to the appropriate recipient promptly following
receipt thereof. If any payment hereunder shall be due on a day that is not a
Business Day, the date for payment shall be extended to the next succeeding
Business Day, and, in the case of any payment accruing interest, interest
thereon shall be payable for the period of such extension. All payments
hereunder shall be made in dollars.
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(b) If at any time insufficient funds are received by and
available to the Administrative Agent to pay fully all amounts of principal of
Loans, interest, fees and commissions then due hereunder, such funds shall be
applied (i) first, towards payment of interest, fees and commissions then due
hereunder, ratably among the parties entitled thereto in accordance with the
amounts of interest, fees and commissions then due to such parties and (ii)
second, towards payment of principal of Loans then due hereunder, ratably among
the parties entitled thereto in accordance with the amounts of principal of
Loans then due to such parties.
(c) If any Lender shall, by exercising any right of setoff or
counterclaim or otherwise, obtain payment in respect of any principal of, or
interest on, any of its Loans resulting in such Lender receiving payment of a
greater proportion of the aggregate amount of its Loans and accrued interest
thereon than the proportion received by any other applicable Lender, then the
applicable Lender receiving such greater proportion shall purchase (for cash at
face value) participations in the Loans of other applicable Lenders to the
extent necessary so that the benefit of all such payments shall be shared by the
applicable Lenders ratably in accordance with the aggregate amount of principal
of, and accrued interest on, their respective Loans, provided that (i) if any
such participations are purchased and all or any portion of the payment giving
rise thereto is recovered, such participations shall be rescinded and the
purchase price restored to the extent of such recovery, without interest, and
(ii) the provisions of this paragraph shall not be construed to apply to any
payment made by the Borrower pursuant to and in accordance with the express
terms of this Agreement or any payment obtained by a Lender as consideration for
the assignment of or sale of a participation in any of its Loans to any assignee
or participant, other than to the Borrower or any Subsidiary or Affiliate
thereof (as to which the provisions of this paragraph shall apply). Each Loan
Party consents to the foregoing and agrees, to the extent it may effectively do
so under applicable law, that any Lender acquiring a participation pursuant to
the foregoing arrangements may exercise against such Loan Party rights of setoff
and counterclaim with respect to such participation as fully as if such Lender
were a direct creditor of such Loan Party in the amount of such participation.
(d) Unless the Administrative Agent shall have received notice
from a Loan Party prior to the date on which any payment is due to the
Administrative Agent for the account of the applicable Credit Parties hereunder
that such Loan Party will not make such payment, the Administrative Agent may
assume that such Loan Party has made such payment on such date in accordance
herewith and may, in reliance upon such assumption, distribute to such Credit
Parties the amount due. In such event, if such Loan Party has not in fact made
such payment, then each such Credit Party severally agrees to repay to the
Administrative Agent forthwith on demand the amount so distributed to such
Credit Party with interest thereon, for each day from and including the date
such amount is distributed to it to but excluding the date of payment to the
Administrative Agent, at the greater of the Federal Funds Rate and a rate
determined by the Administrative Agent in accordance with banking industry rules
on interbank compensation.
(e) If any Credit Party shall fail to make any payment
required to be made by it pursuant to Section 2.04(b), then the Administrative
Agent may, in its discretion (notwithstanding any contrary provision hereof),
apply any amounts thereafter received by the Administrative Agent for the
account of such Credit Party to satisfy such Credit Party's obligations under
such Sections until all such unsatisfied obligations are fully paid.
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ARTICLE 3 INTEREST, FEES, YIELD PROTECTION, ETC.
Section 3.01 Interest
(a) ABR Revolving Loans shall bear interest at the Alternate
Base Rate plus the Applicable Margin.
(b) Eurodollar Revolving Borrowings shall bear interest at the
Adjusted LIBO Rate for the Interest Period in effect for such Borrowing plus the
Applicable Margin.
(c) Notwithstanding the foregoing, if an Event of Default has
occurred and is continuing, then, so long as such Event of Default is
continuing, all principal of and interest on each Loan and each fee and other
amount payable by the Borrower hereunder shall bear interest, after as well as
before judgment, at a rate per annum equal to (i) in the case of principal of
any Loan, 2% plus the rate otherwise applicable to such Loan as provided in the
preceding paragraphs of this Section or (ii) in the case of any other amount, 2%
plus the Alternate Base Rate plus the Applicable Margin.
(d) Accrued interest on each Loan shall be payable in arrears
on each Interest Payment Date for such Loan and on the Revolving Loan Maturity
Date, provided that (i) interest accrued pursuant to paragraph (c) of this
Section shall be payable on demand, and (ii) in the event of any conversion of
any Eurodollar Loan prior to the end of the current Interest Period therefor,
accrued interest on such Loan shall be payable on the effective date of such
conversion.
(e) All interest hereunder shall be computed on the basis of a
year of 360 days, except that interest computed by reference to the Alternate
Base Rate at times when the Alternate Base Rate is based on the Prime Rate shall
be computed on the basis of a year of 365 days (or 366 days in a leap year), and
in each case shall be payable for the actual number of days elapsed (including
the first day but excluding the last day). The applicable Alternate Base Rate,
Adjusted LIBO Rate or LIBO Rate shall be determined by the Administrative Agent,
and such determination shall be conclusive absent clearly demonstrable error.
Section 3.02 Interest Elections
(a) Each Borrowing initially shall be of the Type specified in
the applicable Borrowing Request and, in the case of a Eurodollar Borrowing,
shall have an initial Interest Period as specified in such Borrowing Request.
Thereafter, the Borrower may elect to convert such Borrowing to a different Type
or to continue such Borrowing and, in the case of a Eurodollar Borrowing, may
elect Interest Periods therefor, all as provided in this Section. The Borrower
may elect different options with respect to different portions of the affected
Borrowing, in which case each such portion shall be allocated ratably among the
applicable Lenders holding the Loans comprising such Borrowing, and the Loans
comprising each such portion shall be considered a separate Borrowing.
(b) To make an election pursuant to this Section, the Borrower
shall notify the Administrative Agent of such election in writing by the time
that a Borrowing Request would be required under Section 2.03 if the Borrower
were requesting a Borrowing of the Type resulting from such election to be made
on the effective date of such election. Each such Interest Election Request
shall be irrevocable, shall be delivered by hand or telecopy to the
Administrative Agent in a form approved by the Administrative Agent and shall be
signed by the Borrower.
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(c) Each Interest Election Request shall specify the following
information in compliance with Section 2.02:
(i) the Borrowing to which such Interest Election Request
applies and, if different options are being elected with respect to different
portions thereof, the portions thereof to be allocated to each resulting
Borrowing (in which case the information to be specified pursuant to clauses
(iii) and (iv) of this paragraph shall be specified for each resulting
Borrowing);
(ii) the effective date of the election made pursuant to
such Interest Election Request, which shall be a Business Day;
(iii) whether the resulting Borrowing is to be an ABR
Borrowing or a Eurodollar Borrowing; and
(iv) if the resulting Borrowing is a Eurodollar Borrowing,
the Interest Period to be applicable thereto after giving effect to such
election, which shall be a period contemplated by the definition of the term
"Interest Period".
If any such Interest Election Request requests a Eurodollar Borrowing but does
not specify an Interest Period, then the Borrower shall be deemed to have
selected an Interest Period of one month's duration.
(d) Promptly following receipt of an Interest Election
Request, the Administrative Agent shall advise each applicable Lender of the
details thereof and of such Lender's portion of each resulting Borrowing.
(e) If the Borrower fails to deliver a timely Interest
Election Request prior to the end of the Interest Period applicable thereto,
then, unless such Borrowing is repaid as provided herein, at the end of such
Interest Period, such Borrowing shall be converted to an ABR Borrowing.
Notwithstanding any contrary provision hereof, if an Event of Default has
occurred and is continuing and the Administrative Agent, at the request of the
Required Lenders, so notifies the Borrower, then, so long as an Event of Default
is continuing, (i) no outstanding Borrowing may be converted to or continued as
a Eurodollar Borrowing and (ii) unless repaid, each Eurodollar Borrowing shall
be converted to an ABR Borrowing at the end of the Interest Period applicable
thereto.
Section 3.03 Fees
(a) The Borrower agrees to pay to the Administrative Agent for
the account of each Lender, simultaneously with the execution and delivery of
this Agreement, a non-refundable facility fee in the aggregate amount of
$150,000 representing one percent (1.00%) of the Revolving Commitments as
originally in effect.
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(b) The Borrower agrees to pay to the Administrative Agent for
the account of each Lender having a Revolving Commitment, a commitment fee,
which shall accrue at a rate per annum equal to the Applicable Margin on the
daily amount of the unused Revolving Commitment during the period from and
including the date on which this Agreement shall have become effective in
accordance with Section 10.06 to but excluding the date on which such Revolving
Commitment terminates. Accrued commitment fees shall be payable in arrears on
the last day of March, June, September and December of each year, each date on
which the Revolving Commitments are permanently reduced and on the date on which
the Revolving Commitments terminate, commencing on the first such date to occur
after the date hereof. All commitment fees shall be computed on the basis of a
year of 365 days (or 366 days in a leap year) and shall be payable for the
actual number of days elapsed (including the first day but excluding the last
day).
(c) The Borrower agrees to pay to each Credit Party, for its
own account, fees and other amounts payable in the amounts and at the times
separately agreed upon between the Borrower and such Credit Party.
(d) All fees and other amounts payable hereunder shall be paid
on the dates due, in immediately available funds, to the Administrative Agent
for distribution, in the case of commitment and facility fees, to the Lenders.
Fees and other amounts paid shall not be refundable under any circumstances.
Section 3.04 Alternate Rate of Interest
If prior to the commencement of any Interest Period for a
Eurodollar Borrowing:
(a) the Administrative Agent determines (which determination
shall be conclusive absent manifest error) that adequate and reasonable means do
not exist for ascertaining the Adjusted LIBO Rate or the LIBOR Rate, as
applicable, for such Interest Period; or
(b) the Administrative Agent is advised by any applicable
Lender that the Adjusted LIBO Rate or the LIBOR Rate, as applicable, for such
Interest Period will not adequately and fairly reflect the cost to such Lender
of making or maintaining its Loan included in such Borrowing for such Interest
Period; then the Administrative Agent shall give notice thereof to the Borrower
and the applicable Lenders by telephone or telecopy as promptly as practicable
thereafter and, until the Administrative Agent notifies the Borrower and the
applicable Lenders that the circumstances giving rise to such notice no longer
exist, (i) any Interest Election Request that requests the conversion of any
Borrowing to, or continuation of any Borrowing as, a Eurodollar Borrowing shall
be ineffective, and (ii) if any Borrowing Request requests a Eurodollar
Borrowing, such Borrowing shall be made as an ABR Borrowing.
Section 3.05 Increased Costs; Illegality
(a) If any Change in Law shall:
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(i) 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 Credit Party (except any such reserve
requirement reflected in the Adjusted LIBO Rate);
(ii) impose on any Credit Party or the London interbank
market any other condition affecting this Agreement, any Eurodollar Loans made
by such Credit Party or any participation therein,
and the result of any of the foregoing shall be to increase the cost to such
Credit Party of making or maintaining any Eurodollar Loan hereunder or to
increase the cost to such Credit Party or to reduce the amount of any sum
received or receivable by such Credit Party hereunder (whether of principal,
interest or otherwise), then the Borrower will pay to such Credit Party such
additional amount or amounts as will compensate such Credit Party for such
additional costs incurred or reduction suffered. Failure to demand compensation
pursuant to this Section shall not constitute a waiver of such Credit Party's
right to demand such compensation.
(b) If any Credit Party determines that any Change in Law
regarding capital requirements has or would have the effect of reducing the rate
of return on such Credit Party's capital or on the capital of such Credit
Party's holding company, if any, as a consequence of this Agreement or the Loans
made by such Credit Party to a level below that which such Credit Party or such
Credit Party's holding company could have achieved but for such Change in Law
(taking into consideration such Credit Party's policies and the policies of such
Credit Party's holding company with respect to capital adequacy), then from time
to time the Borrower will pay to such Credit Party such additional amount or
amounts as will compensate such Credit Party or such Credit Party's holding
company for any such reduction suffered.
(c) A certificate of a Credit Party setting forth the amount
or amounts necessary to compensate such Credit Party or its holding company, as
applicable, as specified in paragraph (a) or (b) of this Section shall be
delivered to the Borrower and shall be conclusive absent manifest error. The
Borrower shall pay such Credit Party the amount shown as due on any such
certificate within 10 days after receipt thereof.
(d) Failure or delay on the part of any Credit Party to demand
compensation pursuant to this Section shall not constitute a waiver of such
Credit Party's right to demand such compensation; provided that the Borrower
shall not be required to compensate a Credit Party pursuant to this Section for
any increased costs or reductions incurred more than 90 days prior to the date
that such Credit Party notifies the Borrower of the Change in Law giving rise to
such increased costs or reductions and of such Credit Party's intention to claim
compensation therefor; provided further that, if the Change in Law giving rise
to such increased costs or reductions is retroactive, then the 90-day period
referred to above shall be extended to include the period of retroactive effect
thereof.
(e) Notwithstanding any other provision of this Agreement, if,
after the date of this Agreement, any Change in Law shall make it unlawful for
any Lender to make or maintain any Eurodollar Loan or to give effect to its
obligations as contemplated hereby with respect to any Eurodollar Loan, then, by
written notice to the Borrower and to the Administrative Agent:
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(i) such Lender may declare that Eurodollar Loans will not
thereafter (for the duration of such unlawfulness) be made by such Lender
hereunder (or be continued for additional Interest Periods and ABR Loans will
not thereafter (for such duration) be converted into Eurodollar Loans),
whereupon any request for a Eurodollar Borrowing or to convert an ABR Borrowing
to a Eurodollar Borrowing or to continue a Eurodollar Borrowing, as applicable,
for an additional Interest Period shall, as to such Lender only, be deemed a
request for an ABR Loan (or a request to continue an ABR Loan as such for an
additional Interest Period or to convert a Eurodollar Loan into an ABR Loan, as
applicable), unless such declaration shall be subsequently withdrawn; and
(ii) such Lender may require that all outstanding
Eurodollar Loans made by it be converted to ABR Loans, in which event all such
Eurodollar Loans shall be automatically converted to ABR Loans, as of the
effective date of such notice as provided in the last sentence of this
paragraph.
In the event any Lender shall exercise its rights under (i) or (ii) of this
paragraph, all payments and prepayments of principal that would otherwise have
been applied to repay the Eurodollar Loans that would have been made by such
Lender or the converted Eurodollar Loans of such Lender shall instead be applied
to repay the ABR Loans made by such Lender in lieu of, or resulting from the
conversion of, such Eurodollar Loans, as applicable. For purposes of this
paragraph, a notice to the Borrower by any Lender shall be effective as to each
Eurodollar Loan made by such Lender, if lawful, on the last day of the Interest
Period currently applicable to such Eurodollar Loan; in all other cases such
notice shall be effective on the date of receipt by the Borrower.
Section 3.06 Break Funding Payment
In the event of (a) the payment or prepayment (voluntary or
otherwise) of any principal of any Eurodollar Loan other than on the last day of
an Interest Period applicable thereto (including as a result of an Event of
Default), (b) the conversion of any Eurodollar Loan other than on the last day
of the Interest Period applicable thereto or (c) the failure to borrow, convert,
continue or prepay any Eurodollar Loan on the date specified in any notice
delivered pursuant hereto (regardless of whether such notice may be revoked
under Section 2.07(d) and is revoked in accordance therewith), then, in any such
event, the Borrower shall compensate each Lender for the loss, cost and expense
attributable to such event. In the case of a Eurodollar Loan, such loss, cost or
expense to any Lender shall be deemed to include an amount determined by such
Lender to be the excess, if any, of (i) the amount of interest that would have
accrued on the principal amount of such Loan had such event not occurred, at the
Adjusted LIBO Rate that would have been applicable to such Loan, for the period
from the date of such event to the last day of the then current Interest Period
therefor (or, in the case of a failure to borrow, convert or continue, for the
period that would have been the Interest Period for such Loan), over (ii) the
amount of interest that would accrue on such principal amount for such period at
the interest rate that such Lender would bid were it to bid, at the commencement
of such period, for dollar deposits of a comparable amount and period from other
banks in the eurodollar market. A certificate of any Lender setting forth any
amount or amounts that such Lender is entitled to receive pursuant to this
Section shall be delivered to the Borrower and shall be conclusive absent
manifest error. The Borrower shall pay such Lender the amount shown as due on
any such certificate within 10 days after receipt thereof.
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Section 3.07 Taxes
(a) Any and all payments by or on account of any obligation of
any Loan Party hereunder and under any other Loan Document shall be made free
and clear of and without deduction for any Indemnified Taxes or Other Taxes,
provided that, if such Loan Party shall be required to deduct any Indemnified
Taxes or Other Taxes from such payments, then (i) the sum payable shall be
increased as necessary so that, after making all required deductions (including
deductions applicable to additional sums payable under this Section), the
applicable Credit Party receives an amount equal to the sum it would have
received had no such deductions been made, (ii) such Loan Party shall make such
deductions and (iii) such Loan Party shall pay the full amount deducted to the
relevant Governmental Authority in accordance with applicable law.
(b) In addition, the Loan Parties shall pay any Other Taxes to
the relevant Governmental Authority in accordance with applicable law.
(c) Each Loan Party shall indemnify each Credit Party, within
ten days after written demand therefor, for the full amount of any Indemnified
Taxes or Other Taxes paid by such Credit Party on or with respect to any payment
by or on account of any obligation of such Loan Party under the Loan Documents
(including Indemnified Taxes or Other Taxes imposed or asserted on or
attributable to amounts payable under this Section) and any penalties, interest
and reasonable expenses arising therefrom or with respect thereto, whether or
not such Indemnified Taxes or Other Taxes were correctly or legally imposed or
asserted by the relevant Governmental Authority. A certificate as to the amount
of such payment or liability delivered to the Borrower by a Credit Party, or by
the Administrative Agent on its own behalf or on behalf of a Credit Party, shall
be conclusive absent manifest error.
(d) As soon as practicable after any payment of Indemnified
Taxes or Other Taxes by the Borrower to a Governmental Authority, the Borrower
shall deliver to the Administrative Agent the original or a certified copy of a
receipt issued by such Governmental Authority evidencing such payment, a copy of
the return reporting such payment or other evidence of such payment reasonably
satisfactory to the Administrative Agent.
(e) Any Foreign Lender that is entitled to an exemption from
or reduction of withholding tax under the law of the jurisdiction in which the
relevant Loan Party is located, or any treaty to which such jurisdiction is a
party, with respect to payments under the Loan Documents shall deliver to the
Borrower (with a copy to the Administrative Agent), at the time or times
prescribed by applicable law, such properly completed and executed documentation
prescribed by applicable law or reasonably requested by the Borrower as will
permit such payments to be made without withholding or at a reduced rate.
Section 3.08 Mitigation Obligations
If any Lender requests compensation under Section 3.05, or if
the Borrower is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 3.07,
then such Lender shall use reasonable efforts to designate a different lending
office for funding or booking its Loans (or any participation therein) hereunder
or to assign its rights and obligations hereunder to another of its offices,
branches or affiliates, if, in the judgment of such Lender, such designation or
assignment (i) would eliminate or reduce amounts payable pursuant to Section
3.05 or 3.07, as applicable, in the future and (ii) would not subject such
Lender to any unreimbursed cost or expense and would not otherwise be
disadvantageous to such Lender. The Borrower hereby agrees to pay all reasonable
costs and expenses incurred by any Lender in connection with any such
designation or assignment.
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ARTICLE 4 REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Credit Parties that:
Section 4.01 Organization; Powers
Each of the Borrower and the Subsidiaries is duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
organization, has all requisite power and authority to carry on its business as
now conducted and, except where the failure to do so, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect, is qualified to do business in, and is in good standing in, every
jurisdiction where such qualification is required.
Section 4.02 Authorization; Enforceability
The Transactions are within the corporate, partnership or
other analogous powers of each of the Borrower and the Subsidiaries to the
extent it is a party thereto and have been duly authorized by all necessary
corporate, partnership or other analogous and, if required, equityholder action.
Each Loan Document has been duly executed and delivered by each of the Borrower
and the Subsidiaries to the extent it is a party thereto and constitutes a
legal, valid and binding obligation thereof, enforceable in accordance with its
terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium
or other laws affecting creditors' rights generally.
Section 4.03 Governmental Approvals; No Conflicts
The Transactions (a) do not require any consent or approval
of, registration or filing with, or any other action by, any Governmental
Authority, except such as have been obtained or made and are in full force and
effect, (b) will not violate any applicable law or regulation or the charter,
by-laws or other organizational documents of the Borrower or any of the
Subsidiaries or any order of any Governmental Authority, (c) will not violate or
result in a default under any indenture, agreement or other instrument binding
upon the Borrower or any of the Subsidiaries or its assets, or give rise to a
right thereunder to require any payment to be made by the Borrower or any of the
Subsidiaries, and (d) will not result in the creation or imposition of any Lien
on any asset of the Borrower or any of the Subsidiaries (other than Liens
permitted by Section 7.02).
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Section 4.04 Financial Condition; No Material Adverse Change
(a) The Borrower has heretofore furnished to the Credit
Parties its consolidated and consolidating balance sheets and statements of
income, stockholders equity and cash flows of the Borrower and the Subsidiaries
as of and for the fiscal years ended June 30, 1998, June 30, 1999 and June 30,
2000, reported on by Ernst & Young, independent public accountants. The
consolidated financial statements referred to above present fairly, in all
material respects, the financial position and results of operations and cash
flows of the Borrower and consolidated Subsidiaries as of such dates and for the
indicated periods in accordance with GAAP and are consistent with the books and
records of the Borrower (which books and records are correct and complete).
(b) Since June 30, 2000, there has been no material adverse
change in the business, assets, operations, prospects or condition, financial or
otherwise, of the Borrower and the Subsidiaries, taken as a whole.
Section 4.05 Properties
(a) Each of the Borrower and the Subsidiaries has good title
to, or valid leasehold interests in, all its real and personal property material
to its business, except for minor defects in title that do not interfere with
its ability to conduct its business as currently conducted or to utilize such
properties for their intended purposes.
(b) Each of the Borrower and the Subsidiaries owns, or is
entitled to use, all trademarks, tradenames, copyrights, patents and other
intellectual property material to its business, and the use thereof by the
Borrower and the Subsidiaries does not infringe upon the rights of any other
Person, except for any such infringements that, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect.
Section 4.06 Litigation and Environmental Matters
(a) There are no actions, suits or proceedings by or before
any arbitrator or Governmental Authority pending against or, to the knowledge of
the Borrower, threatened against or affecting the Borrower or any of the
Subsidiaries (i) that, if adversely determined, could reasonably be expected,
individually or in the aggregate, to result in a Material Adverse Effect (other
than the Disclosed Matters) or (ii) that involve any Loan Document or the
Transactions.
(b) Except for the Disclosed Matters and except with respect
to any other matters that, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect, neither the
Borrower nor any of its Subsidiaries (i) have failed to comply with any
Environmental Law or to obtain, maintain or comply with any permit, license or
other approval required under any Environmental Law, (ii) have become subject to
any Environmental Liability, (iii) have received notice of any claim with
respect to any Environmental Liability or (iv) know of any basis for any
Environmental Liability.
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Section 4.07 Compliance with Laws and Agreements
Each of the Borrower and the Subsidiaries is in compliance
with all laws, regulations and orders of any Governmental Authority applicable
to it or its property and all indentures, agreements and other instruments
binding upon it or its property, except where the failure to do so, individually
or in the aggregate, could not reasonably be expected to result in a Material
Adverse Effect. No Default has occurred and is continuing.
Section 4.08 Investment and Holding Company Status
Neither the Borrower nor any of the Subsidiaries are (a) an
"investment company" as defined in, or subject to regulation under, the
Investment Company Act of 1940 or (b) a "holding company" as defined in, or
subject to regulation under, the Public Utility Holding Company Act of 1935.
Section 4.09 Taxes
Each of the Borrower and the Subsidiaries has timely filed or
caused to be filed all Tax returns and reports required to have been filed and
has paid or caused to be paid all Taxes required to have been paid by it, except
(a) Taxes that are being contested in good faith by appropriate proceedings and
for which the Borrower or such Subsidiary, as applicable, has set aside on its
books adequate reserves or (b) to the extent that the failure to do so could not
reasonably be expected to result in a Material Adverse Effect.
Section 4.10 ERISA
No ERISA Event has occurred or is reasonably expected to occur
that, when taken together with all other such ERISA Events for which liability
is reasonably expected to occur, could reasonably be expected to result in a
Material Adverse Effect. The present value of all accumulated benefit
obligations under each Plan (based on the assumptions used for purposes of
Statement of Financial Accounting Standards No. 87) did not, as of the date of
the most recent financial statements reflecting such amounts, exceed the fair
market value of the assets of such Plan, and the present value of all
accumulated benefit obligations of all underfunded Plans (based on the
assumptions used for purposes of Statement of Financial Accounting Standards No.
87) did not, as of the date of the most recent financial statements reflecting
such amounts, exceed the fair market value of the assets of all such underfunded
Plans.
Section 4.11 Disclosure
None of the reports, financial statements, certificates or
other information furnished by or on behalf of the Borrower or any Subsidiary to
any Credit Party in connection with the negotiation of the Loan Documents or
delivered thereunder (as modified or supplemented by other information so
furnished) contains any material misstatement of fact or omits to state any
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, provided that, with
respect to projected financial information, the Borrower represents only that
such information was prepared in good faith based upon assumptions believed to
be reasonable at the time.
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Section 4.12 Subsidiaries
Schedule 4.12 sets forth the name of, and the ownership
interest of the Borrower in, each Subsidiary and identifies each Subsidiary that
is a Subsidiary Guarantor, in each case as of the Effective Date.
Section 4.13 Insurance
Schedule 4.13 sets forth a description of all insurance
maintained by or on behalf of the Borrower and the Subsidiaries as of the
Effective Date. As of the Effective Date, all premiums in respect of such
insurance that are due and payable have been paid.
Section 4.14 Labor Matters
As of the Effective Date, there are no strikes, lockouts or
slowdowns against the Borrower or any Subsidiary pending or, to the knowledge of
the Borrower, threatened. The hours worked by and payments made to employees of
the Borrower and the Subsidiaries have not been in violation of the Fair Labor
Standards Act or any other applicable Federal, state, local or foreign law
dealing with such matters, except where any such violations, individually and in
the aggregate, would not be reasonably likely to result in a Material Adverse
Effect. All material payments due from the Borrower or any Subsidiary, or for
which any claim may be made against the Borrower or any Subsidiary, on account
of wages and employee health and welfare insurance and other benefits, have been
paid or accrued as a liability on the books of the Borrower or such Subsidiary.
The consummation of the Transactions will not give rise to any right of
termination or right of renegotiation on the part of any union under any
collective bargaining agreement to which the Borrower or any Subsidiary is
bound.
Section 4.15 Solvency
Immediately following the making of each Loan made on the date
thereof and after giving effect to the application of the proceeds of such Loan
(a) the fair value of the assets of the Borrower and the Subsidiaries, taken as
a whole, at a fair valuation, will exceed their debts and liabilities,
subordinated, contingent or otherwise; (b) the present fair saleable value of
the property of the Borrower and the Subsidiaries, taken as a whole, will be
greater than the amount that will be required to pay the probable liability of
their debts and other liabilities, subordinated, contingent or otherwise, as
such debts and other liabilities become absolute and matured; (c) each of the
Borrower and the Subsidiary Guarantors will be able to pay its debts and
liabilities, subordinated, contingent or otherwise, as such debts and
liabilities become absolute and matured; and (d) each of the Borrower and the
Subsidiary Guarantors will not have unreasonably small capital with which to
conduct the business in which it is engaged as such business is now conducted
and is proposed to be conducted following such date.
Section 4.16 Security Documents
(a) The Security Agreement is effective to create in favor of
the Administrative Agent, for the ratable benefit of the Secured Parties, a
legal, valid and enforceable security interest in the Collateral (as defined in
the Security Agreement) and, when (i) the pledged property constituting such
Collateral is delivered to the Administrative Agent, (ii) the financing
statements in appropriate form are filed in the offices specified on Schedule 6
to the Perfection Certificate and (iii) all other applicable filings under the
Uniform Commercial Code or otherwise that are required under the Loan Documents
are made, the Security Agreement shall constitute a fully perfected Lien on, and
security interest in, all right, title and interest of the grantors thereunder
in such Collateral (other than the Intellectual Property (as defined in the
Security Agreement)), in each case prior and superior in right to any other
Person, other than with respect to Liens expressly permitted by Section 7.02.
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(b) When the Security Agreement is filed in the United States
Patent and Trademark Office and the United States Copyright Office, the Security
Agreement shall constitute a fully perfected Lien on, and security interest in,
all right, title and interest of the Borrower and the Subsidiary Guarantors in
the Intellectual Property (as defined in the Security Agreement) in which a
security interest may be perfected by filing, recording or registering a
security agreement, financing statement or analogous document in the United
States Patent and Trademark Office or the United States Copyright Office, as
applicable, in each case prior and superior in right to any other Person, other
than with respect to Liens expressly permitted by Section 7.02 (it being
understood that subsequent recordings in the United States Patent and Trademark
Office and the United States Copyright Office may be necessary to perfect a Lien
on registered trademarks, trademark applications and copyrights acquired by the
Borrower and the Subsidiary Guarantors after the date hereof).
Section 4.17 Federal Reserve Regulations
(a) Neither the Borrower nor any of the Subsidiaries are
engaged principally, or as one of their important activities, in the business of
extending credit for the purpose of buying or carrying Margin Stock.
(b) No part of the proceeds of any Loan will be used, whether
directly or indirectly, and whether immediately, incidentally or ultimately, to
purchase, acquire or carry any Margin Stock or for any purpose that entails a
violation of, or that is inconsistent with, the provisions of the regulations of
the Board, including Regulation T, U or X.
ARTICLE 5 CONDITIONS
Section 5.01 Effective Date
The Revolving Commitments and the obligations of the Lenders
to make Loans shall not become effective until the date, which may not be later
than October 31, 2000, on which each of the following conditions is satisfied
(or waived in accordance with Section 10.02):
(a) The Administrative Agent (or its counsel) shall have
received from each party hereto either (i) a counterpart of this Agreement
signed on behalf of such party or (ii) written evidence satisfactory to the
Administrative Agent (which may include telecopy transmission of a signed
signature page of this Agreement) that such party has signed a counterpart of
this Agreement.
(b) The Administrative Agent shall have received the Notes for
each Lender signed on behalf of the Borrower.
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(c) The Administrative Agent shall have received a favorable
written opinion (addressed to the Credit Parties and dated the Effective Date)
from on behalf of the Loan Parties, substantially in the form of Exhibit E, and
covering such other matters relating to the Loan Parties, the Loan Documents or
the Transactions as the Required Lenders shall reasonably request. The Borrower
hereby requests such counsel to deliver such opinion.
(d) The Administrative Agent shall have received a
certificate, dated the date of the initial Loans of the Secretary or an
Assistant Secretary of the Borrower and each Subsidiary:
(i) attaching resolutions of its Board of Directors, and,
if necessary, its shareholders then in full force and effect authorizing the
execution, delivery and performance of this Agreement, the Notes, Guarantee
Agreement, the Security Documents, the other Loan Documents, and the related
transactions contemplated in connection herewith and therewith,
(ii) attaching the by-laws of the Borrower and each
Subsidiary,
(iii) certifying that no amendment or modification of the
Borrower's or any Subsidiary's Certificate of Incorporation has occurred since
the date of the certification thereof by the Secretary of State required by
clause (e) below; and
(iv) certifying as to the incumbency and signatures of
those of its officers authorized to act with respect to this Agreement, the
Notes, the Guarantee Agreement, the Security Documents and each other Loan
Document, upon which certificate the Administrative Agent may conclusively rely
until it shall have received a further certificate of the Secretary of the
Borrower and each Subsidiary canceling or amending such prior certificate.
(e) The Administrative Agent shall have received a copy of the
Borrower's and each Subsidiary's Certificate of Incorporation, certified as of a
recent date by the Secretary of State of the state of its incorporation.
(f) The Administrative Agent shall have received a so-called
"good standing" certificate with respect to the Borrower and each Subsidiary as
of a recent date issued by the Secretary of State of the state of its
incorporation.
(g) The Administrative Agent shall have received certificates
as of a recent date and issued by the appropriate Governmental Authority as to
the qualification of the Borrower to do business (and good standing, where
available) as a foreign corporation in each of the States in which Borrower is
qualified as a foreign corporation.
(h) The Administrative Agent shall have received a
certificate, dated the Effective Date and signed by the President, a Vice
President or a Financial Officer of the Borrower, confirming compliance with the
conditions set forth in paragraphs (a) and (b) of Section 5.02.
(i) The Administrative Agent shall have received all fees and
other amounts due and payable on or prior to the Effective Date, including, to
the extent invoiced, reimbursement or payment of all out-of-pocket expenses
required to be reimbursed or paid by the Borrower hereunder.
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(j) The Administrative Agent shall have received counterparts
of the Security Agreement signed on behalf of the Borrower, and each Subsidiary
Guarantor party thereto, together with the following:
(i) stock certificates representing 100% of the shares of
capital stock of all Domestic Subsidiaries and 65% of the shares of capital
stock of all Material Foreign Subsidiaries, in each case, owned by or on behalf
of any Loan Party as of the Effective Date;
(ii) any promissory notes and other instruments evidencing
all loans, advances and other debt owed or owing to any Loan Party as of the
Effective Date;
(iii) stock powers and instruments of transfer, endorsed
in blank, with respect to such stock certificates, promissory notes and other
instruments;
(iv) all instruments and other documents, including
Uniform Commercial Code financing statements, required by law or reasonably
requested by the Administrative Agent to be filed, registered or recorded to
create or perfect the Liens intended to be created under the Security Agreement;
and
(v) a completed Perfection Certificate, dated the
Effective Date and signed by the President or a Vice President of the Borrower
or a Financial Officer, together with all attachments contemplated thereby,
including the results of a search of the Uniform Commercial Code (or equivalent)
filings made with respect to the Loan Parties in the jurisdictions contemplated
by the Perfection Certificate and copies of the financing statements (or similar
documents) disclosed by such search and evidence reasonably satisfactory to the
Administrative Agent that the Liens indicated by such financing statements (or
similar documents) are permitted by Section 7.02 or have been released.
(k) The Administrative Agent shall have received counterparts
of the Guarantee Agreement signed on behalf of each Subsidiary Guarantor that
exists on the Effective Date.
(l) The Administrative Agent shall have received evidence
satisfactory to it that the insurance required by Section 6.10 is in effect.
(m) The performance by each Loan Party of its obligations
under each Loan Document shall not (i) violate any applicable law, statute, rule
or regulation or (ii) conflict with, or result in a default or event of default
under, any material agreement of any Loan Party or any other Subsidiary, and the
Administrative Agent shall have received one or more officer's certificates to
such effect, satisfactory to the Administrative Agent.
(n) The Lenders shall be reasonably satisfied as to the amount
and nature of any environmental and employee health and safety exposures to
which the Borrower and the Subsidiaries may be subject, and with the plans of
the Borrower with respect thereto.
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(o) The Lenders shall be reasonably satisfied (i) that there
shall be no litigation or administrative proceeding, or regulatory development,
that would reasonably be expected to have a Material Adverse Effect, and (ii)
with the current status of, and the terms of any settlement or other resolution
of, any litigation or other proceedings brought against the Borrower or any
Subsidiary by or on behalf of its subscribers or by any Governmental Authority
relating to its business.
(p) After giving effect to the Transactions, none of the
Borrower or any of the Subsidiaries shall have outstanding any shares of
preferred equity securities or any Indebtedness, other than (i) Indebtedness
incurred under the Loan Documents and (ii) Indebtedness set forth on Schedule
7.01.
(q) The Lenders shall be reasonably satisfied in all respects
with the tax position and the contingent tax and other liabilities of, and with
any tax sharing agreements among, the Borrower and the Subsidiaries, and with
the plans of the Borrower with respect thereto.
(r) Since June 30, 2000, there shall have occurred no material
adverse change or material adverse condition in the business, assets,
operations, properties, condition (financial or otherwise), liabilities
(including contingent liabilities), prospects or material agreements of the
Borrower and the Subsidiaries, taken as a whole.
(s) The Administrative Agent shall have received the financial
statements referred to in Section 4.04(a) and there shall exist no liabilities
of the Borrower or any Subsidiary, fixed or contingent, which are material but
not reflected in such financial statements or the notes thereto, other than
liabilities arising in the ordinary course of business since June 30, 2000.
(t) The Administrative Agent shall have received a Solvency
Certificate from the Chief Financial Officer of the Borrower in the form annexed
hereto as Exhibit F (with the designated exhibits attached).
(u) The Administrative Agent shall have received a
certificate, dated the Effective Date and signed by a Financial Officer of the
Borrower, setting forth reasonably detailed calculations demonstrating
compliance with Sections 7.12, 7.14, 7.15 and 7.16 on a pro forma basis
immediately after giving effect to the initial Revolving Loans.
(v) The Administrative Agent shall have completed its "due
diligence" review of the Borrower and its Subsidiaries including, without
limitation, (i) a field audit of the Accounts and other Collateral covered by
the Security Documents and the results of such review and audit shall be
satisfactory to the Administrative Agent, (ii) a pro forma consolidated and
consolidating balance sheet of the Borrower and its subsidiaries as of the
Effective Date after giving effect to the Transactions, (iv) projections
covering the period in which the Loans will be outstanding, and (v) any
information the Administrative Agent may require regarding the assets of the
Borrower and its Subsidiaries. The Administrative Agent hereby confirms that the
conditions contained in this Section 5.01(v) have been fulfilled to its
satisfaction.
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Section 5.02 Each Credit Event
The obligation of each Lender to make a Loan on the occasion
of any Borrowing is subject to the satisfaction of the following conditions:
(a) The representations and warranties of each Loan Party set
forth in each Loan Document shall be true and correct on and as of the date of
such Borrowing in all material respects except for changes occurring in the
ordinary course of business and otherwise permitted by this Agreement.
(b) At the time of and immediately after giving effect to such
Borrowing, no Default shall have occurred and be continuing.
Each Borrowing shall be deemed to constitute a representation and warranty by
the Borrower on the date thereof as to the matters specified in paragraphs (a)
and (b) of this Section.
ARTICLE 6 AFFIRMATIVE COVENANTS
Until the Revolving Commitments have expired or been terminated and the
principal of and interest on each Loan and all fees and other amounts payable
under the Loan Documents shall have been paid in full, the Borrower covenants
and agrees with the Lenders that:
Section 6.01 Financial Statements and Other Information
The Borrower will furnish to the Administrative Agent and each
Lender:
(a) within 90 days after the end of each fiscal year, its
audited consolidated balance sheet and related statements of income,
stockholders' equity and cash flows as of the end of and for such year, setting
forth in each case in comparative form the figures for the previous fiscal year,
all reported on by Ernst & Young or other independent public accountants of
recognized national standing (without a "going concern" or like qualification or
exception and without any qualification or exception as to the scope of such
audit) to the effect that such consolidated financial statements present fairly
in all material respects the financial condition and results of operations of
the Borrower and its consolidated Subsidiaries on a consolidated basis in
accordance with GAAP consistently applied;
(b) within 90 days after the end of each fiscal year, (i) its
consolidating balance sheets and related statements of income and stockholders'
equity as of the end of and for such year, setting forth in each case in
comparative form the figures for the previous fiscal year and (ii) unaudited
financial information for each of the Borrower's business lines, all certified
by one of its Financial Officers as presenting fairly in all material respects
the financial condition and results of operations of the Borrower on a
consolidating basis in accordance with GAAP consistently applied, subject to
normal year-end audit adjustments and the absence of footnotes, together with a
schedule of other audited financial information consisting of consolidating or
combining details in columnar form with the Subsidiaries separately identified,
in accordance with GAAP consistently applied;
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(c) within 45 days after the end of each of the first three
fiscal quarters of each fiscal year, (i) its consolidated balance sheet and
related statements of income, stockholders' equity and cash flows as of the end
of and for such fiscal quarter and the then elapsed portion of the fiscal year,
setting forth in each case in comparative form the figures for the corresponding
period or periods of (or, in the case of the balance sheet, as of the end of)
the previous fiscal year and (ii) unaudited financial information for each of
the Borrower's business lines, all certified by one of its Financial Officers as
presenting fairly in all material respects the financial condition and results
of operations of the Borrower and the consolidated Subsidiaries on a
consolidated basis in accordance with GAAP consistently applied, subject to
normal year-end audit adjustments and the absence of footnotes;
(d) within 45 days after the end of each of the first three
fiscal quarters of each fiscal year, (i) its consolidating balance sheet and
related statements of income and stockholders' equity as of the end of and for
such fiscal quarter and the then elapsed portion of the fiscal year, setting
forth in each case in comparative form the figures for the corresponding period
or periods of (or, in the case of the balance sheet, as of the end of) the
previous fiscal year and (ii) unaudited financial information for each of the
Borrower's business lines, all certified by one of its Financial Officers as
presenting fairly in all material respects the financial condition and results
of operations of the Borrower on a consolidating basis in accordance with GAAP
consistently applied, subject to normal year-end audit adjustments and the
absence of footnotes, together with a schedule of other audited financial
information consisting of consolidating or combining details in columnar form
with the Subsidiaries separately identified, in accordance with GAAP
consistently applied;
(e) concurrently with any delivery of financial statements
under clause (a), (b), (c) and (d) above, a certificate of a Financial Officer
of the Borrower (i) certifying as to whether a Default has occurred and, if a
Default has occurred, specifying the details thereof and any action taken or
proposed to be taken with respect thereto, (ii) setting forth (A) reasonably
detailed calculations demonstrating compliance with Sections 7.12, 7.14, 7.15,
and 7.16 and (B) the Subsidiary Guarantors as of the date of such certificate,
and (iii) stating whether any change in GAAP or in the application thereof has
occurred since the date of the audited financial statements referred to in
Section 4.04 and, if any such change has occurred, specifying the effect of such
change on the financial statements accompanying such certificate.
(f) concurrently with any delivery of financial statements
under clause (a) above, a certificate of the accounting firm that reported on
such financial statements stating whether they obtained knowledge during the
course of their examination of such financial statements of any Default (which
certificate may be limited to the extent required by accounting rules or
guidelines), together with copies of any "management letter" or similar letter
received by the Borrower or its Board of Directors (or any committee thereof)
from such accounting firm.
(g) promptly after the same become publicly available, copies
of all periodic and other reports, proxy statements and other materials filed by
the Borrower or any Subsidiary with the Securities and Exchange Commission, or
any Governmental Authority succeeding to any or all of the functions of said
Commission, or with any national securities exchange, or distributed by the
Borrower to its shareholders generally, as the case may be; and
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(h) promptly following any request therefor, such other
information regarding the operations, business affairs and financial condition
of the Borrower or any Subsidiary, or compliance with the terms of the Loan
Documents, as the Administrative Agent or any Lender may reasonably request.
Section 6.02 Notices of Material Events
The Borrower will furnish to the Administrative Agent and each
Lender prompt written notice of the following:
(a) the occurrence of any Default;
(b) the filing or commencement of any action, suit or
proceeding by or before any arbitrator or Governmental Authority against or
affecting the Borrower or any Affiliate thereof that, if adversely determined,
could in the good faith opinion of the Borrower reasonably be expected to result
in a Material Adverse Effect;
(c) the occurrence of any ERISA Event that, alone or together
with any other ERISA Events that have occurred, could reasonably be expected to
result in liability of the Borrower and the Subsidiaries in an aggregate amount
exceeding $250,000; and
(d) any other development that results in, or could reasonably
be expected to result in, a Material Adverse Effect.
(e) Each notice delivered under this Section shall be
accompanied by a statement of a Financial Officer or other executive officer of
the Borrower setting forth the details of the event or development requiring
such notice and any action taken or proposed to be taken with respect thereto.
Section 6.03 Existence; Conduct of Business
The Borrower will, and will cause each of the Subsidiaries to,
do or cause to be done all things necessary to preserve, renew and keep in full
force and effect its legal existence and the rights, licenses, permits,
privileges and franchises material to the conduct of its business, provided that
the foregoing shall not prohibit any merger, consolidation, liquidation or
dissolution permitted under Section 7.03.
Section 6.04 Payment of Obligations
The Borrower will, and will cause each of the Subsidiaries to,
pay its obligations, including Tax liabilities, that, if not paid, could result
in a Material Adverse Effect before the same shall become delinquent or in
default, except where (a) the validity or amount thereof is being contested in
good faith by appropriate proceedings, (b) the Borrower or such Subsidiary has
set aside on its books adequate reserves with respect thereto in accordance with
GAAP and (c) the failure to make payment pending such contest could not
reasonably be expected to result in a Material Adverse Effect.
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Section 6.05 Maintenance of Properties
The Borrower will, and will cause each of the Subsidiaries to,
keep and maintain all property material to the conduct of its business in good
working order and condition, ordinary wear and tear excepted.
Section 6.06 Books and Records; Inspection Rights; Collateral Audits
The Borrower will, and will cause each of the Subsidiaries to,
keep proper books of record and account in which full, true and correct entries
are made of all dealings and transactions in relation to its business and
activities. The Borrower will, and will cause each of the Subsidiaries to,
permit any representatives designated by the Administrative Agent or any Lender,
upon reasonable prior notice, to visit and inspect its properties, to examine
and make extracts from its books and records, and to discuss its affairs,
finances and condition with its officers and independent accountants, and to
conduct audits of the Collateral (all at the Borrower's expense, which shall be
reasonable and customary for such inspections and audits) all at such reasonable
times and as often as reasonably requested (and with respect to audits of the
Collateral, so long as no Event of Default exists, not more frequently than once
every year).
Section 6.07 Compliance with Laws
The Borrower will, and will cause each of the Subsidiaries to,
comply with all laws, rules, regulations and orders of any Governmental
Authority applicable to it or its property, except where the failure to do so,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect.
Section 6.08 Use of Proceeds
The proceeds of the Loans will be used only (a) to refinance
certain existing Indebtedness and (b) for general corporate purposes not
inconsistent with the terms hereof. No part of the proceeds of any Loan will be
used, whether directly or indirectly, and whether immediately, incidentally or
ultimately, to purchase, acquire or carry any Margin Stock or for any purpose
that entails a violation of any of the regulations of the Board, including
Regulations T, U and X.
Section 6.09 Information Regarding Collateral
(a) The Borrower will furnish to the Administrative Agent
prompt written notice of any change in (i) the legal name of any Loan Party or
in any trade name used to identify it in the conduct of its business or in the
ownership of its properties, (ii) the location of the chief executive office of
any Loan Party, its principal place of business, any office in which it
maintains books or records relating to Collateral owned or held by it or on its
behalf or any office or facility at which Collateral owned or held by it or on
its behalf with an aggregate book value in excess of $50,000 is located
(including the establishment of any such new office or facility), (iii) the
identity or organizational structure of any Loan Party such that a filed
financing statement becomes misleading or (iv) the Federal Taxpayer
Identification Number of any Loan Party. The Borrower agrees not to effect or
permit any change referred to in the preceding sentence unless all filings have
been made under the Uniform Commercial Code or otherwise that are required in
order for the Administrative Agent to continue at all times following such
change to have a valid, legal and perfected security interest in all the
Collateral. The Borrower also agrees promptly to notify the Administrative Agent
if any material portion of the Collateral is damaged or destroyed.
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(b) Each year, at the time of delivery of annual financial
statements with respect to the preceding fiscal year pursuant to clauses (a) and
(b) of Section 6.01, the Borrower shall deliver to the Administrative Agent a
certificate of a Financial Officer (i) setting forth the information required
pursuant to Sections 1, 2 and 8 of the Perfection Certificate or confirming that
there has been no change in such information since the date of the Perfection
Certificate or the date of the most recent certificate delivered pursuant to
this Section, and (ii) certifying that the Loan Parties are in compliance with
all of the terms of the Security Agreement.
Section 6.10 Insurance
The Borrower will, and will cause each of the Subsidiaries to,
maintain, with financially sound and reputable insurance companies, (a) adequate
insurance for its insurable properties, all to such extent and against such
risks, including fire, casualty, business interruption and other risks insured
against by extended coverage, as is customary with companies in the same or
similar businesses operating in the same or similar locations and (b) such other
insurance as is required pursuant to the terms of any Security Document.
Section 6.11 Casualty and Condemnation
(a) The Borrower will furnish to the Administrative Agent and
the Lenders prompt written notice of any casualty or other insured damage to any
portion of any Collateral or the commencement of any action or proceeding for
the taking of any Collateral or any part thereof or interest therein under power
of eminent domain or by condemnation or similar proceeding.
(b) If any event described in paragraph (a) of this Section
6.11 results in insurance proceeds, condemnation awards or other similar
proceeds, the Administrative Agent is authorized to collect such proceeds and,
if received by the Borrower or any Subsidiary, such proceeds shall be paid over
to the Administrative Agent, provided that (i) to the extent that the Borrower
or any of the Subsidiaries intends to use any such proceeds to repair, restore,
reinvest or replace assets of the Borrower or any of the Subsidiaries, the
Administrative Agent shall, subject to the provisions of the Security Agreement,
deliver such proceeds to the Borrower, (ii) otherwise, the Administrative Agent
shall, and the Borrower hereby authorizes the Administrative Agent to, apply
such proceeds to prepay the Loans and (iii) all proceeds of business
interruption insurance shall be paid over to the Borrower unless a Default has
occurred and is continuing.
(c) If such proceeds retained by or paid over to the
Administrative Agent as provided in paragraphs (a) and (b) of this Section
continue to be held by the Administrative Agent on the date that is 180 days
after the receipt of such proceeds, then such proceeds shall be applied to
prepay Borrowings.
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Section 6.12 Additional Subsidiaries
If any Subsidiary is formed or acquired after the Effective
Date, the Borrower will notify the Administrative Agent and the Lenders in
writing thereof within ten Business Days after the date on which such Subsidiary
is formed or acquired and (a) the Borrower will cause such Domestic Subsidiary
to (i) execute and deliver the Guarantee Agreement (or otherwise become a party
thereto in the manner provided therein) and become a party to each applicable
Security Document in the manner provided therein, in each case within ten
Business Days after the date on which such Subsidiary is formed or acquired, and
(ii) promptly take such actions to create and perfect Liens on such Subsidiary's
assets to secure the Obligations as the Administrative Agent or the Required
Lenders shall reasonably request and (b) if any equity securities issued by any
such Subsidiary are owned or held by or on behalf of the Borrower or any
Subsidiary Guarantor or any loans, advances or other debt is owed or owing by
any such Subsidiary to the Borrower or any Subsidiary Guarantor, the Borrower
will cause all of such equity securities of any Domestic Subsidiary (and 65% of
such equity securities of any Material Foreign Subsidiary) and all promissory
notes and other instruments evidencing such loans, advances and other debt to be
pledged pursuant to the Security Agreement within five Business Days after the
date on which such Subsidiary is formed or acquired.
Section 6.13 Further Assurances
(a) The Borrower will, and will cause each Subsidiary
Guarantor to, execute any and all further documents, financing statements,
agreements and instruments, and take all such further actions (including the
filing and recording of financing statements and other documents), that may be
required under any applicable law, or which the Administrative Agent or the
Required Lenders may reasonably request, to effectuate the transactions
contemplated by the Loan Documents or to grant, preserve, protect or perfect the
Liens created or intended to be created by the Security Documents or the
validity or priority of any such Lien, all at the expense of the Borrower and
the Subsidiary Guarantors.
(b) If any material assets are acquired by the Borrower or any
Subsidiary Guarantor after the Effective Date (other than real property or
leasehold interests in real property and other than assets constituting
Collateral under the Security Agreement that become subject to the Lien of the
Security Agreement upon acquisition thereof), the Borrower will notify the
Administrative Agent and the Lenders thereof, and, if requested by the
Administrative Agent or the Required Lenders, the Borrower will cause such
assets to be subjected to a Lien securing the Obligations and will take, and
cause the Subsidiary Guarantors to take, such actions as shall be necessary or
reasonably requested by the Administrative Agent to grant and perfect such
Liens, including actions described in paragraph (a) of this Section, all at the
expense of the Borrower and the Subsidiary Guarantors.
Section 6.14 Environmental Compliance
The Borrower shall, and shall cause each of its Subsidiaries
to, use and operate all of its facilities and property in compliance with all
Environmental Laws, keep all necessary permits, approvals, certificates,
licenses and other authorizations relating to environmental matters in effect
and remain in compliance therewith, and handle all Hazardous Materials in
compliance with all applicable Environmental Laws, except where noncompliance
with any of the foregoing could not reasonably be expected to have a Material
Adverse Effect.
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ARTICLE 7 NEGATIVE COVENANTS
Until the Revolving Commitments have expired or been terminated and the
principal of and interest on each Loan and all fees and other amounts payable
under the Loan Documents shall have been paid in full, the Borrower covenants
and agrees with the Lenders that:
Section 7.01 Indebtedness
(a) The Borrower will not, and will not permit any Subsidiary
to, create, incur, assume or permit to exist any Indebtedness, except:
(i) Indebtedness under the Loan Documents;
(ii) Indebtedness existing on the date hereof and set
forth in Schedule 7.01;
(iii) Indebtedness of the Borrower or any Subsidiary
incurred to finance the acquisition, construction or improvement of any fixed or
capital assets, including Capital Lease Obligations and any Indebtedness assumed
in connection with the acquisition of any such assets or secured by a Lien on
any such assets prior to the acquisition thereof, and extensions, renewals and
replacements of any such Indebtedness that do not increase the outstanding
principal amount thereof, provided that (A) such Indebtedness is incurred prior
to or within 90 days after such acquisition or the completion of such
construction or improvement and (B) the aggregate principal amount of
Indebtedness permitted by this clause (iii) shall not exceed $2,000,000 at any
time outstanding;
(iv) Indebtedness of any Person that becomes a Subsidiary
after the date hereof, provided that (A) such Indebtedness exists at the time
such Person becomes a Subsidiary and is not created in contemplation of or in
connection with such Person becoming a Subsidiary and (B) the aggregate
principal amount of Indebtedness permitted by this clause (iv) shall not exceed
$1,500,000 at any time outstanding;
(v) Indebtedness of the Borrower to any Subsidiary
Guarantor and of any Subsidiary Guarantor to the Borrower or any other
Subsidiary Guarantor;
(vi) Guarantees by the Borrower of Indebtedness of any
Subsidiary Guarantor and by any Subsidiary Guarantor of Indebtedness of the
Borrower or any other Subsidiary Guarantor; and
(vii) other unsecured Indebtedness of the Borrower and the
Subsidiary Guarantors in an aggregate principal amount not exceeding $1,000,000
at any time outstanding.
(b) The Borrower will not, and it will not permit any
Subsidiary to, (i) issue any preferred equity securities unless the issuance of
such preferred equity securities is on terms and conditions reasonably
satisfactory to the Administrative Agent, or (ii) be or become liable in respect
of any obligation (contingent or otherwise) to purchase, redeem, retire, acquire
or make any other payment in respect of any shares of equity securities of the
Borrower or any Subsidiary or any option, warrant or other right to acquire any
such shares of equity securities, except as permitted under Section 7.08.
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Section 7.02 Liens
The Borrower will not, and will not permit any Subsidiary to,
create, incur, assume or permit to exist any Lien on any property or asset now
owned or hereafter acquired by it, or assign or sell any income or revenues
(including accounts receivable) or rights in respect of any thereof, except:
(a) Liens created under the Loan Documents;
(b) Permitted Encumbrances;
(c) any Lien on any property or asset of the Borrower or any
Subsidiary existing on the date hereof and set forth in Schedule 7.02, provided
that (i) such Lien shall not apply to any other property or asset of the
Borrower or any Subsidiary and (ii) such Lien shall secure only those
obligations which it secures on the date hereof and any extensions, renewals and
replacements thereof that do not increase the outstanding principal amount
thereof,
(d) any Lien existing on any property or asset prior to the
acquisition thereof by the Borrower or any Subsidiary or existing on any
property or asset of any Person that becomes a Subsidiary after the date hereof
prior to the time such Person becomes a Subsidiary, provided that (i) such Lien
is not created in contemplation of or in connection with such acquisition or
such Person becoming a Subsidiary, as applicable, (ii) such Lien shall not apply
to any other property or assets of the Borrower or any Subsidiary and (iii) such
Lien shall secure only those obligations that it secures on the date of such
acquisition or the date such Person becomes a Subsidiary, as applicable, and any
extensions, renewals and replacements thereof that do not increase the
outstanding principal amount thereof,
(e) Liens on fixed or capital assets acquired, constructed or
improved by the Borrower or any Subsidiary, provided that (i) such security
interests secure Indebtedness permitted by clause (iii) of Section 7.01, (ii)
such security interests and the Indebtedness secured thereby are incurred prior
to or within 90 days after such acquisition or the completion of such
construction or improvement, (iii) the Indebtedness secured thereby does not
exceed the cost of acquiring, constructing or improving such fixed or capital
assets and (iv) such security interests shall not apply to any other property or
assets of the Borrower or any Subsidiary.
Section 7.03 Fundamental Change
(a) The Borrower will not, and will not permit any Subsidiary
to, merge into or consolidate with any other Person, or permit any other Person
to merge into or consolidate with it, or sell, transfer, lease or otherwise
dispose of (in one transaction or in a series of transactions) all or
substantially all of its assets, or all or substantially all of the equity
securities of any of the Subsidiaries (in each case, whether now owned or
hereafter acquired), or liquidate or dissolve, except that, if at the time
thereof and immediately after giving effect thereto, no Default shall have
occurred and be continuing:
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(i) any Subsidiary may merge into the Borrower in a
transaction in which the Borrower is the surviving entity, any Subsidiary may
merge into any Subsidiary Guarantor in a transaction in which such Subsidiary
Guarantor is the surviving entity;
(ii) any Subsidiary may merge with any Person in a
transaction that is not permitted by clause (i) of this Section 7.03(a),
provided that such merger is permitted by Section 7.04 or 7.05, as applicable;
(iii) any Subsidiary may sell, transfer, lease or
otherwise dispose of its assets to the Borrower or to any Subsidiary Guarantor;
(iv) the Borrower or any Subsidiary may sell, transfer,
lease or otherwise dispose of its assets in a transaction that is not permitted
by clause (iii) of this Section 7.03(a), provided that such sale, transfer,
lease or other disposition is also permitted by Section 7.05.
(b) The Borrower will not, and will not permit any of the
Subsidiaries to, engage to any material extent in any business other than
businesses of the type conducted by the Borrower and the Subsidiaries on the
date of execution of this Agreement and businesses directly related thereto.
(c) The Borrower will not, and will not permit any Subsidiary
to, liquidate or dissolve.
Section 7.04 Investments, Loans, Advances, Guarantees and Acquisitions
The Borrower will not, and will not permit any of the
Subsidiaries to, purchase, hold or acquire (including pursuant to any merger)
any capital stock, evidences of indebtedness or other securities (including any
option, warrant or other right to acquire any of the foregoing) of, make or
permit to exist any loans or advances to, Guarantee any obligations of, or make
or permit to exist any investment or any other interest in, any other Person, or
purchase or otherwise acquire (in one transaction or a series of transactions
(including pursuant to any merger)) any assets of any other Person constituting
a business unit, except:
(a) Permitted Investments;
(b) investments existing on the date hereof and set forth in
Schedule 7.04;
(c) investments made by the Borrower in the equity securities
of any Subsidiary Guarantor and made by any Subsidiary Guarantor in the equity
securities of any other Subsidiary Guarantor, provided that any such equity
securities owned by the Borrower or any Subsidiary Guarantor shall be pledged
pursuant to the Security Agreement;
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(d) acquisitions (whether by purchase of stock or assets,
merger or consolidation) by the Borrower and/or its Subsidiaries not otherwise
permitted by this Section, provided that (i) such acquisition shall be within
the same industry and line of business as that conducted by, or contemplated to
be conducted by, the Borrower and/or the Subsidiaries on the Effective Date,
(ii) after giving effect to each such acquisition, the aggregate consideration
paid by the Borrower and/or the Subsidiaries in connection with all such
acquisitions, regardless of how such consideration was financed (e.g., with
borrowed money, internally generated funds and/or equity contributions) shall
not exceed $15,000,000, (iii) the Borrower shall furnish the Administrative
Agent with written notice of such acquisition not less than thirty (30) days
prior to the closing of such acquisition; (iv) in the event any acquisition is
of stock, the Borrower shall, pursuant the Security Agreement, grant to the
Administrative Agent a first security interest in the all of the capital stock
of such new Subsidiary if such new Subsidiary is a Domestic Subsidiary, and 65%
of the capital stock of such new Subsidiary if such new Subsidiary is a Material
Foreign Subsidiary, and each new Subsidiary shall, at the time of its creation
and formation, execute such certifications, opinions, resolutions and documents
as the Administrative Agent may require (consistent with the requirements of
this Agreement) to cause such new Subsidiary (if a Domestic Subsidiary) to
become a party to the Guarantee Agreement and to cause such new Subsidiary to
become a party to the Security Agreement in order for such new Subsidiary to
grant to the Administrative Agent a first security interest in the assets of
such new Subsidiary, subject to the Permitted Encumbrances, and (v) the Borrower
shall have delivered to the Administrative Agent a certificate of a Financial
Officer of the Borrower demonstrating that, on a pro forma basis, after giving
effect to such acquisition, no Default or Event of Default would exist,
including under clause (d) of Article 8 as a result of the Borrower's failure to
comply with Section 7.15 (such covenant to be determined as if such acquisition
had been consummated on the first day of the period for which such covenant is
being calculated);
(e) loans or advances made by the Borrower to any Subsidiary
Guarantor and made by any Subsidiary Guarantor to the Borrower or any other
Subsidiary Guarantor, provided that any such loans and advances made by a Loan
Party shall be evidenced by a promissory note which shall be pledged pursuant to
the Security Agreement;
(f) acquisitions made by the Borrower from any Subsidiary
Guarantor and made by any Subsidiary Guarantor from the Borrower or any other
Subsidiary Guarantor; and
(g) if at the time thereof and immediately after giving effect
thereto no Default shall have occurred and be continuing other investments,
loans, advances, Guarantees and acquisitions, provided that the sum of (i) the
aggregate consideration paid by the Borrower or any Subsidiary in connection
with all such acquisitions, (ii) the aggregate amount of all such other
investments, loans and advances outstanding and (iii) the amount of obligations
and liabilities outstanding in the aggregate that is Guaranteed pursuant to all
such other Guarantees shall not exceed $3,500,000 at any time.
Section 7.05 Asset Sales
The Borrower will not, and will not permit any of the
Subsidiaries to, sell, transfer, lease or otherwise dispose (including pursuant
to a merger) of any asset, including any equity securities (provided that it is
hereby acknowledged that this provision shall not prohibit the issuance by the
Borrower of any of its own equity securities otherwise permitted to be issued
under this Agreement, including under Section 7.01(b)(i)), nor will the Borrower
permit any of the Subsidiaries to issue any additional shares of its equity
securities, except:
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(a) sales, transfers, leases and other dispositions of
inventory, used or surplus equipment and Permitted Investments, in each case in
the ordinary course of business;
(b) sales, transfers, leases and other dispositions made by
the Borrower to any Subsidiary Guarantor and made by any Subsidiary Guarantor to
the Borrower or any other Subsidiary Guarantor;
(c) sales of marketable securities to the extent set forth on
Schedule 7.04; and
(d) if at the time thereof and immediately after giving effect
thereto no Default shall have occurred and be continuing, other sales,
transfers, leases and other dispositions of assets, provided that (i) the
aggregate fair market value of all assets, sold, transferred, leased or
otherwise disposed of in reliance upon this clause (d) shall not exceed
$1,000,000 in the aggregate at any time and (ii) all sales, transfers, leases
and other dispositions permitted by this clause (d) shall be made for fair value
and not less than 75% of the consideration therefor shall consist of cash.
Section 7.06 Sale and Lease-Back Transactions
The Borrower will not, and will not permit any of the
Subsidiaries to, enter into any arrangement, directly or indirectly, with any
Person whereby it shall sell or transfer any property, real or personal, used or
useful in its business, whether now owned or hereafter acquired, and thereafter
rent or lease such property or other property that it intends to use for
substantially the same purpose or purposes as the property being sold or
transferred, except that the Borrower and/or the Subsidiaries may enter in sale
and lease-back transactions relating to "demonstration equipment" provided that
after giving effect to each such transaction the aggregate amount of all
obligations incurred with respect to all such transactions would not exceed
$5,000,000.
Section 7.07 Hedging Agreements
The Borrower will not, and will not permit any of the
Subsidiaries to, enter into any Hedging Agreement, other than Hedging Agreements
entered into in the ordinary course of business to hedge or mitigate risks to
which the Borrower or any Subsidiary is exposed in the conduct of its business
or the management of its liabilities.
Section 7.08 Restricted Payments
The Borrower will not, and will not permit any of the
Subsidiaries to, declare or make, or agree to pay for or make, directly or
indirectly, any Restricted Payment, except that (a) the Borrower may declare and
pay dividends with respect to its equity securities payable solely in additional
shares of its equity securities and (b) any Subsidiary may declare and pay
dividends with respect to its equity securities to the Borrower or any
Subsidiary Guarantor.
44
<PAGE>
Section 7.09 Transactions with Affiliates
The Borrower will not, and will not permit any of the
Subsidiaries to, sell, transfer, lease or otherwise dispose (including pursuant
to a merger) any property or assets to, or purchase, lease or otherwise acquire
(including pursuant to a merger) any property or assets from, or otherwise
engage in any other transactions with, any of its Affiliates, except in the
ordinary course of business at prices and on terms and conditions not less
favorable to the Borrower or such Subsidiary than could be obtained on an
arms-length basis from unrelated third parties, provided that this Section shall
not apply to any transaction that is permitted under Section 7.01, 7.03, 7.04,
7.05 or 7.08, or Section 10 of the Guarantee Agreement, between or among the
Loan Parties and not involving any other Affiliate.
Section 7.10 Restrictive Agreements
The Borrower will not, and will not permit any of the
Subsidiaries to, directly or indirectly, enter into, incur or permit to exist
any agreement or other arrangement that prohibits, restricts or imposes any
condition upon (a) the ability of the Borrower or any Subsidiary to create,
incur or permit to exist any Lien upon any of its property or assets or (b) the
ability of any Subsidiary to pay dividends or other distributions with respect
to any shares of its equity securities or to make or repay loans or advances to
the Borrower or any other Subsidiary or to Guarantee Indebtedness of the
Borrower or any other Subsidiary, provided that (i) the foregoing shall not
apply to restrictions and conditions imposed by law or by this Agreement, (ii)
the foregoing shall not apply to restrictions and conditions existing on the
date hereof identified on Schedule 7.10 (but shall apply to any amendment or
modification expanding the scope of, any such restriction or condition), (iii)
the foregoing shall not apply to customary restrictions and conditions contained
in agreements relating to the sale of a Subsidiary pending such sale, provided
that such restrictions and conditions apply only to the Subsidiary that is to be
sold and such sale is permitted hereunder, (iv) clause (a) of this Section shall
not apply to restrictions or conditions imposed by any agreement relating to
secured Indebtedness permitted by this Agreement if such restrictions or
conditions apply only to the property or assets securing such Indebtedness and
(v) clause (a) of this Section shall not apply to customary provisions in leases
restricting the assignment thereof.
Section 7.11 Amendment of Material Documents
The Borrower will not, and will not permit any Subsidiary to,
amend, modify or waive any of its rights under its certificate of incorporation,
by-laws or other organizational documents, other than immaterial amendments,
modifications or waivers that would not reasonably be expected to adversely
affect the Credit Parties.
Section 7.12 Interest Coverage Ratio
As of the last day of any fiscal quarter during any period set
forth below, the Borrower will not permit the ratio of Consolidated EBITDA to
Consolidated Interest Expense, in each case for the four fiscal quarters ending
on such date, to be less than the ratio set forth below opposite such period:
45
<PAGE>
<TABLE>
<CAPTION>
------------------------------------------ ---------------------------------------------------------
PERIOD RATIO
------------------------------------------ ---------------------------------------------------------
<S> <C>
Effective Date through
June 29, 2001 2.50:1.00
------------------------------------------ ---------------------------------------------------------
------------------------------------------ ---------------------------------------------------------
June 30, 2001 and thereafter 3.00:1.00
------------------------------------------ ---------------------------------------------------------
</TABLE>
Section 7.13 Reserved
Section 7.14 Minimum Total Net Worth
Cause, permit or allow Total Net Worth as at the last day of
each fiscal quarter of the Borrower to be less than (i) $47,500,000, plus (ii)
50% of the aggregate Net Income of the Borrower and the Subsidiaries, if
positive, for each fiscal quarter of the Borrower ending after the Effective
Date on a cumulative basis, plus (iii) 75% of all equity issued by the Borrower
and the Subsidiaries after the Effective Date.
Section 7.15 Leverage Ratio
As of the last day of any fiscal quarter during any period set
forth below, the Borrower will not permit the Leverage Ratio for the four fiscal
quarters ending on such date to be greater than the ratio set forth below
opposite such period:
<TABLE>
<CAPTION>
------------------------------------------ ---------------------------------------------------------
PERIOD RATIO
------------------------------------------ ---------------------------------------------------------
<S> <C>
Effective Date through
June 29, 2001 1.75:1.00
------------------------------------------ ---------------------------------------------------------
------------------------------------------ ---------------------------------------------------------
June 30, 2001 through
and thereafter 1.50:1.00
------------------------------------------ ---------------------------------------------------------
</TABLE>
Section 7.16 Capital Expenditures
The Borrower will not permit Capital Expenditures made or
obligated to be made by the Borrower and the Subsidiaries in respect of any
period set forth below to be greater than the amount set forth below with
respect to such period:
<TABLE>
<CAPTION>
------------------------------------------ ---------------------------------------------------------
PERIOD AMOUNT
------------------------------------------ ---------------------------------------------------------
------------------------------------------ ---------------------------------------------------------
<S> <C>
Effective Date through
June 30, 2001 $6,000,000
------------------------------------------ ---------------------------------------------------------
------------------------------------------ ---------------------------------------------------------
------------------------------------------ ---------------------------------------------------------
------------------------------------------ ---------------------------------------------------------
July 31, 2001 through $6,000,000
June 30, 2002 and each plus the amount by which $6,000,000
fiscal year thereafter exceeded the amount of Capital Expenditures
actually incurred during the
immediately preceding fiscal year
------------------------------------------ ---------------------------------------------------------
</TABLE>
46
<PAGE>
ARTICLE 8 EVENTS OF DEFAULT
If any of the following events ("Events of Default") shall occur:
(a) the Borrower shall fail to pay any principal of any Loan
when and as the same shall become due and payable, whether at the due date
thereof or at a date fixed for prepayment thereof or otherwise; or
(b) the Borrower shall fail to pay any interest on any Loan or
any fee, commission or any other amount (other than an amount referred to in
clause (a) of this Article) payable under any Loan Document, when and as the
same shall become due and payable, and such failure shall continue unremedied
for a period of five Business Days; or
(c) any representation or warranty made or deemed made by or
on behalf of any Loan Party or any other Subsidiary in or in connection with any
Loan Document or any amendment or modification hereof or waiver thereunder, or
in any report, certificate, financial statement or other document furnished
pursuant to or in connection with any Loan Document or any amendment or
modification hereof or waiver thereunder, shall prove to have been false or
misleading in any material respect when made or deemed made; or
(d) the Borrower shall fail to observe or perform any
covenant, condition or agreement contained in Section 6.02, 6.08 or 6.12 or in
Article 7, or any Loan Party shall fail to observe or perform any covenant,
condition or agreement contained in any other Loan Document; or
(e) any Loan Party shall fail to observe or perform any
covenant, condition or agreement contained in any Loan Document to which it is a
party (other than those specified in clause (a), (b) or (d) of this Article),
and such failure shall continue unremedied for a period of 30 days after such
Loan Party shall have obtained knowledge thereof, or
(f) the Borrower or any Subsidiary shall fail to make any
payment (whether of principal or interest and regardless of amount) in respect
of any Material Indebtedness, when and as the same shall become due and payable
(after giving effect to any applicable grace period); or
(g) any event or condition occurs that results in any Material
Indebtedness becoming due prior to its scheduled maturity or that enables or
permits (with or without the giving of notice, the lapse of time or both) the
holder or holders of any Material Indebtedness or any trustee or agent on its or
their behalf to cause any Material Indebtedness to become due, or to require the
prepayment, repurchase, redemption or defeasance thereof, prior to its scheduled
maturity (in each case after giving effect to any applicable grace period),
provided that this clause (g) shall not apply to secured Indebtedness that
becomes due solely as a result of the voluntary sale or transfer of the property
or assets securing such Indebtedness; or
(h) an involuntary proceeding shall be commenced or an
involuntary petition shall be filed seeking (i) liquidation, reorganization or
other relief in respect of the Borrower or any Subsidiary or its debts, or of a
substantial part of its assets, under any Federal, state or foreign bankruptcy,
insolvency, receivership or similar law now or hereafter in effect or (ii) the
appointment of a receiver, trustee, custodian, sequestrator, conservator or
similar official for the Borrower or any Subsidiary or for a substantial part of
its assets, and, in any such case, such proceeding or petition shall continue
undismissed for 60 days or an order or decree approving or ordering any of the
foregoing shall be entered; or
47
<PAGE>
(i) the Borrower or any Subsidiary Guarantor shall (i)
voluntarily commence any proceeding or file any petition seeking liquidation,
reorganization or other relief under any Federal, state or foreign bankruptcy,
insolvency, receivership or similar law now or hereafter in effect, (ii) consent
to the institution of, or fail to contest in a timely and appropriate manner,
any proceeding or petition described in clause (h) of this Article, (iii) apply
for or consent to the appointment of a receiver, trustee, custodian,
sequestrator, conservator or similar official for the Borrower or any Subsidiary
Guarantor or for a substantial part of its assets, (iv) file an answer admitting
the material allegations of a petition filed against it in any such proceeding,
(v) make a general assignment for the benefit of creditors or (vi) take any
action for the purpose of effecting any of the foregoing; or
(j) the Borrower or any Subsidiary Guarantor shall become
unable, admit in writing its inability or fail generally to pay its debts as
they become due; or
(k) one or more judgments for the payment of money in an
aggregate amount in excess of $3,000,000 shall be rendered against the Borrower
or any Subsidiary Guarantor or any combination thereof and the same shall remain
undischarged for a period of 30 consecutive days during which execution shall
not be effectively stayed, or any action shall be legally taken by a judgment
creditor to attach or levy upon any assets of the Borrower or any Subsidiary
Guarantor to enforce any such judgment; or
(l) an ERISA Event shall have occurred that, in the opinion of
the Required Lenders, when taken together with all other ERISA Events that have
occurred, could reasonably be expected to result in liability of the Borrower
and the Subsidiaries in an aggregate amount exceeding (i) $500,000 in any year
or (ii) $1,000,000 for all periods; or
(m) any provision of any Loan Document shall cease, for any
reason, to be in full force and effect and such cessation shall have a Material
Adverse Effect, or any Loan Party shall so assert in writing or shall disavow
any of its obligations thereunder; or
(n) any Lien purported to be created under any Security
Document shall cease to be, or shall be asserted by any Loan Party not to be, a
valid and perfected Lien on any Collateral, with the priority required by the
applicable Security Document, except as a result of an act or omission by the
Administrative Agent or as a result of the sale or other disposition of the
applicable Collateral in a transaction permitted under the Loan Documents; or
(o) a Change in Control shall occur;
then, and in every such event (other than an event described in clause (h) or
(i) of this Article), and at any time thereafter during the continuance of such
event, the Administrative Agent may, and at the request of the Required Lenders
shall, by notice to the Borrower, take either or both of the following actions,
at the same or different times: (i) terminate the Revolving Commitments, and
thereupon the Revolving Commitments shall terminate immediately and (ii) declare
the Loans then outstanding to be due and payable in whole (or in part, in which
case any principal not so declared to be due and payable may thereafter be
declared to be due and payable), and thereupon the principal of the Loans so
declared to be due and payable, together with accrued interest thereon and all
fees and other obligations of each Loan Party accrued under the Loan Documents,
shall become due and payable immediately, without presentment, demand, protest
or other notice of any kind, all of which are hereby waived by the Borrower; and
in case of any event described in clause (h) or (i) of this Article, the
Revolving Commitments shall automatically terminate and the principal of the
Loans then outstanding, together with accrued interest thereon and all fees and
other obligations of each Loan Party accrued under the Loan Documents, shall
automatically become due and payable, without presentment, demand, protest or
other notice of any kind, all of which are hereby waived by the Borrower.
48
<PAGE>
ARTICLE 9 THE ADMINISTRATIVE AGENT
Each Credit Party hereby irrevocably appoints the Administrative Agent
as its agent and authorizes the Administrative Agent to take such actions on its
behalf and to exercise such powers as are delegated to the Administrative Agent
by the terms hereof, together with such actions and powers as are reasonably
incidental thereto.
The Person serving as the Administrative Agent hereunder shall have the
same rights and powers in its capacity as a Lender as any other Lender and may
exercise the same as though it were not the Administrative Agent, and such
Person and its Affiliates may accept deposits from, tend money to and generally
engage in any kind of business with the Borrower or any Subsidiary or other
Affiliate thereof as if it were not the Administrative Agent hereunder.
The Administrative Agent shall not have any duties or obligations
except those expressly set forth herein. Without limiting the generality of the
foregoing, (a) the Administrative Agent shall not be subject to any fiduciary or
other implied duties, regardless of whether a Default has occurred and is
continuing, (b) the Administrative Agent shall not have any duty to take any
discretionary action or exercise any discretionary powers, except discretionary
rights and powers expressly contemplated by the Loan Documents that the
Administrative Agent is required to exercise in writing by the Required Lenders
(or such other number or percentage of the Credit Parties as shall be necessary
under the circumstances as provided in Section 10.02), and (c) except as
expressly set forth herein, the Administrative Agent shall not have any duty to
disclose, and shall not be liable for the failure to disclose, any information
relating to the Borrower, any of the Subsidiaries or any other Loan Party that
is communicated to or obtained by the Person serving as Administrative Agent or
any of its Affiliates in any capacity. The Administrative Agent shall not be
liable for any action taken or not taken by it with the consent or at the
request of the Required Lenders (or such other number or percentage of the
Credit Parties as shall be necessary under the circumstances as provided in
Section 10.02) or in the absence of its own gross negligence or willful
misconduct. The Administrative Agent shall be deemed not to have knowledge of
any Default unless and until written notice thereof is given to the
Administrative Agent by the Borrower or a Credit Party (and, promptly after its
receipt of any such notice, it shall give each Credit Party and the Borrower
notice thereof), and the Administrative Agent shall not be responsible for or
have any duty to ascertain or inquire into (i) any statement, warranty or
representation made in or in connection with any Loan Document, (ii) the
contents of any certificate, report or other document delivered thereunder or in
connection therewith, (iii) the performance or observance of any of the
covenants, agreements or other terms or conditions set forth therein, (iv) the
validity, enforceability, effectiveness or genuineness thereof or any other
agreement, instrument or other document or (v) the satisfaction of any condition
set forth in Article 5 or elsewhere herein, other than to confirm receipt of
items expressly required to be delivered to the Administrative Agent.
49
<PAGE>
The Administrative Agent shall be entitled to rely upon, and shall not
incur any liability for relying upon, any notice, request, certificate, consent,
statement, instrument, document or other writing believed by it to be genuine
and to have been signed or sent by the proper Person. The Administrative Agent
also may rely upon any statement made to it orally or by telephone and believed
by it to be made by the proper Person, and shall not incur any liability for
relying thereon. The Administrative Agent may consult with legal counsel (who
may be counsel for the Borrower), independent accountants and other experts
selected by it, and shall not be liable for any action taken or not taken by it
in accordance with the advice of any such counsel, accountants or experts.
The Administrative Agent may perform any and all its duties and
exercise its rights and powers by or through any one or more sub-agents
appointed by the Administrative Agent, provided that no such delegation shall
serve as a release of the Administrative Agent or waiver by the Borrower of any
rights hereunder. The Administrative Agent and any such sub-agent may perform
any and all its duties and exercise its rights and powers through their
respective Related Parties. The exculpatory provisions of the preceding
paragraphs shall apply to any such sub-agent and to the Related Parties of the
Administrative Agent and any such sub-agent, and shall apply to their respective
activities in connection with the syndication of the credit facilities provided
for herein as well as activities as Administrative Agent.
Subject to the appointment and acceptance of a successor Administrative
Agent as provided in this paragraph, the Administrative Agent may resign at any
time by notifying the Credit Parties and the Borrower. Upon any such
resignation, the Required Lenders shall have the right, in consultation with the
Borrower, to appoint a successor. If no successor shall have been so appointed
by the Required Lenders and shall have accepted such appointment within 30 days
after the retiring Administrative Agent gives notice of its resignation, then
the retiring Administrative Agent may, on behalf of the Credit Parties, appoint
a successor Administrative Agent which shall be a bank with an office in New
York, New York, or an Affiliate of any such bank. Upon the acceptance of its
appointment as Administrative Agent hereunder by a successor, such successor
shall succeed to and become vested with all the rights, powers, privileges and
duties of the retiring Administrative Agent, and the retiring Administrative
Agent shall be discharged from its duties and obligations hereunder. The fees
payable by the Borrower to a successor Administrative Agent shall be the same as
those payable to its predecessor unless otherwise agreed between the Borrower
and such successor. After the Administrative Agent's resignation hereunder, the
provisions of this Article and Section 10.03 shall continue in effect for the
benefit of such retiring Administrative Agent, its sub-agents and their
respective Related Parties in respect of any actions taken or omitted to be
taken by any of them while it was acting as Administrative Agent.
50
<PAGE>
Each Credit Party acknowledges that it has, independently and without
reliance upon the Administrative Agent or any other Credit Party and based on
such documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each Credit Party also
acknowledges that it will, independently and without reliance upon the
Administrative Agent or any other Credit Party and based on such documents and
information as it shall from time to time deem appropriate, continue to make its
own decisions in taking or not taking action under or based upon any Loan
Document, any related agreement or any document furnished thereunder,
Notwithstanding anything in any Loan Document to the contrary, no Agent
other than the Administrative Agent shall have any duty or obligation under the
Loan Documents.
ARTICLE 10 MISCELLANEOUS
Section 10.01 Notices
Except in the case of notices and other communications
expressly permitted to be given by telephone, all notices and other
communications provided for herein shall be in writing and shall be delivered by
hand or overnight courier service, mailed by certified or registered mail or
sent by telecopy, as follows:
(a) if to the Borrower:
LeCroy Corporation
700 Chestnut Ridge Road
Chestnut Ridge, New York 10977
Attention: Raymond F. Kunzmann
Telephone No.: (845) 425-2000
Telecopy No.: (845) 425-8967
with a copy to:
Bingham Dana LLP
150 Federal Street
Boston, Massachusetts 02110
Attention: Roger D. Feldman, Esq.
Telephone No.: (617) 951-8414
Telecopy No.: (617) 951-8736
(b) if to the Administrative Agent:
The Bank of New York
One Wall Street
New York, New York 10286
Attention: Tony Pinnilla, Agency Administrative Function
Telephone No.: (212) 635-4698
Telecopy No.: (212) 635-6365, 6366 or 6367
with a copy to:
The Bank of New York
123 Main Street
White Plains, New York 10602
Attention: John F. Volpicella
Telephone No.: (914) 421-5329
Telecopy No.: (914) 421-8065
51
<PAGE>
(c) if to any other Credit Party, to it at its address (or
telecopy number) set forth in its Administrative Questionnaire.
Any party hereto may change its address or telecopy number for notices and other
communications hereunder by notice to the other parties hereto. All notices and
other communications given to any party hereto in accordance with the provisions
of this Agreement shall be deemed to have been given on the date of receipt.
Section 10.02 Waivers; Amendments
(a) No failure or delay by any Credit Party in exercising any
right or power under any Loan Document shall operate as a waiver thereof, nor
shall any single or partial exercise of any such right or power, or any
abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power. The rights and remedies of the Credit Parties under the Loan
Documents are cumulative and are not exclusive of any rights or remedies that
they would otherwise have. No waiver of any provision of any Loan Document or
consent to any departure by any Loan Party therefrom shall in any event be
effective unless the same shall be permitted by paragraph (b) of this Section,
and then such waiver or consent shall be effective only in the specific instance
and for the purpose for which given. Without limiting the generality of the
foregoing, the making of a Loan shall not be construed as a waiver of any
Default, regardless of whether any Credit Party may have had notice or knowledge
of such Default at the time.
(b) Neither this Agreement nor any provision hereof may be
waived, amended or modified except pursuant to an agreement or agreements in
writing entered into by the Borrower and the Required Lenders or by the Borrower
and the Administrative Agent with the consent of the Required Lenders, provided
that no such agreement shall (i) increase the Commitment of any Lender without
the written consent of such Lender, (ii) reduce the principal amount of any
Loan, or reduce the rate of interest thereon, or reduce any fees or other
amounts payable under the Loan Documents, or reduce the amount of any scheduled
reduction of any Commitment, without the written consent of each Credit Party
affected thereby, (iii) postpone the scheduled date of payment of the principal
amount of any Loan, or any interest thereon, or any fees or other amounts
payable under the Loan Documents, or reduce the amount of, waive or excuse any
such payment, or postpone the scheduled date of reduction or expiration of any
Commitment, without the written consent of each Credit Party affected thereby,
(iv) change any provision hereof in a manner that would alter the pro rata
sharing of payments required by any Loan Document, without the written consent
of each Credit Party, (v) change any of the provisions of this Section or the
definition of "Required Lenders" or any other provision hereof specifying the
number or percentage of Lenders required to waive, amend or modify any rights
hereunder or make any determination or grant any consent hereunder, without the
written consent of each Lender, (vi) release any Subsidiary Guarantor from its
Guarantee under the Guarantee Agreement (except as expressly provided in the
Guarantee Agreement or as a result of the termination of the existence of such
Subsidiary Guarantor in a transaction permitted by Section 7.03), or limit its
liability in respect of such Guarantee, without the written consent of each
Lender, or (vii) release any material portion of the Collateral from the Liens
of the Loan Documents (except as expressly provided in the Security Agreement or
in connection with a transaction permitted by Section 7.03), without the consent
of each Lender, and provided, further, that no such agreement shall amend,
modify or otherwise affect the rights or duties of the Administrative Agent
hereunder without the prior written consent of the Administrative Agent.
52
<PAGE>
Section 10.03 Expenses; Indemnity; Damage Waiver
(a) The Borrower shall pay (i) all reasonable out-of-pocket
expenses incurred by the Administrative Agent and its Affiliates, including the
reasonable fees, charges and disbursements of counsel for the Administrative
Agent, in connection with the syndication of the credit facilities provided for
herein, the preparation and administration of this Agreement or any amendments,
modifications or waivers of the provisions of any Loan Document (whether or not
the transactions contemplated thereby shall be consummated) and (ii) all
out-of-pocket expenses incurred by any Credit Party, including the fees, charges
and disbursements of any counsel for any Credit Party, in connection with the
enforcement or protection of its rights in connection with the Loan Documents,
including its rights under this Section, or in connection with the Loans made
hereunder, including all such out-of-pocket expenses incurred during any
workout, restructuring or negotiations in respect of such Loans.
(b) The Borrower shall indemnify each Credit Party and each
Related Party thereof (each such Person being called an "Indemnitee") against,
and hold each Indemnitee harmless from, any and all losses, claims, damages,
liabilities and related expenses, including the fees, charges and disbursements
of any counsel for any Indemnitee, incurred by or asserted against any
Indemnitee arising out of, in connection with, or as a result of (i) the
execution or delivery of any Loan Document or any agreement or instrument
contemplated thereby, the performance by the parties to the Loan Documents of
their respective obligations thereunder or the consummation of the Transactions
or any other transactions contemplated thereby, (ii) any Loan or the use of the
proceeds thereof, (iii) any actual or alleged presence or release of Hazardous
Materials on or from any property owned or operated by the Borrower or any of
the Subsidiaries, or any Environmental Liability related in any way to the
Borrower or any of the Subsidiaries or (iv) any actual or prospective claim,
litigation, investigation or proceeding relating to any of the foregoing,
whether based on contract, tort or any other theory and regardless of whether
any Indemnitee is a party thereto, provided that such indemnity shall not, as to
any Indemnitee, be available to the extent that such losses, claims, damages,
liabilities or related expenses are determined by a court of competent
jurisdiction by final and nonappealable judgment to have resulted from the gross
negligence or willful misconduct of such Indemnitee.
(c) To the extent that the Borrower fails to pay any amount
required to be paid by it to the Administrative Agent under paragraph (a) or (b)
of this Section, each Lender severally agrees to pay to the Administrative Agent
an amount equal to the product of such unpaid amount multiplied by a fraction,
the numerator of which is such Lender's Revolving Commitment and the denominator
of which is the total of all Lenders' Revolving Commitments (in each case
determined as of the time that the applicable unreimbursed expense or indemnity
payment is sought) of, provided that the unreimbursed expense or indemnified
loss, claim, damage, liability or related expense, as applicable, was incurred
by or asserted against the Administrative Agent in its capacity as such.
53
<PAGE>
(d) To the extent permitted by applicable law, the Borrower
shall not assert, and hereby waives, any claim against any Indemnitee, on any
theory of liability, for special, indirect, consequential or punitive damages
(as opposed to direct or actual damages) arising out of, in connection with, or
as a result of, any Loan Document or any agreement, instrument or other document
contemplated thereby, the Transactions or any Loan or the use of the proceeds
thereof.
(e) All amounts due under this Section shall be payable
promptly but in no event later than ten days after written demand therefor.
Section 10.04 Successors and Assigns
(a) The provisions of this Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns permitted hereby, except that the Borrower may not assign or otherwise
transfer any of its rights or obligations hereunder without the prior written
consent of each Credit Party (and any attempted assignment or transfer by the
Borrower without such consent shall be null and void). Nothing in this
Agreement, expressed or implied, shall be construed to confer upon any Person
(other than the parties hereto, their respective successors and assigns
permitted hereby and, to the extent expressly contemplated hereby, the Related
Parties of each Credit Party) any legal or equitable right, remedy or claim
under or by reason of any Loan Document.
(b) Any Lender may assign to one or more assignees all or a
portion of its rights and obligations under this Agreement (including all or a
portion of its Revolving Commitment and the Loans at the time owing to it),
provided that (i) except in the case of an assignment to a Lender or an
Affiliate or an Approved Fund of a Lender, each of the Borrower and the
Administrative Agent must give its prior written consent to such assignment
(which consent shall not be unreasonably withheld), (ii) except in the case of
an assignment to a Lender or an Affiliate or an Approved Fund of a Lender or an
assignment of the entire remaining amount of the assigning Lender's Revolving
Commitment, the amount of the Revolving Commitment of the assigning Lender
subject to each such assignment (determined as of the date the Assignment and
Acceptance with respect to such assignment is delivered to the Administrative
Agent) shall not be less than $5,000,000 unless the Borrower and the
Administrative Agent otherwise consent, (iii) the parties to each assignment
shall execute and deliver to the Administrative Agent an Assignment and
Acceptance together with, unless otherwise agreed by the Administrative Agent, a
processing and recordation fee of $3,500, and (iv) the assignee, if it shall not
be a Lender, shall deliver to the Administrative Agent an Administrative
Questionnaire, and provided further, that any consent of the Borrower otherwise
required under this paragraph shall not be required if a Default has occurred
and is continuing. Subject to acceptance and recording thereof pursuant to
paragraph (d) of this Section, from and after the effective date specified in
each Assignment and Acceptance, the assignee thereunder shall be a party hereto
and, to the extent of the interest assigned by such Assignment and Acceptance,
have the rights and obligations of a Lender under the Loan Documents, and the
assigning Lender thereunder shall, to the extent of the interest assigned by
such Assignment and Acceptance, be released from its obligations under the Loan
Documents (and, in the case of an Assignment and Acceptance covering all of the
assigning Lender's rights and obligations under the Loan Documents, such Lender
shall cease to be a party hereto but shall continue to be entitled to the
benefits of Sections 3.05, 3.06, 3.07 and 10.03). Any assignment or transfer by
a Lender of rights or obligations under the Loan Documents that does not comply
with this paragraph shall be treated for purposes of the Loan Documents as a
sale by such Lender of a participation in such rights and obligations in
accordance with paragraph (e) of this Section.
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(c) The Administrative Agent, acting for this purpose as an
agent of the Borrower, shall maintain at one of its offices in New York City a
copy of each Assignment and Acceptance delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Commitment of,
and principal amount of the Revolving Loans owing to, each Lender pursuant to
the terms hereof from time to time (the "Register"). The entries in the Register
shall be conclusive absent clearly demonstrable error, and the Borrower and each
Credit Party may treat each Person whose name is recorded in the Register
pursuant to the terms hereof as a Lender hereunder for all purposes of this
Agreement, notwithstanding notice to the contrary. The Register shall be
available for inspection by the Borrower and any Credit Party, at any reasonable
time and from time to time upon reasonable prior notice.
(d) Upon its receipt of a duly completed Assignment and
Acceptance executed by an assigning Lender and an assignee, the assignee's
completed Administrative Questionnaire (unless the assignee shall already be a
Lender hereunder), the processing and recordation fee referred to in paragraph
(b) of this Section and any written consent to such assignment required by
paragraph (b) of this Section, the Administrative Agent shall accept such
Assignment and Acceptance and record the information contained therein in the
Register. No assignment shall be effective for purposes of this Agreement unless
it has been recorded in the Register as provided in this paragraph.
(e) Any Lender may, without the consent of the Borrower or any
Credit Party, sell participations to one or more banks or other entities (each
such bank or other entity being called a "Participant") in all or a portion of
such Lender's rights and obligations under the Loan Documents (including all or
a portion of its Commitment and the Loans owing to it), provided that (i) such
Lender's obligations under the Loan Documents shall remain unchanged, (ii) such
Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations and (iii) the Loan Parties and the Credit
Parties shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under the Loan Documents.
Any agreement or instrument pursuant to which a Lender sells such a
participation shall provide that such Lender shall retain the sole right to
enforce the Loan Documents and to approve any amendment, modification or waiver
of any provision of any Loan Documents, provided that such agreement or
instrument may provide that such Lender will not, without the consent of the
Participant, agree to any amendment, modification or waiver described in the
first proviso to Section 10.02(b) that affects such Participant. Subject to
paragraph (f) of this Section, the Borrower agrees that each Participant shall
be entitled to the benefits of Sections 3.05 and 3.06 to the same extent as if
it were a Lender and had acquired its interest by assignment pursuant to
paragraph (b) of this Section. To the extent permitted by law, each Participant
also shall be entitled to the benefits of Section 10.08 as though it were a
Lender, provided that such Participant agrees to be subject to Section 2.10(c)
as though it were a Lender.
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(f) A Participant shall not be entitled to receive any greater
payment under Section 3.05 or 3.07 than the Lender would have been entitled to
receive with respect to the participation sold to such Participant, unless the
sale of the participation to such Participant is made with the Borrower's prior
written consent. A Participant that would be a Foreign Lender if it were a
Lender shall not be entitled to the benefits of Section 3.07 unless the Borrower
is notified of the participation sold to such Participant and such Participant
agrees, for the benefit of the Borrower, to comply with Section 3.07(e) as
though it were a Lender.
(g) Any Lender may at any time pledge or assign a security
interest in all or any portion of its rights under the Loan Documents to secure
obligations of such Lender, including any pledge or assignment to secure
obligations to a Federal Reserve Bank, and this Section shall not apply to any
such pledge or assignment of a security interest, provided that no such pledge
or assignment of a security interest shall release a Lender from any of its
obligations under the Loan Documents or substitute any such pledgee or assignee
for such Lender as a party hereto.
Section 10.05 Survival
All covenants, agreements, representations and warranties made
by the Borrower herein and in the certificates or other instruments prepared or
delivered in connection with or pursuant to this Agreement or any other Loan
Document shall be considered to have been relied upon by the other parties
hereto and shall survive the execution and delivery of any Loan Document and the
making of any Loans, regardless of any investigation made by any such other
party or on its behalf and notwithstanding that any Credit Party may have had
notice or knowledge of any Default or incorrect representation or warranty at
the time any credit is extended hereunder, and shall continue in full force and
effect as long as the principal of or any accrued interest on any Loan or any
fee or any other amount payable under the Loan Documents is outstanding and
unpaid and so long as the Commitments have not expired or terminated. The
provisions of Sections 3.05, 3.06, 3.07 and 10.03 and Article 9 shall survive
and remain in full force and effect regardless of the consummation of the
transactions contemplated hereby, the repayment of the Loans and the termination
of the Commitments or the termination of this Agreement or any provision hereof.
Section 10.06 Counterparts; Integration; Effectiveness
This Agreement may be executed in counterparts (and by
different parties hereto on different counterparts), each of which shall
constitute an original, but all of which, when taken together, shall constitute
but one contract. This Agreement and any separate letter agreements with respect
to fees payable to any Credit Party constitute the entire contract among the
parties relating to the subject matter hereof and supersede any and all previous
agreements and understandings, oral or written, relating to the subject matter
hereof. Except as provided in Section 5.01, this Agreement shall become
effective when it shall have been executed by the Administrative Agent and when
the Administrative Agent shall have received counterparts hereof which, when
taken together, bear the signatures of each of the other parties hereto, and
thereafter shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns. Delivery of an executed counterpart
of this Agreement by facsimile transmission shall be effective as delivery of a
manually executed counterpart of this Agreement.
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Section 10.07 Severability
In the event any one or more of the provisions contained in
this Agreement should be held invalid, illegal or unenforceable in any respect,
the validity, legality and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired thereby (it being understood
that the invalidity of a particular provision in a particular jurisdiction shall
not in and of itself affect the validity of such provision in any other
jurisdiction). The parties shall endeavor in good-faith negotiations to replace
the invalid, illegal or unenforceable provisions with valid provisions the
economic effect of which comes as close as possible to that of the invalid,
illegal or unenforceable provisions.
Section 10.08 Right of Setoff
If an Event of Default shall have occurred and be continuing,
each of the Lenders and their respective Affiliates is hereby authorized at any
time and from time to time, to the fullest extent permitted by applicable law,
to setoff and apply any and all deposits (general or special, time or demand,
provisional or final) at any time held and other obligations at any time owing
by it to or for the credit or the account of the Borrower against any of and all
the obligations of the Borrower now or hereafter existing under this Agreement
held by it, irrespective of whether or not it shall have made any demand under
this Agreement and although such obligations may be unmatured. The rights of
each the Lenders and their respective Affiliates under this Section are in
addition to other rights and remedies (including other rights of setoff) that it
may have.
Section 10.09 Governing Law; Jurisdiction; Consent to Service of Process
(a) This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York.
(b) The Borrower hereby irrevocably and unconditionally
submits, for itself and its property, to the nonexclusive jurisdiction of any
New York State court or Federal court of the United States of America sitting in
New York City, and any appellate court from any thereof, in any action or
proceeding arising out of or relating to this Agreement or the other Loan
Documents, or for recognition or enforcement of any judgment, and each of the
parties hereto hereby irrevocably and unconditionally agrees that, to the extent
permitted by applicable law, all claims in respect of any such action or
proceeding may be heard and determined in such New York State or, to the extent
permitted by applicable law, in such Federal court. Each of the parties hereto
agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law. Nothing in this Agreement shall affect any
right that the Administrative Agent or any other Credit Party may otherwise have
to bring any action or proceeding relating to this Agreement or the other Loan
Documents against the Borrower, or any of its property, in the courts of any
jurisdiction.
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(c) The Borrower hereby irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection that it may now or hereafter have to the laying of venue of any suit,
action or proceeding arising out of or relating to this Agreement or the other
Loan Documents in any court referred to in paragraph (b) of this Section. Each
of the parties hereto hereby irrevocably waives, to the fullest extent permitted
by applicable law, the defense of an inconvenient forum to the maintenance of
such action or proceeding in any such court.
(d) Each party to this Agreement irrevocably consents to
service of process in the manner provided for notices in Section 10.01. Nothing
in this Agreement will affect the right of any party to this Agreement to serve
process in any other manner permitted by law.
Section 10.10 WAIVER OF JURY TRIAL
EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT
OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION
WITH THIS AGREEMENT. EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE,
AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE,
THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE
BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL
WAIVERS AND CERTIFICATIONS IN THIS SECTION.
Section 10.11 Headings
Article and Section headings and the Table of Contents used
herein are for convenience of reference only, are not part of this Agreement and
shall not affect the construction of, or be taken into consideration in
interpreting, this Agreement.
Section 10.12 Interest Rate Limitation
Notwithstanding anything herein to the contrary, if at any
time the interest rate applicable to any Loan, together with all fees, charges
and other amounts that are treated as interest on such Loan under applicable law
(collectively the "charges"), shall exceed the maximum lawful rate (the "maximum
rate") that may be contacted for, charged, taken, received or reserved by the
Lender holding such Loan in accordance with applicable law, the rate of interest
payable in respect of such Loan hereunder, together with all of the charges
payable in respect thereof, shall be limited to the maximum rate and, to the
extent lawful, the interest and the charges that would have been payable in
respect of such Loan but were not payable as a result of the operation of this
Section shall be cumulated, and the interest and the charges payable to such
Lender in respect of other Loans or periods shall be increased (but not above
the maximum rate therefor) until such cumulated amount, together with interest
thereon at the Federal Funds Rate to the date of repayment, shall have been
received by such Lender.
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Section 10.13 Treatment of Certain Information
Each Credit Party agrees to use reasonable precautions to keep
confidential, in accordance with their customary procedures for handling
confidential information of the same nature, all non-public information supplied
by the Borrower or any Subsidiary pursuant to this Agreement which (a) is
clearly identified by such Person as being confidential at the time the same is
delivered to such Credit Party, or (b) constitutes any financial statement,
financial projections or forecasts, budget, compliance certificate, audit
report, management letter or accountants' certification delivered hereunder
("Information"), provided, however, that nothing herein shall limit the
disclosure of any such Information (i) to such of their respective Related
Parties as need to know such Information, (ii) to the extent required by
applicable laws or regulations or by any subpoena or similar legal process, or
requested by any bank regulatory authority, (iii) on a confidential basis, to
prospective lenders or their counsel, (iv) to auditors or accountants, and any
analogous counterpart thereof, (v) to any other Credit Party, (vi) in connection
with any litigation to which any one or more of the Credit Parties is a party,
(vii) to the extent such Information (A) becomes publicly available other than
as a result of a breach of this Agreement, (B) becomes available to any of the
Credit Parties on a non-confidential basis from a source other than the Borrower
or any Subsidiary, or (C) was available to the Credit Parties on a
non-confidential basis prior to its disclosure to any of them by the Borrower or
any Subsidiary; and (viii) to the extent the Borrower shall have consented to
such disclosure in writing.
[Signature Pages to Follow]
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LECROY CORPORATION
CREDIT AGREEMENT
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
LECROY CORPORATION
By: /s/ Raymond F. Kunzmann
-------------------------
Name: Raymond F. Kunzmann
Title: Vice President
<PAGE>
LECROY CORPORATION
CREDIT AGREEMENT
THE BANK OF NEW YORK,
as Administrative Agent and as a Lender
By: /s/ John F. Volpicella
-----------------------
Name: John F. Volpicella
Title: Assistant Vice President
