U.S. $500,000,000
CREDIT AGREEMENT
Dated as of August 28, 1997, among
SUN MICROSYSTEMS, INC.
as Borrower
and
THE LENDERS NAMED HEREIN
as Lenders
and
CITICORP USA, INC.
as Administrative Agent
TABLE OF CONTENTS
Page
----
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS....................................... 1
SECTION 1.01. Certain Defined Terms.......................................................... 1
SECTION 1.02. Computation of Time Periods.................................................... 11
SECTION 1.03. Accounting Terms............................................................... 11
SECTION 1.04. Application of Level Pricing................................................... 11
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES...................................... 12
SECTION 2.01. The A Advances................................................................. 12
SECTION 2.02. Making the A Advances.......................................................... 12
SECTION 2.03. The B Advances................................................................. 14
SECTION 2.04. Fees........................................................................... 17
SECTION 2.05. Termination, Reduction or Increase of the Commitments.......................... 17
SECTION 2.06. Repayment of A Advances........................................................ 20
SECTION 2.07. Interest on A Advances......................................................... 20
SECTION 2.08. Notes.......................................................................... 21
SECTION 2.09. Interest Rate Determination.................................................... 21
SECTION 2.10. Sharing of Payments, Etc....................................................... 21
SECTION 2.11. Prepayments of A Advances...................................................... 22
SECTION 2.12. Increased Costs................................................................ 22
SECTION 2.13. Illegality..................................................................... 23
SECTION 2.14. Payments and Computations...................................................... 24
SECTION 2.15. Taxes.......................................................................... 25
ARTICLE III
CONDITIONS OF LENDING............................................ 27
SECTION 3.01. Condition Precedent to Initial Advances........................................ 27
SECTION 3.02. Conditions Precedent to Each A Borrowing....................................... 28
SECTION 3.03. Conditions Precedent to Each B Borrowing....................................... 28
ARTICLE IV
REPRESENTATIONS AND WARRANTIES........................................ 29
SECTION 4.01. Representations and Warranties of the Borrower................................. 29
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ARTICLE V
COVENANTS OF THE BORROWER.......................................... 33
SECTION 5.01. Affirmative Covenants.......................................................... 33
SECTION 5.02. Negative Covenants............................................................. 38
ARTICLE VI
EVENTS OF DEFAULT.............................................. 43
SECTION 6.01. Events of Default.............................................................. 43
SECTION 6.02. Mandatory Prepayment; Event of Early Termination............................... 45
ARTICLE VII
THE AGENT.................................................. 46
SECTION 7.01. Authorization and Action....................................................... 46
SECTION 7.02. Agent's Reliance, Etc.......................................................... 46
SECTION 7.03. CUSA and Affiliates............................................................ 47
SECTION 7.04. Lender Credit Decision......................................................... 47
SECTION 7.05. Indemnification................................................................ 47
SECTION 7.06. Successor Agent................................................................ 48
SECTION 7.07 Co-Agents...................................................................... 48
ARTICLE VIII
MISCELLANEOUS................................................ 48
SECTION 8.01. Amendments Etc................................................................. 48
SECTION 8.02. Notices; Payments, Etc......................................................... 49
SECTION 8.03. No Waiver; Remedies............................................................ 49
SECTION 8.04. Costs and Expenses............................................................. 49
SECTION 8.05. Right of Set-off............................................................... 51
SECTION 8.06. Binding Effect................................................................. 52
SECTION 8.07. Assignments and Participations................................................. 52
SECTION 8.08. Governing Law.................................................................. 55
SECTION 8.09. Headings....................................................................... 55
SECTION 8.10. Commitment Extension........................................................... 55
SECTION 8.11. Execution in Counterparts...................................................... 55
SECTION 8.12. Confidentiality................................................................ 56
SECTION 8.13. Termination.................................................................... 56
SECTION 8.14. Jurisdiction, Etc.............................................................. 56
SECTION 8.15. WAIVER OF JURY TRIAL........................................................... 57
ii
SCHEDULES
SCHEDULE I
EXHIBITS
EXHIBIT A-1 FORM OF A NOTE
EXHIBIT A-2 FORM OF B NOTE
EXHIBIT B-1 NOTICE OF A BORROWING
EXHIBIT B-2 NOTICE OF B BORROWING
EXHIBIT C ASSIGNMENT AND ACCEPTANCE
EXHIBIT D ASSUMPTION AGREEMENT
EXHIBIT E OPINION OF WILSON, SONSINI, XXXXXXXX & XXXXXX
EXHIBIT F COVENANT COMPLIANCE CERTIFICATE
EXHIBIT G LIENS
EXHIBIT H SUBSIDIARIES
EXHIBIT I RESPONSIBLE OFFICERS
iii
CREDIT AGREEMENT
Dated as of August 28, 1997
SUN MICROSYSTEMS, INC., a Delaware corporation (the "Borrower"), the
Lenders listed on the signature pages hereof, and CITICORP USA, INC., a Delaware
corporation ("CUSA"), as administrative agent (the "Agent") for the Lenders
hereunder, agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms. As used in this Agreement, the
following terms shall have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):
"A Advance" means an advance by a Lender to the Borrower as part of an
A Borrowing and refers to an Alternate Base Rate Advance or a Eurodollar Rate
Advance, each of which shall be a "Type" of A Advance.
"A Borrowing" means a borrowing consisting of simultaneous A Advances
of the same Type made by each of the Lenders pursuant to Section 2.01.
"A Note" means a promissory note of the Borrower payable to the order
of any Lender, in substantially the form of Exhibit A-1 hereto, evidencing the
aggregate indebtedness of the Borrower to such Lender resulting from the A
Advances made by such Lender.
"Adjusted EBIT" means, for any accounting period, net income (or net
loss) plus the amounts (if any) which, in the determination of net income (or
net loss) for such period, have been deducted for (a) gross interest expense,
(b) income tax expense and (c) rent expense under leases of real and personal
property (excluding, however, from the determination of such rent expense, taxes
and normal and customary operating expenses passed on to the Borrower for
reimbursement pursuant to the terms of such real property leases whether
denominated under such leases as "rent", "additional rent" or otherwise, but
only to the extent that such operating expenses are actually incurred and passed
through to the Borrower), in each case determined in accordance with generally
accepted accounting principles, consistent with those applied in the preparation
of the financial statements referred to in Section 4.01(e).
"Advance" means an A Advance or a B Advance.
2
"Affiliate" means, as to any Person, any other Person that, directly or
indirectly, controls, is controlled by or is under common control with such
Person or is a director or officer of such Person.
"Alternate Base Rate" means, for any period (including a period
consisting of a single day), a fluctuating interest rate per annum as shall be
in effect from time to time which rate per annum shall at all times be equal to
the highest of:
(a) the rate of interest announced publicly by Citibank in New York,
New York, from time to time, as Citibank's base rate; or
(b) 1/2 of one percent per annum above the latest three-week moving
average of secondary market morning offering rates in the United States for
three-month certificates of deposit of major United States money market
banks, such three- week moving average being determined weekly on each
Monday (or, if any such date is not a Business Day, on the next succeeding
Business Day) for the three-week period ending on the previous Friday by
the Agent on the basis of such rates reported by certificate of deposit
dealers to and published by the Federal Reserve Bank of New York or, if
such publication shall be suspended or terminated, on the basis of
quotations for such rates received by the Agent from three New York
certificate of deposit dealers of recognized standing selected by the
Agent, in either case adjusted to the nearest 1/16 of one percent or, if
there is no nearest 1/16 of one percent, to the next higher 1/16 of one
percent; or
(c) for any day, 1/2 of one percent per annum above the weighted
average of the rates on overnight Federal funds transactions with members
of the Federal Reserve System arranged by Federal funds brokers, as
published for such day (or, if such day is not a Business Day, for the next
preceding Business Day) by the Federal Reserve Bank of New York, or, if
such rate is not so published for any day which is a Business Day, the
average of the quotations for such day on such transactions received by the
Agent from three Federal funds brokers of recognized standing selected by
it.
"Alternate Base Rate Advance" means an A Advance which bears interest
as provided in Section 2.07(a).
"Applicable Lending Office" means, with respect to each Lender, such
Lender's Domestic Lending Office in the case of an Alternate Base Rate Advance,
and such Lender's Eurodollar Lending Office in the case of a Eurodollar Rate
Advance and, in the case of a B Advance, the office of such Lender notified by
such Lender to the Agent as its Applicable Lending Office with respect to such B
Advance.
3
"Assignment and Acceptance" means an assignment and acceptance entered
into by a Lender and an assignee reasonably acceptable to the Agent and
reasonably consented to by the Borrower, in substantially the form of Exhibit C
hereto.
"Assuming Lender" means an assignee reasonably acceptable to the Agent
not previously a Lender that becomes a Lender hereunder pursuant to Section
2.05(b).
"B Advance" means an advance by a Lender to the Borrower as part of a B
Borrowing resulting from the auction bidding procedure described in Section
2.03.
"B Borrowing" means a borrowing consisting of B Advances made at or
about the same time by each of the Lenders whose offer to make one or more B
Advances as part of such borrowing has been accepted by the Borrower under the
auction bidding procedure described in Section 2.03.
"B Note" means a promissory note of the Borrower payable to the order
of any Lender, in substantially the form of Exhibit A-2 hereto, evidencing the
indebtedness of the Borrower to such Lender resulting from a B Advance made by
such Lender.
"B Reduction" has the meaning specified in Section 2.01.
"Borrowing" means an A Borrowing or a B Borrowing.
"Business Day" means a day of the year other than a Saturday, Sunday or
other day on which banks are not required or authorized to close in New York
City or San Francisco, California and, if the applicable Business Day relates to
any Eurodollar Rate Advances, on which dealings are carried on in the London,
England interbank market.
"Change of Control Event" means the occurrence of the following: (i)
any corporation or Person, or a group of related corporations or Persons, shall
acquire (a) beneficial ownership in excess of 50% of the outstanding Voting
Stock of the Borrower or (b) all or substantially all of the assets of the
Borrower, or (ii) a majority of the Board of Directors of the Borrower is, at
any time, composed of persons other than (a) persons who were members of such
Board on the date of this Agreement, (b) successors to such persons elected or
nominated in the ordinary course of business, and (c) any person who has served
as a member of such Board for at least the prior 12 months.
"Citibank" means Citibank, N.A., a national banking association.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, and the regulations promulgated and rulings issued thereunder.
4
"Commitment" has the meaning specified in Section 2.01.
"consolidated" refers to the consolidation of the accounts of the
Borrower and its Subsidiaries in accordance with generally accepted accounting
principles, including principles of consolidation, consistent with those applied
in the preparation of the consolidated financial statements referred to in
Section 4.01(e).
"Consolidated Tangible Net Worth" means the excess of consolidated
total assets over consolidated total liabilities, consolidated total assets and
consolidated total liabilities each to be determined on a consolidated basis for
the Borrower in accordance with generally accepted accounting principles
consistent with those applied in the preparation of the financial statements
referred to in Section 4.01(e), excluding, however, from the determination of
consolidated total assets (i) goodwill, organizational expenses, research and
development expenses, trademarks, trade names, copyrights, patents, patent
applications, licenses and rights in any thereof, and other similar intangibles,
(ii) all unamortized debt discount and expense, (iii) asset, liability,
contingency and other appropriate reserves, including reserves for depreciation
and for deferred income taxes, (iv) treasury stock, (v) any write-up in the book
value of any asset resulting from a revaluation thereof subsequent to June 30,
1996, (vi) the book value of investments in Persons that are not Subsidiaries
(unless the same are readily marketable), and (vii) any items not included in
clauses (i) through (vi) above which are treated as intangibles in conformity
with generally accepted accounting principles.
"Debt" of any Person means (i) indebtedness for borrowed money, (ii)
obligations evidenced by bonds, debentures, notes or other similar instruments,
(iii) obligations to pay the deferred purchase price of property or services
(excluding ordinary trade payables incurred in the ordinary course of business),
(iv) obligations as lessee under leases which shall have been or should be, in
accordance with generally accepted accounting principles, recorded as capital
leases, (v) all obligations of such Person to purchase securities (or other
property) which arise out of or in connection with the sale of the same or
substantially similar securities or property, (vi) any reimbursement obligations
of such Person to the issuer of a letter of credit or similar instrument, (vii)
all indebtedness or obligations of others secured by a lien on any asset of such
Person, whether or not such indebtedness or obligations are assumed by such
Person (to the extent of the value of the asset), (viii) any reimbursement
obligation of such Person or other arrangement of whatever nature having the
effect of assuring or holding harmless any other Person against loss with
respect to any real property owned by such other Person, including, without
limitation, assuring or guaranteeing that such other Person shall receive a
specified amount in connection with the conveyance of such real property, (ix)
obligations under direct or indirect guaranties in respect of, and obligations
(contingent or otherwise) to purchase or otherwise acquire, or otherwise to
assure a creditor against loss in respect of, indebtedness or obligations of
others of the kinds referred to in clauses (i) through (viii) above, and (x)
liabilities in respect of unfunded vested
5
benefits under plans covered by Title IV of ERISA. Notwithstanding any provision
herein to the contrary, no obligations of any Person (whether such obligations
be direct or indirect, contingent or otherwise) under any Permitted Receivables
Facility shall be "Debt" for purposes of this Agreement; provided that the
foregoing exclusion shall not apply to obligations of any such Person pursuant
to the indemnity or reimbursement provisions contained in any Permitted
Receivables Facility and to fees and expenses payable pursuant to any Permitted
Receivables Facility to the extent that any such obligations are required to be
recorded as liabilities on such Person's balance sheet under generally accepted
accounting principles.
"Default" means any event which, with the passage of time or the giving
of notice or both, would (if not cured within any applicable cure period)
constitute an Event of Default.
"Domestic Lending Office" means, with respect to any Lender, the office
of such Lender specified as its "Domestic Lending Office" opposite its name on
Schedule I hereto or in the Assignment and Acceptance pursuant to which it
became a Lender, or such other office of such Lender as such Lender may from
time to time specify to the Borrower and the Agent.
"Environmental Laws" means any and all federal, state, local and
foreign statutes, laws, regulations, ordinances, rules, judgments, orders,
decrees, permits, concessions, grants, franchises, licenses, agreements or other
governmental restrictions relating to the environment, or to emissions,
discharges or releases of pollutants, contaminants, petroleum or petroleum
products, chemicals or industrial, toxic or hazardous substances or wastes into
the environment, including, without limitation, ambient air, surface water,
ground water, or land, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
pollutants, contaminants, petroleum or petroleum products, chemicals or
industrial, toxic or hazardous substances or wastes or the clean-up or other
remediation thereof.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations promulgated and rulings issued
thereunder.
"ERISA Affiliate" means any Person who for purposes of Title IV of
ERISA is a member of the Borrower's controlled group, or under common control
with the Borrower, within the meaning of Section 414 of the Code, and the
regulations promulgated and rulings issued thereunder.
"ERISA Termination Event" means (i) a Reportable Event described in
Section 4043 of ERISA and the regulations promulgated thereunder (other than a
Reportable Event not subject to the provision for 30 day notice to the Pension
Benefit Guaranty
6
Corporation under such regulations), or (ii) the withdrawal of the Borrower or
any Subsidiary from a Plan during a plan year in which it was a "substantial
employer" as defined in Section 4001(a) (2) of ERISA, or (iii) the filing of a
notice of intent to terminate a Plan or the treatment of a Plan amendment as a
termination under Section 4041 of ERISA or (iv) the institution of proceedings
to terminate a Plan by the Pension Benefit Guaranty Corporation under Section
4042 of ERISA, or (v) any other event or condition which would constitute
grounds under Section 4042 of ERISA for the termination of, or the appointment
of a trustee to administer, any Plan.
"Eurocurrency Liabilities" has the meaning assigned to that term in
Regulation D of the Board of Governors of the Federal Reserve System, as in
effect from time to time.
"Eurodollar Lending Office" means, with respect to any Lender, the
office of such Lender specified as its "Eurodollar Lending Office" opposite its
name on Schedule I hereto or in the Assignment and Acceptance pursuant to which
it became a Lender (or, if no such office is specified, its Domestic Lending
Office), or such other office of such Lender as such Lender may from time to
time specify to the Borrower and the Agent.
"Eurodollar Margin" means, on any day, with respect to any Eurodollar
Rate Advance made or outstanding on such day, an interest rate per annum equal
at all times to (i) .130% for each day during a Level I Period; (ii) .170% for
each day during a Level II Period; (iii) .200% for each day during a Level III
Period; (iv) .250% for each day during a Level IV Period; and (v) .325% for each
day during a Level V Period.
"Eurodollar Rate" means, for the Interest Period for each Eurodollar
Rate Advance comprising part of the same A Borrowing, an interest rate per annum
determined by the Agent to be (a) the arithmetic mean (rounded upward to the
nearest whole multiple of 1/16 of 1% per annum, if such arithmetic mean is not
such a multiple) of the rates notified to the Agent at which deposits in U.S.
dollars are offered by the principal office of each of the Eurodollar Reference
Banks in London, England to prime banks in the London interbank market at 11:00
A.M. (London time) two Business Days before the first day of such Interest
Period in an amount substantially equal to the respective Eurodollar Reference
Bank's (or its Affiliate's) Eurodollar Rate Advance comprising part of such A
Borrowing and for a period equal to such Interest Period, divided by (b) a
percentage equal to 100% minus the Eurodollar Rate Reserve Percentage (as
defined below) for such Interest Period. The "Eurodollar Rate Reserve
Percentage" for the Interest Period for each Eurodollar Rate Advance comprising
part of the same A Borrowing means the reserve percentage applicable two
Business Days before the first day of such Interest Period under regulations
issued from time to time by the Board of Governors of the Federal Reserve System
(or any successor) for determining the maximum reserve requirement (including,
but not limited to, any emergency, supplemental or other marginal reserve
requirement) for a member bank of the Federal
7
Reserve System in New York City with deposits exceeding One Billion Dollars with
respect to liabilities or assets consisting of or including Eurocurrency
Liabilities (or with respect to any other category of liabilities which includes
deposits by reference to which the interest rate on Eurodollar Rate Advances is
determined) having a term equal to such Interest Period.
"Eurodollar Rate Advance" means an A Advance which bears interest as
provided in Section 2.07(b).
"Eurodollar Reference Banks" means the principal London offices of
Citibank, [Bank of America National Trust and Savings Association and ABN AMRO
Bank N.V.] and each such other bank as may be approved pursuant to Section
8.07(i).
"Events of Default" has the meaning specified in Section 6.01.
"Excess Interest in Receivables" means the extent to which (i) any
ownership interest, security interest or other interest of any third party in
the accounts receivable of the Borrower and its Subsidiaries, exceeds (ii) the
aggregate amount advanced by such third party in respect of the purchase of such
interest (net of amounts received by such third party from the collection of
such accounts receivable).
"Federal Funds Rate" means, for any period, a fluctuating interest rate
per annum equal for each day during such period to the weighted average of the
rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rate is not so published for any
day which is a Business Day, the average of the quotations for such day on such
transactions received by the Agent from three Federal funds brokers of
recognized standing selected by it.
"Fixed Charges" means, for any accounting period, the sum, without
duplication, of (i) gross interest expense during such period, plus (ii)
scheduled amortization of principal in respect of all Debt during such period
(but excluding any required principal payment in respect of any obligation that
is a "bullet" payment, i.e., the entire amount thereof is due in full at
maturity without any amortizing payments prior to said maturity), plus (iii)
amortization of debt discount (but excluding from this clause (iii) and clause
(i) above noncash amortization of debt discount if the maturity of the
obligation so discounted is no earlier than December 31, 1998 pursuant to the
terms and conditions of the instruments and agreements creating such debt
discount), plus (iv) rent expense under leases of real and personal property
during such period (excluding, however, from the determination of such rent
expense, taxes and normal and customary operating expenses passed on to the
Borrower for reimbursement pursuant to the terms of such real property leases
whether denominated
8
under such leases as "rent", "additional rent" or otherwise, but only to the
extent that such operating expenses are actually incurred and passed through to
the Borrower).
"Interest Period" means, for each Eurodollar Rate Advance comprising
part of the same A Borrowing, the period commencing on the date of such A
Advance and ending on the last day of the period selected by the Borrower
pursuant to the provisions below. The duration of each such Interest Period
shall be 1, 2, 3 or 6 months or, if available, 9 or 12 months, as the Borrower
may, upon notice received by the Agent in accordance with Section 2.02, select;
provided, however, that:
(i) the Borrower may not select any Interest Period which ends after
the then existing Termination Date;
(ii) Interest Periods commencing on the same date for A Advances
comprising part of the same A Borrowing shall be of the same duration; and
(iii) whenever the last day of any Interest Period would otherwise
occur on a day other than a Business Day, the last day of such Interest Period
shall be extended to occur on the next succeeding Business Day; provided, in the
case of any Interest Period for a Eurodollar Rate Advance, that if such
extension would cause the last day of such Interest Period to occur in the next
following calendar month, the last day of such Interest Period shall occur on
the next preceding Business Day.
"Lenders" means the lenders listed on the signature pages hereof and
each assignee that shall become a party hereto pursuant to Sections 8.07(a) or
(b).
"Level I Period" means a period of time, which may consist of a single
day, during which the Public Debt Rating is (i) A- or better by S&P or (ii) A3
or better by Xxxxx'x.
"Level II Period" means a period of time other than a Level I Period,
which may consist of a single day, during which the Public Debt Rating is (i)
BBB+ or better by S&P or (ii) Baa1 or better by Xxxxx'x.
"Level III Period" means a period of time other than a Level I Period
or a Level II Period, which may consist of a single day, during which the Public
Debt Rating is (i) BBB or better by S&P or (ii) Baa2 or better by Xxxxx'x.
"Level IV Period" means a period of time other than a Level I Period, a
Level II Period or a Level III Period, which may consist of a single day, during
which the Public Debt Rating is (i) BBB- or better by S&P, or (ii) Baa3 or
better by Xxxxx'x.
9
"Level V Period" means a period of time, which may consist of a single
day, during which the Public Debt Rating is (i) lower than BBB- by S&P and lower
than Baa3 by Xxxxx'x (or lower than the level indicated for either S&P or
Xxxxx'x if unrated by the other), or (ii) no Public Debt Rating is available for
whatever reason.
"Lien" means any mortgage, pledge, security interest, encumbrance, lien
or charge of any kind (including any agreement to give any of the foregoing, any
conditional sale or other title retention agreement, any lease in the nature
thereof, and the filing of or agreement to give any financing statement under
the Uniform Commercial Code of any jurisdiction). Customary bankers' rights of
set-off arising by operation of law or by contract in connection with working
capital facilities, lines of credit, term loans and letter of credit facilities
and other contractual arrangements entered into with banks in the ordinary
course of business are not "Liens" for the purposes of this Agreement.
"Majority Lenders" means at any time Lenders holding at least 51% of
the then aggregate unpaid principal amount of the A Advances then outstanding
or, if no such principal amount is then outstanding, then either (i) if the
Commitments have not been terminated or there are no B Advances outstanding,
Lenders having at least 51% of the Commitments, or (ii) if the Commitments have
been terminated and there are B Advances outstanding, Lenders holding at least
51% of the then aggregate unpaid principal amount of the B Advances then
outstanding.
"Material Subsidiary" means, at any point in time, any Subsidiary
having total assets of $500,000 or more as of the end of its most recent fiscal
year or annual gross revenues of $5,000,000 or more during its most recent
fiscal year.
"Moody's" means Xxxxx'x Investors Service, Inc., or its successors.
"Note" means an A Note or a B Note.
"Notice of A Borrowing" has the meaning specified in Section 2.02(a).
"Notice of B Borrowing" has the meaning specified in Section 2.03(a).
"Permitted Receivables Facility" shall mean one or more accounts
receivable securitization arrangements which provide for (a) the sale of
accounts receivables and any related property by Borrower and/or any of its
Subsidiaries to a financing party or a special purpose vehicle, and (b) if a
special purpose vehicle is used in any such arrangement, the granting of a
security interest in accounts receivables and any related property by such
special purpose vehicle and/or the granting of a security interest by Borrower
in any such related property, provided, however, that the sum of the aggregate
net unrecovered investment and the aggregate outstanding advances from the
financing parties under such
10
accounts receivables securitization arrangements shall not exceed the greater of
(i) $250,000,000 and (ii) 15% of Consolidated Tangible Net Worth at any one
time.
"Person" means an individual, partnership, corporation (including a
business trust), joint stock company, trust, unincorporated association, joint
venture or other entity, or a government or any political subdivision or agency
thereof.
"Plan" means at any time an employee pension benefit plan which is
covered under Title IV of ERISA or subject to the minimum funding standards
under Section 412 of the Code and is either (i) maintained by the Borrower or
any Subsidiary for employees of the Borrower or any Subsidiary or (ii)
maintained pursuant to a collective bargaining agreement or any other
arrangement under which more than one employer makes contributions and to which
the Borrower or any Subsidiary is then making or accruing an obligation to make
contributions or has within the preceding five plan years made contributions.
"Public Debt Rating" means, as of any date, the lowest rating that has
been most recently announced (and is then in effect) by either S&P or Moody's
for any class of non-credit enhanced long-term senior unsecured debt issued by
the Borrower or, if the Borrower has no such debt issued, the lowest "implied
rating" (or similar rating in effect from time to time) that has been most
recently stated in writing (and is then in effect) by S&P and/or Moody's for
non-credit enhanced long-term senior unsecured debt of the Borrower. For
purposes of the foregoing, (a) if any rating established by either of S&P or
Moody's shall be changed, such change shall be effective as of the date on which
such change is first announced publicly by the rating agency making such change;
and (b) if S&P or Moody's shall change the basis on which ratings are
established, each reference to the Public Debt Rating announced by S&P or
Moody's, as the case may be, shall refer to the then equivalent rating by S&P or
Moody's, as the case may be.
"Register" has the meaning specified in Section 8.07(c).
"Responsible Financial Officer" means the chief financial officer, the
controller, the treasurer or any assistant treasurer of the Borrower.
"Responsible Officer" means the individuals occupying the executive
offices of the Borrower described in Exhibit I hereto and any successors to the
offices held by the individuals identified therein, and the individuals
occupying any other executive offices of the Borrower which at any time have the
authority, functions and responsibilities as the offices described in Exhibit I.
"S&P" means Standard and Poor's Ratings Group, or its successors.
11
"Subsidiary" means any corporation of which the Borrower and/or its
other Subsidiaries own, directly or indirectly, such number of outstanding
shares as have more than 50% of the ordinary voting power for the election of
directors.
"Termination Date" means August 26, 2002 or such later date as
determined pursuant to Section 8.10, or the earlier date of termination in whole
of the Commitments pursuant to Section 2.05 or 6.01.
"Transfer" means, with respect to any asset, to sell, lease, transfer
or otherwise dispose of such asset.
"Voting Stock" of any Person means any shares of stock of such Person
whose holders are entitled under ordinary circumstances to vote for the election
of directors of such Person (irrespective of whether at the time stock of any
other class or classes shall have or might have voting power by reason of the
happening of any contingency).
"wholly owned Subsidiary" means any Subsidiary all of the outstanding
capital stock (other than directors' qualifying shares and shares issued to
satisfy local ownership requirements) of which is owned, directly or indirectly,
by the Borrower.
SECTION 1.02. Computation of Time Periods. In this Agreement in the
computation of periods of time from a specified date to a later specified date,
the word "from" means "from and including" and the words "to" and "until" each
means "to but excluding".
SECTION 1.03. Accounting Terms. All accounting terms not specifically
defined herein shall be construed in accordance with generally accepted
accounting principles consistent with those applied in the preparation of the
financial statements referred to in Section 4.01(e).
SECTION 1.04. Application of Level Pricing. For purposes of applying
the Level pricing formula in the definition of "Eurodollar Margin" and in
Section 2.04(a), (a) if only one of S&P and Moody's shall have in effect a
Public Debt Rating, the applicable Level shall be determined by reference to the
available rating and (b) if the Public Debt Ratings established by S&P and
Moody's shall fall within different Levels, the applicable Level shall be based
upon the higher rating; provided that, if the lower of such ratings is more than
one level below the higher of such ratings, the applicable Level shall be based
on the level immediately above such lower rating.
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ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
SECTION 2.01. The A Advances. Each Lender severally agrees, on the
terms and conditions hereinafter set forth, to make A Advances to the Borrower
from time to time on any Business Day during the period from the date hereof
until the Termination Date in an aggregate amount not to exceed at any time the
amount set forth opposite such Lender's name on the signature pages hereof or,
if such Lender has entered into any Assignment and Acceptance, set forth for
such Lender in the Register maintained by the Agent pursuant to Section 8.07(c),
as such amount may be reduced pursuant to Section 2.05 (such Lender's
"Commitment"); provided that the aggregate amount of the Commitments of the
Lenders shall be deemed used from time to time to the extent of the aggregate
amount of the B Advances then outstanding and such deemed use of the aggregate
amount of the Commitments shall be applied to the Lenders ratably according to
their respective Commitments (such deemed use of the aggregate amount of the
Commitments being a "B Reduction"). Each A Borrowing shall be in an aggregate
amount not less than $10,000,000 or an integral multiple of $1,000,000 in excess
thereof (or, with respect to an A Borrowing comprised of Alternate Base Rate
Advances, such lesser amount as shall equal the then unborrowed amount of the
aggregate Commitments), and shall consist of A Advances of the same Type made on
the same day by the Lenders ratably according to their respective Commitments.
Within the limits of each Lender's Commitment, the Borrower may from time to
time borrow, prepay pursuant to Section 2.11(b) and reborrow under this Section
2.01.
SECTION 2.02. Making the A Advances. (a) Each A Borrowing shall be made
on notice, given not later than 11:00 A.M. (New York City time) on (x) the date
of a proposed A Borrowing comprised of Alternate Base Rate Advances, and (y) the
third Business Day prior to the date of a proposed A Borrowing comprised of
Eurodollar Rate Advances, by the Borrower to the Agent, which shall give to each
Lender prompt notice thereof (and in any event not later than the same day) by
telecopier or telex. Each such notice of an A Borrowing (a "Notice of A
Borrowing") shall be by telecopier or telex, confirmed immediately in writing,
in substantially the form of Exhibit B-1 hereto, specifying therein the
requested (i) date of such A Borrowing, (ii) Type of A Advances comprising such
A Borrowing, (iii) aggregate amount of such A Borrowing, and (iv) Interest
Period for each such A Advance in the case of Eurodollar Rate Advances. Each
Lender shall, before 12:00 Noon (New York City time) on the date of such A
Borrowing, make available for the account of its Applicable Lending Office to
the Agent at its address referred to in Section 8.02(b), in same day funds, such
Lender's ratable portion of such A Borrowing. After the Agent's receipt of such
funds and upon fulfillment of the applicable conditions set forth in Article
III, the Agent will make such funds available to the Borrower at the Agent's
aforesaid address.
13
(b) Each Notice of A Borrowing shall be irrevocable and binding on the
Borrower. In the case of any A Borrowing which the related Notice of A Borrowing
specifies is to be comprised of Eurodollar Rate Advances, the Borrower shall
indemnify each Lender against any loss, cost or expense incurred by such Lender
as a result of any failure to fulfill on or before the date specified in such
Notice of A Borrowing for such A Borrowing the applicable conditions set forth
in Article III, including, without limitation, any loss (including loss of
anticipated profits), cost or expense incurred by reason of the liquidation or
reemployment of deposits or other funds acquired by such Lender to fund the A
Advance to be made by such Lender as part of such A Borrowing when such A
Advance, as a result of such failure, is not made on such date.
(c) Unless the Agent shall have received notice from a Lender prior to
the date of any A Borrowing that such Lender will not make available to the
Agent such Lender's ratable portion of such A Borrowing, the Agent may assume
that such Lender has made such portion available to the Agent on the date of
such A Borrowing in accordance with subsection (a) of this Section 2.02 and the
Agent may, in reliance upon such assumption, make available to the Borrower on
such date a corresponding amount. If and to the extent that such Lender shall
not have so made such ratable portion available to the Agent, such Lender and
the Borrower severally agree to repay to the Agent forthwith on demand such
corresponding amount together with interest thereon, for each day from the date
such amount is made available to the Borrower until the date such amount is
repaid to the Agent, at (i) in the case of the Borrower, the interest rate
applicable at the time to A Advances comprising such A Borrowing and (ii) in the
case of such Lender, the Federal Funds Rate. If such Lender shall repay to the
Agent such corresponding amount, such amount so repaid shall constitute such
Lender's A Advance as part of such A Borrowing for purposes of this Agreement,
and the interest payable thereon shall be allocated such that the Agent shall
receive (from a combination of the sum, if any, paid to the Agent by such Lender
pursuant to clause (ii) of the preceding sentence and any interest payment made
by the Borrower) an amount equal to interest on such A Advance at the interest
rate applicable thereto from the date the corresponding amount was made
available by the Agent to the Borrower as contemplated by this Section 2.02(c)
to and including the date such amount is repaid to the Agent by such Lender, and
such Lender shall receive the balance of the interest payments made by the
Borrower with respect to such Advance in accordance with the provisions of this
Agreement.
(d) The failure of any Lender to make the A Advance to be made by it as
part of any A Borrowing shall not relieve any other Lender of its obligation, if
any, hereunder to make its A Advance on the date of such A Borrowing, but no
Lender shall be responsible for the failure of any other Lender to make the A
Advance to be made by such other Lender on the date of any A Borrowing.
14
SECTION 2.03. The B Advances. (a) Each Lender severally agrees that the
Borrower may make B Borrowings under this Section 2.03 from time to time on any
Business Day during the period from the date hereof until the date occurring 30
days prior to the Termination Date in the manner set forth below; provided that,
following the making of each B Borrowing, the aggregate amount of the Advances
then outstanding shall not exceed the aggregate amount of the Commitments of the
Lenders (computed without regard to any B Reduction).
(i) The Borrower may request a B Borrowing under this Section 2.03 by
delivering to the Agent, by telecopier or telex, confirmed immediately in
writing, a notice of a B Borrowing (a "Notice of B Borrowing"), in substantially
the form of Exhibit B-2 hereto, specifying the date and aggregate amount of the
proposed B Borrowing, the maturity date for repayment of each B Advance to be
made as part of such B Borrowing (which maturity date (x) may not be earlier
than the date occurring seven days after the date of such B Borrowing or later
than 180 days after the date of such B Borrowing or the Termination Date,
whichever occurs first, if the Borrower shall specify in the Notice of B
Borrowing that the rates of interest to be offered by the Lenders shall be fixed
rates per annum, or (y) shall be 1, 2, 3, 4, 5 or 6 months after the date of
such B Borrowing (but in no event later than the Termination Date) if the
Borrower shall instead specify in the Notice of B Borrowing the basis to be used
by the Lenders in determining the rates of interest to be offered by them), the
interest payment date or dates relating thereto, whether the proposed B
Borrowing shall bear interest at a fixed or fluctuating rate per annum and, if a
fluctuating rate is so specified, the basis to be used by the Lenders in
determining the rate of interest to be offered by them, and any other terms to
be applicable to such B Borrowing, not later than 11:00 A.M. (New York City
time) (A) at least one Business Day prior to the date of the proposed B
Borrowing, if the Borrower shall specify in the Notice of B Borrowing that the
rates of interest to be offered by the Lenders shall be fixed rates per annum
and (B) at least four Business Days prior to the date of the proposed B
Borrowing, if the Borrower shall instead specify in the Notice of B Borrowing
the basis to be used by the Lenders in determining the rates of interest to be
offered by them. The Agent shall in turn promptly notify each Lender of each
request for a B Borrowing received by it from the Borrower by sending such
Lender a copy of the related Notice of B Borrowing.
(ii) Each Lender may, if, in its sole discretion, it elects to do so,
irrevocably offer to make one or more B Advances to the Borrower as part of such
proposed B Borrowing at a rate or rates of interest specified by such Lender in
its sole discretion, by notifying the Agent (which shall give prompt notice
thereof to the Borrower) before 10:00 A.M. (New York City time) (A) on the date
of such proposed B Borrowing, in the case of a Notice of B Borrowing delivered
pursuant to clause (A) of paragraph (i) above and (B) three Business Days before
the date of such proposed B Borrowing, in the case of a Notice of B Borrowing
delivered pursuant to clause (B) of paragraph (i) above, of the minimum amount
and maximum amount of each B Advance which such Lender would be willing to make
as
15
part of such proposed B Borrowing (which amounts may, subject to the proviso to
the first sentence of this Section 2.03(a), exceed such Lender's Commitment),
the rate or rates of interest therefor and such Lender's Applicable Lending
Office with respect to such B Advance; provided that if the Agent in its
capacity as a Lender shall, in its sole discretion, elect to make any such
offer, it shall notify the Borrower of such offer before 9:00 A.M. (New York
City time) on the date on which notice of such election is to be given to the
Agent by the other Lenders. If any Lender shall elect not to make such an offer,
such Lender shall so notify the Agent, before 10:00 A.M. (New York City time) on
the date on which notice of such election is to be given to the Agent by the
other Lenders, and such Lender shall not be obligated to, and shall not, make
any B Advance as part of such B Borrowing; provided that the failure by any
Lender to give such notice shall not cause such Lender to be obligated to make
any B Advance as part of such proposed B Borrowing.
(iii) The Borrower shall, in turn, (A) before 11:00 A.M. (New York City
time) on the date of such proposed B Borrowing, in the case of a Notice of B
Borrowing delivered pursuant to clause (A) of paragraph (i) above and (B) before
12:00 Noon (New York City time) three Business Days before the date of such
proposed B Borrowing, in the case of a Notice of B Borrowing delivered pursuant
to clause (B) of paragraph (i) above, either
(x) cancel such B Borrowing by giving the Agent notice to that
effect, or
(y) accept one or more of the offers made by any Lender or
Lenders pursuant to paragraph (ii) above, in its sole discretion, by giving
notice to the Agent of the amount of each B Advance (which amount shall be equal
to or greater than the minimum amount, and equal to or less than the maximum
amount, notified to the Borrower by the Agent on behalf of such Lender for such
B Advance pursuant to paragraph (ii) above) to be made by each Lender as part of
such B Borrowing, and reject any remaining offers made by Lenders pursuant to
paragraph (ii) above by giving the Agent notice to that effect; provided that
acceptance of offers may only be made on the basis of ascending interest rates
specified by the Lenders pursuant to paragraph (ii) above.
(iv) If the Borrower notifies the Agent that such B Borrowing is
cancelled pursuant to paragraph (iii)(x) above, the Agent shall give prompt
notice thereof to the Lenders and such B Borrowing shall not be made.
(v) If offers are made by two or more Lenders with the same specified
rate of interest for a greater aggregate principal amount than the amount in
respect of which offers are accepted for any B Borrowing, the principal amount
of B Advances in respect of which such offers are accepted shall be allocated by
the Agent among such Lenders as nearly as possible (in such multiples of
$1,000,000 as the Agent may deem appropriate) in
16
proportion to the aggregate principal amount of such offers. Determinations by
the Agent of the amounts of B Advances shall be conclusive in the absence of
manifest error.
(vi) If the Borrower accepts one or more of the offers made by any
Lender or Lenders pursuant to paragraph (iii)(y) above, the Agent shall in turn
promptly notify (A) each Lender that has made an offer as described in paragraph
(ii) above, of the date and aggregate amount of such B Borrowing and whether or
not any offer or offers made by such Lender pursuant to paragraph (ii) above
have been accepted by the Borrower, and (B) each Lender that is to make a B
Advance as part of such B Borrowing, of the amount of each B Advance to be made
by such Lender as part of such B Borrowing. Each Lender that is to make a B
Advance as part of such B Borrowing shall, before 12:00 noon (New York City
time) on the date of such B Borrowing specified in the notice received from the
Agent pursuant to clause (A) of the preceding sentence, make available for the
account of its Applicable Lending Office to the Agent at its address referred to
in Section 8.02(b) such Lenders portion of such B Borrowing, in same day funds.
Upon satisfaction of the applicable conditions set forth in Article III and
after receipt by the Agent of such funds, the Agent will make such funds
available to the Borrower at the Agent's aforesaid address. Promptly after each
B Borrowing the Agent will notify each Lender of the amount of the B Borrowing,
the consequent B Reduction and the dates upon which such B Reduction commenced
and will terminate.
(b) Each B Borrowing shall be in an aggregate amount not less than
$10,000,000 or an integral multiple of $1,000,000 in excess thereof and,
following the making of each B Borrowing, the Borrower shall be in compliance
with the limitation set forth in the proviso to the first sentence of subsection
(a) above.
(c) Within the limits and on the conditions set forth in this Section
2.03, the Borrower may from time to time borrow under this Section 2.03, repay
or prepay pursuant to subsection (d) below, and reborrow under this Section
2.03; provided that a B Borrowing shall not be made within two Business Days of
the date of any other B Borrowing.
(d) The Borrower shall repay to the Agent for the account of each
Lender which has made a B Advance, or each other holder of a B Note, on the
maturity date of each B Advance (such maturity date being that specified by the
Borrower for repayment of such B Advance in the related Notice of B Borrowing
delivered pursuant to subsection (a)(i) above), the then unpaid principal amount
of such B Advance. The Borrower shall have no right to prepay any principal
amount of any B Advance unless, and then only on the terms, specified by the
Borrower for such B Advance in the related Notice of B Borrowing delivered
pursuant to subsection (a)(i) above; provided that the Borrower shall be
obligated to reimburse each Lender whose B Advance has been prepaid by the
Borrower in respect thereof pursuant to Section 8.04(b).
17
(e) The Borrower shall pay interest on the unpaid principal amount of
each B Advance from the date of such B Advance to the date the principal amount
of such B Advance is repaid in full, at the rate of interest for such B Advance
specified by the Lender making such B Advance in its notice with respect thereto
delivered pursuant to subsection (a)(ii) above, payable on the maturity date
specified by the Borrower for such B Advance and on each other interest payment
date or dates specified by the Borrower for such B Advance in the related Notice
of B Borrowing delivered pursuant to subsection (a)(i) above; provided, however,
that if the maturity date of the B Advances comprising a B Borrowing is more
than 90 days after the date of such B Borrowing, then interest shall be payable
on each day which occurs at intervals of 90 days after the date of such B
Borrowing; provided, further, that any amount of principal which is not paid
when due (whether at stated maturity, by acceleration or otherwise) shall bear
interest, from the date on which such amount is due until such amount is paid in
full, payable on demand, at a rate per annum equal at all times (i) from such
due date to the applicable maturity date, to 2% per annum above the interest
rate otherwise payable with respect to such B Advance hereunder, and (ii) from
and after the applicable maturity date, to 2% per annum above the Alternate Base
Rate in effect from time to time.
SECTION 2.04. Fees. (a) Facility Fee. The Borrower agrees to pay to the
Agent, for the account of each Lender, a facility fee on the daily average
amount of such Lender's Commitment (including both the portion thereof that is
used and the portion thereof that is unused) from the date hereof in the case of
each Lender listed on the signature pages hereof and from the effective date
specified in the Assignment and Acceptance pursuant to which it became a Lender
in the case of each other Lender until the Termination Date, payable in arrears
on the last day of each March, June, September and December during the term of
such Lender's Commitment, commencing September 30, 1997, and on the Termination
Date, at the rate of (i) .070% per annum during each Level I Period, (ii) .080%
per annum during each Level II Period, (iii) .100% per annum during each Level
III Period, (iv) .125% per annum during each Level IV Period and (v) .175% per
annum during each Level V Period.
(b) Agent's Fees. The Borrower agrees to pay to the Agent certain fees
for its role hereunder and in connection with the execution and delivery hereof
in the amounts and at the times described in one or more letter agreements
between the Borrower and the Agent dated on or about the date hereof, as the
same may be amended, modified, supplemented or replaced from time to time by the
mutual agreement of the Borrower and the Agent. All such fees shall be for the
sole account and benefit of the Agent.
SECTION 2.05. Termination, Reduction or Increase of the Commitments.
(a) Termination or Reduction of the Commitments. The Borrower shall have the
right, upon at least three Business Days' notice to the Agent, to terminate in
whole or reduce ratably in part the unused portions of the respective
Commitments of the Lenders; provided, that the
18
aggregate amount of the Commitments of the Lenders shall not be reduced to an
amount which is less than the aggregate principal amount of the B Advances then
outstanding; provided further that each partial reduction shall be in the
aggregate amount of $10,000,000 or an integral multiple of $1,000,000 in excess
thereof. Any Commitments terminated or reduced by the Borrower pursuant to this
Section 2.05 may not be reinstated, unless pursuant to an increase of the
Commitments as described below in Section 2.05(b).
(b) Increase in Aggregate of the Commitments. (i) The Borrower may at
any time, by notice to the Agent, propose that the aggregate amount of the
Commitments be increased (such incremental increased amount being, a "Commitment
Increase"), effective as at a date prior to the Termination Date (an "Increase
Date") as to which agreement is to be reached by an earlier date specified in
such notice (a "Commitment Date"); provided, however, that (A) the Borrower may
not propose more than two Commitment Increases in any 12-month period, (B) the
minimum proposed Commitment Increase per notice shall be $25,000,000, (C) in no
event shall the aggregate amount of the Commitments at any time exceed
$650,000,000, (D) the Borrower has a Public Debt Rating from S&P or Moody's of
better than or equal to BBB- or Baa3, respectively, but if the Borrower has a
Public Debt Rating from both S&P and Moody's, the Public Debt Rating of the
Borrower is better than or equal to BBB- and Baa3, respectively, (E) no Default
shall have occurred and be continuing on such Increase Date and (F) a
certificate as to corporate authorization and other documentation similar to
that delivered pursuant to Section 3.01 is received by the Agent. The Agent
shall notify the Lenders thereof promptly upon its receipt of any such notice.
The Agent agrees that it will cooperate with the Borrower in discussions with
the Lenders and other assignees with a view to arranging the proposed Commitment
Increase through the increase of the Commitments of one or more of the Lenders
(each such Lender that is willing to increase its Commitment hereunder being an
"Increasing Lender") and the addition of one or more other assignees as Assuming
Lenders and as parties to this Agreement; provided, however, that it shall be in
each Lender's sole discretion whether to increase its Commitment hereunder in
connection with the proposed Commitment Increase; and provided further that the
minimum Commitment of each such Assuming Lender that becomes a party to this
Agreement pursuant to this Section 2.05(b) shall be at least equal to
$25,000,000. If any of the Lenders agree to increase their respective
Commitments by an aggregate amount in excess of the proposed Commitment
Increase, the proposed Commitment Increase shall be allocated among such Lenders
as determined at such time by the Borrower. If agreement is reached on or prior
to the applicable Commitment Date with any Increasing Lenders and Assuming
Lenders as to a Commitment Increase (which may be less than but not greater than
specified in the applicable notice from the Borrower), such agreement to be
evidenced by a notice in reasonable detail from the Borrower to the Agent on or
prior to the applicable Commitment Date, such Assuming Lenders, if any, shall
become Lenders hereunder as of the applicable Increase Date and the Commitments
of such Increasing Lenders and such Assuming Lenders shall become or be, as the
case may be, as of the Increase Date, the amounts specified in such notice;
provided that:
19
(x) the Agent shall have received (with copies for each
Lender, including each such Assuming Lender) by no later than 10:00
A.M. (New York City time) on the applicable Increase Date a copy
certified by the Secretary, an Assistant Secretary or a comparable
officer of the Borrower, of the resolutions adopted by the Board of
Directors of the Borrower authorizing such Commitment Increase, which
resolutions shall be satisfactory to the Agent;
(y) each such Assuming Lender shall have delivered to the
Agent by no later than 10:00 A.M. (New York City time) on such Increase
Date, an appropriate Assumption Agreement in substantially the form of
Exhibit D hereto, duly executed by such Assuming Lender and the
Borrower; and
(z) each such Increasing Lender shall have delivered to the
Agent by no later than 10:00 A.M. (New York City time) on such Increase
Date (A) its existing A Note and (B) confirmation in writing
satisfactory to the Agent as to its increased Commitment.
(ii) In the event that the Agent shall have received notice
from the Borrower as to its agreement to a Commitment Increase on or prior to
the applicable Commitment Date and each of the actions provided for in clauses
(x) through (z) above shall have occurred prior to 10:00 A.M. (New York City
time) on the applicable Increase Date, the Agent shall notify the Lenders
(including any Assuming Lenders) and the Borrower of the occurrence of such
Commitment Increase by telephone, confirmed immediately in writing, telecopier
or telex and in any event no later than 1:00 P.M. (New York City time) on such
Increase Date and shall record in the Register the relevant information with
respect to each Increasing Lender and Assuming Lender. Each Increasing Lender
and each Assuming Lender shall, before 2:00 P.M. (New York City time) on the
applicable Increase Date, make available for the account of its Applicable
Lending Office to the Agent at the Agent's Account, in same day funds, in the
case of such Assuming Lender, an amount equal to such Assuming Lender's ratable
portion of the A Borrowings then outstanding (calculated based on its Commitment
as a percentage of the aggregate Commitments outstanding after giving effect to
the relevant Commitment Increase) and, in the case of such Increasing Lender, an
amount equal to the excess of (i) such Increasing Lender's ratable portion of
the A Borrowings then outstanding (calculated based on its Commitment as a
percentage of the aggregate Commitments outstanding after giving effect to the
relevant Commitment Increase) over (ii) such Increasing Lender's ratable portion
of the A Borrowings then outstanding (calculated based on its Commitment
(without giving effect to the relevant Commitment Increase) as a percentage of
the aggregate Commitments (without giving effect to the relevant Commitment
Increase). After the Agent's receipt of such funds from each such Increasing
Lender and each such Assuming Lender, the Agent will promptly thereafter cause
to be distributed like funds to the other Lenders for the account of their
respective Applicable Lending Offices in an amount to each other Lender such
that the aggregate amount of the
20
outstanding A Advances owing to each Lender after giving effect to such
distribution equals such Lender's ratable portion of the A Borrowings then
outstanding (calculated based on its Commitment as a percentage of the aggregate
Commitments outstanding after giving effect to the relevant Commitment
Increase). Within five Business Days after the Borrower receives notice from the
Agent, the Borrower, at its own expense, shall execute and deliver to the Agent,
A Notes payable to the order of each Assuming Lender, if any, and, each
Increasing Lender, dated as of the applicable Increase Date, in a principal
amount equal to such Lender's Commitment after giving effect to the relevant
Commitment Increase, and substantially in the form of Exhibit A-1 hereto. The
Agent, upon receipt of such A Notes, shall promptly deliver such A Notes to the
respective Assuming Lenders and Increasing Lenders.
(iii) In the event that the Agent shall not have received notice from
the Borrower as to such agreement on or prior to the applicable Commitment Date
or that Borrower shall, by notice to the Agent prior to the applicable Increase
Date, withdraw its proposal for a Commitment Increase or any of the actions
provided for above in clauses (i)(x) through (i)(z) shall not have occurred by
10:00 A.M. (New York City time) on the such Increase Date, such proposal by the
Borrower shall be deemed not to have been made. In such event, any actions
theretofore taken under clauses (i)(x) through (i)(z) above shall be deemed to
be of no effect and all the rights and obligations of the parties shall continue
as if no such proposal had been made.
SECTION 2.06. Repayment of A Advances. The Borrower shall repay the
principal amount of each A Advance made by each Lender on the last day of the
Interest Period for such A Advance.
SECTION 2.07. Interest on A Advances. The Borrower shall pay interest
on the unpaid principal amount of each A Advance made by each Lender from the
date of such A Advance until such principal amount shall be paid in full, at the
following rates per annum and at the following times:
(a) Alternate Base Rate Advances. If such A Advance is an Alternate
Base Rate Advance, a rate per annum equal at all times to the Alternate Base
Rate in effect from time to time, payable quarterly on the last day of each
March, June, September, and December and on the date such Alternate Base Rate
Advance shall be paid in full; provided that any amount of principal or interest
which is not paid when due (whether at stated maturity, by acceleration or
otherwise) shall bear interest, from the date on which such amount is due until
such amount is paid in full, payable on demand, at a rate per annum equal at all
times to 2% per annum above the Alternate Base Rate in effect from time to time.
21
(b) Eurodollar Rate Advances. If such A Advance is a Eurodollar Rate
Advance, a rate per annum equal at all times during the Interest Period for such
A Advance to the sum of the Eurodollar Rate for such Interest Period plus the
applicable Eurodollar Margin, payable on the last day of such Interest Period
and, if such Interest Period is longer than three months, at intervals of three
months after the first day thereof; provided that any amount of principal or
interest which is not paid when due (whether at stated maturity, by acceleration
or otherwise) shall bear interest, from the date on which such amount is due
until such amount is paid in full, payable on demand, at a rate per annum equal
at all times (i) from such due date to the last day of the applicable Interest
Period, to 2% per annum above the interest rate otherwise payable with respect
to such A Advance hereunder, and (ii) from and after the last day of the
applicable Interest Period, to 2% per annum above the Alternate Base Rate in
effect from time to time.
SECTION 2.08. Notes. The obligation of the Borrower to repay the A
Advances made to the Borrower by each Lender hereunder shall be further
evidenced by an A Note in favor of such Lender in the form and substance of
Exhibit A-1 attached hereto. The obligation of the Borrower to repay the B
Advances made to the Borrower by any Lender shall be evidenced by a B Note in
favor of such Lender in the form and substance of Exhibit A-2 attached hereto.
SECTION 2.09. Interest Rate Determination. (a) The Agent shall give
prompt notice to the Borrower and the Lenders of the applicable interest rate
determined by the Agent for purposes of Section 2.07(a) or (b).
(b) If the Majority Lenders shall, at least one Business Day before the
date of any requested A Borrowing comprised of Eurodollar Rate Advances, notify
the Agent that the Eurodollar Rate for Eurodollar Rate Advances comprising such
A Borrowing will not adequately reflect the cost to such Majority Lenders of
making, funding or maintaining their respective Eurodollar Rate Advances for
such A Borrowing, the Agent shall forthwith so notify the Borrower and the
Lenders, whereupon the right of the Borrower to select Eurodollar Rate Advances
for such A Borrowing or any subsequent A Borrowing shall be suspended until the
Agent shall notify the Borrower and the Lenders that the circumstances causing
such suspension no longer exist, and each A Advance comprising such A Borrowing
shall be an Alternate Base Rate Advance.
SECTION 2.10. Sharing of Payments, Etc. If any Lender shall obtain any
payment (whether voluntary, involuntary, through the exercise of any right of
set-off, or otherwise) on account of the A Advances made by it (other than
pursuant to Section 2.12 or 2.15) in excess of its ratable share of payments on
account of the A Advances obtained by all the Lenders, such Lender shall
forthwith purchase from the other Lenders such participations in the A Advances
made by them as shall be necessary to cause such purchasing Lender to share the
excess payment ratably with each of them; provided, however, that if all or any
22
portion of such excess payment is thereafter recovered from such purchasing
Lender, such purchase from each Lender shall be rescinded and such Lender shall
repay to the purchasing Lender the purchase price to the extent of such recovery
together with an amount equal to such Lender's ratable share (according to the
proportion of (i) the amount of such Lender's required repayment to (ii) the
total amount so recovered from the purchasing Lender) of any interest or other
amount paid or payable by the purchasing Lender in respect of the total amount
so recovered. The Borrower agrees that any Lender so purchasing a participation
from another Lender pursuant to this Section 2.10 may, to the fullest extent
permitted by law, exercise all its rights of payment (including the right of
set-off) with respect to such participation as fully as if such Lender were the
direct creditor of the Borrower in the amount of such participation.
SECTION 2.11. Prepayments of A Advances. (a) The Borrower shall have no
right to prepay any principal amount of any A Advances other than as provided in
subsection (b) below.
(b) The Borrower may, upon at least two Business Days' notice, or in
the case of A Borrowings comprised of Alternate Base Rate Advances notice given
not later than 11:00 A.M. (New York City time) one Business Day prior to the
proposed date of prepayment, to the Agent stating the proposed date and
aggregate principal amount of the prepayment, and if such notice is given the
Borrower shall, prepay the outstanding principal amounts of the A Advances
comprising part of the same A Borrowing in whole or ratably in part, together
with accrued interest to the date of such prepayment on the principal amount
prepaid; provided, however, that (x) each partial prepayment shall be in an
aggregate principal amount not less than $10,000,000 or an integral multiple of
$1,000,000 in excess thereof, and (y) in the case of any such prepayment of a
Eurodollar Rate Advance, the Borrower shall be obligated to reimburse the
Lenders in respect thereof pursuant to Section 8.04(b).
(c) Except as provided in Section 2.03(d), the Borrower shall have no
right to prepay any principal amount of any B Advance.
SECTION 2.12. Increased Costs. (a) If, after the date hereof, due to
either (i) the introduction of or any change (other than any change by way of
imposition or increase of reserve requirements, in the case of Eurodollar Rate
Advances, included in the Eurodollar Rate Reserve Percentage) in or in the
interpretation of any law or regulation or (ii) the compliance with any
guideline or request from any central bank or other governmental authority
(whether or not having the force of law), there shall be any increase in the
cost to any Lender of agreeing to make or making, funding or maintaining
Eurodollar Rate Advances, then the Borrower shall from time to time, upon
written demand by such Lender (with a copy of such demand to the Agent), which
demand must be made no later than the date that is one year after the date on
which the Commitments have been terminated and all
23
sums owing hereunder have been paid in full, pay to the Agent for the account of
such Lender additional amounts sufficient to compensate such Lender for such
increased cost. A certificate as to the amount of such increased cost, submitted
to the Borrower and the Agent by such Lender, shall be conclusive and binding
for all purposes, absent manifest error. It shall be assumed, for the purpose of
computing amounts to be paid by the Borrower to CUSA pursuant to this Section
2.12(a), that the making, funding or maintaining by CUSA of any Advance
hereunder has been by Citibank.
(b) If any Lender determines that compliance with any law or regulation
or any guideline or request from any central bank or other governmental
authority (whether or not having the force of law) affects the amount of capital
to be maintained by such Lender or any corporation controlling such Lender and
that the amount of such capital is increased by or based upon the existence of
such Lender's commitment to lend hereunder and other commitments of this type,
then, upon written demand by such Lender (with a copy of such demand to the
Agent), which demand must be made no later than the date that is one year after
the date on which the Commitments have been terminated and all sums owing
hereunder have been paid in full, the Borrower shall immediately pay to the
Agent for the account of such Lender, from time to time as specified by such
Lender, additional amounts sufficient to compensate such Lender or such
corporation in the light of such circumstances, to the extent that such Lender
reasonably determines such increase in capital is allocable to the existence of
such Lender's commitment to lend hereunder. A certificate as to such amounts
submitted to the Borrower and the Agent by such Lender shall be conclusive and
binding for all purposes, absent manifest error. It shall be assumed, for the
purpose of computing amounts to be paid by the Borrower to CUSA pursuant to this
Section 2.12(b), that the making, funding or maintaining by CUSA of any Advance
hereunder has been by Citibank.
(c) Each Lender agrees that if the Borrower is required to make any
payments to such Lender upon demand therefor pursuant to Sections 2.12(a) or (b)
such Lender shall use reasonable efforts to select an alternative Applicable
Lending Office which would avoid the need thereafter for making such demand;
provided, however, that no Lender shall be obligated to select an alternative
Applicable Lending Office if such Lender determines in its reasonable discretion
that (i) as a result of such selection such Lender would be in violation of any
applicable law, regulation, treaty or directive of any central bank or other
governmental authority, or (ii) such selection would be otherwise
disadvantageous to such Lender.
SECTION 2.13. Illegality. (a) Notwithstanding any other provision of
this Agreement, if any Lender shall notify the Agent that the introduction of or
any change in or in the interpretation of any law or regulation makes it
unlawful, or any central bank or other governmental authority asserts that it is
unlawful, for any Lender or its Eurodollar Lending Office to perform its
obligations hereunder to make Eurodollar Rate Advances or to fund or
24
maintain Eurodollar Rate Advances hereunder, (i) the obligation of the Lenders
to make Eurodollar Rate Advances shall be suspended until the Agent shall notify
the Borrower and the Lenders that the circumstances causing such suspension no
longer exist and (ii) the Borrower shall forthwith prepay in full all Eurodollar
Rate Advances of all Lenders then outstanding, together with interest accrued
thereon.
(b) Each Lender agrees that if it determines, or if a central bank or
other governmental authority asserts, that it is unlawful for such Lender to
make, fund or maintain Eurodollar Rate Advances hereunder, such Lender shall use
reasonable efforts to select an alternative Eurodollar Lending Office to perform
its obligations hereunder to make, fund or maintain Eurodollar Rate Advances;
provided, however, that no Lender shall be obligated to select an alternative
Eurodollar Lending Office if such Lender determines in its reasonable discretion
that (i) as a result of such selection such Lender would be in violation of any
applicable law, regulation, treaty or directive of any central bank or other
governmental authority, or (ii) such selection would be otherwise
disadvantageous to such Lender.
SECTION 2.14. Payments and Computations. (a) The Borrower shall make
each payment hereunder and under the Notes not later than 11:00 A.M. (New York
City time) on the day when due in U.S. dollars to the Agent at its address
referred to in Section 8.02(b) in same day funds. The Agent will promptly
thereafter cause to be distributed like funds relating to the payment of
principal or interest or facility fees ratably (other than amounts payable
pursuant to Section 2.03, 2.12 or 2.15) to the Lenders for the account of their
respective Applicable Lending Offices, and like funds relating to the payment of
any other amount payable to any Lender to such Lender for the account of its
Applicable Lending Office, in each case to be applied in accordance with the
terms of this Agreement. Upon its acceptance of an Assignment and Acceptance and
recording of the information contained therein in the Register pursuant to
Section 8.07(d), from and after the effective date specified in such Assignment
and Acceptance, the Agent shall make all payments hereunder and under the Notes
in respect of the interest assigned thereby to the Lender assignee thereunder,
and the parties to such Assignment and Acceptance shall make all appropriate
adjustments in such payments for periods prior to such effective date directly
between themselves.
(b) The Borrower hereby authorizes each Lender, if and to the extent
payment owed to such Lender is not made when due hereunder or under any Note
held by such Lender, to charge from time to time against (i) any or all of the
Borrower's accounts with such Lender or (ii) in the event any such payment is
not made to CUSA when due, any or all of the Borrower's accounts with Citibank
or any other Affiliate of CUSA (and the Borrower hereby authorizes Citibank and
each such Affiliate to permit such charge), any amount so due.
(c) All computations of interest based on the Alternate Base Rate shall
be made by the Agent on the basis of a year of 365 or 366 days, as the case may
be, and all
25
computations of interest based on the Eurodollar Rate or the Federal Funds Rate
and of interest on B Advances prior to the maturity date applicable thereto and
of facility fees shall be made by the Agent on the basis of a year of 360 days,
in each case for the actual number of days (including the first day but
excluding the last day) occurring in the period for which such interest or fees
are payable. Each determination by the Agent of an interest rate hereunder shall
be conclusive and binding for all purposes, absent manifest error.
(d) Whenever any payment hereunder and under the Notes shall be stated
to be due on a day other than a Business Day, such payment shall be made on the
next succeeding Business Day, and such extension of time shall in such case be
included in the computation of payment of interest or facility fee, as the case
may be; provided, however, if such extension would cause payment of interest on
or principal of Eurodollar Rate Advances to be made in the next following
calendar month, such payment shall be made on the next preceding Business Day.
(e) Unless the Agent shall have received notice from the Borrower prior
to the date on which any payment is due to the Lenders hereunder that the
Borrower will not make such payment in full, the Agent may assume that the
Borrower has made such payment in full to the Agent on such date and the Agent
may, in reliance upon such assumption, cause to be distributed to each Lender on
such due date an amount equal to the amount then due such Lender. If and to the
extent that the Borrower shall not have so made such payment in full to the
Agent, each Lender shall repay to the Agent forthwith on demand such amount
distributed to such Lender together with interest thereon, for each day from the
date such amount is distributed to such Lender until the date such Lender repays
such amount to the Agent, at the Federal Funds Rate.
SECTION 2.15. Taxes. (a) All payments by the Borrower hereunder shall
be made without set-off or counterclaim and free and clear of and without
deduction on account of restrictions or conditions of any nature now or
hereafter imposed or levied by the United States or any political subdivision
thereof, except as specifically provided to the contrary in Section 2.15(b),
unless the Borrower is required by law to make such deductions. If any such
obligation is imposed upon the Borrower with respect to any amount payable by it
hereunder, it will pay to each affected Lender, on the date on which such amount
becomes due and payable hereunder, such additional amount as shall be necessary
to enable such Lender to receive the same net amount which it would have
received on such due date had no such obligation been imposed upon the Borrower.
(b) Each payment to be made by the Borrower hereunder to any Lender
shall be made free and clear of and without deduction or withholding for or on
account of any tax imposed by any governmental or taxing authority of or in the
United States unless the Borrower is required to make such a payment subject to
the deduction or withholding of such tax, in which case the Borrower will pay to
each affected Lender, on the date on which
26
such amount becomes due and payable hereunder, such additional amount as shall
be necessary to enable such Lender to receive the same net amount which it would
have received on such due date had no such obligation been imposed upon the
Borrower; provided, however, that the Borrower shall not be required to pay any
additional amount on account of any tax of, or imposed by, the United States,
pursuant to this Section 2.15(b), to any Lender and shall be entitled to deduct
and withhold such tax if such Lender (i) shall have failed to submit a valid
United States Internal Revenue Service Form 1001 or any successor form thereto
("Form 1001") relating to such Lender and entitling it to a complete exemption
from deduction or withholding on all amounts to be received by such Lender,
including fees, pursuant to this Agreement, or a valid United States Internal
Revenue Service Form 4224 or any successor form thereto ("Form 4224") relating
to such Lender and entitling it to receive all amounts, including fees, pursuant
to this Agreement, without deduction or withholding, or a statement conforming
to the requirements of United States Treasury Regulation 1.1441-5(b), or (ii)
shall have failed to submit such form or other statement which it is required to
deliver pursuant to Section 2.15(c) hereof.
(c) Prior to the date of the initial Borrowing in the case of each
Lender listed on the signature pages hereof, and on the date of the Assignment
and Acceptance pursuant to which it became a Lender in the case of each other
Lender, each Lender agrees that it will deliver to the Borrower either (i) a
statement, in duplicate, conforming to the requirements of United States
Treasury Regulation Section 1.1441-5(b), or (ii) if it is not incorporated under
the laws of the United States or a state thereof, two duly completed copies of
Form 1001 or 4224, or successor applicable forms, as the case may be, certifying
that such Lender is entitled to receive payments under this Agreement without
deduction or withholding of any United States federal income taxes. Subject to
any change in applicable laws or regulations, each Lender which delivers to the
Borrower a Form 1001 or 4224, or successor applicable forms, pursuant to the
provisions of this Section 2.15(c), further undertakes to deliver to the
Borrower, upon request by the Borrower, two further copies of said Form 1001 or
4224, or successor applicable forms, on or before the date that any such form
expires or becomes obsolete certifying that such Lender is entitled to receive
payments under this Agreement without deduction or withholding of any United
States federal income taxes.
(d) Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower contained in
this Section 2.15 shall survive the termination of this Agreement, the
termination of the Commitments and the payment in full of the Notes.
(e) Each Lender agrees that if the Borrower is required to increase any
amounts payable to such Lender under Sections 2.15(a) or 2.15(b), such Lender
shall use reasonable efforts to select an alternative Applicable Lending Office
which would not result in such increased payment by the Borrower to such Lender;
provided, however, that no
27
Lender shall be obligated to select an alternative Applicable Lending Office if
such Lender determines in its reasonable discretion that (i) as a result of such
selection such Lender would be in violation of any applicable law, regulation,
treaty or directive of any central bank or other governmental authority, or (ii)
such selection would be otherwise disadvantageous to such Lender.
ARTICLE III
CONDITIONS OF LENDING
SECTION 3.01. Condition Precedent to Initial Advances. The
effectiveness of the Commitment of each Lender is subject to the condition
precedent that the Agent shall have received the following, in form and
substance satisfactory to the Agent and (except for the Notes) in sufficient
copies for each Lender:
(a) The Notes payable to the order of the Lenders, respectively.
(b) This Agreement executed by the Borrower, the Agent and each of the
Lenders.
(c) Certified copies of the resolutions of the Board of Directors of
the Borrower approving this Agreement and the Notes and of all documents
evidencing other necessary corporate action and governmental approvals, if any,
with respect to this Agreement and the Notes.
(d) A certificate of the Secretary or an Assistant Secretary of the
Borrower certifying the names and true signatures of the officers of the
Borrower authorized to sign this Agreement and the Notes and the other documents
to be delivered hereunder.
(e) A favorable opinion of Wilson, Sonsini, Xxxxxxxx & Xxxxxx, special
counsel for the Borrower, substantially in the form attached hereto as Exhibit
E, and covering such other matters as any Lender through the Agent may
reasonably request.
(f) Evidence that the obligations of the lenders and agent (including
commitments to make advances thereunder) under that certain Credit Agreement
dated as of June 28, 1996 among the Borrower, the lenders thereunder and CUSA,
as agent for the lenders thereunder, as amended, have been terminated and all
unpaid principal and interest thereunder and all other amounts then payable by
the Borrower thereunder have been paid in full (or will be paid in full by
application of the proceeds of the initial Borrowing hereunder).
(g) A favorable opinion of Shearman & Sterling, counsel for the Agent.
28
SECTION 3.02. Conditions Precedent to Each A Borrowing. The obligation
of each Lender to make an A Advance on the occasion of each A Borrowing
(including the initial A Borrowing) shall be subject to the further conditions
precedent that (i) the Agent shall have received the written confirmatory Notice
of A Borrowing with respect thereto and (ii) on the date of such A Borrowing (a)
the following statements shall be true (and each of the giving of the applicable
Notice of A Borrowing and the acceptance by the Borrower of the proceeds of such
A Borrowing shall constitute a representation and warranty by the Borrower that
on the date of such A Borrowing such statements are true):
(1) The representations and warranties contained in Section 4.01 are
correct on and as of the date of such A Borrowing (except the
representation contained in Section 4.01(e) which shall be made only upon
the initial A Borrowing), before and after giving effect to such A
Borrowing and to the application of the proceeds therefrom, as though made
on and as of such date (except to the extent such representations or
warranties specifically relate to an earlier date, in which case they shall
be true and correct as of such date),
(2) No Default or Event of Default has occurred and is continuing, or
would result from such A Borrowing or from the application of the proceeds
therefrom, and
(3) The aggregate amount of such A Borrowing and all other Borrowings
to be made on the same day hereunder is within the aggregate amount of the
unused Commitments of the Lenders, and
(b) if the Agent or any Lender has any reason to believe that any of
the conditions set forth in this Section 3.02 shall not be satisfied on the date
of such A Borrowing, then the Agent shall have received such other approvals,
opinions or documents as the Agent or such Lender through the Agent may
reasonably request.
SECTION 3.03. Conditions Precedent to Each B Borrowing. The obligation
of each Lender which is to make a B Advance on the occasion of a B Borrowing
(including the initial B Borrowing) to make such B Advance as part of such B
Borrowing shall be subject to the further conditions precedent that (i) the
Agent shall have received the written confirmatory Notice of B Borrowing with
respect thereto, and (ii) on the date of such B Borrowing the following
statements shall be true (and each of the giving of the applicable Notice of B
Borrowing and the acceptance by the Borrower of the proceeds of such B Borrowing
shall constitute a representation and warranty by the Borrower that on the date
of such B Borrowing such statements are true):
(a) The representations and warranties contained in Section 4.01 are
correct on and as of the date of such B Borrowing before and after giving effect
to such B
29
Borrowing and to the application of the proceeds therefrom, as though made on
and as of such date (except to the extent such representations or warranties
specifically relate to an earlier date, in which case they shall be true and
correct as of such date),
(b) No Default or Event of Default has occurred and is continuing, or
would result from such B Borrowing or from the application of the proceeds
therefrom, and
(c) The aggregate amount of such B Borrowing and all other Borrowings
to be made on the same day hereunder is within the aggregate amount of the
unused Commitments of the Lenders.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the Borrower. The
Borrower represents and warrants as follows:
(a) The Borrower is a corporation duly organized, validly existing and
in good standing under the laws of the jurisdiction indicated at the beginning
of this Agreement. Each Subsidiary is duly organized and validly existing under
the laws of the jurisdiction in which it is incorporated and is in good standing
under the laws of such jurisdiction except where the failure to so be in good
standing (i) in the case of Restricted Subsidiaries, is remedied within a
reasonable time period after a Responsible Officer has knowledge of any such
failure, and (ii) such failure will not have a material adverse effect on the
business, financial condition, assets, properties or operations of the Borrower
or the Borrower and its Subsidiaries taken as a whole. The Borrower and each
Restricted Subsidiary has the corporate power to own its respective property and
to carry on its respective business as now being conducted.
(b) The execution, delivery and performance by the Borrower of this
Agreement and the Notes are within the Borrower's corporate powers, have been
duly authorized by all necessary corporate action, and do not contravene (i) the
Borrower's charter or by-laws or (ii) any law or contractual restriction binding
on or affecting the Borrower.
(c) No authorization or approval or other action by, and no notice to
or filing with, any governmental authority or regulatory body is required for
the due execution, delivery and performance by the Borrower of this Agreement or
the Notes.
30
(d) This Agreement is, and the Notes when delivered hereunder will be,
legal, valid and binding obligations of the Borrower enforceable against the
Borrower in accordance with their respective terms, except as enforceability may
be limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the enforcement of creditors' rights generally.
(e) The audited consolidated balance sheet of the Borrower as at June
30, 1996, and the related consolidated audited statements of income and
stockholders' equity of the Borrower for the fiscal year then ended, copies of
which have been furnished to each Lender, fairly present in all material
respects the consolidated financial condition of the Borrower as at such date
and the consolidated results of the operations of the Borrower for the period
ended on such date, all in accordance with generally accepted accounting
principles consistently applied except as noted therein, and since June 30,
1996, there has been no material adverse change in the business, financial
condition, assets, properties or operations of the Borrower or the Borrower and
its Subsidiaries taken as a whole.
(f) There is no pending or, to the knowledge of any Responsible Officer
of the Borrower, threatened action or proceeding affecting the Borrower or any
of its Subsidiaries before any court, governmental agency or arbitrator, which
(i) is reasonably likely to be adversely determined and such adverse
determination would likely have a material adverse effect on the business,
financial condition, assets, properties or operations of the Borrower or the
Borrower and its Subsidiaries taken as a whole, or (ii) purports to affect the
legality, validity or enforceability of this Agreement or any Note.
(g) The Borrower is not engaged in the business of extending credit for
the purpose of purchasing or carrying margin stock (within the meaning of
Regulation U issued by the Board of Governors of the Federal Reserve System),
and no proceeds of any Advance will be used to purchase or carry any margin
stock or to extend credit to others for the purpose of purchasing or carrying
any margin stock.
(h) The Borrower and each of its Restricted Subsidiaries has met its
minimum funding requirements under ERISA with respect to all of its Plans and
has not incurred any material liability to the Pension Benefit Guaranty
Corporation under ERISA in connection with any such Plan. No ERISA Termination
Event has occurred and is continuing with respect to any Plan.
(i) The Borrower is not an "investment company" or a company
"controlled" by an "investment company", within the meaning of the Investment
Company Act of 1940, as amended.
(j) Except as disclosed to the Agent and the Lenders in that certain
letter dated August 28, 1997 from the Borrower to the Agent, the Borrower and
its Restricted
31
Subsidiaries, to the best knowledge of the Responsible Officers, have obtained
the right to use all patents, trademarks, service-marks, trade names,
copyrights, licenses and other rights, free from burdensome restrictions, or
could obtain the same on terms and conditions not materially adverse to the
Borrower and its Restricted Subsidiaries and their operations taken as a whole,
that are necessary for the operation of their respective businesses as presently
conducted and for the operation of businesses described to the Lenders in
writing as proposed to be conducted.
(k) The Borrower has and each of its Subsidiaries has good and
indefeasible title to all material properties, assets and rights of every type
and nature now purported to be owned by it (other than properties and assets
disposed of in the ordinary course of business), subject to no Lien of any kind
except Liens permitted by Section 5.02(a). All leases material to the conduct of
the respective businesses of the Borrower and its Subsidiaries as currently
conducted are valid and subsisting and are in full force and effect.
(l) The Borrower has and each of its Restricted Subsidiaries has filed
all Federal, State and other tax returns which, to the best knowledge of the
Borrower, are required to be filed, and each has paid all taxes as shown on such
returns and on all assessments received by it to the extent that such taxes have
become due, except such taxes as are being contested in good faith by
appropriate proceedings and for which adequate reserves have been established in
accordance with generally accepted accounting principles and except where (i)
nonpayment thereof will not have a material adverse effect on the business,
financial condition, assets, properties or operations of the Borrower or of the
Borrower and its Subsidiaries taken as a whole, and (ii) either (A) the
aggregate unpaid amount thereof is less than $1,000,000, or (B) the unpaid
amount thereof shall be paid in full promptly upon the Borrower or the
Restricted Subsidiary owing the same obtaining knowledge of the delinquency
thereof, together with any penalties payable as a result of such delinquency.
(m) Neither the Borrower nor any of its Subsidiaries is a party to any
contract or agreement or subject to any charter or other corporate restriction
which materially and adversely affects the business, financial condition,
assets, properties or operations of the Borrower or the Borrower and its
Subsidiaries taken as a whole. Neither the execution nor delivery of this
Agreement or the Notes, nor fulfillment of nor compliance with the terms and
provisions hereof or thereof will conflict with, or result in a breach of the
terms, conditions or provisions of, or constitute a default under, or result in
any violation of, or result in the creation of any Lien upon any of the
properties or assets of the Borrower or any of its Restricted Subsidiaries
pursuant to, the charter or by-laws of the Borrower or any of its Restricted
Subsidiaries, any award of any arbitrator or any agreement (including any
agreement with stockholders), instrument, order, judgment, decree, statute, law,
rule or regulation to which the Borrower or any of its Restricted Subsidiaries
is subject.
32
(n) The documents, certificates and written statements furnished by any
Responsible Officer to the Agent or any Lender pursuant to any provision of this
Agreement or any other agreement, document or instrument delivered to the Agent
or any Lender pursuant hereto or in connection herewith, taken together with all
such other documents, certificates and written statements, do not contain any
untrue statement of a material fact or omit any material fact necessary to make
the statements made therein, taken together, in light of the circumstances under
which they were made, not misleading. It is recognized by the Agent and the
Lenders that projections and forecasts provided by or on behalf of the Borrower,
although reflecting the Borrower's good faith projections or forecasts based on
methods and data which the Borrower believes to be reasonable and accurate, are
not to be viewed as facts and that actual results during the period or periods
covered by any such projections and forecasts may (and are likely to) differ
from the projected or forecasted results.
(o) Listed on Exhibit H attached hereto are all of the Subsidiaries of
the Borrower as of the date of this Agreement, identifying which of the
Subsidiaries constitute Restricted Subsidiaries as of the date of this
Agreement. All of the issued and outstanding shares (other than shares of any
foreign Subsidiary required by applicable local law to be issued to directors of
such foreign Subsidiary or shares of foreign Subsidiaries issued to Persons to
satisfy local ownership requirements imposed by applicable local law) of the
capital stock of each Subsidiary owned by the Borrower or any Subsidiary are
duly issued and outstanding, fully paid and non-assessable and are free and
clear of any Lien.
(p) In the ordinary course of its business, the Borrower conducts an
ongoing review of the effect of Environmental Laws on the business, operations
and properties of the Borrower and its Subsidiaries, in the course of which it
identifies and evaluates associated liabilities and costs (including, without
limitation, any capital or operating expenditures required for clean-up or
closure of its properties, any capital or operating expenditures required to
achieve or maintain compliance with environmental protection standards imposed
by law or as a condition of any license, permit or contract, any related
constraints on operating activities, including any periodic or permanent
shutdown of any facility or reduction in the level of or change in the nature of
operations conducted thereat and any actual or potential liabilities to third
parties, including employees, and any related costs and expenses). On the basis
of this review, the Borrower has reasonably concluded that Environmental Laws
are not likely to have a material adverse effect on the business, financial
condition, assets, properties or operations of the Borrower or the Borrower and
its Subsidiaries taken as a whole.
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ARTICLE V
COVENANTS OF THE BORROWER
SECTION 5.01. Affirmative Covenants. So long as any amount payable
hereunder or under any Note shall remain unpaid or any Lender shall have any
Commitment hereunder, the Borrower will, unless the Majority Lenders shall
otherwise consent in writing:
(a) Compliance with Laws, Etc. Comply, and cause each of its
Subsidiaries to comply, in all material respects with all applicable laws,
rules, regulations and orders of any governmental authority, the noncompliance
with which would materially adversely affect the business, financial condition,
assets, properties or operations of the Borrower or the Borrower and its
Subsidiaries taken as a whole.
(b) Payment of Taxes and Claims. Pay, and cause each of its Restricted
Subsidiaries to pay, all taxes, assessments and other governmental charges
imposed upon it or any of its properties or assets or in respect of any of its
franchises, business, income or profits before any penalty accrues thereon or
immediately upon any determination that any interest is due thereon, and all
claims (including, without limitation, claims for labor, services, materials and
supplies) for sums which have become due and payable and which by law have or
may become a Lien upon any of its properties or assets; provided that no such
tax, assessment, charge or claim need be paid if it is being contested in good
faith by appropriate proceedings promptly instituted and diligently conducted
and if such accrual or other appropriate provision, if any, as shall be required
by generally accepted accounting principles shall have been made therefor;
provided, further, that the Borrower shall not be deemed to have breached this
Section 5.01(b) on account of the failure to pay any such tax, assessment,
charge or claim if (i) nonpayment thereof will not have a material adverse
effect on the business, financial condition, assets, properties or operations of
the Borrower or the Borrower and its Restricted Subsidiaries taken as a whole,
and (ii) either (A) the aggregate unpaid amount thereof is less than $1,000,000,
or (B) the unpaid amount thereof shall be paid in full promptly upon the
Borrower or the Restricted Subsidiary owing the same obtaining knowledge of the
delinquency thereof, together with any penalties payable as.a result of such
delinquency.
(c) Maintenance of Properties; Insurance; Books and Records. Maintain
or cause to be maintained, and cause each of its Restricted Subsidiaries to
maintain or cause to be maintained (i) to the extent consistent with good
business practices, in good repair, working order and condition all properties
material to the continued conduct of the business of the Borrower and its
Subsidiaries taken as a whole, and from time to time will make or cause to be
made all necessary repairs, renewals and replacements thereof; (ii) with
financially sound and reputable insurers, insurance with respect to its
properties and business and the properties and business of its Restricted
Subsidiaries against loss or damage of the
34
kinds customarily insured against by corporations of established reputation
engaged in the same or similar business and similarly situated, of such types
and in such amounts as are customarily carried under similar circumstances by
such other corporations ("Industry Standards"); provided that the Borrower and
its Restricted Subsidiaries may self insure to the extent, and only to the
extent, consistent with Industry Standards; and (iii) proper books of record and
account in accordance with generally accepted accounting principles consistently
applied.
(d) Corporate Existence, etc. At all times preserve and keep in full
force and effect its corporate existence, and corporate rights and franchises
material to its business, and those of each of its Restricted Subsidiaries,
except as otherwise specifically permitted by Sections 5.02(b). 5.02(d)or
5.02(e), and will qualify, and cause each of its Restricted Subsidiaries to
qualify, to do business in any jurisdiction where the failure to do so (i) is
remedied within a reasonable time period after a Responsible Officer has
knowledge of any such failure, and (ii) will not have a material adverse effect
on the business, financial condition, assets, properties or operations of the
Borrower or the Borrower and its Subsidiaries taken as a whole; provided that
the corporate existence of any Subsidiary may be terminated if, in the good
faith judgment of the Board of Directors of the Borrower, such termination is in
the best interests of the Borrower and is not disadvantageous to the Lenders.
(e) Reporting Requirements. Furnish to the Lenders:
(i) as soon as available and in any event within 45 days after
the end of each of the first three fiscal quarters of each fiscal year of
the Borrower, the unaudited consolidated balance sheet of the Borrower as
of the end of such quarter and consolidated unaudited statements of income,
stockholders' equity and cash flow of the Borrower for the period
commencing at the end of the previous fiscal year and ending with the end
of such quarter, setting forth in comparative form figures for the
corresponding period in the preceding fiscal year, in the case of such
statements of income, stockholders' equity xxx.xxxx flow, and figures at
the end of the preceding fiscal year in the case of such balance sheet, all
in reasonable detail, in accordance with generally accepted accounting
principles consistently applied (except as noted therein and subject to
normal year-end adjustments), and certified in a manner reasonably
acceptable to the Majority Lenders by a Responsible Financial Officer of
the Borrower;
(ii) as soon as available and in any event within 90 days
after the end of each fiscal year of the Borrower, the consolidated balance
sheet of the Borrower as of the end of such fiscal year and consolidated
statements of income, stockholders' equity and cash flow of the Borrower
for the period commencing at the end of the previous fiscal year and ending
with the end of such fiscal year, setting forth in comparative form figures
for the preceding fiscal year, all in reasonable
35
detail, in accordance with generally accepted accounting principles
consistently applied (except as noted therein), and certified in a manner
reasonably acceptable to the Majority Lenders by independent public
accountants of recognized national standing reasonably acceptable to the
Majority Lenders;
(iii) together with the financial statements furnished in
accordance with subdivisions (i) and (ii) of this Section 5.01(e) except as
noted with respect to clause (d) hereof, a certificate of a Responsible
Financial Officer of the Borrower in the form of Exhibit F attached hereto
(a) representing and warranting that no Event of Default or Default has
occurred and is continuing (or, if such an Event of Default or Default has
occurred, stating the nature thereof and the action which the Borrower
proposes to take with respect thereto), (b) setting forth a schedule
containing the information and calculations with respect to the Borrower's
compliance with Sections 5.01(h)- 5.01(i) and 5.02(h), (c) stating that the
representations and warranties contained in Section 4.01 are true and
correct on and as of the date of such certificate as though made on and as
of such date (except to the extent such representations or warranties
specifically relate to an earlier date, in which case they shall be true
and correct as of such date), and (d) only as to the financial statements
furnished in accordance with subdivision (ii) of this Section 5.01(e),
setting forth all changes, if any, to Exhibit H since the date of the
previous certificate furnished to the Lenders hereunder; provided that the
Borrower may, if no Advance is outstanding and no other amount payable
hereunder or under the Notes is then unpaid, elect not to submit the
statement otherwise required pursuant to the foregoing clause (c) so long
as such statement is made at least once each calendar year;
(iv) as soon as possible and in any event within five days after a
Responsible Officer or a Responsible Financial Officer knows or has reason
to know of the occurrence of any Default that is not an Event of Default
(provided, with respect to any such Default, at the time of such Default
any Advance is outstanding or any other amount payable hereunder or under
the Notes shall remain unpaid) and any Event of Default, a statement of a
Responsible Financial Officer of the Borrower setting forth details of such
Event of Default or Default and the action which the Borrower has taken and
proposes to take with respect thereto;
(v) promptly after the same are sent, copies of all financial
statements and reports which the Borrower sends to its shareholders
generally; and promptly after the same are filed, copies of all final
registration statements on Form X-0, X-0, X-0 or S-4 (without exhibits
unless specifically requested) or their successor forms relating to
offerings of debt or equity by the Borrower and copies of all reports on
Form 10-K, Form 10-Q and Form 8-K or their successor forms (without
exhibits unless specifically requested) which the Borrower may make to, or
file with, the Securities and Exchange Commission or any successor or
similar governmental entity;
36
(vi) as soon as practicable and in any event (a) within 30 days after
any Responsible Officer or any Responsible Financial Officer knows or has
reason to know that any ERISA Termination Event described in clause (i) of
the definition of ERISA Termination Event with respect to Any Plan has
occurred and (b) within 10 days after any Responsible Officer or any
Responsible Financial Officer knows or has reason to know that any other
ERISA Termination Event with respect to any Plan has occurred, a statement
of a Responsible Financial Officer of the Borrower describing such ERISA
Termination Event and the action, if any, which the Borrower or such ERISA
Affiliate proposes to take with respect thereto;
(vii) promptly upon receipt thereof, a copy of each other summary
report in its final form submitted to the Borrower or any Restricted
Subsidiary for delivery to, or which is actually delivered to, the Board of
Directors of the Borrower by independent accountants in connection with any
annual, interim or special audit made by them of the books of the Borrower
or any Restricted Subsidiary;
(viii) promptly after a Responsible Officer or a Responsible Financial
Officer knows or has reason to know thereof, notice of all actions, suits
and proceedings before any court or governmental authority or
instrumentality affecting the Borrower or any of its Subsidiaries of the
type described in Section 4.01(f), and promptly after any material adverse
development or change in the status of any such continuing action, suit or
proceeding, notice of such development or change;
(ix) promptly after a Responsible Officer or a Responsible Financial
Officer knows or has reason to know thereof, notice of any violation of any
Environmental Law that is reported or reportable by the Borrower or any of
its Subsidiaries to any federal, state or local environmental agency that
could be reasonably expected to have a material adverse effect on the
business, financial condition, assets, properties or operations of the
Borrower or the Borrower and its Subsidiaries taken as a whole;
(x) (a) promptly after any termination of any commitment (other than at
the request of the Borrower or any of its Subsidiaries) pursuant to any
Permitted Receivables Facility, notice of such termination; (b) promptly
after any change in any collection agent or similar entity pursuant to any
Permitted Receivables Facility (other than designation of any collection
agent affiliated with the Borrower), notice of such change; (c) promptly
after any material change in the financial institutions participating in
any Permitted Receivables Financing, notice of such change; and (d)
promptly after the execution and delivery thereof, copies of any Permitted
Receivables Facility and all amendments thereto, whether or not the consent
thereto of the Lenders is required hereunder; and
37
(xi) such other information respecting the condition or operations,
financial or otherwise (including, without limitation, information
pertaining to any change in accounting principles adopted by the Borrower
or any of its domestic Subsidiaries (or any of its foreign Subsidiaries if
such change in accounting principles would have a material effect on the
financial condition, operating performance or cash flow of the Borrower and
its Subsidiaries taken as a whole) during any fiscal year of the Borrower
and the effect thereof on the financial condition, operating performance or
cash flow of the Borrower and its Subsidiaries taken as a whole), of the
Borrower or any of its Subsidiaries as any Lender through the Agent may
from time to time reasonably request.
(f) Inspection of Property. Permit any employee of, or independent
financial, legal, environmental or other professional consultant or advisor
(other than a Person that is or is affiliated with a direct competitor of the
Borrower) retained by, the Agent or any of the Lenders or any agents or
representatives thereof, at the Agent's or such Lender's expense, to visit and
inspect any of the properties of the Borrower and its Subsidiaries, to examine
the corporate books and financial records of the Borrower and its Subsidiaries
and make copies thereof or extracts therefrom (except that the Borrower, as to
any information certified by the Borrower as constituting trade secrets or other
proprietary information of a non-financial nature, in a certificate delivered to
the Agent or Lender who has requested copies or extracts of such information,
may in its discretion refuse to allow such copies or extracts to be made) and to
discuss the affairs, finances and accounts of any of such corporations with the
principal officers of the Borrower or its independent public accountants (and by
this provision the Borrower authorizes such accountants to discuss with any
Person so designated the affairs, finances and accounts of the Borrower and its
Subsidiaries, whether or not the Borrower is present), all at such reasonable
times and as often as the Agent or any Lender may reasonably request, in each
case as to matters reasonably related to this Agreement or the transactions
contemplated hereby or the interests of the Agent or the Lenders hereunder.
(g) Use of Proceeds. The proceeds of all Advances shall be used for general
corporate purposes, including, without limitation, the retirement of Debt.
Notwithstanding any other term or provision set forth in this Agreement, no
portion of any Advance may be used to initiate or participate in the acquisition
of a controlling interest in the Voting Stock or assets of any corporation
unless such acquisition is made with the consent of such corporation and does
not otherwise violate the terms and provisions of this Agreement.
(h) Debt to Consolidated Tangible Net Worth Ratio. Maintain a ratio of (A)
Consolidated Debt of the Borrower, to (B) Consolidated Tangible Net Worth of not
more than 0.45 to 1.00.
38
(i) Fixed Charge Ratio. Maintain (i) as of the last day of the first fiscal
quarter of each fiscal year of the Borrower a ratio of (A) Adjusted EBIT of the
Borrower determined on a consolidated basis for the 12-month period ending on
such date, to (B) consolidated Fixed Charges of the Borrower for the 12-month
period ending on such date, of not less than 1.25 to 1.00; and (ii) as of the
last day of the second, third and fourth fiscal quarters of each fiscal year of
the Borrower a ratio of (A) Adjusted EBIT of the Borrower for the 12-month
period ending on such date, to (B) consolidated Fixed Charges of the Borrower
for the 12-month period ending on such date, of not less than 1.50 to 1.00, in
each case determined on a consolidated basis.
SECTION 5.02. Negative Covenants. So long as any amount payable hereunder
or under any Note shall remain unpaid or any Lender shall have any Commitment
hereunder, the Borrower will not, without the written consent of the Majority
Lenders:
(a) Liens, Excess Interest in Receivables, Etc. (i) Create, assume or
suffer to exist, or permit any Subsidiary to create, assume or suffer to exist,
any Lien upon any of its property or assets, whether now owned or hereafter
acquired , or any Excess Interest in Receivables, except
(A) Liens for taxes not yet due or which are being actively
contested in good faith by appropriate proceedings,
(B) other Liens incidental to the conduct of its business or
the ownership of its property and assets which were not incurred in
connection with the borrowing of money or the obtaining of advances of
credit, and which do not in the aggregate materially detract from the
value of its property or assets or materially impair the use of such
property or assets in the operation of its business,
(C) Liens existing on the property or assets of the Borrower
or any Subsidiary on the date of this Agreement and set forth on
Exhibit G,
(D) Liens on property or assets of a Subsidiary to secure
obligations of such Subsidiary to the Borrower or a wholly owned
Subsidiary,
(E) any Lien created to secure the purchase price or cost of
construction, or to secure Debt incurred to pay the purchase price or
cost of construction, of any property acquired by the Borrower or any
Subsidiary after the date hereof or any improvements to real property
constructed by or for the account of the Borrower or any Subsidiary
after the date hereof; provided that (x) any such Lien shall be
confined solely to the item or items of property so acquired or
constructed (and any theretofore unimproved real property on
39
which such improvements are located), and (y) any such Lien shall be
created concurrently with or within 12 months following the acquisition
of such property or the completion of construction of improvements
thereon,
(F) Liens on accounts receivable and related property of any
Subsidiary and/or on any such related property of the Borrower, in each
case subject to a Permitted Receivables Facility and created in
connection with such Permitted Receivables Facility,
(G) Liens existing on property including the proceeds thereof
and accessions thereto acquired by the Borrower or any Subsidiary
(including Liens on assets of any corporation at the time it becomes a
Subsidiary, unless such Lien was created in contemplation of such
corporation becoming a Subsidiary),
(H) Liens which constitute rights of set-off of a customary
nature or bankers' Liens with respect to amounts on deposit, whether
arising by operation of law or by contract, in connection with
arrangements entered into with banks in the ordinary course of
business, including rights of set-off created pursuant to or by virtue
of this Agreement and the Notes,
(I) leases or subleases and license and sublicenses granted to
others in the ordinary course of the Borrower's or any Subsidiary's
business not interfering in any material respect with the business of
the Borrower and its Subsidiaries taken as a whole, and any interest or
title of a lessor or licensor under any lease or license,
(J) Liens arising from judgments, decrees or attachments in
circumstances not constituting an Event of Default under Section
6.01(i), and Liens to secure appeal bonds, supersedeas bonds and other
similar Liens arising in connection with court proceedings (including,
without limitation, surety bonds and letters of credit) or any other
instrument serving a similar purpose; provided, however, that the total
amount secured by Liens described in this subsection (J) may not exceed
at any time 5% of Consolidated Tangible Net Worth (plus Liens so
described that are permitted in accordance with Section 5.02(a)(ii)
below),
(K) easements, reservations, rights-of-way, restrictions,
minor defects or irregularities in title and other similar charges or
encumbrances affecting real property not interfering in any material
respect with the ordinary conduct of the business of the Borrower and
its Subsidiaries taken as a whole,
40
(L) Liens in favor of customs and revenue authorities arising
as a matter of law to secure payment of customs duties in connection
with the importation of goods, and
(M) any Lien renewing, extending, or refunding any Lien
permitted under clauses (A) through (L), inclusive, of this Section
5.02(a); provided that the principal amount secured is not increased
and that such Lien is not extended to other property (other than
pursuant to its original terms).
(ii) Notwithstanding the provisions contained in subdivision (i) of
this Section 5.02(a), in addition to the permitted Liens described above,
the Borrower and its Subsidiaries, or any of them, may create, assume or
suffer to exist other Liens and Excess Interest in Receivables if, after
giving effect thereto and to the retirement of any Debt which is
concurrently being retired, the aggregate of (A) the total amount of Debt
then secured by such Liens, and (B) the total amount of Excess Interest in
Receivables then existing, does not exceed 10% of Consolidated Tangible Net
Worth; provided, however, if the aggregate of (A) the total amount of Debt
then secured by such Liens, and (B) the total amount of Excess Interest in
Receivables then existing, exceeds 10% of Consolidated Tangible Net Worth,
no Event of Default shall occur hereunder provided the Borrower
simultaneously therewith makes or causes to be made effective provision
whereby the indebtedness evidenced by this Agreement and the Notes will be
secured by such Liens (pursuant to documentation in form and substance
reasonably satisfactory to the Agent and the Majority Lenders) equally and
ratably with any and all other Debt thereby secured so long as such other
Debt shall be so secured.
(b) Merger and Consolidation. Merge into or consolidate with or into a
corporation, or permit any Subsidiary to do so, except that (i) any Subsidiary
may merge or consolidate with any other Subsidiary and any Subsidiary may merge
into the Borrower, (ii) the Borrower may merge or consolidate with any other
corporation; provided that (A) either (1) the Borrower shall be the continuing
or surviving corporation, or (2) the successor corporation shall be a solvent
corporation organized under the laws of any State of the United States of
America with a financial condition at least equal to that of the Borrower at the
time of such merger or consolidation, and such corporation shall expressly
assume in writing all of the obligations of the Borrower under this Agreement
and under the Notes, including all covenants herein and therein contained which
assumption shall not otherwise violate any term, condition or provision of this
Agreement or the Notes, and such successor shall be substituted for the Borrower
with the same effect as if it had been named herein as a party hereto, and (B)
immediately after giving effect to such merger or consolidation, no Default or
Event of Default shall have occurred, (iii) a Subsidiary may merge into or
consolidate with a corporation in connection with such corporation becoming a
Subsidiary or being combined with any existing Subsidiary, and (iv) provided
that the disposition of such
41
Subsidiary is not otherwise prohibited under the terms of this Agreement
(including pursuant to Section 5.02(d)(ii) below), any Subsidiary may merge into
or consolidate with a corporation, if after giving effect to such merger or
consolidation, neither such Subsidiary nor such corporation is a Subsidiary.
(c) Change in Nature of Business. Make, or permit any Subsidiary to make,
any material change in the nature of its business as carried on at the date
hereof; provided, however, that the Borrower and its Subsidiaries-may enter into
businesses which are appropriate extensions of or are reasonably related or
incidental to the current businesses of the Borrower and its Subsidiaries.
(d) Maintenance of Ownership of Subsidiaries. Sell or otherwise dispose of
any shares of capital stock of any Subsidiary or permit any Subsidiary to issue,
sell or otherwise dispose of any shares of its capital stock or the capital
stock of any other Subsidiary, except
(i) to the Borrower or another Subsidiary;
(ii) that all shares of stock of any Subsidiary at the time
owned by the Borrower or any Subsidiary may be sold as an entirety for
a consideration which represents the fair value (as determined in good
faith by the Board of Directors of the Borrower) at the time of sale of
the shares of stock so sold; provided that after giving effect to the
sale thereof the sum of (A) the total assets of all Subsidiaries whose
stock is so sold pursuant to this clause (ii) after the date of this
Agreement, plus (B) the total assets of all Subsidiaries that have been
merged into or consolidated with a corporation pursuant to clause (iv)
of Section 5.02(b) after the date of this Agreement, does not exceed
15% of the consolidated total assets of the Borrower;
(iii) shares of stock of any Subsidiary may be sold if, after
giving effect to such sale, such Subsidiary shall continue to be a
Subsidiary; and
(iv) shares of stock of any foreign Subsidiary may be issued
to directors of such foreign Subsidiary to satisfy director ownership
requirements imposed by applicable local law and shares of stock of
foreign Subsidiaries may be issued to Persons to the extent necessary
to satisfy local ownership requirements imposed by applicable local
law.
(e) Sales, Etc. of Assets. Transfer, or permit any Subsidiary to
Transfer any assets, if after giving effect to such Transfer the sum of (1) the
total assets as to which there has been a Transfer not permitted by clauses (i)
or (ii) of this Section 5.02(e) after the date of this Agreement, plus (2) the
total assets of all Subsidiaries whose stock is sold pursuant to clause (ii) of
Section 5.02(d) after the date of this Agreement, plus (3) the total
42
assets of all Subsidiaries that have been merged into or consolidated with a
corporation pursuant to clause (iv) of Section 5.02(b) after the date of this
Agreement, would exceed 20% of the consolidated total assets of the Borrower,
except that:
(i) any Subsidiary may Transfer any of its assets to the Borrower or to
another Subsidiary and the Borrower may Transfer assets to a wholly-owned
Subsidiary that had been transferred to the Borrower from a Subsidiary
after the date of this Agreement; and
(ii) the provisions of this Section 5.02(e) shall not apply to (A) any
Transfer made in the ordinary course of business, (B) any Transfer of
obsolete assets, (C) any Transfer by the Borrower or any Subsidiary of
assets (but not of all or substantially all of its assets) if such Transfer
is made pursuant to a plan to replace the assets subject to such Transfer
and such replacement occurs no later than six months after the Transfer
(or, if replacement is not reasonable by such date, binding commitments to
construct and/or acquire replacement assets shall have been entered into no
later than six months after the Transfer and such replacement shall occur
within a reasonable period of time, which shall in no event exceed 18
months), or (D) the sale of notes, leases and accounts receivable pursuant
to and in accordance with the terms of a Permitted Receivables Facility by
Borrower or any Subsidiary.
(f) Sale of Receivables. Sell with recourse, or discount or otherwise sell
for less than the face value thereof, or sell with or without recourse for
consideration other than cash, or permit any Subsidiary to sell with recourse,
or discount or otherwise sell for less than the face value thereof, or sell with
or without recourse for consideration other than cash, any of its notes or
accounts receivable; provided that the foregoing restrictions shall not apply to
(i) any license or sale of products or services in the ordinary course of
business where payment For such transactions is made by credit card; provided
that the fees and discounts incurred by the Borrower or the Subsidiary in
connection therewith shall not exceed the normal and customary fees and
discounts incurred for general credit card transactions through major credit
card issuers; (ii) the delivery and endorsement to banks in the ordinary course
of business by the Borrower or any of its Subsidiaries of promissory notes
received in payment of trade receivables, where delivery and endorsement are
made prior to the date of maturity of such promissory notes, and the retention
by said banks of normal and customary fees and discounts therefor; provided that
such practice is usual and customary in the country where such activity occurs;
and (iii) any sale of notes or accounts receivable (or interests therein) by the
Borrower or any Subsidiary in connection with a Permitted Receivables Facility.
(g) Subsidiary Debt. Permit any Subsidiary organized under the laws of any
State of the United States of America to create, incur, assume or suffer to
exist any Debt if, after giving effect thereto and to the concurrent repayment
of any other Debt, the
43
aggregate Debt of all such Subsidiaries will exceed $300,000,000 (not including
Debt of Subsidiaries incurred in connection with Permitted Receivables
Facilities).
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01. Events of Default. If any of the following events ("Events of
Default") shall occur and be continuing:
(a) the Borrower shall fail to pay (i) any principal of any Advance when
the same becomes due and payable; or (ii) any interest on any Advance or any
fees payable hereunder within five Business Days after the same becomes due; or
(iii) any other amounts payable hereunder within 30 days of the date of invoice
or written demand therefor; or
(b) any representation or warranty made by the Borrower herein or by the
Borrower (or any of its officers) in connection with this Agreement shall prove
to have been incorrect in any material respect when made; or
(c) the Borrower shall fail. to perform or observe any term, covenant or
agreement contained in Sections 5.01(h), 5.01(i), 5.02(b), 5.02(c), 5.02(d),
5.02(e), 5.02(g) or 5.02(h); or
(d) the Borrower shall fail to perform or observe any term, covenant or
agreement contained in this Agreement (other than those covered by the other
clauses of this Section 6.01) on its part to be performed or observed if the
failure to perform or observe such other term, covenant or agreement shall
remain unremedied for 30 days after written notice thereof shall have been given
to the Borrower by the Agent at the request of any Lender; or
(e) (i) the Borrower or any of its Subsidiaries shall fail to pay any
principal of or premium or interest on any Debt which is outstanding in a
principal amount of at least $10,000,000 in the aggregate (but excluding Debt
outstanding hereunder) of the Borrower or such Subsidiary (as the case may be),
when the same becomes due and payable (whether by scheduled maturity, required
prepayment, acceleration, demand or otherwise), and such failure shall continue
after the applicable grace period, if any, specified in the agreement or
instrument relating to such Debt; or any other event shall occur or condition
shall exist under any agreement or instrument relating to any such Debt and
shall continue after the applicable grace period, if any, specified in such
agreement or instrument; but only if the effect of such failure to pay, event or
condition is to accelerate the maturity of such Debt; or any such Debt shall be
declared by the creditor to be due and payable, or required
44
to be prepaid (other than by a regularly scheduled required prepayment),
redeemed, purchased or defeased, or an offer to prepay, redeem, purchase or
defease such Debt shall be required to be made, in each case prior to the stated
maturity thereof; or (ii) any event shall occur or condition shall exist under
any agreement or instrument relating to any Debt of the Borrower or any of its
Subsidiaries outstanding in a principal amount in excess of $50,000,000 in the
aggregate and shall continue after the applicable grace period, if any,
specified in such agreement or instrument, if the effect of such event or
condition is to permit the acceleration by the creditor of, the maturity of such
Debt; or
(f) the Borrower or any of its Subsidiaries shall generally not pay its
debts as such debts become due, or shall admit in writing its inability to pay
its debts generally, or shall make a general assignment for the benefit of
creditors; or any proceeding shall be instituted by or against the Borrower or
any of its Subsidiaries seeking to adjudicate it a bankrupt or insolvent, or
seeking liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief, or composition of it or its debts under any law relating to
bankruptcy, insolvency or reorganization or relief of debtors, or seeking the
entry of an order for relief or the appointment of a receiver, trustee,
custodian or other similar official for it or for any substantial part of its
property and, in the case of any such proceeding instituted against it (but not
instituted by it), either such proceeding shall remain undismissed or unstayed
for a period of 30 consecutive days, or any of the actions sought in such
proceeding (including, without limitation, the entry of an order for relief
against, or the appointment of a receiver, trustee, custodian or other similar
official for, it or for any substantial part of its property) shall occur; or
the Borrower or any of its Subsidiaries shall take any corporate action to
authorize any of the actions set forth above in this subsection (f); or
(g) any order, judgment or decree is entered in any proceedings against the
Borrower or any Material Subsidiary decreeing the dissolution of the Borrower or
such Material Subsidiary and such order, judgment or decree remains unstayed and
in effect for more than 60 consecutive days; or
(h) any order, judgment or decree is entered in any proceedings against the
Borrower or any Material Subsidiary decreeing a split-up of the Borrower or such
Material Subsidiary which requires the divestiture of assets representing a
substantial part, or the divestiture of the stock of a Material Subsidiary whose
assets represent a substantial part, of the consolidated assets of the Borrower
(determined in accordance with generally accepted accounting principles) or
which requires the divestiture of assets, or stock of a Material Subsidiary,
which shall have contributed a substantial part of the consolidated net income
of the Borrower (determined in accordance with generally accepted accounting
principles) for any of the three fiscal years then most recently ended, and such
order, judgment or decree remains unstayed and in effect for more than 60
consecutive days; or
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(i) a final judgment or order for the payment of money in an amount (not
covered by insurance) which exceeds $10,000,000 shall be rendered against the
Borrower or any of its Subsidiaries and; prior to the payment in full of the
amount thereof, either (i) enforcement proceedings shall have been commenced by
any creditor upon such judgment or order, or (ii) there shall be any period of
30 consecutive days during which a stay of enforcement of such judgment or
order, by reason of a pending appeal or otherwise, shall not be in effect; or
(j) any ERISA Termination Event that the Lenders determine in good faith
might constitute grounds for the termination of any Plan or for the appointment
by the appropriate United States district court of a trustee to administer any
Plan shall have occurred and be continuing for 30 days after written notice
shall have been given to the Borrower by the Agent, or any Plan shall be
terminated, or a trustee shall be appointed by an appropriate United States
district court to administer any Plan, or the Pension Benefit Guaranty
Corporation shall institute proceedings to terminate any Plan or to appoint a
trustee to administer any Plan;
then, and in any such event, the Agent (i) shall at the request, or may
with the consent, of the Majority Lenders, by notice to the Borrower, declare
the obligation of each Lender to make Advances to be terminated, whereupon the
same shall forthwith terminate, and (ii) shall at the request, or may with the
consent, of the Majority Lenders, by notice to the Borrower, declare the
Advances, all interest thereon and all other amounts payable under this
Agreement to be forthwith due and payable, whereupon the Advances, all such
interest and all such amounts shall become and be forthwith due and payable,
without presentment, demand, protest or further notice of any kind, all of which
are hereby expressly waived by the Borrower; provided, however, that if an Event
of Default specified in Section 6.01(f) shall occur or in the event of an actual
or deemed entry of an order for relief with respect to the Borrower or any of
its subsidiaries under the Federal Bankruptcy Code, (A) the obligation of each
Lender to make Advances shall automatically be terminated and (B) the Advances,
all such interest and all such amounts shall automatically become and be due and
payable, without presentment, demand, protest or any notice of any kind, all of
which are hereby expressly waived by the Borrower.
SECTION 6.02. Mandatory Prepayment; Event of Early Termination.
Notwithstanding anything to the contrary contained herein, in the event that a
Change of Control Event shall occur with respect to the Borrower, the Agent (i)
shall at the request, or may with the consent, of the Majority Lenders, by
notice to the Borrower, declare the obligation of each Lender to make Advances
to be terminated, whereupon the same shall forthwith terminate, and (ii) shall
at the request, or may with the consent, of the Majority Lenders, by notice to
the Borrower, declare the Advances, all interest thereon and all other amounts
payable under this Agreement to be forthwith due and payable, whereupon the
Advances, all such interest and all such amounts shall become and be forthwith
due and
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payable, without presentment, demand, protest or further notice of any kind, all
of which are hereby expressly waived by the Borrower.
ARTICLE VII
THE AGENT
SECTION 7.01. Authorization and Action. Each Lender hereby appoints and
authorizes the Agent to take such action as agent on its behalf and to exercise
such powers under this Agreement as are delegated to the Agent by the terms
hereof, together with such powers as are reasonably incidental thereto. As to
any matters not expressly provided for by this Agreement (including, without
limitation, enforcement or collection of the amounts payable hereunder and under
the Notes), the Agent shall not be required to exercise any discretion or take
any action, but shall be required to act or to refrain from acting (and shall be
fully protected in so acting or refraining from acting) upon the instructions of
the Majority Lenders, and such instructions shall be binding upon all Lenders
and all holders of Notes; provided, however, that the Agent shall not be
required to take any action which exposes the Agent to personal liability or
which is contrary to this Agreement or applicable law. The Agent agrees to give
to each Lender prompt notice of each notice given to it by the Borrower pursuant
to the terms of this Agreement.
SECTION 7.02. Agent's Reliance, Etc. Neither the Agent nor any of its
directors, officers, agents or employees shall be liable for any action taken or
omitted to be taken by it or them under or in connection with this Agreement,
except for its or their own gross negligence or willful misconduct. Without
limitation of the generality of the foregoing, the Agent: (i) may treat the
payee of any Note as the holder thereof until the Agent receives and accepts an
Assignment and Acceptance entered into by the Lender which is the payee of such
Note, as assignor, and an assignee, as provided in Section 8.07; (ii) may
consult with legal counsel (including counsel for the Borrower), independent
public accountants and other experts selected by it and shall not be liable for
any action taken or omitted to be taken in good faith by it in accordance with
the advice of such counsel, accountants or experts; (iii) makes no warranty or
representation to any Lender and shall not be responsible to any Lender for any
statements, warranties or representations (whether written or oral) made in or
in connection with this Agreement; (iv) shall not have any duty to ascertain or
to inquire as to the performance or observance of any of the terms, covenants or
conditions of this Agreement on the part of the Borrower or to inspect the
property (including the books and records) of the Borrower; (v) shall not be
responsible to any Lender for the due execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Agreement or any other
instrument or document furnished pursuant hereto; and (vi) shall incur no
liability under or in respect of this Agreement by acting upon any notice,
consent, certificate or other
47
instrument or writing (which may be by telecopier, telegram, cable or telex)
believed by it to be genuine and signed or sent by the proper party or parties.
SECTION 7.03. CUSA and Affiliates. With respect to its Commitment and the
Advances made by lt and the Notes issued to lt, CUSA shall have the same rights
and powers under this Agreement as any other Lender and may exercise the same as
though it were not the Agent; and the term "Lender" or "Lenders" shall, unless
otherwise expressly indicated, include CUSA in its individual capacity. CUSA and
its Affiliates may accept deposits from, lend money to, act as trustee under
indentures of, and generally engage in any kind of business with, the Borrower,
any of its Subsidiaries and any Person who may do business with or own
securities of the Borrower or any such Subsidiary, all as if CUSA were not the
Agent and without any duty to account therefor to the Lenders.
SECTION 7.04. Lender Credit Decision. Each Lender acknowledges that it has,
independently and without reliance upon the Agent or any other Lender and based
on the financial statements referred to in Section 4.01 and such other documents
and information as lt has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Lender also acknowledges that it
will, independently and without reliance upon the Agent or any other Lender and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under this Agreement.
SECTION 7.05. Indemnification. The Lenders agree to indemnify the Agent (to
the extent not reimbursed by the Borrower), ratably according to the respective
principal amounts outstanding under the A Notes then held by each of them (or if
no A Advances are at the time outstanding or if any A Notes are held by Persons
which are not Lenders, ratably according to the respective amounts of their
Commitments), from and against any and all claims, liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever which may be imposed on, incurred
by, or asserted against the Agent in any way relating to or arising out of this
Agreement or any action taken or omitted by the Agent under this Agreement;
provided that no Lender shall be liable for any portion of such claims,
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting from the Agent's gross negligence or
willful misconduct. Without limitation of the foregoing, each Lender agrees to
reimburse the Agent promptly upon demand for its ratable share of any
out-of-pocket expenses (including counsel fees, court costs and all other
reasonable litigation expenses, including, but not limited to, expert witness
fees, document copying expenses, exhibit preparation, courier expenses, postage,
and communication expenses) incurred by the Agent in connection with the
preparation, execution, delivery. administration, modification, amendment or
enforcement (whether through negotiations, legal proceedings or otherwise) of,
or legal advice in respect of rights or responsibilities under,
48
this Agreement, to the extent that the Agent is not reimbursed for such expenses
by the Borrower, provided that to the extent indemnification payments made by
the Lenders pursuant to this Section 7.05 are subsequently recovered from or for
the account of the Borrower, the Agent shall promptly refund such previously
paid indemnification payments to the Lenders.
SECTION 7.06. Successor Agent. The Agent may resign at any time by giving
written notice thereof to the Lenders and the Borrower. Upon any such
resignation, the Majority Lenders shall have the right to appoint a successor
Agent, which successor Agent shall (if no Event of Default then exists) be
subject to the approval of the Borrower not to be unreasonably withheld. If no
successor Agent shall have been so appointed by the Majority Lenders, and shall
have accepted such appointment, within 20 days after the retiring Agent's giving
of notice of resignation, then the Borrower may appoint a successor Agent, which
successor Agent shall be subject to the approval of the Majority Lenders not to
be unreasonably withheld. If no successor Agent shall have been so appointed by
the Borrower, and shall have accepted such appointment, within 30 days after the
retiring Agent's giving of notice of resignation, then the retiring Agent may,
on behalf of the Lenders, appoint a successor Agent which shall be a commercial
bank organized under the laws of the United States of America or of any State
thereof and having a combined capital and surplus of at least $300,000,000 or an
Affiliate thereof. Upon the acceptance of any appointment as Agent hereunder by
a successor Agent, such successor Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring Agent,
and the retiring Agent shall be discharged from its duties and obligations under
this Agreement. After any retiring Agent's resignation hereunder as Agent, the
provisions of this Article VII shall inure to its benefit as to any actions
taken or omitted to be taken by lt while lt was Agent under this Agreement.
SECTION 7.07. Co-Agents. None of the Lenders identified on the facing page
or signature pages of this Agreement as a "co-agent" shall have any right,
power, obligation, liability, responsibility or duty under this Agreement other
than those applicable to any Lender. Without limiting the foregoing, none of the
Lenders so identified as a "co- agent" shall have or be deemed to have any
fiduciary relationship with any Lender. Each Lender acknowledges that it has not
relied, and will not rely, on any of the Lenders so identified in deciding to
enter into this Agreement or in taking or not taking any action hereunder.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. Amendments Etc. No amendment or waiver of any provision of
this Agreement or the Notes, nor consent to any departure by the Borrower
therefrom, shall in any event be effective unless the same shall be in writing
and signed by the Majority Lenders and the Borrower, and then such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given; provided, however, that no amendment, waiver or consent
shall, unless in writing and signed by all the Lenders, do any of the following:
(a) waive any of the conditions specified in Section 3.01. 3.02 or 3.03, (b)
increase the Commitments of the Lenders or subject the Lenders to any additional
obligations, (c) reduce the principal of, or interest on, the Advances or any
fees or other amounts payable hereunder, (d) postpone any date fixed for any
payment of principal of, or interest on, the Advances or any fees or other
amounts payable hereunder, (e) change the percentage of the Commitments or the
number of Lenders which shall be required for the Lenders or any of them to take
any action hereunder, or (f) amend this Section 8.01; and
49
provided further that no amendment, waiver or consent shall, unless in writing
and signed by the Agent in addition to the Lenders required above to take such
action, affect the rights or duties of the Agent under this Agreement.
SECTION 8.02. Notices; Payments, Etc. (a) All notices and other
communications provided for hereunder shall be in writing (including telecopier
communication) and mailed, telecopied or delivered, if to the Borrower, at its
address at 0000 Xxxxxx Xxxxxx PAL 0-000, Xxxxxxxx Xxxx, Xxxxxxxxxx 00000,
Attention: Treasurer, with a copy to the attention of General Counsel at the
same address (but with the following mail stop substituted: PAL 1-521); if to
any Lender specified on Schedule I, at its Domestic Lending Office specified
opposite its name on Schedule I hereto; if to any other Lender, at its Domestic
Lending Office specified in the Assignment and Acceptance pursuant to which it
became a Lender; and if to the Agent, at its address c/o Citicorp North America,
Inc. at Citicorp Center, Xxx Xxxxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxxxxxxx,
Xxxxxxxxxx 00000, Attention: Xxxx Xxxxxxx with copies to Citicorp Securities,
Inc., Xxx Xxxxx Xxx, Xxxxx 000, Xxx Xxxxxx, Xxxxxxxx 00000, Attention: Loan
Disclosure, Xxxxxxxxx Xxxxxxx; provided that all notices to the Agent pursuant
to Article II shall be at Citicorp Securities, Inc., Xxx Xxxxx Xxx, Xxxxx 000,
Xxx Xxxxxx, Xxxxxxxx 00000, Attention: Loan Investor Services; or, as to the
Borrower or the Agent, at such other address as shall be designated by such
party in a written notice to the other parties and, as to each other party, at
such other address as shall be designated by such party in a written notice to
the Borrower and the Agent. All such notices and communications shall, (i) when
telecopied, be effective when telecopied, (ii) when sent by an overnight (next
day) courier service, be effective on the Business Day after the date when
delivered to such service, and (iii) when mailed, be effective on the fifth
Business Day after the date deposited in the mails, except that notices and
communications to the Agent pursuant to Article II or VII shall not be effective
until received by the Agent, and any notice of default which is given to the
Borrower only by means of telecopier shall not be effective until such telecopy
is received by the Borrower.
(b) All payments made or funds delivered to the Agent hereunder shall be
made or delivered to the Agent at its Domestic Lending Office or at such other
address as the Agent may designate from time to time in a written notice to the
other parties.
SECTION 8.03. No Waiver; Remedies. No failure on the part of any Lender or
the Agent to exercise, and no delay in exercising, any right hereunder or under
any Note shall operate as a waiver thereof; nor shall any single or partial
exercise of any such right preclude any other or further exercise thereof or the
exercise of any other right. The remedies herein provided are cumulative and not
exclusive of any remedies provided by law.
SECTION 8.04. Costs and Expenses. (a) The Borrower agrees to pay on written
demand all reasonable costs and expenses incurred by the Agent in connection
with the preparation, execution, delivery, administration, modification and
amendment and
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syndication of this Agreement, the Notes and the other documents to be delivered
hereunder, including, without limitation, the reasonable fees and out-of-pocket
expenses of counsel for the Agent with respect thereto and with respect to
advising the Agent as to its rights and responsibilities under this Agreement.
The Borrower further agrees to pay on written demand all reasonable costs and
expenses, if any (including, without limitation, reasonable counsel fees, court
costs, and all other reasonable litigation expenses, including, but not limited
to, expert witness fees, document copying expenses, exhibit preparation, courier
expenses, postage, communication expenses and other expenses, specifically
including reasonable allocated costs of in-house counsel), incurred by the Agent
and the Lenders in connection with the enforcement (whether through
negotiations, legal proceedings or otherwise) of this Agreement, the Notes and
the other documents to be delivered hereunder, including, without limitation,
reasonable counsel fees and expenses in connection with the enforcement of
rights under this Section 8.04(a). In addition, the Borrower shall pay any and
all stamp and other taxes payable or determined to be payable in connection with
the execution and delivery of this Agreement, the Notes and the other documents
to be delivered hereunder, and agrees to save the Agent and each Lender harmless
from and against any and all liabilities with respect to or resulting from any
delay in paying or omission to pay such taxes.
(b) If any payment of principal of any Eurodollar Rate Advance or B Advance
is made other than on the last day of the Interest Period for such A Advance or
the applicable maturity date for such B Advance, as the case may be, as a result
of a payment pursuant to Section 2.13 or acceleration of the maturity of the
Advances pursuant to Section 6.01 or for any other reason, the Borrower shall,
upon written demand by any Lender (with a copy of such demand to the Agent), pay
to the Agent for the account of such Lender any amounts required to compensate
such Lender for any additional losses, costs or expenses which it may reasonably
incur as a result of such payment, including, without limitation, any loss
(including loss of anticipated profits), cost or expense incurred by reason of
the liquidation or reemployment of deposits or other funds acquired by any
Lender to fund or maintain such Advance. Upon the Borrower's written request,
any Lender demanding compensation under this Section 8.04(b) shall furnish to
the Borrower a summary statement as to the method of calculation of any such
losses, costs or expenses.
(c) The Borrower agrees to indemnify, protect, defend and hold harmless the
Agent and each Lender and each of their Affiliates and their respective
officers, directors, employees, agents, advisors and representatives (each, an
"Indemnified Party") from and against any and all claims, damages, losses,
liabilities, obligations, penalties, actions, judgments, suits, costs,
disbursements and expenses (including, without limitation, reasonable fees and
expenses of counsel, including but not limited to court costs and all other
reasonable litigation expenses including, but not limited to, expert witness
fees, document copying expenses, exhibit preparation, courier expenses, postage,
and communication expenses) that may be incurred by or asserted against any
Indemnified Party, in each case
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arising out of or in connection with or by reason of, or in connection with the
preparation for a defense of, any investigation, litigation, proceeding or
settlement arising out of, related to or in connection with (i) this Agreement
or the transactions contemplated by this Agreement or the use of any proceeds of
the Advances, (ii) the Advances, the Borrowings or the Commitments, (iii) the
failure of the Borrower or any of its Subsidiaries to comply fully with any and
all Environmental Laws applicable to it, or (iv) any acquisition or proposed
acquisition by the Borrower or any of its Subsidiaries of all or any portion of
the stock or substantially all of the assets of any Person (including, without
limitation, the Borrower), whether or not an Indemnified Party is a party
thereto and whether or not the transactions contemplated hereby are consummated
and whether or not such investigation, litigation or proceeding is brought by
the Borrower, any of its shareholders or creditors, an Indemnified Party or any
other Person, except to the extent such claims, damages, losses, liabilities,
obligations, penalties, actions, judgments, suits, costs, disbursements and
expenses are found in a final, nonappealable judgment by a court of competent
jurisdiction to have resulted from the gross negligence or willful misconduct of
such Indemnified Party; provided, however, that the Borrower's indemnification
obligations set forth herein shall not extend to expenses or fees paid by an
Indemnified Party for reasons other than in connection with this Agreement or
the transactions contemplated hereby. The Borrower agrees that no Indemnified
Party shall have any liability (whether direct or indirect, in contract, tort or
otherwise) to the Borrower or any of its creditors or shareholders in connection
with this Agreement or the transactions contemplated hereby except to the extent
such liability is found in a final, nonappealable judgment by a court of
competent jurisdiction to have resulted from such Indemnified Party's gross
negligence or willful misconduct.
(d) Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower contained in
this Section 8.04 shall survive the termination of this Agreement, the
termination of the Commitments and the payment in full of the Notes.
SECTION 8.05. Right of Set-off. Upon (i) the occurrence and during the
continuance of any Event of Default and (ii) the making of the request or the
granting of the consent specified by Section 6.01 to authorize the Agent to
declare the Advances and all other amounts payable under this Agreement to be
forthwith due and payable pursuant to the provisions of Section 6.01, each
Lender is hereby authorized at any time and from time to time, to the fullest
extent permitted by law, to set off and apply any and all deposits (general or
special, time or demand, provisional or final) at any time held and other
indebtedness at any time owing by such Lender to or for the credit or the
account of the Borrower against any and all of the obligations of the Borrower
now or hereafter existing under this Agreement and any Note held by such Lender,
whether or not such Lender shall have made any demand under this Agreement or
such Note and although such obligations may be unmatured. Each Lender agrees
promptly to notify the Borrower after any such set-off and application made by
such Lender; provided that the failure to give such notice shall not affect
52
the validity of such set-off and application. The rights of each Lender under
this Section 8.05 are in addition to other rights and remedies (including,
without limitation, other rights of setoff) which such Lender may have. The
Borrower hereby authorizes CUSA, in accordance with the provisions of this
Section 8.05, to so set off and apply any and all such deposits held and other
indebtedness owing by Citibank or any other Affiliate of CUSA to or for the
credit or the account of the Borrower and hereby authorizes Citibank and each
such Affiliate to permit such setoff and application by CUSA.
SECTION 8.06. Binding Effect. This Agreement shall become effective when it
shall have been executed by the Borrower and the Agent and when the Agent shall
have been notified by each Lender that such Lender has executed it and
thereafter shall be binding upon and inure to the benefit of the Borrower, the
Agent and each Lender and their respective successors and assigns, except that
the Borrower shall not have the right to assign its rights hereunder or any
interest herein without the prior written consent of the Lenders.
SECTION 8.07. Assignments and Participations. (a) Each Lender may assign to
one or more banks or other financial institutions all or a portion of its rights
and Obligations under this Agreement (including, without limitation, all or a
portion of its Commitment and the A Advances owing to it and the A Note or Notes
held by it); provided, however, that (i) each such assignment shall be of a
constant, and not a varying, percentage of all rights and obligations under this
Agreement (other than any B Advances or B Notes), (ii) the amount of the
Commitment of the assigning Lender being assigned pursuant to each such
assignment (determined as of the date of the Assignment and Acceptance with
respect to such assignment) shall in no event be less than $25,000,000 (or such
assigning Lender's entire Commitment if such Lender's Commitment is less than
$25,000,000) and shall be an integral multiple of $1,000,000, (iii) each such
assignment shall be to an assignee reasonably acceptable to the Agent and
consented to by the Borrower, which consent shall not be unreasonably withheld;
provided, however, that the consent of the Borrower shall not be required with
respect to any such assignment by CUSA to Citibank or any other Affiliate of
CUSA of any Advance made by CUSA or any such assignment by any other Lender to
an Affiliate of such Lender of any Advance made by such Lender, and (iv) the
parties to each such assignment shall execute and deliver to the Agent, for its
acceptance and recording in the Register, an Assignment and Acceptance, together
with any A Note or Notes subject to such assignment and a processing and
recordation fee of $3,000. Upon such execution, delivery, acceptance and
recording, from and after the effective date specified in each Assignment and
Acceptance, x) the assignee thereunder shall be a party hereto and, to the
extent that rights and obligations hereunder have been assigned to it pursuant
to such Assignment and Acceptance, have the rights and obligations of a Lender
hereunder and (y) the Lender assignor thereunder shall, to the extent that
rights and obligations hereunder have been assigned by it pursuant to such
Assignment and Acceptance, relinquish its rights and be released from its
obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all or the remaining portion of an assigning Lender's rights
and obligations under this Agreement, such Lender shall cease to be a party
hereto).
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(b) By executing and delivering an Assignment and Acceptance, the Lender
assignor thereunder and the assignee thereunder confirm to and agree with each
other and the other parties hereto as follows: (i) other than as provided in
such Assignment and Acceptance, such assigning Lender makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this Agreement or
the execution, legality, validity, enforceability, genuineness, sufficiency or
value of this Agreement or any other instrument or document furnished pursuant
hereto; (ii) such assigning Lender makes no representation or warranty and
assumes no responsibility with respect to the financial condition of the
Borrower or the performance or observance by the Borrower of any of its
obligations under this Agreement or any other instrument or document furnished
pursuant hereto; (iii) such assignee confirms that it has received a copy of
this Agreement, together with copies of the financial statements referred to in
Section 4.01 and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into such
Assignment and Acceptance; (iv) such assignee will, independently and without
reliance upon the Agent, such assigning Lender or any other Lender and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
this Agreement; (v) such assignee appoints and authorizes the Agent to take such
action as agent on its behalf and to exercise such powers under this Agreement
as are delegated to the Agent by the terms hereof, together with such powers as
are reasonably incidental thereto; and (vi) such assignee agrees that it will
perform in accordance with their terms all of the obligations which by the terms
of this Agreement are required to be performed by it as a Lender.
(c) The Agent shall maintain at its address referred to in Section 8.02(a)
a copy of each Assignment and Acceptance delivered to and accepted by it and a
register for the recordation of the names and addresses of the Lenders and the
Commitment of, and principal amount of the A Advances owing to, each Lender from
time to time (the "Register"). The entries in the Register shall be conclusive
and binding for all purposes, absent manifest error, and the Borrower, the Agent
and the Lenders may treat each Person whose name is recorded in the Register as
a Lender hereunder for all purposes of this Agreement. The Register shall be
available for inspection by the Borrower or any Lender at any reasonable time
and from time to time upon reasonable prior notice.
(d) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender and an assignee acceptable to the Agent and reasonably
consented to by the Borrower together with any A Note or Notes subject to such
assignment, the Agent shall, if such Assignment and Acceptance has been
completed and is in substantially the form of Exhibit C hereto, (i) accept such
Assignment and Acceptance, (ii) record the information contained therein in the
Register and (iii) give prompt notice thereof to the Borrower.
54
(e) Each Lender may assign to one or more banks or other entities any B
Note or Notes held by it.
(f) A Lender may at any time grant participations to one or more banks or
other entities in or to all or any part of its rights and obligations under this
Agreement or any Borrowings hereunder without the consent of the Borrower or the
Agent; provided, however, that (i) the Borrower and the Agent shall be entitled
to continue to deal solely with the granting Lender regarding notices, payments,
payment instructions and any other matters arising pursuant to this Agreement;
(ii) the granting Lender's obligations under this Agreement shall remain
unchanged and the granting Lender shall remain solely responsible for the
performance thereof, and (iii) the granting Lender shall remain the holder of
its Note(s) for all purposes under this Agreement. Any agreement pursuant to
which any Lender may grant such a participating interest shall provide that such
Lender shall retain the sole right and responsibility to enforce the obligations
of the Borrower hereunder, including, without limitation, the right to approve
any amendment, modification or waiver of any provision of this Agreement;
provided that such participation agreement may provide that such Lender will not
agree, without the consent of the participant, to any modification, amendment or
waiver of any provision of this Agreement described in clauses (b), (c) or (d)
of Section 8.01, or to the release of any Lien that may at any time be created
to secure any obligations owing to the Agent and/or the Lenders hereunder or
under the Note.
(g) Any Lender may, in connection with any assignment or participation or
proposed assignment or participation pursuant to this Section 8.07, disclose to
the assignee or participant or proposed assignee or participant, any information
relating to the Borrower furnished to such Lender by or on behalf of the
Borrower; provided that, prior to any such disclosure, the assignee or
participant or proposed assignee or participant shall agree, pursuant to Section
8.11, to preserve the confidentiality of any confidential information relating
to the Borrower received by it from such Lender.
(h) Notwithstanding anything else contained herein, each Lender may assign,
as collateral or otherwise, any of its rights (including, without limitation,
rights to payments of principal or interest) under this Agreement to any Federal
Reserve Bank without notice to or the consent of the Borrower or the Agent and
without any requirement that the assignee assume any obligations of such Lender
hereunder.
(i) If any Eurodollar Reference Bank or its Lender Affiliate assigns its
Notes to an unaffiliated institution, the Agent shall, in consultation with the
Borrower and with the consent of the Majority Lenders, appoint another bank to
act as a Eurodollar Reference Bank hereunder, and pending such appointment, the
Eurodollar Rate shall be determined on the basis of the remaining Eurodollar
Reference Bank(s).
55
SECTION 8.08. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of California.
SECTION 8.09. Headings. Article and Section headings in this Agreement
are included herein for convenience of reference only and shall not constitute a
part of this Agreement for any other purpose.
SECTION 8.10. Commitment Extension. The Borrower shall have the right in
each year to request a one-year extension of the Termination Date then in
effect; such request shall be received by the Agent at least 60 days (but not
more than 75 days) prior to each anniversary of the Effective Date. Such request
shall be irrevocable and binding upon the Borrower. The Agent shall promptly
notify each Lender of such request. If a Lender agrees, in its individual and
sole discretion, to so extend its Commitment (an "Extending Lender"), it will
notify the Agent, in writing, of its decision to do so within 30 days after
receipt of such notice from the Agent but in any event, no later than 15 days
prior to the next anniversary of the Effective Date. The Commitment of any
Lender that fails to accept the Borrower's request for extension of the
Termination Date (a "Declining Lender") shall be terminated on the Termination
Date originally in effect (without regard to extension by other Lenders). The
Borrower shall have the right to first, accept from the Extending Lenders
increases in their respective Commitments by an aggregate amount up to the
amount of all Declining Lenders' Commitments and second, to identify assignees
(reasonably acceptable to the Agent) that agree to accept assignments of
Commitments ("Replacement Lenders") in an amount equal to the amount of all
Declining Lenders' Commitments not otherwise assumed by Extending Lenders, in
each case by requiring each Declining Lender to assign in full its rights and
obligations under this Agreement to one or more extending Lenders or Replacement
Lenders; provided that (i) such assignment is otherwise in compliance with
Section 8.07, (ii) such Declining Lender receives payment in full of the
principal amount of all Advances owing to such Declining Lender, together with
accrued interest thereon to the date of such payment of principal and all other
amounts payable to such Declining Lender under this Agreement and (iii) any such
assignment shall be effective on the date specified by the Borrower and agreed
to by the applicable Extending Lenders or Replacement Lenders and the Agent. If
Extending Lenders and/or Replacement Lenders provide Commitments in an aggregate
amount equal to 100% of the aggregate amount of the Commitments outstanding
immediately prior to the Termination Date in effect at the time the Borrower
requests such extension, the Termination Date shall be extended by one year.
SECTION 8.11. Execution in Counterparts. This Agreement may be executed in
any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.
56
SECTION 8.12. Confidentiality. In accordance with normal procedures
regarding proprietary information supplied by customers, each of the Lenders
agrees to keep confidential and to cause its employees, agents and
representatives to keep confidential information relating to the Borrower or any
Subsidiary received pursuant to or in connection with this Credit Agreement and
the transactions contemplated hereby; provided that nothing herein shall be
construed to prevent the Agent or any Lender from disclosing such information
(i) upon the order of any court or administrative agency, (ii) upon the request
or demand of any regulatory agency or authority having jurisdiction over the
Agent or such Lender, (iii) which has been publicly disclosed, (iv) which has
been lawfully obtained by any of the Lenders from a Person other than the
Borrower or any Subsidiary, the Agent or any other Lender, or (v) to the Agent's
or any Lender's attorneys, accountants or auditors (internal or independent) or
to any participant in or assignee of, or prospective participant in or assignee
of, all or any part of the rights and obligations of such Agent or such Lender
under this Agreement or any Advances hereunder (provided that such attorney,
accountant, auditor, participant or assignee, or prospective participant or
assignee, agrees to comply with the confidentiality requirements set forth in
this Section 8.12).
SECTION 8.13. Termination. Except as otherwise provided in this Agreement
and the Notes and the other agreements and instruments executed pursuant hereto,
all rights and obligations hereunder and thereunder shall terminate when all
amounts payable under this Agreement, the Notes and such other agreements shall
have been paid in full and no Lender shall have any Commitment hereunder;
provided, however, that notwithstanding the foregoing the Borrower shall remain
liable for all of its obligations hereunder and thereunder to indemnify or
reimburse the Agent and the Lenders, including, without limitation, pursuant to
the provisions of Sections 2.12. 2.15 and 8.04 hereof.
SECTION 8.14. Jurisdiction, Etc. (a) Each of the parties hereto hereby
irrevocably and unconditionally submits, for itself and its property, to the
nonexclusive jurisdiction of any California State court or federal court of the
United States of America sitting in San Francisco, and any appellate court from
any thereof, in any action or proceeding arising out of or relating to this
Agreement or the Notes, or for recognition or enforcement of any judgment, and
each of the parties hereto hereby irrevocably and unconditionally agrees that
all claims in respect of any such action or proceeding may be heard and
determined in any such California State or, to the extent permitted by law, in
such federal court. Each of the parties hereto agrees that a final nonappealable
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 any party
may otherwise have to bring any action or proceeding relating to this Agreement
or the Notes in the courts of any jurisdiction.
(b) Each of the parties hereto 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
57
relating to this Agreement or the Notes in any California State or federal
court. Each of the parties hereto hereby irrevocably waives, to the fullest
extent permitted by law, the defense of an inconvenient forum to the maintenance
of such action or proceeding in any such court.
SECTION 8.15. WAIVER OF JURY TRIAL. EACH OF THE BORROWER, THE AGENT AND THE
LENDERS HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE)
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE NOTES OR THE ACTIONS OF THE
AGENT OR ANY LENDER IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE OR
ENFORCEMENT THEREOF.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
58
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
SUN MICROSYSTEMS, INC.
By: /s/ Xxxxx X. Page
----------------------------
Name: Xxxxx X. Page
Title: Vice President & Treasurer
CITICORP USA, INC.,
as Administrative Agent
By:
----------------------------
Name:
Title:
CITICORP USA, INC.,
COMMITMENTS: as Lender
$41,000,000 By:
----------------------------
Name:
Title:
ABN AMRO BANK N.V.,
as Lender and Co-Agent
$36,000,000 By:
----------------------------
Name:
Title:
By:
----------------------------
Name:
Title:
00
XXXX XX XXXXXXX NATIONAL
TRUST AND SAVINGS ASSOCIATION,
as Lender and Co-Agent
$36,000,000 By:
----------------------------
Name:
Title:
XXXXXX GUARANTY TRUST
COMPANY OF NEW YORK,
as Lender and Co-Agent
$36,000,000 By:
----------------------------
Name:
Title:
UNION BANK OF CALIFORNIA, N.A.,
as Lender and Co-Agent
$36,000,000 By:
----------------------------
Name:
Title:
THE BANK OF NEW YORK,
as Lender
$21,000,000 By:
----------------------------
Name:
Title:
60
BANKBOSTON, N.A.
as Lender
$21,000,000 By:
----------------------------
Name:
Title:
BANQUE NATIONALE DE PARIS,
as Lender
$21,000,000 By:
----------------------------
Name:
Title:
By:
----------------------------
Name:
Title:
BARCLAYS BANK PLC,
as Lender
$21,000,000 By:
----------------------------
Name:
Title:
00
XXXXXXXXXX XXXXXXXXXXX XX,
Xxx Xxxxxxx Agency, as Lender
$21,000,000 By:
----------------------------
Name:
Title:
By:
----------------------------
Name:
Title:
CARIPLO-CASSA DI RISPARMIO
DELLE PROVINCIE LOMBARDE SPA,
as Lender
$21,000,000 By:
----------------------------
Name:
Title:
By:
----------------------------
Name:
Title:
CORESTATES BANK, N.A.,
as Lender
$21,000,000 By:
----------------------------
Name:
Title:
62
THE FUJI BANK, LIMITED,
San Francisco Agency, as Lender
$21,000,000 By:
----------------------------
Name:
Title:
THE INDUSTRIAL BANK OF
JAPAN, LIMITED,
San Francisco Agency, as Lender
$21,000,000 By:
----------------------------
Name:
Title:
THE NORTHERN TRUST COMPANY,
as Lender
$21,000,000 By:
----------------------------
Name:
Title:
ROYAL BANK OF CANADA,
as Lender
$21,000,000 By:
----------------------------
Name:
Title:
63
THE SAKURA BANK, LIMITED,
San Francisco Agency, as Lender
$21,000,000 By:
----------------------------
Name:
Title:
THE SUMITOMO BANK, LIMITED,
San Xxxxxxxxx Xxxxxx, as Lender
$21,000,000 By:
----------------------------
Name:
Title:
By:
----------------------------
Name:
Title:
THE SUMITOMO TRUST & BANKING
CO, LTD., Los Angeles Agency,
as Lender
$21,000,000 By:
----------------------------
Name:
Title:
By:
----------------------------
Name:
Title:
64
THE TOYO TRUST AND BANKING
COMPANY LTD., New York Branch
as Lender
$21,000,000 By:
----------------------------
Name:
Title:
By:
----------------------------
Name:
Title:
$500,000,000 Total Commitments
