EXHIBIT 10.7
EXECUTION COPY
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VARIAN ASSOCIATES, INC.
To Be Known as
VARIAN MEDICAL SYSTEMS, INC.
Effective April 3, 1999
AMENDED AND RESTATED
NOTE PURCHASE AND PRIVATE SHELF AGREEMENT
$12,500,000
7.15% Series A Senior Notes due April 2, 2010
$25,000,000
6.70% Series B Senior Notes due April 30, 2014
$21,000,000
6.76% Series C Senior Notes due April 2, 2011
and
$50,000,000
Private Shelf Facility
Dated as of April 2, 1999
TABLE OF CONTENTS
(not part of agreement)
Page
1. AUTHORIZATION OF ISSUE OF NOTES.............................................................. 3
1A. Authorization of Issue of Series A Notes............................................ 3
1B. Authorization of Issue of Series B Notes............................................ 3
1C. Authorization of Issue of Series C Notes............................................ 3
1D. Authorization of Issue of Shelf Notes............................................... 4
2. AMENDMENT AND RESTATEMENT OF EXISTING NOTES; PURCHASE
AND SALE OF SERIES C NOTES AND SHELF NOTES................................................... 4
2A(1). Amendment and Restatement of Existing 7.21% Notes and Issuance of
Series A Notes...................................................................... 4
2A(2). Amendment and Restatement of Existing 6.70% Notes and Issuance of
Series B Notes...................................................................... 5
2A(3). Purchase and Sale of Series C Notes................................................. 5
2B. Purchase and Sale of Shelf Notes.................................................... 5
3. CONDITIONS OF CLOSING........................................................................ 10
3A. Conditions to Amendments and Restatements, Release of Company and Issuance of
Series C Notes...................................................................... 10
3B. Conditions to Purchase of Notes..................................................... 11
4. PREPAYMENTS.................................................................................. 13
4A. Required Prepayments of Series A Notes, Series B Notes and Series C Notes........... 13
4B. Required Prepayments of Shelf Notes................................................. 14
4C. Optional Prepayment With Yield-Maintenance Amount................................... 14
4D. Notice of Optional Prepayment....................................................... 14
4E. Application of Prepayments.......................................................... 14
4F. Retirement of Notes................................................................. 15
5. AFFIRMATIVE COVENANTS........................................................................ 15
5A. Financial Statements; Notice of Defaults............................................ 15
5B. Information Required by Rule 144A................................................... 16
5C. Inspection of Property.............................................................. 16
5D. Covenant to Secure Notes Equally.................................................... 17
5E. Maintenance of Insurance............................................................ 17
5F. Compliance with Laws................................................................ 17
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6. NEGATIVE COVENANTS........................................................................... 17
6A. Certain Financial Requirements...................................................... 17
6B. Dividend Limitation................................................................. 18
6C. Lien, Funded Debt and Other Restrictions............................................ 18
7. EVENTS OF DEFAULT............................................................................ 22
7A. Acceleration........................................................................ 22
7B. Rescission of Acceleration.......................................................... 25
7C. Notice of Acceleration or Rescission................................................ 25
7D. Other Remedies...................................................................... 25
8. REPRESENTATIONS, COVENANTS AND WARRANTIES.................................................... 25
8A. Organization........................................................................ 25
8B. Financial Statements................................................................ 26
8C. Actions Pending..................................................................... 27
8D. Outstanding Funded Debt............................................................. 27
8E. Title to Properties................................................................. 27
8F. Taxes............................................................................... 27
8G. Conflicting Agreements and Other Matters............................................ 27
8H. Offering of Notes................................................................... 28
8I. Use of Proceeds..................................................................... 28
8J. ERISA............................................................................... 28
8K. Governmental Consent................................................................ 29
8L. Environmental Compliance............................................................ 29
8M. Disclosure.......................................................................... 29
8N. Hostile Tender Offers............................................................... 30
8O. Year 2000 Compliance................................................................ 30
9. REPRESENTATIONS OF THE PURCHASERS............................................................ 30
9A. Nature of Purchase.................................................................. 30
9B. Source of Funds..................................................................... 30
10. DEFINITIONS; ACCOUNTING MATTERS.............................................................. 31
10A. Yield-Maintenance Terms............................................................. 31
10B. Other Terms......................................................................... 32
10C. Accounting Principles, Terms and Determinations..................................... 41
11. MISCELLANEOUS................................................................................ 41
11A. Note Payments....................................................................... 41
11B. Expenses............................................................................ 42
11C. Consent to Amendments............................................................... 42
11E. Persons Deemed Owners; Participations............................................... 45
11F. Survival of Representations and Warranties; Entire Agreement........................ 45
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11G. Successors and Assigns.............................................................. 45
11H. Disclosure to Other Persons......................................................... 45
11I. Independence of Covenants........................................................... 46
11J. Notices............................................................................. 46
11K. Payments Due on Non-Business Days................................................... 47
11L. Severability........................................................................ 47
11M. Descriptive Headings................................................................ 47
11N. Satisfaction Requirement............................................................ 47
11O. Governing Law....................................................................... 47
11P. Severalty of Obligations............................................................ 47
11Q. Counterparts........................................................................ 48
11R. Binding Agreement................................................................... 48
11S. Amendment and Restatement of Existing Agreements; Release of the Company............ 48
Exhibits and Schedules
Purchaser Schedule for Series A Notes, Series B Notes and Series C Notes
Information Schedule
Exhibit A-1......................................................... Form of Series A Note
Exhibit A-2......................................................... Form of Series B Note
Exhibit A-3......................................................... Form of Series C Note
Exhibit A-4......................................................... Form of Shelf Note
Exhibit B........................................................... Form of Disbursement Direction Letter
Exhibit C........................................................... Form of Request for Purchase
Exhibit D........................................................... Form of Confirmation of Acceptance
Exhibit E-1......................................................... Form of Opinion of Company Counsel, Series C Note
Closing
Exhibit E-2......................................................... Form of Opinion of Company Counsel, Shelf Note Closing
Exhibit F-1......................................................... Form of Prudential Confidentiality Agreement
Exhibit F-2......................................................... Form of Non-Prudential Confidentiality Agreement
Exhibit G........................................................... Investment Policy of Company Board of Directors
Schedule 8G......................................................... Agreements Restricting Debt
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VARIAN ASSOCIATES, INC.
to be known as
VARIAN MEDICAL SYSTEMS, INC.
Effective April 3, 1999
0000 Xxxxxx Xxx
Xxxx Xxxx, Xxxxxxxxxx 00000-0000
As of April 2, 1999
The Prudential Insurance Company
of America ("Prudential")
Pruco Life Insurance Company ("Pruco")
Pruco Life Insurance Company of New Jersey ("Pruco-NJ")
Each Prudential Affiliate (as hereinafter
defined) which becomes bound by certain
provisions of this Agreement as hereinafter
provided (together with Prudential, Pruco and
Pruco-NJ, the "Purchasers")
c/o Prudential Capital Group
Four Xxxxxxxxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Ladies and Gentlemen:
The undersigned, Varian Associates, Inc., a Delaware corporation (to
be known as Varian Medical Systems, Inc. effective April 3, 1999) (herein called
the "Company"), hereby agrees with you as set forth below. Reference is made
to paragraph 10 hereof for definitions of capitalized terms used herein and not
otherwise defined herein.
INTRODUCTION
The Company and Prudential are parties to (i) the Master Shelf
Agreement, dated as of May 11, 1992 (as heretofore amended, the "1992 Note
Agreement"), under which the Company issued, and there are now outstanding and
held by Prudential (a) the Company's 7.49% Senior Notes due June 9, 2002, in the
original aggregate principal amount of $40,000,000, of which $28,000,000
aggregate principal amount are now outstanding (the "Existing 7.49% Notes"), and
(b) the Company's 6.90% Senior Notes due June 9, 2002, in the original aggregate
principal amount of $20,000,000, of which $14,000,000 aggregate principal amount
are now outstanding (the "Existing 6.90% Notes"), and (ii) the Note Purchase and
Private Shelf Agreement, dated as of October 18, 1996 (as heretofore amended,
the "1996 Note Agreement"), under which the Company issued, and
there are now outstanding and held by Prudential (a) the Company's 7.21% Series
A Senior Notes due June 9, 2007 in the aggregate principal amount of $25,000,000
(the "Existing 7.21% Notes"), and (b) the Company's 6.70% Series B Senior Notes
due April 30, 2018 in the aggregate principal amount of $50,000,000 (the
"Existing 6.70% Notes").
The Company has advised Prudential that it intends to distribute all
of the shares of the capital stock of the Company's subsidiary, Varian, Inc., a
Delaware corporation ("Varian, Inc."), to the shareholders of the Company (the
"Spin Off"). In connection with the Spin Off, the Company will prepay
$14,000,000 principal amount of the Existing 7.49% Notes and $7,000,000
principal amount of the Existing 6.90% Notes, and the Company and Varian, Inc.
have requested that Prudential agree to the following effective upon the
consummation of the Spin Off:
(1) to purchase $21,000,000 principal amount of the Company's Series C
Notes (as defined in paragraph 1C hereof) the proceeds of which will be used by
the Company to make such prepayments of the Existing 7.49% Notes and the
Existing 6.90% Notes;
(2) to amend the terms of $12,500,000 principal amount of the Existing
7.21% Notes to extend the maturity thereof and change the interest rate thereon,
as more specifically set forth in paragraph 2A(1) hereof (such $12,500,000
principal amount of the Existing 7.21% Notes amended pursuant to paragraph 2A(1)
hereof being herein called the "Series A Notes", which term shall include each
Series A Note delivered pursuant to any provision of this Agreement and each
promissory note of the Company delivered in substitution or exchange for any
Series A Note pursuant to any such provision);
(3) to shorten the maturity of the Existing 6.70% Notes to April 30,
2014 and to amend the interest rate on $25,000,000 principal amount of the
Existing 6.70% Notes, as more specifically set forth in paragraph 2A(2) hereof
(such $25,000,000 principal amount of the Existing 6.70% Notes the interest rate
on which is amended pursuant to paragraph 2A(2) hereof being herein called the
"Series B Notes", which term shall include each Series B Note delivered pursuant
to any provision of this Agreement and each promissory note of the Company
delivered in substitution or exchange for any Series B Note pursuant to any such
provision);
(4) the assumption by Varian, Inc. of the Company's obligations under,
and the release of the Company from any obligation under, (A) the $14,000,000
principal amount of the Existing 7.49% Notes and the $7,000,000 principal amount
of the Existing 6.90% Notes not prepaid by the Company (the $14,000,000
principal amount of the Existing 7.49% Notes to be so assumed by Varian, Inc.
being herein called the "Varian, Inc. Series C Notes" and the $7,000,000
principal amount of the Existing 6.90% Notes to be so assumed by Varian, Inc.
being herein called the "Varian, Inc. Series D Notes"), (B) the $12,500,000
principal amount of the Existing 7.21% Notes not constituting the Series A Notes
(the $12,500,000 principal amount of the Existing 7.21% Notes to be so assumed
by Varian, Inc. being herein called the "Varian, Inc. Series A Notes") and (C)
the $25,000,000 principal amount of the Existing 6.70% Notes not constituting
Series B Notes (the
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$25,000,000 principal amount of the Existing 6.70% Notes to
be so assumed by Varian, Inc. being herein called the "Varian, Inc. Series B
Notes");
(5) to amend and restate the 1992 Note Agreement and the 1996 Note
Agreement as they relate to the Series A Notes and the Series B Notes in their
entireties as set forth herein, including to provide for a new private shelf
facility as set forth in paragraph 2B hereof, and to provide that the Series A
Notes, the Series B Notes, the Series C Notes and any Shelf Notes shall be
subject to the terms of this Agreement; and
(6) to enter into the Varian, Inc. Amended and Restated Note Agreement
to provide for a new private shelf facility for Varian, Inc. as set forth in
paragraph 2B thereof and to provide that the Varian, Inc. Notes and any Varian,
Inc. Private Shelf Notes shall be subject to the terms of the Varian, Inc.
Amended and Restated Note Agreement.
Subject to the terms and conditions hereof, Prudential is willing to
agree to the foregoing. Accordingly, the Company and the Purchasers agree as
follows:
1. AUTHORIZATION OF ISSUE OF NOTES.
1A. Authorization of Issue of Series A Notes. The Company will authorize
the issue of the Series A Notes in the aggregate principal amount of
$12,500,000, to be dated the date of issue thereof, to mature April 2, 2010, to
bear interest (computed on the basis of a 360 day year-30 day month) on the
unpaid balance thereof from the date thereof until the principal thereof shall
have become due at the rate of 7.15% per annum, and on overdue principal, Yield-
Maintenance Amount and interest at the rate and at the time specified therein,
and to be substantially in the form of Exhibit A-1 attached hereto.
1B. Authorization of Issue of Series B Notes. The Company will authorize
the issue of the Series B Notes in the aggregate principal amount of
$25,000,000, to be dated the date of issue thereof, to mature April 30, 2014, to
bear interest (computed on the basis of a 360 day year-30 day month) on the
unpaid balance thereof from the date thereof until the principal thereof shall
have become due at the rate of 6.70% per annum, and on overdue principal, Yield-
Maintenance Amount and interest at the rate and at the time specified therein,
and to be substantially in the form of Exhibit A-2 attached hereto.
1C. Authorization of Issue of Series C Notes. The Company will authorize
the issue of its senior promissory notes (the "Series C Notes") in the aggregate
principal amount of $21,000,000, to be dated the date of issue thereof, to
mature April 2, 2011 to bear interest (computed on the basis of a 360 day year -
30 day month) on the unpaid balance thereof from the date thereof until the
principal thereof shall have become due at the rate of 6.76% per annum, and on
overdue principal, Yield-Maintenance Amount and interest at the rate and at the
time specified therein, and to be substantially in the form of Exhibit A-3
attached hereto. The terms "Series C Note" and "Series C Notes" as used herein
shall include each Series C Note delivered pursuant to any
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provision of this Agreement and each promissory note of the Company delivered in
substitution or exchange for any Series C Note pursuant to any such provision.
1D. Authorization of Issue of Shelf Notes. The Company may authorize the
issue of its additional senior promissory notes (the "Shelf Notes") in the
aggregate principal amount of $50,000,000, to be dated the date of issue
thereof, to mature, in the case of each Shelf Note so issued, no more than
fifteen years after the date of original issuance thereof, to have an average
life, in the case of each Shelf Note so issued, of no more than twelve years
after the date of original issuance thereof, to bear interest on the unpaid
balance thereof from the date thereof at the rate per annum, and to have such
other particular terms, as shall be set forth, in the case of each Shelf Note so
issued, in the Confirmation of Acceptance with respect to such Shelf Note
delivered pursuant to paragraph 2B(5), and to be substantially in the form of
Exhibit A-4 attached hereto. The terms "Shelf Note" and "Shelf Notes" as used
herein shall include each Shelf Note delivered pursuant to any provision of this
Agreement and each Shelf Note delivered in substitution or exchange for any such
Shelf Note pursuant to any such provision. The terms "Note" and "Notes" as used
herein shall include each Series A Note, each Series B Note, each Series C Note
and each Shelf Note delivered pursuant to any provision of this Agreement and
each Note delivered in substitution or exchange for any such Note pursuant to
any such provision. Notes which have (i) the same final maturity, (ii) the same
principal prepayment dates, (iii) the same principal prepayment amounts (as a
percentage of the original principal amount of each Note), (iv) the same
interest rate, (v) the same interest payment periods and (vi) the same date of
issuance (which, in the case of a Note issued in exchange for another Note,
shall be deemed for these purposes the date on which such Note's ultimate
predecessor Note was issued), are herein called a "Series" of Notes.
2. AMENDMENT AND RESTATEMENT OF EXISTING NOTES; PURCHASE AND SALE OF SERIES
C NOTES AND SHELF NOTES.
2A(1). Amendment and Restatement of Existing 7.21% Notes and Issuance of
Series A Notes. Subject to the terms and conditions herein set forth, the
Company and Prudential agree that, effective on the Series C Closing Day,
$12,500,000 principal amount of the Existing 7.21% Notes will be amended and
restated in their entirety to be a like principal amount of Series A Notes
having the terms described in paragraph 1A hereof and to be in the form of
Exhibit A-1 hereto. On the Series C Closing Day, the Company will deliver to
Prudential, in substitution and exchange for the Existing 7.21% Notes being so
amended and restated, at the offices of Xxxxxx Xxxxxx & Xxxxx, 0000 Xxxxx Xxxxx,
Xxxxxxx, Xxxxxxxx 00000, one or more Series A Notes registered in the name of
Prudential, evidencing the aggregate principal amount of the Existing 7.21%
Notes held by Prudential being so amended and restated, and in the denomination
or denominations, specified in the Purchaser Schedule attached hereto. The
Series A Notes (i) are given in exchange and substitution for, and not as
payment of the indebtedness evidenced by, the $12,500,000 principal amount of
the Existing 7.21% Notes being amended and restated pursuant to this paragraph
2A(1), (ii) merely re-evidence the indebtedness evidenced by such $12,500,000
principal amount of the Existing 7.21% Notes, and (iii) are not intended to
constitute a novation or discharge of the indebtedness evidenced by such
$12,500,000 principal amount of the Existing 7.21% Notes.
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Promptly after the Series C Closing Day Prudential agrees to xxxx such Existing
7.21% Notes "Replaced" and to return such Existing 7.21% Notes to the Company.
2A(2). Amendment and Restatement of Existing 6.70% Notes and Issuance of
Series B Notes. Subject to the terms and conditions herein set forth, the
Company and Prudential agree that, effective on the Series C Closing Day, (i)
the maturity date of all of the Existing 6.70% Notes is amended to be April 30,
2014 and (ii) $25,000,000 principal amount of the Existing 6.70% Notes will be
amended and restated in their entirety to be a like principal amount of Series B
Notes having the terms described in paragraph 1B hereof and to be in the form of
Exhibit A-2 hereto. On the Series C Closing Day, the Company will deliver to
Prudential, in substitution and exchange for the Existing 6.70% Notes being
amended and restated by both clauses (i) and (ii) of this paragraph 2A(2), at
the offices of Xxxxxx Xxxxxx & Xxxxx, 0000 Xxxxx Xxxxx, Xxxxxxx, Xxxxxxxx 00000,
one or more Series B Notes registered in the name of Prudential, evidencing the
aggregate principal amount of the Existing 6.70% Notes held by Prudential being
so amended and restated, and in the denomination or denominations, specified in
the Purchaser Schedule attached hereto. The Series B Notes (i) are given in
exchange and substitution for, and not as payment of the indebtedness evidenced
by, the $25,000,000 principal amount of the Existing 6.70% Notes being amended
and restated by both clauses (i) and (ii) of this paragraph 2A(2), (ii) merely
re-evidence the indebtedness evidenced by such $25,000,000 principal amount of
the Existing 6.70% Notes, and (iii) are not intended to constitute a novation or
discharge of the indebtedness evidenced by such $25,000,000 principal amount of
the Existing 6.70% Notes. Promptly after the Series C Closing Day Prudential
agrees to xxxx such Existing 6.70% Notes "Replaced" and to return such Existing
6.70% Notes to the Company.
2A(3). Purchase and Sale of Series C Notes. The Company hereby agrees to
sell to Prudential and, subject to the terms and conditions herein set forth,
Prudential agrees to purchase from the Company the aggregate principal amount of
Series C Notes set forth opposite its name on the Purchaser Schedule attached
hereto at 100% of such aggregate principal amount. On April 2, 1999 or any other
date prior to April 2, 1999 upon which the Company and Prudential may agree
(herein called the "Series C Closing Day"), the Company will deliver to
Prudential at the offices of Xxxxxx Xxxxxx & Xxxxx, 0000 Xxxxx Xxxxx, Xxxxxxx,
Xxxxxxxx 00000, one or more Series C Notes registered in its name, evidencing
the aggregate principal amount of Series C Notes to be purchased by Prudential
and in the denomination or denominations specified in the Purchaser Schedule
attached hereto, against payment of the purchase price thereof by transfer of
immediately available funds as specified in a letter on the Company's
letterhead, in substantially the form of Exhibit B attached hereto, from the
Company to the Prudential delivered prior to the Series C Closing Day.
2B. Purchase and Sale of Shelf Notes.
2B(1). Facility. Prudential is willing to consider, in its sole discretion
and within limits which may be authorized for purchase by Prudential and
Prudential Affiliates from time to time, the purchase of Shelf Notes pursuant to
this Agreement. The willingness of Prudential to consider such purchase of Shelf
Notes is herein called the "Facility". At any time, the aggregate
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principal amount of Shelf Notes stated in paragraph 1D, minus the aggregate
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principal amount of Shelf Notes purchased and sold pursuant to this Agreement
prior to such time, minus the aggregate principal amount of Accepted Notes (as
-----
hereinafter defined) which have not yet been purchased and sold hereunder prior
to such time, is herein called the "Available Facility Amount" at such time.
NOTWITHSTANDING THE WILLINGNESS OF PRUDENTIAL TO CONSIDER PURCHASES OF SHELF
NOTES, THIS AGREEMENT IS ENTERED INTO ON THE EXPRESS UNDERSTANDING THAT NEITHER
PRUDENTIAL NOR ANY PRUDENTIAL AFFILIATE SHALL BE OBLIGATED TO MAKE OR ACCEPT
OFFERS TO PURCHASE SHELF NOTES, OR TO QUOTE RATES, SPREADS OR OTHER TERMS WITH
RESPECT TO SPECIFIC PURCHASES OF SHELF NOTES, AND THE FACILITY SHALL IN NO WAY
BE CONSTRUED AS A COMMITMENT BY PRUDENTIAL OR ANY PRUDENTIAL AFFILIATE.
2B(2). Issuance Period. Shelf Notes may be issued and sold pursuant to this
Agreement until the earlier of (i) the third anniversary of the date of this
Agreement (or if such anniversary is not a Business Day, the Business Day next
preceding such anniversary) and (ii) the thirtieth day after Prudential shall
have given to the Company, or the Company shall have given to Prudential,
written notice stating that it elects to terminate the issuance and sale of
Shelf Notes pursuant to this Agreement (or if such thirtieth day is not a
Business Day, the Business Day next preceding such thirtieth day). The period
during which Shelf Notes may be issued and sold pursuant to this Agreement is
herein called the "Issuance Period".
2B(3). Request for Purchase. The Company many from time to time during the
Issuance Period make requests for purchases of Shelf Notes (each such request
being herein called a "Request for Purchase"). Each Request for Purchase shall
be made to Prudential by telecopier or overnight delivery service, and shall (i)
specify the aggregate principal amount of Shelf Notes covered thereby, which
shall not be less than $5,000,000 and not be greater than the Available Facility
Amount at the time such Request for Purchase is made, (ii) specify the principal
amounts, final maturities, principal prepayment dates and amounts and interest
payment periods (quarterly or semi-annual in arrears) of the Shelf Notes covered
thereby, (iii) specify the use of proceeds of such Shelf Notes, (iv) specify the
proposed day for the closing of the purchase and sale of such Shelf Notes, which
shall be a Business Day during the Issuance Period not less than 5 Business Days
and not more than 30 Business Days after the making of such Request for
Purchase, (v) specify the number of the account and the name and address of the
depository institution to which the purchase prices of such Shelf Notes are to
be transferred on the Closing Day for such purchase and sale, (vi) certify that
the representations and warranties contained in paragraph 8 are true on and as
of the date of such Request for Purchase (except to the extent caused by the
transactions herein contemplated) and that there exists on the date of such
Request for Purchase no Event of Default or Default, (vii) specify the
Designated Spread for such Shelf Notes and (viii) be substantially in the form
of Exhibit C attached hereto. Each Request for Purchase shall be in writing and
shall be deemed made when received by Prudential.
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2B(4). Rate Quotes. Not later than two Business Days after the Company
shall have given Prudential a Request for Purchase pursuant to paragraph 2B(3),
Prudential may, but shall be under no obligation to, provide to the Company by
telephone or telecopier, in each case between 9:30 A.M. and 1:30 P.M. New York
City local time (or such later time as Prudential may elect) interest rate
quotes for the several principal amounts, maturities, principal prepayment
schedules, and interest payment periods of Shelf Notes specified in such Request
for Purchase. Each quote shall represent the interest rate per annum payable on
the outstanding principal balance of such Shelf Notes at which Prudential or a
Prudential Affiliate would be willing to purchase such Shelf Notes at 100% of
the principal amount thereof.
2B(5). Acceptance. Within 5 minutes after Prudential shall have provided
any interest rate quotes pursuant to paragraph 2B(4) or such shorter period as
Prudential may specify to the Company (such period herein called the "Acceptance
Window"), the Company may, subject to paragraph 2B(6), elect to accept such
interest rate quotes as to not less than $5,000,000 aggregate principal amount
of the Shelf Notes specified in the related Request for Purchase. Such election
shall be made by an Authorized Officer of the Company notifying Prudential by
telephone or telecopier within the Acceptance Window that the Company elects to
accept such interest rate quotes, specifying the Shelf Notes (each such Shelf
Note being herein called an "Accepted Note") as to which such acceptance (herein
called an "Acceptance") relates. The day the Company notifies an Acceptance with
respect to any Accepted Notes is herein called the "Acceptance Day" for such
Accepted Notes. Any interest rate quotes as to which Prudential does not receive
an Acceptance within the Acceptance Window shall expire, and no purchase or sale
of Shelf Notes hereunder shall be made based on such expired interest rate
quotes. Subject to paragraph 2B(6) and the other terms and conditions hereof,
the Company agrees to sell to Prudential or a Prudential Affiliate, and
Prudential agrees to purchase, or to cause the purchase by a Prudential
Affiliate of, the Accepted Notes at 100% of the principal amount of such Notes.
As soon as practicable following the Acceptance Day, the Company, Prudential and
each Prudential Affiliate which is to purchase any such Accepted Notes will
execute a confirmation of such Acceptance substantially in the form of Exhibit D
attached hereto (herein called a "Confirmation of Acceptance"). If the Company
should fail to execute and return to Prudential within three Business Days
following receipt thereof a Confirmation of Acceptance with respect to any
Accepted Notes, Prudential may at its election at any time prior to its receipt
thereof cancel the closing with respect to such Accepted Notes by so notifying
the Company in writing.
2B(6). Market Disruption. Notwithstanding the provisions of paragraph
2B(5), if Prudential shall have provided interest rate quotes pursuant to
paragraph 2B(4) and thereafter prior to the time an Acceptance with respect to
such quotes shall have been notified to Prudential in accordance with paragraph
2B(5) the domestic market for U.S. Treasury securities or derivatives shall have
closed or there shall have occurred a general suspension, material limitation,
or significant disruption of trading in securities generally on the New York
Stock Exchange or in the domestic market for U.S. Treasury securities or
derivatives, then such interest rate quotes shall expire, and no purchase or
sale of Shelf Notes hereunder shall be made based on such expired interest rate
quotes. If the Company thereafter notifies Prudential of the Acceptance of any
such interest rate quotes, such
7
Acceptance shall be ineffective for all purposes of this Agreement, and
Prudential shall promptly notify the Company that the provisions of this
paragraph 2B(6) are applicable with respect to such Acceptance.
2B(7). Facility Closings. Not later than 11:30 A.M. (New York City local
time) on the Closing Day for any Accepted Notes, the Company will deliver to
each Purchaser listed in the Confirmation of Acceptance relating thereto at the
offices of Prudential Capital Group, Four Xxxxxxxxxxx Xxxxxx, Xxxxx 0000, Xxx
Xxxxxxxxx, Xxxxxxxxxx 00000, the Accepted Notes to be purchased by such
Purchaser in the form of one or more Notes in authorized denominations as such
Purchaser may request for each Series of Accepted Notes to be purchased on the
Closing Day, dated the Closing Day and registered in such Purchaser's name (or
in the name of its nominee), against payment of the purchase price thereof by
transfer of immediately available funds for credit to the Company's account
specified in the Request for Purchase of such Notes. If the Company fails to
tender to any Purchaser the Accepted Notes to be purchased by such Purchaser on
the scheduled Closing Day for such Accepted Notes as provided above in this
paragraph 2B(7), or any of the conditions specified in paragraph 3 shall not
have been fulfilled by the time required on such scheduled Closing Day, the
Company shall, prior to 1:00 P.M., New York City local time, on such scheduled
Closing Day notify Prudential (which notification shall be deemed received by
each Purchaser) in writing whether (i) such closing is to be rescheduled (such
rescheduled date to be a Business Day during the Issuance Period not less than
one Business Day and not more than 30 Business Days after such scheduled Closing
Day (the "Rescheduled Closing Day")) and certify to Prudential (which
certification shall be for the benefit of each Purchaser) that the Company
reasonably believes that it will be able to comply with the conditions set forth
in paragraph 3 on such Rescheduled Closing Day and that the Company will pay the
Delayed Delivery Fee in accordance with paragraph 2B(8)(iii) or (ii) such
closing is to be canceled. In the event that the Company shall fail to give such
notice referred to in the preceding sentence, Prudential (on behalf of each
Purchaser) may at its election, at any time after 1:00 P.M., New York City local
time, on such scheduled Closing Day, notify the Company in writing that such
closing is to be canceled. Notwithstanding anything to the contrary appearing in
this Agreement, the Company may not elect to reschedule a closing with respect
to any given Accepted Notes on more than one occasion, unless Prudential shall
have otherwise consented in writing.
2B(8). Fees.
2B(8)(i). Structuring Fee; Rate Reduction Fee; Credit Adjustment Fee. In
consideration for the time, effort and expense involved in the preparation,
negotiation and execution of this Agreement, the Company shall pay to Prudential
on the Series C Closing Day in immediately available funds a fee (herein called
the "Structuring Fee") in the amount of (a) $234,000 less (b) the amount of fees
and expenses paid by the Company pursuant to paragraph 3A(6) hereof. In
consideration of the agreement by Prudential to change the rate of interest on
the Existing 7.21% Notes, the Company shall pay to Prudential on the Series C
Closing Day a fee (herein called the "Rate Reduction Fee") in the amount of
$141,735.07. In consideration of the agreement by Prudential to accept the
assumption by Varian, Inc. of obligations being assumed by Varian, Inc.
8
pursuant to paragraph 2A(1) of the Varian, Inc. Amended and Restated Note
Agreement and the release of the Company from the obligations assumed by Varian,
Inc., the Company shall pay Prudential on the Series C Closing Day in
immediately available funds a fee (herein called the "Credit Adjustment Fee") in
the amount of $992,244.
2B(8)(ii). Issuance Fee. The Company will pay to Prudential in immediately
available funds a fee (herein called the "Issuance Fee") on each Closing Day
(other than the Series C Closing Day or any other Closing Day which occurs prior
to the date which is three months after the Series C Closing Day) in an amount
equal to 0.15% of the aggregate principal amount of Notes sold on such Closing
Day.
2B(8)(iii). Delayed Delivery Fee. If the closing of the purchase and sale
of any Accepted Note is delayed for any reason beyond the original Closing Day
for such Accepted Note, the Company will pay to Prudential (a) on the
Cancellation Date or actual closing date of such purchase and sale and (b) if
earlier, the next Business Day following 90 days after the Acceptance Day for
such Accepted Note and on each Business Day following 90 days after the prior
payment hereunder, a fee (herein called the "Delayed Delivery Fee") calculated
as follows:
(BEY - MMY) X DTS/360 X PA
where "BEY" means Bond Equivalent Yield, i.e., the bond equivalent yield per
annum of such Accepted Note; "MMY" means Money Market Yield, i.e., the yield per
annum on a commercial paper investment of the highest quality selected by
Prudential on the date Prudential receives notice of the delay in the closing
for such Accepted Note having a maturity date or dates the same as, or closest
to, the Rescheduled Closing Day or Rescheduled Closing Days (a new alternative
investment being selected by Prudential each time such closing is delayed);
"DTS" means Days to Settlement, i.e., the number of actual days elapsed from and
including the original Closing Day with respect to such Accepted Note (in the
case of the first such payment with respect to such Accepted Note) or from and
including the date of the next preceding payment (in the case of any subsequent
delayed delivery fee payment with respect to such Accepted Note) to but
excluding the date of such payment; and "PA" means Principal Amount, i.e., the
principal amount of the Accepted Note for which such calculation is being made.
In no case shall the Delayed Delivery Fee be less than zero. Nothing contained
herein shall obligate any Purchaser to purchase any Accepted Note on any day
other than the Closing Day for such Accepted Note, as the same may be
rescheduled from time to time in compliance with paragraph 2B(7).
2B(8)(iv). Cancellation Fee. If the Company at any time notifies Prudential
in writing that the Company is canceling the closing of the purchase and sale of
any Accepted Note, or if Prudential notifies the Company in writing under the
circumstances set forth in the last sentence of paragraph 2B(5) or the
penultimate sentence of paragraph 2B(7) that the closing of the purchase and
sale of such Accepted Note is to be canceled, or if the closing of the purchase
and sale of such Accepted Note is not consummated on or prior to the last day of
the Issuance Period (the date of any such notification, or the last day of the
Issuance Period, as the case may be, being herein called the
9
"Cancellation Date"), the Company will pay to Prudential in immediately
available funds an amount (the "Cancellation Fee") calculated as follows:
PI X PA
where "PI" means Price Increase, i.e., the quotient (expressed in decimals)
obtained by dividing (a) the excess of the ask price (as determined by
Prudential) of the Hedge Treasury Note(s) on the Cancellation Date over the bid
price (as determined by Prudential) of the Hedge Treasury Notes(s) on the
Acceptance Day for such Accepted Note by (b) such bid price; and "PA" has the
meaning ascribed to it in paragraph 2B(8)(iii). The foregoing bid and ask
prices shall be as reported by Bridge Telerate Services (Telerate) (or, if such
data for any reason ceases to be available through Bridge Telerate Services
(Telerate), any publicly available source of similar market data). Each price
shall be based on a U.S. Treasury security having a par value of $100.00 and
shall be rounded to the second decimal place. In no case shall the Cancellation
Fee be less than zero.
3. CONDITIONS OF CLOSING.
3A. Conditions to Amendments and Restatements, Release of Company and
Issuance of Series C Notes. The effectiveness of the amendment and restatement
of the $12,500,000 principal amount of Existing 7.21% Notes pursuant to
paragraph 2A(1) hereof, the amendment to the maturity date of the Existing 6.70%
Notes and the amendment and restatement of the $25,000,000 principal amount of
the Existing 6.70% Notes pursuant to paragraph 2A(2) hereof, the amendment and
restatement of the 1992 Note Agreement and the 1996 Note Agreement and the
release of the Company from any obligations with respect to the Varian, Inc.
Notes pursuant to paragraph 11S hereof and the obligation of Prudential to
purchase and pay for the Series C Notes are subject to the satisfaction, on or
before the Series C Closing Day, of (i) each of the conditions to the
obligations to purchase and pay for the Series C Notes set forth in paragraph 3B
hereof, and (ii) each of the following conditions:
3A(1). Spin Off. All agreements and instruments relating to the Spin Off
shall be in form and substance reasonably satisfactory to the Purchasers and
shall have been duly executed and delivered by the parties thereto, the
Purchasers shall have received copies of all such agreements and instruments
together with an Officer's Certificate certify that such agreements and
instrument are correct and complete, and the Spin Off shall have been
consummated in accordance with the terms of such agreements and instruments.
3A(2). Consummation of Sale of Series C Notes and Prepayment of Existing
Notes. The Company shall have consummated the sale of the Series C Notes to the
Purchasers in accordance with the terms hereof and, concurrently therewith, the
Company shall have prepaid $14,000,000 principal amount of the Existing 7.49%
Notes and $7,000,000 principal amount of the Existing 6.90% Notes, and together
with such prepayment, shall have paid the accrued interest thereon to the date
of prepayment and the Yield-Maintenance Amount (as defined in the 1992 Note
Agreement), if any, with respect thereto, in accordance with paragraph 4A of the
1992 Note
10
Agreement. Notwithstanding the provisions of the 1992 Note Agreement, if the
Company shall prepay such principal amounts of the Existing 7.49% Notes and
Existing 6.90% Notes from the proceeds of the sale of the Series C Notes as
contemplated by this Agreement, then, for the purposes of calculating such
Yield-Maintenance Amount due on such prepayment, the "Reinvestment Yield", as
defined in the 1992 Note Agreement, shall be 0.50% plus the amount of such
Reinvestment Yield otherwise determined in accordance with definition thereof in
the 1992 Note Agreement.
3A(3). Payment of Accrued Interest. To the extent not paid pursuant to
paragraph 3A(2), the Company shall have paid all accrued interest on the
Existing 7.49% Notes, the Existing 6.90% Notes, the Existing 7.21% Notes and the
Existing 6.70% Notes as of the Series C Closing Day.
3A(4). Varian, Inc. Amended and Restated Note Agreement. Prudential and
Varian, Inc shall have duly executed and delivered the Varian, Inc. Amended and
Restated Note Agreement and the Varian, Inc. Amended and Restated Note Agreement
shall be in full force and effect. All conditions to the effectiveness of the
amendment and restatement of the 1992 Note Agreement and the 1996 Note
Agreement, as they relate to the Varian Notes, under the Varian, Inc. Amended
and Restated Note Agreement shall have been satisfied.
3A(5). Restated Notes. Prudential shall have received the Series A Notes
and the Series B Notes, as contemplated by paragraphs 2A(1) and 2A(2) hereof,
duly executed and delivered by the Company.
3A(6). Fees and Expenses. Without limiting the provisions of paragraph 11B
hereof, the Company shall have paid the reasonable fees, charges and
disbursements of special counsel to the Purchasers in connection with the
transactions contemplated thereby.
3A(7). Securities Valuation Office Questionnaire. The Company will have
delivered to the Purchasers a copy of the Company's response to the Year 2000
Due Diligence Questionnaire supplied by the Securities Valuation Office of the
National Association of Insurance Commissioners.
3B. Conditions to Purchase of Notes. The obligation of any Purchaser to
purchase and pay for any Notes is subject to the satisfaction (i) on or before
the Series C Closing Day, of each of the conditions set forth in paragraph 3A,
and (ii) on or before the Closing Day for such Notes, of the following
additional conditions:
3B(1). Certain Documents. Such Purchaser shall have received the following,
each dated the date of the applicable Closing Day:
(i) The Note(s) to be purchased by such Purchaser.
11
(ii) Certified copies of the resolutions of the Boards of Directors of
the Company authorizing the execution and delivery of this Agreement and
the issuance of the Notes, and of all documents evidencing other necessary
corporate action and governmental approvals, if any, with respect to this
Agreement and the Notes.
(iii) Certificates of the Secretary or an Assistant Secretary and one
other officer of the Company certifying the names and true signatures of
the officers of the Company authorized to sign this Agreement and the Notes
and the other documents to be delivered hereunder.
(iv) Certified copies of the Charter and By-laws of the Company.
(v) A favorable opinion from the general counsel of the Company (or
such other counsel designated by the Company and acceptable to the
Purchaser(s)) satisfactory to such Purchaser and substantially in the form
of Exhibit E-1 (in the case of the Series C Notes) or E-2 (in the case of
any Shelf Notes) attached hereto and as to such other matters as such
Purchaser may reasonably request. The Company hereby directs each such
counsel to deliver such opinion, agrees that the issuance and sale of any
Notes will constitute a reconfirmation of such direction, and understands
and agrees that each Purchaser receiving such an opinion will and is hereby
authorized to rely on such opinion.
(vi) Good standing certificates for the Company from the Secretaries
of State of Delaware and California dated as of a recent date and such
other evidence of the status of the Company as such Purchaser may
reasonably request.
(vii) In the case of Closing Days other than the Series C Closing Day,
additional documents or certificates with respect to legal matters or
corporate or other proceedings related to the transactions contemplated
hereby as may be reasonably requested by such Purchaser at least two
Business Days prior to the Closing Day.
3B(2). Opinion of Purchaser's Special Counsel. Such Purchaser shall have
received from Xxxxx X. Xxxxx, Assistant General Counsel of Prudential or such
other counsel who is acting as special counsel for it in connection with this
transaction, a favorable opinion satisfactory to such Purchaser as to such
matters incident to the matters herein contemplated as it may reasonably
request.
3B(3). Representations and Warranties; No Default. The representations and
warranties of the Company contained in paragraph 8 hereof shall be true on and
as of such Closing Day, except to the extent of changes caused by the
transactions herein contemplated; there shall exist on such Closing Day no Event
of Default or Default; and the Company shall have delivered to such Purchaser an
Officer's Certificate, dated such Closing Day, to both such effects.
12
3B(4). Purchase Permitted by Applicable Laws. The purchase of and payment
for the Notes to be purchased by such Purchaser on the terms and conditions
herein provided (including the use of the proceeds of such Notes by the Company)
shall not violate any applicable law or governmental regulation (including,
without limitation, Section 5 of the Securities Act or Regulation T, U or X of
the Board of Governors of the Federal Reserve System) and shall not subject such
Purchaser to any tax, penalty, liability or other onerous condition under or
pursuant to any applicable law or governmental regulation, and such Purchaser
shall have received such certificates or other evidence as it may request to
establish compliance with this condition.
3B(5). Payment of Fees. The Company shall have paid to Prudential any fees
due it pursuant to or in connection with this Agreement, including the
Structuring Fee, the Rate Reduction Fee and the Credit Adjustment Fee due
pursuant to paragraph 2B(8)(i), any Issuance Fee due pursuant to paragraph
2B(8)(ii) and any Delayed Delivery Fee due pursuant to paragraph 2B(8)(iii).
4. PREPAYMENTS. The Series A Notes, the Series B Notes, the Series C Notes
and any Shelf Notes shall be subject to required prepayment as and to the extent
provided in paragraphs 4A and 4B, respectively. The Series A Notes, the Series B
Notes, the Series C Notes and any Shelf Notes shall also be subject to
prepayment under the circumstances set forth in paragraph 4C.
4A. Required Prepayments of Series A Notes, Series B Notes and Series C
Notes.
4A(1). Required Prepayments of Series A Notes. Until the Series A Notes
shall be paid in full, the Company shall apply to the prepayment of the Series A
Notes, without Yield Maintenance Amount, the sum of $2,500,000 on April 2 in
each year, commencing April 2, 2006 through and including April 2, 2009, and
such principal amounts of the Series A Notes, together with interest accrued
thereon to the payment dates, shall become due on such payment dates. The
remaining unpaid principal amount of the Series A Notes, together with interest
accrued thereon, shall become due on the maturity date of the Series A Notes.
4A(2). Required Prepayments of Series B Notes. Until the Series B Notes
shall be paid in full, the Company shall apply to the prepayment of the Series B
Notes, without Yield-Maintenance Amount, the sum of $6,250,000 on each of April
30, 2008, April 30, 2010 and April 30, 2012, and such principal amounts of the
Series B Notes, together with interest accrued thereon to the payment dates,
shall become due on such payment dates. The remaining unpaid principal amount of
the Series B Notes, together with interest accrued thereon, shall become due on
the maturity date of the Series B Notes.
4A(3). Required Prepayments of Series C Notes. Until the Series C Notes
shall be paid in full, the Company shall apply to the prepayment of the Series C
Notes, without Yield-Maintenance Amount, the sum of $5,250,000 on each of April
2, 2005, April 2, 2007 and April 2,
13
2009, and such principal amounts of the Series C Notes, together with interest
accrued thereon to the payment dates, shall become due on such payment dates.
The remaining unpaid principal amount of the Series C Notes, together with
interest accrued thereon, shall become due on the maturity date of the Series C
Notes.
4B. Required Prepayments of Shelf Notes. Each Series of Shelf Notes shall
be subject to the required prepayments, if any, set forth in the Notes of such
Series.
4C. Optional Prepayment With Yield-Maintenance Amount. The Notes of each
Series shall be subject to prepayment, in whole at any time or from time to time
in part (in integral multiples of $100,000 and in a minimum amount of
$1,000,000), at the option of the Company, at 100% of the principal amount so
prepaid plus interest thereon to the prepayment date and the Yield-Maintenance
Amount, if any, with respect to each such Note. Notwithstanding paragraphs
4A(1), 4A(2), 4A(3) and 4B, upon any partial prepayment of Notes of a Series
pursuant to this paragraph 4C, the principal amount of each required prepayment
of the Notes of such Series under paragraph 4A(1), 4A(2), 4A(3) or 4B, as the
case may be, becoming due after the date of such prepayment shall be reduced in
the same proportion as the aggregate unpaid principal amount of the Notes of
such Series is reduced as a result of such prepayment pursuant to this paragraph
4C.
4D. Notice of Optional Prepayment. The Company shall give the holder of
each Note of a Series to be prepaid pursuant to paragraph 4C irrevocable written
notice of such prepayment not less than 5 Business Days prior to the prepayment
date, specifying such prepayment date, the aggregate principal amount of the
Notes of such Series to be prepaid on such date, the principal amount of the
Notes of such Series held by such holder to be prepaid on that date and that
such prepayment is to be made pursuant to paragraph 4C. Notice of prepayment
having been given as aforesaid, the principal amount of the Notes specified in
such notice, together with interest thereon to the prepayment date and together
with the Yield-Maintenance Amount, if any, herein provided, shall become due and
payable on such prepayment date. The Company shall, on or before the day on
which it gives written notice of any prepayment pursuant to paragraph 4C, give
telephonic notice of the principal amount of the Notes to be prepaid and the
prepayment date to each Significant Holder which shall have designated a
recipient for such notices in the Purchaser Schedule attached hereto or in the
applicable Confirmation of Acceptance or by notice in writing to the Company.
4E. Application of Prepayments. In the case of each prepayment of less than
the entire unpaid principal amount of all outstanding Notes of any Series
pursuant to paragraph 4A, 4B or 4C, the amount to be prepaid shall be applied
pro rata to all outstanding Notes of such Series according to the respective
unpaid principal amounts thereof.
4F. Retirement of Notes. The Company shall not, and shall not permit any of
its Subsidiaries or Affiliates to, prepay or otherwise retire in whole or in
part prior to their stated final maturity (other than by prepayment pursuant to
paragraph 4A, 4B or 4C or upon acceleration of such final maturity pursuant to
paragraph 7A), or purchase or otherwise acquire, directly or indirectly, Notes
of any Series held by any holder.
14
5. AFFIRMATIVE COVENANTS. During the Issuance Period and so long thereafter
as any Note is outstanding and unpaid, the Company covenants as follows:
5A. Financial Statements; Notice of Defaults. The Company covenants that it
will deliver to each Significant Holder in duplicate:
(i) as soon as practicable and in any event within 45 days after the
end of each of the first three quarterly periods in each fiscal year,
consolidated statements of earnings, cash flows and shareholders' equity of
the Company and its Subsidiaries for the period from the beginning of the
current fiscal year to the end of such quarterly period, and a consolidated
balance sheet of the Company and its Subsidiaries as at the end of such
quarterly period, setting forth in each case in comparative form figures
for the corresponding period in the preceding fiscal year, all in
reasonable detail and certified by an authorized financial officer of the
Company, subject to changes resulting from year-end adjustments; provided,
--------
however, that delivery pursuant to clause (iii) below of copies of the
-------
Quarterly Report on Form 10-Q of the Company for such quarterly period
filed with the Securities and Exchange Commission shall be deemed to
satisfy the requirements of this clause (i);
(ii) as soon as practicable and in any event within 90 days after the
end of each fiscal year, consolidated statements of earnings, cash flows
and shareholders' equity of the Company and its Subsidiaries for such year,
and a consolidated balance sheet of the Company and its Subsidiaries as at
the end of such year, setting forth in each case in comparative form
corresponding consolidated figures from the preceding annual audit, all in
reasonable detail and satisfactory in form to the Required Holder(s) and
containing an unqualified opinion by independent nationally recognized
public accountants selected by the Company; provided, however, that
-------- -------
delivery pursuant to clause (iii) below of copies of the Annual Report on
Form 10-K of the Company for such fiscal year filed with the Securities and
Exchange Commission shall be deemed to satisfy the requirements of this
clause (ii);
(iii) promptly upon transmission thereof, copies of all such financial
statements, proxy statements, notices and reports as it shall send to its
stockholders and copies of all registration statements (without exhibits
and exclusive of any registration statement on From S-8 or any successor
thereto) and all reports which it files with the Securities and Exchange
Commission (or any governmental body or agency succeeding to the functions
of the Securities and Exchange Commission);
(iv) promptly upon any amendment or other modification thereof which
changes the types or amounts of investments or classes of investments
permitted thereby, a copy of the Investment Policy reflecting such
amendment or other modification; and
15
(v) with reasonable promptness, such other financial data as such
Significant Holder may reasonably request.
Together with each delivery of financial statements required by clauses (i) and
(ii) above, the Company will deliver to each Significant Holder an Officer's
Certificate demonstrating (with computations in reasonable detail) compliance by
the Company and its Subsidiaries with the provisions of paragraphs 6A, 6B, 6C(2)
and 6C(3) and stating that there exists no Event of Default or Default, or, if
any Event of Default or Default exists, specifying the nature and period of
existence thereof and what action the Company proposes to take with respect
thereto. Together with each delivery of financial statements required by clause
(ii) above, the Company will deliver to each Significant Holder a certificate of
such accountants stating that, in making the audit necessary for their report on
such financial statements, they have obtained no knowledge of any Event of
Default or Default, or, if they have obtained knowledge of any Event of Default
or Default, specifying the nature and period of existence thereof. Such
accountants, however, shall not be liable to anyone by reason of their failure
to obtain knowledge of any Event of Default or Default which would not be
disclosed in the course of such audit.
The Company also covenants that immediately after any Designated
Officer obtains knowledge of an Event of Default or Default, it will deliver to
each Significant Holder an Officer's Certificate specifying the nature and
period of existence thereof and what action the Company proposes to take with
respect thereto.
5B. Information Required by Rule 144A. The Company covenants that it will,
upon the request of the holder of any Note, provide such holder, and any
qualified institutional buyer designated by such holder, such financial and
other information as such holder may reasonably determine to be necessary in
order to permit compliance with the information requirements of Rule 144A under
the Securities Act in connection with the resale of Notes, except at such times
as the Company is subject to and in compliance with the reporting requirements
of section 13 or 15(d) of the Exchange Act. For the purpose of this paragraph
5B, the term "qualified institutional buyer" shall have the meaning specified in
Rule 144A under the Securities Act.
5C. Inspection of Property. The Company covenants that it will permit any
Person designated by any Significant Holder in writing, at such Significant
Holder's expense, to visit and inspect any of the properties of the Company and
its Subsidiaries, to examine the corporate books and financial records of the
Company and its Subsidiaries and make copies thereof or extracts therefrom
(provided making copies or taking extracts of any such documents with the
consent of the Company is not prohibited by any federal, state or local law) and
to discuss the affairs, finances and accounts of any of such corporations with
(x) the principal officers of the Company and (y) during the pendency of an
Event of Default and so long as an officer of the Company is provided an
opportunity to attend, its independent public accountants, all at such
reasonable times and as often as such Significant Holder may reasonably request;
provided, however, that (i) the foregoing provisions of this paragraph 5C shall
be subject to compliance with applicable security regulations of the United
States Government, (ii) matters which the Company in good faith has determined
are
16
subject to the attorney/client privilege, information from third parties which
the Company is required to maintain as confidential and confidential research
and design information of the Company or of any Subsidiary shall not be subject
to such inspection, examination, copying and discussion and (iii) disclosure of
any other material non-public information of the Company or its Subsidiaries
requested by such Person may be conditioned upon such Person's execution and
delivery of a confidentiality agreement in the form of Exhibit F-1 (in the case
of Prudential or any Prudential Affiliate) or in the form of Exhibit F-2 or such
other form as is reasonably satisfactory to the Company and such Person (in the
case of any other holder of Notes).
5D. Covenant to Secure Notes Equally. The Company covenants that, if it or
any Subsidiary shall create or assume any Lien upon any of its property or
assets, whether now owned or hereafter acquired, other than Liens permitted by
the provisions of paragraph 6C(1) (unless prior written consent to the creation
or assumption thereof shall have been obtained pursuant to paragraph 11C), it
will, if requested by the Required Holders, make or cause to be made effective
provision whereby the Notes will be secured by such Lien equally and ratably
with any and all other Funded Debt thereby secured so long as any such other
Funded Debt shall be so secured.
5E. Maintenance of Insurance. The Company covenants that it will, and will
cause its Subsidiaries to, maintain insurance in such amounts and against such
hazards and liabilities as customarily is maintained by other companies
operating similar businesses and, from time to time, upon the written request of
any Significant Holder, will deliver an Officer's Certificate specifying the
details of such insurance then in effect.
5F. Compliance with Laws. The Company covenants that it will, and will
cause each of the Subsidiaries to, comply in a timely fashion with, or operate
pursuant to valid waivers of the provisions of, all applicable statutes, rules,
regulations and orders of all federal, state, local and foreign governments,
courts, agencies or regulatory bodies, including all Environmental Laws, except
where noncompliance would not materially adversely affect the business,
condition (financial or otherwise) or operations of the Company and the
Subsidiaries taken as a whole.
6. NEGATIVE COVENANTS. During the Issuance Period and so long thereafter as
any Note or other amount due hereunder is outstanding and unpaid, the Company
covenants as follows:
6A. Certain Financial Requirements. The Company covenants that it will not
permit:
(i) Consolidated Working Capital at any time to be less than
$50,000,000;
(ii) the ratio of (A) the sum of Consolidated Cash and Cash
Equivalents plus Consolidated Receivables to (B) Consolidated Current
Liabilities at any time to be less than 50%; or
17
(iii) the ratio of (A) the sum of (1) Consolidated Net Earnings plus
(2) Consolidated income taxes plus (3) Consolidated Interest Expense to (B)
Consolidated Interest Expense for the five immediately preceding
consecutive fiscal quarters at any time to be less than 300%.
6B. Dividend Limitation. The Company covenants that it will not and will
not permit any Subsidiary to (i) pay or declare any dividend on any class of its
stock, or make any other distribution on account of any class of its stock
(other than the distribution of the stock of Varian, Inc. to the stockholders of
the Company in the Spin-Off), or (ii) redeem, purchase or otherwise acquire,
directly or indirectly, any shares of its stock (all of the foregoing being
herein called "Restricted Payments") except any such Restricted Payment which,
when added to all prior Restricted Payments made by the Company or any
Subsidiary after September 30, 1998, does not exceed Consolidated Net Earnings
Available for Restricted Payments. There shall not be included in Restricted
Payments (i) dividends paid, or distributions made, in its own stock by the
Company or a Subsidiary; (ii) exchanges of stock of one or more classes of the
Company or a Subsidiary for its common stock or for its stock of the same class,
except to the extent that cash or other value is involved in such exchange;
(iii) the cost of stock of the Company repurchased by the Company in any year
for the issuance of new stock to employees and directors under the employee
stock plans and programs described in the Company's proxy statement dated
January 16, 1992, and any successor or replacement programs, but not to exceed
the proceeds received by the Company from the issuance of stock under such plans
and programs during such year; or (iv) dividends or distributions paid by a
Subsidiary to the Company. The term "stock" as used in this paragraph 6B shall
include warrants, rights or options to purchase stock.
6C. Lien, Funded Debt and Other Restrictions. The Company covenants that it
will not and will not permit any Subsidiary to:
6C(1). Liens. Create, assume or suffer to exist at any time any Lien upon
any of its property or assets, whether now owned or hereafter acquired (whether
or not provision is made for the equal and ratable securing of the Note in
accordance with the provisions of paragraph 5C), except
(i) Liens for taxes not yet due or which are being contested in good
faith by appropriate proceedings and for which adequate reserves have been
established in accordance with generally accepted accounting principles;
(ii) 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 or credit, and
which do not in the aggregate materially detract from the value of its
property or assets or materially impair the use thereof in the operation of
its business;
(iii) Liens on property or assets of a Subsidiary to secure
obligations of such Subsidiary to the Company or another Subsidiary; and
18
(iv) any Lien on property of the Company or any Subsidiary securing
Funded Debt permitted by paragraph 6C(2), provided that Funded Debt secured
by all such Liens shall not at any time exceed 15% of Consolidated Tangible
Net Worth;
6C(2). Consolidated Funded Debt. Create, incur, assume or suffer to exist
at any time any Funded Debt, except to the extent that (i) Consolidated Funded
Debt is less than or equal to 55% of Consolidated Tangible Gross Worth, (ii)
Consolidated Funded Debt secured by Liens is less than or equal to 15% of
Consolidated Tangible Net Worth, and (iii) Funded Debt of Subsidiaries
(including Guarantees of Funded Debt of the Company) to Persons other than the
Company or another Subsidiary is less than or equal to 10% of Consolidated
Tangible Net Worth;
6C(3). Loans, Advances, Investments and Contingent Liabilities. Make or
permit to remain outstanding any loan or advance to, or Guarantee, endorse or
otherwise voluntarily be or become contingently liable, directly or indirectly,
in connection with the obligations, stock or dividends of, or own, purchase or
acquire any stock, obligations or securities of, or any other interest in, or
make any capital contribution to, any Person (provided that for purposes of this
Agreement down payments and progress payments in the ordinary course of business
shall not be considered as advances), except that the Company or any Subsidiary
may:
(i) make or permit to remain outstanding loans or advances to any
Subsidiary,
(ii) own, purchase or acquire stock, obligations or securities of a
Subsidiary, or of a corporation which immediately after such purchase or
acquisition will be a Subsidiary,
(iii) acquire and own stock, obligations or securities received in
settlement of debts (created in the ordinary course of business) owing to
the Company or any Subsidiary,
(iv) endorse negotiable instruments for collection in the ordinary
course of business,
(v) make or permit to remain outstanding (A) travel advances in the
ordinary course of business to, and (B) loans and Guarantees pursuant to
employee relocation and housing programs approved by the Company's Board of
Directors to or on behalf of, officers and employees of the Company or any
Subsidiary,
(vi) Guarantee obligations of other Persons, provided the Funded Debt
represented by such Guarantees does not violate any provision of this
Agreement, including paragraph 6C(2),
(vii) make investments as permitted by the investment policy (the
"Investment Policy") adopted by the Board of Directors of the Company and
which is attached hereto as Exhibit G, as amended from time to time,
19
(viii) make Restricted Payments in compliance with paragraph 6B,
(ix) guarantee obligations of Varian, Inc. and VSEA constituting
"shared liabilities" as that term is defined in the Amended and Restated
Distribution Agreement, dated as of January 14, 1999 by and among the
Company, Varian, Inc. and VSEA, and
(x) make other loans, advances and investments, provided that the
aggregate dollar amount thereof shall not at any time exceed 20% of
Consolidated Tangible Net Worth;
6C(4). Sale of Stock and Funded Debt of Subsidiaries. Sell, issue or
otherwise dispose of any shares of stock (other than director's or shareholder's
qualifying shares) or Funded Debt of any Subsidiary, except (i) to the Company
or another Subsidiary, (ii) that all shares of stock and Funded Debt of any
Subsidiary at the time owned by or owed to the Company and all Subsidiaries 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 Company) at the time
of sale of the shares of stock and Funded Debt so sold, provided that such sale
shall be subject to and shall not violate paragraph 6C(5), and further provided
that, at the time of such sale, such Subsidiary shall not own, directly or
indirectly, any shares of stock or Funded Debt of any other Subsidiary (unless
all of the shares of stock and Funded Debt of such other Subsidiary owned,
directly or indirectly, by the Company and all Subsidiaries are simultaneously
being sold as permitted by this paragraph 6C(4)) and (iii) less than all shares
of stock in a Subsidiary may be sold for a consideration of not less than fair
value (as determined in good faith by the Board of Directors of the Company) so
long as the Company's remaining investment in such former Subsidiary is treated
as an investment and can be held in compliance with paragraph 6C(3);
6C(5). Merger and Sale of Assets. Enter into any transaction of merger or
consolidation with any other corporation or sell, lease or transfer or otherwise
dispose of all or a substantial part of its assets to any Person, except that
(i) any Subsidiary wholly-owned by the Company may merge with the
Company (provided that the Company shall be the continuing or surviving
corporation) or with any one or more other Subsidiaries,
(ii) any Subsidiary may sell, lease, transfer or otherwise dispose of
(collectively, "Transfer") any of its assets to the Company or another
Subsidiary,
(iii) any Subsidiary may Transfer all or substantially all of its
assets subject to the conditions specified in paragraphs 6C(4)(ii) and the
remainder of this 6C(5) with respect to the sale of the stock of such
Subsidiary,
(iv) the Company may merge or consolidate with any other corporation
provided that the Company shall be the continuing or surviving corporation
and that immediately after
20
such merger or consolidation, there shall exist no Event of Default or
Default under this Agreement, and
(v) the Company or any Subsidiary may Transfer any of its assets
provided that (x) the book value of all such assets Transferred, together
with the book value of all shares of stock and Funded Debt of any
Subsidiary Transferred pursuant to the provisions of paragraph 6C(4) and
assets Transferred pursuant to clause (iii) of this paragraph 6C(5), in any
fiscal year does not exceed 20% of Consolidated Tangible Net Worth as of
the last day of the immediately preceding fiscal year, and (y) the assets,
including any assets Transferred pursuant to clause (iii) of this paragraph
6C(5) and any Subsidiary Transferred pursuant to the provisions of
paragraph 6C(4), Transferred in any fiscal year shall have contributed less
than 10% of the average amount of Consolidated Net Earnings for the three
fiscal years immediately preceding the fiscal year in which such
determination takes place;
provided, however, that notwithstanding any provision of paragraphs 6C(4) and
6C(5) to the contrary, (A) the Company and its Subsidiaries shall not Transfer
assets, on a cumulative basis from the date of this Agreement, either with a
book value in excess of 40% of Consolidated Tangible Net Worth (measured as of
the last day of the fiscal year immediately preceding the fiscal year in which
such determination takes place) or that contributed Consolidated Net Earnings
(calculated as set forth in clause (v) (y) above) in excess of 20% of
Consolidated Net Earnings for the three fiscal years immediately preceding the
fiscal year in which such determination takes place, and (B) the Company may
discontinue the operation of, or sell, any division of its business or any
Subsidiary if such division or Subsidiary is unprofitable and the Board of
Directors of the Company in good faith has determined that the business of such
division or Subsidiary should be so discontinued or otherwise abandoned;
6C(6). Sale or Discount of Receivables. Discount or sell with recourse, or
sell for less than the face value thereof, any of its notes or accounts
receivable, except that the Company or any Subsidiary may (i) sell notes or
------
accounts receivable with recourse provided that the aggregate face amount of
such notes and accounts receivable sold in any fiscal year does not exceed 5% of
Consolidated gross sales for the fiscal year then most recently ended, and (ii)
discount notes or accounts receivable provided that the amount of such discount
reflects only customary finance charges paid by the Company or such Subsidiary
in the normal course of business;
6C(7). Transactions with Stockholders. Directly or indirectly, purchase,
acquire or lease any property from, or Transfer any property to, or otherwise
deal with, in the ordinary course of business or otherwise (i) any Affiliate or
(ii) any Substantial Stockholder, except that (a) the Company may sell to, or
purchase (within the limitations of paragraph 6B) from, any such person shares
of the Company's stock, (b) such acts and transactions prohibited by this
paragraph 6C(7) may be performed or engaged in if made upon terms not less
favorable than if no such relationship described in clauses (i) and (ii) above
existed, (c) the foregoing shall not apply to cash compensation, stock option
and other stock-based incentive compensation, employee relocation and other
employee benefit plans approved by the Company's Board of Directors, (d) the
Company and its Subsidiaries
21
may, in the ordinary course of business, directly or indirectly, purchase,
acquire or lease property from, or Transfer property to, or otherwise deal with
Affiliates provided that such transaction with any such Affiliate shall be not
less favorable to the Company and its Subsidiaries than if such transactions
were entered into with non-Affiliates and (e) the Company and Subsidiaries may
engage in such transactions if approved by a majority of the outside,
disinterested members of the Company's Board of Directors.
7. EVENTS OF DEFAULT.
7A. Acceleration. If any of the following events shall occur and be
continuing for any reason whatsoever (and whether such occurrence shall be
voluntary or involuntary or come about or be effected by operation of law or
otherwise):
(i) the Company defaults in the payment of any principal of or Yield
Maintenance Amount on any Note when the same shall become due, either by the
terms thereof or otherwise as herein provided; or
(ii) the Company defaults in the payment of any interest on any Note
for more than 10 days after the date due; or
(iii) the Company or any Subsidiary defaults (whether as primary
obligor, as guarantor or other surety) in any payment of principal of or
interest on any other obligation for money borrowed (or any Capitalized Lease
Obligation, any obligation under a conditional sale or other title retention
agreement, any obligation issued or assumed as full or partial payment for
property whether or not secured by a purchase money mortgage or any obligation
under notes payable or drafts accepted representing extensions of credit) beyond
any period of grace provided with respect thereto, or the Company or any
Subsidiary fails to perform or observe any other agreement, term or condition
contained in any agreement under which any such obligation is created (or if any
other event thereunder or under any such agreement shall occur and be
continuing) and the effect of such failure or other event is to cause, or to
permit the holder or holders of such obligation (or a trustee on behalf of such
holder or holders) to cause, such obligation to become due (or to be repurchased
by the Company or any Subsidiary) prior to any stated maturity, provided that
--------
the aggregate amount of all obligations as to which such a payment default shall
occur and be continuing or such a failure or other event causing or permitting
acceleration (or resale to the Company or any Subsidiary) shall occur and be
continuing exceeds $5,000,000; or
(iv) any representation or warranty made by the Company herein or by
the Company or any of its officers in any writing furnished in connection with
or pursuant to this Agreement shall be false in any material respect on the date
as of which made; or
(v) the Company fails to perform or observe any agreement contained in
paragraph 6; or
22
(vi) the Company fails to perform or observe any other agreement, term
or condition contained herein and such failure shall not be remedied within 30
days after any Designated Officer obtains actual knowledge thereof; or
(vii) the Company or any Subsidiary makes an assignment for the
benefit of creditors or is generally not paying its debts as such debts become
due; or
(viii) any decree or order for relief in respect of the Company or any
Subsidiary is entered under any bankruptcy, reorganization, compromise,
arrangement, insolvency, readjustment of debt, dissolution or liquidation or
similar law, whether now or hereafter in effect (herein called the "Bankruptcy
Law"), of any jurisdiction; or
(ix) the Company or any Subsidiary petitions or applies to any
tribunal for, or consents to, the appointment of, or taking possession by, a
trustee, receiver, custodian, liquidator or similar official of the Company or
any Subsidiary, or of any substantial part of the assets of the Company or any
Subsidiary, or commences a voluntary case under the Bankruptcy Law of the United
States or any proceedings (other than proceedings for the voluntary liquidation
and dissolution of a Subsidiary) relating to the Company or any Subsidiary under
the Bankruptcy Law of any other jurisdiction; or
(x) any such petition or application is filed, or any such proceedings
are commenced, against the Company or any Subsidiary and the Company or such
Subsidiary by any act indicates its approval thereof, consent thereto or
acquiescence therein, or an order, judgment or decree is entered appointing any
such trustee, receiver, custodian, liquidator or similar official, or approving
the petition in any such proceedings, and such order, judgment or decree remains
unstayed and in effect for more than 30 days; or
(xi) any order, judgment or decree is entered in any proceedings
against the Company decreeing the dissolution of the Company and such order,
judgment or decree remains unstayed and in effect for more than 60 days; or
(xii) any order, judgment or decree is entered in any proceedings
against the Company or any Subsidiary decreeing a split-up of the Company or
such Subsidiary which requires the divestiture of assets with a book value, or
the divestiture of the stock of a Subsidiary whose assets have a book value, in
excess of 20% of Consolidated Tangible Net Worth (measured at the end of the
fiscal year immediately preceding the fiscal year in which such divestiture
occurs) or which requires the divestiture of assets, or stock of a Subsidiary,
which shall have contributed in excess of 10% of the average amount of
Consolidated Net Earnings for the three completed fiscal years immediately
preceding the fiscal year in which such divestiture occurs, and such order,
judgment or decree remains unstayed and in effect for more than 60 days; or
23
(xiii) one or more final judgments in an aggregate amount in excess of
$5,000,000 is rendered against the Company or any Subsidiary and, within 60 days
after entry thereof, any such judgment is not discharged or execution thereof
stayed pending appeal, or within 60 days after the expiration of any such stay,
any such judgment is not discharged; or
(xiv) if (a) any Plan shall fail to satisfy any applicable minimum
funding standards of ERISA or the Code for any plan year or part thereof or a
waiver of such standards or extension of any amortization period is sought or
granted under section 412 of the Code, (b) a notice of intent to terminate any
Plan shall have been or is reasonably expected to be filed with the PBGC or the
PBGC shall have instituted proceedings under ERISA section 4042 to terminate or
appoint a trustee to administer any Plan or the PBGC shall have notified the
Company or any ERISA Affiliate that a Plan may become a subject of any such
proceedings, (c) the aggregate "amount of unfunded benefit liabilities" (within
the meaning of section 4001(a)(18) of ERISA) under all Plans, determined in
accordance with Title IV of ERISA, shall exceed $1,000,000, (d) the Company or
any ERISA Affiliate shall have incurred or is reasonably expected to incur any
liability pursuant to Title I or IV of ERISA or the penalty or excise tax
provisions of the Code relating to employee benefit plans, (e) the Company or
any ERISA Affiliate withdraws from any Multiemployer Plan, or (f) the Company or
any Subsidiary establishes or amends any employee welfare benefit plan that
provides post-employment welfare benefits in a manner that would increase the
liability of the Company or any Subsidiary thereunder; and any such event or
events described in clauses (a) through (f) above, either individually or
together with any other such event or events, would reasonably be expected to
have a material adverse effect on the financial condition of the Company and its
Subsidiaries taken as a whole;
then (a) if such event is an Event of Default specified in clause (i) or (ii) of
this paragraph 7A, any holder of any Note may at its option during the
continuance of such Event of Default, by notice in writing to the Company,
declare all of the Notes held by such holder to be, and all of the Notes held by
such holder shall thereupon be and become, immediately due and payable at par
together with interest accrued thereon, without presentment, demand, protest or
notice of any kind, all of which are hereby waived by the Company, (b) if such
event is an Event of Default specified in clause (viii), (ix) or (x) of this
paragraph 7A with respect to the Company, all of the Notes at the time
outstanding shall automatically become immediately due and payable together with
interest accrued thereon and together with the Yield-Maintenance Amount, if any,
with respect to each Note, without presentment, demand, protest or notice of any
kind, all of which are hereby waived by the Company, and (c) with respect to any
event constituting an Event of Default, the Required Holder(s) of the Notes of
any Series may at its or their option during the continuance of such Event of
Default, by notice in writing to the Company, declare all of the Notes of such
Series to be, and all of the Notes of such Series shall thereupon be and become,
immediately due and payable together with interest accrued thereon and together
with the Yield-Maintenance Amount, if any, with respect to each Note of such
Series, without presentment, demand, protest or notice of any kind, all of which
are hereby waived by the Company.
24
7B. Rescission of Acceleration. At any time after any or all of the Notes
of any Series shall have been declared immediately due and payable pursuant to
paragraph 7A, the Required Holder(s) of the Notes of such Series may, by notice
in writing to the Company, rescind and annul such declaration and its
consequences if (i) the Company shall have paid all overdue interest on the
Notes of such Series, the principal of and Yield-Maintenance Amount, if any,
payable with respect to any Notes of such Series which have become due otherwise
than by reason of such declaration, and interest on such overdue interest and
overdue principal and Yield-Maintenance Amount at the rate specified in the
Notes of such Series, (ii) the Company shall not have paid any amounts which
have become due solely by reason of such declaration, (iii) all Events of
Default and Defaults, other than non-payment of amounts which have become due
solely by reason of such declaration, shall have been cured or waived pursuant
to paragraph 11C, and (iv) no judgment or decree shall have been entered for the
payment of any amounts due pursuant to the Notes of such Series or this
Agreement. No such rescission or annulment shall extend to or affect any
subsequent Event of Default or Default or impair any right arising therefrom.
7C. Notice of Acceleration or Rescission. Whenever any Note shall be
declared immediately due and payable pursuant to paragraph 7A or any such
declaration shall be rescinded and annulled pursuant to paragraph 7B, the
Company shall forthwith give written notice thereof to the holder of each Note
of each Series at the time outstanding.
7D. Other Remedies. If any Event of Default or Default shall occur and be
continuing, the holder of any Note may proceed to protect and enforce its rights
under this Agreement and such Note by exercising such remedies as are available
to such holder in respect thereof under applicable law, either by suit in equity
or by action at law, or both, whether for specific performance of any covenant
or other agreement contained in this Agreement or in aid of the exercise of any
power granted in this Agreement. No remedy conferred in this Agreement upon the
holder of any Note is intended to be exclusive of any other remedy, and each and
every such remedy shall be cumulative and shall be in addition to every other
remedy conferred herein or now or hereafter existing at law or in equity or by
statute or otherwise.
8. REPRESENTATIONS, COVENANTS AND WARRANTIES. The Company represents,
covenants and warrants as follows (all such representations, warranties and
covenants being made both immediately before and after giving effect to the Spin
Off and all references to "Subsidiary" and "Subsidiaries" in this paragraph 8
shall be deemed omitted if the Company has no Subsidiaries at the time the
representations herein are made or repeated):
8A. Organization. The Company is a corporation duly organized and existing
in good standing under the laws of the State of Delaware, each Subsidiary is
duly organized and existing in good standing under the laws of the jurisdiction
in which it is incorporated, and the Company has and each Subsidiary has the
corporate power to own its respective property and to carry on its respective
business as now being conducted, and the Company is and each Subsidiary is duly
qualified as a foreign corporation to do business and in good standing in every
jurisdiction in which the nature of the respective business conducted by it
makes such qualification necessary,
25
excepting jurisdictions where failure to qualify would on a consolidated basis
have no material effect on the Company. The issuance of any Notes pursuant to
this Agreement is in compliance with the authorizing resolutions of the Board of
Directors then in effect and will not result in the aggregate outstanding amount
of Notes, debt obligations and other borrowings authorized by such resolutions,
after giving effect to the issuance of, and application of the proceeds from,
such Notes, to exceed the aggregate limitation contained in such authorizing
resolutions.
8B. Financial Statements. The Company has furnished each Purchaser of the
Series C Notes and any Accepted Notes with the following financial statements,
identified by a principal financial officer of the Company: (i) a consolidated
balance sheet of the Company and its Subsidiaries as at the last day of each of
the two fiscal years of the Company most recently completed prior to the date as
of which this representation is made or repeated to such Purchaser (other than
fiscal years completed within 90 days prior to such date for which audited
financial statements have not been released) and consolidated statements of
earnings, cash flows and shareholders' equity of the Company and its
Subsidiaries for each such year, all reported on by PricewaterhouseCoopers LLP
(or another nationally recognized independent accounting firm), (ii) a proforma
consolidated balance sheet of the Company and its Subsidiaries after giving
effect to the Spin-Off as of the last day of the fiscal year ending October 2,
1998 and proforma consolidated statements of earnings and cash flows of the
Company and its Subsidiaries after giving effect to the Spin-Off for such year,
(iii) a consolidated balance sheet of the Company and its Subsidiaries as at the
end of the quarterly period (if any) most recently completed prior to such date
and after the end of such fiscal year (other than quarterly periods completed
within 45 days prior to such date for which financial statements have not been
released) and the comparable quarterly period in the preceding fiscal year and
consolidated statements of earnings and cash flows for the periods from the
beginning of the fiscal years in which such quarterly periods are included to
the end of such quarterly periods, prepared by the Company. Such financial
statements (including any related schedules and/or notes) are complete (subject,
as to interim statements, to changes resulting from audits and year-end
adjustments), have been prepared in accordance with generally accepted
accounting principles consistently followed throughout the periods involved and
show all liabilities, direct and contingent, of the Company and its Subsidiaries
required to be shown in accordance with such principles. The balance sheets
fairly present the condition of the Company and its Subsidiaries as at the dates
thereof, and the statements of earnings, stockholders' equity and cash flows
fairly present the results of the operations of the Company and its Subsidiaries
and their cash flows for the periods indicated. Other than as a result of the
Spin-Off, there has been no material adverse change in the business, property or
assets, condition (financial or otherwise) or operations of the Company and its
Subsidiaries taken as a whole since the end of the most recent fiscal year for
which such audited financial statements have been furnished.
8C. Actions Pending. There is no action, suit, investigation or proceeding
pending or, to the knowledge of the Company, threatened against the Company or
any of its Subsidiaries, or any properties or rights of the Company or any of
its Subsidiaries, by or before any court, arbitrator or administrative or
governmental body which could reasonably be expected to
26
result in any material adverse change in the business, property or assets,
condition (financial or otherwise) or operations of the Company and its
Subsidiaries taken as a whole.
8D. Outstanding Funded Debt. Neither the Company nor any of its
Subsidiaries has outstanding any Funded Debt except as permitted by paragraph
6C(2). There exists no default under the provisions of any instrument evidencing
such outstanding Funded Debt or of any agreement relating thereto.
8E. Title to Properties. The Company has and each of its Subsidiaries has
good and marketable title to its respective real properties (other than
properties which it leases) and good title to all of its other respective
properties and assets, other than any immaterial assets with respect to which it
will diligently attempt to obtain good and marketable title after the Spin Off,
in both cases to the extent material to the Company's Consolidated business,
including the properties and assets reflected in the most recent audited balance
sheet referred to in paragraph 8B (other than properties and assets disposed of
in the ordinary course of business, properties and assets of Varian, Inc. and
its Subsidiaries as of the date of the Spin-Off, properties and assets of VSEA
and its Subsidiaries as of the Spin-Off and, to the extent disclosure thereof
has been made in writing to Prudential, other properties and assets disposed of
in compliance with the terms of this Agreement), subject to no Lien of any kind
except Liens permitted by paragraph 6C(1). All leases necessary in any material
respect for the conduct of the Consolidated business of the Company and its
Subsidiaries are valid and subsisting and are in full force and effect.
8F. Taxes. The Company has and each of its Subsidiaries has filed all
federal, state and other income tax returns which, to the best knowledge of the
officers of the Company and its Subsidiaries, 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 and the failure to either file
such returns or pay such taxes or assessments could have a material adverse
effect on the Company and its Subsidiaries, taken as a whole, except such taxes
as are being contested in good faith by appropriate proceedings for which
adequate reserves have been established in accordance with generally accepted
accounting principles.
8G. Conflicting Agreements and Other Matters. Neither the Company 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 Company's Consolidated business, property or assets, condition (financial or
otherwise) or operations. Neither the execution nor delivery of this Agreement
or the Notes, nor the offering, issuance and sale of the Notes, nor fulfillment
of nor compliance with the terms and provisions hereof and of the Notes
(including, without limitation, the consummation of the Spin Off and the
assumption by Varian, Inc. of certain of the obligations of the Company under
the Existing 7.49% Notes, the Existing 6.90% Notes, the Existing 7.21% Notes and
the Existing 6.70% Notes as contemplated by the Varian, Inc. Amended and
Restated Note Agreement) 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 Company or any of its Subsidiaries pursuant to, the charter or
by-
27
laws of the Company or any of its Subsidiaries, any material award of any
arbitrator or any material agreement (including any agreement with
shareholders), instrument, order, judgment, decree, statute, law, rule or
regulation to which the Company or any of its Subsidiaries is subject. Neither
the Company nor any of its Subsidiaries is a party to, or otherwise subject to
any provision contained in, any instrument evidencing Funded Debt of the Company
or such Subsidiary, any agreement relating thereto or any other contract or
agreement (including its charter) which limits the amount of, or otherwise
imposes restrictions on the incurring of, Funded Debt of the Company of the type
to be evidenced by the Notes, except in each case as set forth in the agreements
listed in Schedule 8G attached hereto (as such Schedule 8G may have been
-----------
modified from time to time subsequent to the Series C Closing Day by written
supplements thereto delivered by the Company to Prudential).
8H. Offering of Notes. Neither the Company nor any agent acting on its
behalf has, directly or indirectly, offered the Notes or any similar security of
the Company for sale to, or solicited any offers to buy the Notes or any similar
security of the Company from, or otherwise approached or negotiated with respect
thereto with, any Person other than Institutional Investors, and neither the
Company nor any agent acting on its behalf has taken or will take any action
which would subject the issuance or sale of the Notes to the provisions of
Section 5 of the Securities Act or to the provisions of any securities or Blue
Sky law of any applicable jurisdiction.
8I. Use of Proceeds. The proceeds of the Series C Notes will be used to
fund the prepayment of a portion of the Existing 7.49% Notes and the Existing
6.90% Notes as contemplated by paragraph 3A(2) hereof. None of the proceeds of
the sale of any Notes will be used, directly or indirectly, for the purpose,
whether immediate, incidental or ultimate, of purchasing or carrying any "margin
stock" as defined in Regulation U (12 CFR Part 221) of the Board of Governors of
the Federal Reserve System (herein called "margin stock") or for the purpose of
maintaining, reducing or retiring any indebtedness which was originally incurred
to purchase or carry any stock that is then currently a margin stock (other than
retiring indebtedness incurred to acquire stock of the Company, which stock is
retired promptly upon the Company's acquisition thereof) or for any other
purpose which might constitute the purchase of such Notes a "purpose credit"
within the meaning of such Regulation U, unless the Company shall have delivered
to the Purchaser which is purchasing such Notes, on the Closing Day for such
Notes, an opinion of counsel satisfactory to such Purchaser stating that the
purchase of such Notes does not constitute a violation of such Regulation U.
Neither the Company nor any agent acting on its behalf has taken or will take
any action which might cause this Agreement or the Notes to violate Regulation
T, Regulation U or any other regulation of the Board of Governors of the Federal
Reserve System or to violate the Exchange Act, in each case as in effect now or
as the same may hereafter be in effect.
8J. ERISA. No accumulated funding deficiency (as defined in section 302 of
ERISA and section 412 of the Code), whether or not waived, exists with respect
to any Plan (other than a Multiemployer Plan) that is or would be materially
adverse to the business, property or assets, condition (financial or otherwise)
or operations of the Company and its Subsidiaries taken as a whole. No liability
to the PBGC has been or is expected by the Company or any ERISA Affiliate to be
incurred with respect to any Plan (other than a Multiemployer Plan) by the
Company, any
28
Subsidiary or any ERISA Affiliate which is or would be materially adverse to the
business, property or assets, condition (financial or otherwise) or operations
of the Company and its Subsidiaries taken as a whole. Neither the Company, any
Subsidiary nor any ERISA Affiliate has incurred or presently expects to incur
any withdrawal liability under Title IV of ERISA with respect to any
Multiemployer Plan which is or would be materially adverse to the business,
property or assets, condition (financial or otherwise) or operations of the
Company and its Subsidiaries taken as a whole. The execution and delivery of
this Agreement and the issuance and sale of the Notes will be exempt from or
will not involve any transaction which is subject to the prohibitions of section
406 of ERISA and will not involve any transaction in connection with which a
penalty could be imposed under section 502(i) of ERISA or a tax could be imposed
pursuant to section 4975 of the Code. The representation by the Company in the
next preceding sentence is made in reliance upon and subject to the accuracy of
the representation of each Purchaser in paragraph 9B as to the source of funds
to be used by it to purchase any Notes.
8K. Governmental Consent. Neither the nature of the Company or of any
Subsidiary, nor any of their respective businesses or properties, nor any
relationship between the Company or any Subsidiary and any other Person, nor any
circumstance in connection with the offering, issuance, sale or delivery of the
Notes is such as to require any authorization, consent, approval, exemption or
any action by or notice to or filing with any court or administrative or
governmental body (other than routine filings after the Closing Day for any
Notes with the Securities and Exchange Commission and/or state Blue Sky
authorities) in connection with the execution and delivery of this Agreement,
the offering, issuance, sale or delivery of the Notes or fulfillment of or
compliance with the terms and provisions hereof or of the Notes. To the extent
pertaining to the Securities Act and state Blue Sky laws, the representation by
the Company in the next preceding sentence is made in reliance upon and subject
to the accuracy of the representation of each Purchaser in paragraph 9A hereof.
8L. Environmental Compliance. The Company and its Subsidiaries and all of
their respective properties and facilities have complied at all times and in all
respects with all Environmental Laws, except, in any such case, where failure to
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comply would not result in a material adverse effect on the business, condition
(financial or otherwise) or operations of the Company and its Subsidiaries taken
as a whole.
8M. Disclosure. Neither this Agreement nor any other document, certificate
or statement furnished to any Purchaser by or on behalf of the Company in
connection herewith contains any untrue statement of a material fact or omits to
state a material fact necessary in order to make the statements contained herein
and therein not misleading. To the knowledge of any Designated Officer, there is
no fact peculiar to the Company or any of its Subsidiaries which materially
adversely affects or in the future may (so far as the Company can now foresee)
materially adversely affect the business, property or assets, condition
(financial or otherwise) or operations of the Company and its Subsidiaries taken
as a whole and which has not been set forth in this Agreement and the schedules
hereto (or in any certificate or other document required to be delivered
subsequent to the execution and delivery of this Agreement).
29
8N. Hostile Tender Offers. None of the proceeds of the sale of any Notes
will be used to finance a Hostile Tender Offer.
8O. Year 2000 Compliance. The Company has and its Subsidiaries have
conducted an analysis of, and developed or are developing a compliance program
with respect to, the effect of Year 2000 upon the key software, tradeware,
telecommunications, physical plant and automated processes of the Company and
its Subsidiaries and have made appropriate inquiry of the key customers and
suppliers of the Company and its Subsidiaries. The Company anticipates that
such compliance program will be completed on a timely basis and that the impact
of Year 2000 on the Company, its Subsidiaries and the key customers and
suppliers of the Company and its Subsidiaries will not be such as to have a
material adverse effect on the business, condition (financial or otherwise) or
operations of the Company and its Subsidiaries taken as a whole.
9. REPRESENTATIONS OF THE PURCHASERS.
Each Purchaser represents as follows:
9A. Nature of Purchase. Such Purchaser is acquiring the Notes purchased by
it hereunder for investment only, with neither an intention at the time of such
purchase to sell or distribute such Notes nor with a view to or for sale in
connection with any distribution thereof within the meaning of the Securities
Act, provided that the disposition of such Purchaser's property shall at all
times be and remain within its control.
Such Purchaser acknowledges that the Notes being purchased by it have
not been registered under the Securities Act, and cannot be transferred except
in compliance with the Securities Act and applicable state securities laws.
9B. Source of Funds. At least one of the following statements is an
accurate representation as to each source of funds (a "Source") to be used by
such Purchaser to pay the purchase price of the Notes to be purchased by it
hereunder: (i) the Source is the "insurance company general account" of such
Purchaser (as such term is defined under Section V of the United States
Department of Labor's Prohibited Transaction Class Exemption ("PTCE") 95-60),
and as of the date of the purchase of the Notes such Purchaser satisfies all of
the applicable requirements for relief under Sections 1 and IV of PTCE 95-60;
(ii) the Source is a separate account maintained by such Purchaser in which no
employee benefit plan, other than employee benefit plans identified on a list
which has been furnished by such Purchaser to the Company, participates to the
extent of 10% or more; (iii) the Source constitutes assets of an "investment
fund" (within the meaning of Part V of the QPAM Exemption) managed by a
"qualified professional asset manager" or "QPAM" (within the meaning of Part V
of the QPAM Exemption), no employee benefit plan's assets that are included in
such investment fund, when combined with the assets of all other employee
benefit plans established or maintained by the same employer or by an affiliate
(within the meaning of Section V(c)(1) of the QPAM Exemption) of such employer
or by the same employee organization and managed by such QPAM, exceed 20% of the
total client assets managed by such QPAM, the
30
conditions of Part 1(c) and (g) of the QPAM Exemption are satisfied, neither the
QPAM nor a person controlling or controlled by the QPAM (applying the definition
of "control" in Section V(e) of the QPAM Exemption) owns a 5% or more interest
in the Company and (a) the identity of such QPAM and (b) the names of all
employee benefit plan whose assets are included in such investment fund have
been disclosed to the Company in writing pursuant to this clause (iii); (iv) the
Source is a governmental plan; (v) the Source is one or more employee benefit
plans, or a separate account or trust fund comprised of one or more employee
benefit plans, each of which has been identified to the Company in writing
pursuant to this clause (v); or (vi) the Source does not include assets of any
employee benefit plan, other than a plan exempt from the coverage of ERISA. For
the purpose of this paragraph 9B, the terms "separate account", "governmental
plan", "party in interest" and "employee benefit plan" shall have the respective
meanings specified in section 3 of ERISA.
10. DEFINITIONS; ACCOUNTING MATTERS. For the purpose of this Agreement, the
terms defined in paragraphs 10A and 10B (or within the text of any other
paragraph) shall have the respective meanings specified therein.
10A. Yield-Maintenance Terms.
"Called Principal" shall mean, with respect to any Note, the principal
of such Note that is to be prepaid pursuant to paragraph 4C or is declared to be
immediately due and payable pursuant to paragraph 7A, as the context requires.
"Designated Spread" shall mean 0 in the case of each Series A Note,
each Series B Note and each Series C Note and 0 in the case of each Note of any
other Series unless the Confirmation of Acceptance with respect to the Notes of
such Series specifies a different Designated Spread in which case it shall mean,
with respect to each Note of such Series, the Designated Spread so specified.
"Discounted Value" shall mean, with respect to the Called Principal of
any Note, the amount obtained by discounting all Remaining Scheduled Payments
with respect to such Called Principal from their respective scheduled due dates
to the Settlement Date with respect to such Called Principal, in accordance with
accepted financial practice and at a discount factor (as converted to reflect
the periodic basis on which interest on such Note is payable, if payable other
than on a semi-annual basis) equal to the Reinvestment Yield with respect to
such Called Principal.
"Reinvestment Yield" shall mean, with respect to the Called Principal
of any Note, the Designated Spread over the yield to maturity implied by (i) the
yields reported, as of 10:00 A.M. (New York City local time) on the Business Day
next preceding the Settlement Date with respect to such Called Principal, on the
display designated as "Page 678" on Bridge Telerate Services (Telerate) (or such
other display as may replace page 678 on Bridge Telerate Services (Telerate))
for actively traded U.S. Treasury securities having a maturity equal to the
Remaining Average Life of such Called Principal as of such Settlement Date, or
if such yields shall not be reported as of such time or the yields reported as
of such time shall not be ascertainable, (ii) the Treasury Constant
31
Maturity Series yields reported, for the latest day for which such yields shall
have been so reported as of the Business Day next preceding the Settlement Date
with respect to such Called Principal, in Federal Reserve Statistical Release H.
15 (519) (or any comparable successor publication) for actively traded U.S.
Treasury securities having a constant maturity equal to the Remaining Average
Life of such Called Principal as of such Settlement Date. Such implied yield
shall be determined, if necessary, by (a) converting U.S. Treasury xxxx
quotations to bond-equivalent yields in accordance with accepted financial
practice and (b) interpolating linearly between yields reported for various
maturities.
"Remaining Average Life" shall mean, with respect to the Called
Principal of any Note, the number of years (calculated to the nearest one-
twelfth year) obtained by dividing (i) such Called Principal into (ii) the sum
of the products obtained by multiplying (a) each Remaining Scheduled Payment of
such Called Principal (but not of interest thereon) by (b) the number of years
(calculated to the nearest one-twelfth year) which will elapse between the
Settlement Date with respect to such Called Principal and the scheduled due date
of such Remaining Scheduled Payment.
"Remaining Scheduled Payments" shall mean, with respect to the Called
Principal of any Note, all payments of such Called Principal and interest
thereon that would be due on or after the Settlement Date with respect to such
Called Principal if no payment of such Called Principal were made prior to its
scheduled due date.
"Settlement Date" shall mean, with respect to the Called Principal of
any Note, the date on which such Called Principal is to be prepaid pursuant to
paragraph 4C or is declared to be immediately due and payable pursuant to
paragraph 7A, as the context requires.
"Yield-Maintenance Amount" shall mean, with respect to any Note, an
amount equal to the excess, if any, of the Discounted Value of the Called
Principal of such Note over the sum of (i) such Called Principal plus (ii)
interest accrued thereon as of (including interest due on) the Settlement Date
with respect to such Called Principal. The Yield-Maintenance Amount shall in no
event be less than zero.
10B. Other Terms.
"Acceptance" shall have the meaning specified in paragraph 2B(5).
"Acceptance Day" shall have the meaning specified in paragraph 2B(5).
"Acceptance Window" shall have the meaning specified in paragraph
2B(5).
"Accepted Note" shall have the meaning specified in paragraph 2B(5).
"Affiliate" shall mean any Person directly or indirectly controlling,
controlled by, or under direct or indirect common control with, the Company,
except a Subsidiary. A Person shall be
32
deemed to control a corporation if such Person either (i) possesses, directly or
indirectly, the power to direct or cause the direction of the management and
policies of such corporation, whether through the ownership of voting
securities, by contract or otherwise or (ii) owns beneficially, directly or
indirectly, 10% or more of the voting stock of such corporation.
"Authorized Officer" shall mean (i) in the case of the Company, a
Designated Officer, any other officer of the Company designated as an
"Authorized Officer" of the Company in the Information Schedule attached hereto
or any vice president of the Company designated as an "Authorized Officer" of
the Company for the purpose of this Agreement in an Officer's Certificate
executed by a Designated Officer and delivered to Prudential, and (ii) in the
case of Prudential, any officer of Prudential designated as its "Authorized
Officer" in the Information Schedule or any officer of Prudential designated as
its "Authorized Officer" for the purpose of this Agreement in a certificate
executed by one of its Authorized Officers. Any action taken under this
Agreement on behalf of the Company by any individual who on or after the date of
this Agreement shall have been an Authorized Officer of the Company and whom
Prudential in good faith believes to be an Authorized Officer of the Company at
the time of such action shall be binding on the Company even though such
individual shall have ceased to be an Authorized Officer of the Company, and any
action taken under this Agreement on behalf of Prudential by any individual who
on or after the date of this Agreement shall have been an Authorized Officer of
Prudential and whom the Company in good faith believes to be an Authorized
Officer of Prudential at the time of such action shall be binding on Prudential
even though such individual shall have ceased to be an Authorized Officer of
Prudential.
"Available Facility Amount" shall have the meaning specified in
paragraph 2B(1).
"Bankruptcy Law" shall have the meaning specified in clause (viii) of
paragraph 7A.
"Business Day" shall mean any day other than (i) a Saturday or a
Sunday, (ii) a day on which commercial banks in New York City or San Francisco
are required or authorized to be closed and (iii) for purposes of paragraph
2B(3) hereof only, a day on which The Prudential Insurance Company of America is
not open for business.
"Cancellation Date" shall have the meaning specified in paragraph
2B(8)(iv).
"Cancellation Fee" shall have the meaning specified in paragraph
2B(8)(iv).
"Capitalized Lease Obligation" shall mean any rental obligation which,
under generally accepted accounting principles, is or will be required to be
capitalized on the books of the Company or any Subsidiary, taken at the amount
thereof accounted for as indebtedness (net of interest expenses) in accordance
with such principles.
33
"Closing Day" shall mean, with respect to the Series C Notes, the
Series C Closing Day and, with respect to any Accepted Note, the Business Day
specified for the closing of the purchase and sale of such Accepted Note in the
Request for Purchase of such Accepted Note, provided that (i) if the Company and
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the Purchaser which is obligated to purchase such Accepted Note agree on an
earlier Business Day for such closing, the "Closing Day" for such Accepted Note
shall be such earlier Business Day, and (ii) if the closing of the purchase and
sale of such Accepted Note is rescheduled pursuant to paragraph 2B(7), the
Closing Day for such Accepted Note, for all purposes of this Agreement except
references to "original Closing Day" in paragraph 2B(8)(iii), shall mean the
Rescheduled Closing Day with respect to such Accepted Note.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Confirmation of Acceptance" shall have the meaning specified in
paragraph 2B(5).
"Consolidated" when used in connection with an accounting term,
including all defined terms herein, shall mean the combined account of the type
defined by the accounting term for the Company and all Subsidiaries determined
in accordance with generally accepted accounting principles.
"Consolidated Cash and Cash Equivalents" shall mean, with respect to
the Company and its Subsidiaries (i) all amounts from time to time on deposit in
demand deposit accounts, along with interest thereon, and all other amounts
shown as part of "Cash and Cash Equivalents" on the Company's consolidated
balance sheet in accordance with generally accepted accounting principles, (ii)
all certificates of deposit at banks or other financial institutions, net of any
penalty or fees for early withdrawal and (iii) marketable securities, as
determined by generally accepted accounting principles and that are within the
parameters of the Investment Policy; provided, however, that "Consolidated Cash
and Cash Equivalents" shall not include any of the foregoing to the extent that
such amounts are on deposit for or otherwise subject to a claim or right of
another Person superior or pari passu in right of priority to that of the
Company or any Subsidiary, such as escrow or performance deposits.
"Consolidated Current Assets" shall mean, with respect to the Company
and its Subsidiaries, the consolidated current assets thereof determined in
accordance with generally accepted accounting principles.
"Consolidated Current Liabilities" shall mean, with respect to the
Company and its Subsidiaries, the consolidated current liabilities thereof
determined in accordance with generally accepted accounting principles.
"Consolidated Interest Expense" shall mean Consolidated gross interest
expense, as determined by generally accepted accounting principles.
34
"Consolidated Net Earnings" shall mean the consolidated gross revenues
of the Company and its Subsidiaries less all operating and non-operating
expenses of the Company and its Subsidiaries including all charges of a proper
character (including current and deferred taxes on income, provision for taxes
on unremitted foreign earnings which are included in gross revenues, and current
additions to revenues), but not including in gross revenues any gains (net of
expenses and taxes applicable thereto) in excess of losses resulting from the
sale, conversion or other disposition (other than in the ordinary course of
business) of capital assets (i.e., assets other than current assets), any gains
resulting from the write-up (other than in the ordinary course of business) of
assets, any extraordinary gains, any equity of the Company and its Subsidiaries
in the undistributed earnings of any corporation which is not a Subsidiary, any
earnings of any other corporation acquired by the Company or any Subsidiary
through purchase, merger, or consolidation or otherwise for any year prior to
the year of acquisition, or any equity in any Subsidiary at the date of
acquisition over the cost of the investment in such Subsidiary and not including
in expenses any extraordinary losses, or any equity of the Company and its
Subsidiaries in the undistributed earnings of all such corporations, all
determined in accordance with generally accepted accounting principles
consistently applied. With respect to any determination of Consolidated Net
Earnings hereunder for any period of determination which includes any period
prior to the Spin-Off, Consolidated Net Earnings for such period of
determination shall be calculated on a proforma basis as though the Spin-Off had
been consummated immediately prior to the beginning of the period of
determination.
"Consolidated Net Earnings Available for Restricted Payments" shall
mean an amount equal to (i) $30,000,000 plus (ii) 65% (or minus 100% in case of
a deficit) of Consolidated Net Earnings for the period (taken as one accounting
period) commencing on October 3, 1998 and terminating at the end of the last
fiscal quarter immediately preceding the date of any proposed Restricted
Payment.
"Consolidated Receivables" shall mean the Company's consolidated
accounts receivable, determined in accordance with generally accepted accounting
principles.
"Consolidated Tangible Net Worth" shall mean the amount shown on the
books of the Company and all Subsidiaries as total shareholders' equity
(determined on a consolidated basis in accordance with generally accepted
accounting principles consistently applied, less (without duplication) goodwill,
trade names, trademarks, patents, organization expenses, unamortized debt
discount expenses and other intangibles.
"Consolidated Tangible Gross Worth" shall mean the sum of (i)
Consolidated Funded Debt, and (ii) Consolidated Tangible Net Worth.
"Consolidated Working Capital" shall mean the excess of Consolidated
Current Assets over Consolidated Current Liabilities.
"Credit Adjustment Fee" shall have the meaning specified in paragraph
2(B)(8)(i).
35
"Delayed Delivery Fee" shall have the meaning specified in paragraph
2B(8)(iii).
"Demand" shall have the meaning specified in paragraph 11B.
"Designated Officer" shall mean the Chairman of the Board of
Directors, President, Chief Financial Officer, Treasurer, Assistant Treasurer
and Controller of the Company.
"Environmental Laws" shall mean all federal, state, local and foreign
laws relating to pollution or protection of the environment, including laws
relating to emissions, discharges, releases or threatened releases of
pollutants, contaminants, 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, chemicals, or industrial,
toxic or hazardous substances or wastes, and any and all regulations, codes,
plans, orders, decrees, judgments, injunctions, notices or demand letters
issued, entered, promulgated or approved thereunder.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.
"ERISA Affiliate" shall mean any corporation which is a member of the
same controlled group of corporations as the Company within the meaning of
section 414(b) of the Code, or any trade or business which is under common
control with the Company within the meaning of section 414(c) of the Code.
"Event of Default" shall mean any of the events specified in paragraph
7A, provided that there has been satisfied any requirement in connection with
such event for the giving of notice, or the lapse of time, or the happening of
any further condition, event or act, and "Default" shall mean any of such
events, whether or not any such requirement has been satisfied.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Excluded Persons" shall mean those Persons and their respective
Affiliates set forth on the list provided by the Company to a holder of a Note
pursuant to paragraph 11D(2). "Excluded Persons" shall not include, except if
otherwise agreed to in writing by the Company and such holder, any Person of the
type specified in clause (i) of the definition of Institutional Investors.
"Existing 6.70% Notes" shall have the meaning specified in the
Introduction.
"Existing 6.90% Notes" shall have the meaning specified in the
Introduction.
"Existing 7.21% Notes" shall have the meaning specified in the
Introduction.
36
"Existing 7.49% Notes" shall have the meaning specified in the
Introduction.
"Facility" shall have the meaning specified in paragraph 2B(1).
"Funded Debt" shall mean, without duplication, (i) any obligation
payable more than one year from the date of the creation thereof (or which is
renewable or extendable at the option of the obligor for a period of more than
one year from the date of creation), (ii) all indebtedness having a maturity of
less than one year, provided such indebtedness is incurred pursuant to revolving
credit arrangements or other financing commitments with a final, non-extendable
maturity more than one year from the date of creation thereof, (iii) any
obligation for borrowed money (and any notes payable, drafts accepted or
advances representing extensions of credit (other than trade payables) whether
or not representing obligations for borrowed money) payable on demand or within
a period of one year from the date or creation thereof, (iv) seasonal credit
facilities, (v) Capitalized Lease Obligations, (vi) obligations of third parties
secured by a Lien on the property or other assets of the Company or any
Subsidiary, (vii) obligations of partnerships and joint ventures of which the
Company or any Subsidiary is a general partner or coventurer and which is not
expressly non-recourse to the Company or such Subsidiaries, (viii) unfunded
vested benefits under each Plan maintained for employees of the Company or any
Subsidiary and covered by Title IV of ERISA, (ix) Guarantees by the Company or
any Subsidiary of the foregoing (excluding letters of credit and other
contingent liabilities for advance payments and performance bonds) and (x)
modifications, renewals and extensions of the above.
"Guarantee" shall mean, with respect to any Person, any direct or
indirect liability, contingent or otherwise, of such Person with respect to any
indebtedness, lease, dividend or other obligation of another, including, without
limitation, any such obligation directly or indirectly guaranteed, endorsed
(other than for collection or deposit in the ordinary course of business) or
discounted or sold with recourse by such Person, or in respect of which such
Person is otherwise directly or indirectly liable, including, without
limitation, any such obligation in effect guaranteed by such Person through any
agreement (contingent or otherwise) to purchase, repurchase or otherwise acquire
such obligation or any security therefor, or to provide funds for the payment or
discharge of such obligation (whether in the form of loans, advances, stock
purchases, capital contributions or otherwise), or to maintain the solvency or
any balance sheet or other financial condition of the obligor of such
obligation, or to make payment for any products, materials or supplies or for
any transportation or service, regardless of the non-delivery or non- furnishing
thereof, in any such case if the purpose or intent of such agreement is to
provide assurance that such obligation will be paid or discharged, or that any
agreements relating thereto will be complied with, or that the holders of such
obligation will be protected against loss in respect thereof. The amount of any
Guarantee shall be equal to the outstanding principal amount of the obligation
guaranteed or such lesser amount to which the maximum exposure of the guarantor
shall have been specifically limited.
37
"Hedge Treasury Note(s)" shall mean, with respect to any Accepted
Note, the United States Treasury Note or Notes whose duration (as determined by
Prudential) most closely matches the duration of such Accepted Note.
"Hostile Tender Offer" shall mean, with respect to the use of proceeds
of any Note, any offer to purchase, or any purchase of, shares of capital stock
of any corporation or equity interests in any other entity, or securities
convertible into or representing the beneficial ownership of, or rights to
acquire, any such shares or equity interests, if such shares, equity interests,
securities or rights are of a class which is publicly traded on any securities
exchange or in any over-the-counter market, other than purchases for portfolio
investment purposes of such shares, equity interests, securities or rights
which, together with any such shares, equity, interests, securities or rights
then held, represent less than 5% of the equity interests or beneficial
ownership of such corporation or other entity, and such offer or purchase has
not been duly approved by the board of directors of such corporation or the
equivalent governing body of such other entity prior to the date on which the
Company makes the Request for Purchase of such Note.
"Including" shall mean, unless the context clearly requires otherwise,
"including without limitation."
"Institutional Investors" shall mean (i) banks, finance companies,
insurance companies, pension funds and other commercial lenders, (ii)
"accredited investors," as such term is defined under Regulation D promulgated
under the Securities Act and (iii) "qualified institutional buyers", as such
term is defined in Rule 144A promulgated under the Securities Act.
"Investment Policy" shall have the meaning specified in paragraph
6C(3)(vii).
"Issuance Fee" shall have the meaning specified in paragraph
2B(8)(ii).
"Issuance Period" shall have the meaning specified in paragraph 2B(2).
"Lien" shall mean any mortgage, pledge, security interest,
encumbrance, lien (statutory or otherwise) 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) or any other type of preferential arrangement for the purpose,
or having the effect, of protecting a creditor against loss or securing the
payment or performance of an obligation.
"Multiemployer Plan" shall mean any Plan which is a "multiemployer
plan" (as such term is defined in section 4001(a)(3) of ERISA.
"1992 Note Agreement" shall have the meaning specified in the
Introduction.
"1996 Note Agreement" shall have the meaning specified in the
Introduction.
38
"Notes" shall have the meaning specified in paragraph 1D.
"Officer's Certificate" shall mean a certificate signed in the name of
the Company by an Authorized Officer of the Company.
"PBGC" shall mean the Pension Benefit Guaranty Corporation, or any
successor replacement entity thereto under ERISA.
"Person" shall mean and include an individual, a partnership, a joint
venture, a corporation, a trust, an unincorporated organization and a government
or any department or agency thereof.
"Plan" shall mean any employee pension benefit plan (as such term is
defined in section 3 of ERISA) which is or has been established or maintained,
or to which contributions are or have been made, by the Company or any ERISA
Affiliate.
"Prudential" shall mean The Prudential Insurance Company of America.
"Prudential Affiliate" shall mean (i) any Person which, directly or
indirectly, controls, is controlled by, or is under common control with,
Prudential and (ii) any investment fund which is managed by Prudential or a
Prudential Affiliate described in clause (i) of this definition.
"Purchasers" shall mean Prudential with respect to the Series A Notes,
the Series B Notes and the Series C Notes and, with respect to any Accepted
Notes, Prudential and/or the Prudential Affiliate(s), which are purchasing such
Accepted Notes.
"QPAM Exemption" means Prohibited Transaction Class Exemption 84-14
issued by the United States Department of Labor.
"Rate Reduction Fee" shall have the meaning specified in paragraph
2B(8)(i)
"Request for Purchase" shall have the meaning specified in paragraph
2B(3).
"Required Holder(s)" shall mean the holder or holders of more than 50%
of the aggregate principal amount of the Notes or of a Series of Notes, as the
context may require, from time to time outstanding.
"Rescheduled Closing Day" shall have the meaning specified in
paragraph 2B(7).
"Restricted Payments" shall have the meaning specified to such term in
paragraph 6B.
"Securities Act" shall mean the Securities Act of 1933, as amended.
39
"Series" shall have the meaning specified in paragraph 1D.
"Series A Notes" shall have the meaning specified in the Introduction.
"Series B Notes" shall have the meaning specified in the Introduction.
"Series C Closing Day" shall have the meaning specified in paragraph
2A(3).
"Series C Note(s)" shall have the meaning specified in paragraph 1C.
"Shelf Notes" shall have the meaning specified in paragraph 1D.
"Significant Holder" shall mean (i) Prudential, so long as Prudential
or any Prudential Affiliate shall hold (or be committed under this Agreement to
purchase) any Note, or (ii) any other holder of at least 10% of the aggregate
principal amount of the Notes of any Series from time to time outstanding.
"Spin Off" shall have the meaning specified in the Introduction.
"Structuring Fee" shall have the meaning provided in paragraph
2B(8)(i).
"Subsidiary" shall mean any corporation, association or other business
entity in which the Company or one or more of its Subsidiaries or the Company
and one or more of its Subsidiaries owns at least 75% of the equity or voting
interests of such entity (and such equity or voting interests so owned enable
the Company and/or Subsidiaries to elect at least a majority of the directors,
or persons performing similar functions, of such entity), and any partnership or
joint venture if more than a 75% interest in the profits or capital thereof is
owned by the Company or one or more of its Subsidiaries or the Company and one
or more of its Subsidiaries (unless such partnership can and does ordinarily
take major business actions without the prior approval of the Company or one or
more of its Subsidiaries).
"Substantial Stockholder" shall mean (i) any Person owning
beneficially, directly or indirectly, either individually or together with all
other Persons to whom such Person is related by blood, adoption or marriage, 5%
or more of the outstanding voting stock of the Company, or (ii) any Person
related by blood, adoption or marriage to any Person coming within clause (i) of
this definition.
"Transfer" shall have the meaning specified in paragraph 6C(5)(ii).
"Transferee" shall mean any direct or indirect transferee of all or
any part of any Note purchased by any Purchaser under this Agreement.
"Varian, Inc." shall have the meaning specified in the Introduction.
40
"Varian, Inc. Amended and Restated Note Agreement" shall mean the
Amended and Restated Note Purchase and Private Shelf Agreement and Assumption,
dated as of April 2, 1999, among Varian, Inc., Prudential and each Prudential
Affiliate which becomes bound by the provisions thereof.
"Varian, Inc. Notes" shall mean the Varian, Inc. Series A Notes, the
Varian, Inc. Series B Notes, the Varian, Inc. Series C Notes and the Varian,
Inc. Series D Notes.
"Varian, Inc. Series A Notes" shall have the meaning specified in the
Introduction.
"Varian, Inc. Series B Notes" shall have the meaning specified in the
Introduction.
"Varian, Inc. Series C Notes" shall have the meaning specified in the
Introduction.
"Varian, Inc. Series D Notes" shall have the meaning specified in the
Introduction.
"VSEA" shall mean Varian Semiconductor Equipment Associates, Inc., a
Delaware corporation.
"Voting Stock" shall mean, with respect to any corporation, any shares
of stock of such corporation whose holders are entitled under ordinary
circumstances to vote for the election of directors of such corporation
(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).
10C. Accounting Principles, Terms and Determinations. All references in
this Agreement to "generally accepted accounting principles" shall be deemed to
refer to generally accepted accounting principles in effect in the United States
at the time of application thereof. Unless otherwise specified herein, all
accounting terms used herein shall be interpreted, all determinations with
respect to accounting matters hereunder shall be made, and all unaudited
financial statements and certificates and reports as to financial matters
required to be furnished hereunder shall be prepared, in accordance with
generally accepted accounting principles applied on a basis consistent with the
most recent audited financial statements delivered pursuant to clause (ii) of
paragraph 5A or, if no such statements have been so delivered, the most recent
audited financial statements referred to in clause (i) of paragraph 8B. Any
reference herein to any specific citation, section or form of law, statute, rule
or regulation shall refer to such new, replacement or analogous citation,
section or form should citation, section or form be modified, amended or
replaced.
11. MISCELLANEOUS.
11A. Note Payments. The Company agrees that, so long as any Purchaser shall
hold any Note, it will make payments of principal of, interest on, and any
Yield-Maintenance Amount payable with respect to, such Note, which comply with
the terms of this Agreement, by wire transfer of immediately available funds for
credit to (i) the account or accounts of such Purchaser
41
specified in the Purchaser Schedule attached hereto in the case of any Series A
Note, Series B Note or Series C Note, (ii) the account or accounts of such
Purchaser specified in the Confirmation of Acceptance with respect to such Note
in the case of any Shelf Note or (iii) such other account or accounts in the
United States as such Purchaser may from time to time designate in writing,
notwithstanding any contrary provision herein or in any Note with respect to the
place of payment. Each Purchaser agrees that, before disposing of any Note, it
will make a notation thereon (or on a schedule attached thereto) of all
principal payments previously made thereon and of the date to which interest
thereon has been paid. The Company agrees to afford the benefits of this
paragraph 11A to any Transferee which shall have made the same agreement as the
Purchasers have made in this paragraph 11A.
11B. Expenses. The Company agrees, whether or not the transactions
contemplated hereby shall be consummated, to pay, and save Prudential, each
Purchaser and any Transferee harmless against liability for the payment of' all
reasonable out-of-pocket expenses arising in connection with the following: (i)
all document negotiation, drafting and duplication charges and the fees and
expenses of any special counsel engaged by (A) Prudential and the Purchasers in
connection with entering into this Agreement and (B) Prudential, any Purchaser
or any Transferee in connection with any subsequent transaction contemplated by,
proposed modification of, or proposed consent under, this Agreement, if such
proposed transaction, modification or consent (1) is requested by the Company,
whether or not such transaction occurs, such modification becomes effective or
such consent is granted or (2) results from or relates to the occurrence of a
Default or Event of Default, or in order to avert, waive, consent to or cure the
same; provided, however, that in each such case the Company shall be responsible
-------- -------
for the fees and expenses of only one firm of outside counsel for Prudential,
the Purchasers and the Transferees at any one time; and (ii) the costs and
expenses, including attorneys' fees, incurred by Prudential, any Purchaser or
any Transferee in (A) responding to any subpoena or other legal process,
including in connection with litigation, or informal investigative demand
(collectively, "Demands"), provided, however, that such Demand (1) is issued
-------- -------
principally in connection with this Agreement, the transactions contemplated
hereby or by reason of any Purchaser's or Transferee's having acquired any Note
or having acquired information regarding the Company or any Subsidiary in
connection with its acquisition of any Note, (2) does not arise out of any
litigation between the Purchaser and its Transferee and (3) is not issued in
connection with any inquiry, audit or investigation by any governmental
authority that relates principally to the business, operations or investments
of the entity that received such Demand and (B) enforcing (or determining
whether or how to enforce) any rights under this Agreement or the Notes,
including without limitation costs and expenses incurred in any workout,
restructuring or bankruptcy case.
The obligations of the Company under this paragraph 11B shall survive
the transfer of any Note or portion thereof or interest therein by any Purchaser
or any Transferee and the payment of any Note.
11C. Consent to Amendments. This Agreement may be amended, and the Company
may take any action herein prohibited, or omit to perform any act herein
required to be
42
performed by it, if the Company shall obtain the written consent to such
amendment, action or omission to act, of the Required Holder(s) of the Notes of
each Series except that, (i) with the written consent of the holders of all
Notes of a particular Series, and if an Event of Default shall have occurred and
be continuing, of the holders of all Notes of all Series, at the time
outstanding (and not without such written consents), the Notes of such Series
may be amended or the provisions thereof waived to change the maturity thereof,
to change or affect the principal thereof, or to change or affect the rate or
time of payment of interest on or any Yield-Maintenance Amount payable with
respect to the Notes of such Series, (ii) without the written consent of the
holder or holders of all Notes at the time outstanding, no amendment to or
waiver of the provisions of this Agreement shall change or affect the provisions
of paragraph 7A or this paragraph 11C insofar as such provisions relate to
proportions of the principal amount of the Notes of any Series, or the rights of
any individual holder of Notes, required with respect to any declaration of
Notes to be due and payable or with respect to any consent, amendment, waiver or
declaration, (iii) with the written consent of Prudential (and not without the
written consent of Prudential) the provisions of paragraph 2B may be amended or
waived (except insofar as any such amendment or waiver would affect any rights
or obligations with respect to the purchase and sale of Notes which shall have
become Accepted Notes prior to such amendment or waiver), and (iv) with the
written consent of all of the Purchasers which shall have become obligated to
purchase Accepted Notes of any Series (and not without the written consent of
all such Purchasers), any of the provisions of paragraphs 2B and 3 may be
amended or waived insofar as such amendment or waiver would affect only rights
or obligations with respect to the purchase and sale of the Accepted Notes of
such Series or the terms and provisions of such Accepted Notes. Each holder of
any Note at the time or thereafter outstanding shall be bound by any consent
authorized by this paragraph 11C, whether or not such Note shall have been
marked to indicate such consent, but any Notes issued thereafter may bear a
notation referring to any such consent. No course of dealing between the Company
and the holder of any Note nor any delay in exercising any rights hereunder or
under any Note shall operate as a waiver of any rights of any holder of such
Note. As used herein and in the Notes, the term "this Agreement" and references
thereto shall mean this Agreement as it may from time to time be amended or
supplemented.
11D. Form, Registration, Transfer and Exchange of Notes; Lost Notes. The
Notes are issuable as registered notes without coupons in denominations of at
least $1,000,000, except as may be necessary to reflect any principal amount not
evenly divisible by $1,000,000. The Company shall keep at its principal office a
register in which the Company shall provide for the registration of Notes and of
transfers of Notes. Upon surrender for registration of transfer of any Note at
the principal office of the Company, the Company shall, at its expense, execute
and deliver one or more new Notes of like tenor and of a like aggregate
principal amount, registered in the name of such transferee or transferees. At
the option of the holder of any Note, such Note may be exchanged for other Notes
of like tenor and of any authorized denominations, of a like aggregate principal
amount, upon surrender of the Note to be exchanged at the principal office of
the Company. Whenever any Notes are so surrendered for exchange, the Company
shall, at its expense, execute and deliver the Notes which the holder making the
exchange is entitled to receive. Each prepayment of principal payable on each
prepayment date upon each new Note issued upon any such transfer or exchange
shall be in the same proportion to the unpaid principal amount of such new Note
as the
43
prepayment of principal payable on such date on the Note surrendered for
registration of transfer or exchange bore to the unpaid principal amount of such
Note. No reference need be made in any such new Note to any prepayment or
prepayments of principal previously due and paid upon the Note surrendered for
registration of transfer or exchange. Every Note surrendered for registration of
transfer or exchange shall be duly endorsed, or be accompanied by a written
instrument of transfer duly executed, by the holder of such Note or such
holder's attorney duty authorized in writing. Any Note or Notes issued in
exchange for any Note or upon transfer thereof shall carry the rights to unpaid
interest and Interest to accrue which were carried by the Note so exchanged or
transferred, so that neither gain nor loss of interest shall result from any
such transfer or exchange. Upon receipt of written notice from the holder of any
Note of the loss, theft, destruction or mutilation of such Note and, in the case
of any such loss, theft or destruction, upon receipt of such holder's indemnity
agreement (which shall be unsecured if such holder is Prudential, a Prudential
Affiliate or an Institutional Investor with a tangible net worth in excess of
$200,000,000), or in the case of any such mutilation upon surrender and
cancellation of such Note, the Company will make and deliver a new Note, of like
tenor, in lieu of the lost, stolen, destroyed or mutilated Note.
11D(1). Prior Notice to Company Regarding Resale; Excluded Transferees.
Anything contained in paragraph 11D(1) or paragraph 11E to the contrary
notwithstanding, if any holder of any Note wishes to sell all or any portion of
its Note or grant any participation or other interest therein to any Person
other than Prudential or a Prudential Affiliate, it shall (a) give the Company
written notice of (i) such intent (a "Resale Notice") at the time such
determination is made and (ii) as soon as such information is available, but in
no event later than 10 days prior to any such sale, either a list of Persons to
whom it intends to offer the Notes, if available, or, if such holder is selling
its Notes through another Person, the identity of such Person, (b) for a five-
day period commencing on the date such holder provides to the Company the
information described in clause (a)(ii), consult with the Company in good faith
regarding the acceptability to the Company of any prospective purchasers of such
Notes or participations therein prior to soliciting bids for such sale or
participation, and (c) solicit, accept and consider in good faith bids from the
Company to repurchase such holder's Notes during the same time period as such
holder is soliciting offers for such Notes from third parties (as part of its
bid, the Company shall certify that no Event of Default exists or would exist
after giving effect to its repurchase of such Notes). If such holder has not
entered into a commitment to sell its Note (or portion thereof) within 90 days
after the expiration of such ten-day period, such holder shall again be
obligated to give notice required by this paragraph 11D(2). Prudential and
Prudential Affiliates shall not be liable for any failure to provide any Resale
Notice that results from such Person's negligence. The foregoing right of
notice, consultation and bidding is in addition to the obligations set forth in
the next succeeding paragraph regarding Excluded Persons.
The Company may, at any time, provide to the holders of the Notes a
list of Excluded Persons and update such list from time to time. In designating
Excluded Persons, the Company shall act reasonably and in good faith. If such
list of Excluded Persons is provided or updated, as the case may be, within two
Business Days of the Company's receipt of a Resale Notice, the selling holder
44
will not knowingly sell all or any portion of or participation in its Note to
any Excluded Person or any Affiliate thereof.
11E. Persons Deemed Owners; Participations. Prior to due presentment for
registration of transfer, the Company may treat the Person in whose name any
Note is registered as the owner and holder of such Note for the purpose of
receiving payment of principal of and interest on, and any Yield-Maintenance
Amount payable with respect to, such Note and for all other purposes whatsoever,
whether or not such Note shall be overdue, and the Company shall not be affected
by notice to the contrary. Subject to the preceding sentence and to the
requirements set forth in paragraph 11D, the holder of any Note may from time to
time grant participations in all or any part of such Note to any Person on such
terms and conditions as may be determined by such holder in its sole and
absolute discretion. The Company shall be justified in dealing only with the
holder of the Note who grants any participation, and shall not, except if an
event of the type described in clauses (viii) through (xi) of paragraph 7A
occurs with respect to such holder, be obligated to deal with such participants.
11F. Survival of Representations and Warranties; Entire Agreement. All
representations and warranties contained herein or made in writing by or on
behalf of the Company in connection herewith shall survive the execution and
delivery of this Agreement and the Notes, the transfer by any Purchaser of any
Note or portion thereof or interest therein and the payment of any Note, and may
be relied upon by any Transferee, regardless of any investigation made at any
time by or on behalf of any Purchaser or any Transferee. Subject to the
preceding sentence, this Agreement and the Notes embody the entire agreement and
understanding between the parties hereto with respect to the subject matter
hereof and supersede all prior agreements and understandings relating to such
subject matter.
11G. Successors and Assigns. All covenants and other agreements in this
Agreement contained by or on behalf of any of the parties hereto shall bind and
inure to the benefit of the respective successors and assigns of the parties
hereto (including, without limitation, any Transferee) whether so expressed or
not.
11H. Disclosure to Other Persons. The Company acknowledges that Prudential,
each Purchaser and each holder of any Note (each being a "Delivering Person")
may deliver copies of any financial statements and other documents delivered to
it, and disclose any other information disclosed to it, by or on behalf of the
Company or any Subsidiary in connection with or pursuant to this Agreement to
(i) its directors, officers, employees, agents and professional consultants,
(ii) any Purchaser or holder of any Note, (iii) any Person (other than an
Excluded Person) to which it offers to sell any Note or any part thereof, (iv)
any Person (other than an Excluded Person) to which it sells or offers to sell a
participation in all or any part of any Note, (v) to the extent that it has a
legal obligation to disclose such information, any Person from which it offers
to purchase any security of the Company; provided, however, that in the case of
-------- -------
clause (iii), (iv) or (v), such holder will obtain from such Person an executed
confidentiality agreement in the form of Exhibit F-2 before disclosing any
material non-public information with respect to the Company or any Subsidiary,
(vi) any federal
45
or state regulatory authority having jurisdiction over it, (vii) the National
Association of Insurance Commissioners or any similar organization, or (viii)
any other Person to which such delivery or disclosure may be required (a) to
comply with any law, rule, regulation or order applicable to it, (b) to respond
sufficiently to Demand served on it, provided, however, that with respect to
-------- -------
material, nonpublic information regarding the Company and/or its Subsidiaries,
except as prohibited by law, such Delivering Person shall provide notice to the
Company of such legal requirement or Demand at least ten Business Days (or such
shorter period of time as is set forth therein) prior to the date such
information must be produced so that the Company can intervene on its own behalf
in such proceeding to prevent, postpone or restrict such disclosure; provided
--------
further, however, that (1) not earlier than the third Business Day prior to the
------- -------
date specified in such Demand for such document or information delivery or
disclosure, such Delivering Person shall be free to comply with such Demand if
the Company has not at such time obtained any protective or similar order
preventing, postponing or restricting such disclosure and (2) Prudential and any
Prudential Affiliate shall not be liable for any failure to provide any such
notice to the Company that results from such Person's negligence; or (c) with
the prior consent of the Company (which, if given orally initially by an
Authorized Officer, shall be promptly confirmed, in writing), which consent
shall not be reasonably withheld, in order to protect the investment of such
Delivering Person in its Notes.
11I. Independence of Covenants. Except to the extent the context
specifically requires otherwise, all covenants hereunder shall be given
independent effect so that if a particular action or condition is prohibited by
any one of such covenants, the fact that it would be permitted by an exception
to, or otherwise be in compliance within the limitations of' another covenant
shall not (i) avoid the occurrence of a Default or Event of Default if such
action is taken or such condition exists or (ii) in any way prejudice an attempt
by the holder of any Note to prohibit, through equitable action or otherwise,
the taking of any action by the Company or any Subsidiary which would result in
a Default or Event of Default.
11J. Notices. All written communications provided for hereunder (other than
communications provided for under paragraph 2) shall be sent by first class mail
or nationwide overnight delivery service (with charges prepaid) and (i) if to
any Purchaser, addressed as specified for such communications in the Purchaser
Schedule attached hereto (in the case of the Series A Notes, Series B Notes or
Series C Notes) or the Purchaser Schedule attached to the applicable
Confirmation of Acceptance (in the case of any Shelf Notes) or at such other
address as any such Purchaser shall have specified to the Company in writing,
(ii) if to any other holder of any Note, addressed to it at such address as it
shall have specified in writing to the Company or, if any such holder shall not
have so specified an address, then addressed to such holder in care of the last
holder of such Note which shall have so specified an address to the Company and
(iii) if to the Company, addressed to it at 0000 Xxxxxx Xxx, Xxxx Xxxx,
Xxxxxxxxxx 00000-0000, Attention: Chief Financial Officer, provided, however,
-------- -------
that any such communication to the Company may also, at the option of the Person
sending such communication, be delivered by any other means either to the
Company at its address specified above or to any Authorized Officer of the
Company. Any communication pursuant to paragraph 2 shall be made by the method
specified for such communication in paragraph 2, and shall be effective to
create any rights or obligations under this Agreement only if, in the case
46
of a telephone communication, an Authorized Officer of the party conveying the
information and of the party receiving the information are parties to the
telephone call, and in the case of a telecopier communication, the communication
is signed by an Authorized Officer of the party conveying the information,
addressed to the attention of an Authorized Officer of the party receiving the
information, and in fact received at the telecopier terminal the number of which
is listed for the party receiving the communication in the Information Schedule
or at such other telecopier terminal as the party receiving the information
shall have specified in writing to the party sending such information.
So long as Prudential is the holder of any Note outstanding, the
Company shall be deemed to have given any required notices or information to
Noteholders who are Prudential Affiliates so long as it timely provides such
notice or information to Prudential in the manner specified by the applicable
provision of this Agreement.
11K. Payments Due on Non-Business Days. Anything in this Agreement or the
Notes to the contrary notwithstanding, any payment of principal of or interest
on, or Yield-Maintenance Amount payable with respect to, any Note that is due on
a date other than a Business Day shall be made on the next succeeding Business
Day. If the date for any payment is extended to the next succeeding Business
Day by reason of the preceding sentence, the period of such extension shall not
be included in the computation of the interest payable on such Business Day.
11L. Severability. Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof' and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
11M. Descriptive Headings. The descriptive headings of the several
paragraphs of this Agreement are inserted for convenience only and do not
constitute a part of this Agreement.
11N. Satisfaction Requirement. If any agreement, certificate or other
writing, or any action taken or to be taken, is by the terms of this Agreement
required to be satisfactory to any Purchaser, to any holder of Notes or to the
Required Holder(s), the determination of such satisfaction shall be made by such
Purchaser, such holder or the Required Holder(s), as the case may be, in the
sole and exclusive judgment (exercised in good faith) of the Person or Persons
making such determination.
11O. Governing Law. THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE
INTERNAL LAW OF THE STATE OF CALIFORNIA.
11P. Severalty of Obligations. The sales of Notes to the Purchasers are to
be several sales, and the obligations of Prudential and the Purchasers under
this Agreement are several obligations. No failure by Prudential or any
Purchaser to perform its obligations under this
47
Agreement shall relieve any other Purchaser or the Company of any of its
obligations hereunder, and neither Prudential nor any Purchaser shall be
responsible for the obligations of, or any action taken or omitted by, any other
such Person hereunder.
11Q. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
11R. Binding Agreement. When this Agreement is executed and delivered by
the Company and Prudential, it shall become a binding agreement between the
Company and Prudential. This Agreement shall also inure to the benefit of each
Purchaser which shall have executed and delivered a Confirmation of Acceptance,
and each such Purchaser shall be bound by this Agreement to the extent provided
in such Confirmation of Acceptance.
11S. Amendment and Restatement of Existing Agreements; Release of the
Company. Upon satisfaction of the conditions specified in paragraph 3A hereof,
(i) each of the 1992 Note Agreement and the 1996 Note Agreement, insofar as the
same relate to the Series A Notes or the Series B Notes, shall be amended and
restated in their entirety to read as set forth herein, the Series A Notes, the
Series B Notes, the Series C Notes and any Shelf Notes shall be subject to the
terms hereof, and the Varian, Inc. Notes shall not be subject to the terms
hereof, and (ii) the Company shall be released from any obligations with respect
to the Varian, Inc. Notes or the 1992 Note Agreement or the 1996 Note Agreement,
insofar as the same relate to the Varian, Inc. Notes.
Very truly yours,
VARIAN ASSOCIATES, INC.
By: /s/ Xxxxxx X. Xxxxx
---------------------------------------
Its: Chief Financial Officer
--------------------------------------
Vice President, Finance
And by: /s/ Xxxxxx X. Xxxxxx
------------------------------------
Its: Treasurer
---------------------------------------
48
The foregoing Agreement is hereby
accepted as of the date first above written.
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
By: /s/ Xxxxxxx X. Xxxxxxx
-------------------------------------------
Vice President
PRUCO LIFE INSURANCE COMPANY
By: /s/ Xxxxxxx X. Xxxxxxx
-----------------------------------------
Vice President
PRUCO LIFE INSURANCE COMPANY OF
NEW JERSEY
By: /s/ Xxxxxxx X. Xxxxxxx
----------------------------------------
Vice President
49
INFORMATION SCHEDULE
Authorized Officers for Prudential
----------------------------------
Xxxxx X. Xxxxxx Xxxxxxx X. Xxxxxxx
Senior Managing Director Managing Director
Prudential Capital Group Prudential Capital Group
Two Prudential Plaza Four Embarcadero Center
Suite 5600 Suite 2700
Xxxxxxx, Xxxxxxxx 00000 Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Telephone: (000) 000-0000 Telephone: (000) 000-0000
Facsimile: (000) 000-0000 Facsimile: (000) 000-0000
Xxxxxx X. Xxxxx Xxxxxxx X. XxXxxxxxx
Senior Vice President Senior Vice President
Prudential Capital Group Prudential Capital Group
Four Embarcadero Center Four Xxxxxxxxxxx Xxxxxx
Xxxxx 0000 Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000 Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Telephone: (000) 000-0000 Telephone:(000) 000-0000
Facsimile: (000) 000-0000 Facsimile:(000) 000-0000
Authorized Officers for the Company
-----------------------------------
Each "Designated Officer" of the Company as such term is defined in paragraph
10B of the Agreement.
Varian Medical Systems, Inc.
0000 Xxxxxx Xxx
Xxxx Xxxx, Xxxxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
PURCHASER SCHEDULE
Series A Notes, Series B Notes and Series C Notes
-------------------------------------------------
VARIAN MEDICAL SYSTEMS, INC.
Aggregate principal
amount of Series A
Notes and Series B
Notes to be issued in
exchange for Existing
7.21% Notes and
Existing 6.70% Notes,
respectively, and
aggregate principal
amount of Series C Note
Notes to be purchased Denomination(s)
--------------------- ---------------
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA $12,500,000 of $12,500,000 of
Series A Notes Series A Notes
(1) All payments on account of Series A Notes, $25,000,000 of $20,000,000 and
Series B Notes in the original principal amount Series B Notes $5,000,000 of
of $20,000,000 and Series C Notes held by such Series B Notes
Purchaser shall be made by wire transfer of
immediately available funds for credit to: $16,000,000 of $16,000,000 of
Series C Notes Series C Notes
Account No. 000-0000-000
Bank of New York
New York, New York
(ABA No.: 021-000-018)
All payments on account of the Series B Notes
in the original principal amount of
$5,000,000 held by such Purchaser shall be
made by wire transfer of immediately
available funds for credit to:
Account No. 000-0000-000
Bank of New York
New York, New York
(ABA No.: 021-000-018)
Each such wire transfer shall set forth the
name of the Company, a reference to "7.15%
Series A Senior Notes due April 2, 2010,
Security No. "PPN92220P\B INV6523", 6.70%
Series B Senior Notes due April 30, 2014,
Security No. "!INV______!", or 6.76% Series C
Senior Notes due April 2, 2011, Security No.
"PPN92220P\A INV6523", as the case may be,
and the due date and application (as among
principal, interest and Yield-Maintenance
Amount) of the payment being made
(2) Address for all notices relating to payments:
The Prudential Insurance Company of America
c/o Prudential Capital Group
Gateway Center Three
000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxx Xxxxxx 00000
Attention: Manager, Investment Operations Group
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
2
(3) Address for all other communications and
notices:
The Prudential Insurance Company of America
c/o Prudential Capital Group - Corporates
Four Xxxxxxxxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Managing Director
Telecopy: (000) 000-0000
(4) Recipient of telephonic prepayment notices:
Manager, Investment Structure and Pricing
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
(5) Tax Identification No.: 00-0000000
3
PURCHASER SCHEDULE
(continued)
Aggregate
Principal
Amount of
Series C
Notes to Be Note
Purchased Denomination(s)
--------------------- -------------------
PRUCO LIFE INSURANCE COMPANY
1. All payments on account of the Series C Notes $3,000,000 $3,000,000
held by such purchaser shall be made by wire
transfer of immediately available funds for credit
to:
Pruco Life Private Placement
Account No. 000-0000-000
Bank of New York
New York, New York
(ABA No.: 021-000-018)
Each such wire transfer shall set forth the name
of the Company, a reference to 6.76% Series C
Notes due April 2, 2011, "PPN92220P\A INV6523"
and the due date and application (as among
principal, interest and Yield-Maintenance
Amount) of the payment being made.
2. Address for all communications and notices:
Pruco Life Insurance Company
c/o Prudential Capital Group - Corporate Finance
Four Xxxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000-0000
Attention: Managing Director
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
4
Aggregate
Principal
Amount of
Series C
Notes to Be Note
Purchased Denomination(s)
----------- ---------------
With a copy to:
Pruco Life Insurance Company
x/x Xxxxx Xxxxxxxxxx
Xxxx Xxxxxxx Xxxxxx
000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxx Xxxxxx 00000-0000
Attention: Manager
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
3. Recipient of telephonic prepayment notices with
respect to Notes:
Manager, Investment Structuring and Pricing
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
4. Tax Identification No.: 00-0000000
5
Aggregate
Principal
Amount of
Series C
Notes to Be Note
Purchased Denomination(s)
----------- ----------------
PRUCO LIFE INSURANCE COMPANY OF
NEW JERSEY
1. All payments on account of Series C Notes held $2,000,000 $2,000,000
by such purchaser shall be made by wire transfer of
immediately available funds for credit to:
Pruco Life New Jersey Placement
Account No. 000-0000-000
Bank of New York
New York, New York
(ABA No.: 021-000-018)
Each such wire transfer shall set forth the name
of the Company, a reference to 6.76% Series C
Notes due April 2, 2011, "PPN92220P\A INV6523"
and the due date and application (as among
principal, interest and Yield-Maintenance
Amount) of the payment being made.
2. Address for all communications and notices:
Pruco Life Insurance Company of New Jersey
c/o Prudential Capital Group - Corporate Finance
Four Xxxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000-0000
Attention: Managing Director
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
6
Aggregate
Principal
Amount of
Series C
Notes to Be Note
Purchased Denomination(s)
----------- ----------------
With a copy to:
Pruco Life Insurance Company of New Jersey
x/x Xxxxx Xxxxxxxxxx
Xxxx Xxxxxxx Xxxxxx
000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxx Xxxxxx 00000-0000
Attention: Manager
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
3. Recipient of telephonic prepayment notices with
respect to Notes:
Manager, Investment Structuring and Pricing
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
4. Tax Identification No.: 00-0000000
7
Exhibit A-1
-----------
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND CANNOT
BE TRANSFERRED EXCEPT IN COMPLIANCE WITH
SUCH ACT AND APPLICABLE STATE SECURITIES LAWS.
[FORM OF SERIES A NOTE]
VARIAN ASSOCIATES, INC.
to be known as
VARIAN MEDICAL SYSTEMS, INC.
effective April 3, 1999
7.15% SERIES A SENIOR NOTE DUE APRIL 2, 2010
No. ________ _______________
$ ________________ _______________
FOR VALUE RECEIVED, the undersigned, Varian Associates, Inc. (herein
called the "Company"), a corporation organized and existing under the laws of
the State of Delaware, hereby promises to pay to _____________________________,
or registered assigns, the principal of ____________________________________
($____________) on April 2, 2010 with interest (computed on the basis of a 360-
day year--30-day month) (a) on the unpaid balance thereof at the rate of 7.15%
per annum from the date hereof, payable quarterly on the second day of April,
July, October and January in each year, commencing with the January 2, April 2,
July 2 or October 2 next succeeding the date hereof, until the principal hereof
shall have become due and payable, and (b) on any overdue payment (including any
overdue prepayment) of principal, any overdue payment of Yield Maintenance
Amount and any overdue payment of interest, payable quarterly as aforesaid (or,
at the option of the registered holder hereof, on demand), at a rate per annum
[from time to time]1 equal to [the greater of (i)]/1/ 9.15% [or (ii) 2% over the
rate of interest publicly announced by Bank of New York from time to time in New
York City as its prime rate].
Payments of principal, Yield Maintenance Amount, if any, and interest
are to be made at the main office of Bank of New York in New York City or at
such other place as the holder hereof shall designate to the Company in writing,
in lawful money of the United States of America.
------------------------
/1/ Delete in the case of holder not exempt from California usury law.
A-1-1
This Note is one of a series of Senior Notes (herein called the
"Notes") issued pursuant to an Amended and Restated Note Purchase and Private
Shelf Agreement, dated as of April 2, 1999 (herein called the "Agreement"),
between the Company, on the one hand, and The Prudential Insurance Company of
America and each Prudential Affiliate which becomes party thereto, on the other
hand, and is entitled to the benefits thereof. As provided in the Agreement,
this Note is subject to prepayment, in whole or from time to time in part, in
certain cases without Yield Maintenance Amount and in other cases with the Yield
Maintenance Amount specified in the Agreement. Each holder of this Note will be
deemed by its acceptance hereof, (i) to have agreed to the confidentiality
provisions set forth in paragraph 11H of the Agreement, (ii) to have made the
representation set forth in paragraph 9B of the Agreement, and (iii) to have
agreed to the limitations on transfers set forth in paragraph 11D of the
Agreement.
This Note is a registered Note and, as provided in the Agreement, upon
surrender of this Note for registration of transfer, duly endorsed, or
accompanied by a written instrument of transfer duly executed, by the registered
holder hereof or such holder's attorney duly authorized in writing, a new Note
for the then outstanding principal amount will be issued to, and registered in
the name of, the transferee. Prior to due presentment for registration of
transfer, the Company may treat the person in whose name this Note is registered
as the owner hereof for the purpose of receiving payment and for all other
purposes, and the Company shall not be affected by any notice to the contrary.
In case an Event of Default, as defined in the Agreement, shall occur
and be continuing, the principal of this Note may be declared or otherwise
become due and payable in the manner and with the effect provided in the
Agreement.
This Note (i) merely re-evidences a portion of the indebtedness
previously evidenced by the Company's 7.21% Series A Senior Notes due June 9,
2007 (the "Existing 7.21% Notes"), (ii) is given in exchange for, and not as
payment of, Existing 7.21% Note(s), and (iii) is in no way intended to
constitute a novation of any Existing 7.21% Notes.
Capitalized terms used and not otherwise defined herein shall have the
meanings provided in the Agreement.
This Note shall be construed and enforced in accordance with the
internal law of the State of California.
VARIAN ASSOCIATES, INC.
By:
----------------------------------------------
Title:
-------------------------------------------
A-1-2
And by:
-------------------------------------------
Title:
-------------------------------------------
X-0-0
Xxxxxxx X-0
-----------
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND CANNOT
BE TRANSFERRED EXCEPT IN COMPLIANCE WITH
SUCH ACT AND APPLICABLE STATE SECURITIES LAWS.
[FORM OF SERIES B NOTE]
VARIAN ASSOCIATES, INC.
to be known as
VARIAN MEDICAL SYSTEMS, INC.
effective April 3, 1999
6.70% SERIES B SENIOR NOTE DUE APRIL 30, 2014
No. ________ _______________
$ ________________ _______________
FOR VALUE RECEIVED, the undersigned, Varian Associates, Inc. (herein
called the "Company"), a corporation organized and existing under the laws of
the State of Delaware, hereby promises to pay to ______________________________,
or registered assigns, the principal sum of ________________________________ on
April 30, 2014 with interest (computed on the basis of a 360-day year--30-day
month) (a) on the unpaid balance thereof at the rate of 6.70% per annum from the
date hereof, payable quarterly on January 31, April 30, July 31 and October 31
in each year, commencing with the January 31, April 30, July 31 or October 31
next succeeding the date hereof, until the principal hereof shall have become
due and payable, and (b) on any overdue payment (including any overdue
prepayment) of principal, any overdue payment of Yield Maintenance Amount and
any overdue payment of interest, payable quarterly as aforesaid (or, at the
option of the registered holder hereof, on demand), at a rate per annum [from
time to time]1 equal to [the greater of (i)]/1/ 8.70% [or (ii) 2% over the rate
of interest publicly announced by Bank of New York from time to time in New York
City as its prime rate].
Payments of principal, Yield Maintenance Amount, if any, and interest
are to be made at the main office of Bank of New York in New York City or at
such other place as the holder hereof shall designate to the Company in writing,
in lawful money of the United States of America.
---------------------
/1/ Delete in the case of holder not exempt from California usury law.
A-2-1
This Note is one of a series of Senior Notes (herein called the
"Notes") issued pursuant to an Amended and Restated Note Purchase and Private
Shelf Agreement, dated as of April 2, 1999 (herein called the "Agreement"),
between the Company, on the one hand, and The Prudential Insurance Company of
America and each Prudential Affiliate which becomes party thereto, on the other
hand, and is entitled to the benefits thereof. As provided in the Agreement,
this Note is subject to prepayment, in whole or from time to time in part, in
certain cases without Yield Maintenance Amount and in other cases with the Yield
Maintenance Amount specified in the Agreement. Each holder of this Note will be
deemed by its acceptance hereof, (i) to have agreed to the confidentiality
provisions set forth in paragraph 11H of the Agreement, (ii) to have made the
representation set forth in paragraph 9B of the Agreement, and (iii) to have
agreed to the limitations on transfers set forth in paragraph 11D of the
Agreement.
This Note is a registered Note and, as provided in the Agreement, upon
surrender of this Note for registration of transfer, duly endorsed, or
accompanied by a written instrument of transfer duly executed, by the registered
holder hereof or such holder's attorney duly authorized in writing, a new Note
for the then outstanding principal amount will be issued to, and registered in
the name of, the transferee. Prior to due presentment for registration of
transfer, the Company may treat the person in whose name this Note is registered
as the owner hereof for the purpose of receiving payment and for all other
purposes, and the Company shall not be affected by any notice to the contrary.
In case an Event of Default, as defined in the Agreement, shall occur
and be continuing, the principal of this Note may be declared or otherwise
become due and payable in the manner and with the effect provided in the
Agreement.
This Note (i) merely re-evidences a portion of the indebtedness
previously evidenced by the Company's 6.70% Series B Senior Notes due April 30,
2018 (the "Existing 6.70% Notes"), (ii) is given in exchange for, and not as
payment of, Existing 6.70% Note(s), and (iii) is in no way intended to
constitute a novation of any Existing 6.70% Notes.
Capitalized terms used and not otherwise defined herein shall have the
meanings provided in the Agreement.
This Note shall be construed and enforced in accordance with the
internal law of the State of California.
VARIAN ASSOCIATES, INC.
By:
---------------------------------------------
Title:
------------------------------------------
A-2-2
And by:
----------------------------------------
Title:
-----------------------------------------
X-0-0
Xxxxxxx X-0
-----------
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND CANNOT
BE TRANSFERRED EXCEPT IN COMPLIANCE WITH
SUCH ACT AND APPLICABLE STATE SECURITIES LAWS.
[FORM OF SERIES C NOTE]
VARIAN ASSOCIATES, INC.
to be known as
VARIAN MEDICAL SYSTEMS, INC.
effective April 3, 1999
6.76% SERIES C SENIOR NOTE DUE APRIL 2, 2011
No. ________ _______________
$ ________________ _______________
FOR VALUE RECEIVED, the undersigned, Varian Associates, Inc. (herein
called the "Company"), a corporation organized and existing under the laws of
the State of Delaware, hereby promises to pay to ______________________________,
or registered assigns, the principal sum of ________________________________ on
April 2, 2011 with interest (computed on the basis of a 360-day year--30-day
month) (a) on the unpaid balance thereof at the rate of 6.76% per annum from the
date hereof, payable quarterly on the second day of April, July, October and
January in each year, commencing with the January 2, April 2, July 2 or October
2 next succeeding the date hereof, until the principal hereof shall have become
due and payable, and (b) on any overdue payment (including any overdue
prepayment) of principal, any overdue payment of Yield Maintenance Amount and
any overdue payment of interest, payable quarterly as aforesaid (or, at the
option of the registered holder hereof, on demand), at a rate per annum [from
time to time]/1/ equal to [the greater of (i)]1 8.76% [or (ii) 2% over the rate
of interest publicly announced by Bank of New York from time to time in New York
City as its prime rate].
Payments of principal, Yield Maintenance Amount, if any, and interest
are to be made at the main office of Bank of New York in New York City or at
such other place as the holder hereof shall designate to the Company in writing,
in lawful money of the United States of America.
-------------------------
/1/ Delete in the case of holder not exempt from California usury law.
A-3-1
This Note is one of a series of Senior Notes (herein called the
"Notes") issued pursuant to an Amended and Restated Note Purchase and Private
Shelf Agreement, dated as of April 2, 1999 (herein called the "Agreement"),
between the Company, on the one hand, and The Prudential Insurance Company of
America and each Prudential Affiliate which becomes party thereto, on the other
hand, and is entitled to the benefits thereof. As provided in the Agreement,
this Note is subject to prepayment, in whole or from time to time in part, in
certain cases without Yield Maintenance Amount and in other cases with the Yield
Maintenance Amount specified in the Agreement. Each holder of this Note will be
deemed by its acceptance hereof, (i) to have agreed to the confidentiality
provisions set forth in paragraph 11H of the Agreement, (ii) to have made the
representation set forth in paragraph 9B of the Agreement, and (iii) to have
agreed to the limitations on transfers set forth in paragraph 11D of the
Agreement.
This Note is a registered Note and, as provided in the Agreement, upon
surrender of this Note for registration of transfer, duly endorsed, or
accompanied by a written instrument of transfer duly executed, by the registered
holder hereof or such holder's attorney duly authorized in writing, a new Note
for the then outstanding principal amount will be issued to, and registered in
the name of, the transferee. Prior to due presentment for registration of
transfer, the Company may treat the person in whose name this Note is registered
as the owner hereof for the purpose of receiving payment and for all other
purposes, and the Company shall not be affected by any notice to the contrary.
In case an Event of Default, as defined in the Agreement, shall occur
and be continuing, the principal of this Note may be declared or otherwise
become due and payable in the manner and with the effect provided in the
Agreement.
Capitalized terms used and not otherwise defined herein shall have the
meanings provided in the Agreement.
This Note shall be construed and enforced in accordance with the
internal law of the State of California.
VARIAN ASSOCIATES, INC.
By:
---------------------------------------------
Title:
------------------------------------------
A-3-2
And by:
----------------------------------------
Title:
-----------------------------------------
X-0-0
Xxxxxxx X-0
-----------
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND CANNOT
BE TRANSFERRED EXCEPT IN COMPLIANCE WITH
SUCH ACT AND APPLICABLE STATE SECURITIES LAWS.
[FORM OF SHELF NOTE]
VARIAN MEDICAL SYSTEMS, INC.
SENIOR SERIES ___ NOTE
No. __
ORIGINAL PRINCIPAL AMOUNT:
ORIGINAL ISSUE DATE:
INTEREST RATE:
INTEREST PAYMENT DATES:
FINAL MATURITY DATE:
PRINCIPAL PREPAYMENT DATES AND AMOUNTS:
FOR VALUE RECEIVED, the undersigned, Varian Medical Systems, Inc.
(herein called the "Company"), a corporation organized and existing under the
laws of the State of Delaware, hereby promises to pay to ______________________,
or registered assigns, the principal sum of _______________________ DOLLARS [on
the Final Maturity Date specified above] [, payable on the Principal Prepayment
Dates and in the amounts specified above, and on the Final Maturity Date
specified above in an amount equal to the unpaid balance of the principal
hereof,] with interest (computed on the basis of a 360-day year--30-day month)
(a) on the unpaid balance thereof at the Interest Rate per annum specified
above, payable on each Interest Payment Date specified above and on the Final
Maturity Date specified above, commencing with the Interest Payment Date next
succeeding the date hereof, until the principal hereof shall have become due and
payable, and (b) on any overdue payment (including any overdue prepayment) of
principal, any overdue payment of Yield Maintenance Amount and any overdue
payment of interest, payable on each Interest Payment Date as aforesaid (or, at
the option of the registered holder hereof, on demand), at a rate per annum from
time to time equal to the greater of (i) 2% over the Interest Rate specified
above or (ii) 2% over the rate of interest publicly announced by [Xxxxxx
Guaranty Trust Company of New York] from time to time in New York City as its
prime rate.
A-4-1
Payments of principal, Yield Maintenance Amount, if any, and interest
are to be made at the main office of Bank of New York in New York City or at
such other place as the holder hereof shall designate to the Company in writing,
lawful money of the United States of America.
This Note is one of a series of Senior Notes (herein called the
"Notes") issued pursuant to an Amended and Restated Note Purchase and Private
Shelf Agreement, dated as of April 2, 1999 (herein called the "Agreement"),
between the Company, on the one hand, and The Prudential Insurance Company of
America and each Prudential Affiliate (as defined in the Agreement) which
becomes party thereto, on the other hand, and is entitled to the benefits
thereof. Each holder of this Note will be deemed by its acceptance hereof, (i)
to have agreed to the confidentiality provisions set forth in paragraph 11H of
the Agreement, (ii) to have made the representation set forth in paragraph 9B of
the Agreement, and (iii) to have agreed to the limitations on transfers set
forth in paragraph 11D of the Agreement.
This Note is subject to optional prepayment, in whole or from time to
time in part, on the terms specified in the Agreement.
This Note is a registered Note and, as provided in the Agreement, upon
surrender of this Note for registration of transfer, duly endorsed, or
accompanied by a written instrument of transfer duly executed, by the registered
holder hereof or such holder's attorney duly authorized in writing, a new Note
for the then outstanding principal amount will be issued to, and registered in
the name of, the transferee. Prior to due presentment for registration of
transfer, the Company may treat the person in whose name this Note is registered
as the owner hereof for the purpose of receiving payment and for all other
purposes, and the Company shall not be affected by any notice to the contrary.
In case an Event of Default shall occur and be continuing, the
principal of this Note may be declared or otherwise become due and payable in
the manner and with the effect provided in the Agreement.
Capitalized terms used and not otherwise defined herein shall have the
meanings provided in the Agreement.
A-4-2
This Note shall be construed and enforced in accordance with the
internal law of the State of California.
VARIAN MEDICAL SYSTEMS, INC.
By:
---------------------------------------------
Title:
------------------------------------------
And by:
----------------------------------------
Title:
-----------------------------------------
A-4-3
