EXECUTION COPY
CREDIT AGREEMENT
dated as of
December 5, 1996
among
Corning Clinical Laboratories Inc.
The Banks Listed Herein
NationsBank, N.A., as Issuing Bank,
Wachovia Bank of Georgia, N.A.,
as Swingline Bank,
and
Xxxxxx Guaranty Trust Company of New York,
as Administrative Agent
------------------------------
Xxxxxx Guaranty Trust Company of New York
NationsBank, N.A.
Wachovia Bank of Georgia, N.A.,
as Arranging Agents
[Ref No. 1385-308]
TABLE OF CONTENTS*
ARTICLE I
Definitions
Page
SECTION 1.01 Definitions........................................... 1
1.02 Accounting Terms and Determinations................... 26
1.03 Types of Borrowings................................... 26
ARTICLE II
The Credits
SECTION 2.01 Commitments to Lend................................... 27
2.02 Notice of Borrowing................................... 27
2.03 Notice to Banks; Funding of Loans..................... 28
2.04 Swingline Loans....................................... 30
2.05 Notes................................................. 31
2.06 Interest Rate Elections............................... 32
2.07 Interest Rates........................................ 34
2.08 Fees.................................................. 37
2.09 Termination or Reduction of Commitments............... 38
2.10 Maturity of Loans..................................... 38
2.11 Optional Prepayments; Mandatory Prepayments........... 41
2.12 General Provisions as to Payments..................... 43
2.13 Funding Losses; Prepayment Premium.................... 44
2.14 Computation of Interest and Fees...................... 45
2.15 Letters of Credit..................................... 45
ARTICLE III
Conditions
SECTION 3.01 Effectiveness......................................... 52
3.02 Each Credit Event..................................... 56
--------
*The Table of Contents is not a part of this
Agreement.
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ARTICLE IV
Representations and Warranties
SECTION 4.01 Corporate Existence and Power.......................... 57
4.02 Corporate and Governmental Authorization;
No Contravention.................................... 57
4.03 Binding Effect........................................ 58
4.04 Financial Information................................. 58
4.05 Litigation............................................ 59
4.06 Compliance with ERISA................................. 59
4.07 Environmental Matters................................. 60
4.08 Taxes................................................. 60
4.09 Subsidiaries.......................................... 60
4.10 Regulatory Restriction on Borrowing................... 61
4.11 Full Disclosure....................................... 61
4.12 Compliance with Laws and Agreements................... 61
4.13 Governmental Approvals................................ 61
4.14 Solvency.............................................. 62
4.15 Federal Reserve Regulations........................... 62
ARTICLE V
Covenants
SECTION 5.01 Information........................................... 62
5.02 Payment of Obligations................................ 66
5.03 Maintenance of Property; Insurance.................... 66
5.04 Conduct of Business and Maintenance
of Existence........................................ 67
5.05 Compliance with Laws.................................. 67
5.06 Inspection of Property, Books and Records............. 67
5.07 Additional Subsidiaries............................... 68
5.08 Amendment of Certain Documents;
Post-Closing Transaction Documents.................. 68
5.09 Investments........................................... 69
5.10 Negative Pledge....................................... 70
5.11 Consolidations, Mergers, Acquisitions
and Sales of Assets................................. 71
5.12 Use of Proceeds and Letters of Credit................. 73
5.13 Further Assurances.................................... 74
5.14 Transactions with Affiliates.......................... 74
5.15 Restrictions Affecting Subsidiaries................... 74
5.16 Restricted Payments................................... 75
5.17 Debt.................................................. 76
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5.18 Leverage Ratio...................................... 78
5.19 Debt Coverage Ratio................................. 78
5.20 Coverage Ratio...................................... 79
5.21 Consolidated Capital Expenditures................... 80
5.22 Relationships with Corning Companies
and CPS Companies................................. 80
ARTICLE VI
Defaults
SECTION 6.01 Events of Default................................... 81
6.02 Notice of Default................................... 84
ARTICLE VII
The Agent and Arranging Agents
SECTION 7.01 Appointment and Authorization........................ 85
7.02 Agent and Affiliates................................. 85
7.03 Action by Agent...................................... 85
7.04 Consultation with Experts............................ 85
7.05 Liability of Agent................................... 85
7.06 Indemnification...................................... 86
7.07 Credit Decision...................................... 86
7.08 Successor Agent...................................... 87
7.09 Agent's Fees......................................... 87
7.10 Arranging Agents..................................... 87
ARTICLE VIII
Change in Circumstances
SECTION 8.01 Basis for Determining Interest
Rate Inadequate or Unfair.......................... 87
8.02 Illegality........................................... 88
8.03 Increased Cost and Reduced Return.................... 89
8.04 Taxes................................................ 90
8.05 Base Rate Loans Substituted for
Affected Euro-Dollar Loans......................... 93
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ARTICLE IX
Miscellaneous
SECTION 9.01 Notices........................................... 94
9.02 No Waivers........................................ 95
9.03 Expenses; Indemnification......................... 95
9.04 Sharing of Setoffs................................ 96
9.05 Amendments and Waivers............................ 97
9.06 Successors and Assigns............................ 98
9.07 Collateral........................................ 100
9.08 Governing Law; Submission to Jurisdiction......... 101
9.09 Counterparts; Integration......................... 101
9.10 WAIVER OF JURY TRIAL..............................
9.11 Confidentiality................................... 101
Exhibits:
Exhibit A -- Form of Term Note
Exhibit B-1 -- Form of Working Capital Note
Exhibit B-2 -- Form of Swingline Note
Exhibit C -- Form of Guarantee Agreement
Exhibit D -- Form of Indemnity, Subrogation
and Contribution Agreement
Exhibit E -- Form of Pledge Agreement
Exhibit F -- Form of Security Agreement
Exhibit G-1 -- Form of opinion of Borrower's general counsel
Exhibit G-2 -- Form of opinion of Shearman & Sterling
Exhibit H -- Form of opinion of Agent's counsel
Exhibit I -- Form of Issuing Bank Agreement
Exhibit J -- Form of Corning Subordination Agreement
Schedules:
Schedule 1 -- Commitments
Schedule 1.01(a) -- Certain Lease
Schedule 1.01(b) -- Post-Closing Spin-Off Transactions
Schedule 1.01(c) -- Quadrant Properties
Schedule 1.01(d) -- Qualified Joint Venture
Schedule 4.09 -- Subsidiaries
Schedule 5.09 -- Investments
Schedule 5.10 -- Existing Liens
Schedule 5.11 -- Assets
Schedule 5.15 -- Restrictions Affecting Subsidiaries
Schedule 5.17 -- Existing Debt
CREDIT AGREEMENT
AGREEMENT dated as of December 5, 1996, among CORNING CLINICAL
LABORATORIES INC., the BANKS listed on the signature pages hereof, NATIONSBANK,
N.A., as Issuing Bank, WACHOVIA BANK OF GEORGIA, N.A., as Swingline Bank, XXXXXX
GUARANTY TRUST COMPANY OF NEW YORK, as Administrative Agent, and XXXXXX GUARANTY
TRUST COMPANY OF NEW YORK, NATIONSBANK, N.A. and WACHOVIA BANK OF GEORGIA, N.A.,
as Arranging Agents.
The parties hereto agree as follows:
ARTICLE I
Definitions
SECTION 1.01. Definitions. The following terms, as used
herein, have the following meanings:
"Adjusted Consolidated Net Income" means, for any period, the
net income of the Borrower and its Consolidated Subsidiaries, determined on a
consolidated basis for such period, exclusive of the effect of (i) any
extraordinary or other nonrecurring gain or loss, (ii) charges aggregating
$46,000,000 during the quarter ended June 30, 1996, and $142,000,000 during the
quarter ended September 30, 1996, to establish reserves related to claims
arising out of billing practices, (iii) a charge aggregating $13,700,000 during
the quarter ended September 30, 1996, to write-off certain development costs,
(iv) non-recurring charges not exceeding $25,000,000 associated with the
Spin-Off Transactions as disclosed in the Spin-Off Information, (v) non-cash
charges coincident with the Spin-Off Distributions associated with the write-off
of intangible assets in connection with certain changes in accounting policies
as disclosed in the Spin-Off Information, (vi) any charges taken by the Borrower
after the Effective Date, to the extent that the Borrower is reimbursed for the
after-tax cash portion of such charges pursuant to the Transaction Documents,
and (vii) non-cash charges associated with the issuance by the Borrower of
shares of its common stock to its employees.
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"Adjusted London Interbank Offered Rate" has the meaning set
forth in Section 2.07(b).
"Administrative Questionnaire" means, with respect to each
Bank, an administrative questionnaire in the form prepared by the Agent and
submitted to the Agent (with a copy to the Borrower) duly completed by such
Bank.
"Affiliate" means (i) any Person that directly, or indirectly
through one or more intermediaries, controls the Borrower (a "Controlling
Person") or (ii) any Person (other than the Borrower or a Subsidiary) which is
controlled by or under common control with a Controlling Person. As used herein,
the term "control" means possession, directly or indirectly, of the power to
vote 10% or more of any class of voting securities of a Person or to direct or
cause the direction of the management or policies of a Person, whether through
the ownership of voting securities, by contract or otherwise. The Corning
Companies and the CPS Companies shall be deemed to be Affiliates prior to
consummation of the Spin-Off Distributions.
"Agent" means Xxxxxx Guaranty Trust Company of New York in its
capacity as administrative agent for the Banks hereunder, and its successors in
such capacity.
"Applicable Lending Office" means, with respect to any Bank,
(i) in the case of its Base Rate Loans, its Domestic Lending Office and (ii) in
the case of its Euro- Dollar Loans, its Euro-Dollar Lending Office.
"Applicable Percentage" of any Bank means the percentage of
the aggregate Working Capital Commitments represented by such Bank's Working
Capital Commitment.
"Arranging Agents" means Xxxxxx Guaranty Trust Company of New
York, NationsBank, N.A. and Wachovia Bank of Georgia, N.A.
"Asset Sale" means any sale or other disposition (including
any sale and leaseback) by the Borrower or any of its Subsidiaries of any asset
or assets, other than (i) any sale or other disposition of inventory or used or
surplus equipment including, without limitation, motor vehicles, in each case in
the ordinary course of business, or (ii) any sale or other disposition of
surplus real estate; provided that sales and dispositions of surplus real estate
shall constitute "Asset Sales" to the extent that the aggregate
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cumulative amount of Net Cash Proceeds of all sales and dispositions of such
real estate on and after the Effective Date exceed $5,000,000.
"Asset Swap" means (a) any direct exchange by the Borrower or
any of its Subsidiaries of assets comprising (without limitation) one or more
Quadrant Four Properties for assets comprising (without limitation) one or more
Quadrant One Properties, Quadrant Two Properties or Quadrant Three Properties or
(b) any series of transactions involving a sale by the Borrower or any of its
Subsidiaries of assets comprising (without limitation) one or more Quadrant Four
Properties combined with the acquisition by the Borrower or any of its
Subsidiaries of assets comprising (without limitation) one or more Quadrant One
Properties, Quadrant Two Properties or Quadrant Three Properties; provided that:
(i) prior to consummating any such transaction (and prior to
consummating the first of any series of such transactions) the Borrower
shall notify the Agent of all clinical laboratories to be exchanged,
sold or acquired in connection with such transactions and the material
terms of such transactions;
(ii) within five Domestic Business Days after consummating the
first of any series of such transactions, the Borrower shall deliver to
the Agent copies of executed contracts or letters of intent with
respect to all other transactions involved in such series of
transactions; and
(iii) all transactions involved in any such series of transactions
shall be consummated within six months after consummation of the first
transaction in such series.
If all transactions in a series of transactions intended to
qualify as an Asset Swap are not consummated within six months after the first
such transaction, then none of such transactions shall be considered to be part
of an Asset Swap (except to the extent that the completed transactions alone
would constitute an Asset Swap).
"Assignee" has the meaning set forth in Section 9.06(c).
"Bank" means each Person (other than the Borrower) listed on
the signature pages hereof, each Assignee which
4
becomes a Bank pursuant to Section 9.06(c), and their respective successors.
References herein to a Bank or Banks may include the Issuing Banks or the
Swingline Bank or both as the context requires.
"Base Rate" means, for any day, a rate per annum equal to the
higher of (i) the Prime Rate for such day and (ii) the sum of 1/2 of 1% plus the
Federal Funds Rate for such day.
"Base Rate Loan" means (i) a Loan which bears interest at the
Base Rate pursuant to the applicable Notice of Borrowing or Notice of Interest
Rate Election or the provisions of Article VIII or (ii) an overdue amount which
was a Base Rate Loan immediately before it became overdue.
"Benefit Arrangement" means at any time an employee benefit
plan within the meaning of Section 3(3) of ERISA which is not a Plan or a
Multiemployer Plan and which is maintained or otherwise contributed to by any
member of the ERISA Group.
"Borrower" means Corning Clinical Laboratories Inc. (to be
renamed Quest Diagnostics Incorporated), a Delaware corporation, and its
successors.
"Borrowing" has the meaning set forth in Section 1.03.
"Calculation Period" means a period of four consecutive fiscal
quarters of the Borrower.
"CCL/CPS Spin-Off Tax Indemnification Agreement" means the tax
indemnification agreements to be entered into between CPS and the Borrower as
contemplated by the Spin-Off Information.
"Class" has the meaning set forth in Section 1.03.
"CLSI" means Corning Life Sciences Inc.
"Commitment" means, with respect to each Bank, its Tranche A
Commitment, Tranche B Commitment or Working Capital Commitment or any
combination thereof, as the context may require.
"Commitment Fee Rate" has the meaning set forth in Section
2.08(a).
5
"Consolidated Capital Expenditures" means, for any period, (i)
the additions to property, plant and equipment and other capital expenditures of
the Borrower and its Consolidated Subsidiaries for such period, as the same are
or would be set forth in a consolidated statement of cash flows of the Borrower
and its Consolidated Subsidiaries for such period and (ii) capital lease
obligations incurred during such period.
"Consolidated EBIT" means, for any period, Adjusted
Consolidated Net Income for such period plus, to the extent deducted in
determining Adjusted Consolidated Net Income for such period, the aggregate
amount of (i) Consolidated Interest Expense and (ii) income tax expense.
"Consolidated EBITDA" means, for any period, Consolidated EBIT
for such period plus, to the extent deducted in determining Adjusted
Consolidated Net Income for such period, the aggregate amount of depreciation
and amortization.
"Consolidated Interest Expense" means, for any period, the
interest expense of the Borrower and its Consolidated Subsidiaries determined on
a consolidated basis for such period.
"Consolidated Rental Expense" means, for any period, the sum
of (a) the aggregate rental expense of the Borrower and its Consolidated
Subsidiaries determined on a consolidated basis for such period in accordance
with generally acceptable accounting principles plus (b) rentals during such
period specified in Schedule 1.01(a) to the extent paid by the Borrower or its
Subsidiaries.
"Consolidated Subsidiary" means at any date any Subsidiary or
other entity the accounts of which would be consolidated with those of the
Borrower in its consolidated financial statements if such statements were
prepared as of such date.
"Consolidated Total Capitalization" means at any date the sum
of (a) Consolidated Total Debt at such date and (b) the consolidated
stockholders' equity of the Borrower at such date adjusted to exclude all
write-ups (other than write-ups of assets of a going concern business made
within twelve months after the acquisition of such business) subsequent to the
Effective Date in the book value of any asset owned by the Borrower or a
Consolidated Subsidiary.
6
"Consolidated Total Debt" means at any date the aggregate
principal amount of the Debt (excluding any Excess Corning Debt) of the Borrower
and its Consolidated Subsidiaries, determined on a consolidated basis at such
date.
"Corning" means Corning Incorporated, a New York corporation,
and its successors.
"Corning Companies" means Corning and its subsidiaries other
than the Borrower, its Subsidiaries and the CPS Companies.
"Corning Subordination Agreement" means a Subordination
Agreement among Corning, the Borrower and the Agent substantially in the form of
Exhibit J, as the same may be amended from time to time.
"Coverage Ratio" means, for any Calculation Period, the ratio
of (i) the sum of (a) Consolidated EBITDA plus (b) Consolidated Rental Expense
to (ii) the sum of Consolidated Interest Expense (excluding interest, if any, on
Excess Corning Debt) and Consolidated Rental Expense for such Calculation
Period.
"CPS" means Covance Inc. (formerly known as Corning
Pharmaceutical Services Inc.), a Delaware corporation.
"CPS Capitalization Transactions" means (i) the contribution
by the Corning Companies and the Borrower and its Subsidiaries to the CPS
Companies of all properties and other assets (including, without limitation, the
capital stock of all corporations that are to be subsidiaries of CPS) that are
to be properties and assets of CPS and its subsidiaries at the time of the
Spin-Off Distributions as contemplated by the Spin-Off Information, (ii) the
capitalization of CPS and its subsidiaries as contemplated by the Spin-Off
Information (including, without limitation, the elimination of all Debt and
other intercompany balances between the Corning Companies, the Borrower and its
Subsidiaries, on the one hand, and the CPS Companies, on the other hand) and
(iii) the transfer by the CPS Companies to the Borrower and/or its Subsidiaries
of any and all properties and other assets held by the CPS Companies that are to
be properties and assets of the Borrower and its Subsidiaries after giving
effect to the Spin-Off Distributions as contemplated by the Spin-Off
Information.
7
"CPS Companies" means CPS and the corporations and other
entities that are to be subsidiaries of CPS at the time of the Spin-Off
Distributions as contemplated by the Spin-Off Information.
"Debt" of any Person means at any date, without duplication,
(i) all obligations of such Person for borrowed money, (ii) all obligations of
such Person evidenced by bonds (other than bid and performance bonds),
debentures, notes or other similar instruments, (iii) all obligations of such
Person to pay the deferred purchase price of property or services, except trade
accounts payable arising in the ordinary course of business, (iv) all
obligations of such Person as lessee which are capitalized in accordance with
generally accepted accounting principles, (v) all non-contingent obligations
(and, for purposes of Section 5.17 and the definitions of Material Debt and
Material Financial Obligations, all contingent obligations) of said Person to
reimburse any bank or other person in respect of amounts paid under a letter of
credit or similar instrument, (vi) all Debt secured by a Lien on any asset of
such Person, whether or not such Debt is otherwise an obligation of such Person,
and (vii) all Debt of others Guaranteed by such Person.
"Debt Coverage Ratio" means, at any time, the ratio of (i)
Consolidated Total Debt at such time to (ii) Consolidated EBITDA for the most
recent Calculation Period ended at or prior to such time.
"Default" means any condition or event which constitutes an
Event of Default or which with the giving of notice or lapse of time or both
would, unless cured or waived, become an Event of Default.
"Derivatives Obligations" of any Person means all obligations
of such Person in respect of any rate swap transaction, basis swap, forward rate
transaction, commodity swap, commodity option, equity or equity index swap,
equity or equity index option, bond option, interest rate option, foreign
exchange transaction, cap transaction, floor transaction, collar transaction,
currency swap transaction, cross-currency rate swap transaction, currency option
or any other similar transaction (including any option with respect to any of
the foregoing transactions) or any combination of the foregoing transactions.
8
"Domestic Business Day" means any day except a Saturday,
Sunday or other day on which commercial banks in New York City are authorized by
law to close.
"Domestic Lending Office" means, as to each Bank, its office
located at its address set forth in its Administrative Questionnaire (or
identified in its Administrative Questionnaire as its Domestic Lending Office)
or such other office as such Bank may hereafter designate as its Domestic
Lending Office by notice to the Borrower and the Agent.
"Effective Date" means the date on which the obligations of
the Banks to make Loans and of the Issuing Banks to issue Letters of Credit
under this Agreement become effective in accordance with Section 3.01.
"Environmental Laws" means all laws, rules, regulations,
codes, ordinances, orders, decrees, judgments, injunctions, notices or binding
agreements issued, promulgated or entered into by any governmental body, agency
or official, relating in any way to the protection of the environment,
preservation or reclamation of natural resources, the management, release or
threatened release of any Hazardous Material or to health and safety matters.
"Environmental Liability" means any liability, contingent or
otherwise (including any liability for damages, costs of environmental
remediation, fines, penalties or indemnities), of the Borrower or any Subsidiary
directly or indirectly resulting from or based upon (a) violation of any
Environmental Law, (b) the generation, use, handling, transportation, storage,
treatment or disposal of any Hazardous Materials, (c) exposure to any Hazardous
Materials, (d) the release or threatened release of any Hazardous Materials into
the environment or (e) any contract, agreement or other consensual arrangement
pursuant to which liability is assumed or imposed with respect to any of the
foregoing.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended, or any successor statute.
"ERISA Group" means the Borrower, any Subsidiary and all
members of a controlled group of corporations and all trades or businesses
(whether or not incorporated) under common control which, together with the
Borrower or any
9
Subsidiary, are treated as a single employer under Section 414 of the Internal
Revenue Code.
"Euro-Dollar Business Day" means any Domestic Business Day on
which commercial banks are open for international business (including dealings
in dollar deposits) in London.
"Euro-Dollar Lending Office" means, as to each Bank, its
office, branch or affiliate located at its address set forth in its
Administrative Questionnaire (or identified in its Administrative Questionnaire
as its Euro-Dollar Lending Office) or such other office, branch or affiliate of
such Bank as it may hereafter designate as its Euro-Dollar Lending Office by
notice to the Borrower and the Agent.
"Euro-Dollar Loan" means (i) a Loan which bears interest at a
Euro-Dollar Rate pursuant to the applicable Notice of Borrowing or Notice of
Interest Rate Election or (ii) an overdue amount which was a Euro-Dollar Loan
immediately before it became overdue.
"Euro-Dollar Margin" has the meaning set forth in Section
2.07(b).
"Euro-Dollar Rate" means a rate of interest determined
pursuant to Section 2.07(b) on the basis of the Adjusted London Interbank
Offered Rate.
"Euro-Dollar Reserve Percentage" means, for any day, that
percentage (expressed as a decimal) which is in effect on such day, as
prescribed by the Board of Governors of the Federal Reserve System (or any
successor) for determining the maximum reserve requirement for a member bank of
the Federal Reserve System in New York City with deposits exceeding five billion
dollars in respect of "Eurocurrency liabilities" (or in respect of any other
category of liabilities which includes deposits by reference to which the
interest rate on Euro-Dollar Loans is determined or any category of extensions
of credit or other assets which includes loans by a non-United States office of
any Bank to United States residents).
"Event of Default" has the meaning set forth in
Section 6.01.
"Excluded Subsidiary" means each Subsidiary
existing on the date of this Agreement identified on
10
Schedule 4.09 as an Excluded Subsidiary unless and until either (i) such
Subsidiary has consolidated assets in excess of $1,000,000 or (ii) such
Subsidiary's consolidated revenues for any fiscal year of the Borrower exceeds
1.0% of the Borrower's consolidated revenues for such fiscal year.
"Excess Corning Debt" means any Debt of the Borrower or any of
its Subsidiaries to any of the Corning Companies that remains outstanding on the
Effective Date after giving effect to a repayment of such Debt to be made on the
Effective Date, but excluding Permitted Subordinated Debt.
"Existing Letters of Credit" means the letters of
credit identified on Schedule 5.17.
"Federal Funds Rate" means, for any day, the rate per annum
(rounded upward, if necessary, to the nearest 1/100th of 1%) equal to the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Domestic
Business Day next succeeding such day, provided that (i) if such day is not a
Domestic Business Day, the Federal Funds Rate for such day shall be such rate on
such transactions on the next preceding Domestic Business Day as so published on
the next succeeding Domestic Business Day, and (ii) if no such rate is so
published on such next succeeding Domestic Business Day, the Federal Funds Rate
for such day shall be the average rate quoted to Xxxxxx Guaranty Trust Company
of New York on such day on such transactions as determined by the Agent.
"Financing Transactions" means the execution and delivery of
the Loan Documents and the performance of the transactions contemplated by the
Loan Documents, including the borrowing of the Loans, the issuance of Letters of
Credit and the grant of security interests under the Security Documents.
"Foreign Subsidiary" means a Subsidiary existing on the date
of this Agreement identified on Schedule 4.09 as a Foreign Subsidiary.
"Group of Loans" means at any time a group of Loans of the
same Class consisting of (i) all Loans of such Class which are Base Rate Loans
at such time and (ii) all Euro-Dollar Loans of such Class having the same
Interest
11
Period at such time, provided that, if a Loan of any particular Bank is
converted to or made as a Base Rate Loan pursuant to Article VIII, such Loan
shall be included in the same Group or Groups of Loans from time to time as it
would have been in if it had not been so converted or made.
"Guarantee" by any Person means any obligation, contingent or
otherwise, of such Person directly or indirectly guaranteeing any Debt of any
other Person and, without limiting the generality of the foregoing, any
obligation, direct or indirect, contingent or otherwise, of such Person (i) to
purchase or pay (or advance or supply funds for the purchase or payment of) such
Debt (whether arising by virtue of partnership arrangements, by agreement to
keep-well, to purchase assets, goods, securities or services, to take-or-pay, or
to maintain financial statement conditions or otherwise) or (ii) entered into
for the purpose of assuring in any other manner the holder of such Debt of the
payment thereof or to protect such obligee against loss in respect thereof (in
whole or in part), provided that the term Guarantee shall not include
endorsements for collection or deposit in the ordinary course of business. The
term "Guarantee" used as a verb has a corresponding meaning.
"Guarantee Agreement" means a Guarantee Agreement among the
Agent and the Guarantors substantially in the form of Exhibit C, as the same may
be amended from time to time.
"Guarantor" means each Person that is or becomes party to the
Guarantee Agreement as a Guarantor and their respective successors.
"Hazardous Materials" means all explosive or radioactive
substances or wastes, all hazardous or toxic substances, wastes or other
pollutants, and all other substances or wastes of any nature regulated pursuant
to any Environmental Law, including petroleum or petroleum distillates, asbestos
or asbestos containing materials, polychlorinated biphenyls, radon gas,
infectious or medical wastes and any other toxic or hazardous waste or substance
as defined in any Environmental Law.
"HCFA" means the Health Care Financing Administration or any
successor thereto.
"Indemnity, Subrogation and Contribution Agreement" means an
Indemnity, Subrogation and Contribution
12
Agreement among the Borrower, the Subsidiaries and the Security Agent,
substantially in the form of Exhibit D hereto, as the same may be amended from
time to time.
"Initial Guarantors" means the Subsidiaries listed on Schedule
4.09, other than Subsidiaries identified on such Schedule as Excluded
Subsidiaries, Foreign Subsidiaries, Qualified Joint Ventures and Joint Venture
Holding Companies.
"Initial Pricing Period" means the period commencing on the
Effective Date and ending on the date on which the Borrower's financial
statements for the period ended December 31, 1996, shall have been delivered to
the Agent.
"Interest Period" means with respect to each Euro- Dollar
Loan, the period commencing on the date of borrowing specified in the applicable
Notice of Borrowing or on the date specified in the applicable Notice of
Interest Rate Election and ending one, two, three or six months thereafter, as
the Borrower may elect in the applicable notice; provided that:
(a) any Interest Period which would otherwise end on a day
which is not a Euro-Dollar Business Day shall be extended to the next
succeeding Euro-Dollar Business Day unless such Euro-Dollar Business
Day falls in another calendar month, in which case such Interest Period
shall end on the next preceding Euro-Dollar Business Day;
(b) any Interest Period which begins on the last Euro-Dollar
Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such
Interest Period) shall, subject to clause (c) below, end on the last
Euro-Dollar Business Day of a calendar month; and
(c) any Interest Period which would otherwise end after the
Tranche A Maturity Date or Tranche B Maturity Date, as applicable (in
the case of Term Loans), or the Termination Date (in the case of
Working Capital Loans) shall end on the Tranche A Maturity Date, the
Tranche B Maturity Date or the Termination Date, as applicable.
"Internal Revenue Code" means the Internal Revenue Code of
1986, as amended, or any successor statute.
13
"Investment" means any investment in any Person, whether by
means of share purchase, capital contribution, loan, Guarantee, time deposit or
otherwise (but not including any demand deposit or any account receivable
arising in the ordinary course of business).
"IRS Ruling Letter" means the private letter ruling dated
November 5, 1996, from the Internal Revenue Service to Corning and delivered to
the Borrower on November 21, 1996.
"Issuing Bank" means (i) NationsBank, N.A. and (ii) any other
Bank that shall enter into an Issuing Bank Agreement as provided in Section
2.15(l), in each case in their respective capacities as the issuers of Letters
of Credit, and their respective successors in such capacity.
"Issuing Bank Agreement" has the meaning set forth in Section
2.15(l).
"Joint Venture Holding Company" means a Subsidiary the only
non-cash asset of which is its ownership interest in a Qualified Joint Venture
and the cash assets of which are promptly distributed.
"Letter of Credit" means any letter of credit issued pursuant
to Section 2.15.
"Letter of Credit Disbursement" means a payment or
disbursement made by an Issuing Bank pursuant to a Letter of Credit.
"Letter of Credit Exposure" means at any time the sum of (i)
the aggregate undrawn amount of all outstanding Letters of Credit plus (ii) the
aggregate amount of all Letter of Credit Disbursements not yet reimbursed by the
Borrower as provided in Section 2.15. The Letter of Credit Exposure of any Bank
at any time shall mean its Applicable Percentage of the aggregate Letter of
Credit Exposure at such time.
"Letter of Credit Sublimit Amount" means the lesser of
$20,000,000 and the total amount of the Working Capital Commitments.
"Level I Pricing Period" means any period (other than the
Initial Pricing Period) during which the Borrower's Debt Coverage Ratio as of
the end of the most recent
14
Calculation Period is less than 2.0 to 1.0. Any such period shall commence on
(and include) the date of delivery to the Agent of financial statements
demonstrating that such period has commenced and shall terminate on (and
exclude) the date of delivery to the Agent of financial statements demonstrating
that such period has terminated.
"Level II Pricing Period" means any period (other than the
Initial Pricing Period) during which the Borrower's Debt Coverage Ratio as of
the end of the most recent Calculation Period is 2.0 to 1.0 or greater but less
than 2.25 to 1.0. Any such period shall commence on (and include) the date of
delivery to the Agent of financial statements demonstrating that such period has
commenced and shall terminate on (and exclude) the date of delivery to the Agent
of financial statements demonstrating that such period has terminated.
"Level III Pricing Period" means any period (other than the
Initial Pricing Period) during which the Borrower's Debt Coverage Ratio as of
the end of the most recent Calculation Period is 2.25 to 1.0 or greater but less
than 2.5 to 1.0. Any such period shall commence on (and include) the date of
delivery to the Agent of financial statements demonstrating that such period has
commenced and shall terminate on (and exclude) the date of delivery to the Agent
of financial statements demonstrating that such period has terminated.
"Level IV Pricing Period" means any period (other than the
Initial Pricing Period) during which the Borrower's Debt Coverage Ratio as of
the end of the most recent Calculation Period is 2.5 to 1.0 or greater but less
than 2.75 to 1.0. Any such period shall commence on (and include) the date of
delivery to the Agent of financial statements demonstrating that such period has
commenced and shall terminate on (and exclude) the date of delivery to the Agent
of financial statements demonstrating that such period has terminated.
"Level V Pricing Period" means any period (other than the
Initial Pricing Period) during which the Borrower's Debt Coverage Ratio as of
the end of the most recent Calculation Period is 2.75 to 1.0 or greater but less
than 3.0 to 1.0. Any such period shall commence on (and include) the date of
delivery to the Agent of financial statements demonstrating that such period has
commenced and shall terminate on (and exclude) the date of delivery to the Agent
15
of financial statements demonstrating that such period has terminated.
"Level VI Pricing Period" means (i) the Initial Pricing Period
and (ii) any other period during which the Borrower's Debt Coverage Ratio as of
the end of the most recent Calculation Period is 3.0 to 1.0 or greater but less
than 3.5 to 1.0. Any such period referred to in clause (ii) above shall commence
on (and include) the date of delivery to the Agent of financial statements
demonstrating that such period has commenced and shall terminate on (and
exclude) the date of delivery to the Agent of financial statements demonstrating
that such period has terminated.
"Level VII Pricing Period" means any period that is not a
Level I Pricing Period, a Level II Pricing Period, a Level III Pricing Period, a
Level IV Pricing Period, a Level V Pricing Period or a Level VI Pricing Period.
"Leverage Ratio" means, at any time, the ratio of (i)
Consolidated Total Debt at such time to (ii) Consolidated Total Capitalization
at such time.
"Lien" means, with respect to any asset, any mortgage, lien,
pledge, charge, security interest or encumbrance of any kind, or any other type
of preferential arrangement that has the practical effect of creating a security
interest, in respect of such asset. For the purposes of this Agreement, the
Borrower or any Subsidiary shall be deemed to own subject to a Lien any asset
which it has acquired or holds subject to the interest of a vendor or lessor
under any conditional sale agreement, capital lease or other title retention
agreement relating to such asset.
"Loan" means a Base Rate Loan or a Euro-Dollar Loan of either
Class or a Swingline Loan and "Loans" means any combination of the foregoing.
"Loan Documents" means this Agreement, the
Guarantee Agreement, the Security Documents, the Corning
Subordination Agreement, the Notes and any Issuing Bank
Agreement.
"London Interbank Offered Rate" has the meaning
set forth in Section 2.07(b).
"Margin Stock" has the meaning given to such term
under Regulation U.
16
"Material Adverse Effect" means (i) a materially adverse
effect on the business, assets, liabilities, operations or condition (financial
or otherwise) of the Borrower and its Consolidated Subsidiaries considered as a
whole (after giving effect to any insurance proceeds under existing insurance
policies and indemnification payments by Corning or CPS under the Transaction
Documents), (ii) material impairment of the ability of the Borrower or any
Subsidiary to perform any of its obligations under any Loan Document to which it
is or will be a party, or (iii) material impairment of the rights of or benefits
available to the Agent, the Security Agent or the Banks under any Loan Document.
"Material Debt" means Debt (other than the Notes) of the
Borrower and/or one or more of its Subsidiaries, arising in one or more related
or unrelated transactions, in an aggregate principal amount equal to or
exceeding $10,000,000.
"Material Financial Obligations" means a principal or face
amount of Debt (other than the Notes) and/or payment or collateralization
obligations in respect of Derivatives Obligations of the Borrower and/or one or
more of its Subsidiaries, arising in one or more related or unrelated
transactions, equal to or exceeding in the aggregate $10,000,000.
"Material Plan" means at any time a Plan or Plans having
aggregate Unfunded Liabilities in excess of $10,000,000.
"Multiemployer Plan" means at any time an employee pension
benefit plan within the meaning of Section 4001(a)(3) of ERISA to which any
member of the ERISA Group (i) is then making or accruing an obligation to make
contributions or (ii) has within the preceding five plan years made
contributions, including for these purposes any Person which ceased to be a
member of the ERISA Group during such five year period; provided, however, that
clause (ii) shall apply solely to the extent that any member of the ERISA Group
as of such time has incurred or could reasonably be expected to incur liability
under Title IV of ERISA with respect to such plan.
"Net Cash Proceeds" means (a) in connection with any sale or
other disposition of any asset or any settlement by, or receipt of payment in
respect of, any property or
17
casualty insurance claim or condemnation award in respect thereof, the cash
proceeds (including any cash payments received by way of deferred payment of
principal pursuant to a note or installment receivable or purchase price
adjustment receivable or otherwise, but only as and when received) of such sale,
settlement or payment, net of reasonable and documented attorneys' fees,
accountants' fees, investment banking fees, amounts required to be applied to
the repayment of Debt secured by a Lien expressly permitted hereunder on any
asset which is the subject of such sale, insurance claim or condemnation award
in respect thereof (other than any Lien in favor of the Security Agent for the
benefit of the Banks), any amounts required to be escrowed or reserved by the
Borrower or its Subsidiaries with respect to liabilities retained by the
Borrower or its Subsidiaries in connection with such sale or disposition,
including any indemnification or purchase price adjustments (provided that if
and to the extent any such amounts are released to the Borrower or any of its
Subsidiaries from escrow or such reserve, such amounts will be treated as Net
Cash Proceeds) and other customary fees and other costs and expenses actually
incurred in connection therewith and net of taxes paid or reasonably estimated
to be payable as a result thereof (after taking into account any tax sharing
arrangements) and (b) in connection with any issuance or sale by the Borrower or
any of its Subsidiaries to any Person other than the Borrower or any of its
Subsidiaries of equity securities or debt securities or instruments or the
incurrence of loans, the cash proceeds received from such issuance or
incurrence, net of investment banking fees, reasonable and documented attorneys'
fees, accountants' fees, underwriting discounts and commissions and other
customary fees and other costs and expenses actually incurred in connection
therewith.
"Note" means a promissory note of the Borrower substantially
in the form of Exhibit A, B-1 or B-2, evidencing the obligation of the Borrower
to repay Loans, and "Notes" means any or all of such promissory notes issued
hereunder.
"Notice of Borrowing" has the meaning set forth in Section
2.02.
"Notice of Interest Rate Election" has the meaning set forth
in Section 2.06.
18
"Obligations" has the meaning set forth in the Guarantee
Agreement.
"Parent" means, with respect to any Bank, any Person
controlling such Bank.
"Participant" has the meaning set forth in Section 9.06(b).
"PBGC" means the Pension Benefit Guaranty Corporation or any
entity succeeding to any or all of its functions under ERISA.
"Permitted Preferred Stock" means the 1,000 shares of
cumulative preferred stock of the Borrower described in the Spin-Off Information
to be acquired by Corning.
"Permitted Subordinated Debt" means up to $150,000,000
aggregate principal amount of unsecured subordinated Debt of the Borrower in the
form of the Senior Subordinated Notes or the Senior Subordinated Bridge Loans
or, if the Corning Subordination Agreement has been executed and delivered, Debt
of the Borrower to Corning.
"Person" means an individual, a corporation, a mutual fund, a
limited liability company, a partnership, an association, a trust or any other
entity or organization, including a governmental or political subdivision or an
agency or instrumentality thereof.
"Plan" means at any time an employee pension benefit plan
(other than a Multiemployer Plan) which is covered by Title IV of ERISA or
subject to the minimum funding standards under Section 412 of the Internal
Revenue Code and either (i) is maintained, or contributed to, by any member of
the ERISA Group for employees of any member of the ERISA Group or (ii) has at
any time within the preceding five years been maintained, or contributed to, by
any Person which was at such time a member of the ERISA Group for employees of
any Person which was at such time a member of the ERISA Group; provided,
however, that clause (ii) shall apply solely to the extent that any member of
the ERISA Group as of such time has incurred or could reasonably be expected to
incur liability under Title IV of ERISA with respect to such plan.
19
"Pledge Agreement" means a Pledge Agreement among the
Borrower, the Subsidiaries (other than Qualified Joint Ventures, Joint Venture
Holding Companies, Foreign Subsidiaries and Excluded Subsidiaries) and the
Security Agent, substantially in the form of Exhibit E hereto, as the same may
be amended from time to time.
"Preliminary Spin-Off Transactions" means the Spin-Off
Transactions other than the transactions described in Schedule 1.01(b).
"Pricing Period" means a Level I Pricing Period, a Level II
Pricing Period, a Level III Pricing Period, a Level IV Pricing Period, a Level V
Pricing Period, a Level VI Pricing Period or a Level VII Pricing Period.
"Prime Rate" means the rate of interest publicly announced by
Xxxxxx Guaranty Trust Company of New York in New York City from time to time as
its Prime Rate.
"Quadrant One Property" means any clinical laboratory a
substantial majority of the business of which is derived from a geographical
region identified as a "Quadrant One Property" in Schedule 1.01(c).
"Quadrant Two Property" means any clinical laboratory a
substantial majority of the business of which is derived from a geographical
region identified as a "Quadrant Two Property" in Schedule 1.01(c).
"Quadrant Three Property" means any clinical laboratory a
substantial majority of the business of which is derived from a geographical
region identified as a "Quadrant Three Property" in Schedule 1.01(c).
"Quadrant Four Property" means any clinical laboratory a
substantial majority of the business of which is derived from a geographical
region identified as a "Quadrant Four Property" in Schedule 1.01(c).
"Qualified Joint Venture" means any of (i) Associated Clinical
Laboratories L.P., (ii) the joint ventures described in Schedule 1.01(d) and
(iii) one additional joint venture that the Borrower or any of its Subsidiaries
may enter into in accordance with clause (d) of Section 5.09.
20
"Quarterly Dates" means each March 31, June 30, September 30
and December 31.
"Reference Banks" means the principal London offices of
NationsBank, N.A., Wachovia Bank of Georgia, N.A. and Xxxxxx Guaranty Trust
Company of New York, and "Reference Bank" means any one of such Reference Banks.
"Regulation U" means Regulation U of the Board of Governors of
the Federal Reserve System, as in effect from time to time.
"Required Banks" means at any time Banks having at least 51%
of the sum of the outstanding Loans, Letter of Credit Exposure and unused
Commitments at such time.
"Restricted Payment" means (i) any dividend or other
distribution (whether in cash, securities or other property) on any shares of
the capital stock of the Borrower (except dividends or distributions payable
solely in shares of its capital stock), (ii) any payment (whether in cash,
securities or other property) in respect of any Permitted Subordinated Debt or
Excess Corning Debt, whether on account of principal, interest, premium or
otherwise, or (iii) any payment (whether in cash, securities or other property),
including any sinking fund or similar deposit, on account of the purchase,
redemption, retirement, defeasance or acquisition of (a) any shares of the
capital stock of the Borrower or any Subsidiary owned by any Person other than
the Borrower or any Subsidiary, (b) any option, warrant or other right to
acquire shares of the capital stock of the Borrower or any Subsidiary (but not
including payments of principal, premium (if any) or interest made pursuant to
the terms of convertible debt securities prior to conversion), or (c) any
Permitted Subordinated Debt or Excess Corning Debt.
"Security Agent" means Xxxxxx Guaranty Trust Company of New
York in its capacity as security agent under the Security Documents, and its
successors in such capacity.
"Security Agreement" means a Security Agreement among the
Borrower, its Subsidiaries (other than Qualified Joint Ventures, Joint Venture
Holding Companies, Foreign Subsidiaries and Excluded Subsidiaries) and the
Security Agent, substantially in the form of Exhibit F hereto, as the
same may be amended from time to time.
21
"Security Documents" means the Pledge Agreement, the Security
Agreement and all other security agreements and other documents and instruments
executed and delivered pursuant to Section 5.13 in order to secure any
Obligations.
"Senior Subordinated Bridge Loans" means $150,000,000
aggregate principal amount of unsecured senior subordinated loans to the
Borrower.
"Senior Subordinated Notes" means $150,000,000 aggregate
principal amount of unsecured senior subordinated notes of the Borrower.
"Spin-Off Distributions" means (i) the distribution by Corning
of all the capital stock of the Borrower (other than the Permitted Preferred
Stock) to the holders of Corning's common stock and (ii) the distribution by the
Borrower of all the capital stock of CPS to the holders of the Borrower's common
stock.
"Spin-Off Information" means the information disclosed in (a)
the Transaction Agreement, (b) the Information Statement dated November 26,
1996, and (c) the IRS Ruling Letter, each of which has been delivered to the
Banks prior to the execution and delivery of this Agreement.
"Spin-Off Tax Indemnification Agreement" means the tax
indemnification agreement to be entered into between Corning and the Borrower as
contemplated by the Spin-Off Information.
"Spin-Off Transactions" means the transactions contemplated by
the Spin-Off Information to occur on or before the date of the Spin-Off
Distributions, including without limitation (i) the contribution by the Corning
Companies to the Borrower and its Subsidiaries of all properties and other
assets (including, without limitation, the capital stock of all corporations
that are to be Subsidiaries) that are to be properties and assets of the
Borrower and its Subsidiaries at the time of the Spin-Off Distributions as
contemplated by the Spin-Off Information and the assumption by the Borrower of
liabilities of CLSI not to exceed $250,000,000 (or the transfer to the Borrower
of assets of CLSI subject to such liabilities), (ii) the capitalization of the
Borrower and its Subsidiaries as contemplated by the Spin-Off Information
(including, without limitation, the elimination of all Debt and other
intercompany balances between the Corning Companies, on the
22
one hand, and the Borrower and its Subsidiaries, on the other hand), (iii) the
CPS Capitalization Transaction and (iv) execution and delivery of the
Transaction Documents by the parties thereto; provided that clause (ii) above
shall not be construed to require the elimination of the Debt owed by the
Borrower or its Subsidiaries to the Corning Companies that is to be repaid (a)
on the Effective Date as contemplated by clause (o) of Section 3.01, (b) with
the proceeds of the Senior Subordinated Bridge Loans or the Senior Subordinated
Notes as contemplated by clause (a) of Section 5.16 or (c) as contemplated by
clause (g) of Section 5.16.
"Subordinated Debt Documents" means (i) any indenture, loan
agreement, note purchase agreement or other agreement pursuant to which any
Permitted Subordinated Debt is issued or incurred, (ii) any debt securities,
promissory notes or other instruments evidencing any Permitted Subordinated Debt
and (iii) any other agreements, instruments or documents governing any of the
terms or conditions of any Permitted Subordinated Debt or any Guarantee of any
Permitted Subordinated Debt.
"subsidiary" means, as to any Person, any corporation or other
entity of which securities or other ownership interests having ordinary voting
power to elect a majority of the board of directors or other persons performing
similar functions are at the time directly or indirectly owned by such Person.
"Subsidiary" means a subsidiary of the Borrower; provided that
the CPS Companies shall be deemed not to be "Subsidiaries" prior to the
consummation of the Spin-Off Distributions.
"Swingline Bank" means Wachovia Bank of Georgia, N.A., in its
capacity as lender of Swingline Loans hereunder, and its successors in such
capacity.
"Swingline Exposure" means at any time the aggregate principal
amount of all Swingline Loans outstanding at such time. The Swingline Exposure
of any Bank at any time shall mean its Applicable Percentage of the Swingline
Exposure at such time.
"Swingline Loan" means a loan made by the Swingline Bank
pursuant to Section 2.04.
23
"Tax Sharing Agreement" means the tax sharing agreement to be
entered into among Corning, CPS and the Borrower as contemplated by the Spin-Off
Information.
"Temporary Cash Investment" means any Investment in (i) direct
obligations of the United States or any agency thereof, or obligations fully
guaranteed or insured by the United States or any agency or instrumentality
thereof having maturities of not more than one year, (ii) time deposits with,
including certificates of deposit issued by, any office located in the United
States of any commercial bank which is organized under the laws of the United
States or any state thereof and has capital and surplus exceeding $500,000,000
and having a peer group rating of B or better (or the equivalent thereof) by
Xxxxxxxx Bank Watch, Inc. or outstanding long-term debt rated BBB or better (or
the equivalent thereof) by Standard & Poor's Rating Group or Baa or better (or
the equivalent thereof) by Xxxxx'x Investors Service Inc. or (iii) repurchase
obligations with a term of not more than seven days for underlying securities
described in clause (i) and (ii) above entered into with an office of a bank
meeting the criteria specified in clause (ii) above, or (iv) commercial paper
(other than commercial paper issued by an Affiliate of the Borrower) rated at
least A-1 (or the equivalent thereof) by Standard & Poor's Ratings Group and P-1
(or the equivalent thereof) by Xxxxx'x Investors Service, Inc., in each case
maturing within 90 days.
"Term Loan" means a Tranche A Term Loan or a Tranche B Term
Loan.
"Termination Date" means the last day of the Working Capital
Availability Period.
"Total Commitments" means at any time the sum of the Banks'
Commitments at such time.
"Tranche A Commitment" means, as to any Bank, the obligation
of such Bank to make Tranche A Term Loans to the Borrower in an aggregate
principal amount not exceeding the amount set forth opposite such Bank's name in
Schedule 1 hereto under the caption "Tranche A Commitment".
"Tranche A Bank" means a Bank with a Tranche A Commitment or
an outstanding Tranche A Term Loan.
"Tranche A Maturity Date" means December 5, 2002.
24
"Tranche A Term Loan" means a loan made by a Tranche A Bank
pursuant to clause (i) of Section 2.01(a).
"Tranche B Commitment" means, as to any Bank, the obligation
of such Bank to make Tranche B Term Loans to the Borrower in an aggregate
principal amount not exceeding the amount set forth opposite such Bank's name in
Schedule 1 hereto under the caption "Tranche B Commitments".
"Tranche B Bank" means a Bank with a Tranche B Commitment or
an outstanding Tranche B Term Loan.
"Tranche B Maturity Date" means December 5, 2003.
"Tranche B Term Loan" means a loan made by a Tranche B Bank
pursuant to clause (ii) of Section 2.01(a).
"Transaction Agreement" means the Transaction Agreement dated
as of November 22, 1996, among Corning, Corning Clinical Laboratories Inc., a
Michigan corporation, CPS, CLSI and the Borrower.
"Transactions" means the Financing Transactions, the Spin-Off
Transactions and the Spin-Off Distributions.
"Transaction Documents" means (i) the Transaction Agreement,
the CCL/CPS Spin-Off Tax Indemnification Agreement, the Spin-Off Tax
Indemnification Agreement, the Tax Sharing Agreement and (ii) any other
contracts and agreements between the Borrower or any Subsidiary, on the one
hand, and any Corning Company or CPS Company, on the other hand, in effect on
the Effective Date or contemplated by Schedule 1.01(b) (other than any such
contracts and agreements relating solely to the purchase or sale of inventory or
services in the ordinary course of business on terms no less favorable to the
Borrower and its Subsidiaries than they would obtain in a comparable arm's
length transaction).
"Type" has the meaning set forth in Section 1.03.
"Unfunded Liabilities" means, with respect to any Plan at any
time, the amount (if any) by which (i) the value of all benefit liabilities
under such Plan, determined on a plan termination basis using the assumptions
prescribed by the PBGC for purposes of Section 4044 of ERISA, exceeds (ii) the
fair market value of all Plan assets allocable to such liabilities under Title
IV of ERISA (excluding any
25
accrued but unpaid contributions), all determined as of the then most recent
valuation date for such Plan, but only to the extent that such excess represents
a potential liability of a member of the ERISA Group to the PBGC or any other
Person under Title IV of ERISA.
"United States" means the United States of America, including
the States and the District of Columbia, but excluding its territories and
possessions.
"Working Capital Availability Period" means the period from
and including the Effective Date to but excluding the Working Capital Maturity
Date or such earlier date as the Working Capital Commitments shall have expired
or been terminated.
"Working Capital Bank" means a Bank with a Working Capital
Commitment or, if the Working Capital Commitments have terminated or expired, a
Bank with Working Capital Exposure.
"Working Capital Commitment" means, as to any Bank, the
obligation of such Bank to make Working Capital Loans to the Borrower and to
acquire participations in Letters of Credit and Swingline Loans in an aggregate
principal amount at any one time outstanding not exceeding the amount set forth
opposite such Bank's name in Schedule 1 hereto under the caption "Working
Capital Commitment", as the same may be reduced from time to time pursuant to
Section 2.09 and subject to the limitations of Sections 2.01(b) and 2.15.
"Working Capital Exposure" means, with respect to any Bank at
any time, the sum of the aggregate principal amount of such Bank's Working
Capital Loans outstanding at such time and its Letter of Credit Exposure and
Swingline Exposure at such time.
"Working Capital Loan" means a loan made by a Bank pursuant to
Section 2.01(b).
"Working Capital Maturity Date" means December 5, 2002.
SECTION 1.02. Accounting Terms and Determinations. Unless
otherwise specified herein, all accounting terms used herein shall be
interpreted, all accounting determinations hereunder shall be made, and all
26
financial statements required to be delivered hereunder shall be prepared in
accordance with United States generally accepted accounting principles as in
effect from time to time, applied on a basis consistent (except for changes
concurred in by the Borrower's independent public accountants) with the most
recent audited consolidated financial statements of the Borrower and its
Consolidated Subsidiaries delivered to the Banks; provided that, if the Borrower
notifies the Agent that the Borrower wishes to amend the calculation of the
Borrower's Debt Coverage Ratio for purposes of determining Pricing Periods or to
amend any covenant in Article V, in either case to eliminate the effect of any
change in generally accepted accounting principles on the operation of such
calculation or covenant (or if the Agent notifies the Borrower that the Required
Banks wish to amend any such calculation or covenant for such purpose), then
such calculation or the Borrower's compliance with such covenant, as the case
may be, shall be determined on the basis of generally accepted accounting
principles in effect immediately before the relevant change in generally
accepted accounting principles became effective, until either such notice is
withdrawn or such calculation or covenant is amended in a manner satisfactory to
the Borrower and the Required Banks.
SECTION 1.03. Types of Borrowings. Borrowings and Loans
hereunder are distinguished by "Type" and by "Class". The Type of a Loan refers
to whether such Loan is a Base Rate Loan or a Euro-Dollar Loan. The "Class" of a
Loan (or a Commitment to make such a Loan or a Borrowing comprising such Loans)
refers to whether such Loan is a Tranche A Term Loan, a Tranche B Term Loan, a
Working Capital Loan or a Swingline Loan, each of which constitutes a Class. The
term "Borrowing" denotes the aggregation of Loans of one or more Banks to be
made to the Borrower pursuant to Article II on the same date, all of which Loans
are of the same Type (subject to Article VIII) and Class and, in the case of
Euro-Dollar Loans, have the same initial Interest Period. Borrowings are
classified for purposes of this Agreement either by reference to the Type of
Loans comprising such Borrowing (e.g., a "Euro-Dollar Borrowing" is a Borrowing
comprised of Euro-Dollar Loans) or by reference to the Class of such Loans
(e.g., a "Term Borrowing" is a Borrowing comprised of Term Loans) or both (e.g.,
a "Euro-Dollar Working Capital Borrowing" is a Borrowing comprised of Working
Capital Loans that are Euro- Dollar Loans).
27
ARTICLE II
The Credits
SECTION 2.01. Commitments to Lend. (a) Term Loans. Each
Tranche A Bank severally and not jointly agrees, on the terms and conditions set
forth in this Agreement, to make a Tranche A Term Loan to the Borrower on the
Effective Date in an aggregate principal amount not exceeding its Tranche A
Commitment. Each Tranche B Bank severally and not jointly agrees, on the terms
and conditions set forth in this Agreement, to make a Tranche B Term Loan to the
Borrower on the Effective Date in an aggregate principal amount not exceeding
its Tranche B Commitment.
(b) Working Capital Loans. Each Bank severally and not jointly
agrees, on the terms and conditions set forth in this Agreement, to make loans
to the Borrower from time to time during the Working Capital Availability
Period; provided that the aggregate principal amount of such Bank's loans at any
one time outstanding under this subsection (b) shall not exceed the excess of
(i) its Working Capital Commitment at such time over (ii) the sum of its Letter
of Credit Exposure at such time, plus its Swingline Exposure at such time, plus
its Applicable Percentage of the Existing Letters of Credit outstanding at such
time. Within the foregoing limits, the Borrower may borrow under this subsection
(b), repay or (to the extent permitted by Section 2.11) prepay loans made under
this subsection (b) and reborrow at any time during the Working Capital
Availability Period under this subsection (b).
(c) Borrowings Ratable. Each Borrowing under this Section
shall be made from the Banks ratably in proportion to their respective
Commitments of the relevant Class.
(d) Euro-Dollar Borrowings. There shall not at any time be
more than a total of seven Euro-Dollar Borrowings outstanding.
SECTION 2.02. Notice of Borrowing. The Borrower shall give the
Agent notice (a "Notice of Borrowing") not later than 10:30 A.M. (New York City
time) on (x) the date
28
of each Base Rate Borrowing, and (y) the third Euro-Dollar Business Day before
each Euro-Dollar Borrowing, specifying:
(i) the date of such Borrowing, which shall be a Domestic
Business Day in the case of a Base Rate Borrowing or a Euro-Dollar
Business Day in the case of a Euro-Dollar Borrowing;
(ii) the aggregate amount of such Borrowing, which shall be (x)
in the case of a Euro-Dollar Borrowing, $10,000,000 and (y) in the case
of a Base Rate Borrowing, $5,000,000, or in each case a larger multiple
of $1,000,000;
(iii) the Class and Type of such Borrowing; and
(iv) in the case of a Euro-Dollar Borrowing, the duration of the
Interest Period applicable thereto, subject to the provisions of the
definition of Interest Period.
This Section 2.02 shall not apply to Swingline Loans.
SECTION 2.03. Notice to Banks; Funding of Loans. (a) Upon
receipt of a Notice of Borrowing, the Agent shall promptly notify each Bank that
is to participate in such Borrowing of the contents thereof and of such Bank's
share of such Borrowing and such Notice of Borrowing shall not thereafter be
revocable by the Borrower.
(b) Not later than 12:00 Noon (New York City time) on the date
of each Borrowing, each Bank participating therein shall (except as provided in
subsection (d) of this Section) make available its share of such Borrowing, in
Federal or other funds immediately available in New York City, to the Agent at
its address referred to in Section 9.01. Unless the Agent determines that any
applicable condition specified in Article III has not been satisfied, the Agent
will make the funds so received from the Banks available to the Borrower at the
Agent's aforesaid address.
(c) If an Issuing Bank has not received from the Borrower a
payment required by Section 2.15(g) to be made to such Issuing Bank by 1:00 P.M.
(New York City time) on the date on which such payment is due, as provided in
Section 2.15(g), such Issuing Bank shall promptly notify the Agent
29
thereof and, promptly following receipt of such notice, the Agent will notify
each Bank that has a participation in such Letter of Credit of the Letter of
Credit Disbursement and such Bank's Applicable Percentage of such Letter of
Credit Disbursement. Not later than 3:00 P.M. (New York City time) on such date,
each Bank shall make available such Bank's Applicable Percentage of such Letter
of Credit Disbursement, in Federal or other funds immediately available in New
York City, to the Agent at its address specified in or pursuant to Section 9.01,
and the Agent will promptly make such funds available to such Issuing Bank.
Thereafter, any payments made by the Borrower in respect of such Letter of
Credit Disbursement shall be paid to the Agent (and such Issuing Bank shall
promptly remit such payments to the Agent if received by such Issuing Bank) and
the Agent will promptly remit to each Bank that shall have made such funds
available its Applicable Percentage of any amounts subsequently received by the
Agent from such Issuing Bank or the Borrower in respect of such Letter of Credit
Disbursement (excluding interest for the account of such Issuing Bank for the
period prior to the date that such Bank shall have made such funds available).
(d) If any Bank (including the Swingline Bank) makes a new
Loan to the Borrower hereunder on a day on which the Borrower is to repay all or
any part of an outstanding Loan from such Bank, such Bank shall apply the
proceeds of its new Loan to make such repayment and only an amount equal to the
difference (if any) between the amount being borrowed and the amount being
repaid shall be made available by such Bank to the Agent as provided in
subsection (c) of this Section, or remitted by the Borrower to the Agent as
provided in Section 2.12, as the case may be.
(e) Unless the Agent shall have received notice from a Bank
prior to the date of any Borrowing, or prior to the time of any required payment
by such Bank in respect of a Letter of Credit Disbursement, that such Bank will
not make available to the Agent such Bank's share of such Borrowing or payment,
the Agent may assume that such Bank has made such share available to the Agent
on the date of such Borrowing or payment in accordance with subsection (b) or
(c), as applicable, of this Section and the Agent may, in reliance upon such
assumption, make available to the Borrower or the applicable Issuing Bank, as
the case may be, on such date a corresponding amount. If and to the extent that
such Bank shall not have so made such share available to the Agent, such Bank
and the Borrower severally agree to
30
repay to the Agent forthwith on demand such corresponding amount together with
interest thereon, for each day from the date such amount is made available to
the Borrower or the applicable Issuing Bank until the date such amount is repaid
to the Agent, at (i) in the case of the Borrower, a rate per annum equal to the
higher of the Federal Funds Rate and the interest rate applicable thereto
pursuant to Section 2.07 or Section 2.15(g), as applicable, and (ii) in the case
of such Bank, the Federal Funds Rate. In the case of a Borrowing, if such Bank
shall repay to the Agent such corresponding amount, such amount so repaid shall
constitute such Bank's Loan included in such Borrowing for purposes of this
Agreement.
SECTION 2.04. Swingline Loans. (a) During the Working Capital
Availability Period the Swingline Bank agrees, on the terms and conditions set
forth in this Agreement, to lend to the Borrower from time to time amounts that
will not result in (i) the aggregate principal amount of outstanding Loans under
this Section 2.04 at any time exceeding $10,000,000 or (ii) the sum of the
Letter of Credit Exposure plus the aggregate principal amount of all outstanding
Working Capital Loans and Loans made under this Section 2.04 plus the aggregate
amount of outstanding Existing Letters of Credit at any time exceeding the total
Working Capital Commitments.
(b) In order to request a Swingline Loan, the Borrower shall
notify the Agent and the Swingline Bank of such request not later than 11:00
A.M. (New York City time) on the day of such proposed Swingline Loan, specifying
the proposed date (which shall be a Domestic Business Day) and amount of the
requested Swingline Loan (which shall be $1,000,000 or a larger multiple of
$100,000). The Swingline Bank shall make each Swingline Loan available to the
Borrower by means of a credit to the general deposit account of the Borrower
with the Swingline Bank by 3:00 P.M. (New York City time) on the requested date
of such Swingline Loan.
(c) Each Swingline Loan shall mature and be due and payable,
together with accrued and unpaid interest thereon, on the earlier of (i) the
first day after such Swingline Loan is made on which a Borrowing of Working
Capital Loans is made and (ii) the Working Capital Maturity Date. Each Swingline
Loan shall be a Base Rate Loan and shall bear interest as provided in Section
2.07.
31
(d) The Swingline Bank may by written notice given to the
Agent and the Working Capital Banks not later than 10:00 A.M. New York City
time, on any Domestic Business Day require the Working Capital Banks to acquire
participations on such Domestic Business Day in all or a portion of the
Swingline Loans outstanding. Such notice shall specify the aggregate amount of
Swingline Loans in which the Working Capital Banks will acquire participations.
In furtherance of the foregoing, each Working Capital Bank hereby absolutely and
unconditionally agrees, upon receipt of notice as provided above, to pay to the
Agent, for the account of the Swingline Bank, such Working Capital Bank's
Applicable Percentage of such Swingline Loan or Loans. Each Working Capital Bank
acknowledges and agrees that its obligation to acquire participations in
Swingline Loans pursuant to this paragraph is absolute and unconditional and
shall not be affected by any circumstance whatsoever, including the occurrence
and continuance of a Default or reduction or termination of the Working Capital
Commitments after a Swingline Loan has been advanced, and that each such payment
shall be made without any offset, abatement, withholding or reduction
whatsoever. Each Working Capital Bank shall comply with its obligation under
this paragraph by wire transfer of immediately available funds, in the same
manner as provided in Section 2.05 with respect to Loans made by such Working
Capital Bank (and Section 2.05 shall apply, mutatis mutandis, to the payment
obligations of the Working Capital Banks). The Agent shall notify the Borrower
of any participations in any Swingline Loan acquired pursuant to this paragraph.
Any amounts received by the Swingline Bank from the Borrower (or other party on
behalf of the Borrower) in respect of a Swingline Loan after receipt by the
Swingline Bank of the proceeds of a sale of participations therein shall be
promptly remitted to the Agent; any such amounts received by the Agent shall be
promptly remitted by the Agent pro rata to the Working Capital Banks that shall
have made their payments pursuant to this paragraph and to the Swingline Bank,
as their interests may appear. The purchase of participations in a Swingline
Loan pursuant to this paragraph shall not relieve the Borrower of any default in
the payment thereof.
SECTION 2.05. Notes. (a) Each Bank's Loans of each Class shall
be evidenced by a single Note (in the form applicable to such Class) payable to
the order of such Bank for the account of its Applicable Lending Office.
32
(b) Each Bank may, by notice to the Borrower and the Agent,
request that its Loans of a particular Type and Class be evidenced by a separate
Note. Each such Note shall be in substantially the form of Exhibit A, B-1 or B-2
hereto applicable to the relevant Class with appropriate modifications to
reflect the fact that it evidences solely Loans of the relevant Type. Each
reference in this Agreement to the "Note" of such Bank shall be deemed to refer
to and include any or all of such Notes, as the context may require.
(c) Upon receipt of each Bank's Notes pursuant to clause (b)
of Section 3.01(b), the Agent shall forward such Notes to such Bank. Each Bank
shall record the date and amount of each Loan made by it to the Borrower and the
date and amount of each payment of principal made by the Borrower with respect
thereto and may, if such Bank so elects, in connection with any transfer or
enforcement of any of its Notes, endorse on the schedule forming a part thereof
appropriate notations to evidence the foregoing information with respect to each
such Loan then outstanding; provided that the failure of any Bank to make any
such recordation or endorsement shall not affect the obligations of the Borrower
hereunder or under the Notes. Each Bank is hereby irrevocably authorized by the
Borrower so to endorse its Notes and to attach to and make a part of any of its
Notes a continuation of any such schedule as and when required.
SECTION 2.06. Interest Rate Elections. (a) The initial Type of
Loans comprising each Borrowing, and the duration of the initial Interest Period
applicable thereto if they are initially Euro-Dollar Loans, shall be as
specified in the applicable Notice of Borrowing. Thereafter, the Borrower may
from time to time elect to change or continue the Type of, or the duration of
the Interest Period applicable to, the Loans included in any Borrowing
(excluding overdue Loans and subject in each case to the provisions of the
definition of Interest Period and Article VIII), as follows:
(i) if such Loans are Base Rate Loans, the Borrower may elect
to convert such Loans to Euro-Dollar Loans as of any Euro-Dollar
Business Day; and
(ii) if such Loans are Euro-Dollar Loans, the Borrower may elect
to convert such Loans to Base Rate Loans or elect to continue such
Loans as Euro-Dollar Loans for an additional Interest Period, subject
to
33
Section 2.13 in the case of any such conversion or continuation
effective on any day other than the last day of the then current
Interest Period applicable to such Loans.
Each such election shall be made by delivering a notice (a
"Notice of Interest Rate Election") to the Agent not later than 10:30 A.M. (New
York City time) on the third Euro-Dollar Business Day before the conversion or
continuation selected in such notice is to be effective (unless the relevant
Loans are to be converted to Base Rate Loans in which case such notice shall be
delivered to the Agent not later than 10:30 A.M. (New York City time) on the
second Domestic Business Day before such conversion or continuation is to be
effective). A Notice of Interest Rate Election may, if it so specifies, apply to
only a portion of the aggregate principal amount of the relevant Group of Loans;
provided that (i) such portion is allocated ratably among the Loans comprising
such Group and (ii) the portion to which such Notice applies, and the remaining
portion to which it does not apply, are each $10,000,000 (in the case of
Euro-Dollar Loans) or $5,000,000 (in the case of Base Rate Loans) or any larger
multiple of $1,000,000. Notwithstanding the foregoing, the Borrower may not
elect to convert any Loan to, or continue any Loan as, a Euro-Dollar Loan
pursuant to any Notice of Interest Rate Election if at the time such notice is
delivered an Event of Default shall have occurred and be continuing.
(b) Each Notice of Interest Rate Election shall specify:
(i) the Group of Loans (or portion thereof) to
which such notice applies;
(ii) the date on which the conversion or continuation selected
in such notice is to be effective, which shall comply with the
applicable clause of subsection (a) above;
(iii) if the Loans comprising such Group are to be converted,
the new Type of Loans and, if the Loans being converted are to be
Euro-Dollar Loans, the duration of the next succeeding Interest Period
applicable thereto; and
34
(iv) if such Loans are to be continued as Euro- Dollar Loans
for an additional Interest Period, the duration of such additional
Interest Period.
Each Interest Period specified in a Notice of Interest Rate
Election shall comply with the provisions of the definition of Interest Period.
(c) Upon receipt of a Notice of Interest Rate Election from
the Borrower pursuant to subsection (a) above, the Agent shall promptly notify
each Bank affected thereby of the contents thereof and such notice shall not
thereafter be revocable by the Borrower. If no Notice of Interest Rate Election
is timely received prior to the end of an Interest Period for any Group of
Loans, the Borrower shall be deemed to have elected that such Group of Loans be
converted to Base Rate Loans as of the last day of such Interest Period.
(d) An election by the Borrower to change or continue the rate
of interest applicable to any Group of Loans pursuant to this Section shall not
constitute a "Borrowing" subject to the provisions of Section 3.02. This Section
2.06 shall not apply to Swingline Loans, which may not be converted or
continued.
SECTION 2.07. Interest Rates. (a) Each Base Rate Loan shall
bear interest on the outstanding principal amount thereof, for each day from the
date such Loan is made until it becomes due, at a rate per annum equal to (i) in
the case of a Base Rate Working Capital Loan, a Base Rate Tranche A Term Loan or
a Swingline Loan, the sum of the Base Rate Margin for such day plus the Base
Rate for such day or (ii) in the case of a Base Rate Tranche B Term Loan, the
sum of the Base Rate for such day plus 1.25%. Such interest shall be payable
quarterly in arrears on each Quarterly Date and, with respect to the principal
amount of any Base Rate Loan converted to a Euro-Dollar Loan, on each date a
Base Rate Loan is so converted. Any overdue principal of or interest on any Base
Rate Loan of any Class shall bear interest, payable on demand, for each day
until paid at a rate per annum equal to the sum of 2% plus the rate otherwise
applicable to Base Rate Loans of such Class for such day.
"Base Rate Margin" applicable to any Working Capital Loan or
Tranche A Term Loan that is a Base Rate Loan
35
outstanding on any day, or any Swingline Loan outstanding on any day, means:
(i) if such day falls within a Level I Pricing Period, a Level
II Pricing Period or a Level III Pricing Period, then 0.0%;
(ii) if such day falls within a Level IV Pricing Period, then
0.25%;
(iii) if such day falls within a Level V Pricing Period, then
0.50%;
(iv) if such day falls within a Level VI Pricing Period, then
0.75%; or
(v) if such day falls within a Level VII Pricing Period, then
1.00%.
(b) Each Euro-Dollar Loan shall bear interest on the
outstanding principal amount thereof, for each day during each Interest Period
applicable thereto, at a rate per annum equal to (i) in the case of a
Euro-Dollar Working Capital Loan or a Euro-Dollar Tranche A Term Loan, the sum
of the Euro-Dollar Margin for such day plus the Adjusted London Interbank
Offered Rate applicable to such Interest Period or (ii) in the case of a
Euro-Dollar Tranche B Term Loan, the sum of the Adjusted London Interbank
Offered Rate applicable to such Interest Period plus 2.25%. Such interest shall
be payable for each Interest Period on the last day thereof and, if such
Interest Period is longer than three months, at intervals of three months after
the first day thereof.
"Euro-Dollar Margin" applicable to any Working Capital Loan or
Tranche A Term Loan that is a Euro-Dollar Loan outstanding on any day means:
(i) if such day falls within a Level I Pricing Period, then
0.50%;
(ii) if such day falls within a Level II Pricing Period, then
0.75%;
(iii) if such day falls within a Level III Pricing Period, then
1.00%;
36
(iv) if such day falls within a Level IV Pricing
Period, then 1.25%;
(v) if such day falls within a Level V Pricing
Period, then 1.50%;
(vi) if such day falls within a Level VI Pricing
Period, then 1.75%; or
(vii) if such day falls within a Level VII Pricing
Period, then 2.00%;
The "Adjusted London Interbank Offered Rate" applicable to any
Interest Period means a rate per annum equal to the quotient obtained (rounded
upward, if necessary, to the next higher 1/100 of l%) by dividing (i) the
applicable London Interbank Offered Rate by (ii) 1.00 minus
the Euro-Dollar Reserve Percentage.
The "London Interbank Offered Rate" applicable to any Interest
Period means the average (rounded upward, if necessary, to the next higher 1/16
of 1%) of the respective rates per annum at which deposits in dollars are
offered to each of the Reference Banks in the London interbank market at
approximately 11:00 A.M. (London time) two Euro-Dollar Business Days before the
first day of such Interest Period in an amount approximately equal to the
principal amount of the Euro-Dollar Loan of such Euro-Dollar Reference Bank to
which such Interest Period is to apply and for a period of time comparable to
such Interest Period.
(c) Any overdue principal of or interest on any Euro-Dollar
Loan shall bear interest, payable on demand, for each day until paid, at a rate
per annum equal to the higher of (i) the sum of the Euro-Dollar Margin (or, in
the case of a Euro-Dollar Tranche B Term Loan, 2.25%) for such day plus 2% plus
the quotient obtained (rounded upward, if necessary, to the next higher 1/100 of
1%) by dividing (x) the average (rounded upward, if necessary, to the next
higher 1/16 of 1%) of the respective rates per annum at which one day (or, if
such amount due remains unpaid more than three Euro- Dollar Business Days, then
for such other period of time not longer than three months as the Agent may
select) deposits in dollars in an amount approximately equal to such overdue
payment due to each of the Euro-Dollar Reference Banks are offered to such
Euro-Dollar Reference Bank in the London interbank market for the applicable
period determined as provided above by (y) 1.00 minus the Euro-Dollar Reserve
37
Percentage (or, if the circumstances described in clause (a) or (b) of Section
8.01 shall exist, at a rate per annum equal to the sum of 2% plus the rate
applicable to Base Rate Loans for such day) and (ii) the sum of the Euro-Dollar
Margin (or, in the case of a Euro-Dollar Tranche B Term Loan, 2.25%) for such
day plus 2% plus the Adjusted London Interbank Offered Rate applicable to such
Loan at the date such payment was due.
(d) The Agent shall determine each interest rate applicable to
the Loans hereunder. The Agent shall give prompt notice to the Borrower and the
participant Banks of each rate of interest so determined, and its determination
thereof shall be conclusive in the absence of manifest error.
(e) Each Reference Bank agrees to use its best efforts to
furnish quotations to the Agent as contemplated by this Section. If any
Reference Bank does not furnish a timely quotation, the Agent shall determine
the relevant interest rate on the basis of the quotation or quotations furnished
by the remaining Reference Bank or Banks or, if none of such quotations is
available on a timely basis, the provisions of Section 8.01 shall apply.
SECTION 2.08. Fees. (a) Commitment Fee. During the Working
Capital Availability Period the Borrower shall pay to the Agent for the account
of the Banks ratably in proportion to their Working Capital Commitments a
commitment fee at the applicable per annum Commitment Fee Rate on the daily
amount by which the aggregate amount of the Working Capital Commitments exceeds
the sum of outstanding principal amount of the Working Capital Loans plus the
Letter of Credit Exposure. Such commitment fee shall accrue from and including
the Effective Date to but excluding the date of termination of the Working
Capital Commitments in their entirety.
"Commitment Fee Rate" applicable on any day means:
(i) if such day falls within a Level I Pricing
Period, then 0.175%;
(ii) if such day falls within a Level II Pricing
Period, then 0.250%;
(iii) if such day falls within a Level III Pricing
Period or a Level IV Pricing Period, then 0.300%;
38
(iv) if such day falls within a Level V Pricing
Period or a Level VI Pricing Period, then 0.375%; or
(v) if such day falls within a Level VII Pricing
Period, then 0.500%.
(b) Payments. Accrued fees under this Section shall be payable
quarterly in arrears on each Quarterly Date and on the date of termination of
the Working Capital Commitments in their entirety.
SECTION 2.09. Termination or Reduction of Commitments. (a) The
Tranche A Commitments and Tranche B Commitments shall terminate at the close of
business on the Effective Date. All Commitments shall terminate on January 31,
1997, unless the Effective Date occurs on or before January 31, 1997.
(b) During the Working Capital Availability Period, the
Borrower may, upon at least three Domestic Business Days' notice to the Agent
(i) terminate the Working Capital Commitments at any time if there is no Letter
of Credit Exposure at such time and if no Working Capital Loans are outstanding
at such time or (ii) ratably reduce from time to time by an aggregate amount of
$10,000,000 or any larger multiple of $1,000,000, the aggregate amount of the
Working Capital Commitments in excess of the sum of the Letter of Credit
Exposure and the aggregate outstanding principal amount of the Working Capital
Loans.
(c) Unless previously terminated, the Working Capital
Commitments shall terminate on the Working Capital Maturity Date.
(d) Notwithstanding anything to the contrary in this
Agreement, all Commitments shall terminate and all outstanding Loans shall be
immediately repaid in full (and the full amount available for drawing under all
outstanding Letters of Credit shall be secured by cash collateral as provided in
Section 2.15(k)) on March 31, 1997, in the event that Corning shall not have
delivered to the Agent by such date a certificate, executed on behalf of Corning
by one of its executive officers, confirming that the Spin-Off Transactions and
the Spin-Off Distributions have been completed in all material respects in
accordance with all applicable laws and the Spin-Off Information.
39
SECTION 2.10. Maturity of Loans. (a) The Working Capital Loans
of each Bank shall mature, and the principal amount thereof shall be due and
payable, together with accrued interest thereon, on the Working Capital Maturity
Date or such earlier date on which the Working Capital Commitments shall be
terminated. Each Swingline Loan shall mature, and the principal amount thereof
shall be due and payable, together with accrued interest thereon, as provided in
Section 2.04.
(b) The aggregate principal amount of the Term Loans shall be
payable in quarterly installments on each Quarterly Date commencing March 31,
1998. Subject to adjustment as provided in subsection (c) of this Section, such
installments shall be payable in the respective amounts set forth below opposite
the respective payment dates:
Tranche A Term Loans:
Payment Date Amount Payment Date Amount
-----------------------------------------------------------------------------------------------------
March 31, 1998 $7,500,000 September 30, 2000 $17,500,000
June 30, 1998 $7,500,000 December 31, 2000 $17,500,000
September 30, 1998 $7,500,000 March 31, 2001 $18,750,000
December 31, 1998 $7,500,000 June 30, 2001 $18,750,000
March 31, 1999 $12,500,000 September 30, 2001 $18,750,000
June 30, 1999 $12,500,000 December 31, 2001 $18,750,000
September 30, 1999 $12,500,000 March 31, 2002 $18,750,000
December 31, 1999 $12,500,000 June 30, 2002 $18,750,000
March 31, 2000 $17,500,000 September 30, 2002 $18,750,000
June 30, 2000 $17,500,000 Tranche A Maturity Date $18,750,000
Tranche B Term Loans:
Payment Date Amount Payment Date Amount
---------------------------------------------------------------------------------------------------
March 31, 1998 $250,000 March 31, 2001 $250,000
June 30, 1998 $250,000 June 30, 2001 $250,000
September 30, 1998 $250,000 September 30, 2001 $250,000
December 31, 1998 $250,000 December 31, 2001 $250,000
March 31, 1999 $250,000 March 31, 2002 $250,000
June 30, 1999 $250,000 June 30, 2002 $250,000
40
September 30, 1999 $250,000 September 30, 2002 $250,000
December 31, 1999 $250,000 December 31, 2002 $250,000
March 31, 2000 $250,000 March 31, 2003 $11,250,000
June 30, 2000 $250,000 June 30, 2003 $11,250,000
September 30, 2000 $250,000 September 30, 2003 $11,250,000
December 31, 2000 $250,000 Tranche B Maturity Date $11,250,000
All Tranche A Term Loans and all Tranche B Term Loans
outstanding on the Tranche A Maturity Date or the Tranche B Maturity Date,
respectively, shall mature and be due and payable on such date. All principal
payments in respect of the Term Loans shall be accompanied by accrued interest
on the principal amount being repaid to the date of payment.
(c) If the initial aggregate amount of the Banks' Tranche A
Commitments or Tranche B Commitments exceeds the aggregate principal amount of
Term Loans of such Class that are made on the Effective Date, then the scheduled
repayments of Term Borrowings of such Class to be made pursuant to this Section
shall be reduced ratably by an aggregate amount equal to such excess. Any
prepayment of a Tranche B Term Borrowing shall be applied to reduce the
subsequent scheduled repayments of the Tranche B Term Borrowings to be made
pursuant to this Section in reverse chronological order. Any prepayment of a
Tranche A Term Borrowing shall be applied, first, to reduce the scheduled
repayment of Tranche A Term Loans set forth in subsection (b) of this Section
opposite the Tranche A Maturity Date, second to reduce the scheduled repayment
of Tranche A Term Loans set forth in subsection (b) of this Section opposite
September 30, 2002, and third ratably to reduce the remaining scheduled
repayments of Tranche A Term Loans set forth in subsection (b) of this Section.
(d) Prior to any repayment of any Term Borrowings of either
Class hereunder, the Borrower shall select the Borrowing or Borrowings of the
applicable Class to be repaid and shall notify the Agent by telephone (confirmed
by telecopy) of such selection not later than 11:00 A.M., New York City time,
three Domestic Business Days before the scheduled date of such repayment;
provided that each repayment of Term Borrowings of either Class shall be
41
applied to repay any outstanding Base Rate Term Borrowings of such Class before
any other Borrowings of such Class. If the Borrower fails to make a timely
selection of the Borrowing or Borrowings to be repaid, such repayment shall be
applied, first, to repay any outstanding Base Rate Term Borrowings of the
applicable Class and, second, to other Borrowings of such Class in the order of
the remaining duration of their respective Interest Periods (the Borrowing with
the shortest remaining Interest Period to be repaid first). Each repayment of a
Borrowing shall be applied ratably to the Loans included in the repaid
Borrowing.
SECTION 2.11. Optional Prepayments; Mandatory Prepayments. (a)
Subject to Section 2.13 and to subsection (f) of this Section, the Borrower may,
upon at least one Domestic Business Day's notice to the Agent, prepay any Group
of Base Rate Loans or upon at least three Euro-Dollar Business Days' notice to
the Agent, prepay any Group of Euro-Dollar Loans, in each case in whole at any
time, or from time to time in part in amounts aggregating (i) in the case of
Euro-Dollar Loans, $10,000,000 and (ii) in the case of Base Rate Loans,
$5,000,000, or in each such case any larger multiple of $1,000,000, by paying
the principal amount to be prepaid together with accrued interest thereon to the
date of prepayment. Each such optional prepayment shall be applied to prepay
ratably the Loans of the several Banks included in such Group (or Borrowing).
The Borrower may, upon notice to the Agent and the Swingline Bank prior to 11:00
A.M. (New York City time) on the date of prepayment, prepay any Swingline Loan
in whole at any time, or from time to time in part in amounts aggregating
$100,000 or any larger multiple thereof, by paying the principal amount to be
prepaid together with accrued interest thereon to the date of prepayment.
(b) Upon receipt of a notice of prepayment pursuant to this
Section, the Agent shall promptly notify each Bank that is entitled to a share
of such prepayment of the contents thereof and of such Bank's ratable share of
such prepayment and such notice shall not thereafter be revocable by the
Borrower.
(c) If the Borrower or any of its Subsidiaries shall incur
Debt for borrowed money (other than Debt otherwise permitted under Section
5.17), an amount equal to 100% of the Net Cash Proceeds therefrom shall be
applied on or within two Domestic Business Days after the date of
42
receipt of the Net Cash Proceeds therefrom toward the prepayment of one or more
Groups of Term Loans as set forth in paragraph (f) of this Section.
(d) If the Borrower shall issue in any offering any shares of
any class of equity securities of the Borrower (other than pursuant to the
issuance of equity securities in connection with any employee compensation or
benefit plan), an amount equal to 50% of the Net Cash Proceeds therefrom shall
be applied on or within two Domestic Business Days after the date of receipt of
the Net Cash Proceeds therefrom toward the prepayment of one or more Groups of
Term Loans as set forth in paragraph (f) of this Section.
(e) If the Borrower or any of its Subsidiaries shall receive
Net Cash Proceeds from any Asset Sale, an amount equal to 75% of the Net Cash
Proceeds therefrom shall be applied on or within two Domestic Business Days
after the date of receipt of the Net Cash Proceeds toward the prepayment of one
or more Groups of Term Loans as set forth in paragraph (f) of this Section;
provided, that no such prepayment pursuant to this subsection needs to be made
until the aggregate Net Cash Proceeds required to be applied pursuant to this
subsection to prepay Term Loans and not yet so applied equals or exceeds
$5,000,000, at which time all such Net Cash Proceeds not yet so applied shall be
so applied to prepay Term Loans. Notwithstanding the foregoing, no prepayment
shall be required under this subsection (e) with respect to an Asset Sale that
constitutes part of an Asset Swap; provided that (i) if the aggregate Net Cash
Proceeds, if any, received by the Borrower and its Subsidiaries in connection
with any Asset Swap exceeds the aggregate amount of any cash consideration paid
by the Borrower and its Subsidiaries in connection therewith, then a prepayment
shall be required under this subsection (e) in an amount equal to 75% of such
excess Net Cash Proceeds, and (ii) if the Borrower or any Subsidiary consummates
an Asset Sale that is intended to constitute part of an Asset Swap and such
Asset Swap is not completed within the time required in order for such Asset
Sale to qualify as part of an Asset Swap (as provided in the definition of the
term "Asset Swap"), then a prepayment shall be required under this subsection
(e) with respect to the Net Cash Proceeds of such Asset Sale and the amount of
such prepayment shall be equal to 100% of such Net Cash Proceeds. Subject to the
proviso to the first sentence of this subsection (e), any prepayment required
pursuant to
43
clause (i) above shall be made on or within two Domestic Business Days after
completion of the applicable Asset Swap and any prepayment required pursuant to
clause (ii) above shall be made on or within two Domestic Business Days after
expiration of the period of time allowed to complete the applicable Asset Swap.
(f) The Borrower shall notify the Agent of each mandatory
prepayment of Term Loans pursuant to subsection (c), (d) or (e) of this Section
not less than three Domestic Business Days prior to the date of prepayment,
which notice shall specify the amount and allocation of the prepayment and the
Group or Groups of Term Loans to be prepaid. Each such mandatory prepayment
shall be applied to prepay ratably the Term Loans of the Banks included in such
Group or Groups. In the event of any optional or mandatory prepayment of Term
Borrowings made at a time when Term Borrowings of both Classes remain
outstanding, the Borrower shall select Term Borrowings to be prepaid so that the
aggregate amount of such prepayment is allocated between the Tranche A Term
Borrowings and Tranche B Term Borrowings pro rata based on the aggregate
principal amount of outstanding Borrowings of each such Class; provided that any
Tranche B Bank may elect, by notice to the Agent by telephone (confirmed by
telecopy) at least one Business Day prior to the prepayment date, to decline all
or any portion of any prepayment of its Tranche B Term Loans pursuant to this
Section (other than an optional prepayment pursuant to subsection (a) of this
Section, which may not be declined), in which case the aggregate amount of the
prepayment that would have been applied to prepay Tranche B Term Loans but was
so declined shall be applied to prepay Tranche A Term Borrowings. Each mandatory
prepayment of the Loans under this Section shall be accompanied by accrued
interest to the date of such prepayment on the amount prepaid.
(g) Term Loans that are prepaid may not be reborrowed.
SECTION 2.12. General Provisions as to Payments. (a) The
Borrower shall make each payment of principal of, and interest on, the Loans and
of fees hereunder, not later than 12:00 Noon (New York City time) on the date
when due, in Federal or other funds immediately available in New York City, to
the Agent at its address referred to in Section 9.01, except that (i) fees
payable to an Issuing
44
Bank may be paid directly to such Issuing Bank and (ii) principal of and
interest on Swingline Loans may be paid directly to the Swingline Bank. The
Agent will promptly distribute to each Bank its ratable share of each such
payment received by the Agent for the account of the Banks.
(b) Whenever any payment of principal of, or interest on, the
Base Rate Loans or of fees shall be due on a day which is not a Domestic
Business Day, the date for payment thereof shall be extended to the next
succeeding Domestic Business Day. Whenever any payment of principal of, or
interest on, the Euro-Dollar Loans shall be due on a day which is not a
Euro-Dollar Business Day, the date for payment thereof shall be extended to the
next succeeding Euro-Dollar Business Day unless such Euro-Dollar Business Day
falls in another calendar month, in which case the date for payment thereof
shall be the next preceding Euro-Dollar Business Day. If the date for any
payment of principal is extended by operation of law or otherwise, interest
thereon shall be payable for such extended time.
(c) Unless the Agent shall have received notice from the
Borrower prior to the date on which any payment is due to an Issuing Bank or the
Banks hereunder that the Borrower will not make such payment in full, the Agent
may assume that the Borrower has made such payment in full to the Agent on such
date and the Agent may, in reliance upon such assumption, cause to be
distributed to such Issuing Bank or the relevant Banks, as the case may be, on
such due date an amount equal to the amount then due to such Issuing Bank or
Banks. If and to the extent that the Borrower shall not have so made such
payment, each Issuing Bank or Bank shall repay to the Agent forthwith on demand
such amount distributed to such Issuing Bank or Bank, together with interest
thereon, for each day from the date such amount is distributed to such Issuing
Bank or Bank until the date such Issuing Bank or Bank repays such amount to the
Agent, at the Federal Funds Rate.
SECTION 2.13. Funding Losses; Prepayment Premium. (a) If the
Borrower makes any payment of principal with respect to any Euro-Dollar Loans or
any Euro-Dollar Loan is converted (pursuant to Article II, VI or VIII or
otherwise) on any day other than the last day of an Interest Period applicable
thereto, or the last day of an applicable period fixed pursuant to Section
2.07(c), or if the Borrower fails
45
to borrow, prepay, convert or continue any Euro-Dollar Loans after notice has
been given to any Bank in accordance with Section 2.03, 2.06 or 2.11, the
Borrower shall reimburse each Bank within 15 days after demand for any resulting
loss or expense incurred by it (or by an existing or prospective Participant in
the related Loan), including (without limitation) any loss incurred in
obtaining, liquidating or employing deposits from third parties, but excluding
loss of margin for the period after any such payment or conversion or failure to
borrow; provided that such Bank shall have delivered to the Borrower a
certificate as to the amount of such loss or expense, which certificate shall be
conclusive in the absence of manifest error.
(b) In the event of any optional prepayment of any Tranche B
Term Loan pursuant to Section 2.11(a) prior to the date that is 18 months after
the Effective Date, then the Borrower shall pay to each Tranche B Bank a
prepayment premium equal to 1% of the principal amount so prepaid. Each such
premium payment shall be paid at the time of the prepayment and shall be in
addition to any amounts payable under subsection (a) of this Section.
SECTION 2.14. Computation of Interest and Fees. Interest based
on the Prime Rate hereunder shall be computed on the basis of a year of 365 days
(or 366 days in a leap year) and paid for the actual number of days elapsed
(including the first day but excluding the last day). All other interest and
fees shall be computed on the basis of a year of 360 days and paid for the
actual number of days elapsed (including the first day but excluding the last
day).
SECTION 2.15. Letters of Credit. (a) The Borrower may request
the issuance of Letters of Credit by any Issuing Bank, in a form reasonably
acceptable to the Agent and such Issuing Bank, appropriately completed, for the
account of the Borrower, at any time and from time to time during the Working
Capital Availability Period; provided that any Letter of Credit shall be issued
only if, and each request by the Borrower for the issuance of any Letter of
Credit shall be deemed a representation and warranty of the Borrower that,
immediately following the issuance of any such Letter of Credit, (i) the Letter
of Credit Exposure shall not exceed the Letter of Credit Sublimit Amount and
(ii) the sum of the Letter of Credit Exposure plus the aggregate principal
amount of all
46
outstanding Working Capital Loans and Swingline Loans plus the aggregate amount
of the outstanding Existing Letters of Credit shall not exceed the aggregate
amount of the Working Capital Commitments.
(b) Each Letter of Credit shall provide for
payment of all drawings thereunder in U.S. dollars.
(c) Each issuance of any Letter of Credit shall be made on
such prior notice from the Borrower to the applicable Issuing Bank as shall be
acceptable to such Issuing Bank specifying the date of issuance, the date on
which such Letter of Credit is to expire (which shall not be later than the
earlier of (i) the date that is five Domestic Business Days prior to the Working
Capital Maturity Date, and (ii) subject to renewal, the date one year after the
date of such Letter of Credit), the amount of such Letter of Credit, the name
and address of the beneficiary of such Letter of Credit, the purpose of such
Letter of Credit, and such other information as may be necessary or desirable to
complete such Letter of Credit. Each Issuing Bank will give the Agent prompt
notice of the issuance and amount of each Letter of Credit issued by it, any
amendment, extension or renewal of such Letter of Credit and the expiration of
such Letter of Credit. Each Issuing Bank will give the Agent and the Borrower
(i) daily notice of the aggregate amount available to be drawn under all
outstanding Letters of Credit issued by it and (ii) a quarterly summary
indicating, on a daily basis during such quarter, the issuance of any Letter of
Credit issued by it and the amount thereof, the expiration of any such Letter of
Credit and any payment on drafts presented under such Letters of Credit. Upon
written request by any Bank, the Issuing Bank will give to such Bank any such
information referred to in the immediately precedent sentence that has been
requested by such Bank.
(d) Each Issuing Bank that issues a Letter of Credit, by the
issuance of such Letter of Credit and without any further action on the part of
such Issuing Bank or the Banks in respect thereof, hereby grants to each Working
Capital Bank, and each Working Capital Bank hereby acquires from such Issuing
Bank, a participation in such Letter of Credit equal to such Bank's Applicable
Percentage of the aggregate amount available to be drawn under such Letter of
Credit, effective upon the issuance of such Letter of Credit. In consideration
and in furtherance of the foregoing, each Working Capital Bank hereby absolutely
and
47
unconditionally agrees to pay to the Agent, on behalf of such Issuing Bank, in
accordance with Section 2.03(c) such Bank's Applicable Percentage of each Letter
of Credit Disbursement made by such Issuing Bank and not reimbursed by the
Borrower when due in accordance with subsection (g) of this Section; provided
that the Working Capital Banks shall not be obligated to make any such payment
with respect to any wrongful Letter of Credit Disbursement made as a result of
the gross negligence or wilful misconduct of such Issuing Bank.
(e) Each Working Capital Bank acknowledges and agrees that its
obligation to acquire participations pursuant to subsection (d) above in respect
of Letters of Credit is absolute and unconditional and shall not be affected by
any circumstance whatsoever, including the occurrence and continuance of a
Default, and that each such payment shall be made without any offset, abatement,
withholding or reduction whatsoever (subject only to the proviso in subsection
(d) above).
(f) During the Working Capital Availability Period (and
thereafter if and so long as there is any Letter of Credit Exposure), the
Borrower shall pay (i) to the Agent for the account of the Working Capital Banks
ratably in accordance with their Letter of Credit Exposure a fee at the per
annum Euro-Dollar Margin for such day on the aggregate undrawn amount at the end
of such day of all outstanding Letters of Credit and (ii) to each Issuing Bank
for its own account, a fee at the rate of 0.125% per annum on the amount
available to be drawn on each outstanding Letter of Credit issued by such
Issuing Bank. Accrued fees under this subsection shall be calculated by the
Agent (in the case of fees payable pursuant to clause (i) above) or the
applicable Issuing Bank (in the case of fees payable to it pursuant to clause
(ii) above) and shall be payable quarterly on each Quarterly Date (commencing on
March 31, 1997) and on the Termination Date (and on demand after the Termination
Date). The Agent (in the case of fees payable pursuant to clause (i) above) or
the applicable Issuing Bank (in the case of fees payable to it pursuant to
clause (ii) above) will notify the Borrower of the amount of accrued fees
payable hereunder on each payment date. In addition to the foregoing, the
Borrower shall pay directly to each Issuing Bank, for its account, such Issuing
Bank's customary processing and documentation fees in connection with the
issuance or amendment of or payment on any Letter of Credit,
48
payable within 15 days after demand therefor by such Issuing Bank.
(g) If an Issuing Bank shall pay any draft presented under a
Letter of Credit, the Borrower shall pay directly to such Issuing Bank an amount
equal to the amount of such draft before 1:00 P.M. (New York City time), on the
day on which such Issuing Bank shall have notified the Borrower (as provided in
subsection (j) below) that payment of such draft will be made; provided that, if
the Borrower shall not have received notice of such draft before 11:00 A.M. (New
York City time) on the date that payment of such draft is made, then such
payment may be made by the Borrower to such Issuing Bank on the Domestic
Business Day immediately following the date of receipt by the Borrower of notice
of such draft, together with interest (at a rate per annum equal to the interest
rate then applicable to Base Rate Working Capital Loans) on the amount of such
draft from and including the date such draft was paid by such Issuing Bank to
but excluding such next Domestic Business Day. If the Borrower shall fail to pay
any amount required to be paid by it under this subsection when due, such unpaid
amount shall bear interest, for each day from and including the due date to but
excluding the date of payment, at a rate per annum equal to the interest rate
then applicable to overdue Base Rate Working Capital Loans.
(h) The Borrower's obligation to reimburse Letter of Credit
Disbursements as provided in subsection (g) above shall be absolute,
unconditional and irrevocable and shall be performed strictly in accordance with
the terms of this Agreement under any and all circumstances whatsoever, and
irrespective of:
(i) any lack of validity or enforceability of any Letter of
Credit or any Loan Document;
(ii) the existence of any claim, setoff, defense or other right
which the Borrower, any Subsidiary or any other Person may at any time
have against the beneficiary under any Letter of Credit, any Issuing
Bank, the Agent or any Bank or any other Person in connection with this
Agreement, any other Loan Document or any other related or unrelated
agreement or transaction;
49
(iii) any draft or other document presented under a Letter of
Credit proving to be forged, fraudulent, invalid or insufficient in any
respect or any statement therein being untrue or inaccurate in any
respect;
(iv) payment by any Issuing Bank under a Letter of Credit
against presentation of a draft or other document which does not comply
with the terms of such Letter of Credit, subject to subsection (i)
below; and
(v) any other act or omission or delay of any kind or any
other circumstance or event whatsoever, whether or not similar to any
of the foregoing and whether or not foreseeable, that might, but for
the provisions of this subsection (h), constitute a legal or equitable
discharge of the Borrower's obligations hereunder.
(i) None of the Banks (including any Issuing Bank) nor the
Agent nor any of their officers or directors or employees or agents shall be
liable or responsible by reason of or in connection with (and the Borrower shall
indemnify and hold harmless each of the Banks, the Issuing Banks, the Agent and
their officers, directors, employees and agents from and against any and all
liabilities, losses, damages, costs and expenses, including, without limitation,
reasonable fees and disbursements of counsel, arising by reason of or in
connection with) the execution and delivery or transfer of or payment or failure
to pay under any Letter of Credit, including without limitation any of the
circumstances enumerated in subsection (h) above, as well as (i) any error,
omission, interruption or delay in transmission or delivery of any messages, by
mail, cable, telegraph, telex or otherwise, (ii) any error in interpretation of
technical terms, (iii) any loss or delay in the transmission of any document
required in order to make a drawing under a Letter of Credit, or (iv) any
consequences arising from causes beyond the control of any Issuing Bank,
including without limitation any government acts, or any other circumstances
whatsoever in making or failing to make payment under any Letter of Credit;
provided that the Borrower shall not be required to indemnify any Issuing Bank
for any claims, damages, losses, liabilities, costs or expenses, and the
Borrower shall have a claim for direct (but not consequential) damage suffered
by it, to the extent found by a court of competent jurisdiction to have been
caused by (x) the wilful misconduct or gross negligence of an Issuing Bank in
determining whether a request
50
presented under any Letter of Credit issued by it complied with the terms of
such Letter of Credit or (y) an Issuing Bank's failure to pay under any Letter
of Credit issued by it after the presentation to it of a request strictly
complying with the terms and conditions of such Letter of Credit. Nothing in
this subsection (i) is intended to limit the obligations of the Borrower under
any other provision of this Agreement. To the extent the Borrower does not
indemnify an Issuing Bank as required by this subsection, the Banks agree to do
so ratably in accordance with their Working Capital Commitments. It is expressly
understood and agreed that, for purposes of determining whether a wrongful
payment under a Letter of Credit resulted from an Issuing Bank's gross
negligence or wilful misconduct, such Issuing Bank may accept documents that
appear on their face to be in order, without responsibility for further
investigation, regardless of any notice or information to the contrary and, in
making any payment under any Letter of Credit (A) an Issuing Bank's exclusive
reliance on the documents presented to it under such Letter of Credit as to any
and all matters set forth therein, including reliance on the amount of any draft
presented under such Letter of Credit, whether or not the amount due to the
beneficiary thereunder equals the amount of such draft and whether or not any
document presented pursuant to such Letter of Credit proves to be insufficient
in any material respect, if such document on its face appears to be in order,
and whether or not any other statement or any other document presented pursuant
to such Letter of Credit proves to be forged or invalid or any statement therein
proves to be inaccurate or untrue in any respect whatsoever and (B) any
noncompliance in any immaterial respect of the documents presented under such
Letter of Credit with the terms thereof shall, in each case, be deemed not to
constitute wilful misconduct or gross negligence of such Issuing Bank.
(j) Each Issuing Bank shall, promptly following its receipt
thereof, examine all documents purporting to represent a demand for payment
under a Letter of Credit issued by it. Such Issuing Bank shall as promptly as
possible give telephonic notification, confirmed by telex or telecopy, to the
Agent and the Borrower of such demand for payment and whether such Issuing Bank
has made or will make a Letter of Credit Disbursement thereunder, provided that
the failure to give such notice shall not relieve the Borrower of its obligation
to reimburse any such Letter of Credit Disbursement in accordance with this
Section. The
51
Agent shall promptly give each Bank that holds a participation in such Letter of
Credit notice thereof.
(k) If at any time, (i) the Letter of Credit Exposure exceeds
the Letter of Credit Sublimit Amount or (ii) the sum of the Letter of Credit
Exposure plus the aggregate principal amount of all outstanding Working Capital
Loans and Swingline Loans plus the aggregate amount of the outstanding Existing
Letters of Credit exceeds the aggregate Working Capital Commitments, then the
Borrower shall provide cash collateral in respect of the Letter of Credit
Exposure as provided below in an amount equal to such excess; provided that,
solely for purposes of determining whether the Borrower is in compliance with
the foregoing requirements of this subsection (k), each of the Letter of Credit
Sublimit Amount and the aggregate Working Capital Commitments shall be deemed to
be increased by the amount of any cash collateral then held by the Agent
pursuant to this subsection (k). In the event that the Borrower is required
pursuant to the terms of this Agreement to provide cash collateral in respect of
the Letter of Credit Exposure, the Borrower shall deposit in an account with the
Agent, for the benefit of the Banks (including the Issuing Banks), an amount in
cash equal to (x) in the case of a deposit required pursuant to the first
sentence of this subsection (k), the amount specified therein, or (y) in the
case of a deposit required as a result of an Event of Default, the entire Letter
of Credit Exposure. Such deposit shall be held by the Agent as collateral for
the payment and performance of the Obligations. The Agent shall have exclusive
dominion and control, including the exclusive right of withdrawal, over such
account. Other than any interest earned on the investment of such deposits in
Temporary Cash Investments, which investments shall be made at the direction of
the Borrower if at the time no Event of Default shall have occurred and be
continuing (in which case such investments shall be made at the option and sole
but reasonable discretion of the Agent), such deposits shall not bear interest.
Interest or profits, if any, on such investments shall accumulate in such
account. Moneys in such account shall automatically be applied by the Agent to
reimburse the Issuing Banks for Letter of Credit Disbursements and, if the
maturity of the Loans has been accelerated, to satisfy the Obligations. If the
Borrower is required to provide an amount of cash collateral hereunder pursuant
to the first sentence of this subsection (k), the Agent shall return such amount
(to the extent not applied as
52
aforesaid) to the Borrower, from time to time, to the extent that doing so would
not give rise to an obligation on the part of the Borrower to provide additional
cash collateral pursuant to such sentence. If the Borrower is required to
provide an amount of cash collateral hereunder as a result of an Event of
Default, such amount (to the extent not applied as aforesaid) shall be returned
to the Borrower within three Domestic Business days after all Events of Default
have been cured or waived, and if prior to such return the amount of the Letter
of Credit Exposure is reduced, any excess of the amount deposited (to the extent
not applied as aforesaid and disregarding interest or profits on investments)
over the reduced amount of the Letter of Credit Exposure shall be returned to
the Borrower promptly after such reduction gives rise to such excess.
Notwithstanding the foregoing, if any Obligation is due and payable but remains
unpaid at the time that the Agent would otherwise be required to return any
amount of cash collateral to the Borrower hereunder, the Agent may retain such
cash collateral and apply the amounts retained to the payment of such unpaid
Obligation.
(l) The Borrower, the Agent and any Bank that is willing to be
an Issuing Bank hereunder may agree that such Bank shall be an Issuing Bank by
the execution and delivery of an agreement substantially in the form of Exhibit
I (an "Issuing Bank Agreement"). The Agent shall notify the Banks of the
identity of any Issuing Bank appointed pursuant to this subsection (l). The
Borrower also may terminate the status of any Issuing Bank as an Issuing Bank
hereunder at any time by at least three Domestic Business Days' prior notice to
such Issuing Bank and the Agent, and the Agent shall thereupon notify the Banks
of such termination; provided that such termination shall operate only to
relieve such Issuing Bank of its obligation to issue Letters of Credit hereunder
and shall not affect such Issuing Bank's status as an Issuing Bank or its rights
and obligations hereunder with respect to any Letters of Credit previously
issued by it.
ARTICLE III
Conditions
SECTION 3.01. Effectiveness. The obligations of the Banks to
make Loans and of the Issuing Banks to issue
53
Letters of Credit under this Agreement shall become effective on the date that
each of the following conditions shall have been satisfied (or waived in
accordance with Section 9.05):
(a) receipt by the Agent (with one copy for each Bank) of
counterparts hereof signed by each of the parties hereto (or, in the
case of any party as to which an executed counterpart shall not have
been received, receipt by the Agent in form satisfactory to it of
telecopy or other written confirmation from such party of execution of
a counterpart hereof by such party);
(b) receipt by the Agent for the account of each Bank of duly
executed Notes dated on or before the Effective Date complying with the
provisions of Section 2.05;
(c) receipt by the Agent (with one copy for each
Bank) of counterparts of the Guarantee Agreement, duly
executed by the Initial Guarantors;
(d) receipt by the Agent (with one copy for each Bank) of
counterparts of the Indemnity, Subrogation and Contribution Agreement,
duly executed by the Initial Guarantors;
(e) receipt by the Security Agent of (i) counterparts of the
Pledge Agreement (with one copy for each Bank), duly executed by the
parties thereto and (ii) certificates representing all outstanding
shares of capital stock (or other equity interest) of each Subsidiary
of the Borrower to be pledged under the Pledge Agreement (it being
understood that (x) the Pledge Agreement does not require the pledge of
any shares of capital stock (or other equity interest) owned by an
Excluded Subsidiary, a Foreign Subsidiary, a Qualified Joint Venture or
a Joint Venture Holding Company, or any shares of capital stock (or
other equity interest) issued by a Foreign Subsidiary or Excluded
Subsidiary and (y) prior to January 1, 1997, the Pledge Agreement does
not require the pledge of any shares of capital stock (or other equity
interest) issued by a Qualified Joint Venture not owned by a Joint
Venture Holding Company), accompanied by stock powers endorsed in
blank;
54
(f) receipt by the Security Agent (with one copy for each
Bank) of counterparts of the Security Agreement, duly executed by the
parties thereto, and a duly completed and executed Perfection
Certificate (as defined in the Security Agreement);
(g) receipt by the Security Agent of copies of each document
(including each Uniform Commercial Code financing statement) required
by law or reasonably requested by the Security Agent to be filed,
registered or recorded in order to create in favor of the Security
Agent for the benefit of the Banks a valid, legal and perfected
security interest in or lien on the collateral that is the subject of
the Security Agreement;
(h) receipt by the Security Agent of the results of a search
of the Uniform Commercial Code financing statements filed with respect
to the Borrower and its Subsidiaries in the States in which are located
the chief executive offices of such Persons and the other jurisdictions
in which Uniform Commercial Code financing statements are to be filed,
together with copies of all financing statements disclosed by such
search, and accompanied by evidence reasonably satisfactory to the
Required Banks that each Lien indicated in any such financing statement
is permitted hereunder or that the Lien indicated thereby has been
released;
(i) receipt by the Agent of a certificate signed on behalf of
the Borrower by the chief financial officer, treasurer or controller of
the Borrower, dated the Effective Date, to the effect that (i) no
Default has occurred and is continuing as of the Effective Date, (ii)
the representations and warranties set forth in Article IV hereof and
in the Guarantee Agreement, the Pledge Agreement and the Security
Agreement are true in all material respects on, and as of, the
Effective Date and (iii) all the Preliminary Spin-Off Transactions have
been consummated in all material respects in accordance with applicable
law and the Spin-Off Information and are not subject to any action by
any governmental body, agency or official;
(j) to the extent not received prior to the date of execution
and delivery of this Agreement, receipt by the Agent and its counsel of
true and complete copies
55
of the Transaction Documents (excluding those described in Schedule
1.01(b)) and reasonable satisfaction of the Agent and its counsel with
the form, terms and provisions of the Transaction Documents, including,
without limitation, the indemnities of Corning for the benefit of the
Borrower with respect to certain contingent liabilities;
(k) receipt by the Banks of satisfactory evidence that the
Borrower shall have obtained all consents and approvals of, and shall
have made all filings and registrations with, any governmental
authority required in order to consummate the Transactions (other than
(i) filing of Uniform Commercial Code financing statements in order to
perfect Liens granted under the Security Agreement and (ii) notice
filings in connection with (x) changing the name of the Borrower and
certain Subsidiaries and (y) substituting the ultimate parent entity
with respect to substantially all licenses and accreditation, in each
case in connection with the Spin-Off Transactions), in each case
without the imposition of any condition which, in the reasonable
judgment of the Required Banks, could have a Material Adverse Effect;
(l) receipt by the Agent of all fees and other compensation
payable to the Agent, the Arranging Agents and the Banks on or prior to
the Effective Date pursuant to their agreements with the Borrower,
including reimbursement of all out-of-pocket expenses of the Agent and
the Arranging Agents payable by the Borrower in accordance with this
Agreement for which invoices have been presented to the Borrower at
least one Domestic Business Day prior to the Effective Date;
(m) receipt by the Agent of (i) an opinion of Xxxxxxx X.
Xxxxxx, general counsel of the Borrower, substantially in the form of
Exhibit G-1 hereto, and (ii) an opinion of Shearman & Sterling, counsel
for the Borrower, substantially in the form of Exhibit G-2 hereto, and
in each case covering such additional matters relating to the
Transactions as the Required Banks may reasonably request;
(n) receipt by the Agent of an opinion of Cravath, Swaine &
Xxxxx, special counsel for the Agent, substantially in the form of
Exhibit H hereto and
56
covering such additional matters relating to the transactions
contemplated hereby as the Required Banks may reasonably request;
(o) the Borrower shall have made arrangements satisfactory to
the Agent to repay, on the Effective Date, Debt of the Borrower and its
Subsidiaries owing to the Corning Companies with the proceeds of the
Term Loans, together with the proceeds of certain loan repayments and
dividends received from CPS as contemplated by the Spin-Off
Information, and the Agent shall have received counterparts of the
Corning Subordination Agreement duly executed by the parties thereto
with respect to the remaining Permitted Subordinated Debt and any
Excess Corning Debt;
(p) receipt by the Agent and each Bank of copies of a solvency
opinion from Xxxxxx, Xxxxxx & Co., Inc. in form and substance
satisfactory to the Agent and the Banks, with respect to the solvency
of the Borrower as of the Effective Date and giving effect to the
Spin-Off Transactions;
(q) the Banks shall be reasonably satisfied that there are no
environmental and employee health and safety exposures to which the
Borrower or the Subsidiaries may be subject (other than any such
exposures that individually or in the aggregate would not reasonably be
expected to have a Material Adverse Effect) and shall be reasonably
satisfied with the plans of the Borrower with respect thereto;
(r) the Banks shall be reasonably satisfied with the
Borrower's arrangements for insurance required by Section 5.03(b) and
the Security Documents, including premiums payable with respect
thereto;
(s) the Banks shall be reasonably satisfied with their review
of (i) the tax aspects of the Spin-Off Transactions and the Transaction
Documents and (ii) the capital and ownership structure of the Borrower
and its Subsidiaries after the Spin-Off; and
(t) receipt by the Agent of all documents and certificates it
may reasonably request relating to the existence of the Borrower and
the Initial Guarantors (including certificates of incorporation and
bylaws),
57
the corporate authority for and the validity of this Agreement and the
other Loan Documents, the accuracy of the representations and
warranties contained in this Agreement and the other Loan Documents on
the Effective Date, the Transactions and any other matters relevant
hereto or thereto, all in form and substance satisfactory to the
Agent;
provided that the obligations of the Banks to make Loans and of the
Issuing Banks to issue Letters of Credit under this Agreement shall
not become effective unless all of the foregoing conditions are
satisfied not later than January 31, 1997. The Agent shall promptly
notify the Borrower and the Banks of the Effective Date, and such
notice shall be conclusive and binding on all parties hereto.
SECTION 3.02. Each Credit Event. The obligation of any Bank
(including the Swingline Bank) to make a Loan on the occasion of any Borrowing
and of any Issuing Bank to issue any Letter of Credit is subject to the
satisfaction of the following conditions:
(a) receipt by the Agent of a Notice of Borrowing as required
by Section 2.02, receipt by the Swingline Bank of a notice requesting a
Swingline Loan as required by Section 2.04 or receipt by the applicable
Issuing Bank of a notice requesting issuance of a Letter of Credit as
required by Section 2.15(c), as applicable;
(b) the fact that, immediately after such Borrowing or the
issuance of such Letter of Credit, (i) the sum of the aggregate
principal amount of all outstanding Working Capital Loans and Swingline
Loans plus the Letter of Credit Exposure and the aggregate amount of
the outstanding Existing Letters of Credit shall not exceed the
aggregate Working Capital Commitments and (ii) the Letter of Credit
Exposure shall not exceed the Letter of Credit Sublimit Amount;
(c) the fact that, immediately before and after such Borrowing
or the issuance of such Letter of Credit, no Default shall have
occurred and be continuing; and
(d) the fact that the representations and warranties of the
Borrower contained in this Agreement
58
and of the Borrower and its Subsidiaries contained in the other Loan
Documents shall be true on and as of the date of such Borrowing or
issuance of such Letter of Credit.
Each Borrowing hereunder and the issuance of each Letter of Credit
hereunder shall be deemed to be a representation and warranty by the
Borrower on the date of such Borrowing or issuance as to the facts
specified in clauses (b), (c) and (d) of this Section.
ARTICLE IV
Representations and Warranties
The Borrower represents and warrants that:
SECTION 4.01. Corporate Existence and Power. The Borrower is a
corporation duly incorporated, validly existing and in good standing under the
laws of the State of Delaware, and has all corporate powers and all material
governmental licenses (including any material licenses required by HCFA,
Medicare, Medicaid or other third party payors), franchises, authorizations,
consents and approvals required to carry on its business as now conducted and is
qualified to do business in, and is in good standing in, every jurisdiction
where such qualification is required, except where the failure to do so,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect.
SECTION 4.02. Corporate and Governmental Authorization; No
Contravention. The execution, delivery and performance by each of the Borrower
and the Subsidiaries of each Loan Document to which it is or is to be a party
and the Financing Transactions provided for thereunder and, to the extent
involving the Borrower or any Subsidiary, the Spin-Off Transactions, are within
its corporate powers, have been duly authorized by all necessary corporate
action, require no action or consent by or in respect of, or filing with, any
governmental body, agency or official (other than (i) the filing of Uniform
Commercial Code financing statements in order to perfect Liens granted under the
Security Agreement, (ii) notice filings in connection with (x) changing the name
of the Borrower and certain Subsidiaries and (y) substituting the ultimate
parent entity
59
with respect to substantially all licenses and accreditations, in each case in
connection with the Spin-Off Transactions, (iii) the registration of the Senior
Subordinated Notes under the Securities Act of 1933 and the qualification of the
related indenture under the Trust Indenture Act of 1939, (iv) the filing of an
amendment to the certificate of incorporation of the Company in substantially
the form furnished to the Banks and (v) any other actions and filings that have
been obtained and are in full force and effect) and do not contravene, or
constitute a default under, any provision of applicable law or regulation or of
the certificate of incorporation or by-laws of the Borrower or any Subsidiary or
of any judgment, injunction, order or decree, or any other material agreement or
instrument, in each case binding upon the Borrower or any of its Subsidiaries,
or result in the creation or imposition of any Lien (other than Liens created
under the Security Documents) on any asset of the Borrower or any of its
Subsidiaries.
SECTION 4.03. Binding Effect. This Agreement has been duly
executed and delivered and constitutes a valid and binding agreement of the
Borrower, and the other Loan Documents to which the Borrower or any of the
Subsidiaries is or is to be a party, when executed and delivered in accordance
with this Agreement, will constitute valid and binding agreements and
obligations of each of the Borrower and the Subsidiaries that is a party
thereto, in each case enforceable in accordance with its terms.
SECTION 4.04. Financial Information. (a) The combined balance
sheets of the Borrower as of December 31, 1995 and the related combined
statements of operations, stockholder's equity and cash flows for the fiscal
year then ended, reported on by Price Waterhouse LLP and set forth in the
Spin-Off Information, a copy of which has been delivered to each of the Banks,
fairly present, in conformity with generally accepted accounting principles, the
financial position of the Borrower as of such date and its results of operations
and cash flows for such fiscal year.
(b) The unaudited combined balance sheet of the Borrower as of
September 30, 1996, and the related combined statements of operations and cash
flows for the fiscal period then ended, set forth in the Spin-Off Information, a
copy of which has been delivered to each of the Banks, fairly present, in
conformity with generally accepted
60
accounting principles applied on a basis consistent with the financial
statements referred to in subsection (a) of this Section, the financial position
of the Borrower as of such date and its results of operations and cash flows for
such fiscal period (subject to normal year-end adjustments).
(c) The unaudited pro-forma combined balance sheet of the
Borrower dated as of September 30, 1996, and the related unaudited pro forma
combined statements of income for the fiscal year ended December 31, 1995, and
the fiscal quarter ended September 30, 1996, set forth in the Spin-Off
Information, have been derived from the historical financial statements as of
such date and for such periods referred to in subsections (a) and (b) of this
Section adjusted to give effect to the Transactions on the basis described
therein. Such pro-forma combined financial statements present fairly, on a
pro-forma basis, the consolidated financial position of the Borrower as of the
date thereof and its consolidated income for such periods, assuming that the
adjustments specified therein had occurred as described therein, subject, in the
case of such pro forma financial statements as of and for the period ended
September 30, 1996, to normal year-end adjustments.
(d) Since December 31, 1995, there has been no material
adverse change in the business, assets, liabilities, operations or condition
(financial or otherwise) of the Borrower and its Consolidated Subsidiaries,
considered as a whole; provided that it is understood that the special charges
taken and reserves established as described in footnotes numbered 2, 3 and 6 to
the unaudited combined financial statements of the Borrower for the nine-month
period ended September 30, 1996, as set forth in the Spin-Off Information, shall
not, in and of themselves, be deemed to constitute such a material adverse
change.
SECTION 4.05. Litigation. There is no action, suit or
proceeding pending against, or to the knowledge of the Borrower threatened
against or affecting, the Borrower or any of its Subsidiaries before any court
or arbitrator or any governmental body, agency or official in which there is a
reasonable possibility of an adverse decision which would reasonably be expected
to have a Material Adverse Effect or which in any manner draws into question the
validity or enforceability of this Agreement, any other Loan Document,
61
the Spin-Off Distribution, the Spin-Off Transactions or the Transactions.
SECTION 4.06. Compliance with ERISA. Except to the extent that
all such failures to fulfill any such obligations or comply with any such
provisions would not reasonably be expected to have a Material Adverse Effect,
each member of the ERISA Group has fulfilled its obligations under the minimum
funding standards of ERISA and the Internal Revenue Code with respect to each
Plan and is in compliance in all material respects with the presently applicable
provisions of ERISA and the Internal Revenue Code with respect to each Plan.
Except to the extent that all such waivers, failures and liabilities would not
reasonably be expected to have a Material Adverse Effect, no member of the ERISA
Group has (i) sought a waiver of the minimum funding standard under Section 412
of the Internal Revenue Code in respect of any Plan, (ii) failed to make any
contribution or payment to any Plan or Multiemployer Plan or in respect of any
Benefit Arrangement, or made any amendment to any Plan or Benefit Arrangement,
which failure or amendment has resulted or could result in the imposition of a
Lien or the posting of a bond or other security under ERISA or the Internal
Revenue Code or (iii) incurred any liability under Title IV of ERISA other than
a liability to the PBGC for premiums under Section 4007 of ERISA.
SECTION 4.07. Environmental Matters. Except with respect to
matters that, individually or in the aggregate, would not reasonably be likely
to result in a Material Adverse Effect, neither the Borrower nor any of its
Subsidiaries (i) has failed to comply with any Environmental Law or to obtain,
maintain or comply with any permit, license or other approval required under any
Environmental Law, (ii) has become subject to any Environmental Liability, (iii)
has received notice of any claim with respect to any Environmental Liability or
(iv) knows of any basis for any Environmental Liability.
SECTION 4.08. Taxes. The Borrower and each Subsidiary has
filed, or caused to be filed, all tax returns (Federal, state, local and
foreign) required to be filed and paid (a) all amounts of taxes shown thereon to
be due (including interest and penalties) and (b) all other taxes, fees,
assessments and other governmental charges (including mortgage recording taxes,
documentary stamp taxes and intangible taxes) owed by it, except for such taxes
62
(i) which are not delinquent or (ii) that are being contested in good faith and
by proper proceedings, and against which adequate reserves are being maintained
in accordance with generally accepted accounting principles. Neither the
Borrower nor any of its Subsidiaries is aware of any proposed tax assessments
issued against it by a taxing authority to either the Borrower or any of its
Subsidiaries which would be reasonably likely to have a Material Adverse Effect.
SECTION 4.09. Subsidiaries. (a) Each of the Borrower's
corporate Subsidiaries is a corporation duly incorporated, validly existing and
in good standing under the laws of its jurisdiction of incorporation, and has
all corporate powers and all material governmental licenses, authorizations,
consents and approvals required to carry on its business as now conducted.
(b) Schedule 4.09(b) lists as of the Effective Date, each
Subsidiary indicating the Initial Guarantors, Foreign Subsidiaries, Qualified
Joint Ventures, Joint Venture Holding Companies and Excluded Subsidiaries.
SECTION 4.10. Regulatory Restrictions on Borrowing. The
Borrower is not an "investment company" within the meaning of the Investment
Company Act of 1940, as amended, a "holding company" within the meaning of the
Public Utility Holding Company Act of 1935, as amended, or otherwise subject to
any regulatory scheme which restricts its ability to incur debt.
SECTION 4.11. Full Disclosure. All written information
heretofore furnished by the Borrower to the Agent or any Bank for purposes of or
in connection with this Agreement, any other Loan Document, any Transaction
Document or any Transaction is, and all such information hereafter furnished by
the Borrower to the Agent or any Bank will be, true and accurate in all material
respects on the date as of which such information is stated or certified and
none of the information contains any material misstatement of fact or, taken as
a whole, omits to state any material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading. The Borrower has disclosed to the Banks in the Spin-Off Information
any and all facts which materially and adversely affect or may affect (to the
extent the Borrower can now reasonably foresee) the business, operations or
63
financial condition of the Borrower and its Consolidated Subsidiaries, taken as
a whole, or the ability of the Borrower to perform its obligations under this
Agreement and the other Loan Documents.
SECTION 4.12. Compliance with Laws and Agreements. Neither the
Borrower nor any Subsidiary is in violation of any law, rule or regulation, or
in default with respect to any judgment, writ, injunction or decree applicable
to it of any governmental body, agency or official, where such violation or
default (individually or in the aggregate) could reasonably be expected to
result in a Material Adverse Effect. Neither the Borrower nor any Subsidiary is
in default in any manner under any provision of any indenture or other agreement
or instrument evidencing Debt, or any other agreement or instrument to which it
is a party or by which it or any of its properties or assets are or may be
bound, where such default (individually or in the aggregate) could reasonably be
expected to result in a Material Adverse Effect.
SECTION 4.13. Governmental Approvals. As of the Effective
Date, all material consents and approvals of, and material filings and
registrations with, and all other material actions in respect of, all
governmental bodies, agencies or officials or any other Person required in order
to consummate the Transactions shall have been obtained, given, filed or taken
and shall be in full force and effect, other than the filings and notices
referred to in clauses (i), (ii), (iii) and (iv) of Section 4.02.
SECTION 4.14. Solvency. (a) On the Effective Date and
immediately after the consummation of the Spin-Off Distributions, (i) the fair
value of the assets of the Borrower, at a fair valuation, will exceed its debts
and liabilities, subordinated, contingent or otherwise; (ii) the present fair
saleable value of the property of the Borrower will be greater than the amount
that will be required to pay the probable liability of its debts and other
liabilities, subordinated, contingent or otherwise, as such debts and other
liabilities become absolute and matured; (iii) the Borrower does not intend to
incur and does not believe it will incur debts and liabilities, subordinated,
contingent or otherwise, beyond its ability to pay such debts and liabilities as
they become absolute and matured; and (iv) the Borrower will not have
unreasonably small capital with which to conduct the business in which it is
engaged as such
64
business is now conducted and is proposed to be conducted following the
Effective Date and the consummation of the Spin-Off Distributions.
SECTION 4.15. Federal Reserve Regulations. (a) The Borrower is
not engaged principally, or as one of its important activities, in the business
of extending credit for the purpose of purchasing or carrying Margin Stock.
(b) No part of the proceeds of the Loans has been or will be
used, whether directly or indirectly, and whether immediately, incidentally or
ultimately, for any purpose which entails a violation of the provisions of the
Regulations of the Board, including, without limitation, Regulation G, U or X
thereof. Not more than 25% of the assets subject to the restrictions of Section
5.10 will at any time consist of Margin Stock.
ARTICLE V
Covenants
The Borrower agrees that, so long as any Bank has any
Commitment or any Loan or Letter of Credit Disbursement or accrued interest
thereon remains unpaid or any Letter of Credit remains outstanding:
SECTION 5.01. Information. The Borrower will deliver to each
of the Banks:
(a) as soon as available and in any event within 90 days after
the end of each fiscal year of the Borrower, a consolidated balance
sheet of the Borrower and its Consolidated Subsidiaries as of the end
of such fiscal year and the related consolidated statements of
operations, stockholders' equity and cash flows for such fiscal year,
setting forth in each case in comparative form the figures for the
previous fiscal year, all reported on in a manner acceptable to the
Securities and Exchange Commission by Price Waterhouse LLP or other
independent public accountants of nationally recognized standing;
(b) as soon as available and in any event within
45 days after the end of each of the first three
65
quarters of each fiscal year of the Borrower, a consolidated balance
sheet of the Borrower and its Consolidated Subsidiaries as of the end
of such quarter and the related consolidated statements of operations,
stockholders' equity and cash flows for such quarter and for the
portion of the Borrower's fiscal year ended at the end of such quarter,
setting forth in each case in comparative form the figures for the
corresponding quarter and the corresponding portion of the Borrower's
previous fiscal year, all certified (subject to normal year-end
adjustments) as to fairness of presentation, generally accepted
accounting principles and consistency by the chief financial officer or
chief accounting officer of the Borrower;
(c) simultaneously with the delivery of each set of financial
statements referred to in clauses (a) and (b) above, a certificate of
the chief financial officer or the chief accounting officer of the
Borrower (i) setting forth in reasonable detail the calculations
required to establish whether the Borrower was in compliance with the
requirements of Sections 5.18, 5.19, 5.20 and 5.21 of this Agreement on
the date of such financial statements, (ii) setting forth in reasonable
detail the calculations required to establish the Borrower's Debt
Coverage Ratio as of the end of the Calculation Period ended on the
date of the most recent balance sheet included in such financial
statements, (iii) stating whether to such officer's actual knowledge
any Default exists hereunder on the date of such certificate and, if
any such Default then exists, setting forth the details thereof and the
action which the Borrower is taking or proposes to take with respect
thereto, (iv) stating whether, since the date of the most recent
financial statements previously delivered pursuant to this Section,
there has been any material change in the generally accepted accounting
principles applied in the preparation of such statements, and, if so,
describing such change and (v) stating whether there is any Subsidiary
that has not taken all actions required to be taken pursuant to Section
5.07;
(d) simultaneously with the delivery of each set of financial
statements referred to in clause (a) above, a statement of the firm of
independent public accountants which reported on such statements
66
indicating whether anything has come to their attention to cause them
to believe that any Default existed on the date of such statements
(which certificate may be limited to the extent required by accounting
rules or guidelines);
(e) within five days after any officer of the Borrower obtains
actual knowledge of any Default, if such Default is then continuing, a
certificate of the chief financial officer or the chief accounting
officer of the Borrower setting forth the details thereof and the
action which the Borrower is taking or proposes to take with respect
thereto;
(f) promptly upon the mailing thereof to the shareholders of
the Borrower generally after the Spin- Off Distributions, copies of all
financial statements, reports and proxy statements so mailed;
(g) promptly upon the filing thereof, copies of all
registration statements (other than the exhibits thereto and any
registration statements on Form S-8 or its equivalent) and reports on
Forms 10-K, 10-Q and 8-K (or their equivalents), including, without
limitation, any and all amendments thereto and to the Spin-Off
Information, which the Borrower shall have filed with the Securities
and Exchange Commission;
(h) within 10 days after any member of the ERISA Group (i)
gives or is required to give notice to the PBGC of any "reportable
event" (as defined in Section 4043 of ERISA), other than any reportable
event resulting from the Spin-Off Transactions, with respect to any
Plan with an unfunded liability in excess of $5,000,000 which might
constitute grounds for a termination of such Plan under Title IV of
ERISA, or knows that the plan administrator of any such Plan has given
or is required to give notice of any such reportable event, a copy of
the notice of such reportable event given or required to be given to
the PBGC; (ii) receives notice of complete or partial withdrawal
liability under Title IV of ERISA or notice that any Multiemployer Plan
is in reorganization, is insolvent or has been terminated, a copy of
such notice, if such withdrawal, reorganization, insolvency or
termination has resulted or could reasonably be expected to result in a
current payment obligation of
67
any member of the ERISA Group in excess of $5,000,000; (iii) receives
notice from the PBGC under Title IV of ERISA of an intent to terminate,
impose liability (other than for premiums under Section 4007 of ERISA)
in respect of, or appoint a trustee to administer any Plan with an
unfunded liability in excess of $5,000,000, a copy of such notice; (iv)
applies for a waiver of the minimum funding standard under Section 412
of the Internal Revenue Code, a copy of such application; (v) gives
notice of intent to terminate any Plan with an unfunded liability in
excess of $5,000,000 under Section 4041(c) of ERISA, a copy of such
notice and other information filed with the PBGC; (vi) gives notice of
withdrawal from any Plan with an unfunded liability in excess of
$5,000,000 pursuant to Section 4063 of ERISA, a copy of such notice; or
(vii) fails to make any payment or contribution to any Plan or
Multiemployer Plan or makes any amendment to any Plan which failure or
amendment has resulted or could reasonably be expected to result in the
imposition of a Lien or the posting of a bond or other security, a
certificate of the chief financial officer or the chief accounting
officer of the Borrower setting forth details as to such occurrence and
action, if any, which the Borrower or applicable member of the ERISA
Group is required or proposes to take; provided, however, that prior to
the Spin-Off Transactions, the Borrower's covenant under this
subparagraph (h) shall not apply with respect to (i) any notice given
or required to be given by, (ii) any notice received by, (iii) any
waiver application by, or (iv) any failure or amendment by
(collectively, "Section 5.01(h) Notice"), any member of the ERISA Group
other than the Borrower or any Subsidiary, unless the event or
condition that is the subject of the Section 5.01(h) Notice has
resulted or is reasonably expected to result in a liability in excess
of $10,000,000.
(i) not later than 45 days after the end of each fiscal year
of the Borrower, commencing with the fiscal year beginning in January
1997, a copy of the annual business plan and projections of the
Borrower and its Consolidated Subsidiaries (including, without
limitation, operating budget and cash flow budget of the Borrower and
its Consolidated Subsidiaries) for such fiscal year, such plans and
projections to be accompanied by a certificate of the chief financial
68
officer or chief accounting officer of the Borrower stating that such
plans and projections have been prepared using assumptions believed in
good faith by management of the Borrower to be reasonable at the time
made;
(j) promptly after obtaining knowledge thereof, the filing or
commencement of any action, suit or proceeding by or before any
arbitrator or governmental body, agency or official against or
affecting the Borrower or any Affiliate thereof that, if adversely
determined, could reasonably be expected to result in a Material
Adverse Effect;
(k) within 30 days upon receipt, copies of all management
letters issued by the Borrower's independent public accounts,
accompanied by management's response, if any; and
(l) from time to time such additional information regarding
the financial position or business of the Borrower and its Subsidiaries
as the Agent, at the request of any Bank, may reasonably request.
SECTION 5.02. Payment of Obligations. The Borrower will pay
and discharge, and will cause each of its Subsidiaries to pay and discharge, at
or before maturity, all their respective material obligations and liabilities,
(including, without limitation, tax liabilities and claims of materialmen,
warehousemen and the like which if not paid might by law give rise to a Lien),
except where the same may be contested in good faith by appropriate proceedings,
and will maintain, and will cause each Subsidiary to maintain, in accordance
with generally accepted accounting principles, appropriate reserves for the
accrual of any of the same.
SECTION 5.03. Maintenance of Property; Insurance. (a) The
Borrower will keep, and will cause each of its Subsidiaries to keep, all
property useful and necessary in its business in good working order and
condition, ordinary wear and tear excepted.
(b) The Borrower will, and will cause each of its Subsidiaries
to, maintain (either in the name of the Borrower or in such Subsidiary's own
name) with financially sound and responsible insurance companies, insurance on
all their respective properties in at least such amounts,
69
against at least such risks and with such risk retention as are usually
maintained, insured against or retained, as the case may be, in the same general
area by companies of established repute engaged in the same or a similar
business; and will furnish to the Banks, upon request from the Agent,
information presented in reasonable detail as to the insurance so carried. Prior
to the Spin-Off Distributions, the Borrower will be deemed to be in compliance
with the foregoing provisions of this subparagraph (b) of this Section if and to
the extent Corning maintains such insurance coverage under common policies for
the Borrower and its Subsidiaries.
SECTION 5.04. Conduct of Business and Maintenance of
Existence. The Borrower will continue, and will cause each of its Subsidiaries
to continue, to engage in business of the same general type as now conducted by
the Borrower and its Subsidiaries, and will preserve, renew and keep in full
force and effect, and will cause each of its Subsidiaries to preserve, renew and
keep in full force and effect, their respective corporate existence and their
respective rights, privileges and franchises necessary or desirable in the
normal conduct of business; provided that nothing in this Section 5.04 shall
prohibit (i) any merger of any Subsidiary of the Borrower permitted by Section
5.11(a) or (ii) the termination of the corporate existence of any Subsidiary if
the Borrower in good faith determines that such termination is in the best
interest of the Borrower and is not materially disadvantageous to the Banks (it
being understood that the mere existence of Security Documents or a Guarantee
Agreement applicable to such Subsidiary does not preclude the Borrower from
making such determination).
SECTION 5.05. Compliance with Laws. The Borrower will comply,
and cause each of its Subsidiaries to comply, with all applicable laws,
ordinances, rules, regulations and requirements of any governmental authorities
(including, without limitation, Environmental Laws, HCFA regulations, Medicare
and Medicaid reimbursement regulations and ERISA and the rules and regulations
thereunder) except where (i) noncompliance therewith would not have a Material
Adverse Effect or (ii) the necessity of compliance therewith is contested in
good faith by appropriate proceedings.
SECTION 5.06. Inspection of Property, Books and Records. The
Borrower will keep, and will cause each of its
70
Subsidiaries to keep, proper books of record and account in which full, true and
correct entries shall be made of all dealings and transactions in relation to
its business and activities. The Borrower, upon reasonable advance notice from
any Bank, will permit, and will cause each of its Subsidiaries to permit,
representatives of such Bank at such Bank's expense to visit and inspect any of
their respective properties, to examine and make abstracts from any of their
respective books and records and to discuss their respective affairs, finances
and accounts with their respective officers, employees and independent public
accountants, all at such reasonable times and as often as may reasonably be
desired.
SECTION 5.07. Additional Subsidiaries. If at any time after
the Effective Date any Person is or becomes a Subsidiary (or any Subsidiary that
initially is an Excluded Subsidiary ceases to be an Excluded Subsidiary) the
Borrower, within 30 days of such Person becoming a Subsidiary (or ceasing to be
an Excluded Subsidiary), will (a) cause such Subsidiary (unless such Subsidiary
is a Qualified Joint Venture, Joint Venture Holding Company, Foreign Subsidiary
or Excluded Subsidiary) to become a Guarantor pursuant to the Guarantee
Agreement; (b) pledge, or cause to be pledged, all the outstanding shares of
capital stock of and other Investments in such Subsidiary (unless such
Subsidiary is a Foreign Subsidiary or Excluded Subsidiary or, prior to January
1, 1997, a Qualified Joint Venture not owned by a Joint Venture Holding Company)
that are owned directly or indirectly by or on behalf of the Borrower or any
other Subsidiary (unless such Subsidiary is a Qualified Joint Venture, Joint
Venture Holding Company, Foreign Subsidiary or Excluded Subsidiary), to be
pledged pursuant to the Pledge Agreement; (c) cause such Subsidiary (unless such
Subsidiary is a Qualified Joint Venture, Joint Venture Holding Company, Foreign
Subsidiary or Excluded Subsidiary) to become a party to the Pledge Agreement and
the Security Agreement and grant Liens on its assets to the same extent as the
Borrower and its other Subsidiaries thereunder; and (d) take all actions as
shall be necessary, or that the Agent or the Security Agent shall reasonably
request, to perfect such Liens, including, without limitation, the execution and
filing of Uniform Commercial Code financing statements in all relevant
jurisdictions, and deliver evidence thereof to the Security Agent, all at the
Borrower's expense.
71
SECTION 5.08. Amendment of Certain Documents; Post-Closing
Transaction Documents. (a) The Borrower will not permit any amendment or
modification to be made to, or any waiver of its rights or the rights of any
Subsidiary under, any Transaction Document or Subordinated Debt Document (other
than the termination of services by the Borrower under the service agreements
contemplated by the Transaction Agreement). The Borrower will not permit any
amendment or modification to be made to the terms of the Permitted Preferred
Stock.
(b) Neither the Borrower nor any Subsidiary will enter into
any Transaction Document after the Effective Date unless either (i) such
Transaction Document is substantially in the form delivered to the Agent and its
counsel on or prior to the Effective Date, (ii) such Transaction Document is
entered into in order to effectuate a transaction expressly contemplated by
another Transaction Document and, to the extent the terms and conditions of such
Transaction Document are not disclosed in the Spin-Off Information, is on terms
and conditions no less favorable to the Borrower and its Subsidiaries than they
would obtain in a comparable arm's-length transaction or (iii) such Transaction
Document is approved by the Required Banks (which approval shall not be
unreasonably withheld).
SECTION 5.09. Investments. Neither the Borrower nor any of its
Subsidiaries will make, hold or acquire any Investment in any Person other than:
(a) Investments of the Borrower and its Subsidiaries existing
on the date of this Agreement and set forth in Schedule 5.09;
(b) Investments by the Borrower and its Subsidiaries in the
Borrower and its Subsidiaries other than Excluded Subsidiaries,
Foreign Subsidiaries, Joint Venture Holding Companies and Qualified
Joint Ventures;
(c) Temporary Cash Investments;
(d) Investments by the Borrower and its Subsidiaries in
Excluded Subsidiaries, Foreign Subsidiaries, Joint Venture Holding
Companies and Qualified Joint Ventures consisting of (i) Investments
made prior to the date of this Agreement and set forth in Schedule
5.09, (ii) Investments in additional
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Qualified Joint Ventures consisting of the contribution to such
Qualified Joint Ventures of assets (other than cash and cash
equivalents) described in Schedule 1.01(d) and assets (other than cash
and cash equivalents) comprising one additional Quadrant Four Property
and (iii) additional Investments, provided that the sum of all such
additional Investments plus any commitments to make any such
Investments (including the amount of any Indebtedness or other monetary
obligations of any Excluded Subsidiaries, Foreign Subsidiaries, Joint
Venture Holding Companies and Qualified Joint Ventures Guaranteed by
the Borrower or any other Subsidiary) shall not exceed $25,000,000 in
the aggregate at any time;
(e) Investments by a Qualified Joint Venture;
(f) Investments that constitute acquisitions permitted by
subparagraph (c) of Section 5.11;
(g) loans and advances by the Borrower and its Subsidiaries to
their respective employees not exceeding $4,500,000 in the aggregate
at any time outstanding; and
(h) any Investment by the Borrower not otherwise permitted by
the foregoing clauses of this Section if, immediately after such
Investment is made or acquired, the aggregate net book value of all
Investments permitted by this subparagraph (h) does not exceed
$5,000,000.
SECTION 5.10 Negative Pledge. Neither the Borrower nor any of
its Subsidiaries (other than Qualified Joint Ventures) will create, assume or
suffer to exist any Lien on any asset (including any capital stock of any
Subsidiary) now owned or hereafter acquired by it, except Liens created under
the Security Documents and the following:
(a) Liens existing on the date of this Agreement, or that the
Borrower or any of its Subsidiaries has an existing commitment to
create after the date of this Agreement, in each case identified on
Schedule 5.10 securing obligations identified on such Schedule;
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(b) any Lien existing on any asset of any Person that becomes
a Subsidiary after the Effective Date at the time such Person becomes a
Subsidiary and not created in contemplation of such event;
(c) any Lien on any asset securing Debt incurred or assumed
for the purpose of financing all or any part of the cost of acquiring
such asset; provided that (i) such Lien attaches to such asset
concurrently with or within 90 days after the acquisition thereof, (ii)
such Lien does not attach to any other assets and (iii) such Debt is
permitted hereunder;
(d) any Lien on any asset of any Person (other than the
Borrower or a Subsidiary) existing at the time such Person is merged or
consolidated with or into the Borrower or a Subsidiary and not created
in contemplation of such event; provided that such Lien shall not
attach to any other assets;
(e) any Lien existing on any asset prior to the acquisition
thereof by the Borrower or a Subsidiary and not created in
contemplation of such acquisition; provided that such Lien shall not
attach to any other assets;
(f) any Lien arising out of the refinancing, extension,
renewal or refunding of any Debt secured by any Lien permitted by any
of the foregoing clauses of this Section; provided that such Debt is
permitted hereunder, is not increased and is not secured by any
additional assets;
(g) Liens for taxes not delinquent or being contested in good
faith and by appropriate proceedings;
(h) deposits or pledges to secure obligations under workers'
compensation, social security or similar laws, or under unemployment
insurance;
(i) mechanics', workers', materialmen's, warehousemen's,
lessor's or other like Liens arising in the ordinary course of business
with respect to obligations which are not due or which are being
contested in good faith;
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(j) Liens arising in the ordinary course of its business which
(i) do not secure Debt or Derivatives Obligations, (ii) do not secure
any monetary obligation in an amount exceeding $3,000,000 and (iii) do
not in the aggregate materially detract from the value of its assets
or materially impair the use thereof in the operation of its business;
and
(k) Liens on cash and cash equivalents securing Derivatives
Obligations; provided that the aggregate amount of cash and cash
equivalents subject to such Liens may at no time exceed $5,000,000.
SECTION 5.11. Consolidations, Mergers, Acquisitions and Sales
of Assets. (a) Neither the Borrower nor any of its Subsidiaries will consolidate
or merge with or into any other Person, except that if, after giving effect
thereto, no Default shall have occurred and be continuing, (i) any Subsidiary of
the Borrower may be merged into the Borrower if the Borrower is the surviving
corporation and (ii) any Subsidiary of the Borrower may merge with any other
corporation (other than the Borrower) if the surviving corporation is a
Subsidiary; provided that if any such merger involves a party that was not a
wholly-owned Subsidiary immediately prior to such merger, then such merger must
also comply with subsection (c) of this Section.
(b) Neither the Borrower nor any of its Subsidiaries will sell
or otherwise transfer any asset, except (i) those assets owned on the date of
this Agreement by the Borrower or any of its Subsidiaries identified on Schedule
5.11, (ii) sales and transfers between and among the Borrower and the
Guarantors, (iii) the Spin-Off Transactions identified in Schedule 1.01(b) and
the Spin-Off Distributions may be made in accordance with the Spin-Off
Information, (iv) in the ordinary course of business, (v) transfers made to
acquire Investments permitted by Section 5.09 or transfers made as Restricted
Payments permitted by Section 5.16, (vi) transfer of assets comprising Quadrant
Four Properties and (vii) other transfers (including assets other than Quadrant
Four Properties transferred pursuant to Asset Swaps) provided that the aggregate
fair market value of all assets transferred in reliance upon this clause (vii)
shall not exceed $5,000,000 (or $10,000,000, in the case of transfers of assets
comprising a Quadrant Two Property or Quadrant Three Property as part of an
Asset Swap) per transfer or
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$25,000,000 in the aggregate during the period from the Effective Date through
the Tranche B Maturity Date. Notwithstanding the foregoing, neither the Borrower
nor any of its Subsidiaries will sell or otherwise transfer any assets prior to
the date of the Spin-Off Distributions, except as permitted by clauses (ii),
(iv) or (v) above and except for those assets identified in Part II of Schedule
5.11.
(c) Neither the Borrower nor any of its Subsidiaries will,
directly or indirectly (including, without limitation, by merger or
consolidation), acquire any assets constituting a going concern business, or any
capital stock or other ownership interests in any Person that prior to such
acquisition was not a wholly-owned Subsidiary, except that, if at the time
thereof and after giving effect thereto no Default shall have occurred and be
continuing, the Borrower or any of its Subsidiaries may make any such
acquisition; provided that (i) the business conducted with such acquired assets
or conducted by such acquired Person shall be the same as or substantially
similar to the principal business conducted by the Borrower and its Subsidiaries
on the Effective Date, (ii) the aggregate consideration paid or delivered by the
Borrower and its Subsidiaries (including the fair market value of any non-cash
consideration, including any capital stock of the Borrower issued as part of
such consideration, and any Debt outstanding at the time of any such acquisition
that becomes Debt of the Borrower or a Subsidiary as a result of any such
acquisition) shall not exceed (A) $5,000,000, in the case of any such
acquisition or series of related acquisitions (or $25,000,000, in the case of
any such acquisition or series of acquisition of any Quadrant One Property) or
(B) $50,000,000, on a cumulative basis, for all such acquisitions subsequent to
the Effective Date, (iii) the Borrower would be in compliance with Sections
5.18, 5.19, 5.20 and 5.21 for the most recent Calculation Period and as of the
last day thereof if such acquisition had been consummated at the beginning of
such Calculation Period, (iv) the Borrower shall deliver to the Agent a
certificate of the chief financial officer or the chief accounting officer of
the Borrower setting forth calculations in reasonable detail demonstrating
compliance with the conditions set forth in clauses (ii) and (iii) above and (v)
in the case of any such acquisition of any capital stock of or other ownership
interests in any Person, such acquisition will result in such Person becoming a
wholly-
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owned Subsidiary of the Borrower; provided further, that the limitations set
forth in clause (ii) above shall not apply to any consideration paid or
delivered in connection with an acquisition constituting part of an Asset Swap
to the extent that the aggregate consideration paid or delivered by the Borrower
and its Subsidiaries in connection with such acquisition includes assets
comprising one or more Quadrant Two Properties, Quadrant Three Properties or
Quadrant Four Properties transferred as part of such Asset Swap (or if one or
more of such Quadrant Two Properties, Quadrant Three Properties or Quadrant Four
Properties are sold as part of such Asset Swap, an amount equal to the Net Cash
Proceeds of such sale), but shall apply to any excess consideration so paid or
delivered.
SECTION 5.12. Use of Proceeds and Letters of Credit. The
proceeds of the Term Loans will be used to partially finance the repayment of
the Borrower's or Subsidiaries' intercompany Debt to the Corning Companies. The
proceeds of the Working Capital Loans and Swingline Loans will be used for
general corporate purposes of the Borrower and its Subsidiaries, including
acquisitions permitted by subclause (c) of Section 5.11 and working capital.
Letters of Credit will be issued only to support obligations of the Borrower and
its Subsidiaries incurred in the ordinary course of business. None of such
proceeds of the Loans will be used, directly or indirectly, for the purpose,
whether immediate, incidental or ultimate, of buying or carrying any Margin
Stock.
SECTION 5.13. Further Assurances. The Borrower will, and will
cause each of its Subsidiaries to, execute any and all further documents,
financing statements, agreements and instruments, and take all further action
(including filing Uniform Commercial Code and other financing statements), that
may be required under applicable law, or that the Required Banks, the Agent or
the Security Agent may request, in order to effectuate the transactions
contemplated by the Loan Documents and in order to grant, preserve, protect and
perfect the validity and priority of the security interests created or intended
to be created by the Security Documents. The Borrower agrees to provide such
evidence as the Security Agent shall reasonably request as to the perfection and
priority status of each such security interest.
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SECTION 5.14. Transactions with Affiliates. The Borrower will
not, nor will it permit any of its Subsidiaries to, directly or indirectly,
enter into any transaction, including any purchase, sale, lease or exchange of
property or rendering of services, with or for the benefit of any Affiliate,
other than (a) transactions expressly contemplated by the Transaction Documents
or (b) any transaction entered into by the Borrower or any Subsidiary which is
(i) otherwise permitted under this Agreement, (ii) in the ordinary course of
business of such entity's business and (iii) upon fair and reasonable terms no
less favorable to such entity than it would obtain in a comparable arm's-length
transaction with a Person not an Affiliate.
SECTION 5.15. Restrictions Affecting Subsidiaries. The
Borrower will not create, incur, permit or suffer to exist any agreement or
other arrangement that prohibits, restricts or imposes any condition upon the
ability or right of any Subsidiary to pay dividends or other distributions with
respect to any shares of its capital stock or to make or repay loans or advances
to the Borrower or any other Subsidiary; provided that the foregoing shall not
apply to restrictions or conditions (i) imposed by law, (ii) existing on the
Effective Date that are identified in Schedule 5.15 or (iii) included in any
partnership agreement or other governing document relating to a Qualified Joint
Venture.
SECTION 5.16. Restricted Payments. Neither the Borrower nor
any of its Subsidiaries will declare or make, or agree to declare or make, any
Restricted Payment, except that, if at the time thereof and after giving effect
thereto no Default shall have occurred and be continuing, (a) the Borrower may
repay Permitted Subordinated Debt consisting of Debt owing to Corning, but only
to the extent of the gross proceeds received by the Borrower (before deducting
underwriting discounts and commissions or other expenses) from the issuance of
the Senior Subordinated Notes or the borrowing of Senior Subordinated Bridge
Loans, (b) the Borrower may repay Permitted Subordinated Debt consisting of
Senior Subordinated Bridge Loans, but only to the extent of the gross proceeds
received by the Borrower (before deducting underwriting discounts and
commissions or other expenses) from the issuance of the Senior Subordinated
Notes, (c) the Borrower may pay interest and fees as and when due in respect of
the Senior Subordinated Bridge Loans
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and the Senior Subordinated Notes, (d) the Borrower may make the Spin-Off
Distributions, (e) the Borrower may pay dividends on the Permitted Preferred
Stock in an amount not exceeding $150,000 per year, (f) after consummation of
the Spin-Off Distributions, the Borrower may repurchase shares of its common
stock to be contributed to employee benefit plans, or to the extent of any cash
consideration received by the Borrower in respect of the issuance of shares of
its common stock to employees, provided that aggregate Restricted Payments
pursuant to this clause (f) shall not exceed during any fiscal year of the
Borrower the sum of $10,000,000 plus the amount of cash consideration received
by the Borrower during such fiscal year in respect of the issuance of shares of
common stock to its employees, and (g) following the date of consummation of the
Spin-Off Distributions, the Borrower may make a payment to Corning (as a
Restricted Payment or otherwise) in an amount equal to the excess, if any, of
(i) the aggregate amount of cash and cash equivalents held by the Borrower and
its Subsidiaries on the date of the Spin-Off Distributions over (ii) the sum of
the aggregate principal amount of Working Capital Loans and Swingline Loans
outstanding on the date of the Spin-Off Distributions plus $40,000,000 plus the
Net Cash Proceeds from any sales of assets identified in Part II of Schedule
5.11 received on or prior to such date.
SECTION 5.17. Debt.
(a) The Borrower will not create, assume or otherwise be or
become liable with respect to any Debt, except:
(i) Debt existing on the date of this Agreement identified on
Schedule 5.17 and extensions, renewals and replacements of any such
Debt (other than Existing Letters of Credit) that do not increase the
outstanding principal amount thereof;
(ii) Debt in respect of the Loans and Letters of
Credit hereunder;
(iii) Permitted Subordinated Debt; provided, that (A) the Senior
Subordinated Notes shall be permitted only if issued (1) on terms and
conditions no less favorable to the Borrower and the Banks than those
disclosed to the Banks prior to the execution and delivery of this
Agreement and (2) pursuant to
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documentation reasonably satisfactory to the Agent and (B) the Senior
Subordinated Bridge Loans shall be permitted only if incurred on terms
and conditions, and pursuant to documentation, satisfactory to the
Agent and the Required Banks;
(iv) secured Debt of the Borrower permitted by clause (c) of
Section 5.10 and unsecured Debt of the Borrower not otherwise permitted
by the foregoing clauses of this Section; provided that the aggregate
outstanding principal amount of Debt permitted by this clause (iv) plus
Debt permitted by clause (vii) of subsection (b) of this Section shall
not at any time exceed $10,000,000;
(v) Debt of the Borrower to the Corning Companies that is
repaid on the Effective Date as provided in clause (o) of Section 3.01
and Excess Corning Debt; provided that no payment, whether of
principal, interest or otherwise, shall be made in respect of any
Excess Corning Debt (except to the extent of Restricted Payments made
pursuant to clause (g) of Section 5.16) and all Excess Corning Debt
outstanding on the date of consummation of the Spin-Off Distribution
(other than any portion thereof to be paid pursuant to any such
permitted payments) shall be contributed by the Corning Companies to
the capital of the Borrower and shall cease to be outstanding; and
(vi) Debt owed by the Borrower to any Subsidiary; provided that
such Debt shall be subordinated to the Obligations of the Borrower on
terms no less favorable than the Senior Subordinated Notes are, or are
to be, so subordinated.
(b) The Borrower will not permit any Subsidiary to create,
assume or otherwise be or become liable with respect to any Debt, except:
(i) Debt existing on the date of this Agreement identified on
Schedule 5.17 and extensions, renewals and replacements of any such
Debt (other than Existing Letters of Credit) that do not increase the
outstanding principal amount thereof;
(ii) Debt in respect of the Guarantees under the Guarantee
Agreement;
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(iii) Debt owed by any Subsidiary to the Borrower or to another
Subsidiary; provided that such Debt is incurred in compliance with
Section 5.09;
(iv) unsecured Debt of any Subsidiary that has become a
Guarantor under the Guarantee Agreement in respect of a Guarantee of
Permitted Subordinated Debt provided that any such Guarantee by a
Subsidiary of any Permitted Subordinated Debt shall by its terms
expressly provide that (A) the obligations of such Subsidiary under
such Guarantee are subordinated to the obligations of such Subsidiary
under the Loan Documents to which it is a party on the same terms as
the obligations of the Borrower are subordinated pursuant to the
related Permitted Subordinated Debt and (B) will terminate and be
released if such Subsidiary is released from the Guarantee Agreement or
if the Borrower's ownership interest in such Subsidiary is sold or
otherwise disposed of in a transaction permitted by the terms of the
Permitted Subordinated Debt;
(v) Debt outstanding at the time of any acquisition permitted
by subsection (c) of Section 5.11 that becomes Debt of the Borrower or
a Subsidiary as a result of such acquisition and is treated as
consideration paid in connection with such acquisition for purposes of
subsection (c) of Section 5.11;
(vi) Debt of Qualified Joint Ventures that by its terms provides
that neither the Borrower nor any of its other Subsidiaries (other than
a Joint Venture Holding Company that owns an equity interest in such
Qualified Joint Venture) is liable therefor; provided that the
aggregate principal amount of Debt permitted by this clause (vi) shall
not at any time exceed $5,000,000 for any Qualified Joint Venture or
$15,000,000 in the aggregate for all Qualified Joint Ventures;
(vii) secured Debt of Subsidiaries permitted by clause (c) of
Section 5.10 and unsecured Debt of Subsidiaries not otherwise permitted
by the foregoing clauses of this Section; provided that the aggregate
outstanding principal amount of Debt permitted by this clause (vii)
plus Debt permitted by clause (iv) of subsection (a) of this Section
shall not at any time exceed $10,000,000; and
81
(viii) Debt of any Subsidiary to the Corning Companies that is
repaid on the Effective Date as provided in clause (o) of Section 3.01
and Excess Corning Debt; provided that no payment, whether of
principal, interest or otherwise, shall be made in respect of any
Excess Corning Debt (except to the extent of Restricted Payments made
pursuant to clause (g) of Section 5.16) and all Excess Corning Debt
outstanding on the date of consummation of the Spin-Off Distribution
(other than any portion thereof to be paid pursuant to any such
permitted payments) shall be contributed by the Corning Companies to
the capital of the Borrower and shall cease to be outstanding.
SECTION 5.18. Leverage Ratio. The Leverage Ratio will not at
any time during any period set forth below exceed the ratio set forth opposite
such period:
Period Ratio
Effective Date through December 31, 1997 0.55 to 1.00
January 1, 1998 through December 31, 1998 0.50 to 1.00
January 1, 1999 and thereafter 0.45 to 1.00
SECTION 5.19. Debt Coverage Ratio. The Debt Coverage Ratio
will not at any time during any period set forth below exceed the ratio set
forth opposite such period:
Period Ratio
Effective Date through June 30, 1997 3.80 to 1.00
July 1, 1997 through December 31, 1997 3.50 to 1.00
January 1, 1998 through June 30, 1998 2.80 to 1.00
July 1, 1998 through December 31, 1998 2.50 to 1.00
January 1, 1999 and thereafter 2.00 to 1.00
SECTION 5.20. Coverage Ratio. The Coverage Ratio for any
Calculation Period ending during any period set
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forth below will not be less than the ratio set forth opposite such period:
Calculation Period Ending During the Period Ratio
January 1, 1997 through June 30, 1997 1.80 to 1.00
July 1, 1997 through December 31, 1997 2.00 to 1.00
January 1, 1998 through June 30, 1998 2.25 to 1.00
July 1, 1998 through December 31, 1998 2.50 to 1.00
January 1, 1999 through December 31, 1999 2.75 to 1.00
January 1, 2000 and thereafter 3.00 to 1.00
provided that for purposes of determining the Coverage Ratio (i) for the
Calculation Period ended March 31, 1997, the Consolidated Interest Expense shall
be based on the Consolidated Interest Expense for the fiscal quarter then ended
multiplied by four and shall be determined on a pro forma basis adjusted to give
effect to the Spin-Off Transactions as if the Spin-Off Transactions and the
borrowing of the Term Loans and Permitted Subordinated Debt had occurred on
December 31, 1996; (ii) for the Calculation Period ended June 30, 1997, the
Consolidated Interest Expense shall be based on the Consolidated Interest
Expense for the two fiscal quarters then ended multiplied by two and shall be
determined on a pro forma basis adjusted to give effect to the Spin-Off
Transactions as if the Spin-Off Transactions and the borrowing of the Term Loans
and Permitted Subordinated Debt had occurred on December 31, 1996; (iii) for the
Calculation Period ended September 30, 1997, the Consolidated Interest Expense
shall be based on the Consolidated Interest Expense for the three fiscal
quarters then ended multiplied by four-thirds and shall be determined on a pro
forma basis adjusted to give effect to the Spin-Off Transactions as if the
Spin-Off Transactions and the borrowing of the Term Loans and Permitted
Subordinated Debt had occurred on December 31, 1996; and (iv) for the
Calculation Period ended December 31, 1997, the Consolidated Interest Expense
shall be based on the Consolidated Interest Expense for the four fiscal quarters
then ended and shall be determined on a pro forma basis adjusted to give effect
to the Spin-Off Transactions as if the Spin-Off Transactions and the borrowing
of the Term Loans and Permitted Subordinated Debt had occurred on December 31,
1996.
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SECTION 5.21. Consolidated Capital Expenditures. Consolidated
Capital Expenditures during any fiscal year will not exceed the excess of (i)
$95,000,000 over (ii) one-half of the aggregate consideration paid or delivered
by the Borrower or any of its Subsidiaries during such fiscal year in connection
with any acquisitions permitted by subsection (c) of Section 5.11 (including the
fair market value of any non-cash consideration, including any capital stock of
the Borrower issued as part of such consideration, and any Debt outstanding at
the time of any such acquisition that becomes Debt of the Borrower or a
Subsidiary as a result of such acquisition) excluding any such consideration
that is not subject to the limitations of clause (ii) thereof by reason of the
final proviso to such subsection; provided that, if the aggregate Capital
Expenditures made in any fiscal year commencing on or after January 1, 1997, are
less than the maximum allowed amount for such fiscal year (excluding amounts
allowed by reason of this proviso), then an amount equal to the lesser of (x)
such shortfall and (y) $9,500,000 shall be carried forward and added to the
amount of Capital Expenditures permitted in the immediately succeeding fiscal
year.
SECTION 5.22. Relationships with Corning Companies and CPS
Companies. If the Spin-Off Distributions are not made on or prior to the
Effective Date, then, unless and until the Spin-Off Distributions are made, and
without limitation of the other covenants and agreements of the Borrower herein:
(a) the Borrower shall be permitted to own the shares of
common stock of CPS to be distributed by it in connection with the
Spin-Off Distributions, but neither the Borrower nor any of its
Subsidiaries shall make, hold or acquire any other Investment in any
CPS Company, or Guarantee any Debt or other obligation of any CPS
Company, or incur any Debt to any CPS Company; and
(b) neither the Borrower nor any of its Subsidiaries shall
enter into any agreement or other transaction with any CPS Company or
Corning Company, other than the Transaction Documents entered into on
or prior to the Effective Date and transactions expressly contemplated
thereby and except as otherwise expressly contemplated by Schedule
1.01(b).
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ARTICLE VI
Defaults
SECTION 6.01. Events of Default. If one or more of the
following events ("Events of Default") shall have occurred and be continuing:
(a) (i) the Borrower shall fail to pay when due any principal
of any Loan or any reimbursement obligation in respect of a Letter of
Credit Disbursement or (ii) the Borrower shall fail to pay interest on
any Loan, any fees or any other amount payable hereunder or under any
other Loan Document within three days of the time such amount is due;
(b) the Borrower shall fail to observe or perform any covenant
contained in Section 5.01(e), any of Sections 5.08 to 5.12, inclusive,
any of Sections 5.14 to 5.22, inclusive, or the Borrower or any
Subsidiary shall fail to observe or perform any covenant contained in
any of Section 2.02 of the Pledge Agreement or Section 4.01 of the
Security Agreement;
(c) the Borrower or any Subsidiary shall fail to observe or
perform any covenant or agreement contained in any Loan Document (other
than those covered by clause (a) or (b) above) for 10 days after notice
thereof has been given to the Borrower by the Agent at the request of
any Bank;
(d) any representation, warranty, certification or statement
made by the Borrower, any Subsidiary or Corning in this Agreement or
any other Loan Document or in any certificate, financial statement or
other document delivered pursuant to this Agreement or any other Loan
Document shall prove to have been incorrect in any material respect
when made (or deemed made);
(e) the Borrower or any Subsidiary shall fail to make any
payment in respect of any Material Financial Obligations when due or
within any applicable grace period;
(f) any event or condition shall occur which results in the
acceleration of the maturity of any Material Debt or enables (or, with
the giving of notice or lapse of time or both, would enable) the holder
of
85
such Debt or any Person acting on such holder's behalf to accelerate
the maturity thereof or, under circumstances in the nature of a
default, to require the prepayment, repurchase or redemption thereof;
(g) the Borrower or any Subsidiary shall commence a voluntary
case or other proceeding seeking liquidation, reorganization or other
relief with respect to itself or its debts under any bankruptcy,
insolvency or other similar law now or hereafter in effect or seeking
the appointment of a trustee, receiver, liquidator, custodian or other
similar official of it or any substantial part of its property, or
shall consent to any such relief or to the appointment of or taking
possession by any such official in an involuntary case or other
proceeding commenced against it, or shall make a general assignment for
the benefit of creditors, or shall fail generally to pay its debts as
they become due, or shall take any corporate action to authorize any of
the foregoing;
(h) an involuntary case or other proceeding shall be commenced
against the Borrower or any Subsidiary seeking liquidation,
reorganization or other relief with respect to it or its debts under
any bankruptcy, insolvency or other similar law now or hereafter in
effect or seeking the appointment of a trustee, receiver, liquidator,
custodian or other similar official of it or any substantial part of
its property, and such involuntary case or other proceeding shall
remain undismissed and unstayed for a period of 60 days; or an order
for relief shall be entered against the Borrower or any Subsidiary
under the federal bankruptcy laws as now or hereafter in effect;
(i) any member of the ERISA Group shall fail to pay when due
an amount or amounts aggregating in excess of $10,000,000 which it
shall have become liable to pay under Title IV of ERISA; or notice of
intent to terminate a Material Plan pursuant to Section 4041(c) of
ERISA shall be filed under Title IV of ERISA by any member of the ERISA
Group, any plan administrator or any combination of the foregoing; or
the PBGC shall institute proceedings under Title IV of ERISA to
terminate, to impose liability (other than for premiums under Section
4007 of ERISA) in respect of, or to cause a trustee to be appointed to
administer any Material
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Plan; or the Borrower or any Subsidiary has knowledge that a condition
set forth in Sections 4042(a)(1), (2) or (3) of ERISA exists, or the
PBGC shall have given notice to any member of the ERISA Group that it
has determined that a condition exists, by reason of either of which
the PBGC would be entitled to obtain a decree adjudicating that any
Material Plan must be terminated and it has commenced proceedings to
obtain such a decree; or there shall occur a complete or partial
withdrawal from, or a default, within the meaning of Section 4219(c)(5)
of ERISA, with respect to, one or more Multiemployer Plans which could
reasonably be expected to cause one or more members of the ERISA Group
to incur a current payment obligation in excess of $10,000,000;
provided, however, that prior to the Spin-Off Transactions any such
event or condition with respect to any member of the ERISA Group other
than the Borrower or any Subsidiary shall constitute an Event of
Default only if it has resulted or is reasonably expected to result a
liability in excess of $10,000,000.
(j) one or more judgments or orders for the payment of money
in an aggregate amount in excess of $10,000,000 shall be rendered
against the Borrower or any Subsidiary or a combination thereof and
shall continue unsatisfied and unstayed for a period of 30 days, or any
action shall be legally taken by a judgment creditor to levy upon
assets or properties of the Borrower or any Subsidiary to enforce any
such judgment;
(k) at any time after the Spin-Off Distributions are made, any
person or group of persons (within the meaning of Section 13 or 14 of
the Securities Exchange Act of 1934, as amended) shall have acquired
beneficial ownership (within the meaning of Rule 13d-3 promulgated by
the Securities and Exchange Commission under said Act) of 20% or more
of the outstanding shares of common stock of the Borrower; or, during
any period of 12 consecutive calendar months, individuals who were
directors of the Borrower on the first day of such period, together
with other individuals whose nominations have been approved by the
majority of the board of directors of the Borrower prior to such
nomination, shall cease to constitute a majority of the board of
directors of the Borrower; or any "Change of
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Control", as defined in any Subordinated Debt Document,
occurs; or
(l) any security interest purported to be created by any
Security Document shall cease to be, or shall be asserted by the
Borrower or any Subsidiary not to be, a valid and perfected first
priority security interest in respect of the collateral; or
(m) except as provided therein, any Security Document or the
Guarantee Agreement shall cease to be in full force or effect or the
obligor thereunder shall disaffirm its liability in respect thereof;
then, and in every such event, the Agent shall (i) if requested by
Banks having more than 50% in aggregate amount of the Commitments, by
notice to the Borrower terminate the Commitments and they shall
thereupon terminate, (ii) if requested by Banks holding Notes
evidencing more than 50% of the aggregate principal amount of the
Loans, by notice to the Borrower declare the Loans (together with
accrued interest thereon) to be, and the Loans (together with accrued
interest thereon) shall thereupon become, immediately due and payable
without presentment, demand, protest or other notice of any kind, all
of which are hereby waived by the Borrower, (iii) if requested by
Banks having more than 50% of the Letter of Credit Exposure, require
cash collateral as contemplated by Section 2.15(k) in an amount not
exceeding the Letter of Credit Exposure or (iv) any combination of the
foregoing; provided that in the case of any of the Events of Default
specified in clause (g) or (h) above with respect to the Borrower,
automatically without any notice to the Borrower or any other act by
the Agent or the Banks, the Commitments shall thereupon terminate and
automatically the Loans (together with accrued interest thereon) shall
become immediately due and payable without presentment, demand,
protest or other notice of any kind, all of which are hereby waived by
the Borrower and the Borrower shall be required to provide,
immediately, cash collateral as contemplated by Section 2.15(k) in an
amount equal to the Letter of Credit Exposure.
SECTION 6.02. Notice of Default. The Agent shall give notice
to the Borrower under Section 6.01(c) promptly upon being requested to do so by
any Bank and shall thereupon notify all the Banks thereof.
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ARTICLE VII
The Agent and Arranging Agents
SECTION 7.01. Appointment and Authorization. Each Bank
irrevocably appoints and authorizes each of the Agent and the Security Agent,
each being referred to as an "Agent" for purposes of this Article, to take such
action as agent on its behalf and to exercise such powers under this Agreement
and the other Loan Documents as are delegated to such Agent by the terms hereof
or thereof, together with all such powers as are reasonably incidental thereto.
SECTION 7.02. Agent and Affiliates. Each Bank that is an Agent
shall have the same rights and powers under this Agreement as any other Bank and
may exercise or refrain from exercising the same as though it were not an Agent,
and each such Bank and its affiliates may accept deposits from, lend money to,
and generally engage in any kind of business with the Borrower or any Subsidiary
or Affiliate of the Borrower as if it were not an Agent.
SECTION 7.03. Action by Agent. The obligations of any Agent
under this Agreement or any other Loan Documents are only those expressly set
forth herein and therein. Without limiting the generality of the foregoing, no
Agent shall be required to take any action with respect to any Default, except
as expressly provided in Article VI or, in the case of the Security Agent, as
may be expressly provided in the Security Documents.
SECTION 7.04. Consultation with Experts. Each Agent may
consult with legal counsel (who may be counsel for the Borrower), independent
public accountants and other experts selected by it and shall not be liable for
any action taken or omitted to be taken by it in good faith in accordance with
the advice of such counsel, accountants or experts.
SECTION 7.05. Liability of Agent. Neither any Agent nor any of
its Affiliates nor any of their respective directors, officers, agents, or
employees shall be liable for any action taken or not taken by it in connection
herewith (i) with the consent or at the request of the Required Banks (or, when
expressly required hereby, such different number of Banks required to consent to
or request such action or inaction) or (ii) in the absence of its own gross
negligence or willful misconduct. Neither any Agent
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nor any of its Affiliates nor any of their respective directors, officers,
agents or employees shall be responsible for or have any duty to ascertain,
inquire into or verify (i) any statement, warranty or representation made in
connection with this Agreement or any other Loan Document or any borrowing
hereunder; (ii) the performance or observance of any of the covenants or
agreements of the Borrower or its Subsidiaries; (iii) the satisfaction of any
condition specified in Article III, except receipt of items required to be
delivered to it; or (iv) the validity, effectiveness or genuineness of this
Agreement, the other Loan Documents or any other instrument or writing furnished
in connection herewith or therewith. No Agent shall incur any liability by
acting in reliance upon any notice, consent, certificate, statement, or other
writing (which may be a bank wire, telex, facsimile transmission or similar
writing) believed by it to be genuine or to be signed by the proper party or
parties. Without limiting the generality of the foregoing, the use of the term
"agent" in this Agreement with reference to any Agent is not intended to connote
any fiduciary or other implied (or express) obligations arising under agency
doctrine of any applicable law. Instead, such term is used merely as a matter of
market custom and is intended to create or reflect only an administrative
relationship between independent contracting parties.
SECTION 7.06. Indemnification. Each Bank shall, ratably in
accordance with its Loans, Letter of Credit Exposure and unused Commitment,
indemnify each Agent, its Affiliates and their respective directors, officers,
agents and employees (to the extent not reimbursed by the Borrower) against any
cost, expense (including counsel fees and disbursements), claim, demand, action,
loss or liability (except such as result from such indemnitee's gross negligence
or willful misconduct) that such Agent may suffer or incur in connection with
this Agreement or any other Loan Document or any action taken or omitted by such
indemnities hereunder or thereunder.
SECTION 7.07. Credit Decision. Each Bank acknowledges that it
has, independently and without reliance upon any Agent or any other Bank, and
based on such documents and information as it has deemed appropriate, made its
own credit analysis and decision to enter into this Agreement. Each Bank also
acknowledges that it will, independently and without reliance upon any Agent or
any other Bank, and based on such documents and information as it shall deem
appropriate at the time, continue to make its
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own credit decisions in taking or not taking any action under this Agreement.
SECTION 7.08. Successor Agent. Any Agent may resign at any
time by giving notice thereof to the Banks and the Borrower. Upon any such
resignation, the Required Banks shall have the right to appoint a successor
Agent. If no successor Agent shall have been so appointed by the Required Banks
and shall have accepted such appointment within 30 days after the retiring Agent
gives notice of resignation, then the retiring Agent may, on behalf of the
Banks, appoint a successor Agent, which shall be a commercial bank organized or
licensed under the laws of the United States of America or of any State thereof
and having a combined capital and surplus of at least $500,000,000. Upon the
acceptance of its appointment as an Agent by a successor Agent, such successor
Agent shall thereupon succeed to and become vested with all the rights and
duties of the retiring Agent, and the retiring Agent shall be discharged from
its duties and obligations hereunder. After any retiring Agent's resignation,
the provisions of this Article shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was Agent.
SECTION 7.09. Agent's Fees. The Borrower shall pay to each
Agent for its own account fees in the amounts and at the times previously agreed
upon between the Borrower and such Agent.
SECTION 7.10. Arranging Agents. Each of the parties to this
Agreement hereby acknowledges that the Arranging Agents do not have any
obligations in their capacities as such under this Agreement or any other Loan
Document and that neither any Arranging Agent nor any of its directors,
officers, agents or employees shall have any liability hereunder or thereunder.
ARTICLE VIII
Change in Circumstances
SECTION 8.01. Basis for Determining Interest Rate Inadequate
or Unfair. If on or prior to the first day of any Interest Period for any
Euro-Dollar Borrowing:
(a) the Agent is advised by the Reference Banks that deposits
in dollars (in the applicable amounts)
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are not being offered to the Reference Banks in the relevant market
for such Interest Period; or
(b) Banks having 50% or more of the aggregate principal amount
of the affected Loans advise the Agent that the London Interbank
Offered Rate as determined by the Agent will not adequately and fairly
reflect the cost to such Banks of funding their Euro-Dollar Loans for
such Interest Period, the Agent shall forthwith give notice thereof to
the Borrower and the Banks, whereupon until the Agent notifies the
Borrower that the circumstances giving rise to such suspension no
longer exist, (i) the obligations of the Banks to make Euro-Dollar
Loans or to continue or convert outstanding Loans into Euro-Dollar
Loans shall be suspended, and (ii) each outstanding Euro-Dollar Loan
shall be converted into a Base Rate Loan on the last day of the then
current Interest Period applicable thereto. Unless the Borrower
notifies the Agent at least two Domestic Business Days before the date
of any Euro-Dollar Borrowing for which a Notice of Borrowing has
previously been given that it elects not to borrow on such date, if
such Borrowing is a Euro-Dollar Borrowing such Borrowing shall instead
be made as a Base Rate Borrowing.
SECTION 8.02. Illegality. If, on or after the date of this
Agreement, the adoption of any applicable law, rule or regulation, or any change
in any applicable law, rule or regulation, or any change in the interpretation
or administration thereof by any governmental authority, central bank or
comparable agency charged with the interpretation or administration thereof, or
compliance by any Bank (or its Euro-Dollar Lending Office) with any request or
directive (whether or not having the force of law) of any such authority,
central bank or comparable agency shall make it unlawful or impossible for any
Bank (or its Euro-Dollar Lending Office) to make, maintain or fund its
Euro-Dollar Loans and such Bank shall so notify the Agent, the Agent shall
forthwith give notice thereof to the other Banks and the Borrower, whereupon
until such Bank notifies the Borrower and the Agent that the circumstances
giving rise to such suspension no longer exist, the obligation of such Bank to
make Euro-Dollar Loans, or to convert outstanding Loans into Euro-Dollar Loans,
shall be suspended. Before giving any notice to the Agent pursuant to this
Section, such Bank shall designate a different Euro-Dollar Lending Office if
such designation will avoid the
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need for giving such notice and will not, in the judgment of such Bank, be
otherwise disadvantageous to such Bank. If such notice is given, each
Euro-Dollar Loan of such Bank then outstanding shall be converted either (a) on
the last day of the then current Interest Period applicable to such Euro-Dollar
Loan if such Bank may not lawfully continue to maintain and fund such Loan to
such day or (b) immediately if such Bank shall determine that it may not
lawfully continue to maintain and fund such Loan to such day.
SECTION 8.03. Increased Cost and Reduced Return. (a) If on or
after the date hereof the adoption of any applicable law, rule or regulation, or
any change in any applicable law, rule or regulation, or any change in the
interpretation or administration thereof by any authority, central bank or
comparable agency charged with the interpretation or administration thereof, or
compliance by any Bank (or its Applicable Lending Office) with any request or
directive (whether or not having the force of law) of any such governmental
authority, central bank or comparable agency shall impose, modify or deem
applicable any reserve (including, without limitation, any such requirement
imposed by the Board of Governors of the Federal Reserve System, but excluding
with respect to any Euro-Dollar Loan any such requirement reflected in the
Euro-Dollar Reserve Percentage), special deposit, insurance assessment or
similar requirement against assets of, deposits with or for the account of, or
credit extended by, any Bank (or its Applicable Lending Office) or shall impose
on any Bank (or its Applicable Lending Office) or on the London interbank market
any other condition affecting its Euro-Dollar Loans or Letters of Credit or its
participations therein or its obligation to make such Euro-Dollar Loans or to
issue or participate in Letters of Credit and the result of any of the foregoing
is to increase the cost to such Bank (or its Applicable Lending Office) of
making or maintaining any Euro-Dollar Loan to the Borrower or to issue or
participate in Letters of Credit, or to reduce the amount of any sum received or
receivable by such Bank (or its Applicable Lending Office) under this Agreement
or under its Notes with respect thereto, by an amount deemed by such Bank to be
material, then, within 15 days after demand by such Bank (with a copy to the
Agent), the Borrower shall pay to such Bank such additional amount or amounts as
will compensate such Bank on an after-tax basis (taking into account any
deductions or other tax benefits attributable to items giving rise to payments
hereunder) for such increased cost or reduction.
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(b) If any Bank shall have determined that, after the date
hereof, the adoption of any applicable law, rule or regulation regarding capital
adequacy, or any change in any such law, rule or regulation, or any change in
the interpretation or administration thereof by any governmental authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or any request or directive regarding capital adequacy
(whether or not having the force of law) of any such authority, central bank or
comparable agency, has or would have the effect of reducing the rate of return
on capital of such Bank (or its Parent) as a consequence of such Bank's
obligations hereunder to a level below that which such Bank (or its Parent)
could have achieved but for such adoption, change, request or directive (taking
into consideration its policies with respect to capital adequacy) by an amount
deemed by such Bank to be material, then from time to time, within 15 days after
demand by such Bank (with a copy to the Agent), the Borrower shall pay to such
Bank such additional amount or amounts as will compensate such Bank (or its
Parent) on an after-tax basis (taking into account any deductions or other tax
benefits attributable to items giving rise to payments hereunder) for such
reduction.
(c) Each Bank will promptly notify the Borrower and the Agent
of any event of which it has knowledge, occurring after the date hereof, which
will entitle such Bank to compensation pursuant to this Section and will
designate a different Applicable Lending Office if such designation will avoid
the need for, or reduce the amount of, such compensation and will not, in the
judgment of such Bank, be otherwise disadvantageous to such Bank. A certificate
of any Bank claiming compensation under this Section and setting forth the
additional amount or amounts to be paid to it hereunder shall be conclusive in
the absence of manifest error. In determining such amount, such Bank may use any
reasonable averaging and attribution methods.
(d) The provisions of this Section also shall inure to the
benefit of each Issuing Bank in its capacity as such.
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SECTION 8.04. Taxes. (a) For purposes of this Section 8.04(a),
the following terms have the following meanings:
"Taxes" means any and all present or future taxes, duties,
levies, imposts, deductions, charges or withholdings with respect to
any payment by the Borrower pursuant to this Agreement or under any
other Loan Document, and all liabilities with respect thereto,
excluding (i) in the case of each Bank, each Issuing Bank and the
Agent, income and franchise taxes imposed on or measured by its net
income, and branch profits or similar taxes imposed on it, and taxes on
the overall capital or net worth of the Bank or its applicable lending
office or any branch or Affiliate thereto by a jurisdiction under the
laws of which such Bank, such Issuing Bank or the Agent (as the case
may be), is organized or in which its principal executive office is
located or, in the case of each Bank, in which its Applicable Lending
Office is located, and (ii) in the case of each Bank organized outside
the United States of America, any United States withholding tax imposed
on such payments but only to the extent that such Bank is subject to
United States withholding tax at the time such Bank first becomes a
party to this Agreement.
"Other Taxes" means any present or future stamp or documentary
taxes and any other excise or property taxes, or similar charges or
levies, which arise from any payment made pursuant to this Agreement or
under any other Loan Document or from the execution or delivery of, or
otherwise with respect to, this Agreement or any other Loan Document,
excluding any current or future stamp, intangible or documentary taxes
or any other excise or property taxes, charges or similar levies
(including, without limitation, mortgage recording taxes and similar
fees) that arise as a result of sales, assignments or other transfers
of rights hereunder by any Bank.
(b) Any and all payments by the Borrower to or for the account
of any Bank, any Issuing Bank or the Agent hereunder or under any Note shall be
made without deduction for any Taxes or Other Taxes; provided that, if the
Borrower shall be required by law to deduct any Taxes or Other Taxes from any
such payments, (i) the sum payable shall be increased as necessary so that after
making all required
95
deductions (including deductions applicable to additional sums payable under
this Section) such Bank, such Issuing Bank or the Agent (as the case may be)
receives an amount equal to the sum it would have received had no such
deductions been made, (ii) the Borrower shall make such deductions, (iii) the
Borrower shall pay the full amount deducted to the relevant taxation authority
or other authority in accordance with applicable law and (iv) the Borrower shall
furnish to the Agent, at its address referred to in Section 9.01, the original
or a certified copy of a receipt evidencing payment thereof or, if none is
available, other documentary evidence showing such payment.
(c) The Borrower agrees to indemnify each Bank, each Issuing
Bank and the Agent for the full amount of Taxes or Other Taxes (including,
without limitation, any Taxes or Other Taxes imposed or asserted by any
jurisdiction on amounts payable under this Section) paid by such Bank, such
Issuing Bank or the Agent (as the case may be) and any liability (including
penalties, interest and expenses) arising therefrom or with respect thereto.
This indemnification shall be paid within 30 days after such Bank, such Issuing
Bank or the Agent (as the case may be) makes written demand therefor.
(d) Each Bank organized under the laws of a jurisdiction
outside the United States, on or prior to the date of its execution and delivery
of this Agreement in the case of each Bank listed on the signature pages hereof
and on or prior to the date on which it becomes a Bank in the case of each other
Bank, and from time to time thereafter (but only so long as such Bank remains
lawfully able to do so), shall provide the Borrower and the Agent with the
appropriate form or forms (including IRS Forms No. 1001 and 4224 and any forms
required to replace forms previously provided because of a change in a Bank's
place of organization, principal office or Applicable Lending Office, or in the
event that any forms are no longer valid because of their expiration or a change
in law or regulations, other appropriate evidence of exemption or reduction as
reasonably requested by the Borrower), certifying that such Bank is entitled to
benefits under an income tax treaty to which the United States is a party which
exempts the Bank from withholding tax imposed by the United States or reduces
the rate of withholding tax (if any) on payments of interest for the account of
such Bank or certifying that the income receivable pursuant to this Agreement is
otherwise not subject to such withholding tax.
96
(e) For any period with respect to which a Bank has failed to
provide the Borrower or the Agent with the appropriate form as required by
Section 8.04(d) (unless such failure is due to a change in treaty, law or
regulation occurring subsequent to the date on which such form originally was
required to be provided), such Bank shall not be entitled to indemnification
under Section 8.04(b) or (c) with respect to Taxes imposed by the United States;
provided that if a Bank, which is otherwise exempt from or subject to a reduced
rate of withholding tax, becomes subject to Taxes because of its failure to
deliver a form required hereunder, the Borrower shall take such steps as such
Bank shall reasonably request to assist such Bank to recover such Taxes.
(f) If the Borrower is required to pay additional amounts to
or for the account of any Bank pursuant to this Section, then such Bank will
change the jurisdiction of its Applicable Lending Office if, in the reasonable
judgment of such Bank, such change (i) will eliminate or reduce any such
additional payment which may thereafter accrue and (ii) is not otherwise
disadvantageous to such Bank.
(g) Each Bank that is organized under the laws of the United
States of America or any State thereof shall, on or before the date such Bank
becomes a party to this Agreement, deliver to the Borrower and the Agent an IRS
Form W-9, or successor applicable form, certifying that it is entitled to an
exemption from United States backup withholding tax.
(h) If the Borrower and a Bank (or, in the case of a payment
to the Agent, the Agent) agree that any Taxes paid by the Borrower under this
Section 8.04 with respect to payments to such Bank (or the Agent) should, more
likely than not, be refunded under applicable law, such Bank (or the Agent)
shall, at the request of the Borrower and at the Borrower's expense, take such
steps as may be appropriate to obtain a refund of such Taxes and shall permit
the Borrower to participate in the preparation of any such refund claim. If any
Bank (or the Agent) receives a refund in respect of any Taxes for which the Bank
has received payment from the Borrower hereunder, such Bank (or the Agent),
within 30 days of such receipt, shall deliver to the Borrower the amount of such
refund. In addition, within 30 days of a written request by the Borrower, the
relevant Bank (or Agent) shall execute and deliver to the Borrower such
certificates, forms or other documents which can be reasonably furnished
97
consistent with the facts and which are reasonably necessary to assist the
Borrower in applying for refunds of Taxes remitted hereunder.
SECTION 8.05. Base Rate Loans Substituted for Affected
Euro-Dollar Loans. If (i) the obligation of any Bank to make, or convert
outstanding Loans to, Euro-Dollar Loans to the Borrower has been suspended
pursuant to Section 8.02 or (ii) any Bank has demanded compensation under
Section 8.03 or 8.04 with respect to its Euro-Dollar Loans and the Borrower
shall, by at least five Euro-Dollar Business Days' prior notice to such Bank
through the Agent, have elected that the provisions of this Section shall apply
to such Bank, then, unless and until such Bank notifies the Borrower that the
circumstances giving rise to such suspension or demand for compensation no
longer exist:
(a) all Loans which would otherwise be made by such Bank as
(or continued or converted into) Euro- Dollar Loans shall instead be
Base Rate Loans (on which interest and principal shall be payable
contemporaneously with the related Euro-Dollar Loans of the other
Banks); and
(b) after each of its Euro-Dollar Loans has been repaid (or
converted to a Base Rate Loan), all payments of principal which would
otherwise be applied to repay such Euro-Dollar Loans shall be applied
to repay its Base Rate Loans instead.
If such Bank notifies the Borrower that the circumstances giving rise to such
notice no longer apply, the principal amount of each such Base Rate Loan shall
be converted into a Euro-Dollar Loan on the first day of the next succeeding
Interest Period applicable to the related Euro-Dollar Loans of the other Banks.
ARTICLE IX
Miscellaneous
SECTION 9.01. Notices. All notices, requests and other
communications to any party hereunder shall be in writing (including bank wire,
telex, facsimile transmission or similar writing) and shall be given to such
party: (a) in the case of the Borrower, any Issuing Bank, the Swingline Bank or
the Agent, at its address or its facsimile
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number or telex number set forth on the signature pages hereof (or, in the case
of any Issuing Bank, in its Issuing Bank Agreement), (b) in the case of any
Bank, at its address or its facsimile number or telex number set forth in its
Administrative Questionnaire, or (c) in the case of any party, such other
address or other facsimile number or telex number as such party may hereafter
specify for the purpose by notice to the Agent and the Borrower. Each such
notice, request or other communication shall be effective (i) if given by telex,
when such telex is transmitted to the telex number specified in this Section and
the appropriate answer back is received, (ii) if given by facsimile
transmission, when transmitted to the facsimile number specified in this Section
and confirmation of receipt is received, (iii) if given by mail, 72 hours after
such communication is deposited in the mails with first class postage prepaid,
addressed as aforesaid or (iv) if given by any other means, when delivered at
the address specified in this Section; provided that notices to the Agent under
Article II or Article VIII shall not be effective until received.
SECTION 9.02. No Waivers. No failure or delay by the Agent,
the Security Agent, any Issuing Bank or any Bank in exercising any right, power
or privilege hereunder or under any other Loan Document shall operate as a
waiver thereof nor shall any single or partial exercise thereof preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege. The rights and remedies herein and in the other Loan Documents
provided shall be cumulative and not exclusive of any rights or remedies
provided by law.
SECTION 9.03. Expenses; Indemnification. (a) The Borrower
shall pay (i) all reasonable out-of-pocket expenses of the Agent, the Security
Agent, each Arranging Agent and (in the case of expenses relating to any Letter
of Credit) each Issuing Bank, including reasonable fees and disbursements of
special counsel for the Agent and the Arranging Agents, in connection with the
syndication of the credit facilities contemplated by this Agreement, the
preparation and administration of this Agreement and the other Loan Documents,
any waiver or consent hereunder or thereunder or any amendment hereof or
thereof, the issuance, amendment, renewal or extension of or drawing under any
Letter of Credit, or any Default or alleged Default hereunder and (ii) if an
Event of Default occurs, all reasonable out-of-pocket expenses incurred by the
Agent, the Security Agent, each Arranging Agent, each Issuing Bank and
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each Bank, including reasonable fees and disbursements of outside counsel and
allocated cost of inside counsel, in connection with such Event of Default and
collection, bankruptcy, insolvency and other enforcement proceedings resulting
therefrom.
(b) The Borrower agrees to indemnify the Agent, the Security
Agent, each Arranging Agent, each Issuing Bank and each Bank, their respective
affiliates and the respective directors, officers, agents and employees of the
foregoing (each an "Indemnitee") and hold each such Indemnitee harmless from and
against any and all liabilities, losses, damages, costs and expenses of any kind
(including any of the foregoing with respect to Environmental Laws applicable to
the Borrower or any Subsidiary), including, without limitation, the reasonable
fees and disbursements of counsel, which may be incurred by such Indemnitee in
connection with any investigative, administrative or judicial proceeding
(whether or not such Indemnitee shall be designated a party thereto) brought or
threatened relating to or arising out of any of the Loan Documents or Letters of
Credit or any actual or proposed use of proceeds of Loans or Letters of Credit
hereunder; provided that no Indemnitee shall have the right to be indemnified
hereunder for such Indemnitee's own gross negligence or willful misconduct as
determined by a court of competent jurisdiction.
SECTION 9.04. Sharing of Setoffs. Each Bank agrees that if it
shall, by exercising any right of setoff or counterclaim or otherwise, receive
payment of a proportion of the aggregate amount of its claims in respect of
Letter of Credit Disbursements and principal and interest due with respect to
any Note held by it which is greater than the proportion received by any other
Bank in respect of the aggregate amount of claims in respect of Letter of Credit
Disbursements and principal and interest due with respect to any Note held by
such other Bank, the Bank receiving such proportionately greater payment shall
purchase such participations in the claims in respect of Letter of Credit
Disbursements and Notes held by the other Banks, and such other adjustments
shall be made, as may be required so that all such payments of claims in respect
of Letter of Credit Disbursements and of principal and interest with respect to
the Notes held by the Banks shall be shared by the Banks pro rata; provided that
nothing in this Section shall impair the right of any Bank to exercise any right
of setoff or counterclaim it may have and to apply the amount
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subject to such exercise to the payment of indebtedness of the Borrower other
than its indebtedness under the Loan Documents. The Borrower agrees, to the
fullest extent it may effectively do so under applicable law, that any holder of
a participation in a claim in respect of a Letter of Credit Disbursement or in a
Note, whether or not acquired pursuant to the foregoing arrangements, may
exercise rights of setoff or counterclaim and other rights with respect to such
participation as fully as if such holder of a participation were a direct
creditor of the Borrower in the amount of such participation.
SECTION 9.05. Amendments and Waivers. Any provision of this
Agreement or any other Loan Document may be amended or waived if, but only if,
such amendment or waiver is in writing and is signed by, or approved in writing
by, the Borrower and the Required Banks (and if the rights or duties of the
Agent, the Security Agent, any Issuing Bank or the Swingline Bank are affected
thereby, by the Agent, the Security Agent, such Issuing Bank or the Swingline
Bank, as the case may be); provided that no such amendment or waiver shall (i)
unless signed by all the Banks, increase or decrease the Commitment of any Bank
(except for a ratable decrease in the Commitments of the same Class of all
Banks) or subject any Bank to any additional obligation, (ii) unless signed by
all the Banks, reduce the principal of or rate of interest on any Loan or any
claim for reimbursement of a Letter of Credit Disbursement or any fees
hereunder, (iii) unless signed by all the Banks, postpone the date fixed for any
scheduled payment (but excluding any optional or mandatory prepayment) of
principal of or interest on any Loan or for any reimbursement of a Letter of
Credit Disbursement or for payment of any fees hereunder or for termination of
any Commitment, (iv) unless signed by all the Banks, change the percentage of
the Commitments or of the aggregate unpaid principal amount of the Notes, or the
number of Banks, which shall be required for the Banks or any of them to take
any action under this Section or any other provision of this Agreement, (v)
unless signed by all the Banks, release any amount of collateral from the
security interest granted under any Security Document, except as expressly
contemplated by such Security Document, (vi) unless signed by all the Banks,
release any Guarantor from its Guarantee under the Guarantee Agreement, except
as expressly contemplated by the Guarantee Agreement, (vii) unless signed by the
Banks holding a majority in interest of the outstanding Loans and unused
Commitments of each affected
101
Class, change any provisions of any Loan Document in a manner that by its terms
adversely affects the rights in respect of payments due to Banks holding Loans
of any Class differently than those holding Loans of any other Class or (viii)
unless signed by the Tranche B Banks holding a majority of the outstanding
Tranche B Loans, change the rights of the Tranche B Banks to decline mandatory
prepayments as provided in Section 2.11; provided further that any amendment or
waiver of this Agreement that by its terms affects the rights or duties under
this Agreement of the Working Capital Banks (but not the Tranche A Banks and
Tranche B Banks), the Tranche A Banks (but not the Working Capital Banks and
Tranche B Banks) or the Tranche B Banks (but not the Working Capital Banks and
Tranche A Banks) may be effected by an agreement or agreements in writing
entered into by the Borrower and requisite percentage in interest of the
affected class of Banks.
SECTION 9.06. Successors and Assigns. (a) The provisions of
this Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns, except that the Borrower may
not assign or otherwise transfer any of its rights under this Agreement without
the prior written consent of all Banks.
(b) Any Bank may at any time grant to one or more banks,
mutual funds or other institutions (each a "Participant") participating
interests in its Commitment or any or all of its Loans or its participations in
Letters of Credit. In the event of any such grant by a Bank of a participating
interest to a Participant, whether or not upon notice to the Borrower and the
Agent, such Bank shall remain responsible for the performance of its obligations
hereunder, and the Borrower and the Agent shall continue to deal solely and
directly with such Bank in connection with such Bank's rights and obligations
under this Agreement. Any agreement pursuant to which any Bank may grant such a
participating interest shall provide that such Bank shall retain the sole right
and responsibility to enforce the obligations of the Borrower hereunder
including, without limitation, the right to approve any amendment, modification
or waiver of any provision of this Agreement or any other Loan Document;
provided that such participation agreement may provide that such Bank will not
agree to any modification, amendment or waiver described in clause (i), (ii),
(iii) or (iv) of Section 9.05 without the consent of the Participant. The
Borrower agrees that each Participant shall, to the extent provided in its
participation
102
agreement, be entitled to the benefits of subsection (a) of Section 2.13,
Article VIII and subsection (b) of Section 9.03 with respect to its
participating interest. An assignment or other transfer which is not permitted
by subsection (c) or (d) below shall be given effect for purposes of this
Agreement only to the extent of a participating interest granted in accordance
with this subsection (b).
(c) Any Bank may at any time assign to one or more banks or
other institutions (each an "Assignee") all, or a proportionate part (equivalent
to an initial Commitment of not less than $10,000,000) of all, of its rights and
obligations under this Agreement and the Notes, and such Assignee shall assume
such rights and obligations, pursuant to an instrument executed by such Assignee
and such transferor Bank, with (and subject to) the subscribed consent of the
Borrower, the Agent and (in the case of any assignment of a Working Capital
Commitment), each Issuing Bank and the Swingline Bank (which consents shall not
be unreasonably withheld or delayed); provided that (i) if an Assignee is
another Bank or an affiliate of any Bank, no such consent shall be required,
(ii) the Borrower's consent shall not be required if an Event of Default has
occurred and is continuing and (iii) a Bank may assign all, or a proportionate
part of all, of its rights and obligations of one Class separately from the
other Classes. Upon execution and delivery of such instrument (including by the
Borrower, the Agent, each Issuing Bank and the Swingline Bank, if their consent
is required as provided above) and payment by such Assignee to such transferor
Bank of an amount equal to the purchase price agreed between such transferor
Bank and such Assignee, such Assignee shall be a Bank party to this Agreement
and shall have all the rights and obligations of a Bank with a Commitment as set
forth in such instrument of assumption, and the transferor Bank shall be
released from its obligations hereunder to a corresponding extent, and no
further consent or action by any party shall be required. Upon the consummation
of any assignment pursuant to this subsection (c), the transferor Bank, the
Agent and the Borrower shall make appropriate arrangements so that, if required,
a new Note is issued to the Assignee. In connection with any such assignment,
the transferor Bank shall pay to the Agent an administrative fee for processing
such assignment in the amount of $2,500. If the Assignee is not incorporated
under the laws of the United States of America or a state thereof, it shall,
prior to the first date on which interest or fees are payable hereunder for its
103
account, deliver to the Borrower and the Agent certification as to exemption
from deduction or withholding of any United States federal income taxes in
accordance with Section 8.04.
(d) If any Bank requests compensation under Section 8.03, or
if the Borrower is required to pay any additional amount to any Bank or any
governmental body, agency or official for the account of any Bank pursuant to
Section 8.04, then the Borrower may, at its sole expense and effort, upon notice
to such Bank and the Agent, require such Bank to assign and delegate, without
recourse (in accordance with and subject to the restrictions contained in
Section 9.06), all its interests, rights and obligations under this Agreement to
an assignee that shall assume such obligations (which assignee may be another
Bank, if a Bank accepts such assignment); provided that (i) the Borrower shall
have received the prior written consent of the Agent (and, if a Working Capital
Commitment is being assigned, the Issuing Banks and the Swingline Bank), which
consents shall not unreasonably be withheld, (ii) such Bank shall have received
payment of an amount equal to the outstanding principal of its Loans and
participations in Letter of Credit Disbursements, accrued interest thereon,
funding losses, if any (pursuant to subsection (a) of Section 2.13), resulting
from such payment, accrued fees and all other amounts payable to it hereunder,
from the assignee (to the extent of such outstanding principal and accrued
interest and fees) or the Borrower (in the case of all other amounts) and (iii)
in the case of any such assignment resulting from a claim for compensation under
Section 8.03 or payments required to be made pursuant to Section 8.04, such
assignment will result in a reduction in such compensation or payments. A Bank
shall not be required to make any such assignment and delegation if, prior
thereto, as a result of a waiver by such Bank or otherwise, the circumstances
entitling the Borrower to require such assignment and delegation cease to apply.
(e) Any Bank may at any time assign all or any portion of its
rights under this Agreement and its Notes to a Federal Reserve Bank. No such
assignment shall release the transferor Bank from its obligations hereunder.
(f) No Assignee, Participant or other transferee of any Bank's
rights shall be entitled to receive any greater payment under Section 8.03 or
8.04 than such Bank would have been entitled to receive with respect to the
rights transferred, unless such transfer is made with the
104
Borrower's prior written consent or by reason of the provisions of Section 8.02,
8.03 or 8.04 requiring such Bank to designate a different Applicable Lending
Office under certain circumstances or at a time when the circumstances giving
rise to such greater payment did not exist.
SECTION 9.07. Collateral. Each of the Banks represents to the
Agent and each of the other Banks that it in good faith is not relying upon any
margin stock (as defined in Regulation U) as collateral in the extension or
maintenance of the credit provided for in this Agreement.
SECTION 9.08. Governing Law; Submission to Jurisdiction. This
Agreement and each Note shall be governed by and construed in accordance with
the laws of the State of New York. The Borrower hereby submits to the
nonexclusive jurisdiction of the United States District Court for the Southern
District of New York and of any New York State court sitting in New York City
for purposes of all legal proceedings arising out of or relating to this
Agreement or the transactions contemplated hereby. The Borrower irrevocably
waives, to the fullest extent permitted by law, any objection which it may now
or hereafter have to the laying of the venue of any such proceeding brought in
such a court and any claim that any such proceeding brought in such a court has
been brought in an inconvenient forum. Each of the parties hereto irrevocably
consents to service of process in the manner provided for notices in Section
9.01 (except that process may not be served by telex or by facsimile). Nothing
in this Agreement will affect the right of any party to this Agreement to serve
process in any other manner permitted by law.
SECTION 9.09. Counterparts; Integration. This Agreement may be
signed in any number of counterparts, each of which shall be an original, with
the same effect as if the signatures thereto and hereto were upon the same
instrument. This Agreement, together with the other Loan Documents and separate
letter agreements regarding fees relating hereto, constitutes the entire
agreement and understanding among the parties hereto and supersedes any and all
prior agreements and understandings, oral or written, relating to the subject
matter hereof. This Agreement shall become effective upon receipt by the Agent
of counterparts hereof signed by each of the parties hereto (or, in the case of
any party as to which an executed counterpart shall not have been received,
receipt by the Agent in form satisfactory to it of telegraphic, telex,
105
facsimile or other written confirmation from such party of execution of a
counterpart hereof by such party).
SECTION 9.10. WAIVER OF JURY TRIAL. EACH OF THE BORROWER, THE
AGENT, THE ISSUING BANKS, THE SWINGLINE BANK AND THE BANKS HEREBY IRREVOCABLY
WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF
OR RELATING TO THIS AGREEMENT, THE OTHER LOAN DOCUMENTS OR THE TRANSACTIONS
CONTEMPLATED HEREBY.
SECTION 9.11. Confidentiality. Each of the Agent, the Issuing
Bank, the Swingline Bank and each Bank agrees to maintain the confidentiality of
the Information (as defined below), except that Information may be disclosed (a)
to it and its Affiliates, directors, officers, employees and agents, including
accountants, legal counsel and other advisors (it being understood that the
Persons to whom such disclosure is made will be informed of the confidential
nature of such Information and instructed to keep such Information
confidential), (b) to the extent requested by any regulatory authority, (c) to
the extent required by applicable laws or regulations or by any subpoena or
similar legal process, (d) to any other party to this Agreement, (e) in
connection with the exercise of any remedies hereunder or any suit, action or
proceeding relating to this Agreement or any other Loan Document or the
enforcement of rights hereunder or thereunder, (f) subject to an agreement
containing provisions substantially the same as those of this Section, to any
assignee of or Participant in, or any prospective assignee of or Participant in,
any of its rights or obligations under this Agreement, (g) with the consent of
the Borrower or (h) to the extent such Information (i) becomes publicly
available other than as a result of a breach of this Section or (ii) becomes
available to the Agent, the Issuing Bank, the Swingline Bank or any Bank on a
nonconfidential basis from a source other than the Borrower. For the purposes of
this Section, "Information" means all information received from the Borrower
relating to the Borrower or its business, other than any such information that
is available to the Agent, the Issuing Bank, the Swingline Bank or any Bank on a
nonconfidential basis prior to disclosure by the Borrower; provided that, in the
case of information received from the Borrower after the date hereof, such
information is clearly identified at the time of delivery as confidential. Any
Person required to maintain the confidentiality of Information as provided in
this Section shall be considered to have complied with its obligation to do so
if such Person has exercised the same
106
degree of care to maintain the confidentiality of such Information as such
Person would accord to its own confidential information.
107
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective authorized officers as of the
day and year first above written.
CORNING CLINICAL LABORATORIES INC.,
by
---------------------------------------------
Title:
------------------------------------------
Xxx Xxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attention of: General Counsel
Telecopy Number: (000) 000-0000
XXXXXX GUARANTY TRUST COMPANY OF NEW YORK,
by
---------------------------------------------
Title:
------------------------------------------
NATIONSBANK, N.A.,
by
---------------------------------------------
Title:
------------------------------------------
WACHOVIA BANK OF GEORGIA, N.A.,
by
---------------------------------------------
Title:
------------------------------------------
BANK OF AMERICA ILLINOIS,
by
---------------------------------------------
Title:
------------------------------------------
000
XXXX XX XXXXXXXX,
by
---------------------------------------------
Title:
------------------------------------------
THE BANK OF NEW YORK,
by
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Title:
------------------------------------------
BANQUE PARIBAS,
by
---------------------------------------------
Title:
------------------------------------------
CHL HIGH YIELD LOAN PORTFOLIO (A
UNIT OF THE CHASE MANHATTAN BANK),
by
---------------------------------------------
Title:
------------------------------------------
CREDIT LYONNAIS NEW YORK BRANCH,
by
---------------------------------------------
Title:
------------------------------------------
FLEET NATIONAL BANK,
by
---------------------------------------------
Title:
------------------------------------------
109
THE FUJI BANK, LIMITED, NEW YORK BRANCH,
by
---------------------------------------------
Title:
------------------------------------------
THE NIPPON CREDIT BANK, LTD.,
by
---------------------------------------------
Title:
------------------------------------------
PROTECTIVE LIFE INSURANCE COMPANY,
by
---------------------------------------------
Title:
------------------------------------------
THE SANWA BANK, LIMITED, NEW YORK BRANCH,
by
---------------------------------------------
Title:
------------------------------------------
UNION BANK OF CALIFORNIA, N.A.,
by
---------------------------------------------
Title:
------------------------------------------
XXX XXXXXX AMERICAN CAPITAL PRIME
RATE INCOME TRUST,
by
---------------------------------------------
Title:
------------------------------------------
110
NATIONSBANK, N.A., as Issuing Bank,
by
---------------------------------------------
Title:
------------------------------------------
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attention of: Xxxxxxxxx
X. Xxxxx
Telecopy No.: (000) 000-0000
WACHOVIA BANK OF GEORGIA, N.A., as
Swingline Bank,
by
---------------------------------------------
Title:
------------------------------------------
000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxx, XX 00000
Attention of: Xxxxx Xxxxx
Telecopy No.: (000) 000-0000
XXXXXX GUARANTY TRUST COMPANY OF
NEW YORK, as Administrative Agent
by
---------------------------------------------
Title:
------------------------------------------
00 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention of: Penelope X.X. Xxx
Telecopy No.: (000) 000-0000
