CREDIT AGREEMENT - REVOLVING CREDIT FACILITY
dated as of December 29, 1995
among
CONMED CORPORATION
the Banks signatory hereto
and
THE CHASE MANHATTAN BANK, N.A.
as Agent
TABLE OF CONTENTS
ARTICLE 1 DEFINITIONS; ACCOUNTING TERMS
Section 1.01 Definitions
Section 1.02 Accounting Terms
ARTICLE 2 THE CREDIT
Section 2.01 The Loans
Section 2.02 The Notes
Section 2.03 Purpose
Section 2.04 Borrowing Procedures
Section 2.05 Prepayments and Conversions
Section 2.06 Mandatory Prepayments
Section 2.07 Fixed Rate Loans-Interest Periods;
Renewals
Section 2.08 Changes of Commitment
Section 2.09 Certain Notices
Section 2.10 Minimum Amounts
Section 2.11 Interest
Section 2.12 Fees
Section 2.13 Payments Generally
Section 2.14 Late Payment Fees
ARTICLE 3 YIELD PROTECTION; ILLEGALITY; ETC.
Section 3.01 Additional Costs
Section 3.02 Limitation on Types of Loans
Section 3.03 Illegality
Section 3.04 Certain Conversions
Section 3.05 Certain Compensation
Section 3.06 HLT Classification
ARTICLE 4 COLLATERAL SECURITY
Section 4.01 Collateral
Section 4.02 Setoff
Section 4.03 Guaranties
ARTICLE 5 CONDITIONS PRECEDENT
Section 5.01 Documentary Conditions Precedent
Section 5.02 Additional Conditions Precedent
Section 5.03 Term Loan Borrowings
Section 5.04 Deemed Representations
ARTICLE 6 REPRESENTATIONS AND WARRANTIES
Section 6.01 Incorporation, Good Standing and Due
Qualification
Section 6.02 Corporate Power and Authority;
No Conflicts
Section 6.03 Legally Enforceable Agreements
Section 6.04 Litigation
Section 6.05 Financial Statements
Section 6.06 Ownership and Liens
Section 6.07 Taxes
Section 6.08 ERISA
Section 6.09 Subsidiaries and Ownership of Stock
Section 6.10 Credit Arrangements
Section 6.11 Operation of Business
Section 6.12 Hazardous Materials
Section 6.13 No Default on Outstanding Judgments
or Orders
Section 6.14 No Defaults on Other Agreements
Section 6.15 Labor Disputes and Acts of God
Section 6.16 Governmental Regulation
Section 6.17 Partnerships
Section 6.18 No Forfeiture
Section 6.19 Solvency
Section 6.20 Integrated Group
ARTICLE 7 AFFIRMATIVE COVENANTS
Section 7.01 Maintenance of Existence
Section 7.02 Conduct of Business
Section 7.03 Maintenance of Properties
Section 7.04 Maintenance of Records
Section 7.05 Maintenance of Insurance
Section 7.06 Compliance with Laws
Section 7.07 Right of Inspection
Section 7.08 Reporting Requirements
Section 7.09 Guaranties
ARTICLE 8 NEGATIVE COVENANTS
Section 8.01 Debt
Section 8.02 Guaranties, Etc.
Section 8.03 Liens
Section 8.04 Leases
Section 8.05 Investments
Section 8.06 Loans, Dividends
Section 8.07 Sale of Assets
Section 8.08 Stock of Subsidiaries, Etc
Section 8.09 Transactions with Affiliates
Section 8.10 Mergers, Etc
Section 8.11 Acquisitions
Section 8.12 No Activities Leading to Forfeiture
Section 8.13 New Businesses
Section 8.14 Negative Pledge
ARTICLE 9 FINANCIAL COVENANTS
Section 9.01 Minimum Working Capital
Section 9.02 Minimum Tangible Net Worth
Section 9.03 Leverage Ratio
Section 9.04 Cash Flow Coverage Ratio
Section 9.05 Limitation on Debt
ARTICLE 10 EVENTS OF DEFAULT
Section 10.01 Events of Default
Section 10.02 Remedies
ARTICLE 11 THE AGENT; RELATIONS AMONG BANKS AND BORROWER
Section 11.01 Appointment, Powers and Immunities
of Agent
Section 11.02 Reliance by Agent
Section 11.03 Defaults
Section 11.04 Rights of Agent as a Bank
Section 11.05 Indemnification of Agent
Section 11.06 Documents
Section 11.07 Non-Reliance on Agent and Other Banks
Section 11.08 Failure of Agent to Act
Section 11.09 Resignation or Removal of Agent
Section 11.10 Amendments Concerning Agency Function
Section 11.11 Liability of Agent
Section 11.12 Transfer of Agency Function
Section 11.13 Non-Receipt of Funds by the Agent
Section 11.14 Withholding Taxes
Section 11.15 Several Obligations and Rights of Banks
Section 11.16 Pro Rata Treatment of Loans, Etc
Section 11.17 Sharing of Payments Among Banks
Section 11.18 Hedge Agreements; Notices and Limitations
ARTICLE 12 MISCELLANEOUS
Section 12.01 Amendments and Waivers
Section 12.02 Usury
Section 12.03 Expenses
Section 12.04 Survival
Section 12.05 Assignment; Participations
Section 12.06 Notices
Section 12.07 Jurisdiction; Immunities
Section 12.08 Table of Contents; Headings
Section 12.09 Severability
Section 12.10 Counterparts
Section 12.11 Integration
Section 12.12 Governing Law
Section 12.13 Confidentiality
Section 12.14 Treatment of Certain Information
Section 12.15. Incorporation By Reference; Conflicts
Section 12.16. Cooperation and Further Assurances
EXHIBITS
Exhibit A Promissory Note
Exhibit B Authorization Letter
Exhibit C Guaranty
Exhibit D Security Agreement
Exhibit E Opinion of Counsel for Borrower
Exhibit F Opinion of Counsel for Each Guarantor
Exhibit G Confidentiality Agreement
Exhibit H Borrowing Notice
SCHEDULES
Schedule I Subsidiaries of Borrower
Schedule II Credit Arrangements
Schedule III Hazardous Materials
Schedule IV Employee Benefits; Funding Status
CREDIT AGREEMENT dated as of December 29, 1995 among CONMED
CORPORATION, a corporation organized under the laws of the State of New York
(the "Borrower"), each of the banks which is a signatory hereto (individually a
"Bank" and collectively the "Banks") and THE CHASE MANHATTAN BANK (NATIONAL
ASSOCIATION), a national banking association organized under the laws of the
United States of America, as agent for the Banks (in such capacity, together
with its successors in such capacity, the "Agent").
A. The Borrower desires that the Banks extend credit as provided herein
and the Banks are prepared to extend such credit.
B. Simultaneously herewith, the Borrower, the Banks, and the Agent are
entering a Credit Agreement - Term Loan Facility pursuant to which the Banks
will make Term Loans to Borrower in the aggregate amount of up to $65,000,000.
C. Borrower, Agent, and certain of the Banks are parties to certain
existing Credit Agreements dated March 8, 1995, as amended ("the Existing Credit
Agreements"). The Existing Credit Agreements shall remain in full force and
effect until all of the Conditions Precedent set forth in Article 5 of this
Agreement are satisfied or waived by the Banks. Upon the satisfaction of these
conditions, this Agreement and the Credit Agreement - Term Loan Facility shall
supersede the Existing Credit Agreements, and the loans made under the Existing
Credit Agreements shall be repaid from the Loans made hereunder and/or under the
Credit Agreement - Term Loan Facility of even date. If, on the other hand, the
Conditions Precedent are not satisfied or waived by 5:00 p.m. on March 1, 1996,
the Existing Credit Agreements shall continue and this Agreement shall
terminate.
TERMS
NOW, THEREFORE, in consideration of the matters recited and the
promises contained herein, the Borrower, the Banks and the Agent agree as
follows:
ARTICLE 1. DEFINITIONS; ACCOUNTING TERMS.
Section 1.01. Definitions. As used in this Agreement the
following terms have the following meanings (terms defined in the singular to
have a correlative meaning when used in the plural and vice versa):
"Account" means any right to payment for goods sold or leased
or for services rendered, which is not evidenced by an instrument or chattel
paper, whether or not it has been earned by performance, whether secured or
unsecured, now existing or hereafter arising, and the proceeds thereof.
"Affiliate" means any Person: (a) which directly or indirectly
controls, or is controlled by, or is under common control with, the Borrower or
any of its Subsidiaries; (b) which directly or indirectly beneficially owns or
holds 20% or more of any class of voting stock of the Borrower or any such
Subsidiary; (c) 20% or more of the voting stock of which is directly or
indirectly beneficially owned or held by the Borrower or such Subsidiary; or (d)
which is a partnership in which the Borrower or any of its Subsidiaries is a
general partner. The term "control" means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of a Person, whether through the ownership of voting securities, by
contract, or otherwise.
"Agent's Office" means the principal office of Agent in
Syracuse, New York, presently located at One Lincoln Center, Syracuse, New York
13202.
"Agreement" means this Credit Agreement, as amended or
supplemented from time to time. References to Articles, Sections, Exhibits,
Schedules and the like refer to the Articles, Sections, Exhibits, Schedules and
the like of this Agreement unless otherwise indicated.
"Asset Purchase Agreement" means the Agreement between
Borrower and New Dimensions in Medicine, Inc. dated as of October 18, 1995.
"Authorization Letter" means the letter agreement executed by
the Borrower in the form of Exhibit B.
"Banking Day" means any day on which commercial banks are not
authorized or required to close in New York City and whenever such day relates
to a Eurodollar Loan or notice with respect to any Eurodollar Loan, a day on
which dealings in Dollar deposits are also carried out in the London interbank
market.
"Birtcher" means Birtcher Medical Systems, Inc., a
wholly-owned subsidiary of Borrower.
"Capital Expenditures" means for any period, the Dollar amount
of gross expenditures (including obligations under Capital Leases) made for
fixed assets, real property, plant and equipment, and all renewals, improvements
and replacements thereto (but not repairs thereof) incurred during such period.
Assets acquired in the NDM Acquisition shall not be considered "Capital
Expenditures" for purposes of this Agreement.
"Capital Lease" means any lease which has been capitalized on
the books of the lessee in accordance with GAAP.
"Cash Flow" (as distinguished from Measured Cash Flow) means
the sum of the following measured on a consolidated basis for Borrower and any
subsidiaries, for any twelve month period ending on the last day of Borrower's
fiscal quarters: (i) earnings before interest, taxes, depreciation, and
amortization, minus (ii) Capital Expenditures.
"Cash Flow Coverage Ratio" means the ratio of Measured Cash
Flow to Current Debt Service, measured on a consolidated basis for Borrower and
its Subsidiaries for any twelve month period ending on the last day of each of
Borrower's fiscal quarters.
"Chase" means The Chase Manhattan Bank, N.A.
"Closing Date" means the date this Agreement has been executed
by the Borrower, the Banks and the Agent.
"Code" means the Internal Revenue Code of 1986, as amended
from time to time.
"Collateral" means any and all personal property of Borrower
and of the Guarantors as set forth in Article 4 of this Agreement, together with
any other property of Borrower and the Guarantors in which the Banks hereafter
acquire a security interest or mortgage.
"Commitment" means, with respect to each Bank, the obligation
of such Bank to make its Loan under this Agreement in the principal amount
following, as such amount may be reduced or otherwise modified from time to
time:
Chase $ 5,625,000.00
Fleet $ 3,750,000.00
Nat West $ 3,750,000.00
Credit Lyonnais $ 1,875,000.00
---------------
Total: $15,000,000.00
"Consolidated Capital Expenditures" means Capital Expenditures
of the Borrower and its Consolidated Subsidiaries, as determined on a
consolidated basis in accordance with GAAP.
"Consolidated Current Assets" means Current Assets of the
Borrower and its Consolidated Subsidiaries, as determined on a consolidated
basis in accordance with GAAP.
"Consolidated Current Liabilities" means Current Liabilities
of the Borrower and its Consolidated Subsidiaries, as determined on a
consolidated basis in accordance with GAAP.
"Consolidated Net Worth" means Net Worth of the Borrower and
its Consolidated Subsidiaries, as determined on a consolidated basis in
accordance with GAAP.
"Consolidated Subsidiary" means any Subsidiary whose accounts
are or are required to be consolidated with the accounts of the Borrower in
accordance with GAAP.
"Consolidated Total Liabilities" means the total liabilities
of Borrower and its Subsidiaries as determined on a consolidated basis in
accordance with GAAP.
"Credit Agreement - Term Loan Facility" means the agreement of
even date between Borrower and the Banks under which the Banks have agreed to
make Term Loans to Borrower.
"Credit Lyonnais" means Credit Lyonnais Cayman Island Branch,
a banking corporation organized under the laws of France.
"Current Assets" means all assets of the Borrower treated as
current assets in accordance with GAAP.
"Current Debt Service" means current maturities of long term
Debt.
"Current Liabilities" means all liabilities of the Borrower
treated as current liabilities in accordance with GAAP, including without
limitation (a) all obligations payable on demand or within one year after the
date in which the determination is made and (b) installment and sinking fund
payments required to be made within one year after the date on which
determination is made, but excluding all such liabilities or obligations which
are renewable or extendable at the option of the Borrower to a date more than
one year from the date of determination.
"Debt" means, with respect to any Person: (a) indebtedness of
such Person for borrowed money; (b) indebtedness for the deferred purchase price
of property or services (except trade payables in the ordinary course of
business); (c) Unfunded Benefit Liabilities of such Person (if such Person is
not the Borrower, determined in a manner analogous to that of determining
Unfunded Benefit Liabilities of the Borrower); (d) the face amount of any
outstanding letters of credit issued for the account of such Person; (e)
obligations arising under acceptance facilities; (f) guaranties, endorsements
(other than for collection in the ordinary course of business) and other
contingent obligations to purchase, to provide funds for payment, to supply
funds to invest in any Person, or otherwise to assure a creditor against loss;
(g) obligations secured by any Lien on property of such Person; and (h)
obligations of such Person as lessee under Capital Leases; and (i) Hedge
Exposure of such Person under Hedge Agreements.
"Default" means any event which with the giving of notice or
lapse of time, or both, would become an Event of Default.
"Default Rate" means, with respect to the principal of any
Loan and, to the extent permitted by law, any other amount payable by the
Borrower under this Agreement or any Note that is not paid when due (whether at
stated maturity, by acceleration or otherwise), a rate per annum during the
period from and including the due date, to, but excluding the date on which such
amount is paid in full equal to 2% above the Variable Rate as in effect from
time to time plus the Margin (if any) (provided that, if the amount so in
default is principal of a Fixed Rate Loan and the due date thereof is a day
other than the last day of the Interest Period therefor, the "Default Rate" for
such principal shall be, for the period from and including the due date and to
but excluding the last day of the Interest period therefor, 2% above the
interest rate for such Loan as provided in Section 2.10 hereof and, thereafter,
the Variable Rate plus 2% as provided for above in this definition).
"Dollars" and the sign "$" mean lawful money of the United
States of America.
"Drawdown Date" means the dates on which the Borrower makes
the borrowing hereunder, which date may not be later than the last day of the
Drawdown Period, i.e., the Termination Date.
"Drawdown Period" means the period commencing on the date
hereof and terminating on the Termination Date.
"Environmental Laws" means any and all federal, state, local
and foreign statutes, laws, regulations, ordinances, rules, judgments, orders,
decrees, permits, concessions, grants, franchises, licenses, agreements or other
governmental restrictions relating to the environment or to emissions,
discharges, releases or threatened releases of pollutants, contaminants,
chemicals, or industrial, toxic or hazardous substances or wastes into the
environment including, without limitation, ambient air, surface water, ground
water, or land, or otherwise relating to the manufacture, processing
distribution, use, treatment, storage, disposal, transport, or handling of
pollutants, contaminants, chemicals, or industrial, toxic or hazardous
substances or wastes.
"Equipment" means goods other than Inventory which are used or
bought for use primarily in business, now existing or hereafter acquired, and
the proceeds thereof.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, including any rules and regulations
promulgated thereunder.
"ERISA Affiliate" means any corporation or trade or business
which is a member of any group of organizations (i) described in Section 414(b)
or (c) of the Code of which the Borrower is a member, or (ii) solely for
purposes of potential liability under Section 302(c)(11) of ERISA and Section
412(c)(11) of the Code and the lien created under Section 302(f) of ERISA and
Section 412(n) of the Code, described in Section 414(m) or (o) of the Code of
which the Borrower is a member.
"Existing Credit Agreements" means the Credit Agreement - Term
Loan Facility and the Credit Agreement - Revolving Credit Facility, both dated
March 8, 1995 and amended May 19, 1995, between Borrower, Agent, and certain of
the Banks.
"Eurodollar Loan" (i.e., a "LIBOR Loan") means any Loan when
and to the extent the interest rate therefor is determined on the basis of the
definition "Fixed Base Rate."
"Event of Default" has the meaning given such term in Section
10.01.
"Facility Documents" means this Agreement and the Exhibits and
Schedules hereto, the Notes, the Security Agreement, the Pledge Agreement, the
Authorization Letter, and the Guaranty.
"Final Maturity Date" means January 1, 1999 when the final
principal payment, all accrued interest, and any other amounts due under this
Agreement or the Notes shall be due and payable in full.
"Fixed Base Rate" means with respect to any Interest Period
for a Fixed Rate Loan, i.e., for a Eurodollar Loan, the arithmetic mean, as
calculated by the Agent, of the respective rates per annum (rounded upwards, if
necessary, to the nearest 1/16 of 1%) quoted at approximately 11:00 a.m. London
time by the principal London branch of the Reference Bank two Banking Days prior
to the first day of such Interest Period for the offering to leading banks in
the London interbank market of Dollar deposits in immediately available funds,
for a period, and in an amount, comparable to the Interest Period and principal
amount of the Eurodollar Loan which shall be made by such Reference Bank and
outstanding during such Interest Period.
"Fixed Rate" means, for any Fixed Rate Loan for any Interest
Period therefor, a rate per annum (rounded upwards, if necessary, to the nearest
1/100 of 1%) determined by the Agent to be equal to the quotient of (i) the
Fixed Base Rate for such Loan for such Interest Period, divided by (ii) one
minus the Reserve Requirement for such Loan for such Interest Period.
"Fixed Rate Loan" means any Eurodollar Loan.
"Fleet" means Fleet Bank, a banking corporation organized
under the laws of the State of New York.
"Forfeiture Proceeding" means any action, proceeding or
investigation affecting the Borrower or any of its Subsidiaries or Affiliates
before any court, governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, or the receipt of notice by any such party
that any of them is a suspect in or a target of any governmental inquiry or
investigation, which may result in an indictment of any of them or the seizure
or forfeiture of any of their property.
"GAAP" means generally accepted accounting principles in the
United States of America as in effect from time to time, applied on a basis
consistent with those used in the preparation of the financial statements
referred to in Section 5.05 (except for changes concurred in by the Borrower's
independent certified public accountants).
"Guarantor" shall collectively mean all Subsidiaries of
Borrower now or hereafter existing and their respective successors and assigns.
"Guaranty" means the guaranty in the form of Exhibit C to be
delivered by the Guarantor under the terms of this Agreement.
"Hedge Agreements" means and includes any and all agreements
entered into and in effect from time to time between Borrower or a Subsidiary
and any third party providing any foreign exchange and/or an interest rate
hedging facility.
"Hedge Exposure" means the U.S. dollar amount of all
obligations for the payment of money by Borrower or any Subsidiary under any
Hedge Agreement as of any date of computation as if the Hedge Agreement were to
be terminated or declared in default on such date (after giving effect to any
netting provisions).
"Interest Period" means, with respect to any Fixed Rate Loan,
the period commencing on the date such Loan is made, converted from another type
of Loan or renewed, as the case may be, and ending, as the Borrower may select
pursuant to Section 2.07, on the numerically corresponding day in the first,
second, third, or sixth calendar month thereafter, provided that each such
Interest Period which commences on the last Banking Day of a calendar month (or
on any day for which there is no numerically corresponding day in the
appropriate subsequent calendar month) shall end on the last Banking Day of the
appropriate calendar month.
"Inventory" means goods held for sale or lease or to be
furnished under contracts of service, or raw materials, work-in-process or
materials used or consumed in a business, now existing or hereafter arising, and
the proceeds thereof.
"Lending Office" means, for each Bank and for each type of
Loan, the lending office of such Bank (or of an affiliate of such Bank)
designated as such for such type of Loan on its signature page hereof or such
other office of such Bank (or of an affiliate of such Bank) as such Bank may
from time to time specify to the Agent and the Borrower as the office by which
its Loans of such type are to be made and maintained.
"Lien" means any lien (statutory or otherwise), security
interest, mortgage, deed of trust, priority, pledge, charge, conditional sale,
title retention agreement, financing lease or other encumbrance or similar right
of others, or any agreement to give any of the foregoing.
"Loan" means any loan made by a Bank pursuant to Section 2.01.
"Margin" means for each Variable Rate Loan and Eurodollar Loan
the applicable margin on the following table, computed as of the date of this
Agreement based upon Borrower's financial statements for the immediately
preceding four Quarterly Dates for income statement items and the most recent
Quarterly Date for balance sheet items, and adjusted thereafter on each
Quarterly Date based on information for the immediately preceding four Quarterly
Dates for income statement items and the immediately preceding Quarterly Date
for balance sheet items.
- ------------------------- -------------- ------------------ ------------------ ------------------ ------------------
Ratio of Total Funded Ratio 1.5 1.5 ratio 2.5 2.5 ratio 3.5 3.5 ratio 4.0 Ratio 4.0
Debt to Cash Flow
- ------------------------- -------------- ------------------ ------------------ ------------------ ------------------
Applicable Margin-Fixed 75 basis 100 basis points 125 basis points 150 basis points 200 basis points
Rate Loans (Eurodollar) points
- ------------------------- -------------- ------------------ ------------------ ------------------ ------------------
Applicable Margin 0 0 0 25 basis points 75 basis points
Variable Rate Loans
(Prime)
- ------------------------- -------------- ------------------ ------------------ ------------------ ------------------
The foregoing notwithstanding, it is agreed that from the date
of this Agreement through June 30, 1996, the Applicable Margin for Fixed Rate
Loans will be 125 basis points and the Applicable Margin for Variable Rate Loans
will be 0 basis points.
"Measured Cash Flow" means the sum of the following measured
on a consolidated basis for Borrower and any Subsidiaries, for any twelve month
period ending on the last day of each of Borrower's fiscal quarters:
(a) net income, plus
(b) depreciation and all other non-cash charges to income not
affecting working capital, minus
(c) Capital Expenditures.
"Mortgage" means the Mortgage in the form of Exhibit I to be
executed pursuant to Section 4.01 of this Agreement.
"Multiemployer Plan" means a Plan defined as such in Section
3(37) of ERISA to which contributions have been made by the Borrower or any
ERISA Affiliate and which is covered by Title IV of ERISA.
"NatWest" means NatWest Bank N.A., a banking corporation
organized under the laws of the United States of America.
"NDM" means New Dimensions in Medicine, Inc., a Delaware
corporation.
"NDM Acquisition" means the purchase of certain assets of NDM
by N D M, Inc., as assignee of Borrower, pursuant to the Asset Purchase
Agreement.
"N D M, Inc." means Borrower's wholly owned subsidiary, N D M,
Inc. a New York corporation, formed to assume and perform all of Borrower's
obligations under the Asset Purchase Agreement and to take title to the assets
being acquired in the NDM Acquisition.
"Net Worth" means, at any date of determination thereof, the
excess of total assets over total liabilities, excluding, however, from the
determination of total assets, minority interests, if any, in Subsidiaries.
"Note" means a promissory note of the Borrower in the form of
Exhibit A hereto evidencing the Loans made by a Bank hereunder.
"PBGC" means the Pension Benefit Guaranty Corporation and any
entity succeeding to any or all of its functions under ERISA.
"Person" means an individual, partnership, corporation,
business trust, joint stock company, trust, unincorporated association, joint
venture, governmental authority or other entity of whatever nature.
"Plan" means any employee benefit or other plan established or
maintained, or to which contributions have been made, by the Borrower or any
ERISA Affiliate and which is covered by Title IV of ERISA, other than a
Multiemployer Plan.
"Prime Rate" means that rate of interest from time to time
announced by the Reference Bank at its principal office as its prime commercial
lending rate.
"Principal Office" means the principal office of the Reference
Bank, presently located at 1 Chase Manhattan Plaza, New York, New York 10081.
"Quarterly Date" means the last day of each of Borrower's
fiscal quarters for so long as the Commitment and any Loans made pursuant to
this Agreement remain outstanding.
"Reference Bank" means The Chase Manhattan Bank, N.A.
"Regulation D" means Regulation D of the Board of Governors of
the Federal Reserve System as the same may be amended or supplemented from time
to time.
"Regulation U" means Regulation U of the Board of Governors of
the Federal Reserve System as the same may be amended or supplemented from time
to time.
"Regulatory Change" means, with respect to any Bank, any
change after the date of this Agreement in United States federal, state,
municipal or foreign laws or regulations (including without limitation
Regulation D) or the adoption or making after such date of any interpretations,
directives or requests applying to a class of banks including such Bank of or
under any United States, federal, state, municipal or foreign laws or
regulations (whether or not having the force of law) by any court or
governmental or monetary authority charged with the interpretation or
administration thereof.
"Required Banks" means, at any time while no Loans are
outstanding, Banks having at least 66.667% of the aggregate amount of the
Commitments and, at any time while Loans are outstanding, Banks holding at least
66.667% of the aggregate principal amount of the Loans.
"Reserve Requirement" means, for any Interest Period for any
Fixed Rate Loan, the average maximum rate at which reserves (including any
marginal, supplemental or emergency reserves) are required to be maintained
during such Interest Period under Regulation D by member banks of the Federal
Reserve System in New York City with deposits exceeding $1,000,000,000 against
"Eurocurrency liabilities" (as such term is used in Regulation D). Without
limiting the effect of the foregoing, the Reserve Requirement shall reflect any
other reserves required to be maintained by such member banks by reason of any
Regulatory Change against (i) any category of liabilities which includes
deposits by reference to which the Fixed Base Rate for Eurodollar Loans is to be
determined as provided in the definition of "Fixed Base Rate" in this Section
1.01 or (ii) any category of extensions of credit or other assets which include
Eurodollar Loans.
"Security Agreement" means the security agreement in the form
of Exhibit D to be executed by Borrower and each Guarantor pursuant to Sections
4.01 and 4.03 of this Agreement, as hereafter amended from time to time.
"Subsidiary" means, with respect to any Person, any
corporation or other entity of which at least a majority of the securities or
other ownership interests having ordinary voting power (absolutely or
contingently) for the election of directors or other persons performing similar
functions are at the time owned directly or indirectly by such Person.
"Termination Date" means December 31, 1998; provided that if
such date is not a Banking Day, the Termination Date shall be the next
succeeding Banking Day (or, if such next succeeding Banking Day falls in the
next calendar month, the next preceding Banking Day).
"Term Loans" means loans to Borrower made by the Banks
pursuant to the Credit Agreement - Term Loan Facility.
"Total Funded Debt" means, with respect to Borrower and any
Subsidiaries, all indebtedness (including current maturities) for money borrowed
which by its terms matures more than one year from the date as of which such
indebtedness is incurred, and any indebtedness for money borrowed maturing
within one year from such date which is renewable or extendable at the option of
the obligor to a date beyond one year from such date (whether or not theretofore
renewed or extended), including any such indebtedness renewable or extendable at
the option of the obligor under, or payable from the proceeds of other
indebtedness which may be incurred pursuant to, the provisions of any revolving
credit agreement or other similar agreement.
"Unfunded Benefit Liabilities" means, with respect to any
Plan, the amount (if any) by which the present value of all benefit liabilities
(within the meaning of Section 4001(a)(16) of ERISA) under the Plan exceeds the
fair market value of all Plan assets allocable to such benefit liabilities, as
determined on the most recent valuation date of the Plan and in accordance with
the provisions of ERISA for calculating the potential liability of the Borrower
or any ERISA Affiliate under Title IV of ERISA.
"Variable Rate" means, for any day, the Prime Rate for such
day.
"Variable Rate Loan" means any Loan when and to the extent the
interest rate for such Loan is determined in relation to the Variable Rate.
Section 1.02. Accounting Terms. All accounting terms not
specifically defined herein shall be construed in accordance with GAAP, and all
financial data required to be delivered hereunder shall be prepared in
accordance with GAAP. All terms relating to Collateral and not otherwise defined
herein shall have the meanings ascribed to them in the Uniform Commercial Code
of the State of New York.
ARTICLE 2. THE CREDIT.
Section 2.01. The Loans. (a) Subject to the terms and
conditions of this Agreement, each of the Banks severally agrees to make
revolving credit loans (the "Loans") to the Borrower from time to time from and
including the date hereof to and including the Termination Date up to but not
exceeding the aggregate principal amount outstanding under its Commitment. The
Loans may be outstanding as Variable Rate Loans or Fixed Rate Loans (each a
"type" of Loans). The type of Loans of each Bank shall be made and maintained at
such Bank's Lending Office for such type of Loans.
(b) The Loans shall be due and payable on the Final
Maturity Date. Interest on the Loans shall be due and payable as hereinafter
provided.
(c) Any borrowing under the Credit Agreement -
Revolving Credit Facility dated as of March 8, 1995 (as amended) by Borrower
from any Bank (as defined herein), which is outstanding as of the date of this
Agreement, shall be deemed to be a Loan made pursuant to this Agreement.
Borrower's indebtedness to NBD Bank under said March 8, 1995 Credit Agreement
shall be repaid in full from the initial funding of Loans made pursuant to this
Agreement and/or the Credit Agreement - Term Loan Facility.
(d) Unless hereafter extended in writing by the Agent
with the unanimous approval of the Banks, this Agreement shall automatically
terminate and be of no further force and effect unless all of the Conditions
Precedent set forth in Article 5 of this Agreement are either satisfied or
waived by the Banks by 5:00 p.m. on March 1, 1996, and in that event, the
Existing Credit Agreements shall continue to be in full force and effect.
Section 2.02. The Notes. The Loans of each Bank shall be
evidenced by a single promissory note in favor of such Bank in the form of
Exhibit A, dated the date of this Agreement, duly completed and executed by the
Borrower.
Section 2.03. Purpose. The Borrower shall use the proceeds of
the Loans to consummate the NDM Acquisition (through N D M, Inc.) in accordance
with the Asset Purchase Agreement, to repay existing debt of Borrower to the
Banks pursuant to the Existing Credit Agreements, to pay fees, commissions, and
expenses related to the NDM Acquisition, for working capital, and for general
corporate purposes. Such proceeds shall not be used for the purpose, whether
immediate, incidental or ultimate, of buying or carrying "margin stock" within
the meaning of Regulation U.
Section 2.04. Borrowing Procedures. The Borrower shall make
the borrowings hereunder not later than the last day of the Drawdown Period and
shall give the Agent notice of such borrowing (which shall be on a Banking Day
if such day is not the last day of the Drawdown Period) at or before 10:00 a.m.,
New York City time, on the Drawdown Date for a Variable Rate Loan. Fixed Rate
Loans shall require at least three Banking Days' notice. Not later than 1:00
p.m. New York City time on the date of such borrowing, each Bank shall, through
its Lending Office and subject to the conditions of this Agreement, make the
amount of the Loan to be made by it on such day available to the Agent at the
Agent's Office and in immediately available funds for the account of the
Borrower. The amount so received by the Agent shall, subject to the conditions
of this Agreement, be made available to the Borrower, in immediately available
funds, by the Agent crediting an account of the Borrower designated by the
Borrower and maintained with the Agent at the Agent's Office.
Section 2.05. Prepayments and Conversions. The Borrower shall
have the right to make prepayments of principal, or to convert one type of Loan
into another type of Loan, at any time or from time to time; provided that: (a)
the Borrower shall give the Agent notice of each such prepayment or conversion
as provided in Section 2.09; and (b) Fixed Rate Loans may be prepaid or
converted only on the last day of an Interest Period for such Loans. During the
Drawdown Period, Borrower may reborrow principal amounts prepaid provided that
all conditions precedent hereunder are satisfied and provided that the principal
amount outstanding from each Bank may not exceed the amount of its Commitment.
Section 2.06. Mandatory Prepayments. Anything herein to the
contrary notwithstanding, Borrower shall be obligated to make the following
prepayments ("Mandatory Prepayments") of amounts outstanding hereunder at the
times indicated below, to the extent that any such amounts remain after
application to amounts outstanding under the Credit Agreement - Term Loan
Facility, as provided in Section 2.06 of that Agreement:
(a) 100% of the net proceeds in excess of $100,000
received by Borrower from the sale or disposition of all or any part of the
assets of Borrower or its subsidiaries (other than in the ordinary course of
business), upon Borrower's (or the Subsidiary's, as appropriate) receipt of such
proceeds;
(b) 100% of all insurance proceeds received by
Borrower which are not reasonably promptly applied toward repair or replacement
of the damaged, destroyed, or impaired property to which such proceeds relate,
upon receipt by Borrower of such proceeds; and
(c) 80% of the proceeds of the sale by Borrower of
any equity securities of Borrower (other than shares sold to employees pursuant
to employee stock option plans), upon receipt by Borrower of such proceeds.
Any Mandatory Prepayments shall be applied against the Loans
hereunder or the Term Loans without penalty or premium (other than costs
associated with the mandatory prepayment of Fixed Rate Loans on dates other than
the last day of the Interest Period with respect to each such Loan), as
determined by the Required Banks in their sole discretion. Mandatory Prepayments
shall be divided among the Banks based upon each Bank's pro rata share of the
amounts outstanding hereunder at the time of the Mandatory Prepayment.
Section 2.07. Fixed Rate Loans - Interest Periods; Renewals.
(a) In the case of each Fixed Rate Loan, the Borrower shall select an Interest
Period of any duration in accordance with the definition of Interest Period in
Section 1.01, subject to the following limitations: (i) no Interest Period may
extend beyond the Final Maturity Date; (ii) notwithstanding clause (i) above, no
Interest Period shall have a duration less than one month, and if any such
proposed Interest Period would otherwise be for a shorter period, such Interest
Period shall not be available; (iii) if an Interest Period would end on a day
which is not a Banking Day, such Interest Period shall be extended to the next
Banking Day, unless such Banking Day would fall in the next calendar month in
which event such Interest Period shall end on the immediately preceding Banking
Day; (iv) only three Fixed Rate Interest Periods may be outstanding at any one
time.
(b) Upon notice to the Agent as provided in Section
2.09, the Borrower may renew any Fixed Rate Loan on the last day of the Interest
Period therefor as the same type of Loan with an Interest Period of the same or
different duration in accordance with the limitations provided above. If the
Borrower shall fail to give notice to the Agent of such a renewal, such Fixed
Rate Loan shall automatically become a Variable Rate Loan on the last day of the
current Interest Period.
Section 2.08. Changes of Commitments. The Borrower shall have
the right to reduce or terminate the amount of unused Commitments at any time or
from time to time, provided that: (a) the Borrower shall give notice of each
such reduction or termination to the Agent as provided in Section 2.09; and (b)
each partial reduction shall be pro rata for each Banks and shall be at least
equal to $250,000 for each Bank. The Commitments once reduced or terminated may
not be reinstated.
Section 2.09. Certain Notices. All notices by the Borrower to
the Agent pursuant to this Article 2 shall be given on a Banking Day and shall
be given first by telephone and confirmed by telecopier. Such notices shall be
irrevocable and shall be effective as of the date given only if the telecopy
confirmation is received by the Agent not later than 1:00 p.m. New York City
time with respect to Fixed Rate Loans, and 10:00 a.m. New York City time with
respect to Variable Rate Loans. Where telecopy confirmation is received by the
Agent after 1:00 p.m. with respect to Fixed Rate Loans, and 10:00 a.m. with
respect to Variable Rate Loans, the notice shall be deemed to be given as of the
next Banking Day. In the case of borrowings and prepayments of, conversions into
and renewals of (a) Variable Rate Loans, such notices shall be given on the date
of such borrowing, conversion or renewal; and (b) in the case of Fixed Rate
Loans such notices shall be given three Banking Days prior thereto. Each notice
shall specify the type of Loans to be borrowed, converted, prepaid or renewed
(and, in the case of a conversion, the type of Loans to result from such
conversion and, in the case of Fixed Rate Loans, the Interest Period(s)
therefor) and the date of the borrowing, prepayment, conversion or renewal
(which shall be a Banking Day). Each notice of reduction or termination shall
specify the amount of the Commitments to be reduced or terminated. Notices shall
be similar in form to the attached Exhibit H. The Agent shall promptly notify
the Banks of the contents of each such notice.
Section 2.10. Minimum Amounts. Except for borrowings which
exhaust the full remaining amounts of the Commitments, prepayments or
conversions which result in the prepayment or conversion of all Loans of a
particular type or conversions made pursuant to Section 3.04, each borrowing,
prepayment, conversion and renewal of principal the Loans of a particular type
shall be in an amount at least equal to $2,000,000 in the aggregate for the
Banks (borrowings, prepayments, conversions or renewals of or into Loans of
different types or, in the case of Fixed Rate Loans, having different Interest
Periods at the same time hereunder to be deemed separate borrowings,
prepayments, conversions and renewals for the purposes of the foregoing, one for
each type of Interest Period). Each borrowing, prepayment, conversion or renewal
shall be in increments of principal of $100,000.00.
Section 2.11. Interest. (a) Interest shall accrue on the
outstanding and unpaid principal amount of each Loan for the period from and
including the date of such Loan to but excluding the date such Loan is due at
the following rates per annum: (i) for a Variable Rate Loan, at a variable rate
per annum equal to the Variable Rate plus any Margin and (ii) for a Fixed Rate
Loan, at a fixed rate equal to the Fixed Rate plus the Margin. If the principal
amount of any Loan and any other amount payable by the Borrower hereunder or
under the Note shall not be paid when due (at stated maturity, by acceleration
or otherwise), interest shall accrue on such amount to the fullest extent
permitted by law from and including such due date to but excluding the date such
amount is paid in full at the Default Rate.
(b) The interest rate on each Variable Rate Loan
shall change when the Variable Rate changes and interest on each such Loan shall
be calculated on the basis of a year of 360 days for the actual number of days
elapsed. Interest on each Fixed Rate Loan shall be calculated on the basis of a
year of 360 days for the actual number of days elapsed. Promptly after the
determination of any interest rate provided for herein or any change therein,
the Agent shall notify the Borrower and the Banks.
(c) Accrued interest shall be due and payable in
arrears upon any payment of principal or conversion and (i) for each Variable
Rate Loan, on the first day of each calendar quarter commencing the first such
date after such Loan; (ii) for each Fixed Rate Loan, on the last day of the
Interest Period with respect thereto and, in the case of an Interest Period
greater than three months at three-month intervals (determined on the same basis
as a three month Interest Period) after the first day of such Interest Period;
provided that interest accruing at the Default Rate shall be due and payable
from time to time on demand of the Agent.
Section 2.12. Fees. (a) During the period from the date of
this Agreement through the earlier of the date the Commitments are terminated or
June 30, 1996, the Borrower shall pay to the Agent for the account of each Bank
a commitment fee on the daily average unused Commitment of such Bank equal to
three-eighths percent (.375%). Commencing October 1, 1996, the Borrower shall
pay to the Agent for the account of each Bank a commitment fee on the daily
average unused Commitment of such Bank for the period from and including October
1, 1996, to the earlier of the date the Commitments are terminated or the
Termination Date, at a rate per annum equal to the amount on the following table
computed as of the date of this Agreement based upon Borrower's financial
statements for the immediately preceding four Quarterly Dates for income
statement items and the most recent Quarterly Date for balance sheet items, and
adjusted thereafter on each Quarterly Date based on information for the
immediately preceding four Quarterly Dates for income statement items and the
immediately preceding Quarterly Date for balance sheet items.
- --------------------- ------------------ ------------------ ------------------ ------------------ ------------------
Ratio of Total Ratio 1.5 1.5 Ratio 2.5 2.5 Ratio 3.5 3.5 Ratio 4.0 Ratio 4.0
Funded Debt to Cash
Flow
- --------------------- ------------------ ------------------ ------------------ ------------------ ------------------
Commitment Fee .25% .375% .375% .375% .5%
- --------------------- ------------------ ------------------ ------------------ ------------------ ------------------
The commitment fee shall be calculated on the basis of a year of 360 days for
the actual number of days elapsed. The accrued commitment fee shall be due and
payable in arrears upon any reduction or termination of the Commitments and on
the 1st day of each calendar quarter, commencing on April 1, 1996.
(b) The Borrower shall pay to the Agent an agency fee
(in cash or such other type of compensation as may be mutually agreed), in the
amount (and on the dates) heretofore mutually agreed.
Section 2.13. Payments Generally. All payments under this
Agreement or the Notes shall be made to the Agent in immediately available funds
not later than 1:00 p.m. New York City time on the relevant dates specified in
this Article 2, and such payment received by Agent after 1:00 p.m. shall be
deemed to have been made on the next succeeding Banking Day. The Borrower shall,
at the time of making each payment under this Agreement or the Notes, by
telecopy specify to the Agent the principal or other amount payable by the
Borrower under this Agreement or the Notes to which such payment is to be
applied (and in the event that it fails to so specify, or if a Default or Event
of Default has occurred and is continuing, the Agent may apply such payment as
it may elect in its sole discretion (subject to Section 11.16)). Borrower shall
make all payments through its deposit account with Agent and Agent is hereby
authorized to deduct all payments due hereunder from such account. Except as
otherwise provided herein, if the due date of any payment under this Agreement
or the Notes would otherwise fall on a day which is not a Banking Day, such date
shall be extended to the next succeeding Banking Day and interest shall be
payable for any principal so extended for the period of such extension. Provided
the Agent receives payment in immediately available funds by 1:00 p.m. on a
Banking Day, Agent shall remit the portion of such payment due to each of the
Banks by wire transfer initiated prior to 3:00 p.m. on the same Banking Day. If
payment is not received on a Banking Day or by 1:00 p.m., Agent shall remit the
amount of such payment due each of the Banks by wire transfer on the next
Banking Day.
Any Bank may (but shall not be obligated to) debit the amount
of any such payment which is not made by 4:00 p.m. on the first Banking Day
after the due date to any ordinary deposit account of the Borrower with such
Bank, and any Bank so doing shall promptly notify the Agent.
Section 2.14. Late Payment Fees. (a) If Borrower fails to make
any payment when due, Agent may, and at the request of the Required Banks shall,
require the payment of a late charge to be assessed each day on the amount
overdue based upon the following formulas:
(i) For overdue interest:
(Amount overdue) x 110% x (Prime Rate + 2%)
-------------------------------------------
365
(ii) For overdue principal:
(Amount overdue) x 110% x (Prime Rate + 2%)
-------------------------------------------
365
(b) Late charges may be added to the amount owing on
any future payment, and such assessment and/or collection of late charges shall
in no way impair the Banks' right to pursue any other rights or remedies they
may have upon default.
ARTICLE 3. YIELD PROTECTION; ILLEGALITY; ETC.
Section 3.01. Additional Costs. (a) The Borrower shall pay
directly to each Bank from time to time on demand such amounts as such Bank may
determine to be necessary to compensate it for any costs which such Bank
determines are attributable to its making or maintaining any Fixed Rate Loans
under this Agreement or its Note or its obligation to make any such Loans
hereunder, or any reduction in any amount receivable by such Bank hereunder in
respect of any such Loans or such obligation (such increases in costs and
reductions in amounts receivable being herein called "Additional Costs"),
resulting from any Regulatory Change which: (i) changes the basis of taxation of
any amounts payable to such Bank under this Agreement or its Note in respect of
any of such Loans (other than taxes imposed on the overall net income of such
Bank or of its Lending Office for any of such Loans by the jurisdiction in which
such Bank has its principal office or such Lending Office); or (ii) imposes or
modifies any reserve, special deposit, deposit insurance or assessment, minimum
capital, capital ratio or similar requirements relating to any extensions of
credit or other assets of, or any deposits with or other liabilities of, such
Bank (including any of such Loans or any deposits referred to in the definition
of "Fixed Base Rate" in Section 1.01); or (iii) imposes any other condition
affecting this Agreement or its Note (or any of such extensions of credit or
liabilities). Each Bank will notify the Borrower of any event occurring after
the date of this Agreement which will entitle such Bank to compensation pursuant
to this Section 3.01(a) as promptly as practicable after it obtains knowledge
thereof and determines to request such compensation. If any Bank requests
compensation from the Borrower under this Section 3.01(a), or under Section
3.01(c), the Borrower may, by notice to such Bank (with a copy to the Agent),
require that such Bank's Loans of the type with respect to which such
compensation is requested be converted in accordance with Section 3.04.
(b) Without limiting the effect of the foregoing
provisions of this Section 3.01, in the event that, by reason of any Regulatory
Change, any Bank either (i) incurs Additional Costs based on or measured by the
excess above a specified level of the amount of a category of deposits or other
liabilities of such Bank which includes deposits by reference to which the
interest rate on Eurodollar loans is determined as provided in this Agreement or
a category of extensions of credit or other assets of such Bank which includes
Eurodollar loans or (ii) becomes subject to restrictions on the amount of such a
category of liabilities or assets which it may hold, then, if such Bank so
elects by notice to the Borrower (with a copy to the Agent), the obligation of
such Bank to make or renew, and to convert Loans of any other type into, Loans
of such type hereunder shall be suspended until the date such Regulatory Change
ceases to be in effect (and all Loans of such type held by such Bank then
outstanding shall be converted in accordance with Section 3.04).
(c) Without limiting the effect of the foregoing
provisions of this Section 3.01 (but without duplication), the Borrower shall
pay directly to each Bank from time to time on request such amounts as such Bank
may determine to be necessary to compensate such Bank for any costs which it
determines are attributable to the maintenance by it or any of its affiliates
pursuant to any law or regulation of any jurisdiction or any interpretation,
directive or request (whether or not having the force of law and whether in
effect on the date of this Agreement or thereafter) of any court or governmental
or monetary authority of capital in respect of its Loans hereunder or its
obligation to make Loans hereunder (such compensation to include, without
limitation, an amount equal to any reduction in return on assets or equity of
such Bank to a level below that which it could have achieved but for such law,
regulation, interpretation, directive or request). Each Bank will notify the
Borrower if it is entitled to compensation pursuant to this Section 3.01(c) as
promptly as practicable after it determines to request such compensation.
(d) Determinations and allocations by a Bank for
purposes of this Section 3.01 of the effect of any Regulatory Change pursuant to
subsections (a) or (b), or of the effect of capital maintained pursuant to
subsection (c), on its costs of making or maintaining Loans or its obligation to
make Loans, or on amounts receivable by, or the rate of return to, it in respect
of Loans or such obligation, and of the additional amounts required to
compensate such Bank under this Section 3.01, shall be conclusive, provided that
such determinations and allocations are made on a reasonable basis.
Section 3.02. Limitation on Types of Loans. Anything herein to
the contrary notwithstanding, if:
(a) the Agent determines (which determination shall
be conclusive) that quotations of interest rates for the relevant deposits
referred to in the definition of "Fixed Base Rate" in Section 1.01 are not being
provided in the relevant amounts or for the relevant maturities for purposes of
determining the rate of interest for any type of Fixed Rate Loans as provided in
this Agreement; or
(b) the Required Banks determine (which determination
shall be conclusive) and notify the Agent that the relevant rates of interest
referred to in the definition of "Fixed Base Rate" in Section 1.01 upon the
basis of which the rate of interest for any type of Fixed Rate Loans is to be
determined do not adequately cover the cost to the Banks of making or
maintaining such Loans; then the Agent shall give the Borrower and each Bank
prompt notice thereof, and so long as such condition remains in effect, the
Banks shall be under no obligation to make or renew Loans of such type or to
convert Loans of any other type into Loans of such type and the Borrower shall,
on the last day(s) of the then current Interest Period(s) for the outstanding
Loans of the affected type, either prepay such Loans or convert such Loans into
another type of Loans in accordance with Section 2.05.
Section 3.03. Illegality. Notwithstanding any other provision
in this Agreement, in the event that it becomes unlawful for any Bank or its
Lending Office to (a) honor its obligation to make or renew Eurodollar Loans
hereunder or convert Loans of any type into Loans of such type, or (b) maintain
Eurodollar Loans hereunder, then such Bank shall promptly notify the Borrower
thereof (with a copy to the Agent) and such Bank's obligation to make or renew
Eurodollar Loans and to convert other types of Loans into Loans of such type
hereunder shall be suspended until such time as such Bank may again make, renew,
or convert and maintain such affected Loans and such Bank's outstanding
Eurodollar Loans, as the case may be, shall be converted in accordance with
Section 3.04.
Section 3.04. Certain Conversions pursuant to Sections 3.01
and 3.03. If the Loans of any Bank of a particular type (Loans of such type
being herein called "Affected Loans" and such type being herein called the
"Affected Type") are to be converted pursuant to Section 3.01 or 3.03, such
Bank's Affected Loans shall be automatically converted into Variable Rate Loans
on the last day(s) of the then current Interest Period(s) for the Affected Loans
(or, in the case of a conversion required by Section 3.01(b) or 3.03, on such
earlier date as such Bank may specify to the Borrower with a copy to the Agent)
and, unless and until such Bank gives notice as provided below that the
circumstances specified in Section 3.01 or 3.03 which gave rise to such
conversion no longer exist:
(a) to the extent that such Bank's Affected Loans
have been so converted, all payments and prepayments of principal which would
otherwise be applied to such Bank's Affected Loans shall be applied instead to
its Variable Rate Loans;
(b) all Loans which would otherwise be made or
renewed by such Bank as Loans of the Affected Type shall be made instead as
Variable Rate Loans and all Loans of such Bank which would otherwise be
converted into Loans of the Affected Type shall be converted instead into (or
shall remain as) Variable Rate Loans; and
If such Bank gives notice to the Borrower (with a copy to the
Agent) that the circumstances specified in Section 3.01 or 3.03 which gave rise
to the conversion of such Bank's Affected Loans pursuant to this Section 3.04 no
longer exist (which such Bank agrees to do promptly upon such circumstances
ceasing to exist) at a time when Loans of the Affected Type are outstanding,
such Bank's Variable Rate Loans shall be automatically converted, on the first
day(s) of the next succeeding Interest Period(s) for such outstanding Loans of
the Affected Type to the extent necessary so that, after giving effect thereto,
all Loans held by the Banks holding Loans of the Affected Type and by such Bank
are held pro rata (as to principal amounts, types and Interest Periods) in
accordance with their respective Commitments.
Section 3.05. Certain Compensation. The Borrower shall pay to
the Agent for the account of each Bank, upon the request of such Bank through
the Agent, such amount or amounts as shall be sufficient (in the reasonable
opinion of such Bank) to compensate it for any loss, cost or expense which such
Bank determines is attributable to:
(a) any payment, prepayment, conversion or renewal of
a Fixed Rate Loan made by such Bank on a date other than the last day of an
Interest Period for such Loan (whether by reason of acceleration, mandatory
prepayment or otherwise); or
(b) any failure by the Borrower to borrow, convert
into or renew a Fixed Rate Loan to be made, converted into or renewed by such
Bank on the date specified therefor in the relevant notice under Section 2.04,
2.05 or 2.07, as the case may be.
Without limiting the foregoing, such compensation shall
include an amount equal to the excess, if any, of: (i) the amount of interest
which otherwise would have accrued on the principal amount so paid, prepaid,
converted or renewed or not borrowed, converted or renewed for the period from
and including the date of such payment, prepayment or conversion or failure to
borrow, convert or renew to but excluding the last day of the then current
Interest Period for such Loan (or, in the case of a failure to borrow, convert
or renew, to but excluding the last day of the Interest Period for such Loan
which would have commenced on the date specified therefor in the relevant
notice) at the applicable rate of interest for such Loan provided for herein;
over (ii) the amount of interest (as reasonably determined by such Bank) such
Bank would have bid in the London interbank market for Dollar deposits for
amounts comparable to such principal amount and maturities comparable to such
period. A determination of any Bank as to the amounts payable pursuant to this
Section 3.05 shall be conclusive absent manifest error.
Section 3.06. HLT Classification. If, after the date hereof,
the Agent is advised by any Bank that such Bank has received notice from any
governmental authority, central bank or comparable agency having jurisdiction
over such Bank that the definition of highly leveraged transaction has been
modified with the result that its Loans hereunder are classified as a "highly
leveraged transaction" (an "HLT Classification") or if the Borrower takes any
action which causes this transaction to be subject to HLT Classification, the
Agent shall promptly give notice of such HLT Classification to the Borrower and
the other Banks and the Agent. The Banks and the Borrower shall commence
negotiations in good faith to agree on whether and, if so, the extent to which
commitment fees, interest rates and/or margins hereunder should be increased so
as to reflect such HLT Classification. If the Borrower and the Required Banks
fail to agree on such increases within 10 days after notice is given by the
Agent as provided above, then (i) the Agent, if requested by the Required Banks
shall, by notice to the Borrower immediately terminate the Commitments, and (ii)
the Borrower shall be obligated to prepay on the date of such termination of the
Commitments each outstanding Loan by paying the aggregate principal amount to be
prepaid together with all accrued interest thereon to the date of such
prepayment; provided that, if the Borrower prepays any Fixed Rate Loans pursuant
to this clause, the Borrower shall compensate the Banks for any resulting
funding losses. The Banks acknowledge that a HLT Classification is not a Default
or an Event of Default hereunder.
ARTICLE 4. COLLATERAL SECURITY.
Section 4.01 Security. As security for the payment of all
Loans made hereunder and under the Credit Agreement - Term Loan Facility, and
for the obligations of each Guarantor under its Guaranty, Borrower and the
Guarantors hereby agree that the Banks shall at all times have, pursuant to a
Security Agreement executed concurrently herewith in the Form of Exhibit D, a
continuing general security interest in all personal property of Borrower and
each Guarantor as more fully described in the security agreement. In addition,
as provided in the Security Agreement, the Banks shall at all times have a
perfected first priority security interest in 100% of the stock of all
Subsidiaries of Borrower, now owned or hereafter acquired.
Section 4.02 Setoff. As additional collateral security for the
payment of the Notes and of any and all other obligations and liabilities of
Borrower and each Guarantor to the Banks hereunder, whether due or to become
due, direct or contingent, now existing or hereafter arising, and however
created or acquired, the Banks shall at all times have and are hereby given a
security interest in and a lien upon and right of offset against all moneys,
deposit balances, securities or other property or interest therein of Borrower
and each Guarantor now or at any time after the date of this Loan Agreement held
or received by or for or left in the possession or control of any of the Banks,
whether for safekeeping, custody, transmission, collection, pledge or for any
other or different purpose. The foregoing right of setoff shall at all times be
subject to the Banks' obligation to share payments as set forth in Section
11.17.
Section 4.03 Guaranties. Each Guarantor shall execute and
deliver a Guaranty to each of the Banks, and a Security Agreement granting the
Banks a security interest in all of the Guarantor's personal property as set
forth in Section 4.01.
ARTICLE 5. CONDITIONS PRECEDENT.
Section 5.01. Documentary Conditions Precedent. The
obligations of the Banks to make the Loans constituting the initial borrowing
hereunder are subject to the condition precedent that the Agent and the Banks
shall have received on or before the date of such Loans each of the following,
in form and substance satisfactory to the Agent, the Banks, and their counsel:
(a) the Notes duly executed by the Borrower;
(b) the Authorization Letter duly executed by the
Borrower;
(c) Security Agreements and UCC-1 Financing
Statements duly executed by the Borrower and each Guarantor;
(d) the Guaranty duly executed by each Guarantor;
(e) a certificate of the Secretary or Assistant
Secretary of the Borrower, dated the Closing Date, attesting to all corporate
action taken by the Borrower, including resolutions of its Board of Directors
and sole shareholder authorizing the execution, delivery and performance of the
Facility Documents to which it is a party and each other document to be
delivered pursuant to this Agreement;
(f) a certificate of the Secretary or Assistant
Secretary of the Borrower, dated the Closing Date, certifying the names and true
signatures of the officers of the Borrower authorized to sign the Facility
Documents to which it is a party and the other documents to be delivered by the
Borrower under this Agreement;
(g) a certificate of a duly authorized officer of the
Borrower, dated the Closing Date, stating that the representations and
warranties in Article 6 are true and correct on such date as though made on and
as of such date and that no event has occurred and is continuing which
constitutes a Default or Event of Default;
(h) a favorable opinion of counsel for the Borrower,
dated the Closing Date, in substantially the form of Exhibit E and as to such
other matters as the Agent or any Bank may reasonably request;
(i) a certificate of the Secretary or Assistant
Secretary of each Guarantor, dated the Closing Date, attesting to all corporate
action taken by the Guarantor, including resolutions of its Board of Directors
authorizing the execution, delivery and performance of the Facility Documents to
which it is a party;
(j) a certificate of the Secretary or Assistant
Secretary of each Guarantor, dated the Closing Date, certifying the names and
true signatures of the officers of each Guarantor authorized to sign the
Facility Documents to which it is a party;
(k) a favorable opinion of counsel for each Guarantor
dated the Closing Date, in substantially the form of Exhibit F and as to such
other matters as the Agent or any Bank may reasonably request;
(l) a certificate of a duly authorized officer of
each Guarantor, dated the Closing Date, stating that the representations and
warranties in the Facility Documents to which it is a party are true and correct
on such date as though made on and as of such date and that no event has
occurred and is continuing which constitutes a Default or Event of Default, and
(m) Certificates from the applicable Secretaries of
State showing Borrower and each Guarantor to be corporations in good standing in
the States of their incorporation.
Section 5.02. Additional Conditions Precedent. The obligations
of the Banks to make any Loans pursuant to a borrowing which increases the
amount outstanding hereunder (including the initial borrowing) shall be subject
to the further conditions precedent that on the date of such Loans:
(a) the following statements shall be true:
(i) the representations and warranties contained
in Article 6 and in any other Facility Document are true and correct on
and as of the date of such Loans as though made on and as of such date;
and
(ii) no Default or Event of Default has occurred
and is continuing, or would result from such Loans.
(b) The Banks shall have reviewed, and shall be
satisfied with, the terms and conditions of, and the documentation relating to,
the closing of the NDM Acquisition, and the other transactions contemplated
hereby. The Banks shall also have reviewed, and shall be satisfied with, the pro
forma financial statements for the combined operations of Borrower and NDM, as
of the closing of the NDM Acquisition.
(c) The Banks shall have reviewed, and shall be
satisfied with, the condition (financial and otherwise), operations, assets,
title and nature of assets, liabilities and prospects of the Borrower, and its
respective Subsidiaries, and of NDM.
(d) The Banks shall have reviewed, and shall be
satisfied with, (i) the Borrower's tax assumptions, and (ii) the corporate,
organizational, capital, and legal structure of the Borrower, NDM, and their
respective Subsidiaries.
(e) The Banks shall be satisfied that the borrowings
under this Agreement and other funding for the NDM Acquisition are in full
compliance with all legal requirements, including without limitation Regulations
G, T, U and X of the Board of Governors of the Federal Reserve System, and that
the NDM Acquisition is in compliance with all applicable legal requirements
including, if applicable, the Hart-Scott-Rodino Act, and all securities law
requirements.
(f) The Banks shall be satisfied that the Borrower,
NDM, and their respective Subsidiaries comply in all material respects with all
applicable U.S. federal, state and local laws and regulations, including all
Environmental Laws.
(g) The Banks shall have reviewed, and shall be
satisfied with, an environmental risk assessment (including the potential levels
of environmental liability set forth therein) with respect to NDM and its
Subsidiaries.
(h) The Banks shall have reviewed, and shall be
satisfied with, the insurance program of the Borrower, NDM, and their respective
Subsidiaries.
(i) The Banks shall have reviewed, and shall be
satisfied with, all financial information concerning the NDM Acquisition
furnished to Borrower pursuant to the agreements memorializing the NDM
Acquisition.
(j) The Banks shall have reviewed, and shall be
satisfied with, information concerning any litigation relating to or arising out
of NDM, the Acquisition or any of the other transactions contemplated by this
Agreement.
(k) the Agent shall have received such other
approvals, opinions or documents as the Agent or any Bank may reasonably
request.
(l) Guaranties to each Bank from each Subsidiary
shall be in full force and effect and unrevoked.
(m) The Security Agreements of Borrower and each
Guarantor, and all other Facility Documents, shall be in full force and effect.
Section 5.03. Term Loan Borrowings. The obligations of the
Banks to make any Loans hereunder shall be subject to the further condition
precedent that Borrower shall have borrowed the full amount committed by the
Banks under the Credit Agreement - Term Loan Facility.
Section 5.04. Deemed Representations. Each notice of borrowing
hereunder and acceptance by the Borrower of the proceeds of such borrowing shall
constitute a representation and warranty that the statements contained in
Section 5.02(a) are true and correct both on the date of such notice and, unless
the Borrower otherwise notifies the Agent prior to such borrowing, as of the
date of such borrowing.
ARTICLE 6. REPRESENTATIONS AND WARRANTIES.
The Borrower hereby represents and warrants that:
Section 6.01. Incorporation, Good Standing and Due
Qualification. Each of the Borrower and its Subsidiaries is duly incorporated,
validly existing and in good standing under the laws of the jurisdiction of its
incorporation, has the corporate power and authority to own its assets and to
transact the business in which it is now engaged or proposed to be engaged, and
is duly qualified as a foreign corporation and in good standing under the laws
of each other jurisdiction in which such qualification is required.
Section 6.02. Corporate Power and Authority; No Conflicts. The
execution, delivery and performance by the Borrower of the Facility Documents to
which it is a party have been duly authorized by all necessary corporate action
and do not and will not: (a) require any consent or approval of its
stockholders; (b) contravene its charter or by-laws; (c) violate any provision
of, or require any filing, registration, consent or approval under, any law,
rule, regulation (including, without limitation, Regulation U), order, writ,
judgment, injunction, decree, determination or award presently in effect having
applicability to the Borrower or any of its Subsidiaries or Affiliates; (d)
result in a breach of or constitute a default or require any consent under any
indenture or loan or credit agreement or any other agreement, lease or
instrument to which the Borrower is a party or by which it or its properties may
be bound or affected; (e) result in, or require, the creation or imposition of
any Lien upon or with respect to any of the properties now owned or hereafter
acquired by the Borrower; or (f) cause the Borrower (or any Subsidiary or
Affiliate, as the case may be) to be in default under any such law, rule,
regulation, order, writ, judgment, injunction, decree, determination or award or
any such indenture, agreement, lease or instrument.
Section 6.03. Legally Enforceable Agreements. Each Facility
Document to which the Borrower is a party is, or when delivered under this
Agreement will be, a legal, valid and binding obligation of the Borrower
enforceable against the Borrower in accordance with its terms, except to the
extent that such enforcement may be limited by applicable bankruptcy, insolvency
and other similar laws affecting creditors' rights generally.
Section 6.04. Litigation. There are no actions, suits or
proceedings pending or, to the knowledge of the Borrower, threatened, against or
affecting the Borrower or any of its Subsidiaries before any court, governmental
agency or arbitrator, which may, in any one case or in the aggregate, materially
adversely affect the financial condition, operations, properties or business of
the Borrower or any such Subsidiary or of the ability of the Borrower to perform
its obligations under the Facility Documents to which it is a party.
Section 6.05. Financial Statements. The consolidated balance
sheet of the Borrower and its Consolidated Subsidiaries as at December 30, 1994,
and the related consolidated income statement and statements of cash flows and
changes in stockholders' equity of the Borrower and its Consolidated
Subsidiaries for the fiscal year then ended, and the accompanying footnotes,
together with the opinion thereon, of Price Waterhouse LLP, independent
certified public accountants, copies of which have been furnished to each of the
Banks, are complete and correct and fairly present the financial condition of
the Borrower and its Consolidated Subsidiaries as at such date and the results
of the operations of the Borrower and its Consolidated Subsidiaries for the
periods covered by such statements, all in accordance with GAAP consistently
applied (subject to adjustments under Financial Accounting Standards 106 and
109). There are no liabilities of the Borrower or any of its Consolidated
Subsidiaries, fixed or contingent, which are material but are not reflected in
the financial statements or in the notes thereto, other than liabilities arising
in the ordinary course of business since December 30, 1994. No information,
exhibit or report furnished by the Borrower to the Banks in connection with the
negotiation of this Agreement contained any material misstatement of fact or
omitted to state a material fact or any fact necessary to make the statements
contained therein not materially misleading. Since December 30, 1994, there has
been no material adverse change in the condition (financial or otherwise),
business, operations or prospects of the Borrower or any of its Subsidiaries.
Section 6.06. Ownership and Liens. Each of the Borrower and
its Consolidated Subsidiaries has good, clear and marketable title to, or valid
leasehold interests in, all of its properties and assets, real and personal,
including the properties and assets, and leasehold interests reflected in the
financial statements referred to in Section 6.05 (other than any properties or
assets disposed of in the ordinary course of business), and none of the
properties and assets owned by the Borrower or any of its Subsidiaries and none
of its leasehold interests is subject to any Lien, except as disclosed in such
financial statements or as may be permitted hereunder. Upon consummation of the
NDM Acquisition in accordance with the Asset Purchase Agreement, NDM, Inc. will
acquire good, clear and marketable title to the assets to be acquired from NDM.
Section 6.07. Taxes. Each of the Borrower and its Subsidiaries
has filed all tax returns (federal, state and local) required to be filed and
has paid all taxes, assessments and governmental charges and levies thereon to
be due, including interest and penalties. The federal income tax liability of
the Borrower and its Subsidiaries has been audited by the Internal Revenue
Service and has been finally determined and satisfied for all taxable years up
to and including the taxable year ended in 1990.
Section 6.08. ERISA. Each Plan, and, to the best knowledge of
the Borrower, each Multiemployer Plan, is in compliance in all material respects
with, and has been administered in all material respects in compliance with, the
applicable provisions of ERISA, the Code and any other applicable Federal or
state law, and no event or condition is occurring or exists concerning which the
Borrower would be under an obligation to furnish a report to the Bank in
accordance with Section 7.08(h) hereof. The funded status of each Plan is as set
forth in Schedule IV.
Section 6.09. Subsidiaries and Ownership of Stock. Schedule I
is a complete and accurate list of the Subsidiaries of the Borrower, showing the
jurisdiction of incorporation or organization of each Subsidiary and showing the
percentage of the Borrower's ownership of the outstanding stock or other
interest of each such Subsidiary. All of the outstanding capital stock or other
interest of each such Subsidiary has been validly issued, is fully paid and
nonassessable and is owned by the Borrower free and clear of all Liens.
Section 6.10. Credit Arrangements. Schedule II is a complete
and correct list of all credit agreements, indentures, installment purchase
agreements, guaranties, Capital Leases and other investments, agreements and
arrangements presently in effect providing for or relating to extensions of
credit (including agreements and arrangements for the issuance of letters of
credit or for acceptance financing) in respect of which the Borrower or any of
its Subsidiaries is in any manner directly or contingently obligated; and the
maximum principal or face amounts of the credit in question, outstanding and
which can be outstanding, are correctly stated, and all Liens of any nature
given or agreed to be given as security therefor are correctly described or
indicated in such Schedule.
Section 6.11. Operation of Business. Each of the Borrower and
its Subsidiaries possesses all licenses, permits, franchises, patents,
copyrights, trademarks and trade names, or rights thereto, necessary to conduct
its business substantially as now conducted and as presently proposed to be
conducted, and neither the Borrower nor any of its Subsidiaries is in violation
of any valid rights of others with respect to any of the foregoing.
Section 6.12. Hazardous Materials. The Borrower and each of
its Subsidiaries have obtained all permits, licenses and other authorizations
which are required under all Environmental Laws, except to the extent failure to
have any such permit, license or authorization would not have a material adverse
effect on the consolidated financial condition, operations, business or
prospects of the Borrower and its Consolidated Subsidiaries. The Borrower and
each of its Subsidiaries are in compliance with the terms and conditions of all
such permits, licenses and authorizations, and are also in compliance with all
other limitations, restrictions, conditions, standards, prohibitions,
requirements, obligations schedules and timetables contained in any applicable
Environmental Law or in any regulation, code, plan, order, decree, judgment,
injunction, notice or demand letter issued, entered, promulgated or approved
thereunder, except to the extent failure to comply would not have a material
adverse effect on the consolidated financial condition, operations, business or
prospects of the Borrower and its Consolidated Subsidiaries.
In addition, except as set forth in Schedule III hereto:
(a) No notice, notification, demand, request for
information, citation, summons or order has been issued, no complaint has been
filed, no penalty has been assessed and no investigation or review is pending or
threatened by any governmental or other entity with respect to any alleged
failure by the Borrower or any of its Subsidiaries to have any permit, license
or authorization required in connection with the conduct of the business of the
Borrower or any of its Subsidiaries or with respect to any generation,
treatment, storage, recycling, transportation, release or disposal, or any
release as defined in 42 U.S.C. ss. 9601(22) ("Release"), of any substance
regulated under Environmental Laws ("Hazardous Materials") generated by the
Borrower or any of its Subsidiaries.
(b) Neither the Borrower nor any of its Subsidiaries
has handled any Hazardous Material, other than as a generator, on any property
now or previously owned or leased by the Borrower or any of its Subsidiaries to
an extent that it has, or may reasonably be expected to have, a material adverse
effect on the consolidated financial condition, operations, business or
prospects taken as a whole of the Borrower and its Consolidated Subsidiaries;
and
(i) no polychlorinated biphenyl is or has been
present at any property now or previously owned or leased by the
Borrower or any of its Subsidiaries;
(ii) no asbestos is or has been present at any
property now or previously owned or leased by the Borrower or any of
its Subsidiaries;
(iii) there are no underground storage tanks for
Hazardous Materials, active or abandoned, at any property now or
previously owned or leased by the Borrower or any of its Subsidiaries;
and
(iv) no Hazardous Materials have been Released,
in a reportable quantity, where such a quantity has been established by
statute, ordinance, rule, regulation or order, at, on or under any
property now or previously owned by the Borrower or any of its
Subsidiaries.
(c) Neither the Borrower nor any of its Subsidiaries
has transported or arranged for the transportation of any Hazardous Material to
any location which is listed on the National Priorities List under the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended ("CERCLA"), listed for possible inclusion on the National Priorities
List by the Environmental Protection Agency in the Comprehensive Environmental
Response and Liability Information System as provided by 40 C.F.R. ss. 300.5
("CERCLIS") or on any similar state list or which is the subject of federal,
state or local enforcement actions or other investigations which may lead to
claims against the Borrower or any of its Subsidiaries for clean-up costs,
remedial work, damages to natural resources or for personal injury claims,
including, but not limited to, claims under CERCLA.
(d) No Hazardous Material generated by the Borrower
or any of its Subsidiaries has been recycled, treated, stored, disposed of or
released (as defined in CERCLA) by the Borrower or any of its Subsidiaries at
any location other than those listed in Schedule III hereto.
(e) No oral or written notification of a Release of a
Hazardous material has been filed by or on behalf of the Borrower or any of its
Subsidiaries and no property now or previously owned or leased by the Borrower
or any of its Subsidiaries is listed or proposed for listing on the National
Priorities List promulgated pursuant to CERCLA, on CERCLIS or on any similar
state list of sites requiring investigation or clean-up.
(f) There are no Liens arising under or pursuant to
any Environmental Laws on any of the real property or properties owned or leased
by the Borrower or any of its Subsidiaries, and no government actions have been
taken or are in process which could subject any of such properties to such Liens
and neither the Borrower nor any of its Subsidiaries would be required to place
any notice or restriction relating to the presence of Hazardous Materials at any
property owned by it in any deed to such property.
(g) There have been no environmental investigations,
studies, audits, test, reviews or other analyses conducted by or which are in
the possession of the Borrower or any of its Subsidiaries in relation to any
property or facility now or previously owned or leased by the Borrower or any of
its Subsidiaries which have not been made available to the Banks.
Section 6.13. No Default on Outstanding Judgments or Orders.
Each of the Borrower and its Subsidiaries has satisfied all judgments and
neither the Borrower nor any of its Subsidiaries is in default with respect to
any judgment, writ, injunction, decree, rule or regulation of any court,
arbitrator or federal, state, municipal or other governmental authority,
commission, board, bureau, agency or instrumentality, domestic or foreign.
Section 6.14. No Defaults on Other Agreements. Neither the
Borrower nor any of its Subsidiaries is a party to any indenture, loan or credit
agreement or any lease or other agreement or instrument or subject to any
charter or corporate restriction which could have a material adverse effect on
the business, properties, assets, operations or conditions, financial or
otherwise, of the Borrower or any of its Subsidiaries, or the ability of the
Borrower or any of its Subsidiaries to carry out its obligations under the
Facility Documents to which it is a party. Neither the Borrower nor any of its
Subsidiaries is in default in any respect in the performance, observance or
fulfillment of any of the obligations, covenants or conditions contained in any
agreement or instrument material to its business to which it is a party.
Section 6.15. Labor Disputes and Acts of God. Neither the
business nor the properties of the Borrower or of any of its Subsidiaries are
affected by any fire, explosion, accident, strike, lockout or other labor
dispute, drought, storm, hail, earthquake, embargo, act of God or of the public
enemy or other casualty (whether or not covered by insurance), materially and
adversely affecting such business or properties or the operation of the Borrower
or such Subsidiary.
Section 6.16. Governmental Regulation. Neither the Borrower
nor any of its Subsidiaries is subject to regulation under the Public Utility
Holding Company Act of 1935, the Investment Company Act of 1940, the Interstate
Commerce Act, the Federal Power Act or any statute or regulation limiting its
ability to incur indebtedness for money borrowed as contemplated hereby.
Section 6.17. Partnerships. Neither the Borrower nor
any of its Subsidiaries is a partner in any partnership.
Section 6.18. No Forfeiture. Neither the Borrower nor any of
its Subsidiaries or Affiliates is engaged in or proposes to be engaged in the
conduct of any business or activity which could result in a Forfeiture
Proceeding and no Forfeiture Proceeding against any of them is pending or
threatened.
Section 6.19. Solvency.
(a) The present fair saleable value of the assets of
the Borrower and each Subsidiary, respectively, after giving effect to all the
transactions contemplated by the Facility Documents and the funding of all
Commitments hereunder, exceeds the amount that will be required to be paid on or
in respect of the existing debts and other liabilities (including contingent
liabilities) of the Borrower and its Subsidiaries as they mature.
(b) The respective property of the Borrower and each
Subsidiary does not constitute unreasonably small capital for the Borrower or
any Subsidiary to carry out its business as now conducted and as proposed to be
conducted including the capital needs of the Borrower or its Subsidiaries.
(c) Neither Borrower nor any Subsidiary intends to,
nor does it believe that it will, incur debts beyond its ability to pay such
debts as they mature (taking into account the timing and amounts of cash to be
received by the Borrower and each Subsidiary, and of amounts to be payable on or
in respect of debt of the Borrower and each Subsidiary). The cash available to
the Borrower and its Subsidiaries, after taking into account all other
anticipated uses of the cash of the Borrower and its Subsidiaries, is
anticipated to be sufficient to pay all such amounts on or in respect of debt of
the Borrower and its Subsidiaries when such amounts are required to be paid.
(d) The Borrower does not believe that final
judgments against it or any Subsidiary in actions for money damages will be
rendered at a time when, or in an amount such that, the Borrower and its
Subsidiaries will be unable to satisfy any such judgments promptly in accordance
with their terms (taking into account the maximum reasonable amount of such
judgments in any such actions and the earliest reasonable time at which such
judgments might be rendered). The cash available to the Borrower and its
Subsidiaries after taking into account all other anticipated uses of the cash of
the Borrower and its Subsidiaries (including the payments on or in respect of
debt referred to in paragraph (c) of this Section 6.19), is anticipated to be
sufficient to pay all such judgments promptly in accordance with their terms.
Section 6.20. Integrated Group. Borrower and its Subsidiaries
function as an integrated group and Borrower and each Subsidiary will derive
benefits, directly and indirectly, from the Loans, both in their separate
capacity and as members of the integrated group, because the successful
operation of Borrower and its Subsidiaries is dependant upon the continued
successful operation and functions of Borrower and each Subsidiary and of the
integrated group as a whole. All Loans will be made to and through Borrower, but
it is agreed that each Subsidiary will benefit from the Loans along with
Borrower as members of the integrated and consolidated group.
ARTICLE 7. AFFIRMATIVE COVENANTS.
So long as any of the Notes shall remain unpaid or any Bank
shall have any Commitment under this Agreement, the Borrower shall:
Section 7.01. Maintenance of Existence. Preserve and maintain,
and cause each of its Subsidiaries to preserve and maintain, its corporate
existence and good standing in the jurisdiction of its incorporation, and
qualify and remain qualified, and cause each of its Subsidiaries to qualify and
remain qualified, as a foreign corporation in each jurisdiction in which such
qualification is required.
Section 7.02. Conduct of Business. Continue, and cause each of
its Subsidiaries to continue, to engage in an efficient and economical manner in
a business of the same general type as conducted by it on the date of this
Agreement.
Section 7.03. Maintenance of Properties. Maintain, keep and
preserve, and cause each of its Subsidiaries to maintain, keep and preserve, all
of its properties, (tangible and intangible) necessary or useful in the proper
conduct of its business in good working order and condition, ordinary wear and
tear excepted.
Section 7.04. Maintenance of Records. Keep, and cause each of
its Subsidiaries to keep, adequate records and books of account, in which
complete entries will be made in accordance with GAAP, reflecting all financial
transactions of the Borrower and its Subsidiaries.
Section 7.05. Maintenance of Insurance. Maintain, and cause
each of its Subsidiaries to maintain, insurance with financially sound and
reputable insurance companies or associations in such amounts and covering such
risks as are usually carried by companies engaged in the same or a similar
business and similarly situated, which insurance may provide for reasonable
deductibility from coverage thereof.
Section 7.06. Compliance with Laws. Comply, and cause each of
its Subsidiaries to comply, in all respects with all applicable laws, rules,
regulations and orders (including, but not limited to, environmental laws,
rules, regulations and orders), such compliance to include, without limitation,
paying before the same become delinquent all taxes, assessments and governmental
charges imposed upon it or upon its property.
Section 7.07. Right of Inspection. At any reasonable time and
from time to time, permit the Agent or any Bank or any agent or representative
thereof, to examine and make copies and abstracts from the records and books of
account of, and visit the properties of, the Borrower and any of its
Subsidiaries, and to discuss the affairs, finances and accounts of the Borrower
and any such Subsidiary with any of their respective officers and directors and
the Borrower's independent accountants.
Section 7.08. Reporting Requirements. Furnish directly 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 and
consolidating balance sheet of the Borrower and its Consolidated Subsidiaries as
of the end of such fiscal year and a consolidated and consolidating income
statement and statements of cash flows and changes in stockholders' equity of
the Borrower and its Consolidated Subsidiaries for such fiscal year, all in
reasonable detail and stating in comparative form the respective consolidated
and consolidating figures for the corresponding date and period in the prior
fiscal year and all prepared in accordance with GAAP and as to the consolidated
statements accompanied by an opinion thereon acceptable to the Agent and each of
the Banks by Price Waterhouse LLP or other independent accountants of national
standing selected by the Borrower;
(b) as soon as available and in any event within 45
days after the end of each of the first three quarters of each fiscal year of
the Borrower, a consolidated and consolidating balance sheet of the Borrower and
its Consolidated Subsidiaries as of the end of such quarter and a consolidated
and consolidating income statement and statements of cash flows and changes in
stockholders' equity, of the Borrower and its Consolidated Subsidiaries for the
period commencing at the end of the previous fiscal year and ending with the end
of such quarter, all in reasonable detail and stating in comparative form the
respective consolidated and consolidating figures for the corresponding date and
period in the previous fiscal year and all prepared in accordance with GAAP and
certified by the chief financial officer of the Borrower (subject to year-end
adjustments);
(c) promptly upon receipt thereof, copies of any
reports submitted to the Borrower or any of its Subsidiaries by independent
certified public accountants in connection with examination of the financial
statements of the Borrower or any such Subsidiary made by such accountants;
(d) simultaneously with the delivery of the financial
statements referred to above, a certificate of the chief financial officer of
the Borrower (i) certifying that to the best of his knowledge no Default or
Event of Default has occurred and is continuing or, if a Default or Event of
Default has occurred and is continuing, a statement as to the nature thereof and
the action which is proposed to be taken with respect thereto, and (ii) with
computations demonstrating compliance with the covenants contained in Article 9;
(e) simultaneously with the delivery of the annual
financial statements referred to in Section 7.08(a), a certificate of the
independent public accountants who audited such statements to the effect that,
in making the examination necessary for the audit of such statements, they have
obtained no knowledge of any condition or event which constitutes a Default or
Event of Default, or if such accountants shall have obtained knowledge of any
such condition or event, specifying in such certificate each such condition or
event of which they have knowledge and the nature and status thereof;
(f) promptly after the commencement thereof, notice
of all actions, suits, and proceedings before any court or governmental
department, commission, board, bureau, agency or instrumentality, domestic or
foreign, affecting the Borrower or any of its Subsidiaries which, if determined
adversely to the Borrower or such Subsidiary, could have a material adverse
effect on the financial condition, properties, or operations of the Borrower or
such Subsidiary;
(g) as soon as possible and in any event within 10
days after the occurrence of each Default or Event of Default a written notice
setting forth the details of such Default or Event of Default and the action
which is proposed to be taken by the Borrower with respect thereto;
(h) as soon as possible, and in any event within ten
days after the Borrower knows or has reason to know that any of the events or
conditions specified below with respect to any Plan or Multiemployer Plan have
occurred or exist, a statement signed by a senior financial officer of the
Borrower setting forth details respecting such event or condition and the
action, if any, which the Borrower or its ERISA Affiliate proposes to take with
respect thereto (and a copy of any report or notice required to be filed with or
given to PBGC by the Borrower or an ERISA Affiliate with respect to such event
or condition):
(i) any reportable event, as defined in Section
4043(b) of ERISA, with respect to a Plan, as to which PBGC has not by
regulation waived the requirement of Section 4043(a) of ERISA that it
be notified within 30 days of the occurrence of such event (provided
that a failure to meet the minimum funding standard of Section 412 of
the Code or Section 302 of ERISA including, without limitation, the
failure to make on or before its due date a required installment under
Section 412(m) of the Code or Section 302(e) of ERISA, shall be a
reportable event regardless of the issuance of any waivers in
accordance with Section 412(d) of the Code) and any request for a
waiver under Section 412(d) of the Code for any Plan;
(ii) the distribution under Section 4041 of ERISA of
a notice of intent to terminate any Plan or any action taken by the
Borrower or an ERISA Affiliate to terminate any Plan;
(iii) the institution by PBGC of proceedings under
Section 4042 of ERISA for the termination of, or the appointment of a
trustee to administer, any Plan, or the receipt by the Borrower or any
ERISA Affiliate of a notice from a Multiemployer Plan that such action
has been taken by PBGC with respect to such Multiemployer Plan;
(iv) the complete or partial withdrawal from a
Multiemployer Plan by the Borrower or any ERISA Affiliate that results
in liability under Section 4201 or 4204 of ERISA (including the
obligation to satisfy secondary liability as a result of a purchaser
default) or the receipt of the Borrower or any ERISA Affiliate of
notice from a Multiemployer Plan that it is in reorganization or
insolvency pursuant to Section 4241 or 4245 of ERISA or that it intends
to terminate or has terminated under Section 4041A of ERISA;
(v) the institution of a proceeding by a fiduciary or
any Multiemployer Plan against the Borrower or any ERISA Affiliate to
enforce Section 515 of ERISA, which proceeding is not dismissed within
30 days;
(vi) the adoption of an amendment to any Plan that
pursuant to Section 401(a)(29) of the Code or Section 307 of ERISA
would result in the loss of tax-exempt status of the trust of which
such Plan is a part if the Borrower or an ERISA Affiliate fails to
timely provide security to the Plan in accordance with the provisions
of said Sections;
(vii) any event or circumstance exists which may
reasonably be expected to constitute grounds for the Borrower or any
ERISA Affiliate to incur liability under Title IV of ERISA or under
Sections 412(c)(11) or 412(n) of the Code with respect to any Plan; and
(viii) the Unfunded Benefit Liabilities of one or
more Plans increase after the date of this Agreement in an amount which
is material in relation to the financial condition of the Borrower and
its Subsidiaries, on a consolidated basis; provided, however, that such
increase shall not be deemed to be material so long as it does not
exceed $300,000 during any consecutive one year period .
(i) promptly after the request of any Bank, copies of
each annual report filed pursuant to Section 104 of ERISA with respect to each
Plan (including, to the extent required by Section 104 of ERISA, the related
financial and actuarial statements and opinions and other supporting statements,
certifications, schedules and information referred to in Section 103) and each
annual report filed with respect to each Plan under Section 4065 of ERISA;
provided, however, that in the case of a Multiemployer Plan, such annual reports
shall be furnished only if they are available to the Borrower or an ERISA
Affiliate;
(j) promptly after the furnishing thereof, copies of
any statement or report furnished to any other party pursuant to the terms of
any indenture, loan or credit or similar agreement and not otherwise required to
be furnished to the Banks pursuant to any other clause of this Section 7.08;
(k) promptly after the sending or filing thereof,
copies of all proxy statements, financial statements and reports which the
Borrower or any of its Subsidiaries sends to its stockholders, and copies of all
regular, periodic and special reports, and all registration statements which the
Borrower or any such Subsidiary files with the Securities and Exchange
Commission or any governmental authority which may be substituted therefor, or
with any national securities exchange;
(l) promptly after the commencement thereof or
promptly after the Borrower knows of the commencement or threat thereof, notice
of any Forfeiture Proceeding;
(m) a quarterly report from Borrower's environmental
counsel on the status of environmental matters relating to Birtcher; and
(n) such other information respecting the condition
or operations, financial or otherwise, of the Borrower or any of its
Subsidiaries as the Agent or any Bank may from time to time reasonably request.
Section 7.09. Guaranties. Cause any Subsidiary hereafter
created or acquired to execute and deliver a Guaranty.
ARTICLE 8. NEGATIVE COVENANTS.
So long as any of the Notes shall remain unpaid or any Bank
shall have any Commitment under this Agreement, the Borrower shall not:
Section 8.01. Debt. Create, incur, assume or suffer to exist,
or permit any of its Subsidiaries to create, incur, assume or suffer to exist,
any Debt except:
(a) Debt of the Borrower under this Agreement or the
Notes, or under the Credit Agreement - Term Loan Facility and Notes issued
pursuant thereto;
(b) Debt described in Schedule II, including
renewals, extensions or refinancings thereof, provided that the principal amount
thereof does not increase;
(c) Debt of the Borrower subordinated on terms
satisfactory to the Banks to the Borrower's obligations under this Agreement and
the Notes;
(d) Debt of the Borrower to any such Subsidiary or of
any Subsidiary to the Borrower or another such Subsidiary;
(e) accounts payable to trade creditors for goods or
services which are not aged more than 180 days from billing date and current
operating liabilities (other than for borrowed money) which are not more than
180 days past due, in each case incurred in the ordinary course of business and
paid within the specified time, unless contested in good faith and by
appropriate proceedings;
(f) Debt in respect of letters of credit issued by
Chase for the account of the Borrower or any such Subsidiary in an aggregate
face amount outstanding at any time of up to $100,000;
(g) Debt of the Borrower or any such Subsidiary
secured by purchase money Liens permitted by Section 8.03;
(h) Hedge Exposure under Hedge Agreements with any
conterparty that was a Bank at the time it entered into the Hedge Agreement,
provided that Borrower and its Subsidiaries shall not enter into Hedge
Agreements with any third party other than a Bank and that their maximum,
aggregate Hedge Exposure shall not exceed $2,000,000 at any time; or
(i) A lease from the Oneida County Industrial
Development Agency of the former Carl's Drug Company property located at 5836
Success Drive, West Rome Industrial Park, Rome, New York (the "Rome Property")
at nominal annual rental, which lease will be accounted for as a Capital Lease,
together with governmental financing of up to $1,100,000 for acquisition and
improvement expenditures of the Rome Property.
Section 8.02. Guaranties, Etc. Assume, guarantee, endorse or
otherwise be or become directly or contingently responsible or liable, or permit
any of its Subsidiaries to assume, guarantee, endorse or otherwise be or become
directly or indirectly responsible or liable (including, but not limited to, an
agreement to purchase any obligation, stock, assets, goods or services or to
supply or advance any funds, asset, goods or services, or an agreement to
maintain or cause such Person to maintain a minimum working capital or net worth
or otherwise to assure the creditors of any Person against loss) for the
obligations of any Person, other than Borrower or a subsidiary except guaranties
by endorsement of negotiable instruments for deposit or collection or similar
transactions in the ordinary course of business.
Section 8.03. Liens. Create, incur, assume or suffer to exist,
or permit any of its Subsidiaries to create, incur, assume or suffer to exist,
any Lien, upon or with respect to any of its properties, now owned or hereafter
acquired, except:
(a) Liens in favor of Agent and/or the Banks securing
the Loans hereunder;
(b) Liens for taxes or assessments or other
government charges or levies if not yet due and payable or if due and payable if
they are being contested in good faith by appropriate proceedings and for which
appropriate reserves are maintained;
(c) Liens imposed by law, such as mechanic's,
materialmen's, landlord's, warehousemen's and carrier's Liens, and other similar
Liens, securing obligations incurred in the ordinary course of business which
are not past due for more than 30 days, or which are being contested in good
faith by appropriate proceedings and for which appropriate reserves have been
established;
(d) Liens under workmen's compensation, unemployment
insurance, social security or similar legislation (other than ERISA);
(e) Liens, deposits or pledges to secure the
performance of bids, tenders, contracts (other than contracts for the payment of
money), leases (permitted under the terms of this Agreement), public or
statutory obligations, surety, stay, appeal, indemnity, performance or other
similar bonds, or other similar obligations arising in the ordinary course of
business;
(f) judgment and other similar Liens arising in
connection with court proceedings; provided that the execution or other
enforcement of such Liens is effectively stayed and the claims secured thereby
are being actively contested in good faith and by appropriate proceedings;
(g) easements, rights-of-way, restrictions and other
similar encumbrances which, in the aggregate, do not materially interfere with
the occupation, use and enjoyment by the Borrower or any such Subsidiary of the
property or assets encumbered thereby in the normal course of its business or
materially impair the value of the property subject thereto;
(h) Liens securing obligations of a Subsidiary to the
Borrower or another Subsidiary;
(i) Liens described in Schedule II including
renewals, extensions or refinancings of the obligations secured thereby,
provided that the principal amount does not increase and the Liens are not
extended to other property or obligations;
(j) Liens securing Borrower's obligations relating to
letters of credit permitted under Section 8.01(f) or Hedge Agreements permitted
under Section 8.01(h).
(k) purchase money Liens on any property hereafter
acquired or the assumption of any Lien on property existing at the time of such
acquisition, or a Lien incurred in connection with any conditional sale or other
title retention agreement or a Capital Lease; provided that:
(i) any property subject to any of the
foregoing is acquired by the Borrower or any such Subsidiary in the
ordinary course of its business and the Lien on any such property is
created contemporaneously with such acquisition;
(ii) the obligation secured by any Lien so
created, assumed or existing shall not exceed 100% of the lesser of
cost or fair market value as of the time of acquisition of the property
covered thereby to the Borrower or such Subsidiary acquiring the same;
(iii) each such Lien shall attach only to
the property so acquired and fixed improvements thereon;
(iv) the Debt secured by all such Liens
shall not exceed $200,000 at any time outstanding in the aggregate; and
(v) the obligations secured by such Lien are
permitted by the provisions of Section 8.01 and the related expenditure
is permitted under Section 9.03.
Section 8.04. Leases. Create, incur, assume or suffer to
exist, or permit any of its Subsidiaries to create, incur, assume or suffer to
exist, any obligation as lessee for the rental or hire of any real or personal
property, except: (a) leases existing on the date of this Agreement and any
extensions or renewals thereof; (b) leases (other than Capital Leases) which do
not in the aggregate require the Borrower and its Subsidiaries on a consolidated
basis to make payments (including taxes, insurance, maintenance and similar
expense which the Borrower or any Subsidiary is required to pay under the terms
of any lease) in any fiscal year of the Borrower in excess of $1,000,000; (c)
leases between the Borrower and any Subsidiary or between any Subsidiaries; (d)
Capital Leases permitted by Section 8.03; and (e) a lease with The Oneida County
Industrial Development Agency, Rome Property. Payments under existing Birtcher
leases and renewals of same for premises located at 50 Technology Drive and
15330 Barranca Parkway, Irvine, California shall be disregarded in calculating
Borrower's compliance with the limitations set forth in subsection 8.04(b).
Section 8.05. Loans; Investments. Make, or permit any of its
Subsidiaries to make, any loan or advance to any Person, other than Borrower or
a Subsidiary, or purchase or otherwise acquire, or permit any such Subsidiary to
purchase or otherwise acquire, any capital stock, assets, obligations or other
securities of, make any capital contribution to, or otherwise invest in, or
acquire any interest in, any Person, except: (a) a subsidiary; (b) direct
obligations of the United States of America or any agency thereof with
maturities of five years or less from the date of acquisition; (c) commercial
paper of a domestic issuer rated at least "A-1" by Standard & Poor's Corporation
or "P-1" by Moody's Investors Service, Inc.; (d) certificates of deposit with
maturities of one year or less from the date of acquisition issued by any
commercial bank operating within the United States of America having capital and
surplus in excess of $750,000,000; (e) bank repurchase agreements of 30 days or
less duration backed by direct obligations of the United States of America or
any agencies thereof; and (f) for stock, obligations or securities received in
settlement of debts (created in the ordinary course of business) owing to the
Borrower or any Subsidiary.
Section 8.06. Dividends. Without the consent of the Banks,
declare or pay any dividends, purchase, redeem, retire or otherwise acquire for
value any of its capital stock now or hereafter outstanding, or make any
distribution of assets to its stockholders as such whether in cash, assets or in
obligations of the Borrower, or allocate or otherwise set apart any sum for the
payment of any dividend or distribution on, or for the purchase, redemption or
retirement of any shares of its capital stock, or make any other distribution by
reduction of capital or otherwise in respect of any shares of its capital stock
or permit any of its Subsidiaries to purchase or otherwise acquire for value any
stock of the Borrower or another such Subsidiary, except that: (a) the Borrower
may declare and deliver dividends and make distributions payable solely in
common stock of the Borrower; (b) the Borrower may purchase or otherwise acquire
shares of its capital stock by exchange for or out of the proceeds received from
a substantially concurrent issue of new shares of its capital stock; and (c) a
Subsidiary may pay dividends and make other distributions to Borrower.
Section 8.07. Sale of Assets. Sell, lease, assign, transfer or
otherwise dispose of, or permit any of its Subsidiaries to sell, lease, assign,
transfer or otherwise dispose of, any of its now owned or hereafter acquired
assets (including, without limitation, shares of stock and indebtedness of such
Subsidiaries, receivables and leasehold interests); except: (a) for inventory
disposed of in the ordinary course of business; (b) for the sale or other
disposition of assets no longer used or useful in the conduct of its business;
(c) that Borrower may convey the Rome Property to the Oneida County Industrial
Development Agency, which property will be leased back to Borrower as permitted
under Section 8.04(d) of this Agreement; (d) that any Subsidiary may sell,
lease, assign, or otherwise transfer its assets to the Borrower; and (e) that
Borrower may sell, lease, assign or otherwise transfer assets to any Subsidiary
so long as a Guaranty is in full force and effect for such Subsidiary.
Section 8.08. Stock of Subsidiaries, Etc. Sell or otherwise
dispose of any shares of capital stock of any of its Subsidiaries, except in
connection with a transaction permitted under Section 8.10, or permit any such
Subsidiary to issue any additional shares of its capital stock, except
directors' qualifying shares.
Section 8.09. Transactions with Affiliates. Enter into any
transaction, including, without limitation, the purchase, sale or exchange of
property or the rendering of any service, with any Affiliate or permit any of
its Subsidiaries to enter into any transaction, including, without limitation,
the purchase, sale or exchange of property or the rendering of any service, with
any Affiliate, except in the ordinary course of, and pursuant to the reasonable
requirements of, the Borrower's or such Subsidiary's business and upon fair and
reasonable terms no less favorable to the Borrower or such Subsidiary than would
obtain in a comparable arm's length transaction with a Person not an Affiliate.
Section 8.10. Mergers, Etc. Merge or consolidate with, or
sell, assign, lease or otherwise dispose of (whether in one transaction or in a
series of transactions) all or substantially all of its assets (whether now
owned or hereafter acquired) to, any Person, or acquire all or substantially all
of the assets or the business of any Person (or enter into any agreement to do
any of the foregoing), or permit any of its Subsidiaries to do so except that:
(a) any such Subsidiary may merge into or transfer assets to the Borrower; and
(b) any Subsidiary may merge into or consolidate with or transfer assets to any
other Subsidiary.
Section 8.11. Acquisitions. Enter into any transaction (other
than the NDM Acquisition) pursuant to which the Borrower or any of its
Subsidiaries (a) acquires equity securities (or warrants, options or other
rights to acquire such securities) of any corporation other than the Borrower or
any corporation which is not then a Subsidiary of the Borrower, pursuant to a
solicitation of tenders therefor, or in one or more negotiated block, market or
other transactions not involving a tender offer, or a combination of any of the
foregoing, or (b) makes any corporation a Subsidiary of the Borrower, or causes
any such corporation to be merged into the Borrower or any of its Subsidiaries,
in any case pursuant to a merger, purchase of assets or any reorganization
providing for the delivery or issuance to the holders of such corporation's then
outstanding securities, in exchange for such securities, of cash or securities
of the Borrower or any of its Subsidiaries, or a combination thereof, or (c)
purchases all or substantially all of the business or assets of any corporation.
Section 8.12. No Activities Leading to Forfeiture. Neither the
Borrower nor any of its Subsidiaries or affiliates shall engage in or propose to
be engaged in the conduct of any business or activity which could result in a
Forfeiture Proceeding.
Section 8.13. New Businesses. Engage in, or permit any
Subsidiary to engage in, any business other than those presently conducted.
Section 8.14. Negative Pledge. Neither the Borrower nor any of
its Subsidiaries shall cause or permit, or agree or consent to cause or permit
in the future (upon the happening of a contingency or otherwise), any real
property now or hereafter owned by Borrower or such Subsidiary to be subject to
any lien, mortgage or encumbrance. Neither Borrower not any Subsidiary shall
cause or permit, or agree to cause or permit in the future, said real property
to be sold, conveyed or otherwise alienated.
ARTICLE 9. FINANCIAL COVENANTS.
So long as any of the Notes shall remain unpaid or any Bank
shall have any Commitment under this Agreement:
Section 9.01. Minimum Working Capital. The Borrower shall
maintain at all times an excess of Consolidated Current Assets over Consolidated
Current Liabilities of not less than the amounts listed on the following table
for the periods stated therein.
- ------------------ ------------------ ----------------- ------------------
Fiscal Year Fiscal Year Fiscal Year
1996 1997 1998
- ------------------ ------------------ ----------------- ------------------
1st Quarter $30,000M $42,000M $52,000M
- ------------------ ------------------ ----------------- ------------------
2nd Quarter $30,000M $44,000M $54,000
- ------------------ ------------------ ----------------- ------------------
3rd Quarter $30,000M $46,000M $56,000
- ------------------ ------------------ ----------------- ------------------
4th Quarter $40,000M $50,000M $60,000
- ------------------ ------------------ ----------------- ------------------
For purposes of Sections 9.01 and 9.04 only, Loans under this Agreement shall
not be considered as Current Liabilities.
Section 9.02. Minimum Net Worth. The Borrower shall maintain
at all times a Consolidated Net Worth of not less than the amounts listed on the
following table for the periods stated therein.
- -------------------- ------------------- ------------------- ---------------------
Fiscal Year Fiscal Year Fiscal Year
1996 1997 1998
- -------------------- ------------------- ------------------- ---------------------
1st Quarter $72,000M $85,000M $105,000M
- -------------------- ------------------- ------------------- ---------------------
2nd Quarter $75,000M $89,000M $110,000M
- -------------------- ------------------- ------------------- ---------------------
3rd Quarter $78,000M $93,000M $115,000M
- -------------------- ------------------- ------------------- ---------------------
4th Quarter $81,000M $100,000M $120,000M
- -------------------- ------------------- ------------------- ---------------------
Section 9.03. Leverage Ratio. The Borrower shall maintain at
all times a ratio of Consolidated Total Liabilities to Consolidated Net Worth of
not greater than the amounts listed on the following table for these periods
stated therein.
- ------------------- -------------------- -------------------- --------------------
Fiscal Year Fiscal Year Fiscal Year
1996 1997 1998
- ------------------- -------------------- -------------------- --------------------
1st Quarter 1.20:1.00 0.85:1.00 0.60:1.00
- ------------------- -------------------- -------------------- --------------------
2nd Quarter 1.05:1.00 0.75:1.00 0.55:1.00
- ------------------- -------------------- -------------------- --------------------
3rd Quarter 0.95:1.00 0.65:1.00 0.50:1.00
- ------------------- -------------------- -------------------- --------------------
4th Quarter 0.85:1.00 0.60:1.00 0.40:1.00
- ------------------- -------------------- -------------------- --------------------
Section 9.04. Cash Flow Coverage Ratio. The Borrower shall
maintain a Cash Flow Coverage Ratio of not less than the amounts listed on the
following table for the periods stated therein.
----------------------- -------------------- ----------------------- -----------------------
Fiscal Fiscal Fiscal
Year Year Year
1996 1997 1998
----------------------- -------------------- ----------------------- -----------------------
1st Quarter 0.95:1.00 1.05:1.00 1.25:1:00
----------------------- -------------------- ----------------------- -----------------------
2nd Quarter 1.00:1.00 1.15:1.00 1.25:1.00
----------------------- -------------------- ----------------------- -----------------------
3rd Quarter 1.00:1.00 1.20:1.00 1.25:1.00
----------------------- -------------------- ----------------------- -----------------------
4th Quarter 1.05:1.00 1.25:1.00 1.25:1.00
----------------------- -------------------- ----------------------- -----------------------
Section 9.05. Limitations on Debt.
(a) The Borrower shall maintain at all times a ratio
of Total Funded Debt to Cash Flow of not more than 4.5:1.0.
(b) The Borrower shall maintain at all times a ratio
of Total Funded Debt to Total Funded Debt plus Consolidated Net Worth of not
more than the amounts listed on the following table for the periods stated
therein:
- --------------------- ---------------------- ----------------------- -----------------------
Fiscal Fiscal Fiscal
Year Year Year
1996 1997 1998
- --------------------- ---------------------- ----------------------- -----------------------
1st Quarter 0.51:1.00 0.42:1.00 0.32:1:00
- --------------------- ---------------------- ----------------------- -----------------------
2nd Quarter 0.49:1.00 0.40:1.00 0.30:1.00
- --------------------- ---------------------- ----------------------- -----------------------
3rd Quarter 0.47:1.00 0.38:1.00 0.28:1.00
- --------------------- ---------------------- ----------------------- -----------------------
4th Quarter 0.45:1.00 0.35:1.00 0.25:1.00
- --------------------- ---------------------- ----------------------- -----------------------
ARTICLE 10. EVENTS OF DEFAULT.
Section 10.01. Events of Default. Any of the following events
shall be an "Event of Default":
(a) the Borrower shall: (i) fail to pay the principal
of any Note under this Agreement or with respect to the Term Loans as and when
due and payable; or (ii) fail to pay interest on any Note under this Agreement
or with respect to the Term Loans or any fee or other amount due hereunder as
and when due and payable;
(b) any representation or warranty made or deemed
made by the Borrower in this Agreement or in any other Facility Document or by
any Guarantor in any Facility Document to which it is a party or which is
contained in any certificate, document, opinion, financial or other statement
furnished at any time under or in connection with any Facility Document shall
prove to have been incorrect in any material respect on or as of the date made
or deemed made;
(c) the Borrower shall: (i) fail to perform or
observe any term, covenant or agreement contained in Section 2.03 or Articles 7,
8 or 9 or elsewhere in this Agreement; or (ii) fail to perform or observe any
term, covenant or agreement on its part to be performed or observed (other than
the obligations specifically referred to elsewhere in this Section 10.01) in any
Facility Document and such failure shall continue for 30 consecutive days;
(d) the Borrower, any Guarantor or any of their
respective Subsidiaries shall: (i) fail to pay any indebtedness, including but
not limited to indebtedness for borrowed money (other than the payment
obligations described in (a) above), of the Borrower, such Guarantor or such
Subsidiary, as the case may be, or any interest or premium thereon, within 180
days of billing date in the case of trade accounts payable, 180 days from the
due date in the case of other current operating liabilities (other than for
borrowed money), and within thirty days of the date when due (whether by
scheduled maturity, required prepayment, acceleration, demand or otherwise) for
all other Debt; or (ii) fail to perform or observe any term, covenant or
condition on its part to be performed or observed under any agreement or
instrument relating to any such indebtedness, when required to be performed or
observed, if the effect of such failure to perform or observe is to accelerate,
or to permit the acceleration of, after the giving of notice or passage of time,
or both, the maturity of such indebtedness, whether or not such failure to
perform or observe shall be waived by the holder of such indebtedness; or any
such indebtedness shall be declared to be due and payable, or required to be
prepaid (other than by a regularly scheduled required prepayment), prior to the
stated maturity thereof;
(e) the Borrower, any Guarantor or any of their
respective Subsidiaries: (i) shall generally not, or be unable to, or shall
admit in writing its inability to, pay its debts as such debts become due; or
(ii) shall make an assignment for the benefit of creditors, petition or apply to
any tribunal for the appointment of a custodian, receiver or trustee for it or a
substantial part of its assets; or (iii) shall commence any proceeding under any
bankruptcy, reorganization, arrangement, readjustment of debt, dissolution or
liquidation law or statute of any jurisdiction, whether now or hereafter in
effect; or (iv) shall have had any such petition or application filed or any
such proceeding shall have been commenced, against it, in which an adjudication
or appointment is made or order for relief is entered, and which petition,
application or proceeding remains undismissed for a period of 30 days or more;
or shall be the subject of any proceeding under which its assets may be subject
to seizure, forfeiture or divestiture (other than a proceeding in respect of a
Lien permitted under Section 8.03 (b)); or (v) by any act or omission shall
indicate its consent to, approval of or acquiescence in any such petition,
application or proceeding or order for relief or the appointment of a custodian,
receiver or trustee for all or any substantial part of its property; or (vi)
shall suffer any such custodianship, receivership or trusteeship to continue
undischarged for a period of 30 days or more;
(f) one or more judgments, decrees or orders for the
payment of money in excess of $100,000 in the aggregate shall be rendered
against the Borrower, any Guarantor or any of their respective Subsidiaries and
such judgments, decrees or orders shall continue unsatisfied and in effect for a
period of 30 consecutive days without being vacated, discharged, satisfied or
stayed or bonded pending appeal;
(g) any event or condition shall occur or exist with
respect to any Plan or Multiemployer Plan concerning which the Borrower is under
an obligation to furnish a report to the Bank in accordance with Section 7.08(h)
hereof and as a result of such event or condition, together with all other such
events or conditions, the Borrower or any ERISA Affiliate has incurred or in the
opinion of the Bank is reasonably likely to incur a liability to a Plan, a
Multiemployer Plan, the PBGC, or a Section 4042 Trustee (or any combination of
the foregoing) which is material in relation to the financial position of the
Borrower and its Subsidiaries, on a consolidated basis; provided, however, that
any such amount shall not be deemed to be material so long as all such amounts
do not exceed in the aggregate during any consecutive one year period $500,000;
(h) The Unfunded Benefit Liabilities of one or more
Plans have increased after the date of this Agreement in an amount which is
material (as specified in Section 10.01(g) hereof);
(i) (i) any Person or two or more Persons acting in
concert shall have acquired beneficial ownership (within the meaning of Rules
13d-3 of the Securities and Exchange commission under the Securities Exchange
Act of 1934) of 5% or more of the outstanding shares of voting stock of the
Borrower unless such persons are qualified to file SEC Schedule 12G under SEC
Rules 13d-1(b)(1) and 13d-2(b); or (ii) during any period of 12 consecutive
months, commencing before or after the date of this Agreement, individuals who
at the beginning of such 12-month period were directors of the Borrower cease
for any reason to constitute a majority of the board of directors of the
Borrower unless such persons are replaced as directors by persons nominated by
the then current board of directors;
(j) (A) any Forfeiture Proceeding shall have been
commenced or the Borrower shall have given any Bank written notice of the
commencement of any Forfeiture Proceeding as provided in Section 7.08(l) or (B)
any Bank has a good faith basis to believe that a Forfeiture Proceeding has been
threatened or commenced;
(k) any Guaranty shall at any time after its
execution and delivery and for any reason cease to be in full force and effect
or shall be declared null and void, or the validity or enforceability thereof
shall be contested by the Guarantor, or the Guarantor shall revoke or terminate
its Guaranty with respect to future advances, or shall deny it has any further
liability or obligation thereunder, or shall fail to perform its obligations
thereunder; or
(l) any loss contingency for costs and expenses
relating to environmental remediation becomes accruable as a liability on the
financial statements of Borrower under Financial Accounting Standards Board
Standard No. 5, and such liability exceeds either $5,000,000 in the aggregate,
regardless of when due and payable, or $750,000 if payable within one year.
(m) an Event of Default shall occur and be continuing
under the Credit Agreement - Term Loan Facility or any Facility Document (as
defined therein) relating thereto.
Section 10.02. Remedies. If any Event of Default shall occur
and be continuing, the Agent shall, upon request of the Required Banks, by
notice to the Borrower, (a) declare the Commitments to be terminated, whereupon
the same shall forthwith terminate, and (b) declare the outstanding principal of
the Notes, all interest thereon and all other amounts payable under this
Agreement and the Notes to be forthwith due and payable, whereupon the Notes,
all such interest and all such amounts shall become and be forthwith due and
payable, without presentment, demand, protest or further notice of any kind, all
of which are hereby expressly waived by the Borrower; provided that, in the case
of an Event of Default referred to in Section 10.01(e) or Section 10.01(j)(A)
above, the Commitments shall be immediately terminated, and the Notes, all
interest thereon and all other amounts payable under this Agreement shall be
immediately due and payable without notice, presentment, demand, protest or
other formalities of any kind, all of which are hereby expressly waived by the
Borrower. Further, Agent, acting on behalf of the Banks, and with the consent or
direction of the Required Banks, may then exercise any and all rights and
remedies available under the Facility Documents or at law or in equity.
ARTICLE 11. THE AGENT; RELATIONS AMONG BANKS AND BORROWER.
Section 11.01. Appointment, Powers and Immunities of Agent.
Each Bank hereby irrevocably (but subject to removal by the Required Banks
pursuant to Section 11.09) appoints and authorizes the Agent to act as its agent
hereunder and under any other Facility Document with such powers as are
specifically delegated to the Agent by the terms of this Agreement and any other
Facility Document, together with such other powers as are reasonably incidental
thereto. The Agent shall have no duties or responsibilities except those
expressly set forth in this Agreement and any other Facility Document, and shall
not by reason of this Agreement be a trustee for any Bank. The Agent shall not
be responsible to the Banks for any recitals, statements, representations or
warranties made by the Borrower or any officer or official of the Borrower or
any other Person contained in this Agreement or any other Facility Document, or
in any certificate or other document or instrument referred to or provided for
in, or received by any of them under, this Agreement or any other Facility
Document, or for the value, legality, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or any other Facility Document
or any other document or instrument referred to or provided for herein or
therein, for the perfection or priority of any collateral security for the Loans
or for any failure by the Borrower to perform any of its obligations hereunder
or thereunder. The Agent may employ agents and attorneys-in-fact and shall not
be responsible, except as to money or securities received by it or its
authorized agents, for the negligence or misconduct of any such agents or
attorneys-in- fact selected by it with reasonable care. Neither the Agent nor
any of its directors, officers, employees or agents shall be liable or
responsible for any action taken or omitted to be taken by it or them hereunder
or under any other Facility Document or in connection herewith or therewith,
except for its or their own gross negligence or willful misconduct. The Borrower
shall pay any fee agreed to by the Borrower and the Agent with respect to the
Agent's services hereunder.
Section 11.02. Reliance by Agent. The Agent shall be entitled
to rely upon any certification, notice or other communication (including any
thereof by telephone, telex, telegram or cable) believed by it to be genuine and
correct and to have been signed or sent by or on behalf of the proper Person or
Persons, and upon advice and statements of legal counsel, independent
accountants and other experts selected by the Agent. The Agent may deem and
treat each Bank as the holder of the Loan made by it for all purposes hereof
unless and until a notice of the assignment or transfer thereof satisfactory to
the Agent signed by such Bank shall have been furnished to the Agent but the
Agent shall not be required to deal with any Person who has acquired a
participation in any Loan from a Bank. As to any matters not expressly provided
for by this Agreement or any other Facility Document, the Agent shall in all
cases be fully protected in acting, or in refraining from acting, hereunder in
accordance with instructions signed by the Required Banks, and such instructions
of the Required Banks and any action taken or failure to act pursuant thereto
shall be binding on all of the Banks and any other holder of all or any portion
of any Loan.
Section 11.03. Defaults. The Agent shall not be deemed to have
knowledge of the occurrence of a Default or Event of Default (other than the
non-payment of principal of or interest on the Loans to the extent the same is
required to be paid to the Agent for the account of the Banks) unless the Agent
has received notice from a Bank or the Borrower specifying such Default or Event
of Default and stating that such notice is a "Notice of Default." In the event
that the Agent receives such a notice of the occurrence of a Default or Event of
Default, the Agent shall give prompt notice thereof to the Banks (and shall give
each Bank prompt notice of each such non-payment). The Agent shall (subject to
Section 11.08) take such action with respect to such Default or Event of Default
which is continuing as shall be directed by the Required Banks; provided that,
unless and until the Agent shall have received such directions, the Agent may
take such action, or refrain from taking such action, with respect to such
Default or Event of Default as it shall deem advisable in the best interest of
the Banks; and provided further that the Agent shall not be required to take any
such action which it determines to be contrary to law.
Section 11.04. Rights of Agent as a Bank. With respect to its
Commitment and the Loans made by it, the Agent in its capacity as a Bank
hereunder shall have the same rights and powers hereunder as any other Bank and
may exercise the same as though it were not acting as the Agent, and the term
"Bank" or "Banks" shall, unless the context otherwise indicates, include the
Agent in its capacity as a Bank. The Agent and its affiliates may (without
having to account therefor to any Bank) accept deposits from, lend money to (on
a secured or unsecured basis), and generally engage in any kind of banking,
trust or other business with, the Borrower (and any of its affiliates) as if it
were not acting as the Agent, and the Agent may accept fees and other
consideration from the Borrower for services in connection with this Agreement
or otherwise without having to account for the same to the Banks. Although the
Agent and its affiliates may in the course of such relationships and
relationships with other Persons acquire information about the Borrower, its
Affiliates and such other Persons, the Agent shall have no duty to disclose such
information to the Banks.
Section 11.05. Indemnification of Agent. The Banks agree to
indemnify the Agent (to the extent not reimbursed under Section 12.03 or under
the applicable provisions of any other Facility Document, but without limiting
the obligations of the Borrower under Section 12.03 or such provisions), ratably
in accordance with the aggregate unpaid principal amount of the Loans made by
the Banks (without giving effect to any participations, in all or any portion of
such Loans, sold by them to any other Person) (or, if no Loans are at the time
outstanding, ratably in accordance with their respective Commitments), for any
and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind and nature
whatsoever which may be imposed on, incurred by or asserted against the Agent in
any way relating to or arising out of this Agreement, any other Facility
Document or any other documents contemplated by or referred to herein or the
transactions contemplated hereby or thereby (including, without limitation, the
costs and expenses which the Borrower is obligated to pay under Section 12.03 or
under the applicable provisions of any other Facility Document but excluding,
unless a Default or Event of Default has occurred, normal administrative costs
and expenses incident to the performance of its agency duties hereunder) or the
enforcement of any of the terms hereof or thereof or of any such other documents
or instruments; provided that no Bank shall be liable for any of the foregoing
to the extent they arise from the gross negligence or willful misconduct of the
party to be indemnified.
Section 11.06. Documents. The Agent will forward to each Bank,
promptly after the Agent's receipt thereof, a copy of each report, notice or
other document required by this Agreement or any other Facility Document to be
delivered to the Agent for such Bank.
Section 11.07. Non-Reliance on Agent and Other Banks. Each
Bank agrees that it has, independently and without reliance on the Agent or any
other Bank, and based on such documents and information as it has deemed
appropriate, made its own credit analysis of the Borrower and its Subsidiaries
and decision to enter into this Agreement and that it will, independently and
without reliance upon the Agent or any other Bank, and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own analysis and decisions in taking or not taking action under this Agreement
or any other Facility Document. The Agent shall not be required to keep itself
informed as to the performance or observance by the Borrower of this Agreement
or any other Facility Document or any other document referred to or provided for
herein or therein or to inspect the properties or books of the Borrower or any
Subsidiary. Except for notices, reports and other documents and information
expressly required to be furnished to the Banks by the Agent hereunder, the
Agent shall not have any duty or responsibility to provide any Bank with any
credit or other information concerning the affairs, financial condition or
business of the Borrower or any Subsidiary (or any of their Affiliates) which
may come into the possession of the Agent or any of its affiliates. The Agent
shall not be required to file this Agreement, any other Facility Document or any
document or instrument referred to herein or therein, for record or give notice
of this Agreement, any other Facility Document or any document or instrument
referred to herein or therein, to anyone.
Section 11.08. Failure of Agent to Act. Except for action
expressly required of the Agent hereunder, the Agent shall in all cases be fully
justified in failing or refusing to act hereunder unless it shall have received
further assurances (which may include cash collateral) of the indemnification
obligations of the Banks under Section 10.05 in respect of any and all liability
and expense which may be incurred by it by reason of taking or continuing to
take any such action.
Section 11.09. Resignation or Removal of Agent. Subject to the
appointment and acceptance of a successor Agent as provided below, the Agent may
resign at any time by giving written notice thereof to the Banks and the
Borrower, and the Agent may be removed at any time with or without cause by the
Required Banks; provided that the Borrower and the other Banks shall be promptly
notified thereof. Upon any such resignation or removal, the Required Banks shall
have the right to appoint a successor Agent from among the Banks. 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's giving
of notice of resignation or the Required Banks' removal of the retiring Agent,
then the retiring Agent may, on behalf of the Banks, appoint a successor Agent,
which shall be a bank with capital and surplus in excess of $750,000,000 and
which has an office in New York, New York. The Required Banks or the retiring
Agent, as the case may be, shall upon the appointment of a successor Agent
promptly so notify the Borrower and the other Banks. Upon the acceptance of any
appointment as Agent hereunder by a successor Agent, such successor Agent shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring Agent, and the retiring Agent shall be discharged
from its duties and obligations hereunder. After any retiring Agent's
resignation or removal hereunder as Agent, the provisions of this Article 11
shall continue in effect for its benefit in respect of any actions taken or
omitted to be taken by it while it was acting as the Agent.
Section 11.10. Amendments Concerning Agency Function. The
Agent shall not be bound by any waiver, amendment, supplement or modification of
this Agreement or any other Facility Document which affects its duties hereunder
or thereunder unless it shall have given its prior consent thereto.
Section 11.11. Liability of Agent. The Agent shall not have
any liabilities or responsibilities to the Borrower on account of the failure of
any Bank to perform its obligations hereunder or to any Bank on account of the
failure of the Borrower to perform its obligations hereunder or under any other
Facility Document.
Section 11.12. Transfer of Agency Function. Without the
consent of the Borrower or any Bank, the Agent may at any time or from time to
time transfer its functions as Agent hereunder to any of its offices wherever
located, provided that the Agent shall promptly notify the Borrower and the
Banks thereof.
Section 11.13. Non-Receipt of Funds by the Agent. Unless the
Agent shall have been notified by a Bank or the Borrower (either one as
appropriate being the "Payor") prior to the date on which such Bank is to make
payment hereunder to the Agent of the proceeds of a Loan or the Borrower is to
make payment to the Agent, as the case may be (either such payment being a
"Required Payment"), which notice shall be effective upon receipt, that the
Payor does not intend to make the Required Payment to the Agent, the Agent may
assume that the Required Payment has been made and may, in reliance upon such
assumption (but shall not be required to), make the amount thereof available to
the intended recipient on such date and, if the Payor has not in fact made the
Required Payment to the Agent, the recipient of such payment shall, on demand,
repay to the Agent the amount made available to it together with interest
thereon for the period from the date such amount was so made available by the
Agent until the date the Agent recovers such amount at a rate per annum equal to
the average daily Federal Funds Rate for such period.
Section 11.14. Withholding Taxes. Each Bank represents that it
is entitled to receive any payments to be made to it hereunder without the
withholding of any tax and will furnish to the Agent such forms, certifications,
statements and other documents as the Agent may request from time to time to
evidence such Bank's exemption from the withholding of any tax imposed by any
jurisdiction or to enable the Agent to comply with any applicable laws or
regulations relating thereto. Without limiting the effect of the foregoing, if
any Bank is not created or organized under the laws of the United States of
America or any state thereof, in the event that the payment of interest by the
Borrower is treated for U.S. income tax purposes as derived in whole or in part
from sources from within the U.S., such Bank will furnish to the Agent (and
shall update as required), Form 4224 or Form 1001 of the Internal Revenue
Service, or such other forms, certifications, statements or documents, duly
executed and completed by such Bank as evidence of such Bank's exemption from
the withholding of U.S. tax with respect thereto. The Agent shall not be
obligated to make any payments hereunder to such Bank in respect of any Loan or
such Bank's Commitment until such Bank shall have furnished to the Agent the
requested form, certification, statement or document.
Section 11.15. Several Obligations and Rights of Banks. The
failure of any Bank to make any Loan to be made by it on the date specified
therefor shall not relieve any other Bank of its obligation to make its Loan on
such date, but no Bank shall be responsible for the failure of any other Bank to
make a Loan to be made by such other Bank. The amounts payable at any time
hereunder to each Bank shall be a separate and independent debt, and each Bank
shall be entitled to protect and enforce its rights arising out of this
Agreement, and it shall not be necessary for any other Bank to be joined as an
additional party in any proceeding for such purpose.
Section 11.16. Pro Rata Treatment of Loans, Etc. Except to the
extent otherwise provided: (a) each borrowing under Section 2.04 shall be made
from the Banks, pro rata according to the amounts of their respective
Commitments; (b) each conversion under Section 2.05 of Loans of a particular
type (but not conversions provided for by Section 3.04), shall be made pro rata
among the Banks holding Loans of such type according to the respective principal
amounts of such Loans by such Banks; and (c) each prepayment and payment of
principal of or interest on Loans of a particular type and a particular Interest
Period shall be made to the Agent for the account of the Banks holding Loans of
such type and Interest Period pro rata in accordance with the respective unpaid
principal amounts of such Loans of such Interest Period held by such Banks.
Section 11.17. Sharing of Payments Among Banks. If a Bank
shall obtain payment of any principal of or interest on any Loan made by it
through the exercise of any right of setoff, banker's lien, counterclaim, or by
any other means (including any sale, collection or liquidation of Collateral or
any payment obtained from or charged against any Guarantor), it shall promptly
purchase from the other Banks participations in (or, if and to the extent
specified by such Bank, direct interests in) the Loans made by the other Banks
in such amounts, and make such other adjustments from time to time as shall be
equitable to the end that all the Banks shall share the benefit of such payment
(net of any expenses which may be incurred by such Bank in obtaining or
preserving such benefit) pro rata in accordance with the unpaid principal and
interest on the Loans, on the Term Loans, and on other Debt to any of the Banks
permitted under Section 8.01(b), held by each of them prior to such action. To
such end the Banks shall make appropriate adjustments among themselves (by the
resale of participations sold or otherwise) if such payment is rescinded or must
otherwise be restored. The Borrower agrees that any Bank so purchasing a
participation (or direct interest) in the Loans made by other Banks may exercise
all rights of setoff, banker's lien, counterclaim or similar rights with respect
to such participation (or direct interest). Nothing contained herein shall
require any Bank to exercise any such right or shall affect the right of any
Bank to exercise, and retain the benefits of exercising, any such right with
respect to any other indebtedness of the Borrower.
Section 11.18. Hedge Agreements; Notices and Limitations. Any
Bank that enters into a Hedge Agreement with Borrower or a Subsidiary shall
promptly notify Agent to that effect, which notice shall also specify the dollar
amount of Hedge Exposure under the Hedge Agreement. Agent shall thereupon
furnish a copy of such notice to the other Banks. Notwithstanding anything to
the contrary contained in this Agreement or in any Facility Document, upon a
liquidation of collateral following an Event of Default, any Bank (or former
Bank) that is party to a Hedge Agreement shall, with respect to such Hedge
Agreement, share in Collateral only to the extent of the lesser of its actual
loss under the Hedge Agreement or the amount of Hedge Exposure specified in its
notice to Agent under this Section.
ARTICLE 12. MISCELLANEOUS.
Section 12.01. Amendments and Waivers. Except as otherwise
expressly provided in this Agreement, any provision of this Agreement or the
Facility Documents may be amended or modified only by an instrument in writing
signed by the Borrower, the Agent, and the Required Banks, or by the Borrower
and the Agent acting with the consent of the Required Banks and any provision of
this Agreement or the Facility Documents may be waived by only an instrument in
writing signed by the Agent and the Required Banks or by the Agent acting with
the consent of the Required Banks; provided that no amendment, modification or
waiver shall, unless by an instrument signed by all of the Banks or by the Agent
acting with the consent of all of the Banks: (a) increase or extend the term, or
extend the time or waive any requirement for the reduction or termination, of
the Commitments, (b) extend the date fixed for the payment of principal,
interest or fees on any Loan, (c) reduce the amount of any payment of principal
thereof or the rate at which interest is payable thereon or any fee payable
hereunder, (d) release any Guarantor from any of its obligations under its
Guaranty or, except as otherwise provided in the Credit Agreements or the
Facility Documents, release the rights of the Banks in any Collateral, (e) alter
the terms of this Section 12.01, (f) amend the definition of the term "Required
Banks" or (g) waive any of the conditions precedent set forth in Article 5
hereof and provided, further, that any amendment of Article 11 hereof or any
amendment which increases the obligations of the Agent hereunder shall require
the consent of the Agent. No failure on the part of the Agent or any Bank to
exercise, and no delay in exercising, any right hereunder shall operate as a
waiver thereof or preclude any other or further exercise thereof or the exercise
of any other right. The remedies herein provided are cumulative and not
exclusive of any remedies provided by law.
Section 12.02. Usury. Anything herein to the contrary
notwithstanding, the obligations of the Borrower under this Agreement and the
Notes shall be subject to the limitation that payments of interest shall not be
required to the extent that receipt thereof would be contrary to provisions of
law applicable to a Bank limiting rates of interest which may be charged or
collected by such Bank.
Section 12.03. Expenses. The Borrower shall reimburse the
Agent and the Banks on demand for all costs, expenses, and charges (including,
without limitation, fees and charges of external legal counsel for the Agent and
each Bank and costs allocated by their respective internal legal departments)
incurred by the Agent or the Banks in connection with the preparation,
performance, or enforcement of this Agreement or the Notes; provided, however,
that the Borrower shall only reimburse each Bank other than the Agent for a
maximum of $1,000.00 in fees, charges and/or costs of external or internal legal
counsel in connection with the preparation of this Agreement, the Facility
Documents hereunder, the Credit Agreement - Term Loan Facility, and the Facility
Documents thereunder. The Borrower agrees to indemnify the Agent and each Bank
and their affiliates, and their respective directors, officers, employees and
agents from, and hold each of them harmless against, any and all losses,
liabilities, claims, damages or expenses incurred by any of them arising out of
or by reason of any investigation or litigation or other proceedings (including
any threatened investigation or litigation or other proceedings) relating to any
actual or proposed use by the Borrower or any Subsidiary of the proceeds of the
Loans, including without limitation, the reasonable fees and disbursements of
counsel incurred in connection with any such investigation or litigation or
other proceedings (but excluding any such losses, liabilities, claims, damages
or expenses incurred by reason of the negligence or willful misconduct of the
Person to be indemnified).
Section 12.04. Survival. The obligations of the Borrower under
Sections 3.01, 3.05 and 12.03 shall survive the repayment of the Loans and the
termination of the Commitments.
Section 12.05. Assignment; Participations. (a) This Agreement
shall be binding upon, and shall inure to the benefit of, the Borrower, the
Agent, the Banks and their respective successors and assigns, except that the
Borrower may not assign or transfer its rights or obligations hereunder. Each
Bank may assign, or sell participations in, all or any part of the Loan to
another bank or other entity, in which event (i) in the case of an assignment,
upon notice thereof by the Bank to the Borrower with a copy to the Agent, the
assignee shall have, to the extent of such assignment (unless otherwise provided
therein), the same rights, benefits and obligations as it would have if it were
a Bank hereunder; and (ii) in the case of a participation, the participant shall
have no rights under the Facility Documents and all amounts payable by the
Borrower under Article 3 shall be determined as if such Bank had not sold such
participation. The agreement executed by such Bank in favor of the participant
shall not give the participant the right to require such Bank to take or omit to
take any action hereunder except action directly relating to (i) the extension
of a payment date with respect to any portion of the principal, interest or fees
on any amount outstanding hereunder allocated to such participant, (ii) the
reduction of the principal amount outstanding hereunder, (iii) the reduction of
the rate of interest payable on such amount or any amount of fees payable
hereunder to a rate or amount, as the case may be, below that which the
participant is entitled to receive under its agreement with such Bank, or (iv)
the extension of the Final Maturity Date. Such Bank may furnish any information
concerning the Borrower in the possession of such Bank from time to time to
assignees and participants (including prospective assignees and participants);
provided that such Bank shall require any such prospective assignee or such
participant (prospective or otherwise) to agree in writing to maintain the
confidentiality of such information. In connection with any assignment pursuant
to this paragraph (a), the assigning Bank shall pay the Agent an administrative
fee for processing such assignment in the amount of $2,500.
(b) In addition to the assignments and participations
permitted under paragraph (a) above, any Bank may assign and pledge all or any
portion of its Loans and Note to (i) any affiliate of such Bank or (ii) any
Federal Reserve Bank as collateral security pursuant to Regulation A of the
Board of Governors of the Federal Reserve System and any Operating Circular
issued by such Federal Reserve Bank. No such assignment shall release the
assigning Bank from its obligations hereunder.
Section 12.06. Notices. Except as otherwise provided in this
Agreement, notices may be given by telecopy, overnight courier, or by regular
mail, telecopied or addressed to the intended recipient at its telecopy number
or address listed on the signature page of this Agreement. Notices shall be
effective: (a) if given by mail, 72 hours after deposit in the mails with first
class postage prepaid, addressed as aforesaid; (b) if given by telecopy, when
the telecopy is transmitted to the applicable telecopy number; and (c) if sent
by overnight courier, upon delivery; provided, however, that notices to the
Agent and the Banks shall be effective upon receipt. A party may change its
telecopy number or address for receipt of notices by written notice given in
accordance with this paragraph.
Section 12.07. JURISDICTION; IMMUNITIES; WAIVER OF RIGHT TO
JURY TRIAL. (a) THE BORROWER HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF
ANY NEW YORK STATE OR UNITED STATES FEDERAL COURT SITTING IN ONONDAGA OR ONEIDA
COUNTY OVER ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT, THE NOTES, OR ANY OTHER FACILITY DOCUMENT, AND THE BORROWER HEREBY
IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY
BE HEARD AND DETERMINED IN SUCH NEW YORK STATE OR FEDERAL COURT. THE BORROWER
IRREVOCABLY CONSENTS TO THE SERVICE OF ANY AND ALL PROCESS IN ANY SUCH ACTION OR
PROCEEDING BY THE MAILING OF COPIES OF SUCH PROCESS TO THE BORROWER AT ITS
ADDRESS SPECIFIED IN SECTION 12.07 BY REGISTERED OR CERTIFIED MAIL, RETURN
RECEIPT REQUESTED. THE BORROWER AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION
OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY
SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. THE BORROWER
FURTHER WAIVES ANY OBJECTION TO VENUE IN SUCH STATE AND ANY OBJECTION TO AN
ACTION OR PROCEEDING IN SUCH STATE ON THE BASIS OF FORUM NON CONVENIENS. THE
BORROWER AND THE BANKS FURTHER AGREE THAT ANY ACTION OR PROCEEDING BROUGHT
AGAINST THE AGENT SHALL BE BROUGHT ONLY IN NEW YORK STATE OR UNITED STATES
FEDERAL COURT SITTING IN ONONDAGA COUNTY. THE BORROWER WAIVES ANY RIGHT IT MAY
HAVE TO JURY TRIAL.
(b) Nothing in this Section 12.07 shall affect the
right of the Agent or any Bank to serve legal process in any other manner
permitted by law or affect the right of the Agent or any Bank to bring any
action or proceeding against the Borrower or its property in the courts of any
other jurisdictions.
(c) To the extent that the Borrower has or hereafter
may acquire any immunity from jurisdiction of any court or from any legal
process (whether from service or notice, attachment prior to judgment,
attachment in aid of execution, execution or otherwise) with respect to itself
or its property, the Borrower hereby irrevocably waives such immunity in respect
of its obligations under this Agreement and the Notes.
Section 12.08. Table of Contents; Headings. Any table of
contents and the headings and captions hereunder are for convenience only and
shall not affect the interpretation or construction of this Agreement.
Section 12.09. Severability. The provisions of this Agreement
are intended to be severable. If for any reason any provision of this Agreement
shall be held invalid or unenforceable in whole or in part in any jurisdiction,
such provision shall, as to such jurisdiction, be ineffective to the extent of
such invalidity or unenforceability without in any manner affecting the validity
or enforceability thereof in any other jurisdiction or the remaining provisions
hereof in any jurisdiction.
Section 12.10. Counterparts. This Agreement may be executed in
any number of counterparts, all of which taken together shall constitute one and
the same instrument, and any party hereto may execute this Agreement by signing
any such counterpart.
Section 12.11. Integration. The Facility Documents set forth
the entire agreement among the parties hereto relating to the transactions
contemplated thereby and supersede any prior oral or written statements or
agreements with respect to such transactions.
Section 12.12. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED
BY, AND INTERPRETED AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF
NEW YORK.
Section 12.13. Confidentiality. Each Bank and the Agent agrees
(on behalf of itself and each of its affiliates, directors, officers, employees
and representatives) to use reasonable precautions to keep confidential, in
accordance with safe and sound banking practices, any non-public information
supplied to it by the Borrower pursuant to this Agreement which is identified by
the Borrower as being confidential at the time the same is delivered to the
Banks or the Agent, provided that nothing herein shall limit the disclosure of
any such information (i) to the extent required by statute, rule, regulation or
judicial process, (ii) to counsel for any of the Banks or the Agent, (iii) to
bank examiners, auditors or accountants, (iv) in connection with any litigation
to which any one or more of the Banks is a party or (v) to any assignee or
participant (or prospective assignee or participant) so long as such assignee or
participant (or prospective assignee or participant) first executes and delivers
to the respective Bank a Confidentiality Agreement in substantially the form of
Exhibit G hereto; provided, further, that, unless specifically prohibited by
applicable law or court order, each Bank shall, prior to disclosure thereof,
endeavor to notify the Borrower of any request for disclosure of any such
non-public information (x) by any governmental agency or representative thereof
(other than any such request in connection with an examination of the financial
condition of such Bank by such governmental agency) or (y) pursuant to legal
process; and provided finally that in no event shall any Bank or the Agent be
obligated or required to return any materials furnished by the Borrower. The
obligations of each Bank under this Section 12.13 shall supersede and replace
the obligations of such Bank under the confidentiality letter in respect of this
financing signed and delivered by such Bank to the Borrower prior to the date
hereof.
Section 12.14. Treatment of Certain Information. The Borrower
(a) acknowledges that services may be offered or provided to it (in connection
with this Agreement or otherwise) by each Bank or by one or more of their
respective subsidiaries or affiliates and (b) acknowledges that any information
delivered to each Bank or to its subsidiaries or affiliates regarding the
Borrower may be shared among the Bank and such subsidiaries and affiliates. This
Section 12.14 shall survive the repayment of the loans and the termination of
the Commitments.
Section 12.15. Incorporation By Reference; Conflicts. The
rights and remedies of Agent and the Banks under the other Facility Documents
are incorporated herein by reference and the rights and remedies of the Agent
and the Banks under this Agreement, and all of the terms of this Agreement, are
likewise incorporated in the other Facility Documents by reference. In the case
of any conflict between the terms of this Agreement and the terms of any other
Facility Document, the terms of this Agreement shall govern.
Section 12.16. Cooperation and Further Assurances. At all
times until the Loans are repaid in full, the Borrower shall, and shall cause
its Subsidiaries to, cooperate with the Agent and the Banks to effectuate the
intent and purposes of the Facility Documents. Without limiting the foregoing,
Borrower agrees to execute and deliver any financing statements or other
instruments and do such other acts and things, as Agent may reasonably deem
necessary or advisable to perfect all security interests under the Facility
Documents and to otherwise effectuate the intent and purposes of this Agreement,
and shall cause its Subsidiaries to do likewise.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first above written.
CONMED CORPORATION
By:___________________________
Name:
Title:
Address for Notices:
CONMED CORPORATION
310 Broad Street
Utica, New York 13501
Attn: Eugene R. Corasanti,
President
Telecopy: (315) 797-0321
AGENT:
THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION)
By:___________________________
Name: Frederick K. Miller
Title: Vice President
Address for Notices:
THE CHASE MANHATTAN BANK, N.A.
P.O. Box 4911
One Lincoln Center
Syracuse, New York 13202
Attn: Frederick K. Miller
Telecopy: (315) 424-2933
BANKS:
THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION)
By:___________________________
Name: Frederick K. Miller
Title: Vice President
Lending Office and Address for
Notices:
One Lincoln Center
Syracuse, New York 13202
Attn: Frederick K. Miller
Telecopy: (315) 424-2933
FLEET BANK
By:___________________________
Name: Bruce W. Goodnough
Title: Vice President
Lending Office and Address for
Notices:
One Clinton Square
Syracuse, New York 13221
Attn: Bruce W. Goodnough
Telecopy: (315) 426-4375
NATWEST BANK N.A.
By:___________________________
Name: Cameron Gateman
Title: Vice President
Lending Office and Address for
Notices:
175 Water Street
New York, New York 10038
Telecopy: (212) 602-2671
CREDIT LYONNAIS CAYMAN
ISLAND BRANCH
By:___________________________
Name:
Title: Authorized Signature
Lending Office and Address for
Notices:
c/o Credit Lyonnais
1301 Avenue of The Americas
New York, New York 10019-6022
Telecopy: (212) 261-3440
EXHIBIT A
PROMISSORY NOTE
$[Commitment of Bank X] December ____, 1995
CONMED CORPORATION (the "Borrower"), a corporation organized
under the laws of New York, for value received, hereby promises to pay to the
order of [BANK X] (the "Bank") at the principal office of The Chase Manhattan
Bank, N.A., at One Lincoln Center, Syracuse, New York 13202 (the "Agent"), for
the account of the appropriate Lending Office of the Bank, the principal sum of
($[Commitment amount of Bank X]), or, if less, the amount loaned by the Bank to
the Borrower pursuant to the Credit Agreement referred to below, in lawful money
of the United States of America and in immediately available funds, on the
date(s) and in the manner provided in the Credit Agreement. The Borrower also
promises to pay interest on the unpaid principal balance hereof, for the period
such balance is outstanding, at said principal office for the account of said
Lending Office, in like money, at the rates of interest as provided in the
Credit Agreement described below, on the date(s) and in the manner provided in
said Credit Agreement.
The date and amount of each type of Loan made by the Bank to
the Borrower under the Credit Agreement referred below, and each payment of
principal thereof, shall be recorded by the Bank on its books and, prior to any
transfer of this Note (or, at the discretion of the Bank, at any other time),
endorsed by the Bank on the schedule attached hereto or any continuation
thereof.
This is one of the Notes referred to in that certain Credit
Agreement - Revolving Credit Facility (as amended from time to time the "Credit
Agreement") dated as of December ___,1995 among the Borrower, the Banks named
therein (including the Bank) and the Agent and evidences the Loan made by the
Bank thereunder. All terms not defined herein shall have the meanings given to
them in the Credit Agreement.
The Credit Agreement provides for the acceleration of the
maturity of principal upon the occurrence of certain Events of Default and for
prepayments on the terms and conditions specified therein.
The Borrower waives presentment, notice of dishonor, protest
and any other notice or formality with respect to this Note.
This Note shall be governed by, and interpreted and construed
in accordance with, the laws of the State of New York.
CONMED CORPORATION
By:___________________________
Name:
Title:
Amount Amount of Balance Notation
Date of Loan Payment Outstanding By
EXHIBIT B
__________________, 19__
The Chase Manhattan Bank, N.A.
One Lincoln Center
Syracuse, New York 13202
Attn: Frederick K. Miller
Re: Credit Agreement - Revolving Credit Facility
dated as of December ____, 1995 (the "Credit
Agreement") among CONMED CORPORATION, the Banks named
therein, and The Chase Manhattan Bank, N.A., as Agent
for said Banks
Ladies and Gentlemen:
In connection with the captioned Credit Agreement, we hereby
designate any one of the following persons to give to you instructions,
including notices required pursuant to the Agreement, orally or by telephone or
teleprocess:
NAME (Typewritten)
_________________________________
_________________________________
_________________________________
Instructions may be honored on the oral, telephonic or
teleprocess instructions of anyone purporting to be any one of the above
designated persons even if the instructions are for the benefit of the person
delivering them. We will furnish you with confirmation of each such instruction
either by telex (whether tested or untested) or in writing signed by any person
designated above (including any telecopy which appears to bear the signature of
any person designated above) on the same day that the instruction is provided to
you but your responsibility with respect to any instruction shall not be
affected by your failure to receive such confirmation or by its contents.
You shall be fully protected in, and shall incur no liability
to us for, acting upon any instructions which you in good faith believe to have
been given by any person designated above, and in no event shall you be liable
for special, consequential or punitive damages. In addition, we agree to hold
you and your agents harmless from any and all liability, loss and expense
arising directly or indirectly out of instructions that we provide to you in
connection with the Credit Agreement except for liability, loss or expense
occasioned by the gross negligence or willful misconduct of you or your agents.
Upon notice to us, you may, at your option, refuse to execute
any instruction, or part thereof, without incurring any responsibility for any
loss, liability or expense arising out of such refusal if you in good faith
believe that the person delivering the instruction is not one of the persons
designated above or if the instruction is not accompanied by an authentication
method that we have agreed to in writing.
We will promptly notify you in writing of any change in the
persons designated above and, until you have actually received such written
notice and have had a reasonable opportunity to act upon it, you are authorized
to act upon instructions, even though the person delivering them may no longer
be authorized.
Very truly yours,
CONMED CORPORATION
By:___________________________
Name:
Title:
EXHIBIT C
GUARANTY
[Attached]
EXHIBIT D
SECURITY AGREEMENTS
OF BORROWER and GUARANTORS
[Attached]
EXHIBIT E
(Letterhead of counsel to the Borrower)
[Closing Date]
The Chase Manhattan Bank, N.A.
One Lincoln Center
Syracuse, New York 13202
Fleet Bank
One Clinton Square
Syracuse, New York 13221
NatWest Bank N.A.
175 Water Street
New York, New York 10038
Credit Lyonnais Cayman Island Branch
c/o Credit Lyonnais
1301 Avenue of The Americas
New York, New York 10019-6022
Ladies and Gentlemen:
We have acted as counsel to CONMED CORPORATION (the
"Borrower") in connection with the execution and delivery of that certain Credit
Agreement - Revolving Credit Facility (the "Credit Agreement") dated as of
December __, 1995 among the Borrower, the Banks signatory thereto and The Chase
Manhattan Bank, N.A. as Agent. Except as otherwise defined herein, all terms
used herein and defined in the Credit Agreement or any agreement delivered
thereunder shall have the meanings assigned to them therein.
In connection with this opinion, we have examined executed
copies of the Facility Documents and such other documents, records, agreements
and certificates as we have deemed appropriate. We have also reviewed such
matters of law as we have considered relevant for the purpose of this opinion.
Based upon the foregoing, we are of the opinion that:
1. Each of the Borrower and its Subsidiaries is a corporation
duly incorporated, validly existing and in good standing under the laws of the
jurisdiction of its incorporation, has the corporate power and authority to own
its assets and to transact the business in which it is now engaged or proposed
to be engaged, and is duly qualified as a foreign corporation and in good
standing under the laws of each other jurisdiction in which such qualification
is required.
2. The execution, delivery and performance by the Borrower of
the Facility Documents to which it is a party have been duly authorized by all
necessary corporate action and do not and will not: (a) require any additional
consent or approval of its stockholders; (b) contravene its charter or by-laws;
(c) violate any provision of, or require any filing (other than the filing of
financing statements referred to below), registration, consent or approval
under, any law, rule, regulation (including without limitation, Regulation U),
order, writ, judgment, injunction, decree, determination or award presently in
effect having applicability to the Borrower or any of its Subsidiaries or
affiliates; (d) result in a breach of or constitute a default or require any
consent under any indenture or loan or credit agreement or any other agreement,
lease or instrument to which the Borrower is a party or by which it or its
properties may be bound or affected; (e) result in, or require, the creation or
imposition of any Lien upon or with respect to any of the properties now owned
or hereafter acquired by the Borrower; or (f) cause the Borrower (or any
Subsidiary or affiliate, as the case may be) to be in default under any such
law, rule, regulation, order, writ, judgment, injunction, decree, determination
or award or any such indenture, agreement, lease or instrument.
3. Each Facility Document to which the Borrower is a party is,
or when delivered under the Credit Agreement will be, a legal, valid and binding
obligation of the Borrower, enforceable against the Borrower in accordance with
its terms, except to the extent that such enforcement may be limited by
applicable bankruptcy, insolvency and other similar laws affecting creditors'
rights generally.
4. To the best of our knowledge (after due inquiry), there are
no pending or threatened actions, suits or proceedings against or affecting the
Borrower or any of its Subsidiaries before any court, governmental agency or
arbitrator, which may, in any one case or in the aggregate, materially adversely
affect the financial condition, operations, properties or business of the
Borrower or of any such Subsidiary or the ability of the Borrower to perform its
obligations under the Facility Documents to which it is a party.
Very truly yours,
EXHIBIT F
[Opinion of Guarantor's Counsel]
[Closing Date]
The Chase Manhattan Bank, N.A.
One Lincoln Center
Syracuse, New York 13202
Fleet Bank
One Clinton Square
Syracuse, New York 13221
NatWest Bank N.A.
175 Water Street
New York, New York 10038
Credit Lyonnais Cayman Island Branch
c/o Credit Lyonnais
1301 Avenue of The Americas
New York, New York 10019-6022
Ladies and Gentlemen:
We have acted as counsel to _____________ ("Guarantor") in
connection with the execution and delivery of that certain Credit Agreement -
Revolving Credit Facility (the "Credit Agreement") dated as of December ____,
1995 among CONMED CORPORATION, the Banks signatory thereto and The Chase
Manhattan Bank, N.A. (the "Agent"). Except as otherwise defined herein, all
terms used herein and defined in the Credit Agreement or any agreement delivered
thereunder shall have the meanings assigned to them therein.
In connection with this opinion, we have examined executed
copies of the Facility Documents and such other documents, records, agreements
and certificates as we have deemed appropriate. We have also reviewed such
matters of law as we have considered relevant for the purpose of this opinion.
Based upon the foregoing, we are of the opinion that:
1. Each Guarantor is a corporation duly incorporated, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation, has the corporate power and authority to own its assets and to
transact the business in which it is now engaged or proposed to be engaged, and
is duly qualified as a foreign corporation and in good standing under the laws
of each other jurisdiction in which such qualification is required.
2. The execution, delivery and performance by each Guarantor
of the Facility documents to which it is a party has been duly authorized by all
necessary corporate action and do not and will not: (a) require any additional
consent or approval of its stockholders; (b) contravene its charter or by-laws;
(c) violate any provision of, or require any filing (other than the filing of
financing statements referred to below), registration, consent or approval
under, any law, rule, regulation (including without limitation, Regulation U),
order, writ, judgment, injunction, decree, determination or award presently in
effect having applicability to a Guarantor; (d) result in a breach of or
constitute a default or require any consent under any indenture or loan or
credit agreement or any other agreement, lease or instrument to which a
Guarantor is a party or by which it or its properties may be bound or affected;
(e) result in, or require, the creation or imposition of any Lien (other than in
favor of the Agent on behalf of the Banks, upon or with respect to any of the
properties now owned or hereafter acquired by a Guarantor; or (f) cause a
Guarantor to be in default under any such law, rule, regulation, order, writ,
judgment, injunction, decree, determination or award or any such indenture,
agreement, lease or instrument.
3. Each Facility Document to which a Guarantor is a party is,
or when delivered under the Credit Agreement will be, a legal, valid and binding
obligation of the Guarantor, enforceable against the Guarantor in accordance
with its terms, except to the extent that such enforcement may be limited by
applicable bankruptcy, insolvency and other similar laws affecting creditors'
rights generally.
4. To the best of our knowledge (after due inquiry), there are
no pending or threatened actions, suits or proceedings against or affecting any
Guarantor before any court, governmental agency or arbitrator, which may, in any
one case or in the aggregate, materially adversely affect the financial
condition, operations, properties or business of a Guarantor or the ability of
any Guarantor to perform its obligations under the Facility Documents to which
it is a party.
Very truly yours,
EXHIBIT G
CONFIDENTIALITY AGREEMENT
[Date]
[Insert Name and
Address of Prospective
Participant or Assignee]
Re: Credit Agreement - Revolving Credit Facility
dated as of December 29, 1995 between CONMED
Corporation, the banks party thereto, and The Chase
Manhattan Bank (National Association), as Agent.
Dear _______________:
As a Bank, party to the above-referenced Credit Agreement (the
"Credit Agreement"), we have agreed with CONMED Corporation (the "Borrower")
pursuant to Section 12.13 of the Credit Agreement to use reasonable precautions
to keep confidential, except as otherwise provided therein, all non-public
information identified by the Borrower as being confidential at the time the
same is delivered to us pursuant to the Credit Agreement.
As provided in said Section 12.13, we are permitted to provide
you, as a prospective [holder of a participation in the Loans (as defined in the
Credit Agreement)] [assignee Bank], with certain of such non-public information
subject to the execution and delivery by you, prior to receiving such non-public
information, of a Confidentiality Agreement in this form. Such information will
not be made available to you until your execution and return to us of this
Confidentiality Agreement.
Accordingly, in consideration of the foregoing, you agree (on
behalf of yourself and each of your affiliates, directors, officers, employees
and representatives) that (A) such information will not be used by you except in
connection with the proposed [participation] [assignment] mentioned above and
(B) you shall use reasonable precautions, in accordance with your customary
procedures for handling confidential information and in accordance with safe and
sound banking practices, to keep such information confidential, provided that
nothing herein shall limit the disclosure of any such information (i) to the
extent required by statute, rule, regulation or judicial process, (ii) to your
counsel or to counsel for any of the Banks or the Agent, (iii) to bank
examiners, auditors or accountants, (iv) in connection with any litigation to
which you or any one or more of the Banks is a party; [provided, further, that,
unless specifically prohibited by applicable law or court order, you agree,
prior to disclosure thereof, to endeavor to notify the Borrower of any request
for disclosure of any such non-public information (x) by any governmental agency
or representative thereof (other than any such request in connection with an
examination of your financial condition by such governmental agency) or (y)
pursuant to legal process]; and provided finally that in no event shall you be
obligated to return any materials furnished to you pursuant to this
Confidentiality Agreement.
Would you please indicate your agreement to the foregoing by
signing at the place provided below the enclosed copy of this Confidentiality
Agreement.
Very truly yours,
[Insert Name of Bank]
By:___________________________
The foregoing is agreed to as of the date of this letter.
[Insert name of prospective
participant or assignee]
By: ______________________________
EXHIBIT H
[CONMED Letterhead]
Borrowing Notice
___________, 199___
Date
Via Telecopier
The Chase Manhattan Bank, N.A., Agent
One Lincoln Center
Syracuse, New York 13202
Attention: __________________________
Operations
Re: _____ Term Loan
_____ Revolving Credit Loan
Dear _________________:
Reference is made to our Credit Agreement with you as Agent
and the Banks signatory thereto, dated December ___, 1995. Unless otherwise
defined herein or the context otherwise requires, capitalized terms shall have
the meaning attributed to them in the Credit Agreement.
We hereby confirm our telephone notice to you:
To borrow/renew $_______________ on ________________, 199__ as
a:
____ Variable Rate Loan
____ Fixed Rate Loan with an Interest Period of ___ month(s)
at a rate of _____________________.
We further confirm that after this advance (or payment) we
will have the following kinds of loans outstanding:
Term Loans
---------- Last Date
Kind of Loan Amount Rate of Interest Period
- ------------ ------ -----------------------------------
Variable Rate
Fixed Rate
Fixed Rate
Fixed Rate ______
Total $
Revolving Credit Loans
---------------------- Last Date
Kind of Loan Amount Rate of Interest Period
- ------------ ------ -----------------------------------
Variable Rate
Fixed Rate
Fixed Rate
Fixed Rate ______
Total $
CONMED CORPORATION hereby certifies that both on the date of
this Notice and the date of the borrowing no Event of Default exists, all
representations and warranties contained in the Credit Agreement continue to be
true and correct, and all conditions precedent under the Credit Agreement are
satisfied.
Very truly yours,
CONMED CORPORATION
By:___________________________
Its:___________________________
SCHEDULE I
Subsidiaries of Borrower
Jurisdiction Percentage
Name and Address of Incorporation of Ownership
- ---------------- ---------------- ------------
Birtcher Medical Systems, Inc. California 100%
310 Broad Street
Utica, new York 13501
Consolidated Medical Equipment
International, Inc. New York 100%
310 Broad Street
Utica, New York 13501
Aspen Laboratories, Inc. Colorado 100%
14603 East Fremont Avenue
Englewood, Colorado 80112
CONMED Andover Medical, Inc. New York 100%
60 Newark Street
Haverhill, Massachusetts 01832
N D M, Inc. New York 100%
310 Broad Street,
Utica, New York 13501
SCHEDULE II
CREDIT ARRANGEMENTS
Credit Amount
Arrangement Face Amount Outstanding
- ----------- ------------------------------------------------
1. Letters of Credit:
Chase $ 100,000 $28,700
SCHEDULE III
HAZARDOUS MATERIALS
1. Asbestos: Encapsulated asbestos is present in the basement of CONMED's Utica,
New York facility.
2. Underground Storage Tanks: CONMED purchased a warehouse/manufacturing
facility on February 6, 1995 located at Success Drive, Rome, New York. On this
property there are two underground fuel oil tanks. The seller, Fay's Inc., is
obligated to remove both tanks under DEC supervision and shall indemnify and
hold CONMED harmless from all costs, damages or expenses relating to any
environmental or hazardous waste conditions resulting from the presence or use
of such tanks. The obligation of Fay's Inc., to remove the tanks is expressed in
a purchase and sale agreement executed by the parties on January 20, 1995.
3. Birtcher Medical Systems, Inc.: The California Regional Water Quality Control
Board, Los Angeles region ("CRWQCB") is investigating contamination in the soil
near an industrial waste clarifier located outdoors on a site in an industrial
area of El Monte, California. Between 1977 and 1990, Birtcher leased a portion
of a building also located at the site and adjacent to the clarifier. The
clarifier was used in connection with a plating operation which Birtcher sold to
another party in 1984. The CRWQCB has worked principally with this other party
to determine the extent and effect of the soil contamination and whether
remedial action will be required.
Birtcher, and other Potentially Responsible Parties have conducted
subsurface soils investigations, including soil vapor studies, at the request of
the CRWQCB. The CRWQCB has not responded to the latest report, which was
submitted on May 27, 1994. These investigations have confirmed the presence of
volatile organic compounds ("VOC") in the subsurface below the former facility.
Some of the same type of VOC have been detected in ground water samples
collected by others in the vicinity of this facility. The quantities and sources
of the VOCs detected in soils below the facility have yet to be determined.
While Borrower does not currently anticipate any material adverse effect upon
its business or financial position resulting from the CRWQCB's investigation,
Birtcher may in the future become involved in further environmental assessment
and remediation at the site, the costs of which cannot be determined at this
time.
The EPA has divided the San Gabriel Valley superfund site into five
operable units. The site is located in the El Monte operable unit of the San
Gabriel superfund site. The Environmental Protection Agency (the "EPA") has sent
"Potentially Responsible Party Notices" to current operators ("PRPs") of the
contaminated property in the El Monte operable unit. On November 23, 1994
Birtcher received a Section 104(e) request for information from the EPA
regarding the El Monte facility. The EPA has not identified Birtcher as a PRP.
However, it is likely that Birtcher will be named as a PRP and that it may be
required to participate in a remedial investigation, feasibility study, and
cleanup. The cost of such participation is unknown.
SCHEDULE IV
EMPLOYEE BENEFIT PLANS
FUNDING STATUS
The attached correspondence dated March 8, 1995 from Benefits
Management, Inc., plan actuaries for Borrower and Aspen Laboratories, Inc.,
represents the most current information presently available. The actuary will
provide the Banks with comparable liability reports for both plans as of January
1, 1996 by no later than March 31, 1996.