CREDIT AGREEMENT
Dated as of October 22, 1999
among
McKESSON HBOC, INC.,
BANK OF AMERICA, N.A.,
as Administrative Agent,
THE CHASE MANHATTAN BANK,
as a documentation agent,
FIRST UNION NATIONAL BANK,
as a documentation agent,
BANK ONE, N.A.,
as a documentation agent,
MORGAN GUARANTY TRUST COMPANY,
as a documentation agent,
and
THE OTHER FINANCIAL INSTITUTIONS PARTY HERETO
Arranged by
Banc of America Securities LLC
TABLE OF CONTENTS
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ARTICLE I
DEFINITIONS
1.1 Certain Defined Terms......................................... 1
1.2 Other Interpretive Provisions................................. 15
1.3 Accounting Principles......................................... 16
ARTICLE II
THE CREDITS
2.1 Amounts and Terms of Commitments.............................. 16
2.2 Loan Accounts................................................. 17
2.3 Procedure for Borrowing....................................... 17
2.4 Conversion and Continuation Elections......................... 18
2.5 Voluntary Termination or Reduction of Commitments............. 19
2.6 Optional Prepayments.......................................... 19
2.7 Repayment..................................................... 20
2.8 Interest...................................................... 20
2.9 Fees.......................................................... 21
2.10 Computation of Fees and Interest.............................. 21
2.11 Payments by the Company....................................... 22
2.12 Payments by the Banks to the Administrative Agent............. 22
2.13 Sharing of Payments, Etc...................................... 23
2.14 Optional Increase in Commitments.............................. 23
2.15 Replacement of a Bank......................................... 24
ARTICLE III
TAXES, YIELD PROTECTION AND ILLEGALITY
3.1 Taxes......................................................... 25
3.2 Illegality.................................................... 26
3.3 Increased Costs and Reduction of Return....................... 26
3.4 Funding Losses................................................ 27
3.5 Inability to Determine Rates.................................. 28
3.6 Certificates of Banks......................................... 28
3.7 Survival...................................................... 28
ARTICLE IV
CONDITIONS PRECEDENT
4.1 Conditions of Initial Loans................................... 28
4.2 Conditions to All Borrowings.................................. 30
Section Page
ARTICLE V
REPRESENTATIONS AND WARRANTIES
5.1 Corporate Existence and Power................................. 31
5.2 Corporate Authorization; No Contravention..................... 32
5.3 Governmental Authorization.................................... 32
5.4 Binding Effect................................................ 32
5.5 Litigation.................................................... 32
5.6 No Default.................................................... 33
5.7 Use of Proceeds; Margin Regulations........................... 33
5.8 Financial Condition........................................... 33
5.9 Regulated Entities............................................ 33
5.10 No Burdensome Restrictions.................................... 33
5.11 Subsidiaries and Certain Liens As of the Closing Date......... 34
5.12 Year 2000 Compliance.......................................... 34
5.13 Disclosed Matters............................................. 34
ARTICLE VI
AFFIRMATIVE COVENANTS
6.1 Financial Statements.......................................... 34
6.2 Certificates; Other Information............................... 35
6.3 Notices....................................................... 35
6.4 Preservation of Corporate Existence, Etc...................... 36
6.5 Insurance..................................................... 36
6.6 Payment of Taxes.............................................. 36
6.7 Compliance with Laws.......................................... 37
6.8 Inspection of Property and Books and Records.................. 37
6.9 Use of Proceeds............................................... 37
6.10 Notice of Rating Change....................................... 37
ARTICLE VII
NEGATIVE COVENANTS
7.1 Limitation on Liens........................................... 38
7.2 Consolidations and Mergers.................................... 39
7.3 Use of Proceeds............................................... 39
7.4 Maximum Debt to Capitalization Ratio.......................... 40
ARTICLE VIII
EVENTS OF DEFAULT
ii
Section Page
8.1 Event of Default............................................. 40
8.2 Remedies..................................................... 41
8.3 Rights Not Exclusive......................................... 42
ARTICLE IX
THE ADMINISTRATIVE AGENT
9.1 Appointment and Authorization................................ 42
9.2 Delegation of Duties......................................... 42
9.3 Liability of Administrative Agent............................ 42
9.4 Reliance by the Administrative Agent......................... 43
9.5 Notice of Default............................................ 43
9.6 Credit Decision.............................................. 44
9.7 Indemnification of Administrative Agent...................... 44
9.8 Administrative Agent in Individual Capacity.................. 45
9.9 Successor Administrative Agent............................... 45
9.10 Withholding Tax.............................................. 45
9.11 Documentation Agent; Managing Agent.......................... 47
ARTICLE X
MISCELLANEOUS
10.1 Amendments and Waivers....................................... 48
10.2 Notices...................................................... 48
10.3 No Waiver; Cumulative Remedies............................... 48
10.4 Costs and Expenses........................................... 49
10.5 Indemnification by the Company............................... 49
10.6 Payments Set Aside........................................... 50
10.7 Successors and Assigns....................................... 50
10.8 Assignments, Participations, etc............................. 50
10.9 Confidentiality.............................................. 52
10.10 Set-off...................................................... 53
10.11 Notification of Addresses, Lending Offices, Etc.............. 53
10.12 Counterparts................................................. 53
10.13 Severability................................................. 53
10.14 No Third Parties Benefited................................... 53
10.15 Governing Law and Jurisdiction............................... 53
10.16 Waiver of Jury Trial......................................... 54
10.17 Entire Agreement............................................. 54
iii
McKesson HBOC, Inc.
List of Schedules and Exhibits to Credit Agreement
SCHEDULES
Schedule 2.1 Commitments; Pro Rata Shares
Schedule 5.11 Subsidiaries and Liens Securing Indebtedness for Borrowed
Money
Schedule 10.2 Lending Offices; Addresses for Notices
EXHIBITS
Exhibit A Form of Notice of Borrowing
Exhibit B Form of Notice of Conversion/Continuation
Exhibit C Form of Compliance Certificate
Exhibit D Form of Legal Opinion of Company's Counsel
Exhibit E Form of Assignment and Acceptance
Exhibit F Form of Promissory Note
iv
Exhibit 10.32
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CREDIT AGREEMENT
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This CREDIT AGREEMENT is entered into as of October 22, 1999 among
McKesson HBOC, Inc., a Delaware corporation (the "Company"), the several
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financial institutions from time to time party to this Agreement (collectively,
the "Banks"; individually, a "Bank"), The Chase Manhattan Bank, as a
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documentation agent for the Banks, First Union National Bank, as a documentation
agent for the Banks, Bank One, N.A., as a documentation agent for the Banks,
Morgan Guaranty Trust Company, as a documentation agent for the Banks, and Bank
of America, N.A., as administrative agent for the Banks.
WHEREAS, the Banks have agreed to make available to the Company a
revolving credit facility upon the terms and conditions set forth in this
Agreement;
NOW, THEREFORE, in consideration of the mutual agreements, provisions
and covenants contained herein, the parties agree as follows:
ARTICLE I
DEFINITIONS
1.1 Certain Defined Terms. As used in this Agreement and the other
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Loan Documents, the following terms have the following meanings:
"Administrative Agent" means Bank of America in its capacity as
--------------------
administrative agent for the Banks hereunder, and any successor agent arising
under Section 9.9.
"Administrative Agent-Related Persons" means the Administrative Agent
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and any successor agent arising under Section 9.9, together with their
respective Affiliates (including, in the case of Bank of America, the Arranger),
and the officers, directors, employees, agents and attorneys-in-fact of such
Persons and Affiliates.
"Administrative Agent's Payment Office" means the address for payments
-------------------------------------
set forth on Schedule 10.2 in relation to the Administrative Agent, or such
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other address as the Administrative Agent may from time to time specify.
"Affiliate" means, as to any Person, any other Person which, directly
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or indirectly, is in control of, is controlled by, or is under common control
with, such Person. A Person shall be deemed to control another Person if the
controlling Person possesses, directly or indirectly,
1
the power to direct or cause the direction of the management and policies of the
other Person, whether through the ownership of voting securities, by contract,
or otherwise.
"Agreement" means this Credit Agreement.
---------
"Applicable Currency" means, as to any particular payment or Loan,
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Dollars.
"Applicable Facility Fee" means, on any date and with respect to each
-----------------------
Loan (subject to clauses (b) through (d) of the definition of "Applicable Rating
Level"), the applicable fee (in basis points) set forth below based on the
Applicable Rating Level on such date:
Applicable Applicable Facility
Rating Level Fee (in basis points)
------------ ---------------------
Level I 8.0
Level II 9.0
Level III 11.0
Level IV 12.5
Level V 17.5
Level VI 22.5
"Applicable Margin" means, on any date and with respect to each
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Offshore Rate Loan (subject to clauses (b) through (d) of the definition of
"Applicable Rating Level"), the applicable margin set forth below based on the
Applicable Rating Level on such date:
Applicable Applicable Margin
Rating Level (in basis points)
------------ -----------------
Level I 42.0
Level II 46.0
Level III 51.5
Level IV 62.5
Level V 82.5
Level VI 102.5
The margin set forth above for any Applicable Rating Level on a given
date shall be increased by fifteen (15.0) basis points if, on such date, the sum
of (a) the Total Utilization of Facility A Commitments (as such term is defined
in the November 1998 Credit Agreement) existing on such date and (b) outstanding
Loans (as defined herein) on such date, exceeds 30% of the sum of (x) the
aggregate of the Facility A Commitments (as such term is defined in the November
1998 Credit Agreement) existing on such date and (y) the aggregate of the
Commitments (as defined herein) existing on such date.
"Applicable Rating Level" shall mean and be determined by the ratings
-----------------------
issued from time to time by S&P and Moody's (or S&P or Moody's, if ratings shall
be available from only one of such Rating Agencies) in respect of the Company's
long-term, senior, unsecured, non-credit enhanced debt in accordance with the
following:
2
Rating Level S&P Moody's
------------ --- -------
Level I A or more A2 or more
favorable favorable
Level II A- A3
Level III BBB+ Baa1
Level IV BBB Baa2
Level V BBB- Baa3
Level VI BB+ or less Ba1 or less
or not rated or not rated
For purposes of the foregoing, (a) if ratings are available from both
S&P and Moody's, and the ratings available from such Rating Agencies
do not correspond to the same rating level on the chart above, then
(1) if such rating levels differ by only one level on the chart above,
then the Applicable Rating Level shall correspond to the higher of the
two ratings, and (2) if such rating levels differ by more than one
level on the chart above, then the Applicable Rating Level shall
correspond to that rating which is one rating higher than the lower of
the two ratings; (b) if determinative ratings shall change (other than
as a result of a change in the rating system used by any applicable
Rating Agency) such that a change in the Applicable Rating Level would
result, such change shall effect a change in the Applicable Rating
Level as of the day on which the Administrative Agent receives notice
of such change (such day, a "Change Day"), and any change in the
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Applicable Margin shall take effect commencing on such Change Day and
ending on the date immediately preceding the next Change Day; (c) if
the rating system of any of the Rating Agencies shall change prior to
the date all obligations hereunder have been paid and the Commitments
cancelled, the Company and the Majority Banks shall negotiate in good
faith to amend the references to specific ratings in this definition
to reflect such changed rating system, and pending such amendment, if
no Applicable Rating Level is otherwise determinable based upon the
foregoing, the most recent Applicable Rating Level in effect shall
apply; (d) if the Company shall fail to give notice to the
Administrative Agent of any change in rating by any Rating Agency in
respect of the Company's long-term, senior, unsecured, non-credit
enhanced debt on the date required by Section 6.10, the Applicable
Rating Level shall be deemed to be Level VI for the period from the
date such notice was required to be delivered to the date such notice
is received by the Administrative Agent; and (e) subject to subsection
2.8(c), upon the occurrence of and during the existence of an Event of
Default, the Applicable Rating Level shall be deemed to be Level VI.
"Arranger" means Banc of America Securities LLC, a Delaware limited
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liability company.
"Assignee" has the meaning specified in subsection 10.8(a).
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"Assignment and Acceptance" has the meaning specified in subsection
-------------------------
10.8(a).
3
"Attorney Costs" means and includes all reasonable fees and
--------------
disbursements of any law firm or other external counsel, the allocated
reasonable cost of internal legal services and all reasonable disbursements of
internal counsel; provided that no fees or disbursements shall qualify as
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Attorney Costs unless written evidence substantiating such fees and
disbursements is available to the Company upon request.
"Bank" has the meaning specified in the introductory clause hereto.
----
"Bank of America" means Bank of America, N.A., a national banking
---------------
association.
"Bankruptcy Code" means the Federal Bankruptcy Reform Act of 1978 (11
---------------
U.S.C. (S)101, et seq.).
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"Base Rate" means, for any day, the higher of: (a) 0.50% per annum
---------
above the Federal Funds Rate in effect for that day; and (b) the rate of
interest in effect for such day as publicly announced from time to time by Bank
of America as its "prime rate." (The "prime rate" is a rate set by Bank of
America based upon various factors including Bank of America's costs and desired
return, general economic conditions and other factors, and is used as a
reference point for pricing some loans, which may be priced at, above, or below
such announced rate.) Any change in the prime rate announced by Bank of America
shall take effect at the opening of business on the day specified in the public
announcement of such change.
"Base Rate Loan" means a Loan that bears interest based on the Base
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Rate.
"Borrowing" means a borrowing hereunder consisting of Loans of the
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same Type made to the Company on the same day by the Banks under Article II,
and, other than in the case of Base Rate Loans, having the same Interest Period.
"Borrowing Date" means any date on which a Borrowing occurs under
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Section 2.3.
"Bridge Facility" has the meaning specified in Section 4.1(g)(ii).
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"Business Day" means any day other than a Saturday, Sunday or other
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day on which commercial banks in New York City, Chicago or San Francisco are
authorized or required by law to close and, if the applicable Business Day
relates to any Offshore Rate Loan, means such a day on which dealings in the
Applicable Currency are carried on in the applicable offshore interbank market.
"Capital Adequacy Regulation" means any guideline, request or
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directive of any central bank or other Governmental Authority, or any other law,
rule or regulation, whether or not having the force of law, in each case,
regarding capital adequacy of any bank or of any corporation controlling a bank.
"Closing Date" means the date on which all conditions precedent set
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forth in Section 4.1 are satisfied or waived by all Banks (or, in the case of
subsection 4.1(e), waived by the Person entitled to receive such payment).
4
"Code" means the Internal Revenue Code of 1986, and regulations
----
promulgated thereunder.
"Commitment", as of any date of determination as to each Bank, has the
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meaning specified in Section 2.1, and "Commitments" means the aggregate amount
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of the Commitments for each Bank in effect on such date.
"Company" has the meaning specified in the introductory clause hereto.
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"Compliance Certificate" means a certificate substantially in the form
----------------------
of Exhibit C.
"Contingent Obligation" means, as to any Person, any direct or
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indirect liability of that Person, whether or not contingent, with or without
recourse, (a) with respect to any Indebtedness, lease, dividend, letter of
credit or other obligation (the "primary obligations") of another Person (the
"primary obligor"), including any obligation of that Person (i) to purchase,
repurchase or otherwise acquire such primary obligations or any security
therefor, (ii) to advance or provide funds for the payment or discharge of any
such primary obligation, or to maintain working capital or equity capital of the
primary obligor or otherwise to maintain the net worth or solvency or any
balance sheet item, level of income or financial condition of the primary
obligor, (iii) to purchase property, securities or services primarily for the
purpose of assuring the owner of any such primary obligation of the ability of
the primary obligor to make payment of such primary obligation, or (iv)
otherwise to assure or hold harmless the holder of any such primary obligation
against loss in respect thereof (each, a "Guaranty Obligation"); (b) with
-------------------
respect to any Surety Instrument issued for the account of that Person or as to
which that Person is otherwise liable for reimbursement of drawings or payments;
(c) to purchase any materials, supplies or other property from, or to obtain the
services of, another Person if the relevant contract or other related document
or obligation requires that payment for such materials, supplies or other
property, or for such services, shall be made regardless of whether delivery of
such materials, supplies or other property is ever made or tendered, or such
services are ever performed or tendered, or (d) in respect of any Swap Contract.
The amount of any Contingent Obligation shall, in the case of Guaranty
Obligations, be deemed equal to the stated or determinable amount of the primary
obligation in respect of which such Guaranty Obligation is made or, if not
stated or if indeterminable, the maximum reasonably anticipated liability in
respect thereof, and in the case of other Contingent Obligations, shall be equal
to the maximum reasonably anticipated liability in respect thereof.
"Contractual Obligation" means, as to any Person, any provision of any
----------------------
security issued by such Person or of any agreement, undertaking, contract,
indenture, mortgage, deed of trust or other instrument, document or agreement to
which such Person is a party or by which it or any of its property is bound.
"Conversion/Continuation Date" means any date on which, under Section
----------------------------
2.4, the Company (a) converts Loans of one Type to another Type, or (b)
continues as Loans of the same Type, but with a new Interest Period, Loans
having Interest Periods expiring on such date.
5
"Default" means any event or circumstance which, with the giving of
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notice, the lapse of time, or both, would (if not cured or otherwise remedied
during such time) constitute an Event of Default.
"Disclosed Matters" means (i) those matters described in the Company's
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press release dated April 28, 1999 (the "Press Release"), (ii) litigation which
(A) is related to the matters disclosed in the Press Release and (B) has been
disclosed to the Administrative Agent and the Banks prior to the Closing Date,
and (iii) other matters related to the matters disclosed in the Press Release
which have been publicly disclosed by the Company in its filings with the SEC
prior to the Closing Date.
"Dollars", "dollars" and "$" each means the lawful money of the United
------- ------- -
States.
"Eligible Assignee" means (i) a commercial bank organized under the
-----------------
laws of the United States, or any state thereof, and having a combined capital
and surplus of at least $100,000,000; (ii) a commercial bank organized under the
laws of any other country which is a member of the OECD, or a political
subdivision of any such country, and having a combined capital and surplus of at
least $100,000,000, provided that such bank is acting through a branch or agency
located in the United States; and (iii) a Person that is primarily engaged in
the business of commercial banking and that is (A) a Subsidiary of a Bank, (B) a
Subsidiary of a Person of which a Bank is a Subsidiary, or (C) a Person of which
a Bank is a Subsidiary.
"Employee Benefit Plan" means any "employee benefit plan" as defined
---------------------
in Section 3(3) of ERISA which is, or was at any time, maintained or contributed
to by the Company or any of its ERISA Affiliates.
"Environmental Laws" means all federal, state, provincial or local
------------------
laws, statutes, common law duties, rules, regulations, ordinances and codes,
together with all administrative orders, directed duties, requests, licenses,
authorizations and permits of, and agreements with, any Governmental
Authorities, in each case relating to environmental, health, safety or land use
matters.
"ERISA" means the Employee Retirement Income Security Act of 1974, and
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regulations promulgated thereunder.
"ERISA Affiliate", as applied to any Person, means (i) any corporation
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which is, or was at any time, a member of a controlled group of corporations
within the meaning of Section 414(b) of the Code of which that Person is, or was
at any time, a member; (ii) any trade or business (whether or not incorporated)
which is, or was at any time, a member of a group of trades or businesses under
common control within the meaning of Section 414(c) of the Code of which that
Person is, or was at any time, a member; and (iii) any member of an affiliated
service group within the meaning of Section 414(m) or (o) of the Code of which
that Person, any corporation described in clause (i) above or any trade or
business described in clause (ii) above is, or was at any time, a member;
provided that an ERISA Affiliate shall not include a Person that was a member,
as referenced in clause (i), (ii) or (iii) above if the Company or any of its
6
Subsidiaries would not have any liability in connection with an ERISA Event with
respect to such Person.
"ERISA Event" means (i) a "reportable event" within the meaning of
-----------
Section 4043 of ERISA and the regulations issued thereunder with respect to any
Pension Plan (excluding those for which the provision for 30-day notice to the
PBGC has been waived by regulation); (ii) the failure to meet the minimum
funding standard of Section 412 of the Code with respect to any Pension Plan
(whether or not waived in accordance with Section 412(d) of the Code) or the
failure to make by its due date a required installment under Section 412(m) of
the Code with respect to any Pension Plan or the failure to make any required
contribution to a Multiemployer Plan; (iii) the provision by the administrator
of any Pension Plan pursuant to Section 4041(a)(2) of ERISA of a notice of
intent to terminate such plan in a distress termination described in Section
4041(c) of ERISA; (iv) the withdrawal by the Company or any of its ERISA
Affiliates from any Pension Plan with two or more contributing sponsors or the
termination of any such Pension Plan resulting in liability pursuant to Sections
4063 or 4064 of ERISA; (v) the institution by the PBGC of proceedings to
terminate any Pension Plan, or the occurrence of any event or condition which
might constitute grounds under ERISA for the termination of, or the appointment
of a trustee to administer, any Pension Plan; (vi) the imposition of liability
on the Company or any of its ERISA Affiliates pursuant to Section 4062(e) or
4069 of ERISA or by reason of the application of Section 4212(c) of ERISA; (vii)
the withdrawal by the Company or any of its ERISA Affiliates in a complete or
partial withdrawal (within the meaning of Sections 4203 and 4205 of ERISA) from
any Multiemployer Plan if there is any potential liability therefor, or the
receipt by the Company or any of its ERISA Affiliates of notice from any
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 or 4042 of ERISA; (viii) the occurrence of an act or
omission which could give rise to the imposition on the Company or any of its
ERISA Affiliates of fines, penalties, taxes or related charges under Chapter 43
of the Code or under Section 409 or 502(c), (i) or (l) or 4071 of ERISA in
respect of any Employee Benefit Plan; (ix) the assertion of a material claim
(other than routine claims for benefits) against any Employee Benefit Plan other
than a Multiemployer Plan or the assets thereof, or against the Company or any
of its ERISA Affiliates in connection with any such Employee Benefit Plan; (x)
receipt from the Internal Revenue Service of notice of the failure of any
Pension Plan (or any other Employee Benefit Plan intended to be qualified under
Section 401(a) of the Code) to qualify under Section 401(a) of the Code, or the
failure of any trust forming part of any Pension Plan to qualify for exemption
from taxation under Section 501(a) of the Code; or (xi) the imposition of a Lien
pursuant to Section 401(a)(29) or 412(n) of the Code or pursuant to ERISA with
respect to any Pension Plan.
"Eurodollar Reserve Percentage" has the meaning specified in the
-----------------------------
definition of "Offshore Rate."
"Event of Default" means any of the events or circumstances specified
----------------
in Section 8.1.
"Exchange Act" means the Securities Exchange Act of 1934, and
------------
regulations promulgated thereunder.
7
"Exposure" means, prior to the termination of the Commitments, such
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Bank's Commitment, and, after the termination of the Commitments, the aggregate
outstanding principal amount of the Loans made by such Bank.
"FDIC" means the Federal Deposit Insurance Corporation, and any
----
Governmental Authority succeeding to any of its principal functions.
"Federal Funds Rate" means, for any day, the rate set forth in the
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weekly statistical release designated as H.15(519), or any successor
publication, published by the Federal Reserve Bank of New York (including any
such successor, "H.15(519)") on the preceding Business Day opposite the caption
"Federal Funds (Effective)"; or, if for any relevant day such rate is not so
published on any such preceding Business Day, the rate for such day will be the
arithmetic mean as determined by the Administrative Agent of the rates for the
last transaction in overnight Federal funds arranged prior to 9:00 a.m. (New
York City time) on that day by each of three leading brokers of Federal funds
transactions in New York City selected by the Administrative Agent.
"Fee Letter" has the meaning specified in subsection 2.9(a).
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"FRB" means the Board of Governors of the Federal Reserve System, and
---
any Governmental Authority succeeding to any of its principal functions.
"GAAP" means generally accepted accounting principles set forth from
----
time to time in the opinions and pronouncements of the Accounting Principles
Board and the American Institute of Certified Public Accountants and statements
and pronouncements of the Financial Accounting Standards Board (or agencies with
similar functions of comparable stature and authority within the U.S. accounting
profession), which are applicable to the circumstances as of the date of
determination; provided that with respect to Subsidiaries not organized in the
United States, "GAAP" means generally accepted accounting principles in
accordance with agencies with similar function of comparable stature and
authority within the accounting profession in the relevant jurisdiction.
"Governmental Authority" means any nation or government, any state or
----------------------
other political subdivision thereof, any central bank (or similar monetary or
regulatory authority) thereof, any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government,
and any corporation or other entity owned or controlled, through stock or
capital ownership or otherwise, by any of the foregoing.
"Guaranty Obligation" has the meaning specified in the definition of
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"Contingent Obligation".
"Indebtedness" of any Person means, without duplication, (a) all
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indebtedness for borrowed money; (b) all obligations issued, undertaken or
assumed as the deferred purchase price of property or services (other than trade
payables entered into in the ordinary course of business on ordinary terms); (c)
all non-contingent reimbursement or payment obligations with respect to Surety
Instruments; provided that this clause (c) shall not include up to $25,000,000
of non-contingent reimbursement or payment obligations with respect to Surety
Instruments that do
8
not support indebtedness for borrowed money to the extent that no default has
occurred with respect to the payment thereof; (d) all obligations evidenced by
notes, bonds, debentures or similar instruments, including obligations so
evidenced incurred in connection with the acquisition of property, assets or
businesses; (e) all indebtedness created or arising under any conditional sale
or other title retention agreement, or incurred as financing, in either case
with respect to property acquired by the Person (even though the rights and
remedies of the seller or bank under such agreement in the event of default are
limited to repossession or sale of such property); (f) all obligations with
respect to capital leases; (g) all net obligations with respect to Swap
Contracts; and (h) all indebtedness referred to in clauses (a) through (g) above
secured by (or for which the holder of such Indebtedness has an existing right,
contingent or otherwise, to be secured by) any Lien upon or in property
(including accounts and contracts rights) owned by such Person, even though such
Person has not assumed or become liable for the payment of such Indebtedness.
"Indemnified Liabilities" has the meaning specified in Section 10.5.
-----------------------
"Indemnified Person" has the meaning specified in Section 10.5.
------------------
"Independent Auditor" has the meaning specified in subsection 6.1(a).
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"Ineligible Securities" has the meaning specified in subsection
---------------------
7.3(b).
"Insolvency Proceeding" means (a) any case, action or proceeding
---------------------
before any court or other Governmental Authority relating to bankruptcy,
reorganization, insolvency, liquidation, receivership, dissolution, winding-up
or relief of debtors, or (b) any general assignment for the benefit of
creditors, composition, marshalling of assets for creditors, or other similar
arrangement in respect of its creditors generally or any substantial portion of
its creditors; undertaken under U.S. Federal, state or foreign law, including
the Bankruptcy Code.
"Interest Payment Date" means, as to any Offshore Rate Loan, the last
---------------------
day of each Interest Period applicable to such Loan and, as to any Base Rate
Loan, the last Business Day of each calendar quarter; provided, however, that if
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any Interest Period for an Offshore Rate Loan exceeds three months, the date
that falls three months after the beginning of such Interest Period and after
each Interest Payment Date thereafter is also an Interest Payment Date.
"Interest Period" means, as to any Offshore Rate Loan, the period
---------------
commencing on the Borrowing Date of such Loan or on the Conversion/Continuation
Date on which the Loan is converted into or continued as an Offshore Rate Loan,
and ending on the date one, two, three or six months thereafter as selected by
the Company in its Notice of Borrowing or Notice of Conversion/Continuation;
provided that:
--------
(1) if any Interest Period would otherwise end on a
day that is not a Business Day, that Interest Period shall be extended
to the following Business Day unless the result of such extension
would be to carry such Interest Period into another calendar month, in
which event such Interest Period shall end on the preceding Business
Day;
9
(2) any Interest Period pertaining to an Offshore Rate
Loan that begins on the last Business Day of a calendar month (or on a
day for which there is no numerically corresponding day in the
calendar month at the end of such Interest Period) shall end on the
last Business Day of the calendar month at the end of such Interest
Period; and
(3) no Interest Period for any Loan shall extend
beyond the Revolving Facility Termination Date.
"IRS" means the Internal Revenue Service, and any Governmental
---
Authority succeeding to any of its principal functions under the Code.
"Lending Office" means, as to any Bank, the office of such Bank
--------------
specified as its "Lending Office" on Schedule 10.2, or such other office or
-------------
offices as such Bank may from time to time notify the Company and the
Administrative Agent.
"LIBOR" has the meaning specified in the definition of the "Offshore
-----
Rate."
"Lien" means any security interest, mortgage, deed of trust, pledge,
----
hypothecation, assignment, charge or deposit arrangement, encumbrance, lien
(statutory or other) or preferential arrangement of any kind or nature
whatsoever in respect of any property (including those created by, arising under
or evidenced by any conditional sale or other title retention agreement, the
interest of a lessor under a capital lease, any financing lease having
substantially the same economic effect as any of the foregoing, or the filing of
any financing statement naming the owner of the asset to which such lien relates
as debtor, under the Uniform Commercial Code or any comparable law, but not
including the interest of a lessor under an operating lease or the sale of
accounts receivable, whether or not such sale is evidenced by the filing of a
financing statement under the Uniform Commercial Code) and any contingent or
other agreement to provide any of the foregoing.
"Loan" means an extension of credit by a Bank to the Company under
----
Article II, and may be a Base Rate Loan or an Offshore Rate Loan (each, a "Type"
----
of Loan).
"Loan Documents" means this Agreement, any Notes and all other
--------------
documents delivered to the Administrative Agent or any Bank in connection
herewith.
"Majority Banks" means at any time Banks then holding greater than 50%
--------------
of the combined Exposure at such time of all Banks.
"Margin Stock" means "margin stock" as such term is defined in
------------
Regulation T, U or X of the FRB.
"Material Adverse Effect" means (a) a material adverse change in, or a
-----------------------
material adverse effect upon, the operations, business, properties, condition
(financial or otherwise) or prospects of the Company and its Subsidiaries taken
as a whole or any Material Subsidiary; (b) a material impairment of the ability
of the Company to perform under any Loan Document and to
10
avoid any Event of Default; or (c) a material adverse effect upon the legality,
validity, binding effect or enforceability against the Company of any Loan
Document.
"Material Subsidiary" means, at any time, any Subsidiary having at
-------------------
such time 10% or more of the Company's consolidated total (gross) revenues for
the preceding four fiscal quarter period, as of the last day of the preceding
fiscal quarter based upon the Company's most recent annual or quarterly
financial statements delivered to the Administrative Agent under Section 6.1.
"Medis" means Medis Health and Pharmaceutical Services Inc., an
-----
Ontario corporation and indirect wholly-owned Subsidiary of the Company.
"Moody's" means Moody's Investors Service, Inc. and any successor
-------
thereto that is a nationally-recognized rating agency.
"Multiemployer Plan" means a "multiemployer plan", as defined in
------------------
Section 3(37) of ERISA, to which the Company or any of its ERISA Affiliates is
contributing, or ever has contributed, or to which the Company or any of its
ERISA Affiliates has, or ever has had, an obligation to contribute.
"Net Worth" means the sum of the capital stock and additional paid in
---------
capital plus retained earnings (or minus accumulated deficits) of the Company
and its Subsidiaries determined on a consolidated basis in conformity with GAAP
on such date.
"Note" means a promissory note executed by the Company in favor of a
----
Bank pursuant to subsection 2.2(b), substantially in the form of Exhibit F.
"Notice of Borrowing" means a notice substantially in the form of
-------------------
Exhibit A.
"Notice of Conversion/Continuation" means a notice substantially in
---------------------------------
the form of Exhibit B.
"November 1998 Credit Agreement" has the meaning specified in Section
------------------------------
4.1(g)(i).
"Obligations" means all advances, debts, liabilities, obligations,
-----------
covenants and duties arising under any Loan Document owing by the Company to any
Bank, the Administrative Agent, or any Indemnified Person, whether direct or
indirect (including those acquired by assignment), absolute or contingent, due
or to become due, now existing or hereafter arising.
"OECD" means the Organization for Economic Cooperation and
----
Development.
"Offshore Rate" means, for any Interest Period, with respect to
-------------
Offshore Rate Loans comprising part of the same Borrowing, the rate of interest
per annum (rounded upward to the next 1/100th of 1%) determined by the
Administrative Agent as follows:
11
Offshore Rate = LIBOR
-------------------------------------
1.00 - Eurodollar Reserve Percentage
Where,
"Eurodollar Reserve Percentage" means for any day for any Interest
-----------------------------
Period the maximum reserve percentage (expressed as a decimal, rounded upward to
the next 1/100th of 1%) in effect on such day (whether or not applicable to any
Bank) under regulations issued from time to time by the FRB for determining the
maximum reserve requirement (including any emergency, supplemental or other
marginal reserve requirement) with respect to Eurocurrency funding (currently
referred to as "Eurocurrency liabilities"); and
"LIBOR" means the London Interbank Offering Rate for, as applicable,
-----
1-, 2-, 3- or 6-month dollar deposits, appearing on page 3750 of the Telerate
Screen (or on any successor or substitute page of such service, or any successor
to or substitute for such service, providing rate quotations comparable to those
currently provided on such page of such service, as determined by the
Administrative Agent from time to time for purposes of providing quotations of
interest rates applicable to dollar deposits in the interbank market) at
approximately 11:00 a.m. (London time) two days prior to the commencement of
such Interest Period. If, for any reason, such rate is unavailable at such
time, then LIBOR shall be the rate of interest per annum determined by the
Administrative Agent to be the arithmetic mean (rounded upward to the next
1/16th of 1%) of the rates of interest per annum notified to the Administrative
Agent by each Reference Bank as the rate of interest at which deposits in the
Applicable Currency in the approximate amount of the amount of the Loan to be
made or continued as, or converted into, an Offshore Rate Loan by such Reference
Bank and having a maturity comparable to such Interest Period would be offered
to major banks in the London interbank market at their request at approximately
11:00 a.m. (London time) two Business Days prior to the commencement of such
Interest Period.
The Offshore Rate shall be adjusted automatically as to all Offshore
Rate Loans then outstanding as of the effective date of any change in the
Eurodollar Reserve Percentage.
"Offshore Rate Loan" means a Loan that bears interest based on an
------------------
Offshore Rate.
"Organization Documents" means, for any corporation, the certificate
----------------------
or articles of incorporation, the bylaws, any certificate of determination or
instrument relating to the rights of preferred shareholders of such corporation,
any shareholder rights agreement, and all applicable resolutions of the board of
directors (or any committee thereof) of such corporation.
"Other Taxes" means any present or future stamp or documentary taxes
-----------
or any other excise or property taxes, charges or similar levies which arise
from any payment made hereunder or from the execution, delivery or registration
of, or otherwise with respect to, this Agreement or any other Loan Documents.
"Participant" has the meaning specified in subsection 10.8(d).
-----------
12
"PBGC" means the Pension Benefit Guaranty Corporation, or any
----
Governmental Authority succeeding to any of its principal functions under ERISA.
"Pension Plan" means any Employee Benefit Plan, other than a
------------
Multiemployer Plan, which is subject to Section 412 of the Code or Section 302
of ERISA.
"Permitted Liens" has the meaning specified in Section 7.1.
---------------
"Person" means an individual, partnership, corporation, business
------
trust, limited liability company, joint stock company, trust, unincorporated
association, joint venture or other organization or Governmental Authority.
"Press Release" has the meaning specified in the definition of
-------------
"Disclosed Matters" set forth herein.
"Pro Rata Share" means, as to any Bank at any time, the percentage
--------------
equivalent (expressed as a decimal, rounded to the ninth decimal place) at such
time of (a) such Bank's Exposure, divided by (b) the combined Exposure of all
----------
Banks at such time.
"Rating Agency" means S&P and Moody's.
-------------
"Reference Banks" means Bank of America, The Chase Manhattan Bank,
---------------
First Union National Bank, Bank One, N.A. and Morgan Guaranty Trust Company.
"Requirement of Law" means, as to any Person, any law (statutory or
------------------
common), treaty, rule or regulation or determination of an arbitrator or of a
Governmental Authority, in each case applicable to or binding upon the Person or
any of its property or to which the Person or any of its property is subject,
including but not limited to any Environmental Law.
"Responsible Officer" means a chief executive officer, a president,
-------------------
any corporate vice president or the treasurer of the Company; and, with respect
to compliance with financial covenants, the chief financial officer or the
treasurer of the Company.
"Revolving Facility Termination Date" means the earlier to occur of:
-----------------------------------
(a) October 19, 2000; and
(b) the date on which the Commitments terminate in accordance with the
provisions of this Agreement.
"S&P" means Standard & Poor's Ratings Group and any successor thereto
---
that is a nationally-recognized rating agency.
"SEC" means the Securities and Exchange Commission, or any
---
Governmental Authority succeeding to any of its principal functions.
"Subject Bank" has the meaning specified in Section 2.15.
------------
13
"Subsidiary" of a Person means any corporation, association,
----------
partnership, limited liability company, joint venture or other business entity
of which more than 50% of the voting stock or other equity interests (in the
case of Persons other than corporations), is owned or controlled directly or
indirectly by the Person, or one or more of the Subsidiaries of the Person, or a
combination thereof. Unless the context otherwise clearly requires, references
herein to a "Subsidiary" refer to a Subsidiary of the Company.
"Surety Instruments" means all letters of credit (including standby
------------------
and commercial), banker's acceptances, bank guaranties, shipside bonds, surety
bonds and similar instruments.
"Swap Contract" means any agreement (including any master agreement
-------------
and any agreement, whether or not in writing, relating to any single
transaction) that is an interest rate swap agreement, basis swap, forward rate
agreement, commodity swap, commodity option, equity or equity index swap or
option, bond option, interest rate option, forward foreign exchange agreement,
rate cap, collar or floor agreement, currency swap agreement, cross-currency
rate swap agreement, swaption, currency option or any other, similar agreement
(including any option to enter into any of the foregoing).
"Taxes" means any and all present or future taxes, levies, imposts,
-----
deductions, charges or withholdings, and all liabilities with respect thereto,
excluding, in the case of each Bank and the Administrative Agent, such taxes
(including, without limitation, income taxes, capital taxes, minimum taxes,
branch taxes, capital gains taxes or franchise taxes) (i) as are imposed on or
measured by each Bank's or the Administrative Agent's, as the case may be, net
income or taxable capital by the jurisdiction (or any political subdivision
thereof) under the laws of which such Bank or the Administrative Agent, as the
case may be, is organized or in respect of which it is a resident or within
which it maintains the actual lending office or (ii) to the extent attributable
to a permanent establishment or fixed base located in any jurisdiction (or any
political subdivision thereof) identified in (i) hereof.
"Total Capitalization" means, on any date, the sum of (a) Total Debt
--------------------
and (b) the Net Worth on such date.
"Total Debt" means, on any date, all Indebtedness of the Company and
----------
its Subsidiaries determined on a consolidated basis on such date.
"Type" has the meaning specified in the definition of "Loan."
----
"Unfunded Pension Liability" means the excess of a Pension Plan's
--------------------------
benefit liabilities under Section 4001(a)(16) of ERISA, over the current value
of that Pension Plan's assets, determined in accordance with the assumptions
used for funding the Pension Plan pursuant to Section 412 of the Code for the
applicable plan year.
"United States" and "U.S." each means the United States of America.
------------- ----
"Wholly-Owned Subsidiary" means any corporation in which (other than
-----------------------
directors' qualifying shares required by law) 100% of the capital stock of each
class having
14
ordinary voting power, and 100% of the capital stock of every other class, in
each case, at the time as of which any determination is being made, is owned,
beneficially and of record, by the Company, or by one or more of the other
Wholly-Owned Subsidiaries, or both.
"Year 2000 Problem" means the inability of computers, as well as
-----------------
embedded microchips in non-computing devices, to perform properly date-sensitive
functions with respect to certain dates prior to and after December 31, 1999.
1.2 Other Interpretive Provisions.
------------------------------
(a) The meanings of defined terms are equally applicable to the
singular and plural forms of the defined terms.
(b) The words "hereof", "herein", "hereunder" and similar words refer
to this Agreement as a whole and not to any particular provision of this
Agreement; and subsection, Section, Schedule and Exhibit references are to this
Agreement unless otherwise specified.
(c) (i) The term "documents" includes any and all instruments,
documents, agreements, certificates, indentures, notices and other writings,
however evidenced.
(ii) The term "including" is not limiting and means "including
without limitation."
(iii) In the computation of periods of time from a specified
date to a later specified date, the word "from" means "from and including";
the words "to" and "until" each mean "to but excluding", and the word
"through" means "to and including."
(d) Unless otherwise expressly provided herein, (i) references to
agreements (including this Agreement) and other contractual instruments shall be
deemed to include all subsequent amendments and other modifications thereto, but
only to the extent such amendments and other modifications are not prohibited by
the terms of any Loan Document, and (ii) references to any statute or regulation
are to be construed as including all statutory and regulatory provisions
consolidating, amending, replacing, supplementing or interpreting the statute or
regulation.
(e) The captions and headings of this Agreement are for convenience
of reference only and shall not affect the interpretation of this Agreement.
(f) This Agreement and the other Loan Documents may use several
different limitations, tests or measurements to regulate the same or similar
matters. All such limitations, tests and measurements are cumulative and shall
each be performed in accordance with their terms.
(g) This Agreement and the other Loan Documents are the result of
negotiations among and have been reviewed by counsel to the Administrative
Agent, the Company and the other parties, and are the products of all parties.
Accordingly, they shall not be
15
construed against the Banks or the Administrative Agent merely because of the
Administrative Agent's or Banks' involvement in their preparation.
1.3 Accounting Principles.
----------------------
(a) Unless the context otherwise clearly requires, all accounting
terms not expressly defined herein shall be construed, and all financial
computations required under this Agreement shall be made, in accordance with
GAAP, consistently applied.
(b) If any changes in accounting principles from those used in the
preparation of the financial statements referred to in Section 5.8 hereafter
occasioned by the promulgation of rules, regulations, pronouncements and
opinions by or required by the Financial Accounting Standards Board or the
American Institute of Certified Public Accountants (or successors thereto or
agencies with similar functions) result in a change in the method of calculation
of financial covenants, standards or terms found in Articles I, VI and VII
hereof, the parties hereto agree to enter into negotiations in order to amend
such provisions so as to equitably reflect such changes with the desired result
that the criteria for evaluating the Company's financial condition shall be the
same after such changes as if such changes had not been made.
(c) References herein to "fiscal year" and "fiscal quarter" refer to
such fiscal periods of the Company.
ARTICLE II
THE CREDITS
2.1 Amounts and Terms of Commitments. Each Bank severally agrees, on
---------------------------------
and subject to the terms and conditions set forth herein, to make Base Rate
Loans or Offshore Rate Loans denominated in Dollars to the Company from time to
time as requested by the Company in accordance with Sections 2.3 and 10.2 on any
Business Day during the period from the Closing Date to but not including the
Revolving Facility Termination Date, in an aggregate amount not to exceed at any
time outstanding the amount set forth opposite its name in the column under the
heading "Commitments" on Schedule 2.1 (such amount, as the same may be reduced
------------
under Section 2.5 or as a result of one or more assignments under Section 10.8,
the Bank's "Commitment"); provided, however, that, after giving effect to any
---------- -------- -------
Borrowing, the aggregate principal amount of all outstanding Loans to the
Company shall not at any time exceed the combined Commitments. Within the
limits of each Bank's Commitment, and subject to the other terms and conditions
hereof, the Company may, until the Revolving Facility Termination Date, borrow
under this Section 2.1, prepay under Section 2.6 and reborrow under this Section
2.1; provided further that no Loan to the Company shall be denominated in or
-------- -------
payable in a currency other than Dollars. The aggregate of all Commitments
hereunder on the date of this Agreement is $850,000,000.
2.2 Loan Accounts.
--------------
(a) The Loans made by each Bank shall be evidenced by one or more
loan accounts or records maintained by such Bank in the ordinary course of
business. The loan
16
accounts or records maintained by the Administrative Agent and each Bank shall
be conclusive absent manifest error of the amount of the Loans made by the Banks
to the Company and the interest and payments thereon. Any failure so to record
or any error in doing so shall not, however, limit or otherwise affect the
obligation of the Company hereunder to pay any amount owing with respect to the
Loans made to the Company.
(b) Upon the request of any Bank made through the Administrative
Agent, the Loans made by such Bank to the Company may be evidenced by one or
more Notes, instead of loan accounts. Each such Bank shall endorse on the
schedules annexed to its Note(s) the date, amount and maturity of each Loan made
by it and the amount and Applicable Currency of each payment of principal made
by the Company with respect thereto. Each such Bank is irrevocably authorized by
the Company to endorse its Note(s) and each Bank's record shall be conclusive
absent manifest error; provided, however, that the failure of a Bank to make, or
-------- -------
an error in making, a notation thereon with respect to any Loan shall not limit
or otherwise affect the obligations of the Company hereunder or under any such
Note to such Bank.
2.3 Procedure for Borrowing.
------------------------
(a) Each Borrowing of a Loan shall be made upon the Company's
irrevocable written notice delivered to the Administrative Agent in the form of
a Notice of Borrowing (which notice must be received by the Administrative Agent
prior to 9:00 a.m. (San Francisco time)) (i) three Business Days prior to the
requested Borrowing Date, in the case of Offshore Rate Loans; and (ii) on the
requested Borrowing Date, in the case of Base Rate Loans. Each Notice of
Borrowing shall specify:
(A) the amount of the Borrowing, which shall be in an
aggregate minimum amount of $5,000,000 or any multiple of $1,000,000 in
excess thereof;
(B) the requested Borrowing Date, which shall be a Business
Day;
(C) the Type of Loans comprising the Borrowing; and
(D) the duration of the Interest Period applicable to such
Loans included in such notice. If the Notice of Borrowing fails to specify
the duration of the Interest Period for any Borrowing comprised of Offshore
Rate Loans, such Interest Period shall be three months.
(b) The Administrative Agent will promptly notify each Bank of its
receipt of any Notice of Borrowing requesting a Borrowing of a Loan and the
amount of such Bank's Pro Rata Share of that Borrowing.
(c) Each Bank will make the amount of its Pro Rata Share of each
Borrowing of a Loan available to the Administrative Agent for the account of the
Company at the Administrative Agent's Payment Office on the Borrowing Date
requested by the Company in funds immediately available to the Administrative
Agent and in Dollars, by 11:00 a.m. (San
17
Francisco time). The proceeds of all such Loans will then be made available to
the Company on the Borrowing Date by the Administrative Agent at such office by
crediting the account of the Company on the books of Bank of America with the
aggregate of the amounts made available to the Administrative Agent by the Banks
and in like funds as received by the Administrative Agent.
(d) After giving effect to any Borrowing, there may not be more than
twelve different Interest Periods in effect.
2.4 Conversion and Continuation Elections.
--------------------------------------
(a) The Company may in respect of its outstanding Loans, upon
irrevocable written notice to the Administrative Agent in accordance with
subsection 2.4(b):
(i) elect, as of any Business Day, in the case of Base Rate
Loans, or as of the last day of the applicable Interest Period, in the case
of any other Type of Loans, to convert any such Loans (or any part thereof
in an amount not less than $10,000,000, or that is in an integral multiple
of $1,000,000 in excess thereof) into Loans of any other Type; or
(ii) elect, as of the last day of the applicable Interest Period,
to continue any Loans having Interest Periods expiring on such day (or any
part thereof in an amount not less than $10,000,000, or that is in an
integral multiple of $1,000,000 in excess thereof);
provided, that if at any time the aggregate amount of Offshore Rate Loans in
- --------
respect of any Borrowing is reduced, by payment, prepayment, or conversion of
part thereof to be less than $10,000,000, such Offshore Rate Loans shall
automatically convert into Base Rate Loans, and on and after such date the right
of the Company to continue such Loans as, and convert such Loans into, Offshore
Rate Loans shall terminate.
(b) The Company, in the case of a conversion or continuation of a
Loan, shall deliver a Notice of Conversion/Continuation to be received by the
Administrative Agent not later than 9:00 a.m. (San Francisco time) (i) three
Business Days in advance of the Conversion/Continuation Date, if the Loans are
to be converted into or continued as Offshore Rate Loans denominated in Dollars;
and (ii) on the Conversion/Continuation Date, if the Loans are to be converted
into Base Rate Loans. Each Notice of Conversion/Continuation shall specify:
(A) the proposed Conversion/Continuation Date;
(B) the aggregate amount of Loans to be converted or renewed;
(C) the Type of Loans resulting from the proposed conversion or
continuation; and
18
(D) other than in the case of conversions into Base Rate Loans,
the duration of the requested Interest Period.
(c) If, upon the expiration of any Interest Period applicable to
Offshore Rate Loans, the Company has failed to select in a timely manner a new
Interest Period to be applicable to such Offshore Rate Loans, or if any Default
or Event of Default then exists, the Company shall be deemed to have elected to
convert such Offshore Rate Loans into Base Rate Loans effective as of the
expiration date of such Interest Period.
(d) The Administrative Agent will promptly notify each Bank of its
receipt of a Notice of Conversion/Continuation, or, if no timely notice is
provided by the Company, the Administrative Agent will promptly notify each Bank
of the details of any automatic conversion. All conversions and continuations
shall be made ratably according to the respective outstanding principal amounts
of the Loans held by each Bank with respect to which the notice was given.
(e) Unless the Majority Banks otherwise agree, during the existence
of a Default or Event of Default, the Company may not elect to have a Loan
converted into or continued as an Offshore Rate Loan.
(f) After giving effect to any conversion or continuation of Loans,
there may not be more than ten different Interest Periods in effect.
2.5 Voluntary Termination or Reduction of Commitments. The Company
--------------------------------------------------
may, upon not less than three Business Days' prior notice to the Administrative
Agent, terminate or permanently reduce the Commitments, provided that any such
permanent reduction shall be in an aggregate minimum amount of $10,000,000 or
any multiple of $1,000,000 in excess thereof; unless, after giving effect
------
thereto and to any prepayments of Loans made on the effective date thereof, the
then-outstanding principal amount of the Loans would exceed the amount of the
combined Commitments then in effect. Once reduced in accordance with this
Section, the Commitments may not be increased, except as provided in Section
2.14. Any reduction of the Commitments shall be applied to each Bank according
to its Pro Rata Share. All accrued commitment fees to, but not including, the
effective date of any reduction or termination of Commitments shall be paid on
the effective date of such reduction or termination.
2.6 Optional Prepayments. Subject to Section 3.4, the Company may at
--------------------
any time or from time to time, upon irrevocable notice to the Administrative
Agent (i) of not less than three Business Days in the case of Offshore Rate
Loans (ii) by no later than 9:00 a.m. (San Francisco time) on the date specified
for prepayment in the case of Base Rate Loans, prepay Loans in whole or in part,
in minimum amounts of $10,000,000 or any multiple of $1,000,000 in excess
thereof. Any notice of prepayment shall specify the date and amount of such
prepayment and the Type(s) of Loans to be prepaid. The Administrative Agent will
promptly notify each Bank of its receipt of any such notice, and of such Bank's
Pro Rata Share of such prepayment. If such notice is given by the Company, the
Company shall make such prepayment and the payment amount specified in such
notice shall be due and payable on the date specified therein, together with
accrued interest to each such date on the amount prepaid and any amounts
required pursuant to Section 3.4.
19
2.7 Repayment.
----------
(a) Repayment on Termination Dates and Maturity Dates. The Company
-------------------------------------------------
shall repay to the Administrative Agent for payment to the Banks on the
Revolving Facility Termination Date the aggregate principal amount of Loans made
to the Company and outstanding on such date.
(b) Repayments Due to Reductions or Restrictions of Commitments. From
-----------------------------------------------------------
time to time, if the aggregate principal amount of all outstanding Loans to the
Company exceeds the Commitments of all Banks then in effect, the Company shall
prepay the Loans to the extent necessary so that the aggregate principal amount
of all outstanding Loans shall not at any time exceed such Commitments.
2.8 Interest.
---------
(a) Each Loan shall bear interest on the outstanding principal amount
thereof from the applicable Borrowing Date as follows:
(i) if a Base Rate Loan, then at a rate per annum equal to the
Base Rate; and
(ii) if an Offshore Rate Loan, then at a rate per annum equal to
the Offshore Rate plus the Applicable Margin.
----
(b) Interest on each Loan shall be paid in arrears on each Interest
Payment Date. Interest shall also be paid on the date of any prepayment of Loans
under Section 2.6 for the portion of the Loans so prepaid and upon payment
(including prepayment) in full thereof and, during the existence of any Event of
Default, interest shall be paid on demand of the Administrative Agent at the
request or with the consent of the Majority Banks.
(c) Notwithstanding subsection (a) of this Section, if any amount of
principal of or interest on any Loan, or any other amount payable hereunder or
under any other Loan Document is not paid in full when due (whether at stated
maturity, by acceleration, demand or otherwise), the Company agrees to pay
interest on such unpaid principal or other amount, from the date such amount
becomes due until the date such amount is paid in full, and after as well as
before entry of judgment thereon to the extent permitted by law, payable on
demand, at a fluctuating rate per annum equal to the Base Rate plus 1%.
----
(d) Anything herein to the contrary notwithstanding, the obligations
of the Company to any Bank hereunder shall be subject to the limitation that
payments of interest shall not be required for any period for which interest is
computed hereunder, to the extent (but only to the extent) that contracting for
or receiving such payment by such Bank would be contrary to the provisions of
any law applicable to such Bank limiting the highest rate of interest that may
be lawfully contracted for, charged or received by such Bank, and in such event
the Company shall pay such Bank interest at the highest rate permitted by
applicable law.
20
2.9 Fees.
-----
(a) Upfront, Arrangement, Administrative Fees. The Company shall pay
-----------------------------------------
an upfront fee to the Banks, an arrangement fee to the Arranger for the
Arranger's own account, and shall pay an administrative fee to the
Administrative Agent for the Administrative Agent's own account, as required by
the letter agreement ("Fee Letter") among the Company, the Arranger and the
----------
Administrative Agent dated September 17, 1999.
(b) Facility Fees. The Company shall pay to the Administrative Agent
-------------
for the account of each Bank a facility fee computed on a quarterly basis in
arrears on the later of the fifth Business Day following the end of each
calendar quarter or the fifth Business Day after the Company has received from
the Administrative Agent a notice setting forth the amount of such fee equal to
its Pro Rata Share of the Applicable Facility Fee. The facility fee for any
period shall be equal to, (i) the average for such period of the combined
Commitments of all Banks multiplied by (ii) the Applicable Facility Fee.
-------------
Such facility fee shall accrue from the Closing Date to the Revolving
Facility Termination Date and shall be due and payable quarterly in arrears on
each date specified above following the end of each calendar quarter through
such termination date, with the final payment to be made on such termination
date; provided that, in connection with any reduction or termination of
-------- ----
Commitments under Section 2.5, the accrued facility fee calculated for the
period ending on such date shall also be paid on the date of such reduction or
termination, with the following quarterly payment being calculated on the basis
of the period from such reduction or termination date to such quarterly payment
date. The facility fee provided in this subsection shall accrue at all times
after the Closing Date, including at any time during which one or more
conditions in Article IV are not met.
2.10 Computation of Fees and Interest.
---------------------------------
(a) All computations of interest for Base Rate Loans when the Base
Rate is determined by Bank of America's "prime rate" shall be made on the basis
of a year of 365 or 366 days, as the case may be, and actual days elapsed. All
other computations of fees and interest shall be made on the basis of a 360-day
year and actual days elapsed (which results in more interest being paid than if
computed on the basis of a 365-day year). Interest and fees shall accrue during
each period during which interest or such fees are computed from the first day
thereof to the last day thereof.
(b) Each determination of an interest rate by the Administrative Agent
shall be conclusive and binding on the Company and the Banks in the absence of
manifest error.
(c) If any Reference Bank's Commitment terminates (other than on
termination of all the Commitments), or for any reason whatsoever the Reference
Bank ceases to be a Bank hereunder, that Reference Bank shall thereupon cease to
be a Reference Bank, and the Offshore Rate shall be determined on the basis of
the rates as notified by the remaining Reference Banks.
21
(d) Each Reference Bank shall use its best efforts to furnish
quotations of rates to the Administrative Agent as contemplated hereby. If any
of the Reference Banks fails to supply such rates to the Administrative Agent
upon its request, the rate of interest shall be determined on the basis of the
quotations of the remaining Reference Banks.
2.11 Payments by the Company.
------------------------
(a) All payments to be made by the Company shall be made without set-
off, recoupment or counterclaim. Except as otherwise expressly provided herein,
all payments by the Company shall be made to the Administrative Agent for the
account of the Banks at the Administrative Agent's Payment Office, and, with
respect to all amounts payable hereunder, shall be made in Dollars. Such
payments shall be made in immediately available funds, and no later than 12:00
noon (San Francisco time) on the date specified herein. The Administrative Agent
will promptly distribute to each Bank its Pro Rata Share (or other applicable
share as expressly provided herein) of such payment in like funds as received.
Any payment received by the Administrative Agent later than 12:00 noon (San
Francisco time), shall be deemed to have been received on the following Business
Day and any applicable interest or fee shall continue to accrue.
(b) Subject to the provisions set forth in the definition of "Interest
Period" herein, whenever any payment is due on a day other than a Business Day,
such payment shall be made on the following Business Day, and such extension of
time shall in such case be included in the computation of interest or fees, as
the case may be.
(c) Unless the Administrative Agent receives notice from the Company
prior to the date on which any payment is due to the Banks that the Company will
not make such payment in full as and when required, the Administrative Agent may
assume that the Company has made such payment in full to the Administrative
Agent on such date in immediately available funds and the Administrative Agent
may (but shall not be so required), in reliance upon such assumption, distribute
to each Bank on such due date an amount equal to the amount then due such Bank.
If and to the extent the Company has not made such payment in full to the
Administrative Agent, each Bank shall repay to the Administrative Agent on
demand such amount distributed to such Bank, together with interest thereon at
the Federal Funds Rate for each day from the date such amount is distributed to
such Bank until the date repaid.
2.12 Payments by the Banks to the Administrative Agent.
--------------------------------------------------
(a) Unless the Administrative Agent receives notice from a Bank at
least one Business Day prior to the date of any Borrowing, that such Bank will
not make available as and when required hereunder to the Administrative Agent
for the account of the Company the amount of that Bank's Pro Rata Share of the
Borrowing, the Administrative Agent may assume that each Bank has made such
amount available to the Administrative Agent in immediately available funds on
the Borrowing Date and the Administrative Agent may (but shall not be so
required), in reliance upon such assumption, make available to the Company on
such date a corresponding amount. If and to the extent any Bank shall not have
made its full amount available to the Administrative Agent in immediately
available funds and the Administrative
22
Agent in such circumstances has made available to the Company such amount, that
Bank shall on the Business Day following such Borrowing Date make such amount
available to the Administrative Agent, together with interest at the Federal
Funds Rate for each day during such period. A notice of the Administrative Agent
submitted to any Bank with respect to amounts owing under this subsection (a)
shall be conclusive, absent manifest error. If such amount is so made available,
such payment to the Administrative Agent shall constitute such Bank's Loan on
the date of Borrowing for all purposes of this Agreement. If such amount is not
made available to the Administrative Agent on the Business Day following the
Borrowing Date, the Administrative Agent will notify the Company of such failure
to fund and, upon demand by the Administrative Agent, the Company shall pay such
amount to the Administrative Agent for the Administrative Agent's account,
together with interest thereon for each day elapsed since the date of such
Borrowing, at a rate per annum equal to the interest rate applicable at the time
to the Loans comprising such Borrowing.
(b) The failure of any Bank to make any Loan on any Borrowing Date
shall not relieve any other Bank of any obligation hereunder to make a Loan on
such Borrowing Date, but no Bank shall be responsible for the failure of any
other Bank to make the Loan to be made by such other Bank on any Borrowing Date.
2.13 Sharing of Payments, Etc. If, other than as expressly provided
-------------------------
elsewhere herein, any Bank shall obtain on account of the Loans made by it to
the Company any payment (whether voluntary, involuntary, through the exercise of
any right of set-off, or otherwise) in excess of its Pro Rata Share, such Bank
shall immediately (a) notify the Administrative Agent of such fact, and (b)
purchase from the other Banks such participations in the Loans made by them to
the Company as shall be necessary to cause such purchasing Bank to share the
excess payment pro rata with each of them; provided, however, that if all or any
-------- -------
portion of such excess payment is thereafter recovered from the purchasing Bank,
such purchase shall to that extent be rescinded and each other Bank shall repay
to the purchasing Bank the purchase price paid therefor, together with an amount
equal to such paying Bank's ratable share (according to the proportion of (i)
the amount of such paying Bank's required repayment to (ii) the total amount so
recovered from the purchasing Bank) of any interest or other amount paid or
payable by the purchasing Bank in respect of the total amount so recovered. The
Company agrees that any Bank so purchasing a participation from another Bank
may, to the fullest extent permitted by law, exercise all its rights of payment
(including the right of set-off, but subject to Section 10.10) with respect to
such participation as fully as if such Bank were the direct creditor of the
Company in the amount of such participation. The Administrative Agent will keep
records (which shall be conclusive and binding in the absence of manifest error)
of participations purchased under this Section and will in each case notify the
Banks following any such purchases or repayments.
2.14 Optional Increase in Commitments. At any time prior to the
---------------------------------
Revolving Facility Termination Date, if no Default has occurred and is
continuing, the Company shall have the option to increase the total amount of
the Commitments either by (a) increasing the Commitment of one or more Banks
already party to this Agreement or (b) adding a financial institution not a
party hereto (a "New Bank") as a party to this Agreement. The effectiveness of
--------
any such increase is subject to the satisfaction of the following conditions:
23
(i) that the Company shall provide prompt notice of such
increase to the Administrative Agent, who shall promptly notify the other
Banks;
(ii) that each Bank whose Commitment is to increase shall have
agreed to such increase by a writing addressed to the Company and to the
Administrative Agent;
(iii) that each New Bank shall be an Eligible Assignee;
(iv) that each New Bank shall have executed counterpart
signature pages of this Agreement;
(v) the total Commitments, following such increase, shall not
exceed $1,150,000,000; and
(vi) the sum of (A) all increases in Commitments pursuant to
this Section 2.14 and (B) all increases in commitments under the November
1998 Credit Agreement pursuant to Section 2.14 thereof, shall not exceed
$300,000,000.
Upon any such increase in the Commitments of a Bank already party
to this Agreement, the signature page hereto for such Bank shall be deemed
to be amended to reflect such increase. If a New Bank becomes a party to
this Agreement, the counterpart signatures executed by such New Bank shall
indicate the Commitments of such New Bank. In case of any increase in
Commitments, Schedule 2.1 shall be modified accordingly.
------------
2.15 Replacement of a Bank. If the Company receives a notice of
---------------------
amounts due pursuant to subsection 3.3(a) or subsection 3.3(b) from a Bank or a
Bank defaults in its obligations hereunder (any such Bank, a "Subject Bank"), so
long as (i) no Event of Default shall have occurred and be continuing and the
Company has obtained a commitment from another Bank or an Eligible Assignee to
purchase at par the Subject Bank's Loans and assume the Subject Bank's
Commitments and all other obligations of the Subject Bank hereunder and (ii) the
Subject Bank is unwilling to remedy its default or withdraw its notice, upon 10
days' prior written notice to the Subject Bank and the Administrative Agent, the
Company may require the Subject Bank to assign all of its Loans and Commitments
to such other Bank or Eligible Assignee pursuant to the provisions of Section
10.8; provided that, prior to or concurrently with such replacement (i) the
Company has paid to the Subject Bank all amounts under Article III through such
date of replacement, (ii) Company or the applicable assignee have paid to
Administrative Agent the processing fee required to be paid by Section 10.8 and
(iii) all of the requirements for such assignment contained in Section 10.8,
including, without limitation, the consent of the Administrative Agent (if
required) and the receipt by the Administrative Agent of an executed Assignment
Agreement and other supporting documents, have been fulfilled.
24
ARTICLE III
TAXES, YIELD PROTECTION AND ILLEGALITY
3.1 Taxes.
------
(a) Any and all payments by the Company to each Bank or the
Administrative Agent under this Agreement and any other Loan Document shall be
made free and clear of, and without deduction or withholding for any Taxes. In
addition, the Company shall pay all Other Taxes.
(b) The Company agrees to indemnify and hold harmless each Bank and
the Administrative Agent for the full amount of Taxes or Other Taxes (including
any Taxes or Other Taxes imposed by any jurisdiction on amounts payable under
this Section) paid by the Bank or the Administrative Agent and any liability
(including penalties, interest, additions to tax and expenses) arising therefrom
or with respect thereto, whether or not such Taxes or Other Taxes were correctly
or legally asserted. Payment under this indemnification shall be made within 30
days after the date the Bank or the Administrative Agent makes written demand
therefor.
(c) If the Company shall be required by law to deduct or withhold any
Taxes or Other Taxes from or in respect of any sum payable hereunder to any Bank
or the Administrative Agent, then:
(i) the sum payable shall be increased as necessary so that
after making all required deductions and withholdings (including deductions
and withholdings applicable to additional sums payable under this Section)
such Bank or the Administrative Agent, as the case may be, receives an
amount equal to the sum it would have received had no such deductions or
withholdings been made;
(ii) the Company shall make such deductions and withholdings;
(iii) the Company shall pay the full amount deducted or withheld
to the relevant taxing authority or other authority in accordance with
applicable law; and
(iv) the Company shall also pay to such Bank or the
Administrative Agent at the time the sum payable is paid, all additional
amounts which the Bank or Administrative Agent specifies as necessary to
preserve the after-tax yield the Bank or Administrative Agent would have
received if such Taxes or Other Taxes had not been imposed.
(d) Within 30 days after the date of any payment by the Company of
Taxes or Other Taxes, the Company shall furnish the Administrative Agent the
original or a certified copy of a receipt evidencing payment thereof, or other
evidence of payment satisfactory to the Administrative Agent.
(e) If the Company is required to pay additional amounts to any Bank
or the Administrative Agent pursuant to this Section 3.1, then such Bank shall
use reasonable efforts
25
(consistent with legal and regulatory restrictions) to take such actions as are
necessary to minimize the Company's obligations under this Article III,
including without limitation, changing the jurisdiction of its Lending Office so
as to eliminate any such additional payment by the Company which may thereafter
accrue, if such actions in the sole judgment of such Bank are not otherwise
disadvantageous to such Bank.
(f) Notwithstanding anything to the contrary in this Section 3.1, the
Company shall not be required to compensate an Assignee or Participant of a Loan
for withholding taxes, if at the time of such assignment (i) the assigning Bank
was not subject to withholding taxes in respect of any amount in respect of the
Loans and (ii) the Assignee or Participant was subject to withholding taxes at
the time of such assignment in respect of such amount.
(g) Without prejudice to the survival of any other agreement of the
Company hereunder, the agreements and obligations of the Company contained in
this Section 3.1 shall survive the payment in full of principal and interest
hereunder and under any instrument delivered hereunder.
3.2 Illegality.
-----------
(a) If any Bank determines that the introduction of any Requirement
of Law, or any change in any Requirement of Law, or in the interpretation or
administration of any Requirement of Law, has made it unlawful, or that any
central bank or other Governmental Authority has asserted that it is unlawful,
for any Bank or its applicable Lending Office to make Offshore Rate Loans, then,
on notice thereof by the Bank to the Company through the Administrative Agent,
any obligation of that Bank to make Offshore Rate Loans shall be suspended until
the Bank notifies the Administrative Agent and the Company that the
circumstances giving rise to such determination no longer exist.
(b) If a Bank determines that it is unlawful to maintain any Offshore
Rate Loan, the Company shall, upon its receipt of notice of such fact and demand
from such Bank (with a copy to the Administrative Agent), either, (A) convert in
full such Offshore Rate Loans into Loans of another Type or (B) prepay in full
such Offshore Rate Loans of that Bank then outstanding, together with interest
accrued thereon (in the case of a prepayment) and amounts required under Section
3.4, either on the last day of the Interest Period thereof, if the Bank may
lawfully continue to maintain such Offshore Rate Loans to such day, or
immediately, if the Bank may not lawfully continue to maintain such Offshore
Rate Loan. If the Company prepays any Offshore Rate Loan as provided in the
preceding sentence, then concurrently with such prepayment, the Company shall
borrow from the affected Bank, in the amount of such repayment, a Base Rate
Loan.
3.3 Increased Costs and Reduction of Return.
----------------------------------------
(a) If any Bank determines that, due to either (i) the introduction
of or any change in or in the interpretation of any law or regulation (other
than any change by way of imposition of or increase in reserve requirements
included in the calculation of the Offshore Rate or in respect of the assessment
rate payable by any Bank to the FDIC for insuring U.S. deposits
26
or any change introduced prior to the Closing Date) or (ii) the compliance by
that Bank with any guideline or request from any central bank or other
Governmental Authority (whether or not having the force of law) (other than any
guideline or request introduced prior to the Closing Date), there shall be any
increase in the cost to such Bank of agreeing to make or making, funding or
maintaining any Offshore Rate Loans, then the Company shall be liable for, and
shall from time to time, upon demand (with a copy of such demand to be sent to
the Administrative Agent), pay to the Administrative Agent for the account of
such Bank, additional amounts as are sufficient to compensate such Bank for such
increased costs; provided that no Bank shall be entitled to obtain compensation
--------
with respect to any period prior to six (6) months prior to making such demand.
(b) If any Bank shall have determined that (i) the introduction of
any Capital Adequacy Regulation, (ii) any change in any Capital Adequacy
Regulation, (iii) any change in the interpretation or administration of any
Capital Adequacy Regulation by any central bank or other Governmental Authority
charged with the interpretation or administration thereof, or (iv) compliance by
the Bank (or its Lending Office) or any corporation controlling the Bank with
any Capital Adequacy Regulation, in any such case, after the Closing Date,
affects or would affect the amount of capital required or expected to be
maintained by the Bank or any corporation controlling the Bank and (taking into
consideration such Bank's or such corporation's policies with respect to capital
adequacy and such Bank's desired return on capital) determines that the amount
of such capital is increased as a consequence of its Commitments, loans, credits
or obligations under this Agreement, then, upon demand of such Bank to the
Company through the Administrative Agent, the Company shall pay to the Bank,
from time to time as specified by the Bank, additional amounts sufficient to
compensate the Bank for such increase; provided no Bank shall be entitled to
receive additional amounts with respect to any period prior to six (6) months
prior to making such demand.
3.4 Funding Losses. The Company shall reimburse each Bank and hold
---------------
each Bank harmless from any loss or expense which the Bank may sustain or incur
as a consequence of:
(a) the failure of the Company to make on a timely basis any payment
of principal of any Offshore Rate Loan;
(b) the failure of the Company to borrow, continue or convert a Loan
after the Company has given (or is deemed to have given) a Notice of Borrowing
or a Notice of Conversion/Continuation;
(c) the failure of the Company to make any prepayment in accordance
with any notice delivered under Section 2.6;
(d) the prepayment or other payment (including after acceleration
thereof) of an Offshore Rate Loan on a day that is not the last day of the
relevant Interest Period; or
(e) the automatic conversion under Section 2.4 of any Offshore Rate
Loan to a Base Rate Loan on a day that is not the last day of the relevant
Interest Period;
27
including any such loss or expense arising from the liquidation or reemployment
of funds obtained by such Bank to maintain its Offshore Rate Loans or from fees
payable by such Bank to terminate the deposits from which such funds were
obtained or from charges relating to any Loans. For purposes of calculating
amounts payable by the Company to the Banks under this Section and under
subsection 3.3(a), each Offshore Rate Loan made by a Bank (and each related
reserve, special deposit or similar requirement) shall be conclusively deemed to
have been funded at the LIBOR used in determining the Offshore Rate for such
Offshore Rate Loan by a matching deposit or other borrowing in the interbank
eurodollar market for a comparable amount and for a comparable period, whether
or not such Offshore Rate Loan is in fact so funded.
3.5 Inability to Determine Rates. If the Administrative Agent
-----------------------------
determines that for any reason adequate and reasonable means do not exist for
determining the Offshore Rate for any requested Interest Period with respect to
a proposed Offshore Rate Loan, or that the Offshore Rate applicable pursuant to
subsection 2.8(a) for any requested Interest Period with respect to a proposed
Offshore Rate Loan does not adequately and fairly reflect the cost to the Banks
of funding such Loan, the Administrative Agent will promptly so notify the
Company and each Bank. Thereafter, the obligation of the Banks to make or
maintain Offshore Rate Loans hereunder shall be suspended until the
Administrative Agent revokes such notice in writing. Upon receipt of such
notice, the Company may revoke any Notice of Borrowing or Notice of
Conversion/Continuation previously submitted by the Company. If the Company does
not revoke such Notice, the Banks shall make, convert or continue the Loans, as
proposed by the Company, in the amount specified in the applicable notice
submitted by the Company, but such Loans shall be made, converted or continued
as Base Rate Loans.
3.6 Certificates of Banks. Any Bank claiming reimbursement or
----------------------
compensation under this Article III shall deliver to the Company (with a copy to
the Administrative Agent) a certificate setting forth in reasonable detail the
amount payable to the Bank hereunder and such certificate shall be conclusive
and binding on the Company in the absence of manifest error.
3.7 Survival. The agreements and obligations of the Company in this
---------
Article III shall survive the payment of all other Obligations.
ARTICLE IV
CONDITIONS PRECEDENT
4.1 Conditions of Initial Loans. The obligation of each Bank to make
----------------------------
its initial Loan hereunder is subject to the condition that the Administrative
Agent have received on or before the date the initial Loan is made but not later
than fifteen (15) Business Days after the date hereof all of the following, in
form and substance satisfactory to the Administrative Agent and each Bank, and
in sufficient copies for each Bank:
28
(a) Credit Agreement. This Agreement executed by each party hereto
----------------
and, if requested by any Bank, the Note(s) requested by such Bank executed by
the Company;
(b) Resolutions; Incumbency.
-----------------------
(i) Copies of the resolutions of the board of directors of the
Company authorizing the transactions contemplated hereby, certified as of
the Closing Date by the Secretary or an Assistant Secretary of the Company;
and
(ii) A certificate of the Secretary or Assistant Secretary of
the Company, certifying the names and true signatures of the officers of
the Company authorized to execute, deliver and perform, as applicable, this
Agreement, and all other Loan Documents to be delivered by it hereunder;
(c) Organization Documents; Good Standing. Each of the following
-------------------------------------
documents:
(i) the articles or certificate of incorporation and the
bylaws of the Company as in effect on the Closing Date, certified by the
Secretary or Assistant Secretary of the Company as of the Closing Date; and
(ii) a good standing and tax good standing certificate for the
Company from the applicable Secretary of State (or similar, applicable
Governmental Authority) of the States of Delaware and California dated as
of a recent date;
(d) Legal Opinion. An opinion of Ivan D. Meyerson, Senior Vice
-------------
President, General Counsel and Secretary of the Company, addressed to the
Administrative Agent and the Banks, substantially in the form of Exhibit D;
(e) Payment of Fees. Evidence of payment by the Company of all
---------------
accrued and unpaid fees, costs and expenses to the extent then due and payable
on the Closing Date, together with Attorney Costs of Bank of America to the
extent invoiced prior to or on the Closing Date, including any such costs, fees
and expenses arising under or referenced in Sections 2.9 and 10.4;
(f) Company Certificates. A certificate signed by a Responsible
--------------------
Officer of the Company, dated as of the Closing Date, stating that:
(i) the representations and warranties contained in Article V
and the other Loan Documents are true and correct on and as of such date,
as though made on and as of such date;
(ii) no Default or Event of Default exists or would result from
the initial Borrowing;
29
(iii) there has occurred since March 31, 1999, no event or
circumstance (other than the Disclosed Matters) that has resulted or could
reasonably be expected to result in a Material Adverse Effect; and
(iv) designating the Closing Date;
(g) Notices of Termination.
----------------------
(i) Notice of termination signed by a Responsible Officer of
the Company whereby the Company gives notice, pursuant to that certain
Credit Agreement dated as of November 10, 1998, by and among the Company,
Medis, Bank of America, as agent, Bank of America Canada, as Canadian
administrative agent, The Chase Manhattan Bank, as a documentation agent,
First Union National Bank, as a documentation agent, The First National
Bank of Chicago, as a documentation agent, and the financial institutions
on the signature pages thereof, as amended (such Credit Agreement, the
"November 1998 Credit Agreement"), of the Company's election to terminate,
------------------------------
concurrent with the effectiveness of this Agreement, the "Facility B
Commitments" (as such term is defined in the November 1998 Credit
Agreement) currently existing under the November 1998 Credit Agreement; and
(ii) Notice of termination signed by a Responsible Officer of
the Company whereby the Company gives notice, pursuant to that certain
Revolving Credit Facility dated as of May 25, 1999, by and among the
Company, Bank of America and the financial institutions on the signature
pages thereof, as amended (such Revolving Credit Facility, the "Bridge Loan
-----------
Facility"), of the Company's election to, concurrent with the effectiveness
--------
of this Agreement, (A) repay any outstanding amounts currently existing
under the Bridge Loan Facility and (B) terminate any commitments currently
existing under the Bridge Loan Facility.
(h) Resolution of Year 2000 Problem. Evidence that (i) the Company
-------------------------------
and each of its Subsidiaries have taken or are taking all necessary and
appropriate steps to ascertain the extent of, and to quantify and successfully
address, the Year 2000 Problem, including risks resulting from the failure of
key vendors and customers of the Company and its Subsidiaries to successfully
address the Year 2000 Problem, and (ii) the Company's and each of its
Subsidiaries' material computer applications, and those of the key vendors and
customers of the Company and its Subsidiaries, will, on a timely basis,
adequately address the Year 2000 Problem in all material respects. This
condition shall be satisfied by a statement executed by a Responsible Officer of
the Company certifying that the information concerning the Year 2000 Problem set
forth in the Company's Form 10-Q filed with the SEC on August 13, 1999, is true
and correct as of the Closing Date.
(i) Other Documents. Such other approvals, opinions,
---------------
documents or materials as the Administrative Agent or any Bank may reasonably
request.
4.2 Conditions to All Borrowings. The obligation of each Bank to
-----------------------------
make any Loan to be made by it (including its initial Loan) or to continue or
convert any Loan under
30
Section 2.4 is subject to the satisfaction of the following conditions
precedent on the relevant Borrowing Date or Conversion/Continuation Date:
(a) Notice of Borrowing or Conversion/Continuation. The
-----------------------------------------------
Administrative Agent shall have received (with, in the case of the initial Loan
only, a copy for each Bank) a Notice of Borrowing or a Notice of
Conversion/Continuation, as applicable;
(b) Continuation of Representations and Warranties. The
-----------------------------------------------
representations and warranties in Article V and the other Loan Documents shall
be true and correct on and as of such Borrowing Date or Conversion/Continuation
Date with the same effect as if made on and as of such Borrowing Date or
Conversion/Continuation Date (except to the extent such representations and
warranties expressly refer to an earlier date, in which case they shall be true
and correct as of such earlier date); and
(c) No Existing Default. No Default or Event of Default shall exist
--------------------
or shall result from such Borrowing or continuation or conversion.
Each Notice of Borrowing and Notice of Conversion/Continuation submitted by the
Company hereunder shall constitute a representation and warranty by the Company
as of the date of each such notice and as of each Borrowing Date or
Conversion/Continuation Date, as applicable, that the conditions in Section 4.2
are satisfied.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
The Company represents and warrants to the Administrative Agent and each
Bank that:
5.1 Corporate Existence and Power. The Company and each of its
------------------------------
Subsidiaries:
(a) is duly organized, validly existing and in good standing under
the laws of the jurisdiction of its incorporation or formation;
(b) has the power and authority and all required governmental
licenses, authorizations, consents and approvals to own its assets, carry on its
business and to execute, deliver, and perform its obligations under the Loan
Documents;
(c) is duly qualified as a foreign corporation and is licensed and in
good standing under the laws of each jurisdiction where its ownership, lease or
operation of property or the conduct of its business requires such qualification
or license; and
(d) is in compliance with all Requirements of Law;
except (i) with respect to Subsidiaries of the Company other than Material
Subsidiaries, to the extent that the failure to do so could not reasonably be
expected to have a Material Adverse Effect, and (ii) with respect to the Company
and its Material Subsidiaries (A) in each case
31
referred to in clause (c) or clause (d), to the extent that the failure to do so
could not reasonably be expected to have a Material Adverse Effect and (B) in
each case referred to in clause (d), the Disclosed Matters.
5.2 Corporate Authorization; No Contravention. The execution,
------------------------------------------
delivery and performance by the Company of this Agreement and each other Loan
Document to which the Company is party, and any Borrowing as of the date of such
Borrowing have been duly authorized by all necessary corporate action, and do
not and will not:
(a) contravene the terms of any of the Company's Organization
Documents;
(b) conflict with or result in any breach or contravention of, or the
creation of any Lien under, any document evidencing any Contractual Obligation
to which the Company is a party or any order, injunction, writ or decree of any
Governmental Authority to which the Company or its property is subject; or
(c) violate any Requirement of Law.
5.3 Governmental Authorization. No approval, consent, exemption,
---------------------------
authorization, or other action by, or notice to, or filing with, any
Governmental Authority is necessary or required in connection with the
execution, delivery or performance by, or enforcement against, the Company of
the Agreement or any other Loan Document.
5.4 Binding Effect. This Agreement and each other Loan Document to
---------------
which the Company is a party constitute the legal, valid and binding obligations
of the Company, enforceable against the Company in accordance with their
respective terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, or similar laws affecting the enforcement of creditors'
rights generally or by equitable principles relating to enforceability.
5.5 Litigation. There are no actions, suits, proceedings, claims or
-----------
disputes pending, or to the best knowledge of the Company, threatened or
contemplated, at law, in equity, in arbitration or before any Governmental
Authority, against the Company or its Subsidiaries or any of their respective
properties which:
(a) purport to affect or pertain to this Agreement or any other Loan
Document, or any of the transactions contemplated hereby or thereby; or
(b) other than the Disclosed Matters, if determined adversely to the
Company or its Subsidiaries, would reasonably be expected to have a Material
Adverse Effect as of the Closing Date. No injunction, writ, temporary
restraining order or any order of any nature has been issued by any court or
other Governmental Authority purporting to enjoin or restrain the execution,
delivery or performance of this Agreement or any other Loan Document, or
directing that the transactions provided for herein or therein not be
consummated as herein or therein provided.
5.6 No Default. No Default or Event of Default exists or would
-----------
result from the incurring of any Obligations by the Company. As of the Closing
Date, neither the Company
32
nor any Subsidiary is in default under or with respect to any Contractual
Obligation in any respect which, individually or together with all such
defaults, could reasonably be expected to have a Material Adverse Effect as of
the Closing Date, or that would, if such default had occurred after the Closing
Date, create an Event of Default under subsection 8.1(e).
5.7 Use of Proceeds; Margin Regulations. The proceeds of the Loans
------------------------------------
are to be used solely for the purposes set forth in Section 6.9. Neither the
Company nor any Subsidiary is generally engaged in the business of purchasing or
selling Margin Stock or extending credit for the purpose of purchasing or
carrying Margin Stock.
5.8 Financial Condition.
--------------------
(a) The (i) audited consolidated financial statements of the Company
and its Subsidiaries dated March 31, 1999, and the related consolidated
statements of income or operations, shareholders' equity and cash flows for the
fiscal year ended on that date and (ii) unaudited consolidated financial
statements of the Company and its Subsidiaries dated June 30, 1999, and the
related consolidated statements of income or operations, shareholders' equity
and cash flows for the three months ended on that date:
(A) were prepared in accordance with GAAP consistently
applied throughout the period covered thereby, except as otherwise
expressly noted therein, subject in the case of the unaudited
statements to ordinary, good faith year end audit adjustments;
(B) fairly present the financial condition of the Company
and its Subsidiaries as of the date thereof and results of operations
for the period covered thereby; and
(C) show all material indebtedness and other liabilities,
direct or contingent, of the Company and its consolidated Subsidiaries
as of the date thereof required to be shown in accordance with GAAP.
(b) As of the Closing Date, since June 30, 1999, there has been no
Material Adverse Effect (other than as disclosed by the Company with respect to
the Disclosed Matters).
5.9 Regulated Entities. None of the Company, any Person controlling
-------------------
the Company, or any Subsidiary, is an "Investment Company" within the meaning of
the Investment Company Act of 1940. The Company is not subject to regulation
under the Public Utility Holding Company Act of 1935, the Federal Power Act, the
Interstate Commerce Act, any state public utilities code, or any other Federal,
state or other statute or regulation limiting its ability to incur Indebtedness.
5.10 No Burdensome Restrictions. Neither the Company nor any
---------------------------
Subsidiary is a party to or bound by any Contractual Obligation, or subject to
any restriction in any Organization Document, or any Requirement of Law, which
could reasonably be expected to have a Material Adverse Effect.
33
5.11 Subsidiaries and Certain Liens As of the Closing Date. As of the
------------------------------------------------------
Closing Date, the Company has no corporate Subsidiaries other than those listed
in part (a) of Schedule 5.11 hereto. As of the Closing Date, part (b) of
Schedule 5.11 describes all outstanding Indebtedness of the Company and its
Subsidiaries for borrowed money in excess of $25,000,000 that is secured by a
Lien existing on property of the Company or any of its Subsidiaries.
5.12 Year 2000 Compliance. The Company and its Subsidiaries have
---------------------
developed and budgeted for a comprehensive program to address the Year 2000
Problem. The Company and its Subsidiaries have implemented that program
substantially in accordance with its timetable and budget and the Company
reasonably anticipates that they will substantially avoid the Year 2000 Problem
as to all computers, as well as embedded microchips in non-computing devices,
which are (a) owned, leased or otherwise under the control of the Company or any
of its Subsidiaries, and (b) material to the business, properties or operations
of the Company or any of its Subsidiaries. The Company and its Subsidiaries have
developed commercially reasonable contingency plans adequately to ensure
uninterrupted and unimpaired business operation in the event of failure of their
own or a third party's systems or equipment due to the Year 2000 Problem,
including those of vendors, customers and suppliers.
5.13 Disclosed Matters. As of the Closing Date, based on information
------------------
available to the Company on the Closing Date, it is unlikely that, prior to the
Revolving Facility Termination Date, any actions, suits, proceedings or
governmental investigations, pending or threatened, comprising or resulting from
the Disclosed Matters would materially and adversely affect the ability of the
Company to perform its obligations under any Loan Document.
ARTICLE VI
AFFIRMATIVE COVENANTS
So long as any Bank shall have any Commitment hereunder, or any Loan or
other Obligation (other than Obligations under Section 10.5 that remain
contingent after termination of the Commitments and payment of all other
Obligations) shall remain unpaid or unsatisfied, unless the Majority Banks waive
compliance in writing:
6.1 Financial Statements. The Company shall deliver to the
---------------------
Administrative Agent, in form and detail satisfactory to the Administrative
Agent and the Majority Banks, with sufficient copies for each Bank (which copies
shall subsequently be delivered by the Administrative Agent to the Banks):
(a) as soon as available, but not later than 90 days after the end of
each fiscal year (commencing with the fiscal year ended March 31, 2000), a copy
of the audited consolidated balance sheet of the Company and its Subsidiaries as
at the end of such year and the related consolidated statements of income or
operations, shareholders' equity and cash flows for such year, setting forth in
each case in comparative form the figures for the previous fiscal year, and
accompanied by the unqualified opinion of Deloitte & Touche or another
nationally-recognized independent public accounting firm ("Independent
-----------
Auditor"), which report shall state
- -------
34
that such consolidated financial statements present fairly the financial
position for the periods indicated in conformity with GAAP applied on a basis
consistent with prior years. Such opinion shall not be qualified or limited as
to (i) going concern, (ii) any restriction or limitation in the examination by
the Independent Auditor of any material portion of the Company's or any
Subsidiary's records or (iii) possible errors generated by financial reporting
and related systems due to the Year 2000 Problem; and
(b) as soon as available, but not later than 60 days after the end of
each of the first three fiscal quarters of each fiscal year (commencing with the
fiscal quarter ended September 30, 1999), a copy of the unaudited consolidated
balance sheet of the Company and its Subsidiaries as at the end of such quarter
and the related consolidated statements of income or operations, shareholders'
equity and cash flows for the period commencing on the first day and ending on
the last day of such quarter, and certified by a Responsible Officer as fairly
presenting, in accordance with GAAP (subject to ordinary, good faith year-end
audit adjustments), the financial position and the results of operations of the
Company and the Subsidiaries (which certification may be part of the related
Compliance Certificate delivered pursuant to Section 6.2(a)).
6.2 Certificates; Other Information. The Company shall furnish to
--------------------------------
the Administrative Agent, with sufficient copies for each Bank (which copies
shall subsequently be delivered by the Administrative Agent to the Banks):
(a) concurrently with the delivery of the financial statements
referred to in subsections 6.1(a) and (b), a Compliance Certificate executed by
a Responsible Officer of the Company;
(b) promptly, copies of all financial statements and reports that the
Company sends to its shareholders, and copies of all financial statements and
regular, periodical or special reports (including Forms 10K, 10Q and 8K) that
the Company or any Subsidiary may make to, or file with, the SEC; and
(c) promptly, such additional information regarding the business,
financial or corporate affairs of the Company or any Subsidiary, including
Medis, as the Administrative Agent, at the request of any Bank, may from time to
time reasonably request.
6.3 Notices. The Company shall notify the Administrative Agent and
--------
each Bank:
(a) promptly, upon such occurrence, of the occurrence of any Default
or Event of Default, and of the occurrence or existence of any event or
circumstance that foreseeably will become a Default or Event of Default;
(b) promptly, upon such occurrence, of any matter that has resulted
or may result in a Material Adverse Effect;
(c) promptly upon any Responsible Officer of Company obtaining
knowledge thereof of (i) the institution of, or non-frivolous threat of, any
action, suit, proceeding (whether
35
administrative, judicial or otherwise), governmental investigation of
arbitration against or affecting the Company or any of its Subsidiaries or any
property of the Company or any of its Subsidiaries (collectively "Proceedings")
not previously disclosed in writing by the Company to the Banks or (ii) any
material development in any Proceeding that, in the case of clause (i) or (ii)
above, (1) if adversely determined, has a reasonable possibility of giving rise
to a Material Adverse Effect; or (2) seeks to enjoin or otherwise prevent the
consummation of, or to recover any damages or obtain relief as a result of, the
transactions contemplated hereby, together with such other information as may be
reasonably available to Company that the Administrative Agent requests to enable
the Administrative Agent and the Banks to evaluate such matters.
(d) of any material change in accounting policies or financial
reporting practices by the Company or any of its consolidated Subsidiaries,
including but not limited to any change that has any effect on the calculation
of any financial covenant in this Agreement.
6.4 Preservation of Corporate Existence, Etc. The Company shall, and
-----------------------------------------
shall cause its Material Subsidiaries to:
(a) preserve and maintain in full force and effect its corporate
existence and good standing under the laws of their respective states or
jurisdictions of incorporation except, in the case of any Material Subsidiary,
in connection with transactions permitted by Section 7.2; and
(b) preserve and maintain in full force and effect all governmental
rights, privileges, qualifications, permits, licenses and franchises necessary
in the normal conduct of its business except in connection with transactions
permitted by Section 7.2 or except to the extent that the failure to do so could
not reasonably be expected to have a Material Adverse Effect.
6.5 Insurance. The Company shall maintain, and shall cause its
----------
Material Subsidiaries to maintain, with financially sound and reputable
insurers, insurance (including self-insurance) with respect to its properties
and business against loss or damage of the kinds customarily insured against by
Persons engaged in the same or similar business, of such types and in such
amounts as the Company reasonably deems prudent from time to time.
6.6 Payment of Taxes. The Company shall, and shall cause each of its
-----------------
Material Subsidiaries to, pay and discharge as the same shall become due and
payable, all tax liabilities, assessments and governmental charges or levies
upon it or its properties or assets (other than obligations that a Responsible
Officer is not aware of or are of a nominal amount), unless the same are being
contested in good faith by appropriate proceedings and adequate reserves in
accordance with GAAP are being maintained by the Company or such Subsidiary.
6.7 Compliance with Laws. The Company shall comply, and shall cause
---------------------
each of its Subsidiaries to comply, in all material respects with all material
Requirements of Law of any Governmental Authority having jurisdiction over it or
its business (including the Federal Fair Labor Standards Act), except such as
may be contested in good faith or as to which a bona fide dispute may exist.
36
6.8 Inspection of Property and Books and Records. The Company shall
---------------------------------------------
maintain and shall cause each of its Material Subsidiaries to maintain in all
material respects proper books of record and account, in which full, true and
correct entries in conformity with GAAP consistently applied shall be made of
all financial transactions and matters involving the assets and business of the
Company and such Subsidiary. The Company shall permit, and shall cause each of
its Subsidiaries to permit, representatives and independent contractors of the
Administrative Agent or any Bank to visit and inspect any of their respective
properties, to examine their respective corporate, financial and operating
records, and make copies thereof or abstracts therefrom, and to discuss their
respective affairs, finances and accounts with their respective directors,
officers, and independent public accountants, at such reasonable times during
normal business hours and as often as may be reasonably desired, upon reasonable
advance notice to the Company; provided, however, when an Event of Default
-------- -------
exists the Administrative Agent or any Bank may do any of the foregoing at the
reasonable expense of the Company at any time during normal business hours and
without advance notice.
6.9 Use of Proceeds. The Company shall use the proceeds of the Loans
----------------
for general corporate purposes (including the refinancing of existing
indebtedness) not in contravention of any Requirement of Law or of any Loan
Document.
6.10 Notice of Rating Change. The Company shall, no later than ten
------------------------
(10) Business Days after a Responsible Officer obtains knowledge of any such
change, give notice to the Administrative Agent (by telephone, followed promptly
by written notice transmitted by facsimile with a hard copy sent promptly
thereafter) of any change in rating by any Rating Agency in respect of the
Company's long-term, senior unsecured debt, together with the details thereof,
and of any announcement by any Rating Agency that its rating in respect of such
senior unsecured long-term debt is "under review" or that any such debt rating
has been placed on a "CreditWatch List"(R) or "watch list" or that any similar
action has been taken by such Rating Agency.
ARTICLE VII
NEGATIVE COVENANTS
So long as any Bank shall have any Commitment hereunder, or any Loan or
other Obligation (other than Obligations under Section 10.5 that remain
contingent after termination of the Commitments and payment of all other
Obligations) shall remain unpaid or unsatisfied, unless the Majority Banks waive
compliance in writing:
7.1 Limitation on Liens. The Company shall not, and shall not suffer
--------------------
or permit any of its Subsidiaries to directly or indirectly, make, create,
incur, assume or suffer to exist any Lien upon or with respect to any part of
its property, whether now owned or hereafter acquired, other than the following
("Permitted Liens"):
---------------
(a) any Lien existing on property of the Company or any Subsidiary on
the Closing Date securing Indebtedness outstanding on such date;
37
(b) any Lien created under any Loan Document;
(c) Liens for taxes, fees, assessments or other governmental charges
which are not delinquent or remain payable without penalty, or to the extent
that non-payment thereof is permitted by Section 6.6;
(d) carriers', warehousemen's, mechanics', landlords', materialmen's,
repairmen's or other similar Liens arising in the ordinary course of business
which are not delinquent or remain payable without penalty;
(e) Liens (other than any Lien imposed by ERISA) consisting of
pledges or deposits required in the ordinary course of business in connection
with workers' compensation, unemployment insurance and other social security
legislation ;
(f) Liens on the property of the Company or any Subsidiary securing
(i) the non-delinquent performance of bids, trade contracts (other than for
borrowed money), leases, statutory obligations, (ii) contingent obligations on
surety and appeal bonds, and (iii) other non-delinquent obligations of a like
nature; in each case, incurred in the ordinary course of business, provided all
such Liens in the aggregate would not (even if enforced) cause a Material
Adverse Effect;
(g) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business which, in the
aggregate, are not substantial in amount, and which do not in any case
materially detract from the value of the property subject thereto or interfere
with the ordinary conduct of the businesses of the Company and its Subsidiaries;
(h) Liens arising solely by virtue of any statutory or common law
provision relating to banker's liens, rights of set-off or similar rights and
remedies as to deposit accounts or other funds maintained with a creditor
depository institution; provided that (i) such deposit account is not a
dedicated cash collateral account and is not subject to restrictions against
access by the Company in excess of those set forth by regulations promulgated by
the FRB, and (ii) such deposit account is not intended by the Company or any
Subsidiary to provide collateral to the depository institution;
(i) Any other Liens (other than any Lien imposed by ERISA or any Lien
for taxes, fees, assessments or other governmental charges that is not expressly
permitted under Section 7.1(c));
provided that the aggregate amount of all Permitted Liens shall not exceed at
- --------
any time 25% of Net Worth.
7.2 Consolidations and Mergers. The Company shall not, and shall not
---------------------------
suffer or permit any of its Material Subsidiaries to, directly or indirectly,
liquidate, dissolve, merge, amalgamate, consolidate with or into, or convey,
transfer, 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 or in favor of any Person, except:
38
(a) any Subsidiary may merge with the Company, provided that the
Company shall be the continuing or surviving corporation, or with any one or
more Subsidiaries, provided that if any transaction shall be between a
Subsidiary and a Wholly-Owned Subsidiary, the Wholly-Owned Subsidiary shall be
the continuing or surviving corporation;
(b) any Subsidiary of Medis may amalgamate with Medis or with any one
or more of Medis' Subsidiaries;
(c) any Subsidiary may sell all or substantially all of its assets
(upon voluntary liquidation or otherwise) to the Company or another Wholly-Owned
Subsidiary; and
(d) the Company may merge with another Person provided that the
Company shall be the continuing or surviving corporation and no Default or Event
of Default is in effect immediately prior to or on the date of or would result
from such merger.
7.3 Use of Proceeds.
----------------
(a) The Company shall not, and shall not suffer or permit any of its
Subsidiaries to, use any portion of the Loan proceeds, directly or indirectly,
(i) to purchase or carry Margin Stock, (ii) to repay or otherwise refinance
indebtedness of the Company or others incurred to purchase or carry Margin
Stock, (iii) to extend credit for the purpose of purchasing or carrying any
Margin Stock, or (iv) to acquire any security in any transaction that is subject
to Section 13 or 14 of the Exchange Act.
(b) The Company shall not, directly or indirectly, use any portion of
the Loan proceeds (i) knowingly to purchase Ineligible Securities from the
Arranger during any period in which the Arranger makes a market in such
Ineligible Securities, (ii) knowingly to purchase during the underwriting or
placement period Ineligible Securities being underwritten or privately placed by
the Arranger, or (iii) to make payments of principal or interest on Ineligible
Securities underwritten or privately placed by the Arranger and issued by or for
the benefit of the Company or any Affiliate of the Company. The Arranger is a
registered broker-dealer and permitted to underwrite and deal in certain
Ineligible Securities; and "Ineligible Securities" means securities which may
---------------------
not be underwritten or dealt in by member banks of the Federal Reserve System
under Section 16 of the Banking Act of 1933 (12 U.S.C. (S) 24, Seventh), as
amended.
7.4 Maximum Debt to Capitalization Ratio. The Company shall not
-------------------------------------
permit the ratio of Total Debt to Total Capitalization as at the last day of any
calendar month to exceed 0.565 to 1.00.
39
ARTICLE VIII
EVENTS OF DEFAULT
8.1 Event of Default. Any of the following shall constitute an
----------------
"Event of Default":
----------------
(a) Non-Payment. The Company fails to pay, (i) when and as required
-----------
to be paid herein, any amount of principal of any Loan made to the Company, or
(ii) within five (5) days after the same becomes due, any interest, fee or any
other amount payable by the Company hereunder or under any other Loan Document;
or
(b) Representation or Warranty. Any representation or warranty by
--------------------------
the Company or any Subsidiary made or deemed made herein, in any other Loan
Document, or which is contained in any certificate, document or financial or
other statement by the Company, any Subsidiary, or any Responsible Officer,
furnished at any time under this Agreement, or in or under any other Loan
Document, is incorrect in any material respect on or as of the date made or
deemed made; or
(c) Specific Defaults. The Company fails to perform or observe any
-----------------
term, covenant or agreement contained in subsection 6.4(a) or in Article VII; or
(d) Other Defaults. The Company fails to perform or observe any
--------------
other term or covenant contained in this Agreement or any other Loan Document,
and such default shall continue unremedied for a period of twenty (20) days
after the earlier of (i) in the case of any provision in Article V or VI, the
date upon which a Responsible Officer knew of such failure or (ii) the date upon
which written notice thereof is given to the Company by the Administrative Agent
or any Bank; or
(e) Cross-Default. The Company or any Subsidiary (i) fails to make
-------------
any payment in respect of any Indebtedness or Contingent Obligation having an
aggregate principal amount (including undrawn committed or available amounts and
including amounts owing to all creditors under any combined or syndicated credit
arrangement) of more than $25,000,000 when due (whether by scheduled maturity,
required prepayment, acceleration, demand, or otherwise) and such failure
continues after the applicable grace or notice period, if any, specified in the
relevant document on the date of such failure; or (ii) fails to perform or
observe any other condition or covenant, or any other event shall occur or
condition exist, under any agreement or instrument relating to any Indebtedness
or Contingent Obligation having an aggregate principal amount (including undrawn
committed or available amounts and including amounts owing to all creditors
under any combined or syndicated credit arrangement) of more than $25,000,000,
if the effect of such failure, event or condition is to cause such Indebtedness
to be declared to be due and payable prior to its stated maturity, or such
Contingent Obligation to become payable or cash collateral in respect thereof to
be demanded; provided, however, the preceding provisions of this subsection
-------- -------
8.1(e) shall not apply to the Company's obligations pursuant to a loan in a
principal amount not to exceed $35,000,000 that is secured by real property
located at One Post Street in San Francisco, California, except to the extent
that, if the Company's payment obligations under
40
such loan are accelerated, either (a) if such acceleration is not rescinded by
the lender , the Company fails to pay the accelerated loan in full within ninety
(90) days after acceleration or (b) if such acceleration is rescinded by the
lender, a default under such loan continues to exist following such rescission
on or after a date ninety (90) days after acceleration; or
(f) Insolvency; Voluntary Proceedings. The Company or any Material
---------------------------------
Subsidiary (i) ceases or fails to be solvent, or generally fails to pay, or
admits in writing its inability to pay, its debts as they become due, subject to
applicable grace periods, if any, whether at stated maturity or otherwise; (ii)
voluntarily ceases to conduct its business in the ordinary course; (iii)
commences any Insolvency Proceeding with respect to itself; or (iv) takes any
action to effectuate or authorize any of the foregoing; or
(g) Involuntary Proceedings. (i) Any involuntary Insolvency
-----------------------
Proceeding is commenced or filed against Company or any Material Subsidiary, or
any writ, judgment, warrant of attachment, execution or similar process, is
issued or levied against a substantial part of Company's or any Material
Subsidiary's properties, and any such proceeding or petition shall not be
dismissed, or such writ, judgment, warrant of attachment, execution or similar
process shall not be released, vacated or fully bonded within sixty (60) days
after commencement, filing or levy; (ii) the Company or any Material Subsidiary
admits the material allegations of a petition against it in any Insolvency
Proceeding, or an order for relief (or similar order under non-U.S. law) is
ordered in any Insolvency Proceeding; or (iii) the Company or any Material
Subsidiary acquiesces in the appointment of a receiver, trustee, custodian,
conservator, liquidator, mortgagee in possession (or agent therefor), or other
similar Person for itself or a substantial portion of its property or business;
or
(h) ERISA. There shall occur one or more ERISA Events which
-----
individually or in the aggregate results in or might reasonably be expected to
result in liability of the Company or any of its Subsidiaries in excess of
$25,000,000 during the term of this Agreement; or there shall exist an amount of
unfunded benefit liabilities (as defined in Section 4001(a)(18) of ERISA),
individually or in the aggregate for all Pension Plans (excluding for purposes
of such computation any Pension Plans with respect to which assets exceed
benefit liabilities), which exceeds 5% of Net Worth.
8.2 Remedies. If any Event of Default occurs, the Administrative
--------
Agent shall, at the request of, or may, with the consent of, the Majority Banks,
(a) declare the commitment of each Bank to make Loans to be
terminated, whereupon such commitments shall be terminated;
(b) declare the unpaid principal amount of all outstanding Loans,
all interest accrued and unpaid thereon, and all other amounts owing or payable
hereunder or under any other Loan Document to be immediately due and payable,
without presentment, demand, protest or other notice of any kind, all of which
are hereby expressly waived by the Company; and
(c) exercise on behalf of itself and the Banks all rights and
remedies available to it and the Banks under the Loan Documents or applicable
law;
41
provided, however, that upon the occurrence of any event specified in subsection
- -------- -------
(f) or (g) of Section 8.1 (in the case of clause (i) of subsection (g) upon the
expiration of the 60-day period mentioned therein), the obligation of each Bank
to make Loans shall automatically terminate and the unpaid principal amount of
all outstanding Loans and all interest and other amounts as aforesaid shall
automatically become due and payable without further act of the Administrative
Agent or any Bank.
8.3 Rights Not Exclusive. The rights provided for in this Agreement
--------------------
and the other Loan Documents are cumulative and are not exclusive of any other
rights, powers, privileges or remedies provided by law or in equity, or under
any other instrument, document or agreement now existing or hereafter arising.
ARTICLE IX
THE ADMINISTRATIVE AGENT
9.1 Appointment and Authorization. Each Bank hereby irrevocably
-----------------------------
(subject to Section 9.9) appoints, designates and authorizes the Administrative
Agent to take such action on its behalf under the provisions of this Agreement
and each other Loan Document and to exercise such powers and perform such duties
as are expressly delegated to it by the terms of this Agreement or any other
Loan Document, together with such powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary contained elsewhere in this
Agreement or in any other Loan Document, the Administrative Agent shall not have
any duties or responsibilities, except those expressly set forth herein, nor
shall the Administrative Agent have or be deemed to have any fiduciary
relationship with any Bank, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist against the
Administrative Agent.
9.2 Delegation of Duties. The Administrative Agent may execute any
--------------------
of its duties under this Agreement or any other Loan Document by or through
agents, employees or attorneys-in-fact and shall be entitled to advice of
counsel concerning all matters pertaining to such duties; provided that the
--------
Administrative Agent in its capacity as the Administrative Agent shall not
delegate its duty hereunder to make or receive payments unless the delegee shall
be a resident of the same jurisdiction as the Administrative Agent making such
delegation. The Administrative Agent shall not be responsible for the negligence
or misconduct of any agent or attorney-in-fact that it selects with reasonable
care.
9.3 Liability of Administrative Agent. None of the Administrative
---------------------------------
Agent-Related Persons shall (a) be liable for any action taken or omitted to be
taken by any of them under or in connection with this Agreement or any other
Loan Document or the transactions contemplated hereby (except for its own gross
negligence or willful misconduct), or (b) be responsible in any manner to any of
the Banks for any recital, statement, representation or warranty made by the
Company or any Subsidiary or Affiliate of the Company, or any officer thereof,
contained in this Agreement or in any other Loan Document, or in any
certificate, report, statement or other document referred to or provided for in,
or received by the Administrative
42
Agent under or in connection with, this Agreement or any other Loan Document, or
the validity, effectiveness, genuineness, enforceability or sufficiency of this
Agreement or any other Loan Document, or for any failure of the Company or any
other party to any Loan Document to perform its obligations hereunder or
thereunder. No Administrative Agent-Related Person shall be under any obligation
to any Bank to ascertain or to inquire as to the observance or performance of
any of the agreements contained in, or conditions of, this Agreement or any
other Loan Document, or to inspect the properties, books or records of the
Company or any of the Company's Subsidiaries or Affiliates.
9.4 Reliance by the Administrative Agent.
-------------------------------------
(a) The Administrative Agent shall be entitled to rely, and shall be
fully protected in relying, upon any writing, resolution, notice, consent,
certificate, affidavit, letter, telegram, facsimile, telex or telephone message,
statement or other document or conversation believed by it to be genuine and
correct and to have been signed, sent or made by the proper Person or Persons,
and upon advice and statements of legal counsel (including counsel to the
Company), independent accountants and other experts selected with reasonable
care by it. The Administrative Agent shall be fully justified in failing or
refusing to take any action under this Agreement or any other Loan Document
unless it shall first receive such advice or concurrence of the Majority Banks
as it deems appropriate and, if it so requests, it shall first be indemnified to
its satisfaction by the Banks against any and all liability and expense which
may be incurred by it by reason of taking or continuing to take any such action.
The Administrative Agent shall in all cases be fully protected in acting, or in
refraining from acting, under this Agreement or any other Loan Document in
accordance with a request or consent of the Majority Banks or all Banks, if
required hereunder, and such request and any action taken or failure to act
pursuant thereto shall be binding upon all of the Banks.
(b) For purposes of determining compliance with the conditions
specified in Section 4.1, each Bank that has executed this Agreement shall be
deemed to have consented to, approved or accepted or to be satisfied with, each
document or other matter either sent by the Administrative Agent to such Bank
for consent, approval, acceptance or satisfaction, or required thereunder to be
consented to or approved by or acceptable or satisfactory to the Bank.
9.5 Notice of Default. The Administrative Agent shall not be deemed
-----------------
to have knowledge or notice of the occurrence of any Default or Event of
Default, except with respect to defaults in the payment of principal, interest
and fees required to be paid to it for the account of the Banks, unless it shall
have received written notice from a Bank or the Company referring to this
Agreement, describing such Default or Event of Default and stating that such
notice is a "notice of default". The Administrative Agent will notify the Banks
of its receipt of any such notice. The Administrative Agent shall take such
action with respect to such Default or Event of Default as may be requested by
the Majority Banks in accordance with Article VIII; provided, however, that
-------- -------
unless and until the Administrative Agent has received any such request, the
Administrative Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default or Event of
Default as it shall deem advisable or in the best interest of the Banks.
43
9.6 Credit Decision. Each Bank acknowledges that none of the
---------------
Administrative Agent-Related Persons has made any representation or warranty to
it, and that no act by the Administrative Agent hereinafter taken, including any
review of the affairs of the Company and its Subsidiaries, shall be deemed to
constitute any representation or warranty by any Administrative Agent-Related
Person to any Bank. Each Bank represents to the Administrative Agent that it
has, independently and without reliance upon any Administrative Agent-Related
Person and based on such documents and information as it has deemed appropriate,
made its own appraisal of and investigation into the business, prospects,
operations, property, financial and other condition and creditworthiness of the
Company and its Subsidiaries, and all applicable bank regulatory laws relating
to the transactions contemplated hereby, and made its own decision to enter into
this Agreement and to extend credit to the Company hereunder. Each Bank also
represents that it will, independently and without reliance upon any
Administrative Agent-Related Person and based on such documents and information
as it shall deem appropriate at the time, continue to make its own credit
analysis, appraisals and decisions in taking or not taking action under this
Agreement and the other Loan Documents, and to make such investigations as it
deems necessary to inform itself as to the business, prospects, operations,
property, financial and other condition and creditworthiness of the Company.
Except for notices, reports and other documents expressly herein required to be
furnished to the Banks by the Administrative Agent, the Administrative Agent
shall not have any duty or responsibility to provide any Bank with any credit or
other information concerning the business, prospects, operations, property,
financial and other condition or creditworthiness of the Company which may come
into the possession of any of the Administrative Agent-Related Persons.
9.7 Indemnification of Administrative Agent. Whether or not the
---------------------------------------
transactions contemplated hereby are consummated, the Banks shall indemnify upon
demand the Administrative Agent-Related Persons (to the extent not reimbursed by
or on behalf of the Company and without limiting the obligation of the Company
to do so), pro rata, from and against any and all Indemnified Liabilities and
any other liability, obligation, loss, damage, penalty, action, judgment, suit,
cost, charge, expense or disbursement (including Attorney Costs) that would be
an Indemnified Liability but for the fact that it relates or arises out of a
claim or threatened claim by the Company or other Person party to this
Agreement; provided, however, that no Bank shall be liable for the payment to
-------- -------
the Administrative Agent-Related Persons of any portion of such Indemnified
Liabilities resulting from such Person's gross negligence or willful misconduct.
Without limitation of the foregoing, each Bank shall reimburse the
Administrative Agent upon demand for its ratable share of any costs or out-of-
pocket expenses (including Attorney Costs) incurred by it in connection with the
preparation, execution, delivery, administration, modification, amendment or
enforcement (whether through negotiations, legal proceedings or otherwise) of,
or legal advice in respect of rights or responsibilities under, this Agreement,
any other Loan Document, or any document contemplated by or referred to herein,
to the extent that it is not reimbursed for such expenses by or on behalf of the
Company. The undertaking in this Section shall survive the payment of all
Obligations hereunder and the resignation or replacement of the Administrative
Agent.
9.8 Administrative Agent in Individual Capacity. The Administrative
-------------------------------------------
Agent and any of its Affiliates may make loans to, issue letters of credit for
the account of, accept deposits from, acquire equity interests in and generally
engage in any kind of banking,
44
trust, financial advisory, underwriting or other business with the Company and
its Subsidiaries and Affiliates as though the Administrative Agent were not
Administrative Agent hereunder and without notice to or consent of the Banks.
The Banks acknowledge that, pursuant to such activities, Administrative Agent or
any of its Affiliates may receive information regarding the Company or its
Affiliates (including information that may be subject to confidentiality
obligations in favor of the Company or such Subsidiary) and acknowledge that the
Administrative Agent shall not be under any obligation to provide such
information to them. With respect to its Loans, the Administrative Agent shall
have the same rights and powers under this Agreement as any other Bank and may
exercise the same as though it were not the Administrative Agent. The terms
"Bank" and "Banks" include the Administrative Agent in its individual capacity.
9.9 Successor Administrative Agent. The Administrative Agent may,
------------------------------
and at the request of the Majority Banks shall, resign as Administrative Agent
upon thirty (30) days' notice to the Banks. If the Administrative Agent resigns
under this Agreement, then the Majority Banks shall appoint from among the Banks
a successor agent for the Banks which successor agent shall be approved by the
Company. If no successor agent is appointed prior to the effective date of the
resignation of the Administrative Agent, the Administrative Agent may appoint,
after consulting with the Banks and the Company, a successor agent from among
the Banks. Upon the acceptance of its appointment as successor agent hereunder,
such successor agent shall succeed to all the rights, powers and duties of the
retiring Administrative Agent, and the term "Administrative Agent" shall mean
such successor agent and the retiring agent's appointment, powers and duties as
Administrative Agent shall be terminated. After any retiring agent's resignation
hereunder as Administrative Agent, the provisions of this Article IX and
Sections 10.4 and 10.5 shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was Administrative Agent under this
Agreement. If no successor agent has accepted appointment as Administrative
Agent by the date which is thirty (30) days following a retiring agent's notice
of resignation, the retiring agent's resignation shall nevertheless thereupon
become effective and the Banks shall perform all of the duties of the
Administrative Agent hereunder until such time, if any, as the Majority Banks
appoint a successor agent as provided for above.
9.10 Withholding Tax.
----------------
(a) If any Bank is a "foreign corporation, partnership or trust"
within the meaning of the Code and such Bank claims exemption from, or a
reduction of, U.S. withholding tax under Sections 1441 or 1442 of the Code, such
Bank agrees with and in favor of the Administrative Agent, to deliver to the
Administrative Agent:
(i) if such Bank claims an exemption from, or a reduction of,
witholding tax under a United States tax treaty, properly completed IRS
Forms 1001 and W-8 before the payment of any interest in the first calendar
year and before the payment of any interest in each third succeeding
calendar year during which interest may be paid under this Agreement;
(ii) if such Bank claims that interest paid under this Agreement
is exempt from United States withholding tax because it is effectively
connected with a
45
United States trade or business of such Bank, two properly completed and
executed copies of IRS Form 4224 before the payment of any interest is due
in the first taxable year of such Bank and in each succeeding taxable year
of such Bank during which interest may be paid under this Agreement, and
IRS Form W-9; and
(iii) such other form or forms as may be required under the
Code or other laws of the United States as a condition to exemption from,
or reduction of, United States withholding tax.
Such Bank agrees to promptly notify the Administrative Agent of any change in
circumstances which would modify or render invalid any claimed exemption or
reduction.
(b) If any Bank claims exemption from, or reduction of, withholding
tax under a United States tax treaty by providing IRS Form 1001 and such Bank
sells, assigns, grants a participation in, or otherwise transfers all or part of
the Obligations of the Company to such Bank, such Bank agrees to notify the
Administrative Agent of the percentage amount in which it is no longer the
beneficial owner of Obligations of the Company to such Bank. To the extent of
such percentage amount, the Administrative Agent will treat such Bank's IRS Form
1001 as no longer valid.
(c) If any Bank claiming exemption from United States withholding
tax by filing IRS Form 4224 with the Administrative Agent sells, assigns, grants
a participation in, or otherwise transfers all or part of the Obligations of the
Company to such Bank, such Bank agrees to undertake sole responsibility for
complying with the withholding tax requirements imposed by Sections 1441 and
1442 of the Code.
(d) If any Bank is entitled to a reduction in the applicable
withholding tax, the Administrative Agent may withhold from any interest payment
to such Bank an amount equivalent to the applicable withholding tax after taking
into account such reduction. If the forms or other documentation required by
subsection (a) of this Section are not delivered to the Administrative Agent,
then the Administrative Agent may withhold from any interest payment to such
Bank not providing such forms or other documentation an amount equivalent to the
applicable withholding tax.
(e) If the IRS or any other Governmental Authority of the United
States or other jurisdiction asserts a claim that the Administrative Agent did
not properly withhold tax from amounts paid to or for the account of any Bank
(because the appropriate form was not delivered, was not properly executed, or
because such Bank failed to notify the Administrative Agent of a change in
circumstances which rendered the exemption from, or reduction of, withholding
tax ineffective, or for any other reason) such Bank shall indemnify the
Administrative Agent fully for all amounts paid, directly or indirectly, by the
Administrative Agent as tax or otherwise, including penalties and interest, and
including any taxes imposed by any jurisdiction on the amounts payable to the
Administrative Agent under this Section, together with all costs and expenses
(including Attorney Costs). The obligation of the Banks under this subsection
shall survive the payment of all Obligations and the resignation or replacement
of the Administrative Agent.
46
9.11 Documentation Agent; Managing Agent. No Bank identified as a
------------------------------------
"documentation agent" in the preamble hereof or designated as a "managing agent"
on the signature pages hereto, in its capacity as a documentation agent or as a
managing agent, as applicable, shall have any duties or responsibilities under
this Agreement or any other Loan Document.
ARTICLE X
MISCELLANEOUS
10.1 Amendments and Waivers. No amendment or waiver of any
----------------------
provision of this Agreement or any other Loan Document, and no consent with
respect to any departure by the Company therefrom, shall be effective unless the
same shall be in writing and signed by the Majority Banks (or by the
Administrative Agent at the written request of the Majority Banks) and the
Company and acknowledged by the Administrative Agent, and then any such waiver
or consent shall be effective only in the specific instance and for the specific
purpose for which given; provided, however, that no such waiver, amendment, or
-------- -------
consent shall, unless in writing and signed by all the Banks and the Company and
acknowledged by the Administrative Agent, do any of the following:
(a) increase or extend the Commitment of any Bank (or reinstate any
Commitment terminated pursuant to Section 8.2), except as otherwise permitted by
Section 2.14;
(b) postpone or delay any date fixed by this Agreement or any other
Loan Document for any payment of principal, interest, fees or other amounts due
to the Banks (or any of them) hereunder or under any other Loan Document;
(c) reduce the principal of, or the rate of interest specified
herein on any Loan, or (subject to clause (ii) below) any fees or other amounts
payable hereunder or under any other Loan Document;
(d) change the percentage of the Commitments or of the aggregate
unpaid principal amount of the Loans which is required for the Banks or any of
them to take any action hereunder; or
(e) amend this Section 10.1, or Section 2.13, or any provision
herein providing for consent or other action by all Banks; or
(f) permit the payment of principal of or interest on the Loans to be
subordinated in right of payment to any other payment obligations of the
Company;
and, provided, further, that (i) no amendment, waiver or consent shall, unless
-------- -------
in writing and signed by the Administrative Agent, in addition to the Majority
Banks or all the Banks, as the case may be, affect the rights or duties of the
Administrative Agent under this Agreement or any other Loan Document, and (ii)
the Fee Letter may be amended, or rights or privileges thereunder waived, in a
writing executed by the parties thereto.
47
10.2 Notices.
--------
(a) All notices, requests and other communications required or
permitted hereunder shall be in writing, except as otherwise expressly set forth
herein (including, unless the context expressly otherwise provides, by facsimile
transmission, provided that any matter transmitted by the Company by facsimile
(i) shall be immediately confirmed by a telephone call to the recipient at the
number specified on Schedule 10.2, and (ii) shall be followed promptly by
-------------
delivery of a hard copy original thereof), and mailed, faxed or delivered, to
the address or facsimile number specified for notices on Schedule 10.2; or, as
-------------
directed to the Company or the Administrative Agent, to such other address as
shall be designated by such party in a written notice to the other parties, and
as directed to any other party, at such other address as shall be designated by
such party in a written notice to the Company and the Administrative Agent. All
such notices, requests and communications shall, when transmitted by overnight
delivery, or faxed, be effective when delivered for overnight (next-day)
delivery, or transmitted in legible form by facsimile machine, respectively, or
if mailed, upon the third Business Day after the date deposited into the U.S.
mail, or if delivered, upon delivery; except that notices pursuant to Article II
or IX shall not be effective until actually received by the Administrative
Agent.
(c) Any agreement of the Administrative Agent and the Banks herein
to receive certain notices by telephone or facsimile is solely for the
convenience and at the request of the Company. The Administrative Agent and the
Banks shall be entitled to rely on the authority of any Person purporting to be
a Person authorized by the Company to give such notice and the Administrative
Agent and the Banks shall not have any liability to the Company or other Person
on account of any action taken or not taken by the Administrative Agent or the
Banks in reliance upon such telephonic or facsimile notice. The obligation of
the Company to repay the Loans made to it shall not be affected in any way or to
any extent by any failure by the Administrative Agent and the Banks to receive
written confirmation of any telephonic or facsimile notice or the receipt by the
Administrative Agent and the Banks of a confirmation which is at variance with
the terms understood by the Administrative Agent and the Banks to be contained
in the telephonic or facsimile notice.
10.3 No Waiver; Cumulative Remedies. No failure to exercise and no
------------------------------
delay in exercising, on the part of the Administrative Agent or any Bank, any
right, remedy, power or privilege hereunder shall operate as a waiver thereof;
nor shall any single or partial exercise of any right, remedy, power or
privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege. The rights and remedies
of the parties provided herein and in the other Loan Documents are cumulative
and are in addition to, and not exclusive of, any rights or remedies provided by
law.
10.4 Costs and Expenses. The Company shall:
-------------------
(a) whether or not the transactions contemplated hereby are
consummated, pay or reimburse all Administrative Agent-Related Persons
(including Bank of America in its capacity as Administrative Agent) within five
(5) Business Days after demand (subject
48
to subsection 4.1(e)) for all reasonable costs and expenses incurred by such
Administrative Agent-Related Persons (including Bank of America in its capacity
as Administrative Agent) reasonably required in connection with the development,
preparation, negotiation, delivery, administration and execution of, and any
amendment, supplement, waiver or modification to (in each case, whether or not
consummated), this Agreement, any Loan Document and any other documents prepared
in connection herewith or therewith, and the consummation of the transactions
contemplated hereby and thereby including reasonable Attorney Costs incurred by
such Administrative Agent-Related Persons (including Bank of America in its
capacity as Administrative Agent) with respect thereto; provided that any costs
--------
and expenses incurred under this subsection 10.4(a) prior to the Closing Date
shall be limited to the reasonable Attorney Costs incurred by the Administrative
Agent and any out-of-pocket costs and expenses (other than attorney fees) of the
Administrative Agent and the Arranger; and
(b) pay or reimburse all Administrative Agent-Related Persons and
each Bank within five Business Days after demand (subject to subsection 4.1(e))
for all costs and expenses (including Attorney Costs) incurred by them in
connection with the enforcement, attempted enforcement, or preservation of any
rights or remedies under this Agreement or any other Loan Document during the
existence of an Event of Default or after acceleration of the Loans (including
in connection with any "workout" or restructuring regarding the Loans, and
including in any Insolvency Proceeding or appellate proceeding).
10.5 Indemnification by the Company. Whether or not the transactions
-------------------------------
contemplated hereby are consummated, the Company shall indemnify and hold the
Administrative Agent-Related Persons, and each Bank and each of its respective
Affiliates, officers, directors, employees, counsel, agents and attorneys-in-
fact (each, an "Indemnified Person") harmless from and against any and all
------------------
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, charges, expenses and disbursements (including Attorney Costs) of any
kind or nature whatsoever which may at any time (including at any time following
repayment of the Loans and the termination, resignation or replacement of the
Administrative Agent or replacement of any Bank) be imposed on, incurred by or
asserted against any such Person as a result of any claim or threatened claim by
a Person not party to this Agreement or by the Company (except for claims by the
Company or against any Administrative Agent or a Bank that are successful on the
merits as determined by a court of competent jurisdiction), in any case in any
way relating to or arising out of this Agreement or any document contemplated by
or referred to herein, or the transactions contemplated hereby, or any action
taken or omitted by any such Person under or in connection with any of the
foregoing, including with respect to any investigation, litigation or proceeding
(including any Insolvency Proceeding or appellate proceeding) related to or
arising out of this Agreement or the Loans or the use of the proceeds thereof,
whether or not any Indemnified Person is a party thereto (all the foregoing,
collectively, the "Indemnified Liabilities"); provided that the Company shall
----------------------- --------
have no obligation hereunder to any Indemnified Person with respect to
Indemnified Liabilities to the extent resulting from the gross negligence or
willful misconduct of such Indemnified Person. The agreements in this Section
shall survive payment of all other Obligations; provided further that this
----------------
Section 10.5 shall not be construed to expand the obligations of the Company to
make payments to the Banks in the circumstances required under Sections 3.1,
3.2, 3.3, 3.4 or 3.5, it being understood and agreed that such Sections shall
govern the rights and obligations of the Company and the Banks
49
as to matters set forth therein, or to require the Company to compensate a Bank
for any Indemnified Liability relating to its cost of funds for any Borrowing.
10.6 Payments Set Aside. To the extent that the Company makes a
-------------------
payment to the Administrative Agent or the Banks, or the Administrative Agent or
the Banks exercise their right of set-off, and such payment or the proceeds of
such set-off or any part thereof are subsequently invalidated, declared to be
fraudulent or preferential, set aside or required (including pursuant to any
settlement entered into by the Administrative Agent or such Bank in its
discretion) to be repaid to a trustee, receiver or any other party, in
connection with any Insolvency Proceeding or otherwise, then (a) to the extent
of such recovery the obligation or part thereof originally intended to be
satisfied shall be revived and continued in full force and effect as if such
payment had not been made or such set-off had not occurred, and (b) each Bank
severally agrees to pay to the Administrative Agent upon demand its pro rata
share of any amount so recovered from or repaid by the Administrative Agent.
10.7 Successors and Assigns. The provisions of this Agreement shall
-----------------------
be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns, except that the Company may not assign or
transfer any of its rights or obligations under this Agreement without the prior
written consent of the Administrative Agent and each Bank.
10.8 Assignments, Participations, etc.
---------------------------------
(a) Any Bank may, with the written consent of the Company at all
times other than during the existence of an Event of Default and the
Administrative Agent, which consents of the Company and the Administrative Agent
shall not be unreasonably withheld, at any time assign and delegate to one or
more Eligible Assignees (provided that no written consent of the Company or the
Administrative Agent shall be required in connection with any assignment and
delegation by a Bank to an Eligible Assignee that is an Affiliate of such Bank)
(each an "Assignee") all, or any ratable part of all, of the Loans, the
--------
Commitments and the other rights and obligations of such Bank hereunder, in a
minimum amount of $10,000,000 or any multiple of $5,000,000 in excess thereof,
or, if less, the amount of the Commitment of such Bank; provided, however, that
-------- -------
the Company and the Administrative Agent may continue to deal solely and
directly with such Bank in connection with the interest so assigned to an
Assignee until (i) written notice of such assignment, together with payment
instructions, addresses and related information with respect to the Assignee,
shall have been given to the Company and the Administrative Agent by such Bank
and the Assignee; (ii) such Bank and its Assignee shall have delivered to the
Company and the Administrative Agent an Assignment and Acceptance substantially
in the form of Exhibit E ("Assignment and Acceptance") with such changes thereto
-------------------------
as the Administrative Agent and the Company may approve together with any Note
or Notes subject to such assignment and (iii) the assignor Bank or Assignee has
paid to the Administrative Agent a processing fee in the amount of $3,500.
(b) From and after the date that the Administrative Agent notifies
the assignor Bank that it has received (and provided its consent and received
the Company's consent with respect to) an executed Assignment and Acceptance and
payment of the above-referenced processing fee, (i) the Assignee thereunder
shall be a party hereto and, to the extent that rights
50
and obligations hereunder have been assigned to it pursuant to such Assignment
and Acceptance, shall have the rights and obligations of a Bank under the Loan
Documents, and (ii) the assignor Bank shall, to the extent that rights and
obligations hereunder and under the other Loan Documents have been assigned by
it pursuant to such Assignment and Acceptance, relinquish its rights and be
released from its obligations under the Loan Documents.
(c) If the assignor Bank had received any Notes, within five (5)
Business Days after its receipt of notice by the Administrative Agent that it
has received an executed Assignment and Acceptance and payment of the processing
fee, (and provided that the Company and the Administrative Agent have consented
to such assignment in accordance with subsection 10.8(a)), the Company, as
applicable, shall execute and deliver to the Administrative Agent, new Notes
evidencing such Assignee's assigned Loans and, if the assignor Bank has retained
a portion of its Loans, replacement Notes in the principal amount of the Loans
retained by the assignor Bank (such Notes to be in exchange for, but not in
payment of, the Notes held by such Bank). Immediately upon each Assignee's
becoming a party to this Agreement in accordance with subsection 10.8(b)(i),
this Agreement shall be deemed to be amended to the extent, but only to the
extent, necessary to reflect the addition of the Assignee and the resulting
adjustment of the Commitments arising therefrom. The Commitment allocated to
each Assignee shall reduce the Commitment of the assigning Bank pro tanto.
--- -----
(d) Any Bank may, with the written consent of the Company at all
times other than during the existence of an Event of Default and the
Administrative Agent, which consents of the Company and the Administrative Agent
shall not be unreasonably withheld, at any time sell to one or more Eligible
Assignees (provided that no written consent of the Company or the Administrative
Agent shall be required in connection with any participation by a Bank to an
Eligible Assignee that is an Affiliate of such Bank) (a "Participant")
-----------
participating interests in any Loans or the Commitment of that Bank and the
other interests of that Bank (the "originating Bank") hereunder and under the
other Loan Documents; provided, however, that (i) the originating Bank's
-------- -------
obligations under this Agreement shall remain unchanged, (ii) the originating
Bank shall remain solely responsible for the performance of such obligations,
(iii) the Company and the Administrative Agent shall continue to deal solely and
directly with the originating Bank in connection with the originating Bank's
rights and obligations under this Agreement and the other Loan Documents, and
(iv) no Bank shall transfer or grant any participating interest under which the
Participant has rights to approve any amendment to, or any consent or waiver
with respect to, this Agreement or any other Loan Document, except to the extent
such amendment, consent or waiver would require unanimous consent of the Banks
as described in the first proviso to Section 10.1. In the case of any such
----- -------
participation, the Participant shall not have any rights under this Agreement,
or any of the other Loan Documents, and all amounts payable by the Company
hereunder shall be determined as if such Bank had not sold such participation;
except that, if amounts outstanding under this Agreement are due and unpaid, or
shall have been declared or shall have become due and payable upon the
occurrence of an Event of Default, each Participant shall be deemed to have the
right of set-off in respect of its participating interest in amounts owing under
this Agreement to the same extent as if the amount of its participating interest
were owing directly to it as a Bank under this Agreement.
51
(e) Notwithstanding any other provision in this Agreement, any Bank
may at any time create a security interest in, or pledge, all or any portion of
its rights under and interest in this Agreement and any Notes held by it in
favor of any Federal Reserve Bank in accordance with Regulation A of the FRB or
U.S. Treasury Regulation 31 CFR (S)203.14, and such Federal Reserve Bank may
enforce such pledge or security interest in any manner permitted under
applicable law.
10.9 Confidentiality. The Administrative Agent and each Bank agree to
----------------
take and to cause its Affiliates (including the Administrative Agent-Related
Persons) to take normal and reasonable precautions and exercise due care to
maintain the confidentiality of all information identified as "confidential" or
"secret" by the Company and provided to it by the Company or any Subsidiary, or
by the Administrative Agent on the Company's or Subsidiary's behalf, under this
Agreement or any other Loan Document, and neither it nor any of its Affiliates
shall use any such information other than in connection with or in enforcement
of this Agreement and the other Loan Documents or in connection with other
business now or hereafter existing or contemplated with the Company or any
Subsidiary, except to the extent such information (i) was or becomes generally
available to the public other than as a result of disclosure by the
Administrative Agent or such Bank, or (ii) was or becomes available on a non-
confidential basis from a source other than the Company, provided that such
source is not bound by a confidentiality agreement with the Company known to the
Administrative Agent or such Bank; provided, however, that the Administrative
-------- -------
Agent and any Bank may disclose such information (A) at the request or pursuant
to any requirement of any Governmental Authority to which the Administrative
Agent or any Bank is subject or in connection with an examination of such Bank
by any such authority; (B) pursuant to subpoena or other court process; (C) when
required to do so in accordance with the provisions of any applicable
Requirement of Law; (D) to the extent reasonably required in connection with the
exercise of any remedy hereunder or under any other Loan Document; (E) to such
Bank's independent auditors and other professional advisors and to the
Administrative Agent or any other Bank; (F) to any Participant or Assignee,
actual or potential, provided that such Person agrees in writing to keep such
information confidential to the same extent required of the Banks hereunder; (G)
as to the Administrative Agent or any Bank or its Affiliate, as expressly
permitted under the terms of any other document or agreement regarding
confidentiality to which the Company or any Subsidiary is party or is deemed
party with such Bank or such Affiliate; and (H) to its Affiliates; provided,
--------
further, that to the extent permitted by applicable law or regulation, the
- -------
Administrative Agent and each Bank agree to notify the Company prior to (if
reasonably practicable) or concurrently with its disclosure of such information
to any third party pursuant to clauses (B), (C), or (F).
10.10 Set-off. In addition to any rights and remedies of the Banks
--------
provided by law, if an Event of Default exists or the Loans have been
accelerated, each Bank and its respective Affiliates are authorized at any time
and from time to time, without prior notice to the Company, any such notice
being waived by the Company to the fullest extent permitted by law, to set off
and apply any and all deposits (general or special, time or demand, provisional
or final) at any time held by, and other indebtedness at any time owing by, such
Bank or any such Affiliate to or for the credit or the account of the Company
against any and all Obligations owing to such Bank, now or hereafter existing,
irrespective of whether or not the Administrative Agent or such Bank shall have
made demand under this Agreement or any Loan Document and
52
although such Obligations may be contingent or unmatured. Each Bank agrees
promptly to notify the Company and the Administrative Agent after any such set-
off and application made by such Bank; provided, however, that the failure to
-------- -------
give such notice shall not affect the validity of such set-off and application.
10.11 Notification of Addresses, Lending Offices, Etc. Each Bank
------------------------------------------------
shall notify the Administrative Agent in writing of any changes in the address
to which notices to the Bank should be directed, of addresses of any Lending
Office, of payment instructions in respect of all payments to be made to it
hereunder and of such other administrative information as the Administrative
Agent shall reasonably request.
10.12 Counterparts. This Agreement may be executed in any number of
-------------
separate counterparts, each of which, when so executed, shall be deemed an
original, and all of said counterparts taken together shall be deemed to
constitute but one and the same instrument.
10.13 Severability. The illegality or unenforceability of any
-------------
provision of this Agreement or any instrument or agreement required hereunder
shall not in any way affect or impair the legality or enforceability of the
remaining provisions of this Agreement or any instrument or agreement required
hereunder.
10.14 No Third Parties Benefited. This Agreement is made and entered
---------------------------
into for the sole protection and legal benefit of the Company, the Banks, the
Administrative Agent and the Administrative Agent-Related Persons, and their
permitted successors and assigns, and no other Person shall be a direct or
indirect legal beneficiary of, or have any direct or indirect cause of action or
claim in connection with, this Agreement or any of the other Loan Documents.
10.15 Governing Law and Jurisdiction.
-------------------------------
(a) THIS AGREEMENT AND THE NOTES SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAW OF THE STATE OF CALIFORNIA WITHOUT REFERENCE TO
PRINCIPLES OF CONFLICTS OF LAWS.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR
ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF CALIFORNIA
OR OF THE UNITED STATES FOR THE NORTHERN DISTRICT OF CALIFORNIA, AND BY
EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF THE COMPANY, THE
ADMINISTRATIVE AGENT AND THE BANKS CONSENTS, FOR ITSELF AND IN RESPECT OF ITS
PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. EACH OF THE
COMPANY, THE ADMINISTRATIVE AGENT AND THE BANKS IRREVOCABLY WAIVES ANY
OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE
GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
--------------------
BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS
AGREEMENT OR ANY DOCUMENT RELATED HERETO. THE COMPANY, THE ADMINISTRATIVE AGENT
AND THE BANKS EACH
53
WAIVE PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE
MADE BY ANY OTHER MEANS PERMITTED BY CALIFORNIA LAW.
10.16 Waiver of Jury Trial. THE COMPANY, THE BANKS AND THE
---------------------
ADMINISTRATIVE AGENT EACH WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF
ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR RELATED TO THIS
AGREEMENT, THE OTHER LOAN DOCUMENTS, OR THE TRANSACTIONS CONTEMPLATED HEREBY OR
THEREBY, IN ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY
ANY OF THE PARTIES AGAINST ANY OTHER PARTY OR ANY AGENT-RELATED PERSON,
PARTICIPANT OR ASSIGNEE, WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS,
OR OTHERWISE. THE COMPANY, THE BANKS AND THE ADMINISTRATIVE AGENT EACH AGREE
THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A
JURY. WITHOUT LIMITING THE FOREGOING, THE PARTIES FURTHER AGREE THAT THEIR
RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS SECTION AS TO
ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART,
TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT OR THE OTHER LOAN
DOCUMENTS OR ANY PROVISION HEREOF OR THEREOF. THIS WAIVER SHALL APPLY TO ANY
SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT
AND THE OTHER LOAN DOCUMENTS.
10.17 Entire Agreement. This Agreement, together with the other Loan
-----------------
Documents, embodies the entire agreement and understanding among the Company,
the Banks and the Administrative Agent, and supersedes all prior or
contemporaneous agreements and understandings of such Persons, verbal or
written, relating to the subject matter hereof and thereof.
[Remainder of page intentionally left blank]
54
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered in San Francisco, California by their proper and
duly authorized officers as of the day and year first above written.
McKESSON HBOC, INC.
By: /s/ Nicholas A. Loiacono
------------------------------
Name: Nicholas A. Loiacono
Title: Vice President, Finance and Treasurer
By: /s/ Lincoln K. Walworth
------------------------------
Name: Lincoln K. Walworth
Title: Assistant Treasurer
S-1
BANK OF AMERICA, N.A., as Administrative Agent
and as a Bank
By: /s/ Vanessa Meyer
-----------------------
Name: Vanessa Meyer
Title: Managing Director
S-2
THE CHASE MANHATTAN BANK, as
documentation agent and as a Bank
By: /s/ Lenard Weiner
-----------------------
Name: Lenard Weiner
Title: Managing Director
S-3
BANK ONE, N.A., as documentation agent and as a
Bank
By:_____________________________
Name:__________________________
Title:_________________________
S-4
FIRST UNION NATIONAL BANK, as documentation
agent and as a Bank
By:______________________________
Name:___________________________
Title:__________________________
S-5
MORGAN GUARANTY TRUST COMPANY, as a
documentation agent and as a Bank
By:______________________________
Name:___________________________
Title:__________________________
S-6
TORONTO DOMINION (TEXAS), INC.
By:_____________________________
Name: _________________________
Title: ________________________
S-7
WACHOVIA BANK, N.A.
By:_____________________________
Name: _________________________
Title: ________________________
S-8
THE BANK OF NEW YORK
By:_____________________________
Name: _________________________
Title: ________________________
S-9
PNC BANK, NATIONAL ASSOCIATION
By: /s/ Philip K. Liebscher
------------------------
Name: Philip K. Liebscher
Title: Vice President
S-10
WELLS FARGO BANK, N.A.
By:_____________________________
Name: _________________________
Title: ________________________
By:_____________________________
Name: _________________________
Title: ________________________
S-11
ALLFIRST BANK
By:_____________________________
Name: _________________________
Title: ________________________
S-12
BANK OF MONTREAL
By: /s/ Leon Sinclair
------------------
Name: Leon Sinclair
Title: Director
S-13
THE BANK OF NOVA SCOTIA
By: /s/ R. P. Reynolds
-------------------------
Name: R. P. Reynolds
Title: Relationship Manager
S-14
U.S. BANK NATIONAL ASSOCIATION
By: /s/ Aaron J. Gordon
--------------------
Name: Aaron J. Gordon
Title: Vice President
S-15
MELLON BANK, N.A.
By:_____________________________
Name: _________________________
Title: ________________________
S-16
COUNTERPART TO CREDIT AGREEMENT
IN WITNESS WHEREOF, the undersigned financial institution has caused this
counterpart to that certain Credit Agreement dated as of October 22, 1999, by
and among McKesson HBOC, Inc., Bank of America, N.A., as administrative agent,
The Chase Manhattan Bank, as a documentation agent, Bank One, N.A., as a
documentation agent, Morgan Guaranty Trust Company, as a documentation agent,
and the other financial institutions party to such Credit Agreement, to be duly
executed and delivered by its duly authorized agent as of December 3, 1999.
BANQUE NATIONALE DE PARIS
By:_____________________________
Name: _________________________
Title: ________________________
By:_____________________________
Name: _________________________
Title: ________________________
The Commitment of this financial
institution is set forth opposite its name
in the column under the heading
"Commitments" on Schedule 2.1.
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